Registration Statement for Securities to Be Issued in Business Combination Transactions (s-4/a)

Date : 08/23/2019 @ 8:03PM
Source : Edgar (US Regulatory)
Stock : Nicolet Bankshares Inc (NCBS)
Quote : 73.26  -0.18 (-0.25%) @ 9:00PM

Registration Statement for Securities to Be Issued in Business Combination Transactions (s-4/a)

As filed with the Securities and Exchange Commission on August 23, 2019
Registration No. 333-232971​
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
NICOLET BANKSHARES, INC.
(Exact name of registrant as specified in its charter)
6021
(Primary Standard Industrial
Classification Code Number)
Wisconsin
47-0871001
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
111 North Washington Street
Green Bay, Wisconsin 54301
(920) 430-1400
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
Robert B. Atwell
Chairman, President, and Chief Executive Officer
Nicolet Bankshares, Inc.
111 North Washington Street
Green Bay, Wisconsin 54301
(920) 430-1400
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Robert D. Klingler, Esq.
Bryan Cave Leighton Paisner LLP
1201 West Peachtree Street, NW
Atlanta, Georgia 30309-3488
(404) 572-6600
John T. Reichert, Esq.
Reinhart Boerner Van Deuren, s.c.
N16 W23250 Stone Ridge Drive, Suite One
Waukesha, Wisconsin 53188
(262) 951-4500
Approximate Date of Commencement of Proposed Sale of the Securities to the Public: As soon as practicable after the effective date of this Registration Statement.
If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of  “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)
Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this proxy statement-prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This proxy statement-prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
Preliminary — Subject to Completion Dated August 23, 2019
[MISSING IMAGE: LG_CHOICE.JPG]
[MISSING IMAGE: LG_NICOLET.JPG]
PROXY STATEMENT
OF
CHOICE BANCORP, INC.
PROSPECTUS
OF
NICOLET BANKSHARES, INC.
PROPOSED MERGER — YOUR VOTE IS VERY IMPORTANT
The boards of directors of Choice Bancorp, Inc. (“Choice”) and Nicolet Bankshares, Inc. (“Nicolet”) have each unanimously approved a transaction that will result in the merger of Choice with and into Nicolet. Nicolet will be the surviving bank holding company in the merger. If the merger is completed, Choice shareholders will receive 0.5 of a share of Nicolet common stock for each share of Choice common stock (the “exchange ratio”). The exchange ratio may fluctuate in the event that the Nicolet Common Stock Price, as defined in the merger agreement, is (a) greater than $67.00, in which case the exchange ratio would become floating at the quotient of  $33.50 divided by the Nicolet Common Stock Price, or (b) less than $55.00, in which case the exchange ratio would become floating at the quotient of $27.50 divided by the Nicolet Common Stock Price. In the event the Nicolet Common Stock Price is less than $55.00, in lieu of adjusting the exchange ratio, Nicolet may elect to leave the exchange ratio unchanged and instead add additional cash consideration in an amount sufficient to bring the aggregate per share consideration to $27.50 per share. After the merger is completed, we expect that current Choice shareholders will own approximately 11% of the outstanding shares of common stock of Nicolet, assuming no adjustment to the exchange ratio.
Nicolet’s common stock trades on the Nasdaq Capital Market under the symbol “NCBS.” The closing price of Nicolet common stock was $61.13 per share on June 26, 2019, the last trading day before public announcement of the merger. The closing price of Nicolet common stock was $[•] per share on August 28, 2019, the last trading day before the date of this proxy statement-prospectus. Choice’s common stock is quoted on the OTC Pink under the symbol “CBKW.” The last known trade of Choice common stock prior to public announcement of the merger was $21.25 per share June 26, 2019. The shares of Nicolet common stock issued pursuant to the merger will be registered under the Securities Act of 1933, as amended, and will trade on the Nasdaq Capital Market.
We cannot complete the merger unless we obtain the necessary governmental approvals and unless the shareholders of Choice approve the merger agreement and the transactions contemplated thereby. Choice is asking its shareholders to consider and vote on this merger proposal at Choice’s special meeting of shareholders. Whether or not you plan to attend the special meeting, please take the time to vote by following the voting instructions included in the enclosed proxy card. If you sign, date and mail your proxy card without indicating how you want to vote, your proxy will be counted as a vote FOR the merger agreement and the transactions contemplated thereby. If you do not vote your shares as instructed in the enclosed proxy card, or if you do not instruct your broker how to vote any shares held for you in “street name,” the effect will be a vote against the merger.
The special meeting will be held on October 22, 2019 at 5:30 p.m. at 1041 North Westhaven Drive, Oshkosh, Wisconsin 54904.
This document contains a more complete description of the special meeting and the terms of the merger. We urge you to review this entire document carefully. You may also obtain additional information about Nicolet from documents that Nicolet has filed with the Securities and Exchange Commission.
The Choice board of directors recommends that Choice shareholders vote FOR approval of the merger agreement and the transactions contemplated thereby.
[MISSING IMAGE: SG_ROBERT-ATWELLB.JPG]
Robert B. Atwell
Chairman, President and Chief Executive Officer
Nicolet Bankshares, Inc.
[MISSING IMAGE: SG_SCOTT-SITTER.JPG]
J. Scott Sitter
President and Chief Executive Officer
Choice Bancorp, Inc.
You should read this entire proxy statement-prospectus carefully because it contains important information about the merger. In particular, you should read carefully the information under the section entitled “Risk Factors,” beginning on page 8.
Neither the Securities and Exchange Commission nor any state securities regulators have approved or disapproved of the securities to be issued in the merger or determined if this document is truthful or complete. Any representation to the contrary is a criminal offense.
The shares of Nicolet common stock to be issued in the merger are not deposits or savings accounts or other obligations of any bank or savings association and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.
This proxy statement-prospectus is dated August 29, 2019, and is first being mailed to Choice’s shareholders on or about September 10, 2019.

PLEASE NOTE
We have not authorized anyone to provide you with any information other than the information included in this proxy statement-prospectus and the documents to which we refer you herein. If someone provides you with other information, please do not rely on it as being authorized by us.
This proxy statement-prospectus has been prepared as of the date on the cover page. There may be changes since that date in the affairs of Choice or Nicolet that are not reflected in this document.
As used in this proxy statement-prospectus, the terms “Choice” and “Nicolet” refer to Choice Bancorp, Inc. and Nicolet Bankshares, Inc., respectively. Where the context requires, “Choice” may refer to Choice Bancorp, Inc. and its subsidiaries, including Choice Bank. Similarly, “Nicolet” may refer to Nicolet Bankshares, Inc. and its subsidiaries, including Nicolet National Bank.
Unless the context indicates otherwise, all references to the “merger agreement” refer to the Agreement and Plan of Merger dated June 26, 2019, between Nicolet and Choice, which is included in its entirety at Appendix A.

Choice Bancorp, Inc.
1041 North Westhaven Drive
Oshkosh, Wisconsin 54904
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 22, 2019
To the Shareholders of Choice Bancorp, Inc.:
Choice Bancorp, Inc. will hold a special meeting of shareholders at 1041 North Westhaven Drive, Oshkosh, Wisconsin 54904, on October 22, 2019, at 5:30 p.m., local time, for the following purposes:
1. Merger.   To authorize, approve and adopt the Agreement and Plan of Merger by and between Choice Bancorp, Inc. and Nicolet Bankshares, Inc., pursuant to which Choice will merge with and into Nicolet, and the other transactions contemplated by the merger agreement. A copy of the merger agreement is attached to the accompanying proxy statement-prospectus as Appendix A.
2. Other business.   To transact such other business as may properly come before the special meeting or any adjournments or postponements of the special meeting.
3. Adjournment.   To adjourn the special meeting to a later date or dates, if necessary or appropriate, including to solicit additional proxies to approve the merger agreement and the transactions contemplated by the merger agreement.
Only shareholders of record at the close of business on August 27, 2019, the record date, are entitled to notice of and to vote at the special meeting or any adjournments or postponements of the special meeting. The approval of the merger agreement requires the affirmative vote of at least a majority of the shares of Choice common stock outstanding on the record date.
After careful consideration, the Choice board of directors supports the merger and unanimously recommends that you vote FOR approval of the Agreement and Plan of Merger and the transactions contemplated thereby and FOR the adjournment proposal.
YOUR VOTE IS VERY IMPORTANT.   Whether or not you plan to attend the special meeting, please take the time to vote by following the instructions in the enclosed proxy card. You may revoke your proxy at any time before it is voted by giving written notice of revocation to Choice’s Corporate Secretary or by filing a properly executed proxy card of a later date with Choice’s Corporate Secretary at or before the meeting. You may also revoke your proxy by attending the meeting, giving oral notice of your revocation, and voting your shares in person at the meeting.
Choice shareholders have dissenters’ rights with respect to the merger under Wisconsin law. Shareholders who wish to assert their dissenters’ rights and comply with the procedural requirements of Subchapter XIII of the Wisconsin Business Corporation Law will be entitled to receive payment of the fair value of their shares in cash in accordance with Wisconsin law. A copy of Subchapter XIII of the Wisconsin Business Corporation Law is attached as Appendix C to the proxy statement-prospectus.
We do not know of any other matters to be presented at the special meeting, but if other matters are properly presented, the persons named as proxies will vote on such matters at their discretion.
By Order of the Board of Directors
[MISSING IMAGE: SG_SCOTT-SITTER.JPG]
J. Scott Sitter
President and Chief Executive Officer
Oshkosh, Wisconsin
August 29, 2019

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iii

QUESTIONS AND ANSWERS
Q:
On what am I being asked to vote?
A:
You are being asked to approve the Agreement and Plan of Merger by and between Nicolet and Choice, which we may refer to as the merger agreement, which provides for the merger of Choice with and into Nicolet, and the other transactions contemplated thereby. You are also being asked to approve a proposal to adjourn the special meeting, if necessary or appropriate, including to solicit additional proxies to approve the merger agreement and the transactions contemplated by the merger agreement.
Q:
How does the board of directors recommend I vote on the merger agreement?
A:
The board of directors of Choice has unanimously approved and adopted the merger agreement and recommends that Choice shareholders vote “FOR” approval of the merger agreement and the transactions contemplated thereby, and “FOR” approval of the adjournment proposal.
Q:
What will happen to Choice Bank as a result of the merger?
A:
If the merger occurs, Choice Bank, which is a wholly owned subsidiary of Choice, will be merged with and into Nicolet National Bank, which is a wholly owned subsidiary of Nicolet. We may refer to this transaction as the “bank merger.” Nicolet National Bank will be the surviving entity in the bank merger.
Q:
What vote is required to approve the merger agreement and the transactions contemplated thereby?
A:
The merger cannot be completed unless a majority of the outstanding shares of Choice vote to approve the merger agreement and the transactions contemplated thereby.
Q:
What will I receive in the merger?
A:
If the merger is completed, each share of Choice common stock (excluding treasury shares, shares held directly or indirectly by Nicolet (other than in a fiduciary capacity or in connection with debts previously contracted), shares underlying restricted stock awards, and dissenting shares; all such shares are referred to herein as the “cancelled shares”) will be converted into the right to receive 0.5 of a share of Nicolet common stock (the “per share stock consideration”).
Adjustment of Exchange Ratio
The merger agreement provides that the exchange ratio is fixed unless the Nicolet Common Stock Price (defined in the agreement as the volume weighted average closing price of Nicolet common stock on the Nasdaq Capital Market over the thirty trading day period ending on the third trading day prior to the closing date) is (a) greater than $67.00, in which case the exchange ratio would become floating at the quotient of  $33.50 divided by the Nicolet Common Stock Price, or (b) less than $55.00, in which case the exchange ratio would become floating at the quotient of  $27.50 divided by the Nicolet Common Stock Price. If the Nicolet Common Stock Price falls below $55.00 per share, in lieu of adjusting the exchange ratio, Nicolet may elect to add a cash component to the merger consideration in an amount sufficient to make the aggregate per share consideration equal to $27.50 per share of Choice Common Stock.
Cash in Lieu of Fractional Shares
In lieu of any fractional shares of Nicolet common stock, Choice shareholders will receive an amount in cash (without interest and rounded to the nearest whole cent) as determined by multiplying the Nicolet Common Stock Price by the fractional share of Nicolet common stock to which such holder would otherwise be entitled.
Cash for Cancelled Choice Stock Options
Pursuant to the merger agreement, each Choice Stock Option (whether vested or not) will be cancelled in exchange for cash in an amount equal to the product of  (i) the number of shares of Choice common stock subject to such Choice Stock Option and (ii) the excess of the product of  (x) the Nicolet
iv

Common Stock Price and (y) the exchange ratio over the exercise price per share of the Choice common stock subject to such Choice Stock Option. Following the effective time of the merger, Choice Stock Options will no longer be valid or exist.
Relative Ownership of Nicolet following Closing
After the merger is completed, we expect that current Nicolet shareholders will own approximately 89% of the outstanding shares of common stock of the combined company, and current Choice shareholders will own approximately 11% of the outstanding shares of common stock of the combined company, assuming no adjustment to the exchange ratio.
Q:
What are the federal income tax consequences of the merger to me as a holder of Choice common stock?
A:
Bryan Cave Leighton Paisner LLP has issued an opinion, which it will confirm as of the effective date of the merger, that the merger will qualify as a reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). Choice shareholders receiving Nicolet common stock in the merger will not recognize gain for U.S. federal income tax purposes as a result of the surrender of Choice common stock for receipt of Nicolet common stock. However, Choice shareholders receiving cash in the merger, whether as a result of exercising dissenters’ rights, fractional shares or otherwise, will generally recognize gain or loss in an amount equal to the difference between the amount of cash received and the Choice shareholder’s aggregate tax basis in its Choice common stock surrendered or cancelled in exchange thereof. Each holder of Choice common stock who contemplates exercising statutory dissenters’ or appraisal rights should consult its tax advisor as to the possibility that all or a portion of the payment received pursuant to the exercise of such rights will be treated as dividend income. Choice shareholders may also recognize gain for U.S. federal income tax purposes with respect to any cash received in lieu of fractional shares. Your tax treatment will depend on your specific situation and many variables not within our control. You should consult your own tax advisor for a full understanding of the tax consequences of the merger to you.
Q:
What are the federal income tax consequences of the merger to me as a holder of Choice Stock Option?
A:
The receipt of cash by an employee that has his or her Choice Stock Option cancelled in connection with the merger will be included as compensation in your Form W-2 for the year in which you receive the cash payment. The amount of the cash payment will be subject to and reduced by any applicable U.S. federal and state income tax withholding, social security (FICA) taxes, and other applicable taxes that Choice, as your employer, is required to withhold with respect to the payment to you of wage income. You should consult your own tax advisor for a full understanding of the tax consequences of the receipt of cash in cancellation of your Choice Stock Option.
Q:
When do you expect the merger to be completed?
A:
We are working to complete the merger on November 8, 2019, assuming Choice shareholders and the applicable bank regulatory agencies approve the merger and other conditions to closing are met. We could experience delays in meeting these conditions or be unable to meet them at all. See “Risk Factors” beginning on page 8 for a discussion of these and other risks relating to the merger.
Q:
Will I be able to sell any shares of Nicolet common stock I receive pursuant to the merger?
A:
Yes. The Nicolet common stock issued pursuant to the merger will be registered under the Securities Act of 1933, as amended, and Nicolet will cause the shares to be issued in the merger to be listed on the Nasdaq Capital Market. All shares of Nicolet common stock that you receive pursuant to the merger will be freely transferable unless you are deemed an affiliate of Nicolet. Affiliates of Nicolet will be able to sell the shares they receive pursuant to the merger subject to applicable securities regulations. See “Resale of Nicolet Common Stock” on page 31.
v

Q:
What should I do now?
A:
After carefully reading and considering the information in this proxy statement-prospectus, follow the voting instructions included in the enclosed proxy card in order to vote your shares as soon as possible, so that your shares will be represented at the special meeting. You can vote by (i) accessing the internet website specified on the enclosed proxy card, (ii) completing, signing and dating the enclosed proxy card and returning it in the postage-paid envelope, or (iii) voting in person at the special meeting.
NOTE:   If you sign and send in your proxy card and do not indicate how you want to vote, your proxy will be voted “FOR” the proposal to approve the merger agreement and the transactions contemplated thereby, and “FOR” the adjournment proposal.
Q:
What if I do not vote?
A:
If you do not vote, it will have the same effect as voting your shares against the merger.
Q:
If my shares are held in “street name” by my broker, will my broker automatically vote my shares for me?
A:
No. Your broker will vote your shares of stock on the merger agreement only if you provide instructions on how to vote. You should instruct your broker on how to vote your shares, following the directions your broker provides. If you do not provide instructions to your broker, and your broker submits an unvoted proxy, the resulting broker nonvote will not be counted toward a quorum and your shares will not be voted at your company’s special meeting, which will have the same effect as voting your shares against the merger.
Q:
Can I change my vote after I deliver my proxy?
A:
Yes. You can change your vote at any time before your proxy is voted at the special meeting. You can do this in four ways. First, you can revoke your proxy by giving written notice of revocation to Choice’s Corporate Secretary. Second, you can submit a new properly executed proxy with a later date to Choice’s Corporate Secretary at or before the special meeting. The latest proxy actually received before the meeting will be counted, and any earlier proxies will be revoked. Third, if you voted over the internet, you can vote again over the internet by the applicable deadline described below or submit a proxy card and return it prior to the vote at the special meeting. Fourth, you can attend Choice’s special meeting, give oral notice of your revocation, and vote your shares in person. Any earlier proxy will be thereby revoked. Your last properly submitted vote will be the vote that is counted. However, simply attending the meeting without voting will not revoke your proxy. If you hold shares in “street name,” you must contact your broker prior to the special meeting if you wish to revoke your proxy or change your vote.
Q:
What is the deadline for voting?
A.
If you are the record holder of shares of our common stock, you may vote by mail at any time prior to the special meeting as long as we receive your proxy through the mail before the time of the special meeting or 5:30 p.m. local time on October 22, 2019. In addition, as a record holder, you may vote by internet until 11:59 p.m., local time, on October 21, 2019. If your shares are held in “street name,” you must vote your shares in accordance with the voting instruction form by the deadline set by your broker.
Q:
Should I send in my stock certificates now?
A:
No. If the merger is completed, Nicolet or Nicolet’s exchange agent will send a letter of transmittal and other customary transmittal materials providing written instructions for exchanging Choice common stock certificates for the merger consideration in accordance with the merger agreement. In any event, do not send your stock certificates with your proxy card. If you hold your shares in “street name” or “book-entry form” through a broker, the broker will provide separate instructions for voting and for surrendering and exchanging your shares.
vi

