Ames National Corp DEF 14A 4-25-2007
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A 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 o
Check
the
appropriate box:
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Preliminary
Proxy Statement
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o
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Confidential,
For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
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x
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Definitive
Proxy Statement
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o
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Definitive
Additional Materials
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o
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Soliciting
Material under Rule14a-12
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AMES
NATIONAL CORPORATION
(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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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(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 (Set forth the amount on which the filing fee is calculated and state
how it was determined):
_______________________________
(4) Proposed
maximum aggregate value of transaction:
_______________________________
(5) Total
fee
paid:
_______________________________
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Fee
paid previously with preliminary
materials.
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o
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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) Amount
Previously
Paid:
_______________________________
(2) Form,
Schedule or
Registration Statement No.:
_______________________________
(3) Filing
Party:
_______________________________
(4) Date
Filed:
_______________________________
March
20,
2007
Dear
Shareholder:
You
are
invited to attend the 2007 Annual Meeting of Shareholders of Ames National
Corporation to be held on Wednesday, April 25, 2007 at Reiman Gardens, 1407
Elwood Drive, Ames, Iowa. Registration begins at 4:00 p.m. with the Annual
Meeting to commence at 4:30 p.m. Enclosed are the Notice of Annual Meeting
of
Shareholders, Proxy Statement, Proxy Card and 2006 Annual Report to
Shareholders.
The
Board
of the Company currently consists of nine (9) directors, three (3) of whose
terms of service will expire at the Meeting. The Board is
recommending to expand its size from nine (9) to twelve (12) members
effective as of the date of the Meeting. The change in the number of
directors will allow for representation from two affiliate banks which
are not presently represented on the Board and the addition of a Company
executive officer. As a result, six (6) directors will be elected at the
Meeting, with three (3) directors to be elected to replace those directors
whose
terms of service are scheduled to expire at the Meeting and three (3) directors
to be elected to fill the newly-created positions on the Board. Management
will
also report on the operations and activities of the Company with an opportunity
for shareholders to ask questions.
Your
vote
is important regardless of the number of shares you own. Whether or not you
plan
to attend the Annual Meeting, the Board of Directors encourages you to mark,
sign, date and return your Proxy Card as soon as possible in the enclosed
postage-paid envelope. Returning the Proxy Card will not prevent you from voting
in person at the Annual Meeting, but will assure that your vote is counted
if
you are unable to attend.
On
behalf
of the Boards of Directors, officers and staff of Ames National Corporation,
Boone Bank & Trust Co., First National Bank, Randall-Story State Bank, State
Bank & Trust Co. and United Bank & Trust NA, we thank you for your
continued support and look forward to visiting with you at the Annual
Meeting.
Sincerely,
/s/
Daniel L. Krieger
Daniel
L.
Krieger
Chairman
and President
5th
& Burnett ·
PO Box 846 ·
Ames, IA 50010
Tel
515.232.6251 ·
Fax 515.663.3033
AMES
NATIONAL CORPORATION
405
Fifth Street
Ames,
Iowa 50010
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
April
25, 2007
NOTICE
IS
HEREBY GIVEN that the Annual Meeting of Shareholders of Ames National
Corporation, an Iowa corporation (the “Company”), will be held on Wednesday,
April 25, 2007, at 4:30 o’clock p.m., local time, at Reiman Gardens, 1407 Elwood
Drive, Ames, Iowa, and at any adjournment or postponement thereof (the
“Meeting”), for the following purposes:
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1.
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To
elect six members of the Board of
Directors.
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2.
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To
consider such other business as may properly be brought before the
Meeting.
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The
Board
of Directors has fixed the close of business on March 16, 2007 as the record
date for the determination of those shareholders entitled to notice of and
to
vote at the Meeting. Accordingly, only shareholders of record at the close
of
business on that date will be entitled to vote at the Meeting.
TO
INSURE YOUR REPRESENTATION AT THE MEETING, THE BOARD OF DIRECTORS REQUESTS
THAT
YOU MARK, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE.
YOUR PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED AND, IF YOU ARE
ABLE TO ATTEND THE MEETING AND WISH TO VOTE YOUR SHARES IN PERSON, YOU MAY
REVOKE YOUR PROXY AND DO SO.
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By
Order of the Board of Directors
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/s/
John P. Nelson
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John
P. Nelson
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March
20, 2007
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Vice
President and Secretary
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Ames,
Iowa
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AMES
NATIONAL CORPORATION
405
Fifth Street
Ames,
Iowa 50010
PROXY
STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
To
Be Held on April 25, 2007
This
Proxy Statement is furnished to the shareholders of Ames National Corporation,
an Iowa corporation, (the “Company”), in connection with the solicitation of
proxies by the Board of Directors of the Company (the “Board”) for use at the
Annual Meeting of Shareholders to be held on Wednesday, April 25, 2007, at
4:30
o’clock p.m., local time, at Reiman Gardens, 1407 Elwood Drive, Ames, Iowa, and
at any adjournment or postponement thereof (the “Meeting”). This Proxy Statement
and form of Proxy enclosed herewith are first being sent to the shareholders
of
the Company entitled thereto on or about March 20, 2007.
Only
shareholders of record at the close of business on March 16, 2007 are entitled
to notice of and to vote at the Meeting. There were 9,425,013 shares of the
Company’s common stock (the “Common Stock”) outstanding at the close of business
on that date, all of which will be entitled to vote at the Meeting. The
presence, in person or by proxy, of the holders of a majority of those
outstanding shares is necessary to constitute a quorum for the transaction
of
business at the Meeting. Holders of shares of Common Stock are entitled to
one
vote per share standing in their names on the record date on all matters to
properly come before the Meeting. Shareholders do not have cumulative voting
rights. If the holder of shares abstains from voting on any matter, or if shares
are held by a broker which has indicated that it does not have discretionary
authority to vote on a particular matter, those shares will be considered to
be
present for the purpose of determining whether a quorum is present, but will
not
be counted as votes cast with respect to any matter to come before the Meeting
and will not affect the outcome of any matter. The Board has appointed an
inspector of elections who will be responsible for tabulating the votes by
Proxy, counting the votes cast in person at the Meeting and announcing the
results of voting.
If
the
accompanying Proxy is properly signed and returned and is not revoked, the
shares represented thereby will be voted in accordance with the instructions
indicated thereon. If the manner of voting such shares is not indicated on
the
Proxy, the shares will be voted FOR
the
election of the nominees for directors named herein. Election of any nominee
for
director will require the affirmative vote of a plurality of those shares voting
at the Meeting in person or by proxy.
The
Company will bear the cost of solicitation of proxies. In addition to the use
of
the mails, proxies may be solicited by officers, directors and regular employees
of the Company, without extra compensation, by telephone, e-mail, facsimile
or
personal contact. It will greatly assist the Company in limiting expense in
connection with the Meeting if any shareholder who does not expect to attend
the
Meeting in person will return a signed Proxy promptly.
A
shareholder may revoke his or her Proxy at any time prior to the exercise
thereof by filing with the Secretary of the Company at the Company’s principal
executive office at P.O. Box 846, 405 Fifth Street, Ames, Iowa 50010, Attn:
Secretary, either a written revocation of the Proxy or a duly executed Proxy
bearing a later date. A shareholder may also revoke the Proxy by attending
the
Meeting and voting in person. Attendance at the Meeting without voting in person
will not serve as the revocation of a Proxy.
INFORMATION
CONCERNING NOMINEES
FOR
ELECTION AS DIRECTORS
The
Board
of the Company currently consists of nine (9) directors, three (3) of whose
terms of service will expire at the Meeting. The Board has now determined,
however, to expand its size from nine (9) to twelve (12) members effective
as of
the date of the Meeting. As a result, six (6) directors will be elected at
the
Meeting, with three (3) directors to be elected to replace those directors
whose
terms of service are scheduled to expire at the Meeting and three (3) directors
to be elected to fill the newly-created positions on the Board.
The
Board
is divided into three classes for the purpose of electing and defining the
terms
of service of the directors. Currently, each class consists of three (3)
directors. Directors are elected to serve three-year terms, with one-third
of
the directors being elected on an annual basis, except where it is necessary,
as
will be the case at the Meeting, to fix shorter terms for certain directors
to
preserve the classification as a result of the increase in the number of
directors constituting the Board. Consequently, those directors elected to
replace the directors whose terms of service are expiring at the Meeting will
each serve a three-year term, while the three directors elected to fill the
newly-created positions will serve a term of one year, two years and three
years, respectively, in order to preserve the classification of the Board.
Upon
conclusion of the election, each class will consist of four (4)
directors.
Each
Director elected at the Meeting shall serve until his or her successor is
elected and qualified, or until his or her earlier death, resignation or
removal. The Board has no reason to believe that any nominee named in this
Proxy
Statement will be unable to serve as a director, if elected. However, in case
any nominee should become unavailable for election, the Proxy will be voted
for
such substitute, if any, as the Board may designate.
Set
forth
below are the names of the six persons nominated by the Board for election
as
directors at the Meeting, along with certain other information concerning such
persons. Mr. Pohlman, Mr. Forth and Mr. Raymon, who are nominated to serve
a
one-year, two-year and three-year term, respectively, do not currently serve
as
directors of the Company. Mr. Krieger, Mr. Samuelson and Mr. Walter, who are
each nominated to serve a three-year term, are currently serving as directors
of
the Company and are standing for re-election to the Board.
