FOR
IMMEDIATE RELEASE
PRESS
RELEASE
KEITH
B. EDQUIST URGES FELLOW SHAREHOLDERS
TO
VOTE THE GOLD PROXY CARD
OMAHA, NE (June 5, 2008) - Keith B.
Edquist, today issued the following letter in response to recent communications
issued by the Management of Team Financial, Inc.:
KEITH
B. EDQUIST
9747
Nottingham Drive
Omaha,
Nebraska 68114
E-mail:
teamedquist@gmail.com
June 5,
2008
Dear
Fellow Shareholders:
I write
to you once again to urge you to vote the enclosed GOLD proxy
card.
You may
have now received the letters from the Management and Directors (letter dated
May 31, 2008) and the Company’s Compensation Committee (letter dated June
2, 2008). Both are responses to my proxy statement, letter and GOLD proxy
card dated June 2, 2008, which I am hopeful that you have
received. It is possible though that many shareholders have received
the responses to my proxy statement, even though they have not yet received my
proxy statement. This is due to the unfortunate fact that the
Management and Directors of the Company have not complied with my repeated
requests to supply us with shareholder information that we need in order to
ensure we can provide proxy information to all shareholders. If you
have not received our proxy statement and proxy card, or know of other
shareholders that have not, please call Morrow & Co., the firm assisting us
with our proxy efforts, at 800-662-5200.
In their
letter of June 2, the Compensation Committee members have invited you to call
them with questions, and I invite you do just that and urge them to ask Mr.
Weatherbie, our Chairman, to provide me the information that I
need. Indeed, I
invite shareholders who receive this letter to call our Chairman, Robert
Weatherbie, 913-294-9667, e-mail bob.weatherbie@teamfinancialinc.com, and remind
him that he works for all shareholders and urge him to provide me the
information that I have requested and that I need in order to communicate with
all shareholders.
Now I
would like to address some of the issues that the Compensation Committee has
raised in its letter:
THE
DECEMBER 20, 2005 MEETING OF THE COMPENSATION COMMITTEE
The
meeting of the Compensation Committee held on December 20, 2005, is the primary
subject of the Compensation Committee’s letter. The Committee has
gone into great detail in Exhibit A to its letter
to describe the material reviewed by the Compensation Committee at that
meeting. What they do not tell you is that all of that information,
other than two reports, was
developed
by and presented to the Committee by Mr. Weatherbie, the CEO of our Company,
with the assistance of the Company’s Assistant Comptroller. The two
exceptions are: (i) the report of the Committee’s Consultant, The Watson
Company, which report they tell you simply reviewed and commented on the
information presented by Mr. Weatherbie, and (ii) the report from
Clark Consulting regarding Bank Owned Life Insurance (“BOLI”) and the
related Salary Continuation Plan of the Company.
The
Committee does not tell you what happened at that meeting after the presentation
by Mr. Weatherbie, and after Mr. Weatherbie and the Assistant Comptroller had
left the meeting. A summary is set forth in the Attachment to this
letter.
I urge
you to read and examine Attachment in
detail. I then urge you to consider the statement of Management and
the Board of Directors in their May 31, 2008 letter:
“Mr.
Edquist was pivotal to the creation of the executive compensation packages about
which he now complains.”
I then
ask you to decide which of us--me or Management and the Board of Directors--is
making inaccurate and misleading statements. If Management and the
Board of Directors believe that I was pivotal in the creation of the executive
compensation packages, I can only wonder what more I should or could have done
to convince them that I opposed the basic premises on which those packages were
created.
One
reason that I am involved in this proxy contest is that I have concluded that in
order to oppose the premises, philosophy and processes which resulted in those
pay packages it is necessary for me to have a place on the Board of Directors of
your--and my--Company. My proxy solicitation is not “sour grapes”, it
is a desire and commitment to improve your--and my--Company for the benefit of
all shareholders.
OWNERS
OR MANAGERS
When you
compare my qualifications and the qualifications of my Nominees versus the
qualifications and the Board’s nominees, the one thing that stands out is: NONE
OF THE COMPANY’S NOMINEES HAVE EVER OWNED A BANK. Management and the
Board of Directors believe, and want you to believe, that the fact that I have
owned a bank and that Jeffrey L. Renner still owns his own banks are
negatives. The claim of Mr. Renner’s conflict of interest is
absurd--his bank in Halbur, Iowa is 260 miles from Paola and 100 miles from the
closest TeamBank branch, and his bank in Westside, Iowa is 304 miles from Paola
and 80 miles from the closest TeamBank branch. There is no
competition between his banks and your Bank.