Q:
Who can help answer my questions?
A:
If you would like additional copies of this document, or if you would like to ask any questions about the merger and related matters, you should contact:
John F. Glynn
Executive Vice President and Chief Financial Officer, Choice Bank
1041 North Westhaven Drive
Oshkosh, Wisconsin 54904
(920) 230-1300
john.glynn@choice.bank
vii

SUMMARY
We have prepared this summary of certain material information to assist you in your review of this proxy statement-prospectus. It is necessarily general and abbreviated, and it is not intended to be a complete explanation of all of the matters covered in this proxy statement-prospectus. To understand the merger and the issuance of shares of Nicolet common stock in the merger, please see the more complete and detailed information in the sections that follow this summary, as well as the financial statements and appendices included in this proxy statement-prospectus by reference. For more information about Nicolet, please see the section entitled “Where You Can Find Additional Information.” We urge you to read all of these documents in their entirety prior to returning your proxy or voting at the special meeting of your company’s shareholders.
Each item in this summary refers to the page of this document on which that subject is discussed in more detail.
The Companies
NICOLET BANKSHARES, INC.
111 North Washington Street
Green Bay, Wisconsin 54301
(920) 430-1400
Nicolet is a Wisconsin corporation and was incorporated as Green Bay Financial Corporation, a Wisconsin corporation, on April 5, 2000, to serve as the holding company for and the sole shareholder of Nicolet National Bank. It amended and restated its articles of incorporation and changed its name to Nicolet Bankshares, Inc. on March 14, 2002. It subsequently became the holding company for Nicolet National Bank upon completion of Nicolet National Bank’s reorganization into a holding company structure on June 6, 2002.
Nicolet is a registered bank holding company under the Bank Holding Company Act of 1956, as amended. It conducts operations through its wholly owned subsidiary, Nicolet National Bank, which was organized in 2000 as a national bank under the laws of the United States and opened for business on November 1, 2000. Nicolet National Bank provides a full range of traditional banking services throughout northeastern Wisconsin and the upper peninsula of Michigan. Nicolet offers commercial, retail and wealth management services through 38 branch locations in Wisconsin and Menominee, Michigan, as of June 30, 2019.
As of June 30, 2019, Nicolet had consolidated total assets of approximately $3.1 billion, consolidated total gross loans of approximately $2.2 billion, consolidated total deposits of approximately $2.5 billion, and consolidated shareholders’ equity of approximately $411 million. At June 30, 2019, Nicolet had 9,351,359 shares of common stock issued and 9,327,420 shares outstanding, held by approximately 2,100 shareholders of record.
CHOICE BANCORP, INC.
1041 North Westhaven Drive
Oshkosh, Wisconsin 54904
(920) 230-1300
Choice Bancorp, Inc. is a registered bank holding company headquartered in Oshkosh, Wisconsin. Choice Bank (“Choice Bank”), Choice’s wholly owned banking subsidiary, is a state-chartered banking institution under the laws of the State of Wisconsin. Choice Bank offers a full range of traditional banking services, including commercial and retail, through two retail banking locations in Oshkosh, Wisconsin.
As of June 30, 2019, Choice had consolidated total assets of approximately $444 million, consolidated total gross loans of approximately $349 million, consolidated total deposits of approximately $312 million and consolidated shareholders’ equity of approximately $39 million. At June 30, 2019, Choice had 2,729,015 shares of common stock issued and 2,400,921 shares outstanding, held by approximately 700 shareholders of record.
1

The Merger Agreement
(See page 34)
Under the terms of the merger agreement, Choice will merge with and into Nicolet, with Nicolet being the surviving corporation. Following the merger of Choice with and into Nicolet, Choice Bank will merge with and into Nicolet National Bank, with Nicolet National Bank being the surviving bank. Both Nicolet and Nicolet National Bank will continue their existence under Wisconsin law and the laws of the United States, respectively, while Choice Bank will cease to exist. The merger agreement is attached to this document as Appendix A and is incorporated into this proxy statement-prospectus by reference. We encourage you to read the entire merger agreement carefully, as it is the legal document that governs the proposed merger.
What You Will Receive in the Merger
(See page 34)
If the merger is completed, each share of Choice common stock (excluding treasury shares, shares held directly or indirectly by Nicolet (other than in a fiduciary capacity or in connection with debts previously contracted), shares underlying Choice Stock Options, and dissenting shares; all such shares are referred to herein as the “cancelled shares”) will be converted into the right to receive the per share stock consideration of 0.5 of a share of Nicolet common stock.
Adjustment of Exchange Ratio
The merger agreement provides that the exchange ratio is fixed unless the Nicolet Common Stock Price (defined in the agreement as the volume weighted average closing price of Nicolet common stock on the Nasdaq Capital Market over the thirty trading day period ending on the third trading day prior to the closing date) is (a) greater than $67.00, in which case the exchange ratio would become floating at the quotient of  $33.50 divided by the Nicolet Common Stock Price, or (b) less than $55.00, in which case the exchange ratio would become floating at the quotient of  $27.50 divided by the Nicolet Common Stock Price.
If the Nicolet Common Stock Price falls below $55.00 per share, in lieu of adjusting the exchange ratio, Nicolet may elect to add a cash component to the merger consideration in an amount sufficient to make the aggregate per share consideration equal to $27.50 per share of Choice Common Stock.
Cash in Lieu of Fractional Shares
In lieu of any fractional shares of Nicolet common stock, Choice shareholders will receive an amount in cash (without interest and rounded to the nearest whole cent) as determined by multiplying the Nicolet Common Stock Price by the fractional share of Nicolet common stock to which such holder would otherwise be entitled.
Relative Ownership of Nicolet following Closing
After the merger is completed, we expect that current Nicolet shareholders will own approximately 89% of the outstanding shares of common stock of the combined company, and current Choice shareholders will approximately 11% of the outstanding shares of common stock of the combined company, assuming no adjustment to the exchange ratio.
Effect of the Merger on Choice Stock Options
(See page 35)
As of June 30, 2019, there were 118,783 shares of Choice common stock underlying Choice Stock Options. Pursuant to the merger agreement, each Choice Stock Option outstanding immediately prior to the effective date (whether vested or not) shall be cancelled in exchange for a cash payment equal to the product of  (i) the number of shares of Choice common stock subject to such Choice Stock Option immediately prior to the effective time of the merger and (ii) the excess, if any, of the product of  (x) the Nicolet Common Stock Price and (y) the exchange ratio, subject to any adjustment, over the exercise price per share of Choice common stock subject to such Choice Stock Option immediately prior to the effective time of the merger.
2

Dissenters’ Rights
(See page 55)
If the merger is completed, Choice shareholders who do not vote for the merger and who follow certain procedures as required by Wisconsin law and described in this proxy statement-prospectus will be entitled to exercise dissenters’ rights and receive the “fair value” of their shares in cash under Wisconsin law. If you assert and perfect your dissenters’ rights, you will not receive any merger consideration but will be entitled to receive the “fair value” of your shares of stock in cash as determined in accordance with Wisconsin law. The “fair value” of your shares may be more or less than the consideration to be paid in the merger. Appendix C includes the relevant provisions of Wisconsin law regarding these rights. See “Dissenters’ Rights” beginning on page 15 of this proxy statement-prospectus.
Your Expected Tax Treatment as a Result of the Merger
(See page 33)
We expect that the merger will qualify as a reorganization under Section 368(a) of the Internal Revenue Code and that Choice shareholders will not recognize gain for U.S. federal income tax purposes as a result of the surrender of Choice common stock solely for receipt of Nicolet common stock. Choice shareholders receiving cash in the merger, whether as a result of exercising dissenters’ rights, cancellation of Choice Stock Options or otherwise, will generally recognize gain or loss in an amount equal to the difference between the amount of cash received and the Choice shareholder’s aggregate tax basis in its Choice common stock or Choice Stock Option surrendered or cancelled in exchange thereof. Choice shareholders may also recognize gain for U.S. federal income tax purposes with respect to any cash received in lieu of fractional shares.
The completion of the merger is conditioned on receipt of a tax opinion from Bryan Cave Leighton Paisner LLP that the merger qualifies as a tax-free reorganization under Section 368(a) of the Internal Revenue. The opinion will not bind the Internal Revenue Service, which could take a different view.
See “Material U.S. Federal Income Tax Consequences of the Merger” for a more detailed discussion of the tax consequences of the merger. Determining the actual tax consequences of the merger to you as an individual taxpayer can be complicated. The tax treatment will depend on your specific situation and many variables not within our control. For these reasons, we recommend that you consult your tax advisor concerning the federal and any applicable state, local or other tax consequences of the merger to you.
Comparative Stock Prices
(See page 49)
Nicolet.   Nicolet common stock currently trades on the Nasdaq Capital Market under the ticker “NCBS.” The closing price of Nicolet common stock was $61.13 per share on June 26, 2019, the last trading day before public announcement of the merger. The closing price of Nicolet common stock was $[•] per share on August 28, 2019, the last trading day before the date of this proxy statement-prospectus.
Choice.   Choice’s common stock is quoted on the OTC Pink under the symbol “CBKW.” The closing price of Choice common stock was $21.25 per share on June 26, 2019, the last trading day before public announcement of the merger. The closing price of Choice common stock was $[•] per share on August 28, 2019, the last trading day before the date of this proxy statement-prospectus.
The Choice Board of Directors Recommends Shareholder Approval of the Merger
(See page 15)
The board of directors of Choice has unanimously approved the merger agreement and believes that the merger is in the best interests of Choice’s shareholders. The board unanimously recommends that you vote FOR approval of the merger proposal and FOR the adjournment proposal.
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In deciding to engage in the merger transaction with Nicolet, Choice’s board of directors consulted with its management, as well as its legal counsel and financial advisor, and considered numerous factors, including the following:

the board’s belief that the combined company and combined bank will each have a strong management team with the experience and qualifications necessary to navigate a larger banking organization;

the complementary aspects of the Choice and Nicolet businesses, including customer focus, geographic coverage, business orientation, core operating systems and compatibility of the companies’ management and operating styles;

the potential expense-saving and revenue-enhancing opportunities in connection with the merger, the related potential impact on the combined company’s earnings and the fact that the Choice shareholders will be able to participate as Nicolet shareholders in the benefits of such savings opportunities and the future performance of the combined company generally;

the respective presentations by management and financial advisors concerning the operations, financial condition and prospects of Choice and the expected financial impact of the merger on the combined company;

the terms of the merger agreement, and the presentation by Choice’s outside legal advisors regarding the merger and merger agreement;

the belief that Choice and Nicolet share a similar strategic vision and a similar community banking philosophy;

the financial structure, results of operations, and prospects of Choice and Nicolet, the capital adequacy of the resulting holding company and the outlook for the organizations in the rapidly changing financial services industry;

the relationship of the consideration to be paid in the merger to market prices and the book value and earnings per share of Choice and Nicolet;

the fact that the merger will create a significantly larger financial institution that will have capabilities to offer a wider array of financial products and services;

the combined resources of the two holding companies are expected to improve the efficiencies associated with the development of new products and services to be offered by Nicolet and its subsidiary bank;

the size and capital structure of the resulting holding company following the merger, which are expected to provide greater opportunities and flexibility in responding to the rapidly changing industry for financial service providers;

the enhanced ability of the combined organization to take advantage of current and emerging opportunities for growth and profitability; and

the receipt by Choice’s board of directors of the Stephens Inc. opinion (discussed below) concerning the fairness, from a financial point of view, of the merger to holders of Choice’s common stock.
Opinion of Stephens Inc.
(See page 21)
In deciding to approve the merger, the board of directors of Choice considered the opinion of its financial advisor, Stephens Inc., an investment banking and financial advisory firm. Stephens Inc. has given a fairness opinion to the Choice board of directors that, as of the date thereof, the merger consideration is fair, from a financial point of view, to the holders of Choice common stock. The opinion is based on and subject to the procedures, matters and limitations described in the opinion and other matters that Stephens
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Inc. considered relevant. The fairness opinion is attached to this proxy statement-prospectus as Appendix B. We urge all shareholders of Choice to read the entire opinion, which describes the procedures followed, matters considered and limitations on the review undertaken by Stephens Inc. in providing its opinion.
Information About the Special Shareholders’ Meeting
(See page 13)
A special meeting of the shareholders of Choice will be held on October 22, 2019, at 5:30 p.m., local time. The meeting will be held at 1041 North Westhaven Drive, Oshkosh, Wisconsin 54904. At the meeting, the shareholders of Choice will vote on the merger agreement described herein and in the notice for the meeting. If Choice’s shareholders approve the merger agreement and the other conditions to completing the merger are satisfied, we expect to complete the merger on November 8, 2019.
Quorum and Vote Required at the Meeting
(See page 13)
Shareholders who own Choice common stock at the close of business on August 27, 2019, the record date, will be entitled to vote at the special shareholders’ meeting. A majority of the outstanding shares of Choice common stock as of the record date for the meeting must be present in person or by proxy at the meeting in order for a quorum to be present. If a quorum is not present at the meeting, the meeting will be adjourned, and no vote will be taken until and unless a quorum is present.
Approval of the merger proposal requires the affirmative vote of a majority of the shares of Choice common stock outstanding on the record date. Abstentions, shares not voted, and broker nonvotes will have the same effect as a vote against the merger proposal. Approval of the adjournment proposal requires that the votes cast for the proposal exceed the votes cast against the proposal.
Share Ownership of Management
(See page 61)
As of the record date for the special meeting, directors and executive officers of Choice had or shared voting or dispositive power over approximately 40% of the outstanding shares of Choice common stock. It is anticipated that these individuals will vote their shares of Choice common stock in favor of the merger agreement. Certain of these individuals have entered into a written agreement with Nicolet providing that they will vote the shares over which they have voting power in favor of the merger agreement. A copy of the form of such agreement is included as an exhibit to the merger agreement.
As of the record date for the meeting, directors and executive officers of Nicolet had or shared no voting or dispositive power over any of the outstanding shares of Choice common stock. Nicolet had voting and dispositive power over approximately 2% of the outstanding shares of Choice common stock as of the record date.
Structure of the Merger
(See page 17)

Choice Bancorp, Inc. and Choice Bank will cease to exist after the merger.

Subsequent to the bank merger, the business of Choice Bank will be conducted through Nicolet National Bank.