Nominee
for One Year-Term
Thomas
H. Pohlman
Age
56
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Mr.
Pohlman was named Executive Vice President and Chief Operating Officer
of
the Company in 2006 and has been employed as President of First National
Bank since 2000. He has served on the board of directors of First
National
Bank since 2000.
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Nominee
for Two Year-Term
Steven
D. Forth
Age
56
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Mr.
Forth owns and operates a large row crop farm operation in western
Story
County, Iowa. He has served on the board of directors of Randall-Story
State Bank since 1999.
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Nominees
for Three Year-Terms
Daniel
L. Krieger
Age
70
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Mr.
Krieger has served as a director of the Company since 1978. He has
been
employed as President of the Company since 1997 and was named Chairman
in
2003. He served as President of First National Bank from 1984 through
1999
and continues to serve as a trust officer of the bank. He also serves
as
Chairman of the Board for First National Bank, Boone Bank & Trust Co.
and United Bank & Trust NA.
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Larry
A. Raymon
Age
63
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Mr.
Raymon is owner and Chief Executive Officer of Raymon Enterprises,
Inc.,
an air distribution equipment business located in Albion, Iowa. He
has
served on the board of directors of United Bank & Trust NA since
2002.
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Frederick
C. Samuelson
Age
63
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Mr.
Samuelson has served as a director of the Company since 2004. He
has been
employed since 1971 as President and owner of James Michael &
Associates, Inc., a general retail business located in Nevada, Iowa.
He
also holds management and ownership positions in several other retail
businesses with operations located in Iowa, Missouri and Wisconsin.
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Marvin
J. Walter
Age
66
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Mr.
Walter has served as a director of the Company since 1978. He is
the
President of Dayton Road Development Corporation, a real estate
development business located in Ames,
Iowa.
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The
Board recommends a vote FOR the election of each of the foregoing nominees
to
the Board.
INFORMATION
CONCERNING DIRECTORS
OTHER
THAN NOMINEES
Set
forth
below is certain information with respect to directors of the Company who will
continue to serve subsequent to the Meeting and who are not nominees for
election at the Meeting.
Directors
Whose Terms will Expire in 2008
Betty
A. Baudler Horras
Age
53
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Ms.
Baudler Horras has served as a director of the Company since 2000.
She is
the President of Baudler Enterprises, Inc., a sign business located
in
Ames, Iowa and the former owner and General Manager of radio stations
KASI
and KCCQ located in Ames, Iowa and KIKD located in Carroll,
Iowa.
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Douglas
C. Gustafson, DVM
Age
63
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Dr.
Gustafson has served as a director of the Company since 1999. He
is a
practicing veterinarian and partner in Boone Veterinary Hospital
located
in Boone, Iowa.
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Charles
D. Jons, MD
Age
65
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Dr.
Jons has served as a director of the Company since 1996. He retired
in
1999 after a 20 year medical practice with McFarland Clinic in Ames,
Iowa
and is currently a self-employed health care consultant.
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Directors
Whose Terms will Expire in 2009
Robert
L. Cramer
Age
66
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Mr.
Cramer has served as a director of the Company since 2003. He retired
in
March of 2006 after being employed as President of Fareway Stores,
Inc., a
privately owned company operating grocery stores in Iowa, Illinois
and
Nebraska.
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James
R. Larson II
Age
55
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Mr.
Larson has served as a director of the Company since 2000. He is
President
of Larson Development Corporation, a real estate development and
property
management company located in Ames, Iowa. Mr. Larson was elected
to the
Ames City Council in the fall of 2006. He retired in 2004 from ACI
Mechanical, Inc., a commercial and industrial mechanical contracting
and
engineering company for which he served as President.
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Warren
R. Madden
Age
67
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Mr.
Madden has served as a director of the Company since 2003. He is
employed
as Vice President of Business and Finance at Iowa State University.
Iowa
State University is a major land grant university located in Ames,
Iowa
with an enrollment of over 24,000
students.
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None
of
the nominees or directors serve as a director of another company whose
securities are registered under the Securities Exchange Act of 1934 or a company
registered under the Investment Company Act of 1940. There are no family
relationships among the Company’s directors, nominees for director and executive
officers.
INFORMATION
CONCERNING THE BOARD OF DIRECTORS
Director
Independence
The
Common Stock is listed and traded on the NASDAQ Capital Market. The corporate
governance rules of the NASDAQ Capital Market require that a majority of the
Board consist of directors who are "independent" of the Company. The Board
has
determined that each of the directors and nominees for director qualify as
"independent" under the NASDAQ standards for determining independence, with
the
exception of Mr. Krieger and Mr. Pohlman who do not qualify as independent
directors given their employment relationship with the Company.
Meetings
The
Board
holds regular quarterly meetings and held four such meetings during 2006. During
2006, each director of the Company attended at least 75% of all meetings of
the
Board and meetings of committees to which such director was
appointed.
Board
Committees
The
Board
has established an Audit Committee, a Compensation Committee and a Nominating
Committee as standing committees of the Board. Additional information concerning
each of the committees and the directors serving thereon follows.
Audit
Committee
The
Audit Committee is responsible for
review of the Company’s auditing, accounting, financial reporting and internal
control functions and for the appointment, compensation and oversight of the
Company’s independent accountants. In addition, the Audit Committee is
responsible for monitoring the quality of the Company’s accounting principles
and financial reporting as well as the independence of the Company’s independent
accountants. The Audit Committee is also required to preapprove any audit or
permissible non-audit services to be provided by the independent accountants
and
to review and approve any transaction constituting a “related party transaction”
under rules adopted by the Securities and Exchange Commission. The Board has
adopted a written charter for the Audit Committee, a copy of which may be
accessed on the Company’s website at www.amesnational.com. A report of
the Audit Committee appears in this Proxy Statement. During 2006, the Audit
Committee consisted of Mr. Walter, who acted as chairperson, Ms. Baudler Horras,
Mr. Cramer and Mr. Madden. The Audit Committee met on four occasions during
2006.
Compensation
Committee
The
Compensation Committee determines
and makes recommendations to the Board on all elements of compensation for
the
executive officers of the Company and certain executive officers of the
Company's subsidiary banks (the "Banks"). The Compensation Committee also
assists the Board in establishing fees to be paid to the directors of the
Company and in determining appropriate employee benefit programs to be provided
to eligible employees of the Company and the Banks. The Board has adopted a
written charter for the Compensation Committee, a copy of which can be accessed
on the Company’s website at www.amesnational.com. A report of the
Compensation Committee appears in this Proxy Statement. During 2006, the
Compensation Committee consisted of Mr. Larson, who acted as chairperson, Dr.
Gustafson and Dr. Jons. The Compensation Committee met on two occasions during
2006.
Nominating
Committee
The
Nominating Committee is responsible for evaluating and recommending to the
Board
the names of nominees for election as directors. The Nominating Committee also
reviews and recommends to the Board the desired characteristics of the
composition of the Board, including the number of directors, age, experience
and
other appropriate attributes. The Board has adopted a written charter for the
Nominating Committee, a copy of which may be accessed on the Company’s website
at www.amesnational.com. During 2006, the Nominating Committee consisted
of Dr. Gustafson, who acted as chairperson, Dr. Jons, Mr. Samuelson and Mr.
Walter. The Nominating Committee met once during 2006.
Nomination
of Directors
The
Nominating Committee evaluates and
recommends to the Board the names of nominees for election as directors. The
Nominating Committee will consider, as part of its nomination process, any
nominee submitted by a shareholder of the Company, provided such shareholder
has
complied with the procedure set forth in the Company’s bylaws (the “Bylaws”) for
the submission of nominees. In order to submit the name of a nominee, a
shareholder must provide written notice of such nominee, accompanied by other
information concerning the nominee as specified in Section 3.1(c) of the Bylaws,
to the Secretary of the Company no less than 120 days prior to the first
anniversary of the date of the proxy statement distributed by the Company in
connection with the prior year’s annual meeting of shareholders. A nomination
with respect to the election of directors at the annual meeting of shareholders
to be held in 2008 would need to be submitted no later than November 19, 2007.
A
copy of the relevant provisions of the Bylaws pertaining to nominations may
be
obtained by contacting the Secretary of the Company or by accessing the Bylaws
on the Company’s website at www.amesnational.com. A shareholder who has
complied with the procedure for submitting the name of a nominee may nominate
such individual at an annual meeting notwithstanding that such individual has
not been nominated for election by the Board.
On
an
annual basis, the Board compiles a list of candidates for submission to the
Nominating Committee for its evaluation. As noted above, the list of candidates
will include any person nominated by a shareholder in compliance with the
nomination procedures set forth in the Bylaws. The Nominating Committee may
also
identify and evaluate any other person that may come to the attention of the
Nominating Committee as a candidate for nomination. The Nominating Committee
evaluates each candidate utilizing the minimum qualifications specified in
the
Nominating Committee Charter and taking into account any other information
deemed by the Nominating Committee to be relevant to the evaluation process.
