SCHEDULE 14-A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant
x
Filed by a Party other than the Registrant
¨
Check the appropriate box:
¨
Preliminary Proxy Statement
x
Definitive Proxy Statement
¨
Definitive Additional Materials
¨
Soliciting Material Pursuant to
§240.14a-11(c) or §240.14a-12
PSB Holdings, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
x
No fee required.
¨
$125 per Exchange
Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
¨
$500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3).
¨
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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:
4) Proposed maximum aggregate value of transaction:
¨
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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
October 1, 2007
Dear
Stockholder:
We cordially invite you to attend the Annual Meeting of Stockholders of PSB Holdings, Inc. (the Company). The Company is the
holding company of Putnam Savings Bank, and our common stock is traded on the NASDAQ Global Market under the symbol PSBH. The Annual Meeting will be held at the Community Room of Quinebaug Valley Community College, located at 742 Upper
Maple Street, Danielson, Connecticut, at 11:00 a.m., Connecticut Time, on Friday, November 2, 2007.
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. Executive officers of the Company, as well as a representative of our independent registered public accounting
firm, will be present to respond to any questions that stockholders may have.
The Annual Meeting is being held so that stockholders may consider the
election of directors and the ratification of the appointment of Whittlesey & Hadley, P.C. as the Companys independent registered public accounting firm for fiscal year 2008. For the reasons set forth in the proxy statement, the Board
of Directors unanimously recommends that you elect the four recommended nominees as directors and vote FOR the appointment of Whittlesey & Hadley, P.C. as the Companys independent registered public accounting firm.
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 meeting. Your vote is important, regardless of the number of shares that you own.
Sincerely,
Thomas A. Borner
Chairman and
Chief Executive Officer
PSB Holdings, Inc.
40 Main Street
Putnam, Connecticut 06260
(860) 928-6501
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
To Be Held On November 2, 2007
Notice is hereby given that the Annual Meeting of Stockholders of PSB
Holdings, Inc. (the Company) will be held at the Community Room of Quinebaug Valley Community College, located at 742 Upper Maple Street, Danielson, Connecticut, on Friday, November 2, 2007 at 11:00 a.m., Connecticut 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:
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1.
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The election of four directors to the Board of Directors;
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2.
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The ratification of the appointment of Whittlesey & Hadley, P.C. as the independent registered public accounting firm for the Company for the fiscal year ending
June 30, 2008; and
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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 September 17, 2007, are the stockholders entitled to vote at the Annual
Meeting, and at any adjournments thereof. A list of stockholders entitled to vote at the Annual Meeting will be available at 40 Main Street, Putnam, Connecticut, for a period of ten days prior to the Annual Meeting and will also be available for
inspection at the meeting itself.
EACH STOCKHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE ANNUAL 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 ANNUAL 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 IN ORDER TO VOTE PERSONALLY AT THE ANNUAL MEETING.
By Order of the Board of Directors
Robert J. Halloran, Jr.
Secretary
October 1, 2007
A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR
YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES.
PROXY STATEMENT
PSB Holdings, Inc.
40 Main Street
Putnam, Connecticut 06260
(860) 928-6501
ANNUAL MEETING OF STOCKHOLDERS
November 2, 2007
This Proxy Statement is furnished in connection with the solicitation of proxies on behalf of the Board of
Directors of PSB Holdings, Inc. (the Company) to be used at the Annual Meeting of Stockholders of the Company (the Annual Meeting), which will be held at the Community Room of Quinebaug Valley Community College, located at
742 Upper Maple Street, Danielson, Connecticut, on Friday, November 2, 2007, at 11:00 a.m., Connecticut 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 October 1, 2007.
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 thereon.
Where no
instructions are indicated, validly executed proxies will be voted FOR the proposals set forth in this Proxy Statement. If any other matters are properly brought before the Annual Meeting, the persons named in the accompanying proxy will
vote the shares represented by such proxies on such matters in such manner as shall be determined by a majority of the Board of Directors.
A proxy may be revoked at any time prior to its exercise by sending written notice of revocation to the Secretary of the Company at the address shown above, by delivering to the Company a duly executed proxy bearing a later date, or by
attending the Annual Meeting and voting in person. However, if you are a stockholder whose shares are not registered in your own name, you will need appropriate documentation from your record holder to vote personally at the Annual Meeting. The
presence at the Annual Meeting of any stockholder who had returned 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 PROCEDURES AND METHODS OF COUNTING VOTES
Holders of record of the Companys common stock, par value $0.10 per share, as of the close of business on September 17, 2007 (the Record
Date) are entitled to one vote for each share then held. As of the Record Date, the Company had 6,943,125 shares of common stock issued and 6,667,177 shares outstanding, 3,729,846 of which were held by Putnam Bancorp, MHC (the Mutual
Holding Company), and 2,937,331 of which were held by stockholders other than the Mutual Holding Company. The presence in person or by proxy of a majority of the total number of shares of common stock outstanding and entitled to vote is
necessary to constitute a quorum at the Annual Meeting. Abstentions and broker non-votes will be counted for purposes of determining that a quorum is present. In the event there are not sufficient votes for a quorum, or to approve or ratify any
matter being presented at the time of the Annual Meeting, the Annual Meeting may be adjourned in order to permit the further solicitation of proxies. However, the presence by proxy of the Mutual Holding Companys shares will assure a quorum is
present at the Annual Meeting.
In accordance with the provisions of the Companys Charter, record holders of common stock who
beneficially own in excess of 10% of the outstanding shares of common stock (the Limit) are not entitled to any vote with respect to the shares held in excess of the Limit. The Limit does not apply to shares of common stock held by the
Mutual Holding Company.
As to the election of directors, the Proxy Card being provided by the Board of Directors enables a
stockholder to vote FOR the election of the four nominees proposed by the Board, to WITHHOLD AUTHORITY to vote for the nominees being proposed, or to vote FOR ALL EXCEPT one or more of the nominees being 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 nominees being proposed is withheld.
As to the ratification of Whittlesey & Hadley, P.C. as the Companys independent registered public accounting firm, by checking the appropriate box, a stockholder may: (i) vote FOR the ratification;
(ii) vote AGAINST the ratification; or (iii) ABSTAIN from voting on the ratification. The ratification of this matter shall be determined by a majority of the shares present and voting, without regard to broker non-votes or proxies marked
ABSTAIN.