Upon consummation of the merger and the bank merger, Scott Sitter is anticipated to join the management team of Nicolet and be named the Senior Vice President and Commercial Banking Manager of Oshkosh/Fox Valley.
We Must Obtain Regulatory Approval to Complete the Merger
(See page 32)
We cannot complete the merger unless we receive the approval of the Board of Governors of the Federal Reserve System (the “Federal Reserve”), the Office of the Comptroller of the Currency (“OCC”) and the Wisconsin Department of Financial Institutions (the “WDFI”). All regulatory applications and notices required to be filed prior to the merger have been or will be filed. Although we do not know of any reason why we could not obtain the necessary regulatory approvals in a timely manner, we cannot be certain whether or when we will obtain them.
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We Must Meet Several Conditions to Complete the Merger
(See page 36)
In addition to the required regulatory approvals, the merger will be completed only if certain conditions are met or waived, including the following:

approval by Choice’s shareholders of the merger agreement by the required vote;

receipt by Choice and Nicolet of an opinion from Bryan Cave Leighton Paisner LLP that the merger qualifies as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code;

Choice maintaining tangible common equity of at least $36 million (as defined in the merger agreement); and

each party’s certification to the other as to the continued accuracy of the representations and warranties contained in the merger agreement, compliance with covenants and closing conditions, and the satisfaction of all other matters applicable to the transaction.
If all regulatory approvals are received and the other conditions to completion are satisfied, Nicolet and Choice contemplate that they will complete the merger on November 8, 2019.
Termination and Termination Fee
(See page 42)
The merger agreement may be terminated, either before or after shareholder approval, under certain circumstances described in detail later in this proxy statement-prospectus. If Nicolet terminates the merger agreement because Choice’s board withdraws or changes its recommendation of the merger agreement, if Choice terminates the agreement to accept an Acquisition Proposal it deems a Superior Proposal, as each term is defined in the merger agreement, or if either party terminates the merger agreement under certain circumstances and within twelve months of such termination Choice enters into a definitive agreement with respect to an Acquisition Proposal, then Choice (or its successor) must pay Nicolet a termination fee of $3.0 million.
Choice’s Directors and Executive Officers Have Interests in the Merger that Differ from its Shareholders’ Interests
(See page 49)
The executive officers and directors of Choice have interests in the merger in addition to their interests as shareholders of Choice generally. The members of the Choice board of directors knew about these additional interests and considered them when they adopted the merger agreement. Such interests include, among others:

the potential continuation of employee benefits;

Choice Stock Options;

the potential payment of certain change in control benefits pursuant to the terms of employment agreements; and

provisions in the merger agreement relating to director and officer liability insurance and the indemnification of officers and directors of Choice for certain liabilities.
These interests are more fully described in this proxy statement-prospectus under the heading “The Merger — Interests of Certain Persons in the Merger” at page 29.
Employee Benefits of Choice Employees after the Merger
(See page 34)
Nicolet has agreed to offer to all current employees of Choice and Choice Bank who become Nicolet employees as a result of the merger substantially similar employee benefits to those that Nicolet offers to its employees in similar positions.
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Differences in Rights of Choice’s Shareholders after the Merger
(See page 52)
To the extent that they receive Nicolet common stock as merger consideration, Choice shareholders will become Nicolet shareholders as a result of the merger. Their rights as shareholders after the merger will be governed by Nicolet’s articles of incorporation and bylaws. The rights of Nicolet shareholders are different in certain respects from the rights of Choice’s shareholders. The material differences are described later in this proxy statement-prospectus.
Accounting Treatment
(See page 33)
Nicolet is required to account for the merger as a purchase transaction for accounting and financial reporting purposes under accounting principles generally accepted in the United States of America (“GAAP”). Under purchase accounting, the assets (including any identifiable intangible assets) and liabilities (including executory contracts and other commitments) of Choice at the effective time of the merger will be recorded at their respective fair values and added to those of Nicolet. Any excess of purchase price over the fair values is recorded as goodwill. Any excess of the fair values over the purchase price is recorded in earnings as a bargain purchase gain. Consolidated financial statements of Nicolet issued after the merger would reflect those fair values and would not be restated retroactively to reflect the historical consolidated financial position or results of operations of Choice.
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RISK FACTORS
In addition to the other information included in this proxy statement-prospectus, you should carefully consider the matters described below in determining whether to adopt and approve the merger agreement.
Risks Relating to the Merger
Because the market price of Nicolet common stock will fluctuate, Choice shareholders cannot be sure of the exact value of the merger consideration they will receive.
Upon completion of the merger, each share of Choice common stock issued and outstanding immediately prior to closing of the merger (excluding cancelled shares) will be converted into the right to receive the merger consideration, which shall consist of 0.5 of a share of Nicolet common stock. The value of such shares of Nicolet common stock to be received will depend on the price per share of Nicolet common stock at the time the shares are actually received by a Choice shareholder. The value of Nicolet common stock may fluctuate from the date the merger agreement was signed and publicly announced to the date this proxy statement-prospectus was prepared, the date of the Choice special shareholders’ meeting, and the date immediately prior to the closing of the merger. Accordingly, Choice shareholders will not know or be able to calculate the value of any Nicolet common stock they are to receive in the merger at the time they submit their proxy or at the time of the special shareholders’ meeting. Stock price changes may result from a variety of factors, including but not limited to general market and economic conditions, changes in Nicolet’s businesses, operations and prospects, and regulatory considerations, among other things. Many of these factors are beyond the control of Nicolet.
Further, the exchange ratio may adjust in the event that the Nicolet Common Stock Price (defined in the merger agreement as the volume weighted average closing price of Nicolet common stock on the Nasdaq Capital Market over the thirty trading day period ending on the third trading day prior to the closing date) is greater than $67.00 or less than $55.00. In the event that the Nicolet Common Stock Price falls below $55.00 per share, in lieu of adjusting the exchange ratio, Nicolet may elect to add a cash component to the merger consideration as set forth in the merger agreement.
Because Choice common stock is traded infrequently, it is difficult to determine how the fair value of Choice common stock compares with the merger consideration.
Choice common stock is traded on the OTC Pink market of the OTC Markets Group, Inc. The market for Choice common stock has been illiquid and irregular. This lack of liquidity makes it difficult to determine the fair value of Choice common stock.
Nicolet’s integration of Choice may be more difficult, costly, or time-consuming than we expect.
Nicolet and Choice have operated, and, until completion of the merger, will continue to operate, independently. It is possible that the integration process could result in the loss of key employees or disruption of each company’s ongoing business or inconsistencies in standards, procedures and policies, each of which would adversely affect the ability to maintain relationships with clients and employees or to achieve the anticipated benefits of the merger. If Nicolet experiences difficulties with the integration process, Nicolet might not achieve the economic benefits expected to result from the merger. As with any merger of banking institutions, there also may be business disruptions that cause the combined entity to lose customers or cause customers to take their deposits out of our banks and move their business to other financial institutions.
Choice and Nicolet will be subject to business uncertainties while the merger is pending, which could adversely affect their respective businesses.
Uncertainty about the effect of the merger on employees and customers may have an adverse effect on Choice and Nicolet and consequently on the business and stock price of Nicolet after the merger. Although the parties intend to take steps to reduce any adverse effects, these uncertainties may impair their ability to attract, retain, and motivate key personnel until the merger is consummated and for a period of time thereafter, and such uncertainties could cause customers and others that deal with Choice or Nicolet to seek to change their existing business relationships. Employee retention could be particularly challenging during
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the merger, as employees may experience uncertainty about their roles in the combined company following the merger. If key employees depart because of issues relating to the perceived uncertainty and difficulty of integration or a desire not to remain with the combined company, the combined company’s business following the merger could be harmed and the market price of its common stock could decrease.
Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated.
The merger must be approved by the Federal Reserve, the OCC and the WDFI. The Federal Reserve, the OCC and the WDFI will consider, among other factors, the competitive impact of the merger, our financial and managerial resources and the convenience and needs of the communities to be served. As part of that consideration, we expect that the Federal Reserve, the OCC and the WDFI will review the capital position, safety and soundness, and legal and regulatory compliance matters and Community Reinvestment Act (“CRA”) matters. There can be no assurance as to whether other necessary approvals will be received, the timing of those approvals, or whether any conditions will be imposed.
The market price of Nicolet common stock after the merger may be affected by factors different from those currently affecting the market price of Choice.
The businesses of Nicolet and Choice differ in some respects and, accordingly, the results of operations of Nicolet and the market price of Nicolet’s shares of common stock after the merger may be affected by factors different from those currently affecting Choice’s results of operations. For a discussion of the businesses of Nicolet and Choice and of certain factors to consider in connection with those businesses, see “The Companies” at page 1.
The Merger Agreement limits Choice’s ability to pursue alternatives to the merger.
The merger agreement contains provisions that limit Choice’s ability to discuss competing third-party proposals to acquire all or a significant part of either party or any of its subsidiaries. In addition, Choice has agreed to pay Nicolet a fee of  $3.0 million if Nicolet terminates the agreement after Choice’s board of directors withdraws or changes its recommendation of the merger agreement, if Choice terminates the merger agreement to accept an Acquisition Proposal that Choice’s board deems a Superior Proposal, as each term is defined in the merger agreement, or if either party terminates the merger agreement either because Choice’s shareholders did not approve the merger agreement or because the merger was not consummated on or prior to June 26, 2020, and, within twelve months following such termination, Choice enters into a definitive agreement with respect to an Acquisition Proposal. These provisions might discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of Choice from considering or proposing that acquisition, even if it were prepared to pay consideration with a higher per share price than that proposed in the merger, or might result in a potential competing acquirer proposing to pay a lower per share price to acquire Choice than it might otherwise have proposed to pay.
Certain directors and executive officers of Choice have interests in the merger other than their interests as shareholders.
Certain directors and executive officers of Choice have interests in the merger other than their interests as shareholders. The board of directors of Choice was aware of these interests at the time it approved the merger. These interests may cause Choice’s directors and executive officers to view the merger proposal differently than you may view it. See “The Merger — Interests of Certain Persons in the Merger” at page 29.
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Failure to complete the merger could negatively impact the stock price and future business and financial results of Choice.
If the merger is not completed for any reason, including as a result of Choice shareholders failing to approve the merger agreement and the merger, the ongoing business of Choice may be adversely affected and, without realizing any of the benefits of having completed the merger, Choice could be subject to a number of possible consequences, including the following:

Choice may be required, under certain circumstances, to pay a termination fee to Nicolet;

Choice is subject to certain restrictions on the conduct of business prior to completing the merger, which may adversely affect its ability to execute certain business strategies;

Choice may experience negative impacts on its stock price or from customers, regulators and employees;

Choice has incurred and will continue to incur certain costs and fees associated with the merger; and

matters related to the merger (including integration planning) may require substantial commitments of time and resources by the management and employees of Choice, which would otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to Choice as an independent company.
You will experience a substantial reduction in percentage ownership and voting power with respect to your shares as a result of the merger.
Choice shareholders will experience a substantial reduction in their respective percentage ownership interests and effective voting power through their stock ownership in Nicolet after the merger relative to their percentage ownership interest in Choice prior to the merger. If the merger is consummated, current Choice shareholders would own approximately 11% of Nicolet’s outstanding common stock, assuming no adjustments to the exchange ratio, while current Nicolet shareholders would own the remaining 89%. Consequently, Choice shareholders will have less voting power per share in Nicolet following the merger than they currently have in Choice as an independent entity. See “The Merger Agreement — What Choice Shareholders will Receive in the Merger” at page 34.
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A WARNING ABOUT FORWARD-LOOKING STATEMENTS
This proxy statement-prospectus includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss future expectations, describe future plans and strategies, contain projections of results of operations or of financial condition or state other forward-looking information. Forward-looking statements are generally identifiable by the use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “endeavor,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “objective,” “potential,” “predict,” “project,” “seek,” “should,” “will” and other similar words and expressions of future intent.
The ability of Nicolet and Choice to predict results or the actual effect of future plans or strategies is inherently uncertain. Although Nicolet and Choice believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, actual results and performance could differ materially from those set forth in the forward-looking statements. Factors that could cause actual results and performance to differ from those expressed in the forward-looking statements include, but are not limited to:

the businesses of Nicolet and Choice may not integrate successfully or the integration may be more difficult, time-consuming or costly than expected;

the expected growth opportunities and cost savings from the transaction may not be fully realized or may take longer to realize than expected;

revenues following the transaction may be lower than expected as a result of losses of customers or other reasons, including issues arising in connection with integration of the two banks;

deposit attrition, operating costs, customer loss and business disruption following the transaction, including difficulties in maintaining relationships with employees, may be greater than expected;

governmental approvals of the transaction may not be obtained on the proposed terms or expected timeframe;

the terms of the proposed transaction may need to be modified to satisfy such approvals or conditions;

Choice’s shareholders may fail to approve the transaction;

reputational risks and the reaction of the companies’ customers to the transaction;

diversion of management time on merger-related issues;

changes in asset quality and credit risk;

the cost and availability of capital;

customer acceptance of the combined company’s products and services;

customer borrowing, repayment, investment and deposit practices;

the introduction, withdrawal, success and timing of business initiatives;

the impact, extent, and timing of technological changes;

severe catastrophic events in our geographic area;

a weakening of the economies in which the combined company will conduct operations may adversely affect its operating results;

the U.S. legal and regulatory framework, including those associated with the Dodd Frank Wall Street Reform and Consumer Protection Act, could adversely affect the operating results of the combined company;
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the impact of interest rates on margins and net interest income; and

competition from other financial services companies in the companies’ markets could adversely affect operations.
The cautionary statements in the “Risk Factors” section and elsewhere in this proxy statement- prospectus, and other risks detailed in the parties’ press releases, shareholder communications and other SEC filings, including the Form 10-K filed by Nicolet for the year ended December 31, 2018, identify important factors and possible events that involve risk and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. Nicolet and Choice do not intend to, and undertake no obligation to, update or revise any forward-looking statements, whether as a result of differences in actual results, changes in assumptions or changes in other factors affecting such statements.
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THE CHOICE SPECIAL SHAREHOLDERS’ MEETING
Purpose
Choice shareholders are receiving this proxy statement-prospectus because on August 27. 2019, the record date for a special meeting of shareholders to be held on October 22, 2019, at 1041 North Westhaven Drive, Oshkosh, Wisconsin 54904 at 5:30 p.m., they owned shares of the common stock of Choice, and the board of directors of Choice is soliciting proxies for the matters to be voted on at this special meeting, as described in more detail below. A copy of this proxy statement-prospectus was mailed to holders of Choice common stock on or about September 10, 2019, accompanied by a proxy card for use at the meeting and at any adjournment(s) of the meeting.
At the meeting, Choice shareholders will consider and vote upon the merger agreement and the transactions contemplated thereby and any other matters that are properly brought before the meeting or any adjournments(s) of the meeting.
When you sign the enclosed proxy card or otherwise vote pursuant to the instructions set forth on the proxy card, you appoint the proxy holder as your representative at the meeting. The proxy holder will vote your shares as you have instructed in the proxy card, thereby ensuring that your shares will be voted whether or not you attend the meeting. Even if you plan to attend the meeting, we ask that you instruct the proxies how to vote your shares in advance of the meeting just in case your plans change. In the event that other matters arise at the special meeting, the proxy holder will vote your shares according to his or her discretion.
If you have not already done so, please complete, date and sign the accompanying proxy card and return it promptly in the enclosed, postage paid envelope or otherwise vote pursuant to the instructions set forth on the proxy card. If you do not vote your shares as instructed on the proxy card, or if you do not attend and cast your vote at the special meeting, the effect will be a vote against the merger agreement.
Record Date; Quorum and Vote Required
The record date for the Choice special meeting is August 27, 2019. Choice’s shareholders of record as of the close of business on that day will receive notice of and will be entitled to vote at the special meeting. As of the record date, there were 2,400,921 shares of Choice common stock outstanding and entitled to vote at the meeting. The outstanding shares are held by approximately 700 holders of record.
The presence, in person or by proxy, of a majority of the shares of Choice common stock entitled to vote on the merger agreement is necessary to constitute a quorum at the meeting. Each share of Choice common stock outstanding on the record date entitles its holder to one vote on the merger agreement and any other proposal that may properly come before the meeting.
To determine the presence of a quorum at the meeting, Choice will also count as present at the meeting the shares of Choice common stock present in person but not voting, and the shares of common stock for which Choice has received proxies but with respect to which the holders of such shares have abstained or signed without providing instructions as described in “Solicitation and Revocation of Proxies” below. Based on the number of shares of Choice common stock outstanding as of the record date, at least 1,200,461 shares need to be present at the special meeting, whether in person or by proxy, to constitute a quorum.
Approval of the merger proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Choice common stock as of the record date for the special meeting. Abstentions, shares not voted, and broker nonvotes will have the same effect as a vote against the merger proposal. Approval of the adjournment proposal requires that more votes be cast in favor of the adjournment proposal than against it; abstentions, shares not voted, and broker nonvotes will have no effect on this proposal.
As of the record date for the meeting, Choice’s directors and executive officers beneficially owned a total of 963,641 shares, or approximately 40% of the shares entitled to vote on the merger, of Choice common stock. We anticipate that these individuals will vote their shares in favor of the merger agreement. Certain of these individuals, representing approximately 37% of the shares entitled to vote on the merger,
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have entered into a written agreement with Nicolet that they will vote their shares in favor of the merger agreement, except as may be limited by any existing fiduciary obligations to beneficial owners of such shares. In addition, Nicolet had voting power over approximately 2% of the shares entitled to vote on the merger.
Solicitation and Revocation of Proxies
If you have delivered a signed proxy card for the Choice special meeting, you may revoke it at any time before it is voted by:

attending the meeting, giving oral notice of your revocation, and voting in person;

giving written notice revoking your proxy to Choice’s Corporate Secretary prior to the date of the meeting;

if you voted over the internet, voting again over the internet by the applicable deadline described below or submit a proxy card and return it prior to the vote at the special meeting; or

submitting a signed proxy card that is dated later than your initial proxy card to Choice’s Corporate Secretary.
The proxy holders will vote as directed on all valid proxies that are received at or prior to the meeting and that are not subsequently revoked. If you complete, date and sign your proxy card but do not provide instructions as to your vote, the proxy holders will vote your shares FOR approval of the merger proposal and FOR the adjournment proposal. If any other matters are properly presented at the meeting for consideration, the persons named in the proxy card will have discretionary authority to vote your shares on those matters. Choice’s board of directors is not aware of any matter to be presented at the meeting other than the merger proposal and the adjournment proposal.
If you hold shares in “street name” with a broker, bank, or other fiduciary, you will receive voting instructions from the holder of record of your shares. Under the rules of various national and regional securities exchanges, brokers, banks and other fiduciaries may generally vote your shares on routine matters, such as the ratification of an independent registered public accounting firm, even if you provide no instructions, but may not vote on non-routine matters, such as the matters being brought before the special meeting, unless you provide voting instructions. Shares for which a broker does not have the authority to vote are recorded as “broker nonvotes” and are not counted in the vote by shareholders, but will count for purposes of a quorum. As a result, any broker nonvotes will have the practical effect of a vote against the merger proposal but will not affect the adjournment proposal. We therefore encourage you to provide directions to your broker as to how you want your shares voted on all matters to be brought before the special meeting. You should do this by carefully following the instructions your broker gives you concerning its procedures. If you hold shares in “street name” and wish to change your vote at any time, you must contact your broker.
Choice will bear the cost of soliciting proxies from its shareholders. Choice will solicit shareholder votes by mail and may also solicit certain shareholders by other means of communication, including telephone or in person. If anyone solicits your vote in person, by telephone, or by other means of communication, they will receive no additional compensation for doing so. Choice will reimburse brokerage firms and other persons representing beneficial owners of shares for their reasonable expenses in forwarding solicitation material to those beneficial owners.
How to Vote Your Shares
Shareholders of record (i.e., those who own shares in their own name) can vote by internet, mail or in person as follows:

Voting By Internet.   Access the internet website specified on the enclosed proxy card.