The
evaluation process for director and shareholder nominated-candidates is applied
on a uniform basis. The Nominating Committee may, to the extent it deems
appropriate, contact other directors not serving on the Nominating Committee,
directors and officers of the Banks and any shareholder nominating an
individual, to ensure the necessary information is obtained to properly evaluate
the desirability of each candidate. Upon completion of the evaluation process,
the Nominating Committee will make its recommendations to the Board based upon
the desired composition of the Board, review of minimum qualifications and
other
information deemed by the Nominating Committee to be relevant and the readily
ascertainable strengths and weaknesses of each candidate.
The
Nominating Committee Charter identifies the following minimum qualifications
under which a candidate will be evaluated: (i) the ability to understand
financial affairs and complexities of business organizations; (ii) business
experience and community involvement in the market areas in which the Banks
conduct their business; (iii) although not required, the prior experience of
a
candidate as a director of one of the Banks; (iv) reputation for high moral
and
ethical business standards that will add to the stature of the Board; and (v)
compliance with the requirements of the Company’s age limitation policies. The
age limitation policy provides that a newly-nominated director must be under
age
60 (unless the nominee also serves as an executive officer of the Company or
a
Bank or as a director of a Bank) and that a current director will be eligible
for re-election only if such director will not be more than 75 years of age
at
the end of the term for which the director would be re-elected.
With
respect to the nominees for election as directors at the Meeting, Mr. Krieger,
Mr. Samuelson and Mr. Walter currently serve as directors of the Company and
are
standing for re-election. Mr. Forth, Mr. Raymon and Mr. Pohlman, who do not
currently serve as directors of the Company, were recommended to the Nominating
Committee by Mr. Krieger.
Shareholder
Communications
The
Board has adopted a process whereby
a shareholder may direct written communications to the Board. A shareholder
desiring to communicate with the Board may send a written communication
addressed to the Board and directed, if by e-mail, to
[email protected] with Attention: “Board of Directors” in the subject
line or, if sent by regular mail, addressed to Ames National Corporation, P.O.
Box 846, 405 Fifth Street, Ames, Iowa 50010, Attention: Board of Directors.
Upon
receipt of a written communication from a shareholder addressed to the Board
in
a manner described above, the communication will be reviewed by the Chairman
of
the Company and the Chairman of the Audit Committee for purposes of determining
whether the communication raises an issue of appropriate concern to the Board.
Communications raising issues of appropriate concern will be forwarded to each
member of the Board for consideration by the Board as a whole. All written
communications directed to the Board and submitted in the manner prescribed
by
the process will, regardless of whether such communication is ultimately
submitted to the Board, receive a written response from the Chairman of the
Company.
Director
Attendance at Annual Meetings
The
Board
has adopted a policy providing that each member of the Board shall use his
or
her reasonable efforts to attend each annual meeting of shareholders of the
Company, giving appropriate consideration to the business and travel schedule
of
the director. Each person who was serving as a director of the Company at the
time of the annual meeting of shareholders in 2006 attended such meeting.
Director
Compensation for 2006
Compensation
paid to the directors of the Company is determined on an annual basis by the
Board upon recommendation of the Compensation Committee. Each year, Mr. Krieger,
in his capacity as President of the Company, develops recommendations to the
Compensation Committee with respect to fees to be paid to directors of the
Company for attendance at meetings of the Board and of committees of the Board
and fees to be paid to members of the boards of directors of the Banks for
board
and committee meetings. These recommendations are provided to the Compensation
Committee which, in turn, reviews and makes its recommendation to the Board
with
respect to director fees to be paid for the year.
The
following table provides information concerning all compensation paid to the
directors during 2006 for services as a member of the Board and, to the extent
applicable, for services as a member of the board of directors of one of the
Banks.
Name
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Fees
Earned or Paid in Cash(1)
($)
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All
Other Compensation(2)
($)
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Total
($)
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Betty
A. Baudler Horras
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$
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13,025
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None
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$
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13,025
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Robert
L. Cramer
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$
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11,585
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None
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$
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11,585
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Douglas
C. Gustafson, DVM
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$
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11,265
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None
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$
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11,265
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Charles
D. Jons, MD
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$
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14,120
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None
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$
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14,120
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Daniel
L. Krieger
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None
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None
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None
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James
R. Larson II
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$
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14,425
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None
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$
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14,425
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Warren
R. Madden
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$
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6,350
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None
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$
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6,350
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Frederick
C. Samuelson
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$
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11,310
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None
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$
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11,310
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Marvin
J. Walter
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$
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14,690
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None
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$
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14,690
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Notes:
(1)
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Consists
of cash payments of director fees determined as follows: (i) $1,000
for
each regular meeting of the Board of the Company attended by a director
during 2006; and (ii) $320 for members and $415 for the committee
chair
for each meeting of a committee of the Board attended by a director
during
2006. In addition, seven (7) directors also received cash payments
of
director fees for service as a member of the board of directors of
one of
the Banks determined as follows: (i) fees ranging from $415 to $645
for
Bank board meetings attended by a director during 2006; and (ii)
fees
ranging from $150 to $415 for meetings of Bank board committees attended
by a director during 2006.
|
(2)
|
No
other form of compensation was paid to any director during
2006.
|
SECURITY
OWNERSHIP OF MANAGEMENT AND
CERTAIN
BENEFICIAL OWNERS
Directors,
Nominees and Named Executive Officers
The
following table sets forth the shares of Common Stock beneficially owned as
of
February 28, 2007 by each director of the Company, by each nominee for director
of the Company and by each executive officer of the Company or the Banks named
in the Summary Compensation Table included herein (the “named executive
officers”) and by all directors and executive officers (including the named
executive officers) as a group.
Name
|
|
Shares
Beneficially Owned
(1)(2)
|
|
Percent
of Total Shares
Outstanding
|
|
|
|
|
|
|
|
Betty
A. Baudler Horras
|
|
|
19,340
|
|
|
*
|
|
Robert
L. Cramer(3)
|
|
|
15,675
|
|
|
*
|
|
Steven
D. Forth
|
|
|
780
|
|
|
*
|
|
Douglas
C. Gustafson, DVM (4)
|
|
|
43,265
|
|
|
*
|
|
Charles
D. Jons, MD (5)
|
|
|
22,310
|
|
|
*
|
|
Daniel
L. Krieger (6)
|
|
|
908,927
|
|
|
9.64
|
%
|
James
R. Larson II(7)
|
|
|
14,865
|
|
|
*
|
|
Warren
R. Madden(8)
|
|
|
2,160
|
|
|
*
|
|
John
P. Nelson
(9) (10)
|
|
|
2,552
|
|
|
*
|
|
Thomas
H. Pohlman(10))(11)
|
|
|
745,704
|
|
|
7.91
|
%
|
Jeffrey
K. Putzier (10)
(12)
|
|
|
8,474
|
|
|
*
|
|
Larry
A. Raymon(13)
|
|
|
3,820
|
|
|
*
|
|
Frederick
C. Samuelson(14)
|
|
|
13,030
|
|
|
*
|
|
Marvin
J. Walter (15)
|
|
|
28,091
|
|
|
*
|
|
Terrill
L. Wycoff (16)
|
|
|
130,197
|
|
|
1.38
|
%
|
|
|
|
|
|
|
|
|
Directors
and Executive Officers as a Group
(17)
|
|
|
1,390,918
|
|
|
14.76%
|
%
|
Notes:
*
|
Indicates
less than 1% ownership of outstanding
shares.
|
(1)
|
Shares
"beneficially owned" include shares owned by or for, among others,
the
spouse and/or minor children of the named individual and any other
relative who has the same home as such individual, as well as other
shares
with respect to which the named individual has sole investment or
voting
power or shares investment or voting power. Beneficial ownership
may be
disclaimed as to certain of the shares.
|
(2)
|
Except
as otherwise indicated in the following notes, each named individual
owns
his or her shares directly and has sole investment and voting power
with
respect to such shares.
|
(3)
|
Includes
2,580 shares held in an individual retirement account for the benefit
of
his spouse over which he has shared investment and voting
power.
|
(4)
|
Includes
7,500 shares held in his spouse’s name over which he has shared investment
and voting power.
|
(5)
|
Consists
of shares held in the name of Charles D. Jons and Carolyn L. Jons,
Trustees (and their successors) of the Charles and Carolyn Jons Trust
u/t/a dtd 7-8-97 over which he has shared investment and voting
power.
|
(6)
|
Includes
110,500 shares held in the name of the Daniel L. Krieger 2000 Revocable
Trust dated March 21, 2000, Daniel L. Krieger and Sharon J. Krieger
Trustees and 62,000 shares held in the name of the Sharon J. Krieger
2000
Revocable Trust dated March 21, 2000, Daniel L. Krieger and Sharon
J.
Krieger Trustees over which he has shared investment and voting power.
Also includes 30,935 shares held by the Ames National Corporation
401(k)
Plan (the “Company 401(k) Plan”) for the benefit of Mr. Krieger over which
he has sole investment power in his personal capacity and shares
over
which Mr. Krieger has shared investment and/or voting power in his
capacity as trust officer of First National Bank, which acts as trustee
of
the Company 401(k) Plan and for various trust clients, as
follows:
|
Shares
Held By:
|
|
Investment
Power
|
|
Voting
Power
|
|
Company
401(k) Plan
|
|
|
30,945
|
|
|
(sole)
|
|
|
146,601
|
|
|
(shared)
|
|
Various
First National Bank Trust Clients
|
|
|
167,559
|
|
|
(shared)
|
|
|
589,826
|
|
|
(shared)
|
|
Total
Shares
|
|
|
198,504
|
|
|
|
|
|
736,427
|
|
|
(shared)
|
|
Mr.