Management of the Company anticipates that the Mutual Holding Company, the majority stockholder of the Company, will vote all of
its shares in favor of all the matters set forth above. If the Mutual Holding Company votes all of its shares in favor of the election of the four nominees proposed by the Board and in favor of the ratification of Whittlesey & Hadley, P.C.
as the Companys independent registered public accounting firm, the approval of each such proposal would be assured.
Proxies
solicited hereby will be returned to the Company and will be tabulated by an Inspector of Election designated by the Board of Directors of the Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Persons and groups who
beneficially own in excess of 5% of the common stock are required to file certain reports with the Securities and Exchange Commission (the SEC) regarding such ownership. The following table sets forth, as of the Record Date, the shares
of common stock beneficially owned by each person who was the beneficial owner of more than 5% of the Companys outstanding shares of common stock, and all directors and executive officers of the Company as a group.
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Name and Address of Beneficial Owners
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Amount of Shares
Owned and Nature
of Beneficial
Ownership
(1)
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Percent of Shares
of Common Stock
Outstanding
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Principal Stockholders:
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Putnam Bancorp, MHC
40 Main Street Putnam,
Connecticut 06260
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3,729,846
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55.9
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%
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Putnam Bancorp, MHC
(2)
and all Directors and Executive Officers
as a group (9 persons)
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4,086,754
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61.3
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%
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(1)
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For purposes of this table, a person is deemed to be the beneficial owner of 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 of or
direct the disposition of shares. The table 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.
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(2)
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The Companys executive officers and directors are also executive officers and directors of Putnam Bancorp, MHC. Excluding shares held by Putnam Bancorp, MHC, the
Companys executive officers and directors owned an aggregate of 356,908 shares, or 5.4% of the outstanding shares.
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PROPOSAL 1ELECTION OF DIRECTORS
The Companys Board of
Directors consists of nine members, and is divided into three classes, with one class of directors elected each year. Directors of the Company are generally elected to serve for a three-year period and until their respective successors have been
elected and qualified. The Nominating Committee of the Board of Directors has nominated four individuals to stand for election as directors, each to serve for the period set forth following his name and until his successor has been elected and shall
qualify. The nominees are Charles W. Bentley, Jr. (three-year term), Charles H. Puffer (three-year term), Paul M. Kelly (three-year term) and Jitendra K. Sinha (one-year term). Each nominee is prepared to serve, if elected, and, except for
Mr. Sinha, each nominee is currently a member of the Board of Directors.
The table below sets forth certain information as of
September 17, 2007 regarding the current members of the Companys Board of Directors and the nominees, 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 determine. At this time, the Board of Directors knows of no reason why any of the nominees would be unable to serve if elected. Except as indicated herein, there are no arrangements
or understandings between any nominee or continuing director and any other person pursuant to which such nominee or continuing director was selected.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES LISTED IN THIS PROXY STATEMENT.
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Name
(1)
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Age
(4)
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Positions
Held
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Director
Since
(2)
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Current Term
to Expire
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Shares of
Common Stock
Beneficially
Owned on Record
Date
(3)(5)(6)
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Percent of
Class
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NOMINEES
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Charles W. Bentley, Jr.
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54
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Director
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2006
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2007
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46,140
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(9)
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0.7
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%
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Paul M. Kelly
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56
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Director
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1993
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2007
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44,310
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(10)
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0.7
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%
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Charles H. Puffer
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56
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Director
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1984
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2007
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44,052
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0.7
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%
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Jitendra K. Sinha
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58
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Director
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2,000
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(11)
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0.0
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%
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DIRECTORS CONTINUING IN OFFICE
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Mary E. Patenaude
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62
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Director
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1991
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2008
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32,301
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(13)
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0.5
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%
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Robert J. Halloran, Jr.
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53
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Director and President and Chief Financial Officer
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2006
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2008
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29,123
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(12)
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0.4
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%
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Thomas A. Borner
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53
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Chairman of the Board and Chief Executive Officer
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1987
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2009
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126,718
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(7)
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1.9
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%
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Richard A. Loomis
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49
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Director
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2002
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2009
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28,264
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(8)
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0.4
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%
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John P. Miller
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49
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Director
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2006
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2009
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4,000
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0.1
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%
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356,908
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5.4
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%
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(1)
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The mailing address for each person listed is 40 Main Street, Putnam, Connecticut 06260. Each of the persons listed is also a director of Putnam Bancorp, MHC, which owns the
majority of the Companys issued and outstanding shares of common stock.
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(2)
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Except for Mr. Sinha, Mr. Bentley, Mr. Miller and Mr. Halloran reflects initial appointment to the Board of Trustees of the mutual predecessor to Putnam Savings
Bank.
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(3)
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Except as otherwise noted in these footnotes, the nature of beneficial ownership for shares reported in this table is sole voting and investment power.
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(4)
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As of September 17, 2007.
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(5)
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Included in the shares beneficially owned by the listed individuals are options to purchase shares of Company stock, which are exercisable within 60 days of November 2, 2007,
as follows:
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Mr. Borner24,496; Mr. Kelly9,526; Mr. Loomis4,082;
Ms. Patenaude9,526; Mr. Puffer9,526; Mr. Halloran13,608.
(6)
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Included in the shares beneficially owned by the listed individuals includes shares of restricted stock, which were granted under the PSB Holdings, Inc. 2005 Stock-Based Incentive
Plan, as follows:
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Mr. Borner34,021; Mr. Kelly9,526; Mr. Loomis4,083;
Ms. Patenaude9,526; Mr. Puffer9,526; Mr. Halloran9,526; Mr. Miller1,000; Mr. Bentley 1,000.
(7)
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Includes 701 allocated shares under the Putnam Savings Bank Employee Stock Ownership Plan (ESOP) and 25,000 shares held by Mr. Borners spouse.
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(8)
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Includes 1,836 shares held in Trust.
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(9)
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Includes 22,640 shares held by Mr. Bentleys spouse.
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(10)
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Includes 5,258 shares held in Trust.
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(11)
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Includes 2,000 shares held jointly with Mr. Sinhas spouse.
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(12)
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Includes 689 allocated shares under the ESOP.
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(13)
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Includes 6,099 shares held in Trust.
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The principal
occupation during the past five years of each director and nominee for director is set forth below. All such persons have held their present positions for five years unless otherwise stated.
Directors
Charles W. Bentley, Jr.
is
Owner and Chief Executive Officer of Colts Plastics Company, Inc. in Dayville, Connecticut, where he has been employed for the last thirty-five years. Colts Plastics is recognized as a global market leader in the plastics industry.
Maurice P. Beaulac
is retired. Mr. Beaulac was formerly with Beaulacs Pharmacy, Inc., located in Thompson,
Connecticut, where he served as President. Mr. Beaulac is retiring from the Companys Board of Directors, effective at the Annual Meeting.
