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. 1)
Filed by the Registrant
Filed by
a Party other than the Registrant
Check
the appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §240.14a-12
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First Business
Financial Services, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
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No
fee required.
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title
of each class of securities to which transaction applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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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)
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Proposed
maximum aggregate value of transaction:
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Fee
paid previously with preliminary materials.
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Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of
its filing.
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(1)
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Amount
Previously Paid:
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Form,
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FIRST BUSINESS
FINANCIAL SERVICES, INC.
November ____, 2008
Dear Fellow Shareholder:
Enclosed
are proxy materials for our special shareholder meeting scheduled to be held at _____ a.m.
on _______, December ___, 2008 at our corporate offices. As described more fully in the
enclosed materials, we are proposing amendments to our Articles of Incorporation that will
allow us to issue additional shares of common stock and preferred stock.
Please return
your proxy card and vote Yes to both of these proposals.
As
many of you know, financial institutions have experienced unprecedented instability
lately. Fortunately, we have not. Our Company is healthy and profitable. Our balance sheet
is strong and our capital position and liquidity are more than adequate. We have avoided
the exposure to mortgage-backed securities and other similar securities that have plagued
many other financial institutions. Unlike other banks, originating and holding residential
mortgage loans are only a small portion of our business.
The
current turmoil in the financial services industry allows us some
unique opportunities to continue to grow and expand, and we would like to take advantage
of these opportunities. This is why we have applied to the FDIC and the Treasury
Department to participate in the Treasurys Capital Purchase Program. We are seeking
between $9 million and $27 million of additional preferred stock capital from the Treasury
to facilitate our continued growth and expansion.
Your
Yes vote to approve the proposed amendments to our Articles of Incorporation
will allow us the flexibility to accept additional equity capital from the Treasury if our
application is approved.
Your vote is important. Please join us and our Board in
supporting these proposals.
Please
do not hesitate to call us if you would like more information.
Sincerely,
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Jerry Smith
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Corey Chambas
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Chairman of the Board
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President and Chief Executive Officer
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FIRST BUSINESS
FINANCIAL SERVICES, INC.
NOTICE OF SPECIAL
MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER , 2008
To Our Shareholders:
A
Special Meeting of Shareholders of First Business Financial Services, Inc. will be held
at our offices located at 401 Charmany Drive, Madison, Wisconsin, on December ,
2008, at , to vote on the following matters:
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(1)
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Approval
of an amendment to our Restated Articles increasing the number of
authorized shares of our common stock, par value $0.01 per share, from
8,000,000 to 25,000,000;
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(2)
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Approval
of an amendment to our Restated Articles (a) authorizing our company to
issue up to 2,500,000 shares of one or more new series of preferred stock,
par value of $0.01 per share, which preferred stock shall have the
relative rights, preferences, privileges and restrictions as determined
from time to time by our Board of Directors and (b) terminating the
existing authorization to issue Series A and Series B preferred stock.
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Only
shareholders of record at the close of business on October 31, 2008, will be entitled to
vote at the special meeting and any postponement or adjournment of the meeting.
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By
Order of the Board of Directors,
Barbara M. Conley, Corporate
Secretary
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November , 2008
YOUR VOTE IS IMPORTANT
PLEASE PROMPTLY
COMPLETE, SIGN, DATE AND RETURN
YOUR PROXY CARD
Your
vote is important. Even if you plan to attend the meeting, we encourage you to sign the
enclosed proxy card to vote your shares. Please read our proxy statement for more
information about our meeting and the voting process.
Important
Notice regarding the Availability of Proxy Materials for the Shareholder Meeting to Be
Held on December , 2008. Our Proxy Statement is available free of charge
at www.firstbusiness.com.
3
FIRST BUSINESS
FINANCIAL SERVICES, INC.
401 Charmany Drive
Madison,
Wisconsin 53719
PROXY STATEMENT
Our
Board of Directors is soliciting proxies for a Special Meeting of Shareholders to be held
at , , December , 2008 at our offices located at 401
Charmany Drive, Madison, Wisconsin, and at any postponement or adjournment of the meeting.