Krieger disclaims any pecuniary interst in shares reported in the preceding
table, with the exception of 30,945 shares held by the Company 401(k) Plan
for
his benefit over which he has sole investment power in his personal capacity
and
shared voting power in his capacity as trust officer.
(7)
|
Includes
2,400 shares held in the name of James R. & Teresa B. Larson Revocable
Trust dated November 28, 1990, James R. & Teresa B. Larson Trustees
over which he has shared investment and voting
power.
|
(8)
|
Includes
840 shares held in the name of the Warren R. Madden Revocable Trust
dated
December 10, 1996, Warren R. Madden and Beverly S. Madden, Trustees
and
600 shares held in the name of the Beverly S. Madden Revocable Trust
dated
December 10, 1996, Warren R. Madden and Beverly S. Madden, Trustees,
over
which he has shared investment and voting
power.
|
(9)
|
Includes
602 shares held by the Company 401(k) Plan for the benefit of Mr.
Nelson
over which Mr. Nelson has investment power but not voting
power.
|
(10)
|
Consists
of, or includes, shares held jointly with his spouse over which he
has
shared investment and voting power.
|
(11)
|
Includes
1,535 shares held by the Company 401(k) Plan for the benefit of Mr.
Pohlman over which Mr. Pohlman has sole investment power in his personal
capacity and shares over which Mr. Pohlman has shared investment
and/or
voting power in his capacity as trust officer of First National Bank,
which acts as trustee of the Company 401(k) Plan and for various
trust
clients, as follows:
|
Shares
Held By:
|
|
Investment
Power
|
|
Voting
Power
|
|
Ames
National Corporation 401(k) Plan
|
|
|
1,535
|
|
|
(sole)
|
|
|
146,601
|
|
|
(shared)
|
|
Various
First National Bank Trust Clients
|
|
|
167,559
|
|
|
(shared)
|
|
|
589,826
|
|
|
(shared)
|
|
Total
Shares
|
|
|
169,094
|
|
|
|
|
|
736,427
|
|
|
(shared)
|
|
Mr.
Pohlman disclaims any pecuniary interst in shares reported in the preceding
table, with the exception of 1,535 shares held by the Company 401(k) Plan for
his benefit over which he has sole investment power in his personal capacity
and
shared voting power in his capacity as trust officer. Beneficial ownership
of
shares over which Mr. Pohlman has shared investment and/or voting power in
his
capacity as a trust officer have also been reported above under the holdings
of
Mr. Krieger who also acts as a trust officer for First National Bank. In
addition, a total of 7,718 shares beneficially owned by Mr. Pohlman in his
personal capacity are subject to a pledge arrangement.
(12)
|
Includes
2,210 shares held by the Company 401(k) Plan for the benefit of Mr.
Putzier over which Mr. Putzier has investment power but not voting
power.
A total of 5,337 shares are beneficially owned by Mr. Putzier are
subject
to a pledge arrangement.
|
(13)
|
Consists
of 820 shares held jointly with his spouse over which he has shared
investment and voting power and 3,000 shares held by Raymon Enterprises,
Inc. over which he has shared investment and voting
power.
|
(14)
|
Includes
3,725 shares held in an individual retirement account for the benefit
of
his spouse over which he has shared investment and voting
power.
|
(15)
|
Consists
of 15,609 shares held in the name of the Marvin J. Walter Revocable
Trust
dated January 12. 2005, Marvin J. Walter and Janice G. Walter, Trustees;
240 shares held in the name of the Janice G. Walter Revocable Trust
dated
January 12, 2005, Marvin J. Walter and Janice G. Walter, Trustees
over
which he has shared investment and voting power; and 12,242 shares
held in
the name of the W&G 401(k) Plan for the benefit of Marvin J. Walter,
who serves as trustee and has sole investment and voting power over
those
shares.
|
(16)
|
Includes
36,754 shares held in his spouse’s name over which he has shared
investment and voting power and 22,445 shares held by the Company
401(k)
Plan for the benefit of Mr. Wycoff over which Mr. Wycoff has investment
power but not voting power.
|
(17)
|
Includes,
in addition to shares owned by the directors and named executive
officers,
a total of 37,266 shares owned by four other executive officers of
the
Company or the Banks for whom disclosure of individual share ownership
is
not required. An additional 130,889 shares owned by various trust
clients
of State Bank & Trust Co. are also included in this total, as one of
the executive officers exercises shared investment and voting power
in his
capacity as trust officer of State Bank & Trust Co. which serves as
trustee of the trusts.
|
Other
Beneficial Owners
The
following table sets forth certain information on each person who is known
to
the Company to be the beneficial owner as of February 28, 2006 of more than
five
percent of the Common Stock.
Name
and Address
|
|
Shares
Beneficially
Owned
|
|
Percent
of Total
Shares
Outstanding
|
|
|
|
|
|
|
|
Suzanne
Ammerman(1)
554
North Eighth Street
River
Falls, WI 54022-1526
|
|
|
503,115
|
|
|
5.34
|
%
|
|
|
|
|
|
|
|
|
George
B. Coover (2)
2533
Coral Brooke Drive
Sierra
Vista, AZ 85650
|
|
|
630,648
|
|
|
6.69
|
%
|
|
|
|
|
|
|
|
|
Charlotte
H. Stafford (3)
9701
Meyer Forest Drive, Apt. 12202
Houston,
TX 77096-4324
|
|
|
456,707
|
|
|
4.85
|
%
|
|
|
|
|
|
|
|
|
Robert
W. Stafford (4)
P.O.
Box 846
Ames,
Iowa 50010
|
|
|
933,636
|
|
|
9.91
|
%
|
Notes:
(1)
|
Consists
of 238,858 shares held in the name of Suzanne Ammerman in her individual
capacity, 58,103 shares held in her spouse’s name, 29,112 shares held in
the name of the Alan W. Ammerman Education Trust dated 12/19/98 of
which
Ms. Ammerman serves as co-trustee, 29,112 shares held in the name
of the
Kelsey K. Ammerman Education Trust dated 12/6/89 of which Ms. Ammerman
serves as co-trustee, 29,902 shares held in the name of the Kristin
M.
Ammerman Education Trust dated 12/3/92 of which Ms. Ammerman serves
as
co-trustee, 29,112 shares held in the name of the Mathew S. Ammerman
Education Trust dated 12/19/98 of which Ms. Ammerman serves as co-trustee,
29,112 shares held in the name of the Melanie B. Ammerman Education
Trust
dated 12/19/98 of which Ms. Ammerman serves as co-trustee, 29,902
shares
held in the name of Ms. Ammerman in her capacity as custodian for
Kimberly
Ann Ammerman under the Uniform Gifts to Minors Act and 29,902 shares
held
in the name of Ms. Ammerman in her capacity as custodian for Chiara
Lynn
Ammerman under the Uniform Gifts to Minors Act. Ms. Ammerman holds
shared
investment and voting power with respect to the shares held by her
spouse
and the above-referenced trusts.
|
(2)
|
Consists
of 474,648 shares held in the name of George B. Coover in his capacity
as
trustee of the Coover Family Trust - Trust A u/t/a 4/22/75 and 156,000
shares held in the name of Mr. Coover in his capacity as trustee
of the
Coover Family Trust - Trust B u/t/a 4/22/75. Mr. Coover is the
brother-in-law of Robert W. Stafford.
|
(3)
|
Consists
of 34,140 shares held in the name of Charlotte H. Stafford in her
individual capacity, 144,000 shares held in the name of the Richard
C.
Stafford Family Trust U/W of Richard C. Stafford, Robert W. Stafford
and
Charlotte H. Stafford as Co-Trustees and 278,567 shares held in the
name
of the Charlotte H. Stafford Trust U/W of Richard C. Stafford, Robert
W.
Stafford and Charlotte H. Stafford as Co-Trustees. Ms. Stafford holds
shared investment and voting power with respect to the shares owned
by the
two trusts. Ms. Stafford is the sister-in-law of Robert W. Stafford.
Beneficial ownership of the shares owned by the two trusts has also
been
reported under the holdings of Robert W. Stafford, although Mr. Stafford
disclaims any pecuniary interest in such
shares.
|
(4)
|
Includes
241,823 shares held in his spouse’s name, 144,000 shares held in the name
of the Richard C. Stafford Family Trust U/W of Richard C. Stafford,
Robert
W. Stafford and Charlotte H. Stafford, Co-Trustees and 278,567 shares
held
in the name of the Charlotte H. Stafford Trust U/W of Richard C.
Stafford,
Robert W. Stafford and Charlotte H. Stafford, Co-Trustees. Richard
C.
Stafford is Robert W. Stafford’s deceased brother and Robert W. Stafford
is the brother-in-law of Charlotte H. Stafford. Mr. Stafford has
shared
investment and voting power with respect to the foregoing shares,
but
disclaims any pecuniary interest in the shares held in the two
trusts.
|
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires the directors
and executive officers of the Company and the holders of more than ten percent
of the Common Stock to file with the Securities and Exchange Commission reports
regarding their ownership and changes in ownership of the Common Stock. The
Company believes that during 2006 its directors, executive officers and ten
percent shareholders complied with all Section 16(a) filing requirements. In
making the foregoing statements, the Company has relied upon an examination
of
the copies of Forms 3 and 4 provided to the Company and on the written
representations of its directors and executive officers.