Voting by Mail.   Complete, sign, date, and return the enclosed proxy card in the envelope provided.

Voting at the Special Meeting.   If you decide to attend the special meeting and vote in person, you
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may deposit your proxy card with a representative of Choice at the special meeting registration desk. You may also complete a ballot that will be distributed at the meeting. Whether or not you plan to attend the special meeting, please submit your proxy promptly in the enclosed envelope.
“Street name” shareholders (i.e., those who own their shares in the name of a broker, bank, or other fiduciary) should refer to the information you receive from your broker to see which voting methods are available to you. Please note, if you are a street name shareholder and wish to vote in person at the special meeting, you must obtain a proxy executed in your favor from your broker to be able to vote at the special meeting.
You should not send any stock certificates with your proxy card. If the merger is completed, you will receive a letter of transmittal with instructions for exchanging your stock certificates.
Dissenters’ Rights
Choice’s shareholders have dissenters’ rights with respect to the merger under Wisconsin law. Shareholders who wish to assert their dissenters’ rights and comply with the procedural requirements of Subchapter XIII of the Wisconsin Business Corporation Law (“WBCL”) will be entitled to receive payment of the fair value of their shares in cash in accordance with Wisconsin law. For more information regarding the exercise of these rights, see, “Dissenters’ Rights,” at page 55.
Recommendation of the Board of Directors of Choice
Choice’s board of directors has unanimously approved the merger agreement and the transactions contemplated thereby, believes that the merger is in the best interests of Choice and its shareholders, and recommends that you vote FOR approval of the merger agreement and the transactions contemplated thereby and FOR the adjournment proposal.
For a discussion of the factors considered by the board of directors in reaching its conclusion, see “The Merger — Background of the Merger” at page 17 and “The Merger — Reasons for the Merger” at page 19.
Shareholders should note that Choice’s directors have certain interests in, and may derive benefits as a result of, the merger that are in addition to their interests as shareholders of Choice. See “The Merger — Interests of Certain Persons in the Merger” at page 29.
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THE PROPOSALS
Proposal 1 — Approval of the Merger Agreement and the Merger
At the special meeting, shareholders of Choice will be asked to approve the merger proposal providing for the merger of Choice with and into Nicolet. Shareholders of Choice should read this proxy statement- prospectus carefully and in its entirety, including the appendices, for more detailed information concerning the merger agreement and the merger. A copy of the merger agreement is attached to this proxy statement- prospectus as Appendix A.
After careful consideration, the Choice board of directors, by a unanimous vote of all directors, approved the merger agreement and the merger, and found them to be advisable and in the best interests of Choice and its shareholders. See “The Merger — Background of the Merger” and “The Merger — Reasons for the Merger” included elsewhere in this proxy statement-prospectus for a more detailed discussion of the Choice board’s recommendation.
THE CHOICE BOARD UNANIMOUSLY RECOMMENDS THAT
CHOICE SHAREHOLDERS VOTE “FOR” THE MERGER PROPOSAL.
Proposal 2 — Adjournment of the Special Meeting
If Choice does not receive a sufficient number of votes to constitute a quorum of the common stock or approve the merger agreement and the transactions contemplated thereby, it may propose to adjourn the special meeting for the purpose of soliciting additional proxies to establish such quorum or approve the merger proposal. Choice does not currently intend to propose adjournment of the special meeting if there are sufficient votes to approve the merger agreement and the transactions contemplated thereby. If approval of the proposal to adjourn the special meeting for the purpose of soliciting additional proxies is submitted to the Choice shareholders for approval, the approval requires the affirmative vote of the holders of a majority of the shares of common stock present, in person or by proxy, at the special meeting, whether or not a quorum is present.
THE CHOICE BOARD UNANIMOUSLY RECOMMENDS THAT
CHOICE SHAREHOLDERS VOTE “FOR” THE ADJOURNMENT PROPOSAL.
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THE MERGER
Structure of the Merger
The merger agreement provides for the merger of Choice with and into Nicolet, with Nicolet being the surviving entity in the merger. After the merger, Choice Bank will merge with and into Nicolet National Bank, with Nicolet National Bank being the surviving bank. Each share of Choice common stock outstanding at the effective time of the merger, other than certain cancelled shares, will be converted into the right to receive merger consideration consisting of 0.5 of a share of Nicolet common stock. The merger agreement provides that the exchange ratio is fixed unless the Nicolet Common Stock Price (as defined in the merger agreement) is (a) greater than $67.00, in which case the exchange ratio would become floating at the quotient of  $33.50 divided by the Nicolet Common Stock Price, or (b) less than $55.00, in which case the exchange ratio would become floating at the quotient of  $27.50 divided by the Nicolet Common Stock Price. If the Nicolet Common Stock Price falls below $55.00 per share, in lieu of adjusting the exchange ratio, Nicolet may elect to add a cash component to the merger consideration in an amount sufficient to make the aggregate per share consideration equal to $27.50 per share of Choice Common Stock.
See “The Merger Agreement” on page 34 for additional details regarding the structure of the merger.
Background of the Merger
Choice’s board of directors and senior management regularly review and evaluate its business, strategic direction, performance, prospects and strategic alternatives as part of Choice’s ongoing efforts to strengthen its businesses and improve its operations and financial performance in order to create value for its shareholders, taking into account economic, regulatory, competitive and other conditions. In recent years, such strategic reviews have identified that the pricing in the strategic market is peaking and such pricing may not be sustainable long term. At the same time, many of Choice’s shareholders have expressed a desire to retain their ownership in the local community bank and avoid the tax event that would be triggered by selling their shares. It is within this framework that the board of directors of Choice devoted significant time evaluating various strategic options. All of these options addressed only a handful of the intermediate and long-term challenges facing Choice and all similarly-situated community bank holding companies.
There have been an increasing number of burdens placed on banks in recent years which have resulted in a wave of consolidation. As banks get bigger, it is easier to absorb the increasing operational expenses associated with regulatory compliance and technology. Since passage of the Dodd-Frank Act by Congress in 2010, numerous new rules and regulations have made compliance, particularly by community banks, very costly. These rules have required banks to devote more resources to hiring compliance personnel, training, audit and so forth, all of which are resources taken from customer-facing, profit-generating endeavors. In addition to the regulatory costs, the technology requirements are rapidly evolving, both in terms of product offerings and security. These technology developments require substantial investment by banks, often using up capital which would otherwise be leveraged to originate income-generating loans or investments.
The result of these forces has been an increase in the number of community banks which have been acquired or merged with other banks. According to the Federal Deposit Insurance Corporation (“FDIC”), there were approximately 5,400 FDIC-insured institutions as of January 31, 2019, which is down from more than 7,600 in 2010. The elimination of over 2,200 banks (or more than 1 in 4) during that time is evidence of the challenges facing the banking industry. The trend has continued throughout the first six months of 2019.
The changing landscape of community bank consolidations results in Choice having to compete with larger competitors, combined with an expanding array of financial services providers coming from large internet based competition. Both scenarios will result in it being more challenging for small community banks to successfully compete in the coming years.
Given the foregoing background, in the fourth quarter of 2018, the board of directors of Choice began considering and evaluating investment banking firms. After significant discussion and analysis, the board decided that it would be in the best interests of the shareholders of Choice to conduct a formal, coordinated bid process and engaged Stephens Inc. to coordinate that effort. Choice’s management team and board of directors, in collaboration with Stephens Inc., identified and reviewed the universe of potential acquirers,
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and ultimately selected seven potential partners to contact in the sale process. Those parties were deemed to be the most credible and logical based on a review of many factors, including but not limited to their markets, size, financial resources and capacity to pay a premium for Choice, as well as the perceived ability of each institution to execute a strategic transaction of this type. After conducting its own due diligence, Stephens Inc., in conjunction with Choice’s management, prepared confidential offering materials and established a virtual data room. Stephens Inc. officially launched the sales effort on February 19, 2019. The seven financial institutions previously identified were contacted, and each executed a confidentiality agreement and received confidential marketing materials with respect to Choice.
On March 12, 2019, the board of Nicolet met and discussed the potential transaction with Choice, as well as a proposed timeline.
On March 20, 2019, initial indications of interest were received from multiple institutions. At this time Nicolet submitted a proposal that valued Choice at approximately $27.00 per share, and included a mix of stock and cash as the form of consideration.
On March 26, 2019, the board of directors of Choice, along with representatives from Stephens Inc. discussed and evaluated the indications of interest in detail. At that time, the board of directors of Choice decided to move forward with Nicolet and one other party. After discussions with Stephens, Nicolet submitted a revised letter of intent on March 28, 2019 that proposed a 0.5 fixed exchange ratio whereby Nicolet would acquire Choice in an all-stock transaction. That same day, Nicolet was informed that it would be allowed to conduct further due diligence as part of a potential transaction, and immediately provided Choice with its request list of further material it wanted to evaluate.
From April 13, 2019 through the end of May, Nicolet and Choice, along with their respective legal advisors, engaged in extensive due diligence. At the request of Stephens, Nicolet provided an updated letter of intent on May 23, 2019, which confirmed its previous proposal to offer a fixed exchange ratio of 0.5 of a share of Nicolet for each share of Choice in an all-stock transaction.
On May 28, 2019, the board of directors of Choice met with Stephens and counsel from Reinhart Boerner Van Deuren, s.c. (“Reinhart”). At this meeting, executives from Nicolet presented additional information regarding Nicolet and fielded questions regarding the bid. After the Nicolet executives departed, the board of directors of Choice engaged in extensive discussions with Stephens Inc. and Reinhart and the board of directors ultimately approved moving forward with a definitive agreement with Nicolet.
From May 31, 2019 to June 19, 2019, all parties negotiated the terms of the merger agreement and exchanged comments and revised drafts of the agreements. During this process, the parties implemented a cap-and-collar structure, so that the exchange ratio would be fixed within a range of trading prices of Nicolet Common Stock.
On June 18, 2019, the board of Nicolet met to discuss the terms of the merger. Management provided an in-depth analysis of the bid from a financial perspective. The board also reviewed the final draft of the definitive merger agreement and summarized the terms and conditions. After a thorough discussion, the board of Nicolet voted unanimously to proceed with the transaction
On June 25, 2019, the board of Choice met again with its advisors from Stephens and Reinhart. Counsel reviewed the final draft of the definitive merger agreement and summarized the terms and conditions. Stephens issued its fairness opinion, from a financial point of view, after considering a finalized draft of the definitive merger agreement and the revised merger consideration. After a thorough discussion, the board of Choice voted unanimously to proceed with the transaction.
Nicolet and Choice executed the merger agreement on June 26, 2019 and issued a joint press release announcing the execution of the merger agreement and the terms of the merger on June 27, 2019.
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Reasons for the Merger
General
The financial and other terms of the merger agreement resulted from arm’s-length negotiations between Nicolet’s and Choice’s representatives. The following discussion of the information and factors considered by the Nicolet and Choice boards of directors is not intended to be exhaustive, but includes all of the material factors the respective boards considered in determining whether to enter into the merger agreement. In reaching their determinations to approve the merger and to recommend that their respective shareholders approve the merger, neither the Nicolet board of directors nor the Choice board of directors assigned any relative or specific weight to the following factors, and individual directors may have assigned different weight to different factors.
Nicolet
In deciding to pursue a merger with Choice, Nicolet’s management and board of directors considered, among other things, the following:

the effectiveness of the merger in allowing Nicolet to expand its existing competitive position in the Oshkosh market;

Nicolet’s belief that the greater Fox Valley region (which includes the Appleton and Oshkosh-Neenah MSAs) is an attractive and dynamic market, and collectively, is the third largest market by population in the state of Wisconsin;

Choice’s strong reputation and successful track record of organic loan growth in the Fox Valley market and its management team’s long-term expertise in commercial lending;

the fact that Nicolet will be able to offer its full suite of banking and wealth management services in these markets to complement its current location in Oshkosh;

the fact that certain members of Nicolet’s and Choice’s boards of directors have long standing professional relationships and Nicolet’s belief that Choice’s business values, cultures and philosophies seem to align with those of Nicolet;

Nicolet’s expectation that Nicolet will retain its strong capital position and asset quality upon completion of the transaction; and

Nicolet’s expectations that the merger will offer cost savings opportunities, opportunities for revenue growth through the ability to offer new products and services to Choice customers, and as a result, be accretive to earnings per share within the first full year.
The Nicolet board of directors approved the merger agreement after Nicolet’s senior management discussed with the Nicolet board of directors a number of factors, including those described above and the business, loan and deposit structure, assets, liabilities, results of operations, financial performance, and strategic direction of Choice. The foregoing discussion of the information and factors considered by the Nicolet board of directors is not exhaustive, but includes the material factors considered by the Nicolet board of directors. In view of the wide variety of factors considered by the Nicolet board of directors in connection with its evaluation of the merger, the Nicolet board of directors did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors it considered in reaching its determination. The Nicolet board of directors viewed its position as being based on all of the information and the factors presented to and considered by it. In addition, individual directors may have given different weights to different information and factors. The explanation of Nicolet’s reasons for the merger includes statements that are forward-looking in nature and, therefore, should be read in light of the factors discussed above under “A Warning About Forward-Looking Statements.”
Choice
In deciding to pursue the merger transaction with Nicolet, Choice’s board of directors consulted with its management, as well as its legal counsel and financial advisor, and considered numerous factors, including the following:
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the board’s belief that the combined company and combined bank will each have a strong management team with the experience and qualifications necessary to navigate a larger banking organization;

the complementary aspects of the Choice and Nicolet businesses, including customer focus, geographic coverage, business orientation, core operating systems and compatibility of the companies’ management and operating styles;

the potential expense-saving and revenue-enhancing opportunities in connection with the merger, the related potential impact on the combined company’s earnings and the fact that the nature of the merger consideration allows Choice shareholders to participate as Nicolet shareholders in the benefits of such savings opportunities and the future performance of the combined company generally;

the respective presentations by management and financial advisors concerning the operations, financial condition and prospects of Choice and the expected financial impact of the merger on the combined company;

the terms of the merger agreement, and the presentation by Choice’s outside legal advisors regarding the merger and merger agreement;

the belief that Choice and Nicolet share a similar strategic vision and a similar community banking philosophy;

the financial structure, results of operations, and prospects of Choice and Nicolet, the capital adequacy of the resulting holding company and the outlook for the organizations in the rapidly changing financial services industry;

the relationship of the consideration to be paid in the merger to market prices and the book value and earnings per share of Choice and Nicolet;

the fact that the merger will create a significantly larger financial institution that will have capabilities to offer a wider array of financial products and services;

the combined resources of the two holding companies are expected to improve the efficiencies associated with the development of new products and services to be offered by Nicolet and its subsidiary bank;

the size and capital structure of the resulting holding company following the merger, which are expected to provide greater opportunities and flexibility in responding to the rapidly changing industry for financial service providers;

the enhanced ability of the combined organization to take advantage of current and emerging opportunities for growth and profitability; and

the receipt by Choice’s board of directors of the Stephens Inc. opinion concerning the fairness, from a financial point of view, of the merger to holders of Choice common stock.
The board also considered certain potential risks associated with the merger, including the following:

the significant time and costs to be undertaken by management in completing the merger and the effort that could cause in disrupting Choice normal business activities; and

the conditions to closing set forth in the merger agreement and the likelihood such conditions will be satisfied, including the receipt of approvals from government agencies.
While each member of Choice’s board of directors evaluated each of the foregoing as well as other factors, the board of directors collectively did not assign any specific or relative weights to the factors considered and did not make any determination with respect to any individual factor. The Choice board of directors collectively made its determination with respect to the merger based on its unanimous conclusion that the merger, in light of the factors which each of them individually considered appropriate, is in the best interest of Choice’s shareholders. All members of the board of directors voted to approve merger agreement and the merger.
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Opinion of Stephens Inc.
Choice retained Stephens Inc. as financial advisor on February 4, 2019. Pursuant to that engagement, the Choice board of directors requested that Stephens Inc. evaluate the fairness, from a financial point of view, to Choice and its public shareholders. The full text of the written opinion of Stephens Inc. is attached as Appendix B to this document. The summary of the opinion of Stephens Inc. set forth in this document is qualified in its entirety by reference to the full text of such written opinion. Public shareholders of Choice are urged to read this opinion in its entirety.
At the June 25, 2019 meeting of the Choice board of directors, representatives of Stephens Inc. rendered its oral opinion, which was subsequently confirmed by delivery of a written opinion to the board dated June 25, 2019, as to the fairness, as of such date, from a financial point of view, to the public shareholders of Choice of the merger consideration to be received by such holders in the transaction pursuant to the merger agreement, based upon and subject to the qualifications, assumptions and other matters considered in connection with the preparation of its opinion.
Stephens Inc. provided its opinion for the information of the Choice board of directors (solely in its capacity as such) in connection with, and for purposes of, its consideration of the merger transaction and its opinion only addresses whether the merger consideration to be received by the public shareholders of Choice in the transaction pursuant to the merger agreement was fair, from a financial point of view, to such holders. The opinion of Stephens Inc. does not address any other term or aspect of the merger agreement or the merger transaction contemplated thereby. The Stephens Inc. opinion does not constitute a recommendation to the Choice board or to any holder of Choice common stock as to how the board, such shareholder, or any other person should vote, or otherwise act, with respect to the merger transaction or any other matter. Stephens Inc. does not express any opinion as to the likely trading range of Nicolet common stock following the merger, which may vary depending on numerous factors that generally impact the price of securities or on the operations, financial condition or prospects of Nicolet at that time.
In connection with its review of the proposed merger transaction and the preparation of its opinion, Stephens Inc., among other things:

analyzed certain publicly available financial statements and reports regarding Choice and Nicolet;

analyzed certain audited financial statements and management reports regarding Choice and Nicolet;

analyzed certain internal financial statements and other financial and operating data concerning Choice prepared by management of Choice;

analyzed, on a pro forma basis, the effect of the Transaction on the balance sheet, capitalization ratios, earnings and book value both in the aggregate and, where applicable, on a per share basis of Nicolet;

reviewed the reported prices and trading activity for the common stock of Choice and Nicolet;

compared the financial performance of Choice and Nicolet with that of certain other publicly-traded companies and their securities that Stephens Inc. deemed relevant to its analysis of the Transaction;

reviewed the financial terms, to the extent publicly available, of certain merger or acquisition transactions that Stephens Inc. deemed relevant to its analysis of the Transaction;

reviewed the most recent draft of the Agreement and related documents provided to Stephens Inc. by Choice;

discussed with management of Choice and Nicolet the operations of and future business prospects for Choice and Nicolet and the anticipated financial consequences of the Transaction to Choice and Nicolet;

assisted in the deliberations of Choice regarding the material terms of the Transaction and the negotiations of Choice with Nicolet; and
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performed such other analyses and provided such other services as Stephens Inc. have deemed appropriate.
With Choice’s consent, Stephens Inc. assumed and relied upon the accuracy and completeness of all information supplied by or on behalf of Choice, or otherwise reviewed by or discussed with Stephens Inc., and Stephens Inc. did not undertake any duty or responsibility to, nor did Stephens Inc., independently verify any of such information. Stephens Inc. did not make or obtain an independent appraisal of the assets or liabilities (contingent or otherwise) of Choice or Nicolet. With respect to the projections and any other information and data provided to or otherwise reviewed by or discussed with Stephens Inc., Stephens Inc., with Choice’s consent, assumed that the projections and such other information and data were reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of management of Choice. Stephens Inc. relied upon Choice to advise Stephens Inc. promptly if any information previously provided became inaccurate or was required to be updated during the period of its review. Stephens Inc. expressed no opinion with respect to the projections or the assumptions on which they were based. Based upon the terms specified in the merger agreement, Stephens Inc. assumed that the merger will qualify as a reorganization under the provisions of Section 368(a) of the Internal Revenue Code. Stephens Inc. relied upon and assumed, without independent verification, that the final form of the merger agreement would be substantially similar to the draft agreement reviewed by Stephens Inc. in all respects material to its analysis, and that the merger transaction would be consummated in accordance with the terms of the draft agreement without any material waiver of or amendment to any of the conditions thereto. Furthermore, Stephens Inc. assumed, in all respects material to its analysis, that the representations and warranties of each party contained in the draft agreement were true and correct and that each party will substantially perform all of the covenants and agreements required to be performed by it as contemplated under the draft agreement. Stephens Inc. also relied upon and assumed, without independent verification, that: (i) the merger transaction would be consummated in a manner that complies in all respects with all laws, rules and regulations; and (ii) all governmental, regulatory or other consents and approvals necessary for the consummation of the transaction would be obtained and that no delay, limitations, restrictions or conditions would be imposed or amendments, modifications or waivers made that would have an adverse effect on the merger consideration, the transaction or Choice that would be material to its analysis or opinion.
In formulating its opinion, Stephens Inc. considered only the merger consideration to be received by the public shareholders of Choice, and Stephens Inc. did not consider, and its opinion did not address, the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of Choice, or such class of persons, in connection with the merger transaction whether relative to the merger consideration or otherwise. Stephens Inc. was not requested to opine as to, and its opinion did not express an opinion as to or otherwise address, among other things: (1) the fairness of the merger transaction to the holders of any class of securities, creditors or other constituencies of Choice, or to any other party, except and only to the extent expressly set forth in the last sentence of its opinion; or (2) the fairness of the transaction to any one class or group of Choice’s or any other party’s security holders or other constituents vis-à-vis any other class or group of Choice’s or such other party’s security holders or other constituents (including, without limitation, the allocation of any consideration to be received in the transaction amongst or within such classes or groups of security holders or other constituents). Stephens Inc. expressed no opinion as to the impact of the merger transaction on the solvency or viability of Choice or Nicolet or the ability of Choice or Nicolet to pay their respective obligations when they come due.
Material Financial Analyses
The following summarizes the material financial analyses reviewed by Stephens Inc. with the Choice board of directors at its meeting on June 25, 2019, which material was considered by Stephens Inc. in rendering its opinion. No company or transaction used in the analyses described below is identical or directly comparable to Choice, Nicolet or the contemplated merger transaction.
Selected Public Companies Analysis.   Stephens Inc. analyzed the relative valuation multiples of 18 publicly-traded banks and thrifts headquartered in the Midwest (Iowa, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, North Dakota, Nebraska, Ohio, South Dakota and Wisconsin) with assets between $350 million and $500 million, that Stephens Inc. deemed relevant, including:
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CITBA Financial Corporation

Iowa First Bancshares Corp.

Wayne Savings Bancshares, Inc.

West Shore Bank Corporation

Oxford Bank Corporation

FCN Banc Corp.

First Bancorp of Indiana, Inc.

SVB&T Corporation

FNBH Bancorp, Inc.

Madison County Financial, Inc.

FFD Financial Corporation

Andover Bancorp, Inc.

FFW Corporation

HFB Financial Corporation

Baraboo Bancorporation, Inc.

Eastern Michigan Financial Corporation

Liberty Bancshares, Inc.

First Bancshares, Inc.
Stephens Inc. calculated various financial multiples for each company, including: (i) price compared to tangible book value (TBV) as of March 31, 2019 (or December 31, 2018 when March 31, 2019 data was unavailable); (ii) price compared to earnings for the most recent LTM ended March 31, 2019 (or December 31, 2018 when March 31, 2019 was unavailable). Stephens Inc. reviewed the median, 25th percentile and 75th percentile relative valuation multiples of the selected public companies and compared them to corresponding valuation multiples for Choice implied by the merger consideration. The results of the selected public companies analysis are summarized below:
Price/​
TBV
Price/​
LTM Earnings
Median
113% 11.5x
25th Percentile
105% 9.7x
75th Percentile
119% 13.3x
Merger Consideration
202% 16.2x
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Furthermore, Stephens Inc. applied the 25th percentile and 75th percentile relative valuation multiples for each of the metrics to Choice’s actual and projected financial results and determined the implied equity price of Choice common stock and then compared those implied equity prices to the merger consideration of  $73.5 million. For purposes of this analysis, implied equity price is based on all outstanding common stock and common stock awards of Choice. The results of this are summarized below:
Implied Equity Price:
($ in millions)
Price/​
TBV
Price/​
LTM Earnings
25th Percentile
$ 38.2 $ 44.0
75th Percentile
$ 43.1 $ 60.3
Merger – Consideration
$ 73.5 $ 73.5
Selected Transaction Analysis.   Stephens Inc. analyzed publicly available information relating to selected transactions announced since October 1, 2018 involving targets headquartered in the Midwest (Iowa, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, North Dakota, Nebraska, Ohio, South Dakota and Wisconsin) with assets between $200 million and $1 billion.
Stephens Inc. also analyzed publicly available information relating to selected transactions announced since October 1, 2018 involving nationwide targets with assets between $200 million and $1 billion and LTM ROAA greater than 1.0%. Stephens Inc. prepared a summary of the relative valuation multiples paid in these transactions. The selected transactions used in the analysis included (public announcement date of transaction shown in parenthesis):
Regional:

Acquisition of STC Bancshares Corp. by Wintrust Financial Corporation (6/5/19)

Acquisition of Liberty Bancorp, Inc. by Central Bancompany Inc. (4/10/19)

Acquisition of County Bank Corp by ChoiceOne Financial Services (3/25/19)

Acquisition of Citizens First Corporation by German American Bancorp Inc. (2/21/19)

Acquisition of Partnership Community Bancshares, Inc. by Bank First Corporation (1/23/19)

Acquisition of Blue Valley Ban Corp. by Heartland Financial USA, Inc. (1/16/19)

Acquisition of HopFed Bancorp, Inc. by First Financial Corporation (1/7/19)

Acquisition of Salin Bancshares, Inc. by Horizon Bancorp, Inc. (10/29/18)

Acquisition of First Prestonsburg Bancshares, Inc. by Peoples Bancorp, Inc. (10/29/18)

Acquisition of Peoples State Bank by Foote Financial Shares LLC (10/22/18)

Acquisition of Oak Park River Forest Bankshares, Inc. by Byline Bancorp, Inc. (10/17/18)
National:

Acquisition of Clarkston Financial Corporation by Waterford Bancorp, Inc. (6/5/19)

Acquisition of Lighthouse Bank by Santa Cruz County Bank (5/28/19)

Acquisition of Presidio Bank by Heritage Commerce Corp (5/16/19)

Acquisition of Pegasus Bank by BancFirst Corporation (4/24/19)

Acquisition of Liberty Bancorp, Inc. by Central Bancompany, Inc. (4/10/19)

Acquisition of Heritage Bancorp by Glacier Bancorp, Inc. (4/3/19)

Acquisition of County Bank Corp by ChoiceOne Financial Services, Inc. (3/25/19)

Acquisition of Summit Financial Enterprise, Inc. by BancorpSouth Bank (3/5/19)
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Acquisition of Van Alstyne Financial Corporation by BancorpSouth Bank (3/5/19)

Acquisition of Citizens First Corporation by German American Bancorp, Inc. (2/21/19)

Acquisition of First Madison Bank & Trust by United Community Banks, Inc. (2/5/19)

Acquisition of Partnership Community Bancshares, Inc. by Bank First Corporation (1/23/19)

Acquisition of FNB Bancorp by Glacier Bancorp, Inc. (1/16/19)

Acquisition of Uniti Financial Corporation by BayCom Corp (12/10/18)

Acquisition of First Beeville Financial Corporation by Spirit of Texas Bancshares, Inc. (11/27/18)

Acquisition of Biscayne Bancshares, Inc. by First Citizens BancShares, Inc. (11/16/18)

Acquisition of Casey Bancorp, Inc. by BancorpSouth Bank (11/13/18)

Acquisition of FPB Financial Corp. by First Bancshares, Inc. (11/6/18)

Acquisition of Capital Bank of New Jersey by OceanFirst Financial Corp. (10/25/18)