This proxy statement and the enclosed form of proxy are being mailed to shareholders
beginning on approximately November , 2008. If you have any questions about
attending our special meeting, you can call our Corporate Secretary, Barbara Conley, at
608-232-5902.
About the Meeting and
Proxy Materials
What is the purpose
of the special meeting?
At
our special meeting, our shareholders will act on the matters outlined in our notice of
meeting on the preceding page. The two matters to be acted on by our shareholders are the
approval of:
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(1)
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an
amendment to our Restated Articles increasing the number of authorized shares
of our common stock from 8,000,000 to 25,000,000, attached as Exhibit A;
and
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(2)
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an
amendment to our Restated Articles (a) authorizing our company to issue up to
2,500,000 shares of one or more new series of preferred stock, par value
of $0.01 per share, which preferred stock shall have the relative rights,
preferences and limitations as determined from time to time by our Board
of Directors and (b) terminating the existing authorization to issue
Series A and Series B preferred stock, attached as Exhibit A.
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Who is entitled to
vote at the special meeting?
Only
shareholders of record at the close of business on October 31, 2008, the record date for
the meeting, are entitled to receive notice of and to participate in the special meeting.
For each share of our common stock that you held on that date, you are entitled to one
vote on each matter considered at the meeting. On the record date, 2,545,546 shares of our
common stock were outstanding and entitled to vote.
What is a proxy?
A
proxy is another person you legally designate to vote your shares. If you designate
someone as your proxy in a written document such as the enclosed card, that document is
also called a proxy or a proxy card.
How do I vote my
shares?
If
you are a shareholder of record, meaning your shares are registered directly in your name
with Computershare Investor Services, LLC, our stock transfer agent, you may vote your
shares by completing, signing and returning the enclosed proxy card in the envelope
provided. If you attend the meeting, you may withdraw your proxy and vote your shares in
person.
If
you hold your shares in street name, meaning your shares are held in a stock
brokerage account or by a bank or other nominee, your broker or nominee has enclosed or
provided a voting instruction form for you to use to direct the broker or nominee how to
vote your shares.
Can I change my vote
after I return my proxy card?
Yes,
you can revoke your proxy at any time before your shares are voted by advising our
Corporate Secretary in writing, by submitting a signed proxy with a later date, or by
voting in person at the special meeting. If your shares are held in street name by a
broker, bank or nominee, you must follow the instructions of the broker, bank or nominee
on how to change your vote.
How are the votes
counted?
A
quorum is necessary to hold the special meeting and will exist if a majority of the
2,545,546 shares of our common stock outstanding on the record date are represented, in
person or by proxy, at the meeting. Votes cast by proxy or in person at the meeting will
be counted by Computershare, which has been appointed by our Board of Directors to act as
inspector of election for the meeting.
Shares
represented by proxy cards marked Abstain will be counted to determine the
presence of a quorum, but will not be counted as votes for or against any matter.
Broker non-votes, which occur when a broker or other nominee does not have
authority to vote on a particular matter without instructions from the beneficial owner of
the shares and has not received such instructions, will be counted for quorum purposes but
will be not be counted as votes for or against any matter.
What are our Boards
recommendations?
Our
Board of Directors recommends a vote
FOR
approval of both Proposal 1 and Proposal
2.
If
you sign and return a proxy card without specifying how you want your shares voted, the
named proxies will vote your shares in accordance with the recommendations of our Board
for both proposals.
Will any other items
be acted upon at the special meeting?
No
other business will be presented at the special meeting.
What are the
deadlines for submission of shareholder proposals for the next annual meeting?
Shareholders
may submit proposals on matters appropriate for shareholder action at future annual
meetings by following the rules of the Securities and Exchange Commission. Proposals
intended for inclusion in next years proxy materials must be received by our
Corporate Secretary no later than December 4, 2008.
Under
our By-Laws, a shareholder who wants to bring business before an annual meeting that has
not been included in the proxy materials for the meeting, or who wants to nominate
directors at the meeting, must be eligible to vote at the meeting and give written notice
of the proposal to our Corporate Secretary. The procedures contained in our By-Laws
include giving notice to our Corporate Secretary at least 60 days and not more than 90
days before the first anniversary of the date set forth in our proxy statement for the
prior Annual Meeting as the date on which we first mailed such proxy materials to
shareholders. For the 2009 annual meeting, the notice must be received by the Corporate
Secretary no later than March 6, 2009, and no earlier than February 4, 2009. For director
nominations, the notice must comply with the By-Laws and provide the information required
to be included in the proxy statement for individuals nominated by our Board. For any
other proposals, the notice must describe the proposal and why it should be approved,
identify any material interest of the shareholder in the matter, and include other
information required by the By-Laws.