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
The
following discussion describes the material elements of the compensation program
as endorsed by the Board and the process followed in determining the
compensation provided during 2006 to the executive officers identified in the
following Summary Compensation Table. For purposes of this discussion, the
executive officers consist of Daniel L. Krieger and John P. Nelson, who are
employed by the Company (each, a "Company Executive"), and Thomas H. Pohlman,
Terrill L. Wycoff and Jeffrey K. Putzier, each of whom are employed by one
of
the Banks (each, a "Bank Executive" and, together with the Company Executives,
the "Executive Officers"). Decisions regarding compensation of the Executive
Officers are made by the Board upon recommendation of the Compensation Committee
of the Board (the "Compensation Committee") and, in the case of the Bank
Executives, upon the additional recommendation of the board of directors of
the
Bank by which a Bank Executive is employed. The Company and the Banks all
endorse the same compensation program and follow the same process in setting
or
recommending the compensation of their respective Executive Officers.
Accordingly, the following description of the compensation program and process
as endorsed and followed by the Compensation Committee and the Board are equally
applicable to compensation decisions made both for the Company Executives and
the Bank Executives.
Objectives
of Compensation
Program
The
executive compensation program is administered under the terms of the Management
Incentive Compensation Plan (the "MIC Plan") which covers the Company's
executive management team and the executive management team in place at each
Bank. The MIC Plan has been designed to provide a fair and competitive
compensation package that will enable the Company to compete for and retain
talented executives who will enhance the Company's ability to continue its
history of steady growth and financial stability. As the business activities
of
the Company are conducted entirely within the State of Iowa, the Company
believes that the level of compensation paid to the Executive Officers must
be
competitive within the Iowa banking industry and, more particularly, within
an
identified peer group of Iowa banking institutions that are similar in size
and
located in communities of similar populations as the Banks. The MIC Plan also
seeks to encourage superior performance through incentive compensation
consisting of: (i) the deferral of payment of a designated portion of each
Executive Officer's salary until earned by performance ("deferred salary");
and
(ii) the opportunity to earn additional incentive compensation based on
performance ("performance awards"). Both deferred salary and performance awards
are dependent upon actual performance as compared to a pre-designated
performance target that is established for each Bank through use of an
industry-accepted profitability ratio. Bank Executives are eligible to earn
deferred salary and receive performance awards based on the performance of
the
Bank by which each of them is employed, while the Company Executives are
eligible to earn deferred salary and receive performance awards based on the
performance of all the Banks, with each Bank being viewed on an individual
basis
for purposes of determining its performance. This approach permits a Bank
Executive, whose Bank performs favorably compared to its performance target,
to
receive incentive compensation even though the performance of another Bank
may
have fallen short of its target, thus resulting in a reduction in compensation
for its management team. The sub-standard performance of one or more of the
Banks would, however, negatively impact the incentive compensation received
by a
Company Executive. This result follows from the Company's philosophy that a
Bank
Executive should receive incentive compensation based solely upon the
performance of the Bank for which that Bank Executive is responsible, while
the
Company Executives, being responsible for the ultimate oversight and management
of all the Banks, should receive incentive compensation based upon the
performance of all of the Banks.
The
executive compensation program as administered through the MIC Plan is designed
to reward both individual performance and the collective performance of the
executive management team of a Bank or the Company, as applicable. The MIC
Plan
rewards individual performance primarily through the salary that is established
for each Executive Officer, as the evaluation of individual performance is
a
significant factor taken into account in establishing salary. The MIC Plan
rewards collective performance through the deferred salary and performance
award
components of the program, both of which are dependent upon the efforts of
the
Executive Officer, working together with his management team, to achieve actual
performance which compares favorably with the performance target for an
individual Bank or, in the case of the Company Executives, the performance
target for each of the Banks.
Components
of the Compensation Program
The
executive compensation program, as administered through the MIC Plan, consists
of total salary (with total salary being divided between base salary and
deferred salary) and performance awards. Deferred salary and performance awards
are considered to be forms of incentive compensation as they are dependent
upon
performance. The components of the MIC Plan are described in greater detail
as
follows:
|
·
|
Base
salary - this is the portion of total salary that is not contingent
upon
performance. Base salary is paid to the Executive Officer in twelve
equal
monthly installments.
|
|
·
|
Deferred
salary - this is the portion of total salary that is contingent,
in that
it is "deferred" until earned through performance by a Bank in the
case of
a Bank Executive and performance by all the Banks in the case of
a Company
Executive. The right to receive deferred salary is reviewed on a
semi-annual basis (based on performance during the previous two calendar
quarters) and, if earned, is paid on June 15 and December 15 of each
year.
If the review indicates that the performance target has been achieved
for
the semi-annual period, the Executive Officer will receive all of
the
deferred salary for which he was eligible during the period. If,
on the
other hand, the review indicates that the performance target was
not
satisfied, the amount of deferred salary to be paid will be reduced
in
accordance with a formula contained in the MIC Plan and could be
forfeited
entirely in the event actual performance trails targeted performance
by an
amount which results in an elimination of the deferred salary for
the
period. Any deferred salary not earned during the particular semi-annual
period for which it was established will be forfeited and not carried
over
to the following period. The deferred salary component can, in essence,
be
viewed as placing a portion of total salary "at risk" in that the
Executive Officer must work with his management team to achieve a
level of
performance that is adequate, based on the pre-designated performance
target, to earn all deferred salary for which he is
eligible.
|
|
·
|
Performance
awards - performance awards are additional incentive compensation
that an
Executive Officer is eligible to earn (over and above deferred salary)
upon exceeding the performance target for a Bank in the case of a
Bank
Executive or, in the case of a Company Executive, exceeding the
performance targets of one or more of the Banks. The right to receive
a
performance award is also reviewed on a semi-annual basis (based
on
performance during the previous two calendar quarters) and, if earned,
is
paid on June 15 and December 15 of each year. If the review determines
that actual performance has exceeded the performance target (which
is
established at the same level as used for purposes of determining
entitlement to deferred salary), the Executive Officer will receive
a
performance award, the amount of which is calculated in accordance
with a
formula contained in the MIC Plan and is dependent upon the amount
by
which actual performance has exceeded targeted performance. As with
deferred salary, any performance award not earned during the particular
semi-annual period for which it was established will be forfeited
and not
carried over to the following
period.
|
An
additional element of the Company's compensation program, not encompassed within
the MIC Plan, is participation by the Executive Officers in the Ames National
Corporation 401(k) Profit Sharing Plan (the "Company 401(k) Plan"), which is
a
defined contribution plan in which all employees of the Company and the Banks
are eligible to participate after meeting minimum eligibility requirements.
Compensation
Policy
The
Company's rationale in dividing executive compensation between base salary,
deferred salary and performance awards as encompassed within the MIC Plan is
that an Executive Officer should be assured of receiving a fair base salary
that
is reflective of the individual Executive Officer's individual performance,
tenure and responsibilities within the organization, while at the same time
being eligible to receive incentive compensation in the form of deferred salary
and performance awards that are contingent upon the ability of the Executive
Officer, in working together with his management team, to achieve the applicable
performance targets. As described in greater detail below, eligibility to
receive deferred salary is contingent upon satisfaction of performance targets
that are established at the beginning of each year and which, in the judgment
of
the Compensation Committee, represent an acceptable level of profitability
for
the particular Bank, based on historical earnings and peer bank profitability
ratios. In essence, the right to receive all deferred salary for which an
Executive Officer is eligible in a given year is contingent upon the Bank
achieving an acceptable level of profitability. In contrast, eligibility to
receive performance awards is conditioned upon achievement of profitability
levels that exceed those levels that have previously been determined by the
Compensation Committee to be acceptable for the particular Bank, thus entitling
the Executive Officer to receive additional incentive compensation in the form
of performance awards. Taken together, deferred salary can be viewed as a reward
for achieving acceptable performance (and, conversely, a penalty for failing
to
achieve acceptable performance), while performance awards can be viewed as
a
reward for achieving performance that is beyond what would be deemed to be
acceptable for the particular Bank. By structuring the compensation package
in
this manner, the Company believes that an Executive Officer is provided with
a
powerful incentive to achieve results that are not only acceptable, thus earning
deferred salary, but results that are better than expected, thus earning
additional performance awards.