Acquisition of Peoples State Bank by Foote Financial Shares LLC (10/22/18)
Stephens Inc. examined valuation multiples of transaction value compared to the target companies’ most recent quarter (MRQ) TBV, LTM earnings and MRQ core deposits, where such information was publicly available. Core deposits are defined as total deposits less time deposits of  $100,000 or more. Stephens Inc. reviewed the median, 25th percentile and 75th percentile relative valuation multiples of the selected transactions and compared them to corresponding valuation multiples for Choice implied by the merger consideration. Furthermore, Stephens Inc. applied the median, 25th percentile and 75th percentile relative valuation multiples from the regional transactions and the median valuation multiples from the nationwide transactions to Choice’s MRQ TBV, LTM earnings and MRQ core deposits to determine the implied equity price and then compared those implied equity prices to the merger consideration of $73.5 million. The results of the selected transactions analysis are summarized below:
Transaction Value/​
MRQ TBV
Implied/​
Equity Price
($M)
Regional – Median
162% $ 58.9
Regional 25th Percentile
152% $ 55.2
Regional 75th Percentile
186% $ 67.7
Merger Consideration
202% $ 73.5
Transaction Value/​
LTM Earnings
Implied
Equity Price
($M)
Regional – Median
14.6x $ 66.2
Regional 25th Percentile
13.1x $ 59.4
Regional 75th Percentile
16.0x $ 72.5
Merger Consideration
16.2x $ 73.5
Premium to
Core Deposits
Implied
Equity Price
($M)
Regional – Median
7.8% $ 51.2
Regional 25th Percentile
6.6% $ 48.9
Regional 75th Percentile
8.3% $ 52.2
Merger Consideration
19.6% $ 73.5
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Transaction Value/​
MRQ TBV
Implied/​
Equity Price
($M)
National – Median
185% $ 67.3
National 25th Percentile
167% $ 60.9
National 75th Percentile
198% $ 72.0
Merger Consideration
202% $ 73.5
Transaction Value/​
LTM Earnings
Implied
Equity Price
($M)
National – Median
13.7x $ 62.1
National 25th Percentile
12.5x $ 56.6
National 75th Percentile
14.6x $ 66.2
Merger Consideration
16.2x $ 73.5
Premium to
Core Deposits
Implied
Equity Price
($M)
National – Median
11.2% $ 57.7
National 25th Percentile
8.1% $ 51.8
National 75th Percentile
14.2% $ 63.4
Merger Consideration
19.6% $ 73.5
Discounted Cash Flow Analysis.   Stephens Inc. analyzed the discounted present value of Choice’s projected free cash flows for the quarter ending September 30, 2019 through the year ending December 31, 2024 on a standalone basis. Stephens Inc. used tangible-common-equity-to-tangible-assets in excess of a target ratio of 8.0% at the end of each projection period for free cash flow.
The discounted cash flow analysis was based on the projections as prepared by the management of Choice. Consistent with the periods included in the projections, Stephens Inc. used calendar year 2023 as the final year for the analysis and applied multiples, ranging from 10.0x to 12.0x, to calendar year 2024 net income in order to derive a range of terminal values for Choice in 2023.
The projected unleveraged free cash flows and terminal values were discounted using rates ranging from 12.0% to 14.0%. Stephens Inc. reviewed the range of prices derived in the discounted cash flow analysis and compared them to the price for Choice implied by the merger consideration. The results of the discounted cash flow analysis are summarized below:
Implied
Equity Price
($M)
Minimum
$ 47.7
Maximum
$ 58.1
Merger Consideration
$ 73.5
Additional Considerations.   The preparation of a fairness opinion is a complex process and is not susceptible to a partial analysis or summary description. Stephens Inc. believes that its analyses must be considered as a whole and that selecting portions of its analyses, without considering the analyses taken as a whole, would create an incomplete view of the process underlying its opinion. In addition, Stephens Inc. considered the results of all such analyses and did not assign relative weights to any of the analyses, but rather made qualitative judgements as to significance and relevance of each analysis and factor, so the ranges of valuations resulting from any particular analysis described above should not be taken to be the view of Stephens Inc. as to the actual value of Choice.
In performing its analyses, Stephens Inc. made numerous assumptions with respect to industry performance, general business, economic and regulatory conditions and other matters, many of which are beyond the control of Choice. The analyses performed by Stephens Inc. are not necessarily indicative of
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actual values, trading values or actual future results which might be achieved, all of which may be significantly more or less favorable than suggested by such analyses. Such analyses were provided to the Choice board of directors (solely in its capacity as such) and were prepared solely as part of the analysis of Stephens Inc. of the fairness, from a financial point of view, to the public shareholders of Choice of the merger consideration to be received by such holders in connection with the proposed merger transaction pursuant to the merger agreement. The analyses do not purport to be appraisals or to reflect the prices at which companies may actually be sold, and such estimates are inherently subject to uncertainty. The opinion of Stephens Inc. was one of many factors taken into account by the Choice board in making its determination to approve the merger transaction. Neither Stephens Inc.’s opinion nor the analyses described above should be viewed as determinative of the Choice board of directors’ or Choice management’s views with respect to Choice, Nicolet or the merger transaction. Stephens Inc. provided advice to Choice with respect to the proposed transaction. Stephens Inc. did not, however, recommend any specific amount of consideration to the Choice board or that any specific merger consideration constituted the only appropriate consideration for the merger transaction. Choice placed no limits on the scope of the analysis performed, or opinion expressed, by Stephens Inc.
The Stephens Inc. opinion was necessarily based upon market, economic, financial and other circumstances and conditions existing and disclosed to it on or before June 20, 2019, and any material change in such circumstances and conditions may affect the opinion of Stephens Inc., but Stephens Inc. does not have any obligation to update, revise or reaffirm that opinion. Stephens Inc. relied upon and assumed, without independent verification, that there had been no change in the business, assets, liabilities, financial condition, results of operations, cash flows or prospects of Choice since the respective dates of the most recent financial statements and other information, financial or otherwise, provided to Stephens Inc. that would be material to its analyses or its opinion, and that there was no information or any facts that would make any of the information reviewed by Stephens Inc. incomplete or misleading in any material respect.
Choice has agreed to pay Stephens Inc. a fee equal to 1.10% of the transaction value for advisory services in connection with the merger transaction upon the closing of the transaction. This fee will be reduced by a retainer fee in the amount of $25,000 that Choice paid Stephens Inc. in connection with its engagement as Choice’s financial advisor and a fee of $150,000 for services rendered in connection with the delivery of its opinion. Choice has also agreed to reimburse Stephens Inc. for its expenses incurred in connection with its services, including the fees and expenses of its counsel, and will indemnify Stephens Inc. against certain liabilities arising out of its engagement. Except as described above, Choice has paid Stephens Inc. no other fees or commissions for other services during the last two years. Within the past three years Stephens Inc. provided financial advisory services to another company that was acquired by Nicolet.
Stephens Inc. is actively involved in the investment banking business and regularly undertakes the valuation of investment securities in connection with public offerings, private placements, business combinations and similar transactions. In the ordinary course of business, Stephens Inc. may trade in the securities of Choice and Nicolet for its own account and for the accounts of its customers and, accordingly, may at any time hold a long or short position in such securities. Stephens Inc. may provide investment banking, financial advisory and other financial services to Choice and/or Nicolet or other participants in the merger transaction in the future, for which Stephens Inc. may receive compensation.
Prospective Financial Information of Choice
Choice does not as a matter of course make public projections as to future sales, earnings, or other results. However, the management of Choice has prepared the prospective financial information set forth in this proxy statement-prospectus to present certain unaudited prospective financial information regarding Choice’s future operations for the quarter ending September 30, 2019 through the year ending December 31, 2024 (which we refer to in this proxy statement-prospectus as the “Choice projections”). The accompanying prospective financial information was not prepared with a view toward public disclosure or with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants with respect to prospective financial information, but, in the view of the Choice’s management, was prepared on a reasonable basis, reflects the best currently available estimates and
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judgments, and presents, to the best of management’s knowledge and belief, the expected course of action and the expected future financial performance of Choice. However, this information is not fact and should not be relied upon as being necessarily indicative of actual future results, and readers of this proxy statement-prospectus are cautioned not to place undue reliance on the prospective financial information.
Neither Choice’s independent auditors, nor any other independent accountants, have compiled, examined, or performed any procedures with respect to the prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the prospective financial information.
The Choice projections, which were prepared by management of Choice, were prepared solely for internal use and are subjective in many respects. The Choice projections reflect numerous estimates and assumptions made with respect to business, economic, market, competition, regulatory and financial conditions and matters specific to the business of Choice, all of which are difficult to predict and many of which are beyond the control of Choice. The Choice projections reflect assumptions as to certain business decisions that are subject to change and, in many respects, subjective judgment, and thus are susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. Choice can give no assurance that the Choice projections and the underlying estimates and assumptions will be realized. In addition, because the Choice projections cover multiple years, the information by its nature becomes less predictive with each successive year. Actual results may differ materially from those set forth below, and important factors that may affect actual results and cause the Choice projections not to be realized include, but are not limited to, risks and uncertainties relating to the business of Choice, industry performance, general business and economic conditions, customer requirements, competition and adverse changes in applicable laws, regulations or policies. Other factors that could cause actual results to differ are further described in the sections of this proxy statement-prospectus entitled “Risk Factors” and “A Warning About Forward-Looking Statements,” beginning on page 8 and page 11, respectively.
Furthermore, the Choice projections do not take into account any circumstances or events occurring after the date they were prepared. Choice can give no assurance that, had the Choice projections been prepared as of the date of this proxy statement-prospectus, similar estimates and assumptions would be used. Neither Nicolet nor Choice intend to, and each disclaims any obligation to, make publicly available any update or other revision to the Choice projections to reflect circumstances existing since their preparation or to reflect the occurrence of unanticipated events, even in the event that any or all of the underlying assumptions are shown to be in error, or to reflect changes in general economic or industry conditions. The Choice projections do not give effect to the impact of negotiating or executing the merger agreement, the expenses that may be incurred in connection with consummating the merger, the effect of any business or strategic decision or action that has been or will be taken as a result of the merger agreement having been executed, or the effect on Choice of any business or strategic decisions or actions that would likely have been taken if the merger agreement had not been executed, but which were instead altered, accelerated, postponed or not taken in anticipation of the merger. Further, the Choice projections do not take into account the effect of any possible failure of the merger to occur. None of Choice, Nicolet or their respective affiliates, officers, directors, advisors or other representatives has made, makes or is authorized in the future to make any representation to any shareholder of Choice or Nicolet, or any other person, regarding Nicolet’s actual performance compared to the information contained in the Choice projections or that projected results will be achieved.
In light of the foregoing, and considering that the Choice special meeting will be held several months after the Choice projections were prepared, as well as the uncertainties inherent in any forecasted information, shareholders of Choice are cautioned not to place unwarranted reliance on such information in connection with their consideration of the merger.
Choice projected total assets to grow to $601 million at December 31, 2023 — a rate of approximately 7% annually. During this period, loans were projected to grow approximately 7% annually and deposits were projected to grow approximately 5% annually. All projections are based solely on organic growth relying on greater market share penetration as the overall market is expected to grow at less than half of these levels. Net income was expected to grow approximately 6% annually based on projected balance sheet growth.
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Interests of Certain Persons in the Merger
General
The directors and executive officers of Choice have interests in the transaction in addition to their interests generally as shareholders of Choice. These interests are described below. The board of directors of each of Nicolet and Choice was aware of these interests and considered them, in addition to other matters, in approving the merger agreement.
Employment Agreements.   Choice has entered into separate employment agreements with each of the following Choice officers: J. Scott Sitter, Stanley Leedle, John Glynn and Fred Siemers. Each Employment Agreement provides for severance benefits upon a termination of employment in connection with a change in control of an amount equal to two times the sum of  (a) such employee’s base salary plus (b) the annual cash incentive bonus earned by such officer for the most recently completed calendar year. If such officer’s employment is terminated in connection with a change in control, the severance shall be paid in a single lump sum within thirty days of termination of employment. Each officer has also agreed not to compete during and following termination of employment and not to solicit employees or customers following termination of employment, regardless of the reason for such termination of employment. The Employment Agreements also include standard non-disclosure of confidential information provisions.
The following chart shows the potential contractual payments to Choice’s executive officers pursuant to such Employment Agreements in the event of their severance of employment following consummation of the merger.
Executive Officer
Severance
Payment
J. Scott Sitter
$ 651,370
Stanley Leedle
$ 390,000
John Glynn
$ 446,400
Fred Siemers
$ 390,000
Potential Employment with Nicolet.   Nicolet has had preliminary discussions with certain Choice executive officers about the possibility of the executives continuing employment with Nicolet, including preliminary discussions regarding base salary and other terms of potential employment agreements. In recognition of the potential contractual obligations discussed above in the event of severance of employment following consummation of the merger, any employment agreement for continued employment may include a signing bonus to offset all or some of the lost severance payment. The merger agreement does not impose any requirement on Nicolet regarding retention or compensation of the Choice executive officers. At this time, it is expected that certain of Choice’s executive officers may enter into employment agreements with Nicolet between the date of this proxy statement-prospectus and the closing of the merger. The terms of these potential employment agreements have not been finalized.
Payments in Respect of Choice Stock Options.   Choice has granted certain of its executive officers stock options under the Choice 2006 Stock Incentive Plan and the Choice 2016 Stock Incentive Plan. The merger agreement provides that, immediately prior to the effective time of the merger, each Choice Stock Option (whether vested or not) shall be cancelled in exchange for cash in an amount equal to the product of (i) the number of shares of Choice common stock subject to such Choice Stock Option and (ii) the excess of the product of  (x) the Nicolet Common Stock Price and (y) the exchange ratio over the exercise price per share of the Choice common stock subject to such Choice Stock Option. The following chart shows the potential cash payments to Choice’s executive officers pursuant to outstanding stock option awards (assuming, in each case, that the amount calculated as the product of  (x) and (y) in the immediately foregoing sentence is $30.00).
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Executive Officer
Payment
J. Scott Sitter
$ 81,933
Stanley Leedle
$ 38,805
John Glynn
$ 25,875
Fred Siemers
$ 198,000
Indemnification and Insurance.   The merger agreement provides that certain indemnification and insurance arrangements for Choice’s current officers and directors will be continued for six years after the completion of the transactions. For a summary of the indemnification provisions, see the section entitled “The Merger Agreement — Indemnification and Insurance.”
Supplemental Life Insurance.   Choice has entered into a separate Supplemental Life Insurance Plan with each of the following Choice officers: J. Scott Sitter, Stanley Leedle and John Glynn. Each Supplemental Life Insurance Plan requires Choice to acquire a life insurance policy for the purpose of insuring such officer’s life and allows such officer to designate a beneficiary to receive the percentage of the death proceeds from the policy designated by Choice. The right to such proceeds shall become vested upon the occurrence of a change in control (meaning the officers will not forfeit any right to a benefit under their respective Supplemental Life Insurance Plans upon any termination of employment following a change in control).
Trading Market for Nicolet Stock
The shares of Nicolet common stock issued pursuant to the merger will be registered under the Securities Act of 1933, as amended, and will be freely transferable under applicable securities laws, except to the extent of any limitations or restrictions applicable to any shares received by any shareholder who may be deemed an affiliate of Nicolet following completion of the merger. See “Resale of Nicolet Common Stock” at page 31.
Nicolet’s common stock is currently traded on the Nasdaq Capital Market, and the merger agreement requires that the shares issued in the merger also be eligible for trading on the Nasdaq Capital Market. The trading volume of Nicolet’s common stock is less than that of other larger financial services companies, and there is no guarantee that a liquid market for shares of Nicolet common stock will exist in the future.
Nicolet Dividends
The holders of Nicolet common stock receive dividends if and when declared by the Nicolet board of directors out of legally available funds. Nicolet’s board of directors has not declared a dividend since its inception in 2000. The board currently anticipates that all earnings, if any, will be used for working capital, to support Nicolet’s operations and to finance the growth and development of its business, including the merger and integration of Choice. Any future determination relating to dividend policy will be made at the discretion of Nicolet’s board of directors and will depend on a number of factors, including the company’s future earnings, capital requirements, financial condition, future prospects, regulatory restrictions, stock repurchase strategy and other factors that the board of directors may deem relevant.
Potential Adjustment to Exchange Ratio
The merger agreement provides that the exchange ratio is fixed unless the Nicolet Common Stock Price (defined in the merger agreement as the volume weighted average closing price of Nicolet common stock on the Nasdaq Capital Market over the thirty trading day period ending on the third trading day prior to the closing date) is (a) greater than $67.00, in which case the exchange ratio would become floating at the quotient of  $33.50 divided by the Nicolet Common Stock Price, or (b) less than $55.00, in which case the exchange ratio would become floating at the quotient of  $27.50 divided by the Nicolet Common Stock Price. In the event that the Nicolet Common Stock Price falls below $55.00 per share, in lieu of adjusting the exchange ratio, Nicolet may elect to add a cash component to the merger consideration as set forth in the merger agreement.
Based on 9,327,420 shares of Nicolet common stock outstanding at June 30, 2019, and an exchange ratio of 0.5 on Choice common stock outstanding, the number of shares of Nicolet common stock to be issued in the merger would equal approximately 11% of Nicolet’s outstanding shares of common stock following the merger.
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Surrender and Exchange of Choice Stock Certificates
At the effective time of the merger, Choice shareholders will automatically become entitled to all of the rights and privileges afforded to Nicolet shareholders as of that time. However, the actual physical exchange of Choice common stock certificates representing shares of Nicolet common stock will occur after the merger. If you hold your shares in “street name” or “book-entry form” through a broker, the broker will provide separate instructions for surrendering and exchanging your shares.
If the merger is completed, Nicolet or Nicolet’s exchange agent will send or cause to be sent to each of Choice’s shareholders a letter of transmittal and other customary transmittal materials providing written instructions for exchanging Choice common stock certificates for the merger consideration in accordance with the merger agreement. Each Choice stock certificate outstanding immediately prior to the effective time of the merger will be deemed for all purposes to evidence the right to receive the merger consideration to which such holder is entitled, regardless of when they are actually exchanged.
Nicolet will delay paying former shareholders of Choice who become holders of Nicolet common stock pursuant to the merger any dividends or other distributions that may become payable to holders of record of Nicolet common stock following the effective time of the merger until they have surrendered their certificates evidencing their Choice common stock, at which time Nicolet will pay any such dividends or other distributions without interest.
You should not send in your Choice stock certificate(s) until you have received the letter of transmittal and further written instructions after the effective date of the merger. Please do NOT send in your stock certificates with your proxy card.
Assuming the merger has been consummated, after the exchange agent receives your Choice certificate(s), together with a properly completed letter of transmittal, it will deliver to you the merger consideration to which you are entitled, consisting of Nicolet common stock (in certificated or book entry form, together with any withheld dividends or other distributions, but without interest thereon) and any cash due (whether as a result of exercising dissenters’ rights, cash in lieu of fractional shares or otherwise), without interest. Within five business days after consummation of the merger, the exchange agent will send a transmittal letter to all Choice shareholders who did not previously tender their shares.
Shareholders who cannot locate their stock certificates are urged to contact Choice’s transfer agent promptly:
American Stock Transfer & Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
Telephone Toll Free: (800) 937-5449
Telephone Local: (718) 821-8124
Choice will issue a new stock certificate (or provide book entry) to replace the lost certificate(s) only if the shareholder of Choice signs an affidavit certifying that his, her or its certificate(s) cannot be located and containing an agreement to indemnify Choice and Nicolet against any claim that may be made against Choice or Nicolet by the owner of the certificate(s) alleged to have been lost or destroyed. Choice or Nicolet may also require the shareholder to post a bond in an amount sufficient to support the shareholder’s agreement to indemnify Choice and Nicolet.
Resale of Nicolet Common Stock
The shares of Nicolet common stock to be issued in the merger will be registered under the Securities Act. Choice shareholders who are not affiliates of Nicolet may generally freely trade their Nicolet common stock upon completion of the merger. The term “affiliate” generally means each person who is an executive officer, director or 10% shareholder of Nicolet after the merger.
Those shareholders who are deemed to be affiliates of Nicolet may only sell their Nicolet common stock as provided by Rule 144 under the Securities Act or as otherwise permitted under the Securities Act. Rule 144 requires the availability of current public information about the issuer, a holding period for shares issued without registration with the SEC, volume limitations and other restrictions on the manner of sale of the shares.
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Regulatory and Other Required Approvals
Federal Reserve
The Federal Reserve must approve the merger before it can be completed or waive the application. Nicolet filed a waiver request in connection with the Federal Reserve’s approval of the merger on August 21, 2019 pursuant to Section 225.12(d)(2) of Regulation Y. If the waiver is denied, Nicolet will need to submit an application. In reviewing that waiver request, the Federal Reserve is required to consider the following:

competitive factors, such as whether the merger will result in a monopoly or whether the benefits of the merger to the public in meeting the needs and convenience of the community clearly outweigh the merger’s anticompetitive effects or restraints on trade; and

banking and community factors, which includes an evaluation of:

the financial and managerial resources of Nicolet, including its subsidiaries, and of Choice, and the effect of the proposed transaction on these resources;

management expertise;

internal control and risk management systems;

the capital of Nicolet;

the convenience and needs of the communities to be served; and

the effectiveness of Nicolet and Choice in combating money laundering activities.
If the waiver request is not granted and Nicolet is required to file an application, the application process includes publication and opportunity for comment by the public. The Federal Reserve Board may receive, and must consider, properly filed comments and protests from community groups and others regarding (among other issues) each institution’s performance under the Community Reinvestment Act of 1977, as amended (the “CRA”). The Federal Reserve is also required to ensure that the proposed transaction would not violate Wisconsin law regarding the number of years a bank must be in operation before it can be acquired, deposit concentration limits, Wisconsin community reinvestment laws and any Wisconsin antitrust statutes.
OCC
The merger of Choice Bank with and into Nicolet National Bank requires the approval of the OCC. Nicolet filed an Interagency Bank Merger Application for approval of the bank merger with the OCC on July 10, 2019 and received approval from the OCC on August 16, 2019. In evaluating the bank merger, the OCC must consider, among other factors, the financial and managerial resources and future prospects of the institutions and the convenience and needs of the communities to be served. The relevant statutes prohibit the OCC from approving the bank merger if:

it would result in a monopoly or be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the business of banking in any part of the United States; or