Who pays to prepare,
mail and solicit the proxies?
We
will pay the cost of soliciting proxies. In addition to soliciting proxies by mail, our
employees may solicit proxies personally and by telephone. We have also engaged Georgeson
Inc. to provide proxy solicitation services for a fee of $7,500, plus costs and expenses.
We will reimburse brokers and other custodians, nominees and fiduciaries for their
reasonable expenses in communicating with persons for whom they hold our common stock.
2
What if I have
additional questions?
If
you would like additional copies, without charge, of this proxy statement or if you have
questions about the proposals or the procedures for voting your shares, you should contact
Georgeson Inc., which is assisting us, toll-free at 866-828-3401.
Stock Ownership
Management and Directors
The
following table sets forth certain information regarding the beneficial ownership of our
common stock as of October 31, 2008 by: (i) each director; (ii) each of the executive
officers; and (iii) all of the directors and executive officers as a group. Except as
otherwise indicated in the footnotes, each of the holders listed below has sole voting and
investment power over the shares beneficially owned. As of October 31, 2008, there were
2,545,546 shares of our common stock outstanding.
Name of Beneficial Owner
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Shares of
Common Stock
Beneficially Owned
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Percent of
Common Stock
Beneficially Owned
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Gary E. Zimmerman
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94,436 (1)
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3.6%
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Corey Chambas
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86,841 (2)
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3.4%
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Lee Bruce
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74,670 (3)
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2.8%
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Jerome J. Smith
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57,685
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2.2%
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John M. Silseth
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32,893
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1.2%
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Michael J. Losenegger
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26,125 (2)
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1.0%
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Charles H. Batson
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20,975
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*
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Loren D. Mortenson
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10,000
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*
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Jan A. Eddy
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7,428
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*
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Dean W. Voeks
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5,335
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*
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Mark D. Bugher
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1,500
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*
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All directors and executive
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officers as a group (16 persons)
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511,769 (2)(4)
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19.4%
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* Denotes less than 1%.
1)
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Includes
5,732 shares held by Mr. Zimmermans spouse through an IRA.
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2)
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Includes
shares that may be purchased under stock options which are currently
exercisable or exercisable within 60 days of October 31, 2008 as follows:
Mr. Chambas, 32,682 shares; Mr. Losenegger, 16,250 shares; and
all directors and executive officers as a group, 89,616 shares.
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3)
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Includes
6,096 shares held by Mr. Bruces spouse and 12,500 shares held by LCB,
LLC, an entity owned by Mr. Bruce.
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4)
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Includes
15,583 shares held by spouses of all directors and executive officers as a
group.
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3
Other Beneficial Owners
The
following table sets forth certain information regarding beneficial ownership of our
common stock by the only person known by us to own more than 5% of the outstanding shares
of our common stock. The beneficial ownership information set forth below is based on
information available to us through February 6, 2008, the last date for which such
information was made available to us.
Name and Address of
Beneficial Owner
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Shares of Common Stock
Beneficially Owned
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Percent of
Class as of
October 31,
2008
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Sam Jacobsen
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341,536
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13.4%
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3541 Bishops Way
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Middleton, WI 53562
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Proposal 1
Amendment to our Restated Articles to increase our authorized common stock
Background
We
recommend that our shareholders approve an amendment to our Amended and Restated Articles
of Incorporation to increase the number of shares of our common stock we are authorized to
issue to 25,000,000 from 8,000,000. The complete text of the form of amendment to the
Restated Articles is set forth in Exhibit A. As of October 31, 2008, (a) 2,545,546 shares
of our common stock were outstanding, (b) 272,041 shares were reserved under our equity
incentive plans and (c) 1,444,233 shares are, or, in the case of shares not yet issued,
will need to be, reserved to be issued pursuant to our shareholder rights agreement.