Thomas A. Borner
is Chairman of the Board and Chief Executive Officer of the Company and of Putnam Savings Bank. Mr. Borner has served as a Director and Chairman of the Board of the Company since
its formation in 2003, as a director of the Bank since 1987 and as Chairman of the Board of the Bank since 1992. In addition, Mr. Borner was Interim Chief Executive Officer of the Bank from 1999 to 2000. Since October 2005, Mr. Borner has
been principal of the law offices of Thomas A. Borner, located in Putnam, Connecticut. Prior to October 2005, Mr. Borner served as of counsel to the law firm of Borner Scola Hill Baruti Vancini & Smith, located in Putnam,
Connecticut.
Robert J. Halloran, Jr.
is President and Chief Financial Officer of Putnam Savings Bank and the Company. He
joined Putnam Savings Bank and the Company in 2004 and, until his appointment as President in June 2006, served as Senior Vice President and Chief Financial Officer of Putnam Savings Bank and Vice President and Treasurer of the Company. Prior to
joining Putnam Savings Bank and the Company, Mr. Halloran served as Chief Financial Officer of Commerce Bank & Trust Company.
Paul M. Kelly
is the Treasurer of Kellys Tire, Inc., an automotive tire retail business, located in Putnam, Connecticut.
Richard A. Loomis
is the owner and operator of Loomis Real Estate located in Putnam, Connecticut.
John P. Miller
is the President and Owner of the National Chromium Company, Inc., a metal finishing company that specializes in chromium and nickel coatings, servicing accounts across the United States. Mr. Miller, an
MBA, also serves as Adjunct Instructor of Business Management at Quinebaug Valley Community College, located in Danielson, Connecticut.
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Mary E. Patenaude
is the owner and sole proprietor of Pomfret Spirit Shoppe, located in
Pomfret, Connecticut.
Charles H. Puffer
is the owner and operator of Leschke-Puffer Insurance Agency, Inc., located in
Putnam, Connecticut.
Jitendra K. Sinha
is owner and operator of Putnam Supermarket, Inc., located in Putnam, Connecticut.
Section 16 (a) Beneficial Ownership Reporting Compliance
The common stock of the Company is registered with the SEC pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the Exchange Act). Officers and directors of the Company and
beneficial owners of greater than 10% of the Companys 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 Companys Proxy Statement or Annual Report on Form 10-KSB of the failure of an officer, director or 10% beneficial owner of the Companys common stock to file a Form 3, 4, or 5 on a timely
basis. Based on the Companys review of such ownership reports, the Company believes that no officer or director of the Company failed to timely file such ownership reports for the fiscal year ended June 30, 2007.
Board Independence
The Board of Directors has
determined that, except for Messrs. Borner and Halloran, each member of the Board is an independent director within the meaning of Rule 4200(a)(15) of the NASDAQ corporate governance listing standards. Messrs. Borner and Halloran are not
considered independent because they serve as executive officers of the Company. In determining the independence of the independent directors listed above, the Board of Directors reviewed the following transactions, which are not required to be
reported under Transactions With Certain Related Persons, below:
Mary E. Patenaude: $17,601 Loan relationship
Charles H. Puffer: $20,696 Loan relationship
Meetings
and Committees of the Board of Directors
General
.
The business of the Company is conducted at regular and special
meetings of the full Board and its standing committees. In addition, the independent members of the Board of Directors (as defined in the listing standards of the NASDAQ Stock Market) meet in executive session at least annually and held
two meetings during fiscal 2007. The standing committees consist of the Compensation Committee and the Audit Committee. During the year ended June 30, 2007, the Board of Directors of the Company held 24 meetings regular meetings. No member of
the Board or any committee thereof attended fewer than 75% of the aggregate of: (i) the total number of meetings of the Board of Directors (held during the period for which he has been a director); and (ii) the total number of meetings
held by all committees of the Board on which he or she served (during the periods that he or she served).
While the Company has no formal
policy on director attendance at annual meetings of stockholders, all directors are encouraged to attend. Each of the then current directors attended last years Annual Meeting of Stockholders.
Compensation Committee.
The Compensation Committee of the Board of Directors is responsible for developing compensation guidelines and for
recommending the compensation for the Chief Executive Officer, President and Chief Financial Officer and other senior executive officers. The Compensation Committee consists of directors Richard A. Loomis, Charles W. Bentley, Jr. and Charles H.
Puffer. No member of the Compensation
5
Committee is a current or former officer or employee of PSB Holdings, Inc., Putnam Savings Bank or any subsidiary. Each member of the Compensation Committee
is considered independent as defined in the NASDAQ corporate governance listing standards. The Compensation Committee met two times during the fiscal year ended June 30, 2007.
The Companys philosophy is to align executive compensation with the interests of stockholders and to determine appropriate compensation levels that
will enable the Company to meet the following objectives:
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To attract, retain and motivate an experienced, competent executive management team;
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To reward the executive management team for the enhancement of shareholder value based on our annual earnings performance and the market price of our stock;
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To provide compensation rewards that are adequately balanced between short-term and long-term performance goals;
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To encourage ownership of Company common stock through stock-based compensation at all levels of management; and
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To maintain compensation levels that are competitive with other financial institutions, and particularly those in the Companys peer group based on asset size
and market area.
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The Compensation Committee considers a number of factors in its decisions regarding executive
compensation, including, but not limited to, the level of responsibility and performance of the individual executive officers, the overall performance of the Company and a peer group analysis of compensation paid at institutions of comparable size
and complexity. The Compensation Committee also considers the recommendations of the Chief Executive Officer with respect to the compensation of executive officers other than the Chief Executive Officer. The Compensation Committee and the Chief
Executive Officer review the same information in connection with this recommendation.
The base salary levels for the Companys
executive officers are set to reflect the duties and levels of responsibilities inherent in the position and to reflect competitive conditions in the banking business in the Companys market area. Comparative salaries paid by other financial
institutions are considered in establishing the salary for the given executive officer. The Compensation Committee has utilized bank compensation surveys compiled by the Americas Community Bankers as well as other surveys prepared by trade
groups and independent benefit consultants. In setting the base salaries, the Compensation Committee also considers a number of factors relating to the executive officers, including individual performance, job responsibilities, experience level,
ability and the knowledge of the position. These factors are considered subjectively and none of the factors are accorded a specific weight.
Nomination Procedures.