Compensation
Process and Decisions
In
determining compensation on an annual basis, the Board, based on recommendation
of the Compensation Committee, must establish the parameters required under
the
terms of the MIC Plan to implement the three components of executive
compensation discussed above. These parameters consist of: (i) performance
criteria for each Bank which are used to determine entitlement to deferred
salary and performance awards; (ii) an allocation percentage for each Executive
Officer which is also used in determining entitlement to deferred salary and
performance awards; and (iii) total salary for each Executive Officer which,
as
noted above, is divided between base salary and deferred salary. The following
is a description of the process by which these parameters are established and
the manner in which the three components of compensation under the MIC Plan
interact in determining compensation for the Executive Officers:
|
·
|
Performance
criteria - performance criteria are established by the Compensation
Committee for each Bank to define the performance target (also known
as
the "earnings threshold") for the year, as well as a performance
"floor"
and a performance "cap". Each of these criteria is defined by reference
to
an appropriate "return on assets” ratio selected by the Compensation
Committee. The return on assets ratio is an industry-accepted measure
of
profitability for which substantial information is available to enable
the
Compensation Committee to evaluate the profitability of the Banks
as
compared to other financial institutions of similar size and
characteristics. The performance target is defined by selecting a
specific
return on assets target that the Compensation Committee views as
representing an acceptable level of Bank profitability for the year,
such
that the Executive Officer will receive all deferred salary to which
he
was entitled and, in addition, become eligible to receive performance
awards based on the amount by which actual performance exceeds the
performance target. In establishing the performance target, the
Compensation Committee reviews and relies primarily on historical
earnings
of the Bank and on national and state peer group return on asset
ratios of
financial institutions of similar size and characteristics. Although
the
MIC Plan provides that the Banks are generally expected to achieve
profitability results above the peer group average, a decision concerning
the appropriate performance target is ultimately a subjective decision
of
the Compensation Committee. While the performance targets designated
for
each Bank have remained fairly static over time, these thresholds
are
reviewed and analyzed on an annual basis by the Compensation Committee
and
ultimately approved by the Board. The MIC Plan also requires the
Compensation Committee to establish a performance "floor" and a "cap",
both of which are also expressed in terms of specific return on asset
ratios. Generally, the "floor" and the "cap" are established at equal
intervals under and over the performance target selected for each
Bank.
The "floor" represents a level of profitability that is sufficiently
below
the performance target that the Executive Officer should not be entitled
to receive any portion of his deferred salary for the year. The "cap",
on
the other hand, establishes an upper limit on the receipt of additional
compensation in the form of performance awards in situations in which
the
level of Bank profitability has exceeded the performance target.
|
For
2006,
the Compensation Committee recommended, and the Board approved, the following
performance criteria for each of the Banks, with such criteria being expressed
in terms of designated “return on assets” earnings ratios:
|
|
Floor
|
|
Target
|
|
Cap
|
|
First
National Bank
|
|
|
0.9%
|
|
|
1.3%
|
|
|
1.7%
|
|
Boone
Bank & Trust Co.
|
|
|
0.8%
|
|
|
1.2%
|
|
|
1.6%
|
|
Randall-Story
State Bank
|
|
|
0.8%
|
|
|
1.2%
|
|
|
1.6%
|
|
State
Bank & Trust Co.
|
|
|
0.8%
|
|
|
1.2%
|
|
|
1.6%
|
|
Entitlement
to deferred salary and performance awards was determined by comparing the
earnings of each Bank against the designated performance target (expressed
in
terms of earnings at the designated return on asset ratio). The earnings of
each
Bank were based on net income of the Bank as determined in accordance with
generally accepted accounting principles (“GAAP”), subject to the following
adjustments: (i) a deduction from net income for a management fee allocated
to
each Bank for management services provided by the Company, which allocation
was
generally based on the “average assets” of each Bank; (ii) an addition to net
income for the loan loss provision of each Bank (to reverse the effect of the
loan loss provision deducted in calculating net income on a GAAP basis) and
a
deduction in the amount of the net charge-offs for the loan portfolio of each
Bank; and (iii) in the case of First National Bank only, a deduction to net
income for certain start-up expenses related to the establishment of a new
bank
office in Ankeny, Iowa.
|
·
|
Allocation
percentage - an allocation percentage for each Executive Officer
is
determined by the Compensation Committee for purposes of dividing
the
"performance award pool" between the executive management team of
each
Bank and, in the case of the Company Executives, the "performance
award
pool" of the Company. The performance award pool provides the source
for
payment of performance awards to an executive management team when
the
profitability of a Bank has exceeded its performance target, thus
resulting in the right to receive performance awards. The performance
award pool is an amount equal to 10% of the amount by which the actual
earnings exceeds the performance target. Each member of the management
team is assigned an allocation percentage which, in turn, defines
the
portion of the performance award pool to which the executive will
be
entitled as a performance award. Allocation percentages are generally
determined on the basis of the level of responsibility within the
Bank,
with higher allocation percentages being awarded to the president
of a
Bank and lower allocation percentages being awarded to lower-level
executive officers. Allocation percentages may remain static over
time,
but may be altered as a result of additions or departures to or from
the
executive management team.
|
|
·
|
Total
salary - Total salary (consisting of base salary and deferred salary)
of
an Executive Officer is established on an annual basis by the board
upon
recommendation of the Compensation Committee. In establishing total
salary, the Compensation Committee reviews individual performance,
Bank
performance in the case of a Bank Executive and Company performance
(including performance of all the Banks) in the case of a Company
Executive (primarily in terms of profitability ratios) as compared
to peer
groups both on a national and state basis. Also reviewed is a compensation
survey prepared by the Iowa Bankers Association providing state-wide
peer
group compensation data by position for similarly-sized institutions
and
for institutions located in communities with similar populations.
No
specific weight is accorded to the various factors considered, and
the
total salary established is ultimately a subjective decision of the
Board
based upon recommendation of the Compensation Committee. The Compensation
Committee does not maintain any policy or practice with respect to
the
level within the range of peer group salaries at which the Executive
Officer will be compensated. Although the allocation of total salary
between base salary and deferred salary is accomplished through use
of a
formula outlined in the MIC Plan, the Compensation Committee takes
the
proposed allocation into account when establishing total salary.
Under the
MIC Plan, deferred salary is determined according to a formula based
on
the average assets of the particular Bank (as calculated for the
two
quarters ended September 30 of the year prior to the year for which
compensation is being determined). The formula provides that deferred
salary will be an amount equal to $250 for each $1 million of average
assets of the Bank multiplied by the allocation percentage assigned
to the
Executive Officer. By way of example, if the average assets of a
Bank for
the previous two quarters was $350 million and the Executive Officer's
allocation percentage was 20%, the portion of that Executive Officer's
total salary that would be deferred would be equal to $250 x 350
x .20 or
$17,500.
|
Under
the
MIC Plan, the entitlement to deferred salary and performance awards are reviewed
and determined on a semi-annual basis, with such review comparing the actual
performance during the two prior calendar quarters against the performance
target established under the MIC Plan. The first semi-annual review occurs
in
May of each year and is based upon results for the fourth quarter of the
previous year and the first quarter of the current year. A second semi-annual
review occurs in November of each year and is based on results during the second
and third quarters of the current year. If the review determines that actual
performance is below the target, the Executive Officer will receive only a
portion of the deferred salary (or no deferred salary at all if actual
performance is below the "floor") and no performance award. The reduction in
deferred salary is determined by multiplying the Executive Officer's assigned
allocation percentage times 10% of the shortfall between the performance target
and actual performance for the two quarters. If the review determines that
actual performance has exceeded the target, the Executive Officer will receive
all deferred salary to which he was eligible. In addition, the Executive Officer
will receive his allocation percentage of the performance award pool established
under the MIC Plan, with such pool being an amount equal to 10% of the amount
by
which the actual performance exceeded the performance target for the two
quarters, subject to the "cap" established by the Compensation Committee over
and above which additional performance awards will not be earned.
The
determination of whether an Executive Officer is entitled to deferred salary
and
performance awards varies depends on whether the Executive Officer is a Bank
Executive or a Company Executive. For Bank Executives, deferred salary and
performance awards are determined solely with respect to the actual performance
of the Bank by which the Bank Executive is employed based on a comparison of
actual performance to the performance target as described above. In the case
of
a Company Executive, however, the performance of each Bank is analyzed on an
individual basis and the Company Executive will earn or forfeit deferred salary
and become entitled to additional performance awards based on a comparison
of
the actual performance of each Bank to its target performance. Under this
approach, a Company Executive could forfeit a portion of his deferred salary
and
earn no performance award with respect to the performance of one Bank, while
earning all deferred salary and additional performance awards based on the
performance of another Bank.
Participation
in Company 401(k) Plan
Each
Executive Officer also receives contributions to the Company 401(k) Plan. Under
the Company 401(k) Plan, an Executive Officer, along with all other eligible
employees of the Company and the Banks, may defer up to $15,000 of total
compensation on an annual basis and receive a matching contribution from the
Company or applicable Bank in an amount of up to 2% of total compensation
subject to a cap of $220,000. An additional contribution of 5% of total
compensation (which is subject to the same cap but a different vesting schedule
than the 2% contribution) is made by the Company or applicable Bank to the
account of each Executive Officer, as well as to the accounts of all other
eligible employees of the Company and the Banks. In addition, the Company,
or
individual Banks, may make a discretionary contribution to the Company 401(k)
Plan which historically has been based on profitability of the Company and/or
the Bank for the year. Such contribution, if made, is allocated among all
eligible employees, including the Executive Officer, on a pro rata basis
relative to total compensation. All contributions are subject to certain
ceilings established by applicable law.
Compensation
Committee Procedures
The
Compensation Committee is authorized under its charter to review, determine
and
recommend to the Board the compensation to be paid to those members of the
executive management teams of the Company and the Banks who are covered by
the
MIC Plan (including the Executive Officers). In particular, the Compensation
Committee is authorized to review, determine and recommend to the Board those
members of the executive management teams that will be covered by the MIC Plan
and the various parameters required under the terms of the MIC Plan to establish
compensation for each covered executive, including performance criteria for
each
Bank (which are used to determine entitlement to deferred salary and performance
awards), an allocation percentage for each covered executive and total salary
for each covered executive (and the allocation thereof between base salary
and
deferred salary). Apart from the involvement of certain executive officers
in
the compensation process as described below, the Compensation Committee does
not
delegate its responsibilities to other persons. The Compensation Committee
does,
however, receive and review the recommendations of the boards of directors
of
the Banks with respect to members of the executive management teams of the
Banks
covered by the MIC Plan. All decisions of the Compensation Committee are subject
to ultimate approval by the Board.