its effect in any section of the country could be to substantially lessen competition or to tend to create a monopoly, or if it would result in a restraint of trade in any other manner.
However, if the OCC should find that any anticompetitive effects are outweighed clearly by the public interest and the probable effect of the transaction in meeting the convenience and needs of the communities to be served, it may approve the bank merger. The bank merger may not be consummated until the 30th day (which the OCC may reduce to 15 days) following the later of the date of OCC approval, during which time the U.S. Department of Justice would be afforded the opportunity to challenge the transaction on antitrust grounds. The commencement of any antitrust action would stay the effectiveness of the approval of the agencies, unless a court of competent jurisdiction should specifically order otherwise.
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WDFI
In addition to the required approvals of the Federal Reserve and OCC discussed above, the merger also requires the approval of the WDFI. Nicolet filed an application with the WDFI on July 19, 2019 pursuant to Section 221.0901 of Wisconsin banking law. In evaluating the application, the WDFI must consider various aspects of the proposed transaction and the parties thereto, including, among others, the financial and managerial resources and future prospects of the institutions involved, the best interests of their shareholders and customers, safety and soundness considerations, and the CRA compliance status of each bank. The relevant statutes prohibit the WDFI from approving the transaction if, following consummation, the combined institution would control more than 30 percent of the deposits in the state.
In connection with or as a result of the merger, Nicolet or Choice may be required, pursuant to other laws and regulations, either to notify or obtain the consent of other regulatory authorities and organizations to which such companies or subsidiaries of either or both of them may be subject. The Nicolet common stock to be issued in exchange for Choice common stock in the merger has been registered with the SEC and will be issued pursuant to available exemptions from registration under state securities laws.
Status and Effect of Approvals
All regulatory applications and notices required to be filed prior to the merger are in process. Nicolet and Choice contemplate that they will complete the merger on November 8, 2019, assuming the receipt of all required regulatory approvals, approval by Choice shareholders, and the satisfaction or waiver of all other closing conditions.
Nicolet and Choice believe that the proposed merger is compatible with the regulatory requirements described in the preceding paragraphs; however, we cannot assure you that we will be able to comply with any required conditions or that compliance or noncompliance with any such conditions would not have adverse consequences for the combined company after the merger.
While Nicolet and Choice believe that the requisite regulatory approvals for the merger will be obtained, we can give you no assurance regarding the timing of the approvals, our ability to obtain the approvals on satisfactory terms or the absence of litigation challenging those approvals or otherwise. Similarly, we cannot assure you that any state attorney general or other regulatory authority will not attempt to challenge the merger on antitrust grounds or for other reasons, or, if such a challenge is made, project the result thereof. The merger is conditioned upon the receipt of all consents, approvals and actions of governmental authorities and the filing of all other notices with such authorities in respect of the merger.
We are not aware of any regulatory approvals that would be required for completion of the transactions contemplated by the merger agreement other than as described above. Should any other approvals be required, those approvals would be sought, but we cannot assure you that they will be obtained.
Accounting Treatment of the Merger
Nicolet is required to account for the merger as a purchase transaction for accounting and financial reporting purposes under GAAP. Under purchase accounting, the assets (including any identifiable intangible assets) and liabilities (including executory contracts and other commitments) of Choice at the effective time of the merger will be recorded at their respective fair values and added to those of Nicolet. Any excess of purchase price over the fair values is recorded as goodwill. Any excess of the fair values over the purchase price is recorded in earnings as a bargain purchase gain. Consolidated financial statements of Nicolet issued after the merger would reflect those fair values and would not be restated retroactively to reflect the historical consolidated financial position or results of operations of Choice.
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THE MERGER AGREEMENT
This section of the proxy statement-prospectus describes certain terms of the merger agreement. It is not intended to include every term of the merger, but rather addresses only the significant aspects of the merger. This discussion is qualified in its entirety by reference to the merger agreement, which is attached as Appendix A to this proxy statement-prospectus and is incorporated herein by reference.
General; Business and Operations after the Merger
If the shareholders of Choice approve the merger agreement and the other conditions to the consummation of the merger are satisfied, Choice will merge with and into Nicolet. Following the consummation of the merger, Choice Bank will merge with and into Nicolet National Bank with Nicolet National Bank surviving the merger. Choice Bancorp, Inc. and Choice Bank will cease to exist after the merger, and the business of Choice Bank will be conducted through Nicolet National Bank.
What Choice’s Shareholders Will Receive in the Merger
If the merger is completed, Choice shareholders will receive 0.5 of a share of Nicolet common stock for each share of Choice common stock.
The exchange ratio may fluctuate in the event that the Nicolet Common Stock Price (defined in the merger agreement to equal the volume weighted average closing price of Nicolet common stock on the Nasdaq Capital Market over the thirty trading day period ending on the third trading day prior to the closing date), is (a) greater than $67.00, in which case the exchange ratio would become floating at the quotient of  $33.50 divided by the Nicolet Common Stock Price, or (b) less than $55.00, in which case the exchange ratio would become floating at the quotient of  $27.50 divided by the Nicolet Common Stock Price. In the event that the Nicolet Common Stock Price falls below $55.00 per share, in lieu of adjusting the exchange ratio, Nicolet may elect to add a cash component to the merger consideration as set forth in the merger agreement.
No payment will be made with respect to shares of Choice common stock held in the treasury of Choice; shares held directly or indirectly by Nicolet (other than in a fiduciary capacity or in connection with debts previously contracted); shares underlying Choice Stock Options; and dissenting shares. Upon consummation of the merger, all such shares, referred to herein as the “cancelled shares,” will be canceled and extinguished.
No fractional shares of Nicolet common stock will be issued in connection with the merger. Instead, Nicolet will make a cash payment without interest to each shareholder of Choice who would otherwise receive a fractional share. The amount of such cash payment will be determined by multiplying the fraction of a share of Nicolet common stock otherwise issuable to such shareholder by the Nicolet Common Stock Price.
Potential Adjustment of Exchange Ratio
The merger agreement provides that the exchange ratio is fixed unless the Nicolet Common Stock Price (defined in the merger agreement as the volume weighted average closing price of Nicolet common stock on the Nasdaq Capital Market over the thirty trading day period ending on the third trading day prior to the closing date) is (a) greater than $67.00, in which case the exchange ratio would become floating at the quotient of  $33.50 divided by the Nicolet Common Stock Price, or (b) less than $55.00, in which case the exchange ratio would become floating at the quotient of  $27.50 divided by the Nicolet Common Stock Price. In the event that the Nicolet Common Stock Price falls below $55.00 per share, in lieu of adjusting the exchange ratio, Nicolet may elect to add a cash component to the merger consideration as set forth in the merger agreement.
Based on 9,327,420 shares of Nicolet common stock outstanding at June 30, 2019, and an exchange ratio of 0.5 on Choice common stock outstanding, the number of shares of Nicolet common stock to be issued in the merger would equal approximately 11% of Nicolet’s outstanding shares of common stock following the merger.
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Dissenters’ Rights
Holders of shares of Choice common stock who properly elect to exercise the dissenters’ rights provided for in Subchapter XIII of the WBCL will not have their shares converted into the right to receive merger consideration. If a holder’s dissenters’ rights are lost or withdrawn, such holder will receive his, hers or its pro rata portion of the merger consideration. See “Dissenters’ Rights” on page 55 and Appendix C for additional information.
Effect of the Merger on Choice Stock Options
As of June 30, 2019, there were 118,783 shares of Choice common stock underlying Choice Stock Options. Pursuant to the merger agreement, each Choice Stock Option outstanding immediately prior to the effective date (whether vested or not) shall be cancelled in exchange for a cash payment (without interest and less applicable withholding Taxes) equal to the product of  (i) the number of shares of Choice common stock subject to such Choice Stock Option immediately prior to the effective time of the merger and (ii) the excess, if any, of the product of  (x) the Nicolet Common Stock Price and (y) the exchange ratio, subject to any adjustment, over the exercise price per share of Choice common stock subject to such Choice Stock Option immediately prior to the effective time of the merger.
Closing and Effective Time of the Merger
The merger will be completed only if all of the following occur:

the merger agreement is approved by a majority of Choice’s shareholders;

all required regulatory consents and approvals are obtained; and

all other conditions to the merger discussed in this proxy statement-prospectus and the merger agreement are either satisfied or waived.
If all of these conditions are met, the closing of the merger is expected to occur on November 8, 2019.
Representations and Warranties in the Merger Agreement
Choice and Nicolet have made customary representations and warranties to each other as part of the merger agreement. Choice’s representations and warranties are contained in Article 3 of the merger agreement and relate to, among other things:

its organization and authority to enter into the merger agreement;

its capitalization, subsidiaries, properties and financial statements;

pending and threatened litigation against Choice and its subsidiaries;

Choice Bank’s loan portfolio and allowance for loan losses;

its insurance, employee benefits, tax and environmental matters;

its legal and regulatory compliance;

its contractual obligations and contingent liabilities; and

its financial statements and regulatory filings.
Nicolet’s representations and warranties are contained in Article 4 of the merger agreement and relate to, among other things:

its organization and authority to enter into the merger agreement;

its capitalization, subsidiaries, financial statements and public filings with the SEC;

pending and threatened litigation against Nicolet and its subsidiaries;

Nicolet National Bank’s loan portfolio and allowance for loan losses;

its employee benefits, tax and environmental matters;
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legal and regulatory compliance; and

the shares of Nicolet common stock to be issued in the merger.
Each party’s representations and warranties are for the benefit of the other; they are not for the benefit of and may not be relied upon by shareholders. The representations and warranties of the parties will not survive the closing of the merger.
Conditions to the Merger
The merger agreement contains a number of conditions that must be satisfied or waived (if they are waivable) to complete the merger. The conditions include, among other things:

the representations and warranties made by each party in the merger must be accurate as of the closing date of the merger;

each party must have performed or complied in all material respects with all covenants and obligations as established in the merger agreement;

approval by Choice’s shareholders of the merger agreement by the required vote;

an absence of any commenced or pending legal proceeding that challenges any of the contemplated transactions or that may have the effect of preventing, delaying or making illegal or otherwise interfering with any of the contemplated transactions;

approval of the merger and the transactions contemplated thereby by the Federal Reserve, OCC and WDFI without imposing any restrictions that would have a “material adverse effect,” as defined in the merger agreement, on either Nicolet or Choice;

the registration statement has become effective under the Securities Act;

the absence of a stop order suspending the effectiveness of Nicolet’s registration statement under the Securities Act with respect to the shares of Nicolet common stock to be issued to the Choice shareholders;

both parties shall have received a certificate signed by an executive on behalf of the other party certifying that such party’s representations and warranties are accurate and that all covenants and obligations have been performed;

receipt by Choice and Nicolet of a tax opinion from Bryan Cave Leighton Paisner LLP that the merger qualifies as a tax-free reorganization under the Internal Revenue Code;

Nicolet shall have filed with the Nasdaq Stock Market, LLC a notification form for the listing of all shares of Nicolet common stock to be delivered in the merger, and the Nasdaq Stock Market, LLC shall not have objected to the listing of such shares of Nicolet common stock;

as of the Closing Date, Choice shall have Tangible Common Equity (as defined in the merger agreement) of no less than $36 million (Choice’s tangible common equity was $39 million as of June 30, 2019);

the absence of any material adverse change in the financial condition, results of operations, business or prospects of either Choice or Nicolet;

each party shall have obtained the written consents, permissions and approvals as required under any agreements, contracts, appointments, indentures, plans, trusts or other arrangements with third parties; and

the absence of an order, decree or injunction enjoining or prohibiting completion of the merger.
The conditions to the merger are set forth in Articles 8 and 9 of the merger agreement.
The parties intend to complete the merger on November 8, 2019; however, we cannot assure you that all conditions will be satisfied or waived.
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Waiver and Amendment
Nearly all of the conditions to completing the merger may be waived at any time by the party for whose benefit they were created; however, the merger agreement provides that the parties may not waive any condition that would result in the violation of any law or regulation. Also, the parties may amend or supplement the merger agreement at any time by written agreement. Any material change in the terms of the merger agreement after the Choice special shareholders’ meeting may require a re-solicitation of votes from Choice’s shareholders with respect to the amended merger agreement.
Business of Choice Pending the Merger
The merger agreement requires Choice to continue to operate its business as usual and to preserve its business organization, rights and franchises pending the merger and to refrain from taking any action that would materially adversely affect the receipt of required regulatory or other consents or materially adversely affect either party’s ability to perform its covenants and agreements under the merger agreement.
Among other things, and subject to certain specified exceptions, Choice may not, without Nicolet’s consent, take or agree to take any of the following actions:

conduct its business in any manner other than in the ordinary course of business in all material respects;

take any action or make any decision in contravention of commercially reasonable efforts to maintain and preserve intact its business organization and advantageous business relationships;

take any action that is intended to or would reasonably be expected to adversely affect or materially delay the ability of Choice or Nicolet to obtain any of the required regulatory approvals, to provide Choice’s covenants and agreements under the merger agreement, or to consummate the contemplated merger;

other than pursuant to the terms of any contract to which Choice is a party that is outstanding on the date of the merger agreement: (i) issue, sell or otherwise permit to become outstanding, or dispose of or encumber or pledge, or authorize or propose the creation of, any additional shares of Choice capital stock or any security convertible into Choice capital stock; (ii) permit any additional shares of Choice capital stock to become subject to new grants; or (iii) grant any registration rights with respect to shares of Choice capital stock;

make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on any shares of Choice capital stock (other than dividends from its wholly owned subsidiary to it or another of its wholly owned subsidiaries);

directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of Choice capital stock (other than repurchases of shares of Choice common stock in the ordinary course of business to satisfy obligations under Choice benefit plans);

amend the terms of, waive any rights under, terminate, knowingly violate the terms of or enter into: (i) any contract that is material to Choice’s operations; (ii) any material restriction on the ability of Choice or its subsidiaries to conduct its business as it is presently being conducted; or (iii) any contract or other binding obligation relating to any class of Choice capital stock or rights associated therewith or any outstanding instrument of indebtedness;

enter into loan transactions not in accordance with, or consistent with, past practices of Choice Bank or that are on terms and conditions that, to the knowledge of Choice, are materially more favorable than those available to the borrower from competitive sources in arm’s-length transactions;

enter into any new credit or new lending relationships greater than $500,000 that would require an exception to Choice Bank’s formal loan policy as in effect as of the date of the merger agreement or that are not in strict compliance with the provisions of such loan policy;

other than incident to a reasonable loan restructuring, extend additional credit to any individual or entity, or any director or officer of, or any owner of a material interest in, such entity if such
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person or entity is the obligor under any indebtedness to Choice or any of its subsidiaries which constitutes a nonperforming loan or against any part of such indebtedness Choice or any of its subsidiaries has established loss reserves or any part of which has been charged-off by Choice or any of its subsidiaries;

maintain an allowance for loan and lease losses which is not appropriate in all material respects under the requirements of GAAP to provide for possible losses, net of recoveries relating to Choice loans previously charged-off, on Choice loans and leases outstanding (including accrued interest receivable);

fail to: (i) charge-off any Choice loans or leases that would be deemed uncollectible in accordance with GAAP or any applicable legal requirement; or (ii) place on nonaccrual any Choice loans or leases that are past due greater than ninety (90) days;

sell, transfer, mortgage, encumber, license, let lapse, cancel, abandon or otherwise dispose of or discontinue any of its assets, deposits, business or properties, except for sales, transfers, mortgages, encumbrances, licenses, lapses, cancellations, abandonments or other dispositions or discontinuances in the ordinary course of business and in a transaction that, together with other such transactions, is not material to Choice and its subsidiaries, taken as a whole;

acquire (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary course of business) all or any portion of the assets, business, deposits or properties of any other entity except in the ordinary course of business and in a transaction that, together with other such transactions, is not material to Choice and its subsidiaries, taken as a whole, and does not present a material risk that the closing date of the proposed merger will be materially delayed or that any approvals necessary to complete the merger or the other contemplated transactions will be more difficult to obtain;

purchase any equity security for its investment portfolio that is inconsistent with Choice Bank’s formal investment policy as in effect as of the date of the merger agreement or that are not in strict compliance with the provisions of such investment policy;

amend its articles of incorporation or its bylaws, or similar governing documents of any of its subsidiaries;

implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or applicable regulatory accounting requirements;

increase in any manner the compensation or benefits of any of the current or former directors, officers, employees, consultants, independent contractors or other service providers of Choice or its subsidiaries;

become a party to, establish, amend, commence participation in, terminate or commit itself to the adoption of any stock option plan or other stock-based compensation plan, compensation, severance, pension, consulting, non-competition, change in control, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement or employment agreement with or for the benefit of any Choice employee (or newly hired employees), director or shareholder;

accelerate the vesting of or lapsing of restrictions with respect to any stock-based compensation or other long-term incentive compensation under any Choice benefit plans;

cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Choice benefit plan;

materially change any actuarial assumptions used to calculate funding obligations with respect to any Choice benefit plan that is required by applicable legal requirements to be funded or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or any applicable legal requirement;
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conduct the administration of the Choice benefit plan in any manner other than in the ordinary course of business;

hire any new employees with an annual salary in excess of  $75,000;

incur or guarantee any indebtedness for borrowed money other than deposits or overnight fed funds or enter into any capital lease or leases; or, except in the ordinary course of business, (i) lend any money or pledge any of its credit in connection with any aspect of its business, whether as a guarantor, surety, issuer of a letter of credit or otherwise; (ii) mortgage or otherwise subject to any lien any of its assets or sell, assign or transfer any of its assets in excess of  $50,000 in the aggregate; or (iii) incur any other liability or loss representing, individually or in the aggregate, over $50,000;

enter into any new line of business or materially change its lending, investment, underwriting, risk and asset liability management and other banking and operating policies, except as required by applicable legal requirements or requested by any regulatory authority;

settle any action, suit, claim or proceeding against it or any of its subsidiaries, except for an action, suit, claim or proceeding that is settled in an amount and for consideration not in excess of $150,000 and that would not: (i) impose any material restriction on the business of Choice or its subsidiaries; or (ii) create precedent for claims that is reasonably likely to be material to it or its subsidiaries;

make application for the opening, relocation or closing of any, or open, relocate or close any, branch office, loan production office or other significant office or operations facility;

make or change any material tax elections, change or consent to any change in it or its subsidiaries’ method of accounting for tax purposes (except as required by applicable tax law), take any material position on any material tax return filed on or after the date of the merger agreement, settle or compromise any material tax liability, claim or assessment, enter into any closing agreement, waive or extend any statute of limitations with respect to a material amount of taxes, surrender any right to claim a refund for a material amount of taxes, or file any material amended tax return; or

agree to take, make any commitment to take, or adopt any resolutions of the Choice board of directors in support of, any of the prohibited actions listed immediately above.
The above restrictions on Choice’s business activities are set forth in Section 5.2 of the merger agreement.
Business of Nicolet Pending the Merger
The merger agreement requires Nicolet to continue to operate its business as usual and to preserve its business organization, rights and franchises pending the merger and to refrain from taking any action that would materially adversely affect the receipt of required regulatory or other consents or materially adversely affect either party’s ability to perform its covenants and agreements under the merger agreement.
Among other things, and subject to certain specified exceptions, Nicolet may not, without Choice’s consent, take or agree to take any of the following actions:

conduct its business in any manner other than in the ordinary course of business in all material respects;

take any action or make any decision in contravention of commercially reasonable efforts to maintain and preserve intact its business organization and advantageous business relationships;

take any action that is intended to or would reasonably be expected to adversely affect or materially delay the ability of Nicolet or Choice to obtain any of the required regulatory approvals, to provide Nicolet’s covenants and agreements under the merger agreement, or to consummate the contemplated merger;
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make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on any shares of Nicolet capital stock, other than dividends from its wholly owned subsidiary to it or another of its wholly owned subsidiaries;

directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of Nicolet capital stock, other than (i) repurchases of shares of Nicolet common stock in the ordinary course of business to satisfy obligations under Nicolet benefit plans, or (ii) repurchases pursuant to Nicolet’s common stock repurchase program;

maintain an allowance for loan and lease losses which is not appropriate in all material respects under the requirements of GAAP to provide for possible losses, net of recoveries relating to Nicolet loans previously charged-off, on Nicolet loans and leases outstanding (including accrued interest receivable);

acquire (other than by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary course of business) all or any portion of the assets, business, deposits or properties of any other entity except in the ordinary course of business and in a transaction that, together with other such transactions, is not material to Nicolet and its subsidiaries, taken as a whole, and does not present a material risk that the closing date of the proposed merger will be materially delayed or that any approvals necessary to complete the merger or the other contemplated transactions will be more difficult to obtain;

amend its articles of incorporation or its bylaws, or similar governing documents of any of its subsidiaries;

implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or applicable regulatory accounting requirements;

make or change any material tax elections, change or consent to any change in it or its subsidiaries’ method of accounting for tax purposes (except as required by applicable tax law), take any material position on any material tax return filed on or after the date of the merger agreement, settle or compromise any material tax liability, claim or assessment, enter into any closing agreement, waive or extend any statute of limitations with respect to a material amount of taxes, surrender any right to claim a refund for a material amount of taxes, or file any material amended tax return; or

agree to take, make any commitment to take, or adopt any resolutions of the Nicolet board of directors in support of, any of the prohibited actions listed immediately above.
The above restrictions on Nicolet’s business activities are set forth in Section 6.2 of the merger agreement.
Covenants of the Parties
In addition to the above restrictions on each party’s business activities prior to consummation of the merger and the covenants discussed elsewhere in this summary of the merger agreement, the parties have agreed to the following covenants:

the parties shall cooperate and use reasonable best efforts to obtain the required regulatory approvals;

the parties are required to prepare and file a proxy statement-prospectus with the SEC, and Nicolet shall use reasonable best efforts to have such proxy statement-prospectus declared effective and to keep it effective as long as necessary to consummate the merger, and Choice shall use its reasonable best efforts to cause the proxy statement-prospectus to be mailed to its shareholders;