The Board of Directors of the Company has not established a separate standing Nomination Committee of the Board. Instead, nominations for director must be approved by a majority of the Board of Directors
and a majority of the independent directors of the Board of Directors. The Board of Directors believes that it is the responsibility of the entire Board of Directors to participate in the identification, evaluation, recruitment and selection of
qualified directors and, therefore, has not delegated this function to a committee of the Board. PSB Holdings, Inc. relies upon NASDAQs Controlled Company Exemption from the independence requirements with respect to nominating
committees for companies with majority stockholders. PSB Holdings, Inc. is a Controlled Company because more than 50% of its shares of common stock are owned by Putnam Bancorp, MHC. The Board of Directors, acting as the Nomination
Committee, met once during the year ended June 30, 2007.
The Board of Directors intends to identify nominees by first evaluating the
current members of the Board of Directors willing to continue in service. Current members of the Board with skills and experience that are relevant to the Companys business and who are willing to continue in service are first considered for
re-nomination, balancing the value of continuity of service by existing members of the Board with that of
6
obtaining a new perspective. If any member of the Board does not wish to continue in service, or if the Board decides not to re-nominate a member for
re-election, or if the size of the Board is increased, the Board would solicit suggestions for director candidates from all Board members. In addition, the Board may engage a third party to assist in the identification of director nominees. During
the year ended June 30, 2007, the Company did not pay a fee to any third party to identify or evaluate or assist in identifying or evaluating potential nominees for director. The Board would seek to identify a candidate with consideration of
the following criteria:
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Contributes to the range of talent, skill and expertise appropriate for the Board;
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Financial, regulatory and business experience, knowledge of banking and financial services industries;
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Familiarity with the operations of public companies and ability to understand financial statements;
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Familiarity with the Companys market area and participation and ties to local businesses and local civic, charitable and religious organizations;
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The ability to represent the best interests of the stockholders of the Company and the best interest of Putnam Savings Bank;
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The ability to devote sufficient time and energy to the performance of his or her duties;
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Independence under applicable Securities and Exchange Commission and listing definitions; and
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Current equity holdings in the Company.
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Finally, if a nominee is sought for service on the audit committee, the financial and accounting expertise of a candidate, including whether the individual qualifies as an audit committee financial expert, would be taken into account.
Procedures for the Nomination of Directors by Stockholders
.
The Board of Directors has adopted procedures for the
submission of director nominees by stockholders. If a determination is made that an additional candidate is needed for the Board, the Board of Directors will consider candidates submitted by the Companys stockholders. Stockholders can submit
qualified names of candidates for director by writing to our Corporate Secretary, at 40 Main Street, Putnam, Connecticut 06260. The Corporate Secretary must receive a submission not less than five days prior to the date of the Annual Meeting. The
submission must include the following information:
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the name and address of the stockholder as they appear on the Companys books, and number of shares of the Companys common stock that are owned
beneficially by such stockholder (if the stockholder is not a holder of record, appropriate evidence of the stockholders ownership will be required);
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|
the name, age, address and contact information for the candidate, as well as a statement of the candidates occupation or employment; and
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a written consent that the candidate is willing to be considered and willing to serve as a director if nominated and elected.
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There have been no material changes to these procedures since they were previously disclosed in the proxy statement for the Companys 2006 annual
meeting of stockholders.
Submissions that are received and that meet the criteria outlined above are forwarded to the Chairman of
the Board for further review and consideration. A nomination submitted by a stockholder for presentation by the stockholder at an annual meeting of stockholders must comply with the procedural and informational requirements described in this Proxy
Statement under the heading Stockholder Proposals.
Stockholder Communications with the Board
.
A
stockholder of the Company who wishes to communicate with the Board or with any individual director may write to the Corporate Secretary of the Company, 40 Main Street, Putnam, Connecticut 06260, Attention: Board Administration. The letter should
indicate that the author is
7
a stockholder and if shares are not held of record, should include appropriate evidence of stock ownership. Depending on the subject matter, management will:
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forward the communication to the director or directors to whom it is addressed;
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|
attempt to handle the inquiry directly, for example where it is a request for information about the Company or a stock-related matter; or
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|
not forward the communication if it is primarily commercial in nature, relates to an improper or irrelevant topic, or is unduly hostile, threatening, illegal or
otherwise inappropriate.
|
At each Board meeting, management will present a summary of all communications received since
the last meeting that were not forwarded and make those communications available to the directors.
The Audit Committee
.
The Audit Committee consists of directors Paul M. Kelly, Mary E. Patenaude and John P. Miller. Each member of the Audit Committee is considered independent as defined in the NASDAQ corporate governance listing standards and under SEC
Rule 10A-3. The Board of Directors has determined that director Paul M. Kelly qualifies as an audit committee financial expert as that term is defined by the rules and regulations of the SEC. The duties and responsibilities of the Audit
Committee include, among other things:
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retaining, overseeing and evaluating an independent registered public accounting firm to audit the Companys annual financial statements;
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|
in consultation with the independent auditors and the internal auditor, reviewing the integrity of the Companys financial reporting processes, both internal
and external;
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approving the scope of the audit in advance;
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reviewing the financial statements and the audit report with management and the independent auditors;
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|
considering whether the provision by the external auditors of services not related to the annual audit and quarterly reviews is consistent with maintaining the
auditors independence;
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reviewing earnings and financial releases and quarterly reports filed with the SEC;
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consulting with the internal audit staff and reviewing managements administration of the system of internal accounting controls;
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approving all engagements for audit and non-audit services by the independent auditors; and
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reviewing the adequacy of the Audit Committee charter.
|
The Audit Committee met five times during the fiscal year ended June 30, 2007. The Audit Committee reports to the Board on its activities and findings. The Board of Directors has adopted a written charter for the
Audit Committee, which was appended to the 2005 Annual Meeting Proxy Statement as Appendix A and which is available at the Companys website at www.putnamsavings.com.
Audit Committee Report
The following Audit Committee Report is provided in accordance with the
rules and regulations of the SEC. Pursuant to such rules and regulations, this report shall not be deemed soliciting material, filed with the SEC, subject to Regulation 14A or 14C of the SEC or subject to the liabilities of
Section 18 of the Securities and Exchange Act of 1934, as amended.
The Audit Committee has prepared the following report for
inclusion in this Proxy Statement:
As part of its ongoing activities, the Audit Committee has:
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Reviewed and discussed with management the Companys audited consolidated financial statements for the fiscal year ended June 30, 2007;
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Discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, Communications with Audit Committees,
as amended; and
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8
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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. In addition, the Audit Committee approved the appointment of Whittlesey & Hadley, P.C. as the Companys independent auditors for the fiscal year
ending June 30, 2008, subject to the ratification of the appointment by the stockholders.
|
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 Companys Annual Report on Form 10-KSB for the fiscal year ended June 30, 2007.