Mr.
Krieger, in his capacity as President of the Company, has a significant role
in
the executive compensation process for each executive covered by the MIC Plan
(other than himself). With respect to the executive management team of each
Bank, Mr. Krieger works with the president of each Bank in formulating a
recommendation for compensation of each member of the bank executive management
team that is covered by the MIC Plan, which recommendation is made to the
compensation committee of the board of directors of each Bank by which the
executives are employed. The recommendation is reviewed by the Bank compensation
committee and its recommendation is, in turn, forwarded to the board of
directors of the Bank. Mr. Krieger or Mr. Nelson attends meetings of both the
Bank compensation committee and the Bank board of directors and presents the
recommendations and acts as a resource in addressing the manner in which the
recommendations were developed. With respect to members of the executive
management team of the Company covered by the MIC Plan (other than himself),
Mr.
Krieger also makes a recommendation to the Compensation Committee with respect
to the various components of the compensation decisions for the executives.
The
Compensation Committee then takes the recommendations for the Bank executives
received from the board of directors of each Bank, and Mr. Krieger’s
recommendation for the Company executives, and reaches decisions with respect
to
the compensation for each Bank executive and Company executive. Mr. Krieger’s
compensation is also determined by the Compensation Committee, although Mr.
Krieger is not involved in any capacity in making a recommendation as to his
compensation to the Compensation Committee. Mr. Krieger is also involved in
supervising the process by which the compensation materials, consisting of
peer
group compensation surveys, performance information for similarly-situated
financial institutions and related materials are prepared for use by the
compensation committee and board of directors of each Bank and by the
Compensation Committee and Board in reviewing and approving all compensation
decisions for members of the executive management teams covered by the MIC
Plan.
Summary
Compensation Table for 2006
The
following table sets forth information concerning all forms of compensation
paid
to or earned by the following Executive Officers during 2006: (i) Daniel L.
Krieger, in his capacity as principal executive officer of the Company; (ii)
John P. Nelson, in his capacity as principal financial officer of the Company;
and (iii) Thomas H. Pohlman, Terrill L. Wycoff and Jeffrey K. Putzier, in their
capacities as the three most highly compensated executive officers other than
the principal executive officer and principal financial officer.
Name
and Principal Position
|
|
Year
|
|
Salary(1)
($)
|
|
Non-Equity
Incentive Plan Compensation(2)
($)
|
|
All
Other Compensation(3)
($)
|
|
Total(4)
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel
L. Krieger Chairman & President of the Company (Principal Executive
Officer)
|
|
|
2006
|
|
$
|
208,240
|
|
$
|
52,806
|
|
$
|
20,152
|
|
$
|
281,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John
P. Nelson Vice President & Secretary of the Company (Principal
Financial Officer)
|
|
|
2006
|
|
$
|
93,000
|
|
$
|
26,404
|
|
$
|
10,937
|
|
$
|
130,341
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas
H. Pohlman President of First National Bank
|
|
|
2006
|
|
$
|
158,200
|
|
$
|
37,496
|
|
$
|
19,591
|
|
$
|
215,287
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Terrill
L. Wycoff Executive VP of First National Bank
|
|
|
2006
|
|
$
|
140,100
|
|
$
|
31,910
|
|
$
|
17,220
|
|
$
|
189,230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey
K. Putzier President of Boone Bank & Trust Co.
|
|
|
2006
|
|
$
|
117,300
|
|
$
|
20,330
|
|
$
|
13,652
|
|
$
|
151,282
|
|
Notes:
(1)
|
Amounts
reported in this column represent the base salary paid to each Executive
Officer during 2006.
|
(2)
|
Amounts
reported in this column represent the total amount of incentive
compensation paid to each Executive Officer during 2006, consisting
of
deferred salary and, if applicable, performance awards. During 2006,
Mr.
Krieger earned deferred salary of $39,001 and performance awards
of
$13,805 for total incentive compensation of $52,806. Mr. Nelson earned
deferred salary of $19,501 and performance awards of $6,903 for total
incentive compensation of $26,404; Mr. Pohlman earned deferred salary
of
$29,295 and performance awards of $8,201 for total incentive compensation
of $37,496; Mr. Wycoff earned deferred salary of $24,880 and performance
awards of $7,030 for total incentive compensation of $31,910; and
Mr.
Putzier earned deferred salary of $11,296 and performance awards
of $9,034
for total incentive compensation of
$20,330.
|
(3)
|
Amounts
reported in this column represent employer contributions by the Bank,
in
the case of a Bank Executive, and by the Company, in the case of
a Company
Executive, to the Company 401(k) Plan in which each of the Executive
Officers participated during 2006.
|
(4)
|
Amounts
reported in this column consist of total compensation paid to each
Executive Officer during 2006, calculated by adding the figures appearing
in the Salary column, the Non-Equity Incentive Plan Compensation
column
and the All Other Compensation column for each Executive
Officer.
|
Grants
of Plan-Based Awards Table for 2006
The
following table sets forth information concerning the incentive compensation
potentially available to the Executive Officers under the MIC Plan during 2006in
the form of deferred salary and performance awards. The notes following the
table indicate the amounts of deferred salary and performance awards that were
actually earned by each Executive Officer during 2006.
Name
|
|
Estimated
Payouts Under Non-Equity Incentive Plan Awards
|
|
|
|
Target
1
($)
|
|
Maximum
2
($)
|
|
Daniel
L. Krieger
|
|
$
|
53,600
|
|
$
|
84,629
|
|
John
P. Nelson
|
|
$
|
26,800
|
|
$
|
42,315
|
|
Thomas
H. Pohlman
|
|
$
|
36,668
|
|
$
|
57,984
|
|
Terrill
L. Wycoff
|
|
$
|
31,430
|
|
$
|
49,700
|
|
Jeffrey
K. Putzier
|
|
$
|
11,296
|
|
$
|
17,326
|
|
Notes:
1
|
Amounts
reported in this column represent the deferred salary available to
each
Executive Officer for 2006 based upon actual performance of the Bank
by
which a Bank Executive is employed or, in the case of a Company Executive,
based on actual performance of each of the Banks. A Bank Executive
would
earn all of the deferred salary reported in this column in the event
the
actual performance of the Bank by which he is employed met its performance
target for 2006. A Company Executive would earn all of the deferred
salary
reported in this column if the actual performance of each of the
Banks met
their respective performance targets for 2006. In the event a Bank
did not
meet its performance target during 2006, the amount of deferred salary
earned by the Executive Officer was reduced based on a formula contained
in the MIC Plan. For 2006, Mr. Krieger earned $39,001 of his available
deferred salary; Mr. Nelson earned $19,501 of his available deferred
salary; Mr. Pohlman earned $29,295 of his available deferred salary;
Mr.
Wycoff earned $24,880 of his available deferred salary; and Mr. Putzier
earned all $11,296 of his available deferred
salary.
|
2
|
Amounts
reported in this column represent the maximum amount of performance
awards
available to each Executive Officer for 2006 based on the actual
performance of the Bank by which a Bank Executive is employed or,
in the
case of a Company Executive, based on the actual performance of each
of
the Banks. The amount of performance awards earned by each Executive
Officer is determined by a formula contained in the MIC Plan that
is
primarily dependent upon the amount by which actual performance exceeds
targeted performance for 2006, subject to a “cap” establishing a maximum
award as reported in the table. For 2006, Mr. Krieger earned performance
awards of $13,805; Mr. Nelson earned performance awards of $6,903;
Mr.
Pohlman earned performance awards of $8,201; Mr. Wycoff earned performance
awards of $7,030; and Mr. Putzier earned performance awards of
$9,034.
|
Compensation
Committee Interlocks and Insider Participation
There
are
no members of the Compensation Committee who were officers or employees of
the
Company or any of the Banks during 2006, who were previously officers or
employees of the Company or the Banks, or who had any relationship otherwise
requiring disclosure hereunder.
Compensation
Committee Report
The
Compensation Committee has reviewed the disclosures contained in the
Compensation Discussion and Analysis and has discussed disclosures with
management of the Company. Based on its review and discussions with management,
the Compensation Committee has recommended to the Board that the Compensation
and Discussion and Analysis be included in this Proxy Statement and in the
Annual Report on Form 10-K to be filed by the Company with the Securities and
Exchange Commission.
The
undersigned members of the Compensation Committee have submitted this
report.
|
|
James
R. Larson II, Chair
|
|
|
Douglas
C. Gustafson, DVM
|
|
|
Charles
D. Jons, M.D.
|
LOANS
TO DIRECTORS AND EXECUTIVE OFFICERS
AND
RELATED PARTY TRANSACTIONS
Certain
directors ,nominees for director and executive officers of the Company, their
associates or members of their families, were customers of, and have had
transactions with, the Banks from time to time in the ordinary course of
business, and additional transactions may be expected to take place in the
ordinary course of business in the future. All loans and commitments included
in
such transactions have been made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons. In the opinion of management of the Company,
such loan transactions do not involve more than the normal risk of
collectability or present other unfavorable features.