I submit
that our present or past ownership is a factor in our
favor. Management and the Board apparently take offense at the fact
that my two Nominees, i.e. Jeffrey L.
Renner and Lloyd A. Byerhof, have acquired shares of your Company in
anticipation of their election to the Board. I submit to you that the
fact that Mr. Kurtenbach, Chairman of your Compensation Committee, has acquired
only 4,425 shares of our Company throughout his long 26-year directorship of our
Bank and Company speaks volumes about Mr. Kurtenbach’s commitment and
bias. The goal of most Compensation Committees is to align the
interests of Management with the interests of shareholders through the
compensation packages provided to Management. I submit
to
you that
what our Company needs now is to align the interests of our Compensation
Committee and Board with the interests of the shareholders. Until we
do that it will not be possible to align the interests of Management with those
of the shareholders.
Management
and the Board tell you that you need a calm, collective, cohesive and focused
Board. I tell you that you need Directors who have the experience and
the perspective of an owner of a bank, and Directors who will approach decisions
with the interests of the shareholders primarily in mind. Each of you
receiving this letter is an owner, and I am an owner and both of my Nominees are
owners. You need representatives on the Board who will act in the
best interests of the owners.
I urge
you to read Mr. Blachly’s qualifications as touted by Management and the Board
of Directors very, very carefully. Mr. Blachly owns only 65 shares of
the Company. Mr. Blachly’s 30-year relationship with our Company
apparently is as a customer of the Bank. He was employed by the Bank
for three years 30 years ago. He has served as a Director of TeamBank
only since August of 2006.
Carolyn
Jacobs is no doubt a key employee. But, unless Management and the
Board is suggesting that she will resign as an officer and employee if she is
not re-elected to the Board, her value as an officer and employee is not
relevant to the desirability of having her on the Board. If Ms.
Jacobs intends to resign if she is not re-elected to the Board, she should tell
you so since this is a material fact that should be
disclosed. Otherwise, I submit to you that the goal should be to have
a Board of Directors which manages your Company with the primary interests of
the shareholders in mind. A Management representative on the Board by
definition has a split allegiance.
No doubt
Mr. Kurtenbach has invested more than money in the Company--certainly, as noted
earlier, he has not invested significant funds in the Company. The
question for you and me as owners is whether we want someone who has invested
money making decisions for our Company. As I have previously pointed
out to you: If
options are excluded, I own more than ten times the number of shares owned by
all the other non-Management Directors combined.
Management
and the Board of Directors simply do not appear to grasp the theory of
holes: when you find yourself in a hole, you don’t keep
digging.
If you do
not like where the Company is--or more specifically, if you do not like what has
happened to your investment in the Company--you should not vote for more of the
same. That is what a vote on the white proxy card is--a vote for more
of the same.
If you
want a different perspective on your Board--the perspective of an owner--you
should vote the GOLD proxy
card.
SHOULD
WE BLAME THE ECONOMY
Management
and the Board of Directors would have you believe that the recent performance of
the Company “is largely a result of the downturn in the national economy, and
performance shortfalls are widespread among banks nationwide.” Of
course, if that were true, every bank in the United States would be a “troubled
institution” and every bank holding company in the country would have defaulted
on its credit line. There can be no doubt that the economy of the
country has
adversely
affected banks. I submit to you that the seriousness of the effect of
the economy on a bank is largely determined by the action or inaction of
management of that bank and that bank’s Board of Directors.
We all
know that every bank in the country is not a “troubled
institution.” We do not know how many are so
classified. However, if you review the Quarterly Report of the
Federal Deposit Insurance Corporation you will find that as of March 30, 2008,
the FDIC classified only 90 insured institutions as “problem”
institutions. For this purpose, a “problem institution” is an
institution with a CAMELS rating of 4 or 5 so the class is probably more
restrictive than the class of “troubled institutions.” Neither I nor
Management or the Board of Directors can tell you what the CAMELS ratings of our
Banks are, since those ratings are confidential. I can tell you that
of the 8,542 insured institutions included in the FDIC’s Quarterly Bank Profile
as of December 31, 2007, only 82, or less than 1% of all institutions, had a
risk category of a III or IV. V rated banks were not included in the
FDIC report--I believe because a bank that receives a V rating is generally
closed by the appropriate regulatory authority. The troubles that our
Company and Bank have encountered cannot be laid off by Management and the Board
of Directors on the economy. They need to own up to their
responsibility, rather than attempting to shift all of the blame to the
economy.