This report shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into
any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such Acts.
This report has been provided by the Audit Committee:
Paul M. Kelly
Mary E. Patenaude
John P. Miller
Code of Ethics
The Company has adopted a Code of Ethics that is applicable to the Companys officers, directors and employees, including its
principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The Code of Ethics is available on the Companys website at
www.putnamsavings.com
. Amendments
to and waivers from the Code of Ethics will also be disclosed on the Companys website.
Executive Compensation
The following table sets forth for the year ended June 30, 2007 certain information as to the total remuneration paid by us to Mr. Borner, who
serves as Chairman and Chief Executive Officer, and the only other highly compensated executive officer of the Company other than Mr. Borner (Named Executive Officers).
SUMMARY COMPENSATION TABLE
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Name and principal position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
awards
($)
(1)
|
|
Option
awards
($)
(1)
|
|
Non-equity
incentive plan
compensation
($)
(3)
|
|
Nonqualified
deferred
compensation
earnings
($)
|
|
All other
compensation
($)
(2)
|
|
Total
($)
|
Thomas A. Borner,
Chairman and Chief Executive Officer
|
|
2007
|
|
163,942
|
|
0
|
|
72,124
|
|
24,454
|
|
30,000
|
|
8,769
|
|
29,197
|
|
328,486
|
|
|
|
|
|
|
|
|
|
|
Robert J. Halloran, Jr.,
President and Chief Financial Officer
|
|
2007
|
|
135,500
|
|
0
|
|
20,195
|
|
13,585
|
|
25,000
|
|
0
|
|
19,089
|
|
213,369
|
(1)
|
Reflects the amount expensed in accordance with Statement of Financial Accounting Standards No. 123(R) during fiscal 2007 with respect to awards of restricted stock and stock
options granted to each of the Named Executive Officers. For a discussion of the assumptions used to establish the valuation of the restricted stock awards and stock options, reference is made to Note 10Stock-Based Compensation
included in the Audited Financial Statements filed as part of our Annual Report on Form 10-KSB for the Year Ended June 30, 2007.
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9
(2)
|
The compensation represented by the amounts for 2007 set forth in the All Other Compensation column for the Named Executive Officers is detailed in the following table.
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
401(k) plan
contributions
|
|
ESOP
contributions
|
|
Life
insurance
premiums
|
|
Cash
dividends
on unvested
restricted
stock
|
|
Profit
sharing
contributions
|
|
Total all
other
compensation
|
Thomas A. Borner
|
|
$
|
2,188
|
|
$
|
5,618
|
|
$
|
918
|
|
$
|
7,348
|
|
$
|
13,125
|
|
$
|
29,197
|
Robert J. Halloran, Jr.
|
|
$
|
1,180
|
|
$
|
4,698
|
|
$
|
918
|
|
$
|
2,058
|
|
$
|
10,235
|
|
$
|
19,089
|
(3)
|
Amounts included in the Non-equity incentive plan compensation column are based on the Companys incentive plan, which is discussed below under
Incentive Plan.
|
Benefit Plans
Insurance Plan
.
Putnam Savings Bank provides its full-time officers and employees with health and life insurance through Anthem Blue Cross & Blue Shield, Fort Dearborn Life Insurance Co.,
and GE Group Life Assurance Co.
Deferred Compensation Retirement Plan.
Putnam Savings Bank maintains a deferred compensation
retirement plan for the benefit of directors designated by the board to participate in the plan. The plan was frozen as of July 1, 2004, and no further contributions have been made to the plan since that date. Prior to July 1, 2004, a
participant was allowed to defer a portion of his annual compensation in the form of a percentage or dollar amount. The election, once made for a plan year, was irrevocable for that plan year. Deferrals under the plan are credited to an account for
the participant. In its discretion, Putnam Savings Bank was entitled to make a contribution to the account of any participant for any plan year. As of each valuation date, the participants accounts have been credited with an investment return
equal to the New York prime rate of interest, compounded monthly.
Participants are fully vested in their accounts at all times. The
participants account will be distributed to the participant (or the participants beneficiary in the event of death) in periodic installments (at least annually) as elected by the participant or the participants beneficiary. In the
event the annual installment exceeds $10,000, the maximum distribution period will be ten years. In the event the participants account is less than $10,000, distribution will be made in a lump sum. Distribution will be made within 60 days of a
participants normal or late retirement. In the event of termination of service due to disability, distribution will be made within 60 days following the close of the plan year in which termination of service occurs. In the event a participant
terminates service for any reason other than normal retirement, disability or death, distribution will commence within the later of 60 days following the close of the plan year in which the participant terminates service or 60 days after the
participants election to commence payment is delivered to the plan administrator. In the event of a participants death prior to termination of service, the participants account will be distributed to his or her beneficiary. If the
participant dies after termination of service but prior to the complete distribution of his account balance, the undistributed balance will be distributed to the participants beneficiary in annual installments over three years unless the
beneficiary elects otherwise.
In 2004, the deferred compensation retirement plan was amended to permit the directors to elect to invest
their existing account balance in common stock of the Company. A rabbi trust was established and holds only the shares of Company common stock acquired by the plan.
Incentive Plan.
Putnam Savings Bank maintains an incentive compensation plan for the benefit of its employees, including the Named Executive Officers. The operation of the plan is predicated on attaining
and exceeding pre-defined management performance goals. The Board of Directors will formulate a rate of distribution for awards, based upon Putnam Savings Banks performance, measured by the banks return on
10
equity and efficiency ratio. To be eligible for an award, a participant must be employed by April 1 of the plan year and must remain employed through
the date of disbursement. Under the plan, incentive bonuses of up to 25% of salary may be paid to Putnam Savings Banks Chief Executive Officer and President, up to 20% to other senior officers, and up to 10% to 15% to other officers and
employees. For the year ended June 30, 2007, the Named Executive Officers received bonuses of approximately 18.4% of their respective base salaries. While the specific performance goals were not attained in fiscal year 2007, the Board of
Directors, in exercising its discretion and as permitted under the plan, granted bonuses to Putnam Savings Banks employees, including the Named Executive Officers in recognition of the difficult operating environment for financial institutions
and the non-recurring expense associated with the formation of a state chartered subsidiary formed to reduce future state income taxes.
Outstanding Equity Awards at Year End.