The
Audit
Committee is responsible for reviewing and approving any transaction involving
the Company or a Bank which constitutes a “related party transaction” under
rules adopted by the Securities and Exchange Commission, except that any loan
made by any of the Banks in the ordinary course of business which would
otherwise constitute a “related party transaction” is not subject to Audit
Committee review if the loan is made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with non-related parties and the loan otherwise meets the
requirements of Regulation O of the Federal Reserve System. Approval of a
transaction constituting a “related party transaction” requires a determination
by the Audit Committee that the transaction is “fair and reasonable” to the
Company or the Bank involved in the transaction. The requirement for review
and
approval of “related party transactions” is set forth in the Audit Committee
Charter.
REPORT
OF THE AUDIT COMMITTEE
The
Audit
Committee assists the Board in carrying out its oversight responsibilities
for
the Company’s financial reporting process, audit process and internal controls.
The Audit Committee also reviews the audited financial statements and recommends
to the Board whether the financial statements should be included in the
Company’s Annual Report on Form 10-K filed with the Securities and Exchange
Commission. The Audit Committee is comprised solely of independent
directors.
The
Audit
Committee has reviewed and discussed the Company’s audited financial statements
for the year ended December 31, 2006 with management and Clifton Gunderson
LLP,
the Company’s independent auditors. The Audit Committee has also discussed with
Clifton Gunderson LLP the matters required to be discussed by SAS 61, as amended
by SAS 90 (Codification of Statements on Auditing Standards). The Audit
Committee has also received and reviewed the written disclosures and the letter
from Clifton Gunderson LLP required by Independence Standards Board Standard
No.
1 (Independence Discussions with Audit Committees) and has discussed with
Clifton Gunderson LLP its independence with respect to the Company. Based on
the
review and discussions with management and Clifton Gunderson LLP, the Audit
Committee has recommended to the Board that the audited financial statements
be
included in the Company’s Annual Report on Form 10-K for the year ending
December 31, 2006 to be filed with the Securities and Exchange
Commission.
The
undersigned members of the Audit Committee have submitted this
report.
|
Marvin
J. Walter, Chair
|
|
Betty
A. Baudler Horras
|
|
Robert
L. Cramer
|
|
Warren
R. Madden
|
RELATIONSHIP
WITH REGISTERED PUBLIC ACCOUNTING FIRM
Clifton
Gunderson LLP, Certified Public Accountants, provided accounting and auditing
services to the Company during the year ended December 31, 2006 and has been
selected by the Audit Committee to provide accounting and auditing services
to
the Company for the year ending December 31, 2007.
A
representative of Clifton Gunderson LLP is expected to be present at the
Meeting. This representative will have the opportunity to make a statement
at
the Meeting and is expected to be available to respond to appropriate questions
from shareholders.
The
Company’s prior independent auditor, McGladrey & Pullen, LLP, was dismissed
by the Company on February 8, 2006, with such dismissal effective upon
completion of its audit of the Company’s financial statements for the year ended
December 31, 2005. The Company’s current independent auditor, Clifton Gunderson
LLP, was retained by the Company on February 8, 2006. The dismissal of McGladrey
& Pullen, LLP and the retention of Clifton Gunderson LLP was approved by the
Audit Committee. During the Company’s two fiscal years ended December 31, 2005,
and during the subsequent interim period proceeding dismissal of McGladrey
&
Pullen, LLP in 2006, there was no disagreement between the Company and McGladrey
& Pullen, LLP on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure which, if not resolved
to
the satisfaction of McGladrey & Pullen, LLP, would have caused McGladrey
& Pullen, LLP to make reference to the subject matter of the disagreement in
connection with its reports on the Company’s financial statements. The audit
reports of McGladrey & Pullen, LLP on the financial statements of the
Company as of and for the two years ended December 31, 2005 did not contain
any
adverse opinion or disclaimer of opinion, nor were these opinions qualified
or
modified as to uncertainty, audit scope or accounting principles. The Company
has previously provided a copy of the foregoing disclosures to McGladrey &
Pullen, LLP and McGladrey & Pullen, LLP, in a letter dated February 13,
2006, stated its agreement with the Company’s statements regarding its dismissal
as independent auditor.
The
following table presents principal accountant fees for services rendered by
Clifton Gunderson LLP for the year ended December 31, 2006 and McGladrey &
Pullen, LLP for the year ended December 31, 2005.
|
|
2006
|
|
2005
|
|
|
|
|
|
|
|
Audit
Fees(1)
|
|
$
|
125,000
|
|
$
|
131,600
|
|
Audit-Related
Fees(2)
|
|
|
5,000
|
|
|
5,000
|
|
Tax
Fees (3)
|
|
|
12,500
|
|
|
16,800
|
|
All
Other Fees (4)
|
|
|
0
|
|
|
18,483
|
|
Total
|
|
$
|
142,500
|
|
$
|
171,883
|
|
Notes:
(1)
|
Audit
fees represent fees for professional service provided for the audit
of the
Company’s annual financial statements, review of the Company’s quarterly
financial statements in connection with the filing of current and
periodic
reports and reporting on internal control over financial
reporting.
|
(2)
|
Audit-related
fees consist of fees for an audit of financial statements of an employee
benefit plan maintained by the
Company.
|
(3)
|
Tax
fees consist of fees for tax consultation and tax compliance services
for
the Company and its employee benefit
plans.
|
(4)
|
All
other fees consist of fees for edgarization of periodic reports and
consultation costs in conjunction with a possible merger and acquisition
project in 2005.
|
The
Audit
Committee pre-approves all audit and permissible non-audit services provided
by
the independent auditors. The non-audit services include audit-related services,
tax services and other services. The Audit Committee’s policy is to pre-approve
all services and fees for up to one year, which approval includes the
appropriate detail with regard to each particular service and its related fees.
In addition, the Audit Committee can be convened on a case-by-case basis to
pre-approve any services not anticipated or services whose costs exceed the
previously pre-approved amounts.
PROPOSALS
BY SHAREHOLDERS
In
order for any proposals of
shareholders pursuant to the procedures prescribed in Rule 14a-8 under the
Securities Exchange Act of 1934, as amended, to be presented as an item of
business at the annual meeting of shareholders to be held in 2008, the proposal
must be received at the Company’s principal executive offices no later than
November 19, 2007. Such proposals will need to comply with the regulations
of
the Securities and Exchange Commission regarding the inclusion of shareholder
proposals in the Company’s proxy materials. Any shareholder proposal submitted
outside the procedures prescribed in Rule 14a-8 shall be considered untimely
under the Bylaws unless received at the Company’s principal executive offices no
later than November 19, 2007 and unless such proposal contains the information
required by the Bylaws. Proposals should be submitted to the Company at its
principal executive offices at P.O. Box 846, 405 Fifth Street, Ames, Iowa 50010,
Attention: Secretary. A copy of the Bylaws may be obtained by contacting John
P.
Nelson, Vice President and Secretary, at the Company’s principal executive
offices or by accessing the Company’s website at
www.amesnational.com.
AVAILABILITY
OF FORM 10-K REPORT
Copies
of the Company’s Annual Report to the Securities and Exchange Commission (Form
10-K) including the financial statements and schedules thereto for the year
ended December 31, 2006, will be mailed when available without charge (except
for exhibits) to a holder of shares of the Common Stock upon written request
directed to John P. Nelson, Vice President and Secretary, Ames National
Corporation, P.O. Box 846, 405 Fifth Street, Ames, Iowa
50010.
OTHER
MATTERS
Management
of the Company knows of no other matters which will be presented for
consideration at the Meeting other than those stated in the Notice of Annual
Meeting which is part of this Proxy Statement, and management does not intend
itself to present any other business. If any other matters do properly come
before the Meeting, it is intended that the persons named in the accompanying
Proxy will vote thereon in accordance with their judgment. The persons named
in
the Proxy will also have the power to vote for the adjournment of the Meeting
from time to time.
A
copy of
the Annual Report to Shareholders for the year ended December 31, 2006 is mailed
to shareholders together with this Proxy Statement. Such report is not
incorporated in this Proxy Statement and is not to be considered a part of
the
proxy soliciting material.
To
reduce
expenses, the Company, in some cases, is delivering only one copy of this Proxy
Statement and the Annual Report to Shareholders to certain shareholders who
share an address, unless otherwise requested by one or more of the shareholders
at a particular address. A separate Proxy for each shareholder is included
in
the voting materials. A shareholder who has received only one set of voting
materials may request separate copies of the voting materials at no additional
cost by contacting the Company at (515) 232-6251 or by writing to Ames National
Corporation, P.O. Box 846, 405 Fifth Street, Ames, Iowa 50010, Attn: John P.
Nelson, Vice President and Secretary. A shareholder may also contact the Company
at the above number or address in the event a shareholder desires to receive
separate voting materials for future annual meetings or if shareholders who
share an address desire to receive a single copy of voting materials in lieu
of
the multiple copies they are now receiving.
The
Report of the Compensation Committee and the Report of the Audit Committee
(including the reference to the independence of the Audit Committee members)
contained herein are not being filed with the Securities and Exchange Commission
and shall not be deemed incorporated by reference in any prior or future filings
made by the Company under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates such information by reference.