Based
on the foregoing, 3,738,180 shares remain available. Of these shares, only 2,492,120 could
be issued, considering that issuance of these shares would require us to reserve
1,246,060
additional shares under our shareholder rights agreement.
Our
Board has approved the amendment and believes such action to be in the best interest of
our company and shareholders for the following reasons. This action will provide us with
flexibility in the future by assuring the availability of sufficient authorized but
unissued common stock for general corporate purposes, including stock dividends,
financings, mergers and acquisitions and employee equity incentive awards. At the date of
mailing of this proxy statement, we did not have any plans to issue any additional shares
of our common stock, other than the possible issuance of reserved shares under our 2001
and 2006 Equity Incentive Plans and in connection with warrants that may be issued in
connection with our potential participation in the U.S. Department of Treasurys
Capital Purchase Program. See Proposal 2.
Shareholders
do not have any preemptive rights to subscribe for any shares of our common stock,
including those authorized by the amendment. Any of the authorized shares of our common
stock may be issued by action of our Board without further action by shareholders, other
than as may be required by the rules of the NASDAQ Stock Market and the Wisconsin Business
Corporation Law. (In general, the rules of the NASDAQ Stock Market would require
shareholder approval only for shares issued in certain new equity compensation programs,
and in business combinations and certain non-public offerings in which, in both cases, the
shares issued will equal or exceed 20% of our shares outstanding prior to the combination
or offering.) The Wisconsin Business Corporation Law would require shareholder approval
only for shares issued in certain business combinations. The issuance of common stock
other than on a pro rata basis to all shareholders may have the effect of diluting the
ownership interest and voting power of our existing shareholders, as well as our earnings
per share. Similarly, the shares authorized by the amendment could be used to discourage
or make more difficult a non-negotiated attempt to obtain control of our company. This
effect could occur through issuance of additional shares of our common stock that would
dilute the interest in the equity and voting power of a party seeking to gain control,
including pursuant to our shareholder rights agreement. However, the increase in the
number of authorized shares of our common stock has not been proposed for an
anti-takeover-related purpose, and we are not aware of any current efforts to obtain
control of us or to effect large accumulations of our voting stock.
4
Shareholder Vote Required
The
affirmative vote of a majority of the votes cast on the amendment is required for approval
of the amendment. Abstentions and broker non-votes will not be counted as votes cast.
YOUR
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF PROPOSAL 1. PROXIES WILL BE VOTED FOR
APPROVAL UNLESS A SHAREHOLDER GIVES OTHER INSTRUCTIONS ON THE PROXY CARD.
Proposal 2
Amendment to
our Restated Articles authorizing our company to (a) issue 2,500,000 shares of one or more
new series of preferred stock, par value of $0.01 per share, which preferred stock shall
have the relative rights, preferences and limitations as determined from time to time by
our Board of Directors and (b) eliminate the existing authorization to issue Series A and
Series B preferred stock.
Background
We
recommend that our shareholders approve an amendment to Article IV and Article V of our
Restated Articles. The amendment, if approved, would amend Article IV to (1) authorize our
company to issue up to 2,500,000 shares of one or more new series of a new class of
preferred stock, par value of $0.01 per share, and (2) to eliminate the existing
authorization to issue 10,000 shares of Series A and 10,000 shares Series B preferred
stock.
The
new class of preferred stock is a type of stock sometimes called blank check
preferred stock because, the amendment, if approved, would provide that our Board would
have the authority to designate the relative rights, preferences and limitations and
restrictions of each series of the new class. The complete text of the form of amendment
to the Restated Articles is set forth in Exhibit A.
Purpose of the Preferred
Stock
Our
Board has approved this amendment and believes such action is in the best interests of our
company and shareholders for several reasons. One of the reasons for the amendment is to
give us the ability to sell shares of preferred stock to the U.S. Department of the
Treasury under the Capital Purchase Program, which we refer to as the CPP. Under the CPP,
the Treasury will purchase senior preferred stock of qualifying bank holding companies on
what our Board considers to be favorable terms.