The following table sets forth information with respect to outstanding equity awards as of June 30, 2007 for the Named Executive Officers.
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|
|
|
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OUTSTANDING EQUITY AWARDS AT JUNE 30, 2007
(1)
|
|
|
Option awards
|
|
Stock award
|
Name
|
|
Number of
securities
underlying
unexercised
options (#)
exercisable
|
|
Number of
securities
underlying
unexercised
options (#)
unexercisable
|
|
Equity
incentive
plan
awards:
number of
securities
underlying
unexercised
unearned
options
(#)
|
|
Option
exercise
price ($)
|
|
Option
expiration
date
|
|
Number of
shares or
units of
stock
that have
not vested
(#)
|
|
Market
value of
shares or
units of
stock that
have
not vested
($)
|
|
Equity
incentive
plan
awards:
number of
unearned
shares,
units or
other
rights that
have
not
vested (#)
|
|
Equity
incentive
plan
awards:
market or
payout
value
of
unearned
shares,
units
or other
rights
that have
not vested
($)
|
Thomas A. Borner
|
|
12,246
|
|
48,992
|
|
|
|
10.60
|
|
11/07/15
|
|
27,216
|
|
287,945
|
|
|
|
|
Robert J. Halloran, Jr.
|
|
6,805
|
|
27,216
|
|
|
|
10.60
|
|
11/07/15
|
|
7,620
|
|
80,620
|
|
|
|
|
(1)
|
All equity awards noted in this table were granted pursuant to the PSB Holdings, Inc. 2005 Stock-based Incentive Plan, which was approved by stockholders on October 21, 2005,
and represent all awards held at June 30, 2007 by the Named Executive Officers. On November 7, 2005, the Named Executive Officers were granted shares of restricted stock and stock options. Shares of restricted stock vest at a rate of
20% per year commencing on November 7, 2006. Stock options vest at a rate of 20% per year commencing on November 7, 2006, have an exercise price of $10.60, the closing price on the date of grant, and expire ten years from the
date of grant.
|
Stock Benefit Plans
Employee Stock Ownership Plan and Trust.
The Board of Directors of Putnam Savings Bank has adopted an employee stock ownership plan. Employees who are at least 21 years old with at least one year of
employment with Putnam Savings Bank are eligible to participate. The employee stock ownership plan trust has borrowed funds from the Company and used those funds to purchase 257,062 shares of Company common stock. Collateral for the loan is the
common stock purchased by the employee stock ownership plan. The loan is being repaid principally from Putnam Savings Bank discretionary contributions to the employee stock ownership plan over a period of up to 20 years. The loan documents provide
that the loan may be repaid over a shorter period, without penalty for prepayments. The interest rate for the loan is a floating rate equal to the prime rate. Shares purchased by the employee stock ownership plan are held in a suspense account for
allocation among participants as the loan is repaid.
Contributions to the employee stock ownership plan and shares released from the
suspense account in an amount proportional to the repayment of the employee stock ownership plan loan will be allocated among employee stock ownership plan participants on the basis of compensation in the year of allocation. Benefits under the plan
vest
11
at the rate of 20% per year, starting upon completion of three years of credited service, and will be fully vested upon completion of seven years of
credited service, with credit given to participants for years of credited service with Putnam Savings Banks mutual predecessor prior to the adoption of the plan. A participants interest in his account under the plan fully vests in the
event of termination of service due to a participants early or normal retirement, death, disability, or upon a change in control (as defined in the plan). Vested benefits are payable in the form of common stock and/or cash. Putnam Savings
Banks contributions to the employee stock ownership plan are discretionary, subject to the loan terms and tax law limits. Therefore, benefits payable under the employee stock ownership plan cannot be estimated. Pursuant to SOP 93-6, the
Company records compensation expense each year in an amount equal to the fair market value of the shares released from the suspense account. In the event of a change in control, the employee stock ownership plan will terminate.
Stock-Based Incentive Plan.
The Company has adopted the PSB Holdings, Inc. 2005 Stock-Based Incentive Plan (the Incentive
Plan), to provide officers, employees and directors of the Company or the Bank with additional incentives to share in the growth and performance of the Company. The Incentive Plan was approved by stockholders on October 21, 2005.
The Incentive Plan authorizes the issuance of up to 476,298 shares of Company common stock pursuant to grants of incentive and
non-statutory stock options, stock appreciation rights, reload options, and restricted stock awards, provided that no more than 136,085 shares may be issued as restricted stock awards, and no more than 340,213 shares may be issued pursuant to the
exercise of stock options.
Employees and outside directors of the Company or its subsidiaries are eligible to receive awards under the
Incentive Plan.
The Incentive Plan provides for awards in the form of stock options, reload options (Reload Options), and
restricted stock awards. Stock options granted under the Incentive Plan may be either Incentive Stock Options as defined under Section 422 of the Code or stock options not intended to qualify as such (non-statutory stock
options). The Reload Options entitle the option holder, who has delivered shares that he or she owns as payment of the exercise price for option stock, to a new option to acquire additional shares equal in amount to the shares he or she has
traded in. Reload Options may also be granted to replace option shares retained by the employer for payment of the option holders withholding tax. The option price at which additional shares of stock can be purchased by the option holder
through the exercise of a Reload Option is equal to the market value of the previously owned stock at the time it was surrendered. The option period during which the Reload Option may be exercised expires at the same time as that of the original
option that the holder has exercised.
Pursuant to the Incentive Plan, on November 7, 2005, options to purchase 23,815 shares were
granted to each non-employee director of the Company, except director Richard A. Loomis, who was granted options to purchase 10,206 shares. All such options were granted with an exercise price of $10.60 per share, the fair market value of the
underlying shares on the date of the award. Awards vest in equal installments at a rate of 20% per year commencing on November 7, 2006. Pursuant to the Incentive Plan, on May 25, 2007, options to purchase 3,000 shares were granted to
director John P. Miller and Charles W. Bentley, Jr. All such options were granted with an exercise price of $10.70 per share, the fair market value of the underlying shares on the date of the award. Awards vest in equal installments at a rate of
20% per year commencing on May 25, 2008. Awards will be 100% vested upon termination of employment due to death or disability, or following a change of control.