WHAT
THIS VOTE IS ALL ABOUT
While
Management and the Company--and their Consultant--have lots of derogatory terms
to describe someone who does not see eye to eye with them (translated--Keith B.
Edquist); I believe the true description would be that I am
independent. I stand before you as an independent person, former bank
owner, and a person who views his responsibilities as a Director of your Company
as an owner--one of you. I do not and will not fit the mold dictated
by the Consultant: “Team Financial, Inc. needs team players.” I WILL NOT GO ALONG TO
GET ALONG--NOR WILL MY NOMINEES.
I urge
you to sign, date and return the GOLD proxy
card today.
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Yours
very truly,
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/s/
Keith B. Edquist
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Keith
B. Edquist
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Attachment
ACTIONS
TAKEN BY YOUR COMPENSATION COMMITTEE
AT
THE MEETING HELD ON DECEMBER 20, 2005
The
following is a summary of the Compensation Committee meeting held on
December 20, 2005, after presentation of the information by Chairman
Weatherbie as outlined in Exhibit A to the Compensation
Committee’s letter, and after the Company employees recused themselves from the
meeting.
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Mr.
Edquist asked the Consultant why nominee Carolyn Jacobs had not been
included in the salary survey. The Consultant said “It was
probably an inadvertent error.”
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Mr.
Edquist asked whether retirement benefits should be considered as an
offset to total compensation. The Consultant responded that
such was not consistent with industry standards nor was it an appropriate
approach to compensation considerations.
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Mr.
Weatherbie’s base salary was increased 5% on a vote of 2 in favor, Mr.
Edquist opposed. Mr. Edquist stated that the CEO’s base salary
should not be increased until the Committee completed a substantive review
of the other components of compensation, such as long-term compensation,
deferred compensation, and “similar bonuses.” The Consultant said that base
salary should not be correlated to such
components.
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Mr.
Edquist recommended that Mr. Weatherbie’s incentive bonus should be
accrued before year end since the trigger for the incentive bonus would be
met. The estimated amount, subject to finalization of year-end
numbers, was $112,500. The Committee agreed to the
accrual.
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The
Committee unanimously approved the grant of 5,000 stock options to
Mr. Weatherbie, the CEO.
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The
CFO’s base salary was increased by 5% on a vote of 2 in favor, Mr. Edquist
opposed. Mr. Edquist objected to the increase on the same
grounds as his objection to the CEO’s increased salary.
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The
Committee approved a discretionary bonus of $45,000 for the CFO, since
there was no incentive bonus for the CFO. Mr. Edquist voted in
favor, stating that in his opinion the CFO, who was a founder of the
Company and once President of the Company, should receive a bonus if a
bonus was being paid to the CEO.
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In
an extraordinary display of extrasensory perception, the Minutes, as
prepared by counsel, then state:
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“There was no discussion regarding the
amount of a discretionary bonus in the event that the CEO bonus was less than
projected. It was the intent of the Committee to adjust the amount of
the CFO’s discretionary bonus when the final numbers on the CEO bonus are
presented at the January Committee meeting.”
NOTE THAT
MR. EDQUIST ALONE OBJECTED AT THE JANUARY MEETING AND STATED THAT THIS WAS NOT
HIS INTENT AT ALL.
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The
Committee approved a three-year contract for the CEO, with Mr. Edquist
voting “no” because the current contract form was then more than six years
old and the banking industry had undergone significant changes during that
period of time. Mr. Edquist wanted a full review of the
terms and conditions of the Agreement prior to any
extension. One of the Board’s nominees, Mr. Kurtenbach, voted
in favor of the three-year contract with the stipulation that the
Committee review in depth the contractual provisions and the severance
provisions as a priority item in 2006. (In Kansas, this is
called shutting the barn door after the horse has
escaped.)
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Mr.
Edquist moved that the CFO be granted a three-year contract with the same
stipulation. The motion passed unanimously.
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The
final act at the meeting was the distribution by the Chairman, Mr.
Kurtenbach, of three articles regarding the work of the Compensation
Committee--articles that Mr. Edquist had requested in advance of the
meeting, but which had been denied by Chairman
Kurtenbach.
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Contact:
Keith B.
Edquist
teamedquist@gmail.com