We
have submitted an application to participate in the CPP pursuant to which we would issue
preferred shares under the CPP with an aggregate liquidation preference of no less than $9
million and no more than $27 million. As of the date of this proxy statement, we have
not yet been informed of the status of our application. It is possible that our
application will not be accepted or, even if it is accepted, that we may decide not to
participate in the CPP. If we are accepted and do participate, then we estimate our net
proceeds from issuing senior preferred stock to the Treasury under the CPP would be
between approximately $9 million and $27 million. The Treasury and the Federal Deposit
Insurance Corporation, or FDIC, are considering our application, but they are not required
to accept our application, and the estimated proceeds of the sale of securities under the
CPP are not guaranteed. We believe our non-participation in the CPP would not have a
material adverse effect on our capital resources, results of operations or liquidity.
Without the additional capital, we anticipate that our growth may be slowed, but we are
well capitalized, profitable and have policies and procedures in place which we believe
allow us to adequately maintain our liquidity. Our consolidated total capital and Tier 1
capital at September 30, 2008 were $108.9 million and $59.1 million, respectively, and our
ratios of consolidated total capital and Tier 1 capital to risk-weighted assets at
September 30, 2008 were 12.03% and 6.52%, respectively, compared to minimum ratios
required for capital adequacy purposes of 8.0% and 4.0%, respectively.
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While
we believe that our capital base does not require the issuance of preferred stock under
the CPP, participation in the CPP would provide us with additional equity capital which
would support and enhance our long-term growth strategy. This capital will provide us with
the flexibility to continue to invest in our growth markets, pursue strategic
opportunities and maintain our strong history of expanding existing client relationships
and developing new relationships. Although we do not currently have specific plans for the use of the net proceeds from the issuance of
preferred stock, we anticipate using such proceeds to support our plans to maintain higher capital levels during these
uncertain economic times and to continue our disciplined growth strategy through extending
financing to new and existing clients and funding selected acquisitions.
We will not be
eligible to participate in the CPP if this proposal is not approved by our shareholders at
the special meeting.
Our
proposal to create a class of blank check preferred stock would additionally assure that
we have shares of preferred stock available for general corporate needs and would provide
our Board with the necessary flexibility to issue preferred stock in connection with
private placements or public offerings of equity securities or other financings and as
consideration in share exchanges, mergers or other acquisitions without the expense and
delay associated with obtaining shareholder approval of an amendment to our Restated
Articles of Incorporation establishing the terms of the preferred stock at the time of
such action. Our Board believes that such enhanced ability to respond to opportunities and
favorable market conditions before the opportunity or conditions pass is in the best
interests of our company and shareholders.
Effect of the Preferred
Stock Upon Holders of Common Stock
The
actual effect of the issuance of any shares of preferred stock upon the rights of the
holders of our common stock cannot be determined until our Board determines the specific
rights of the holders of such preferred stock. However, the effects might include, among
other things, restricting dividends on our common stock, diluting the voting power of our
common stock, diluting the equity interest of the existing holders of our common stock if
the preferred stock is convertible into common stock, reducing the market price of our
common stock, reducing our earnings per share, or impairing the liquidation rights of our
common stock.
If
this proposal is approved and we issue preferred shares under the CPP to the Treasury,
such shares (the CPP shares) would qualify as Tier 1 capital and would rank
senior to our common stock but junior to all of our indebtedness, including our
outstanding junior subordinated notes. Our capitalization as of September 30, 2008 on an
historical basis and on a pro forma basis, adjusted to reflect the issuance of CPP shares
with either the $9 million minimum liquidation preference, or the $27 million maximum
liquidation preference, under the CPP, is as follows:
(dollar amounts in
thousands)
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Historical
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Pro forma, assuming
issuance of CPP shares
with $9.0 million
liquidation preference
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Pro forma, assuming
issuance of CPP shares
with $27.0 million
liquidation preference
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Total capital
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$108,876
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$117,876
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$135,876
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Tier 1 capital
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$59,060
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$68,060
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$86,060
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Ratio of total capital to
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risk-weighted assets
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12.03%
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13.03%
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15.02%
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Ratio of Tier 1 capital to
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risk-weighted assets
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6.52%
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7.52%
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9.51%
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The
CPP shares would pay a cumulative dividend rate of 5% per annum for the first five years
after issuance and would reset to a rate of 9% per annum after year five. The dividend
would be payable quarterly in arrears. The CPP shares would be callable at par after three
years. Prior to the end of three years, we could redeem the CPP shares with the proceeds
from a qualifying equity offering of any Tier 1 perpetual preferred stock or common stock.