Pursuant to the Incentive Plan, on November 7, 2005, 9,526 shares of restricted stock were awarded to each non-employee director of the Company, except director Loomis, who was granted 4,083 shares. The market
value per share of the common stock was $10.60 on the date of the grant, and as of such date the aggregate value of the 9,526 shares awarded to each outside director was $100,976, and the aggregate value of the shares awarded to director Loomis was
$43,280. Awards vest in equal installments at a rate of 20% per year commencing on November 7, 2006. Pursuant to the Incentive Plan, on May 25, 2007, 1,000 shares of restricted stock were awarded to directors John P. Miller and
Charles W. Bentley, Jr. The market value per share of the common stock
12
was $10.70 on the date of the grant, and as of such date the aggregate value of the 1,000 shares awarded to each outside director was $10,700. Awards vest in
equal installments at a rate of 20% per year commencing on May 25, 2008. Awards will be 100% vested upon termination of employment due to death or disability, or following a change of control.
Set forth below is information as of June 30, 2007 regarding equity compensation plans. Other than the ESOP, the Company does not have any equity
compensation plans that were not approved by its stockholders.
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
Number of Securities to be
Issued upon Exercise of
Outstanding Options and
Rights
|
|
|
Weighted Average
Exercise Price
|
|
|
Number of Securities Remaining
Available for Issuance under the
Plans
|
|
Equity compensation plans approved by stockholders
|
|
421,930
|
(1)
|
|
$
|
10.62
|
(2)
|
|
54,368
|
(3)
|
Equity compensation plans not approved by stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
421,930
|
(1)
|
|
$
|
10.62
|
(2)
|
|
54,368
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes 122,368 shares of restricted stock and 299,562 options to purchase shares of common stock awarded under the Incentive Plan.
|
(2)
|
Relates to 299,562 outstanding stock options.
|
(3)
|
Includes 13,717 shares of restricted stock available for future issuance and 40,651 options to purchase shares of common stock under the Incentive Plan.
|
Directors Compensation
The following table
sets forth for the year ended June 30, 2007 certain information as to the total remuneration paid to directors other than Mr. Borner and Mr. Halloran.
DIRECTOR COMPENSATION TABLE FOR THE YEAR ENDED JUNE 30, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Fees earned
or paid in
cash ($)
|
|
Stock
awards
($)
(1)
|
|
Option
awards
($)
(1)
|
|
Non-equity
incentive plan
compensation
($)
|
|
Nonqualified
deferred
compensation
earnings ($)
|
|
All other
compensation
($)
|
|
Total ($)
|
Charles W. Bentley, Jr.
|
|
14,450
|
|
219
|
|
95
|
|
0
|
|
0
|
|
0
|
|
14,764
|
Paul M. Kelly
|
|
18,350
|
|
20,195
|
|
9,510
|
|
0
|
|
57
|
|
0
|
|
48,112
|
Charles H. Puffer
|
|
17,000
|
|
20,195
|
|
9,510
|
|
0
|
|
2,262
|
|
0
|
|
48,967
|
Richard A. Loomis
|
|
20,200
|
|
8,656
|
|
4,076
|
|
0
|
|
297
|
|
0
|
|
33,229
|
John P. Miller
|
|
17,600
|
|
219
|
|
95
|
|
0
|
|
0
|
|
0
|
|
17,914
|
Mary E. Patenaude
|
|
18,900
|
|
20,195
|
|
9,510
|
|
0
|
|
27
|
|
0
|
|
48,632
|
Maurice Beaulac
|
|
16,250
|
|
45,204
|
|
21,305
|
|
0
|
|
0
|
|
0
|
|
82,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals:
|
|
122,750
|
|
114,883
|
|
54,101
|
|
0
|
|
2,643
|
|
0
|
|
294,377
|
(1)
|
Reflects the amount expensed in accordance with Statement of Financial Accounting Standards No. 123(R) during fiscal 2007 with respect to awards of restricted stock and stock
options granted to each Director. For a discussion of the assumptions used to establish the valuation of the restricted stock awards and stock options, reference is made to Note 10Stock-Based Compensation included in the Audited
Financial Statements filed as part of our Annual Report on Form 10-KSB for the Year Ended June 30, 2007.
|
Directors
Compensation
The Company currently pays no fees for service on the Board of Directors or Board committees. Putnam Savings Bank pays
each non-employee director an annual retainer of $8,000 and $300 for each board meeting
13
that he/she attends. All non-employee Board committee members receive a fee of $150 for each committee meeting attended except that committee chairpersons
receive a fee of $200 for each committee meeting attended. Putnam Savings Bank paid fees totaling $122,750 to directors for the fiscal year ended June 30, 2007.
Transactions with Certain Related Persons
All transactions between the Company and its executive
officers, directors, holders of 10% or more of the shares of its common stock and affiliates thereof, are on terms no less favorable to the Company than could have been obtained by it in arms-length negotiations with unaffiliated persons. Such
transactions must be approved by a majority of the independent directors of the Company not having any interest in the transaction. In the ordinary course of business, Putnam Savings Bank makes loans available to its directors, officers and
employees. These loans are made in the ordinary course of business on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable loans with persons not related to Putnam Savings Bank.
Management believes that these loans neither involve more than the normal risk of collectibility nor present other unfavorable features.
Section 402 of the Sarbanes-Oxley Act of 2002 generally prohibits an issuer from: (1) extending or maintaining credit; (2) arranging for the extension of credit; or (3) 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. Sarbanes-Oxley 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 Putnam Savings Banks directors and officers are made in conformity with the Federal Reserve Act and applicable regulations.
In accordance with the listing standards of the NASDAQ Stock Market, any transactions that would be required to be reported under this section of this
Proxy Statement must be approved by our audit committee or another independent body of the board of directors. In addition, any transaction with a director is reviewed by and subject to approval of the members of the board of directors who are not
directly involved in the proposed transaction to confirm that the transaction is on terms that are no less favorable as those that would be available to us from an unrelated party through an arms-length transaction.
PROPOSAL 2RATIFICATION OF
APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors of the Company has approved the engagement of Whittlesey & Hadley, P.C. to be the Companys
independent registered public accounting firm for the 2008 fiscal year, subject to the ratification of the engagement by the Companys stockholders. Stockholder ratification of the selection of Whittlesey & Hadley, P.C. is required by
the Companys Bylaws. At the Annual Meeting, stockholders will consider and vote on the ratification of the engagement of Whittlesey & Hadley, P.C. for the Companys fiscal year ending June 30, 2008. A representative of
Whittlesey & Hadley, P.C. is expected to attend the Meeting to respond to appropriate questions and to make a statement, if deemed appropriate.
Audit Fees.
During the past two fiscal years, the fees for professional services rendered by Whittlesey & Hadley, P.C. (the Independent Auditor) for the audit of the Companys
annual financial statements and for the review of the consolidated financial statements included in the Companys quarterly reports on Form 10-QSB were $103,000 for 2007 and $74,600 for 2006.