The
CPP shares would be non-voting, other than class voting rights on:
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any
authorization or issuance of shares ranking senior to the CPP shares;
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6
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any
amendment to the rights of CPP shares, or
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any
merger, exchange or similar transaction which would adversely affect the rights of the
CPP shares.
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If we would fail to pay in full
dividends on the CPP shares for six dividend periods, whether or not consecutive, the
holders of the CPP shares would have the right to elect two directors to our Board, and we
would be required to increase the size of our Board to accommodate the two directors if
necessary. The right to elect directors would end when he have paid dividends in full for
four consecutive dividend periods.
In
conjunction with the purchase of the CPP shares, the Treasury would also receive warrants
to purchase our common stock with an aggregate market price equal to 15% of the aggregate
liquidation preference of the CPP shares. The warrants would have a term of 10 years, and
the exercise price of the warrants would be the market price of our common stock at the
time of issuance, calculated on a 20- trading day trailing average. As of November 14,
2008, the 20-trading day trailing average market price of our common stock was $15.82. The
issuance of the warrants may have a dilutive effect on earnings per share. For example,
based on the trailing average market price above and the minimum and maximum liquidation
preference of the CPP shares, if we issued CPP shares and warrants under the CPP, and held
the proceeds in a non-interest bearing account, the dilutive effect on our earnings per
share for the nine-month period ended September 30, 2008 would be as follows:
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Historical
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Pro forma, assuming
issuance of CPP shares
with $9.0 million
liquidation preference
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Pro forma, assuming
issuance of CPP shares
with $27.0 million
liquidation preference
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Common shares subject to
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CPP warrants
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--
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85,335
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256,005
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Earnings per share - basic
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$1.24
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$1.08
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$0.75
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Earnings per share - diluted
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$1.24
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$1.07
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$0.75
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To
be eligible to participate in the CPP, we would have to agree to register with the SEC the
public resale of the CPP shares, the warrants and the underlying common stock purchasable
upon exercise of the warrants (1) upon the request of the Treasury or (2) at the time or
times we register the sale of our equity securities on a form of registration statement on
which the sale of those securities by the Treasury could be registered. We would also
agree not to increase the dividend on our common stock or repurchase our common stock or
other securities junior to the CPP shares without the Treasurys consent until the
earlier of (1) the time at which the Treasury no longer owns any CPP shares or warrants or
(2) the third anniversary of the issuance of the securities. We would also be required to
maintain certain limits on our executive compensation during the period in which the CPP
shares are outstanding, including:
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ensuring
that incentive compensation for our senior executive officers does not encourage
unnecessary and excessive risks that threaten the value of our company;
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requiring
a clawback of any bonus or incentive compensation paid to a senior executive officer
based on statements of earnings, gains or other criteria that are later proven to be
materially inaccurate;
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prohibiting
us from making any golden parachute payment to a senior executive officer; and
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agreeing
not to deduct for tax purposes executive compensation in excess of $500,000 in any year
for each senior executive officer.
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7
We have reviewed our executive
compensation arrangements and do not anticipate that it will be necessary to modify any
employee plans or contracts to comply with the above limits on executive compensation,
except that, prior to the issuance of the CPP shares, we will amend our existing bonus and
incentive compensation plans to provide for clawbacks of compensation paid to executive
officers based on statements of earnings, gains or other criteria that are later proven to
be materially inaccurate during the period in which the CPP shares are outstanding. Within
90 days of the issuance of the CPP shares and warrants, and at least annually thereafter,
our compensation committee will review our incentive compensation plans with our senior
risk officers to ensure that incentive compensation for our senior executive officers does
not encourage unnecessary and excessive risks that threaten the value of our company.
Anti-Takeover Effects of
the Preferred Stock
Any
issuance of preferred stock with voting rights could, under certain circumstances, have
the effect of delaying or of preventing a change in control by increasing the number of
outstanding shares entitled to vote and by increasing the number of votes required to
approve a change in control. Shares of voting or convertible preferred stock could be
issued, or rights to purchase such shares could be issued, to render more difficult or
discourage an attempt to obtain control of us by means of a tender offer, proxy contest,
merger or otherwise. Such issuances or potential issuances could therefore deprive
shareholders of benefits that could result from an attempt for a person to acquire
control, such as the realization of a premium over the market price that such an attempt
could cause. However, the preferred stock has not been proposed for an
anti-takeover-related purpose, and we are not aware of any current efforts to obtain
control of us or to effect large accumulations of our voting stock.
Shareholder Vote Required
The
affirmative vote of a majority of the votes cast on the amendment is required for approval
of the amendment. Abstentions and broker non-votes will not be counted as votes cast.
YOUR
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF PROPOSAL 2. PROXIES WILL BE VOTED FOR
APPROVAL UNLESS A SHAREHOLDER GIVES OTHER INSTRUCTIONS ON THE PROXY CARD.
8
EXHIBIT A
TEXT OF AMENDMENTS
Common Stock Amendment
Article
IV of the Corporations Amended and Restated Articles of Incorporation is amended and
restated in its entirety to read as follows:
|
The
number of shares of capital stock which the Corporation shall have the authority to issue
is as follows:
|
|
Twenty-five
million (25,000,000) shares of common stock, par value of $0.01 per share; and
|
|
[Reference
to preferred stock omitted as it relates to the preferred stock amendment. See Preferred
Stock Amendment below.]
|
|
Except
to the extent required by governing law, rule or regulation, the shares of capital stock
may be issued from time to time by the Board of Directors without further approval of the
shareholders of the Corporation.
|
Preferred Stock Amendment
Article
IV of the Corporations Amended and Restated Articles of Incorporation is amended and
restated in its entirety to read as follows:
|
The
number of shares of capital stock which the Corporation shall have the authority to issue
is as follows:
|
|
[Reference
to common stock omitted as it relates to the common stock amendment. See Common
Stock Amendment above.]
|
|
Two
million five hundred thousand (2,500,000) shares of preferred stock, par value of $0.01
per share.
|
|
Except
to the extent required by governing law, rule or regulation, the shares of capital stock
may be issued from time to time by the Board of Directors without further approval of the
shareholders of the Corporation.
|
Paragraph
B of Article V of the Corporations Amended Restated Articles of Incorporation is
amended and restated in its entirety to read as follows:
|
B.
Preferred Stock
. The Board of Directors of the Corporation is
authorized, to the full extent permitted under the Wisconsin Business
Corporation Law and the provisions of this Paragraph B, to provide
for the issuance of the preferred stock in series, each of such
series to be distinctively designated, and to have such redemption
rights, dividend rights, rights on dissolution or distribution of
assets, conversion or exchange rights, voting powers, designations,
preferences and relative participating, optional or other special
rights, if any, and such qualifications, limitations or restrictions
thereof as shall be provided by the Board of Directors of the
Corporation consistent with the provisions of this Paragraph B.
|
|
Before
any dividends shall be paid or set apart for payment upon shares of common stock, the
holders of each series of preferred stock shall be entitled to receive dividends at the
rate (which may be fixed or variable) and at such times as specified in the particular
series. The holders of shares of preferred stock shall have no rights to participate with
the holders of shares of common stock in any distribution of dividends in excess of the
preferential dividends, if any, fixed for such preferred stock.
|
9
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In
the event of any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the holders of shares of each series of preferred stock shall be entitled to
receive out of the assets of the Corporation in money or moneys worth the
preferential amount, if any, specified in the particular series for each share at the time
outstanding together with all accrued but unpaid dividends thereon, before any of such
assets shall be paid or distributed to holders of common stock. The holders of preferred
stock shall have no rights to participate with the holders of common stock in the assets
of the Corporation available for distribution to shareholders in excess of the
preferential amount, if any, fixed for such preferred stock.
|
|
The
holders of preferred stock shall have only such voting rights as are fixed for shares of
each series by the Board of Directors pursuant to this Paragraph B or are provided, to the
extent applicable, by the Wisconsin Business Corporation Law.
|
10
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