Audit-Related Fees.
During the past two fiscal years, there were no aggregate fees for professional services by the Independent Auditor
that were reasonably related to the performance of the audit.
Tax Fees.
During the past two fiscal years, the fees billed
for professional services by the Independent Auditor for tax services such as tax advice, tax planning, tax compliance and the review of tax returns were $9,000 for 2007 and $8,000 for 2006. All tax fees by the Independent Auditor during 2007 were
pre-approved by the Audit Committee.
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All Other Fees.
There were no aggregate fees billed to the Company by the Independent
Auditor that are not described above during the past two fiscal years.
The Audit Committee considered whether the provision of non-audit
services was compatible with maintaining the independence of its independent registered public accounting firm. The Audit Committee concluded that performing such services in fiscal 2007 did not affect the independent registered public accounting
firms independence in performing its function as auditors of the Companys financial statements.
Policy on Audit Committee Pre-Approval of
Audit and Non-Audit Services of Independent Auditor
The Audit Committees policy is to pre-approve all audit and non-audit
services provided by the Companys independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year and any
pre-approval is detailed as to particular service or category of services and is generally subject to a specific budget. The Audit Committee has delegated pre-approval authority to its Chairman when expedition of services is necessary. The
independent registered public accounting firm and management are required to periodically report to the full Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this
pre-approval, and the fees for the services performed to date.
In order to ratify the selection of Whittlesey & Hadley, P.C. as
the independent registered public accounting firm for the 2008 fiscal year, the proposal must receive at least a majority of the votes cast FOR or AGAINST, either in person or by proxy, in favor of such ratification.
The
Board of Directors recommends a vote FOR the ratification of Whittlesey & Hadley, P. C., as the Companys independent registered public accounting firm for the 2008 fiscal year.
STOCKHOLDER PROPOSALS
In order to be
eligible for inclusion in the proxy materials for next years Annual Meeting of Stockholders, any stockholder proposal to take action at such meeting must be received at the Companys executive office, 40 Main Street, Putnam, Connecticut
06260, no later than June 1, 2008. Any such proposals shall be subject to the requirements of the proxy rules adopted under the Exchange Act.
OTHER MATTERS
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.
ADVANCE NOTICE OF BUSINESS TO BE
BROUGHT BEFORE AN ANNUAL MEETING
The Bylaws of the Company provide an advance notice procedure for certain business or nominations to the Board of Directors to be brought before an annual meeting. In order for a stockholder to properly bring business
before an annual meeting, or to propose a nominee to the Board, the stockholder must give written notice to the Secretary of the Company not less than five days prior to the date of the annual meeting. No other proposal shall be acted upon at the
annual meeting. A stockholder may make any other proposal at the annual meeting and the same 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 adjourned, special or annual meeting taking place 30 days or more thereafter.
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The date on which the next Annual Meeting of Stockholders is expected to be held is November 7,
2008. Accordingly, advance written notice of business or nominations to the Board of Directors to be brought before the 2008 Annual Meeting of Stockholders must be made in writing and delivered to the Secretary of the Company no later than
November 2, 2008.
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.
The Companys 2007 Annual Report to Stockholders has been mailed to all stockholders of record as of the Record Date. Any stockholder
who has not received a copy of such Annual Report may obtain a copy by writing the Company. Such Annual Report is not to be treated as a part of the proxy solicitation material nor as having been incorporated herein by reference.
A COPY OF THE COMPANYS ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED JUNE 30, 2007, WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS
OF THE RECORD DATE UPON WRITTEN OR TELEPHONIC REQUEST TO ROBERT J. HALLORAN, JR., CORPORATE SECRETARY, PSB HOLDINGS, INC., 40 MAIN STREET, PUTNAM, CONNECTICUT 06260, OR CALL AT (860) 928-6501.
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BY ORDER OF THE BOARD OF DIRECTORS
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Robert J. Halloran, Jr.
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Corporate Secretary
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Putnam, Connecticut
October 1, 2007
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REVOCABLE PROXY
PSB HOLDINGS, INC.
ANNUAL MEETING OF STOCKHOLDERS
November 2, 2007
The undersigned
hereby appoints the official proxy committee consisting of the Board of Directors with full powers of substitution to act as attorneys and proxies for the undersigned to vote all shares of common stock of the Company that the undersigned is entitled
to vote at the Annual Meeting of Stockholders (Annual Meeting) to be held at the Community Room of Quinebaug Valley Community College, located at 742 Upper Maple Street, Danielson, Connecticut on November 2, 2007, at 11:00 a.m.,
Connecticut time. The official proxy committee is authorized to cast all votes to which the undersigned is entitled as follows:
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FOR
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VOTE
WITHHELD
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(except as
marked to the
contrary
below)
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1.
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The election as directors of all nominees listed below, each to serve for the term specified after his name:
Charles W. Bentley, Jr. (three-year term)
Charles H. Puffer (three-year term)
Paul M. Kelly (three-year term)
Jitendra K. Sinha
(one-year term)
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INSTRUCTION: To withhold your vote for one or more
nominees, write the name of the
nominee(s) on the line(s)
below.
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FOR
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AGAINST
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ABSTAIN
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2.
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The ratification of Whittlesey & Hadley, P.C. as the Companys independent registered public accounting firm for the fiscal year ending June 30, 2008.
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The Board of Directors recommends a vote FOR Proposal 1 and Proposal 2.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2. IF ANY OTHER BUSINESS IS
PRESENTED AT SUCH ANNUAL MEETING, THIS PROXY WILL BE VOTED AS DIRECTED BY A MAJORITY OF THE BOARD OF DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING.
THIS PROXY IS SOLICITED BY THE BOARD OF
DIRECTORS.
Should the undersigned 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 stockholders 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 proxy prior to a vote being taken on a particular proposal at the Annual Meeting.
The undersigned acknowledges receipt from the Company prior to the execution of this proxy of notice of the Annual
Meeting, a Proxy Statement dated October 1, 2007, and audited financial statements.
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Dated:
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Check Box if You Plan
to Attend Annual Meeting
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PRINT NAME OF STOCKHOLDER
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PRINT NAME OF STOCKHOLDER
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SIGNATURE OF STOCKHOLDER
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SIGNATURE OF STOCKHOLDER
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Please sign exactly as your name appears on this card. When signing as attorney, executor, administrator, trustee
or guardian, please give your full title.
Please complete and date this proxy and return it promptly
in the enclosed postage-prepaid
envelope.
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