Choice has agreed that the information to be included in the proxy statement-prospectus shall not be false or misleading;
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Choice shall call a shareholders’ meeting for the purpose of approving the merger agreement and the merger, and Choice’s board of directors shall use reasonable best efforts to obtain approval of the merger;

each party shall give the other prompt notice of any changes that would constitute a material breach of the merger agreement;

the parties shall use commercially reasonable efforts to cause the merger to qualify as a reorganization under the Internal Revenue Code, and shall deliver such certificates and other documents necessary for Nicolet’s counsel to issue its opinion that the merger qualifies as a reorganization;

Nicolet shall maintain employee benefit plans and compensation opportunities that, in the aggregate, are no less favorable than the employee benefit plans and compensation opportunities made available to similarly-situated Nicolet employees, and Nicolet has agreed to credit Choice employees for their years of service at Choice to the same extent as if that service had been with Nicolet under the applicable Nicolet benefit plans;

Choice has agreed to take all appropriate actions, upon the request of Nicolet, to amend, suspend or terminate any benefit plans;

Choice has agreed, if requested by Nicolet, to use commercially reasonable efforts to repay in full to any lending parties all indebtedness owing under any agreement representing indebtedness incurred by Choice outstanding at the time of the merger agreement, which may include (i) payment of a dividend by Choice Bank in the amount sufficient to enable Choice to make any requested repayments, and/or (ii) approval by regulatory authorities necessary to enable Choice to make any requested repayments;

Nicolet has agreed to authorize and reserve the number of shares of Nicolet common stock necessary to constitute the merger and to cause such shares to be approved for listing on the Nasdaq Capital Market;

Nicolet shall take such action to cause the acquisition of Nicolet common stock in the merger to be exempt under Exchange Act Rule 16b-3; and

the parties shall consult concerning the defense of any shareholder litigation.
No Solicitation of Alternative Transactions
Choice was required to immediately cease any negotiations with any person regarding any Acquisition Proposal, as defined in the merger agreement, existing at the time the merger agreement was executed. In addition, Choice may not solicit, directly or indirectly, inquiries or proposals with respect to, or, except to the extent determined by its board of directors in good faith, after consultation with its legal counsel, to be required to discharge properly the directors’ fiduciary duties, furnish any information relating to, or participate in any negotiations or discussions concerning, any sale of all or substantially all of its assets, any purchase of a substantial equity interest in it or any merger or other combination with Choice. Subject to the same fiduciary duties, Choice’s board may not withdraw its recommendation to its shareholders of the merger or recommend to its shareholders any such other transaction.
Choice was also required to instruct its officers, directors, agents, and affiliates to refrain from taking such action prohibited by the merger agreement and is required to notify Nicolet immediately if it receives any inquiries from third parties. However, no director or officer of Choice is prohibited from taking any action that the board of directors determines in good faith, after consultation with counsel, is required by law or is required to discharge such director’s or officer’s fiduciary duties.
Indemnification and Insurance
Nicolet has agreed to provide certain indemnification in favor of the directors, officers and employees of Choice and its subsidiaries with respect to matters occurring prior to or at the effective time of the merger. Nicolet will cause the officers and directors currently covered by Choice’s policy to be covered by a directors’ and officers’ liability insurance policy for six years following the effective time of the merger, subject to certain conditions provided in Section 6.3 of the merger agreement.
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Termination of the Merger Agreement; Termination Fee
The merger agreement specifies the circumstances under which the parties may terminate the agreement and abandon the merger. Those circumstances are:

by mutual consent of Choice’s board of directors and Nicolet’s board of directors;

by either party if the other party materially breaches any representation, warranty or covenant, such breach cannot be, or is not, cured within 30 days after written notice, subject to a requirement in certain circumstances that the existence of such breach would result in a “material adverse effect,” as defined in the merger agreement, on the breaching party;

by either party if any regulatory authority that must grant a required approval has denied approval of any of the contemplated transactions and such denial has become final and nonappealable; provided, however, that the right to terminate the merger agreement shall not be available to a party whose failure (or the failure of any of its affiliates) to fulfill any of its obligations (excluding warranties and representations) under the merger agreement has been the cause of or resulted in the occurrence of a regulatory authority denial;

by either party if any application, filing or notice for a required regulatory approval has been withdrawn at the request or recommendation of the applicable regulatory authority; provided, however, that the right to terminate the merger agreement shall not be available to a party whose failure (or the failure of any of its affiliates) to fulfill any of its obligations (excluding warranties and representations) under the merger agreement has been the cause of or resulted in the occurrence of a regulatory request for withdrawal;

by either party if Choice’s shareholders fail to approve the proposed merger; provided, however, that the right to terminate the merger agreement shall not be available to a party whose failure (or the failure of its affiliates) to fulfill any of its obligations (excluding warranties and representations) under the merger agreement has been the cause of or resulted in the failure to obtain the approval of Choice’s shareholders;

by either party if the merger is not consummated on or before June 26, 2020;

by either party if any court of competent jurisdiction or other regulatory authority shall have issued a judgment, order, injunction, rule or decree, or taken any other action restraining, enjoining or otherwise prohibiting any of the contemplated transactions and such judgment, order, injunction, rule, decree or other action shall have become final and nonappealable;

by Choice, prior to receipt of its shareholders’ approval, to accept an Acquisition Proposal that Choice’s board of directors deems a Superior Proposal, as each term is defined in the merger agreement;

by Nicolet, if Choice’s board of directors makes an adverse recommendation, whereby the Choice board of directors withdraws, qualifies or adversely modifies its recommendation to Choice shareholders that they vote in favor of the adoption and approval of the merger agreement;

by Nicolet, if the holders of more than 10% of the outstanding shares of Choice common stock assert dissenters’ rights in compliance with Subchapter XIII of the WBCL;

by Nicolet, if the Nicolet Common Stock Price is less than $55.00 per share; or

by Choice, if the Nicolet Common Stock Price is less than $55.00 per share and Nicolet elects to leave the exchange ratio unchanged and does not supplement the consideration with a cash component sufficient to make the per share merger consideration equal to $27.50.
If Nicolet terminates the merger agreement because Choice’s board withdraws or changes its recommendation of the merger agreement, or if Choice terminates the merger agreement to accept an Acquisition Proposal it deems a Superior Proposal, as each term is defined in the merger agreement, then Choice (or its successor) must pay Nicolet a termination fee of  $3.0 million. If an Acquisition Proposal is made, and if either party thereafter terminates the merger agreement either because the Choice shareholder
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approval was not obtained or because the merger is not consummated by June 26, 2020, and within 12 months of such termination Choice enters into a definitive agreement with respect to such Acquisition Proposal, then Choice (or its successor) must pay Nicolet a termination fee of  $3.0 million.
Provisions of the merger agreement regarding confidentiality, payment of the termination fee and indemnification of Choice and its controlling persons will survive any termination of the merger agreement.
Payment of Expenses Relating to the Merger
The parties will pay all of their own expenses related to negotiating and completing the merger, whether or not the merger is consummated, except that the expenses incurred in connection with the filing, printing and mailing of this proxy statement-prospectus, and all filing and other fees paid to the SEC, in each case in connection with the merger (other than attorneys’ fees, accountants’ fees and related expenses), shall be shared equally by Nicolet and Choice.
Affiliate Agreements
Each director of Choice has executed a Voting and Support Agreement, in which each such director agrees to vote all of his, her or its shares of Choice common stock in favor of the merger agreement.
Forms of the Voting and Support Agreements are attached as Exhibit B to the merger agreement, which is attached to this proxy statement-prospectus as Appendix A. These agreements may have the effect of discouraging third parties from making an Acquisition Proposal, as defined in the merger agreement. The following is a brief summary of the material provisions of the agreements:

The director agrees to vote, or cause to be voted, in person or by proxy, all of the shares of Choice common stock that the director owns beneficially or of record in favor of the merger agreement, unless Nicolet is then in breach of the agreement.

The director agrees, except for certain specific transfers set forth in the agreement, not to directly or indirectly transfer any of his, her or its Choice common stock until the closing date of the merger without prior written consent of Nicolet.
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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
The following is a summary description of the anticipated material U.S. federal income tax consequences of the merger generally applicable to U.S. Shareholders (as defined below) of Choice who hold the common stock as capital assets within the meaning of Section 1221 of the Internal Revenue Code. This discussion constitutes the tax opinion of Bryan Cave Leighton Paisner LLP, tax counsel to Nicolet, as to the material U.S. federal income tax consequences of the merger to the U.S. holders of Choice common stock. This summary description deals only with the U.S. federal income tax consequences of the merger. No information is provided regarding the tax consequences of the merger under state, local, gift, estate, foreign or other tax laws. We do not intend it to be a complete description of the U.S. federal income tax consequences of the merger to all Choice shareholders in light of their particular circumstances or to Choice shareholders subject to special treatment under U.S. federal income tax laws, such as:

Non-U.S. Shareholders (as defined below) (except to the extent discussed under the subheading “Tax Implications to Non-U.S. Shareholders” below);

entities treated as partnerships for U.S. federal income tax purposes or Choice shareholders who hold their shares through entities treated as partnerships for U.S. federal income tax purposes;

qualified insurance plans;

tax-exempt organizations;

qualified retirement plans and individual retirement accounts;

brokers or dealers in securities or currencies;

traders in securities that elect to use a mark-to-market method of accounting;

regulated investment companies;

real estate investment trusts;

persons whose functional currency is not the U.S. dollar;

persons who received their stock upon the exercise of employee stock options or otherwise acquired their stock as compensation;

persons who purchased or sell their shares of Choice common stock as part of a wash sale; or

persons who hold the common stock as part of a “hedge,” “straddle” or other risk reduction, “constructive sale,” or “conversion transaction,” as these terms are used in the Internal Revenue Code.
This discussion is based upon, and subject to, the Internal Revenue Code, the Treasury regulations promulgated under the Internal Revenue Code, existing interpretations, administrative rulings and judicial decisions, all of which are in effect as of the date of this statement, and all of which are subject to change, possibly with retroactive effect. Any such change could affect the continuing validity of this discussion. Tax laws are complex, and your individual circumstances may affect the tax consequences to you. We urge you to consult a tax advisor regarding the tax consequences of the merger to you.
U.S. Shareholders
For purposes of this discussion, the term “U.S. Shareholder” means a beneficial owner of Choice common stock that is:

a citizen or resident of the U.S.;

a corporation (including any entity treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the U.S. or any of its political subdivisions;

a trust that (i) is subject to both the primary supervision of a court within the U.S. and the control of one or more U.S. persons, or (ii) has a valid election in effect under applicable U.S. treasury regulations to be treated as a U.S. person; or
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an estate that is subject to U.S. federal income tax on its income regardless of its source.
If a partnership (including any entity or arrangement, domestic or foreign, that is treated as a partnership for U.S. federal income tax purposes) holds Choice common stock, the tax treatment of a partner will generally depend on the status of the partners and the activities of the partnership. Partnerships and partners in such a partnership should consult their tax advisors regarding the tax consequences of the merger to them.
Qualification of the Merger as a Reorganization
The merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code. The obligation of Nicolet and Choice to complete the merger is conditioned upon receipt of a tax opinion from Bryan Cave Leighton Paisner LLP to the effect that:

the merger will constitute a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code; and

each of Choice and Nicolet will be a party to such reorganization within the meaning of Section 368(b) of the Internal Revenue Code.
The tax opinion is filed as Exhibit 8.1 to the registration statement of which this proxy statement- prospectus is a part. The tax opinion is based upon law existing on the date of the opinion and upon certain facts, assumptions, limitations, representations and covenants including those contained in representation letters executed by officers of Choice and Nicolet that, if incorrect in certain material respects, would jeopardize the conclusions reached by Bryan Cave Leighton Paisner LLP in its opinion. The tax opinion will not bind the Internal Revenue Service or prevent the Internal Revenue Service from successfully asserting a contrary opinion. No ruling will be requested from the Internal Revenue Service in connection with the merger.
Tax Implications to U.S. Shareholders
The following discussion summarizes the material U.S. federal income tax consequences of the merger to U.S. Shareholders.
Tax Consequences to U.S. Shareholders.   The U.S. federal income tax consequences of the merger to an owner of Choice common stock that is a U.S. Shareholder generally will depend on whether the Nicolet common stock received by the U.S. Shareholder in exchange for Choice common stock results in a payment of cash to the U.S. Shareholder (whether by issuance of a fractional share of Nicolet common stock or exercise of dissenter’s rights).

Exchange solely for Nicolet Common Stock.   No gain or loss will be recognized by U.S. Shareholders upon the exchange of shares of Choice common stock solely for shares of Nicolet common stock pursuant to the merger, except in respect of cash received in lieu of the issuance of a fractional share of Nicolet common stock (as discussed below).

Exchange of Cash in Lieu of Fractional Share.   A U.S. Shareholder who receives cash in lieu of the issuance of a fractional share of Nicolet common stock will generally be treated as having received such fractional share pursuant to the merger and then as having received cash in exchange for such fractional share. Gain or loss generally will be recognized in an amount equal to the difference between the amount of cash received instead of the fractional share and the portion of the U.S. Shareholder’s aggregate adjusted tax basis of the Choice shares exchanged in the merger which is allocable to the fractional share of Nicolet common stock. Such gain or loss generally will be capital gain or loss, and will be long-term capital gain or loss if, as of the effective date of the merger, the holding period for such shares of Choice common stock is more than one year.

Exchange for Cash and Nicolet Common Stock.   In the event that the Nicolet Common Stock Price is less than $55.00 and Nicolet elects to leave the exchange ratio unchanged and instead add additional cash consideration in an amount sufficient to bring the aggregate per share consideration to $27.50 per share, a U.S. Shareholder who receives a combination of cash (not including cash received in lieu of the issuance of a fractional share of Nicolet common stock) and
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Nicolet common stock in exchange for Choice common stock will generally recognize gain (but not loss) in an amount equal to the lesser of: (i) the excess, if any, of  (a) the sum of the amount of cash treated as received in exchange for Choice common stock in the merger (excluding cash received in lieu of a fractional share) plus the fair market value of Nicolet common stock (including the fair market value of any fractional share) received in the merger, over (b) the U.S. Shareholder’s adjusted tax basis in the shares of Choice common stock exchanged, or (ii) the amount of cash (excluding cash received in lieu of a fractional share) received in the merger. Any taxable gain to a U.S. Shareholder on the exchange of Choice common stock generally will be treated as capital gain (either long-term or short-term capital gain depending on whether the shareholder has held such Choice common stock for more than one year in the case of long-term capital gain or one year or less in the case of short-term capital gain). If a U.S. Shareholder acquired different blocks of Choice common stock at different times or at different prices, such U.S. Shareholder’s basis and holding period in its shares of Nicolet common stock may be determined with reference to each block of Choice common stock. Such U.S. Shareholder should consult its individual tax advisor regarding the manner in which gain or loss should be determined.

Tax Basis of Nicolet Common Stock Received in the Merger.   The aggregate tax basis of the Nicolet common stock (including a fractional share deemed received and sold for cash as described above) by those Choice shareholders that receive only Nicolet common stock (and cash in lieu of a fractional share) in the merger will equal the aggregate tax basis of the Choice common stock surrendered in the exchange.

Holding Period of Nicolet Common Stock Received in the Merger.   The holding period for any Nicolet common stock received in the merger will include the holding period of the Choice common stock surrendered in the exchange.

Exchange Resulting in Solely Cash.   A U.S. Shareholder who receives solely cash in exchange for Choice common stock as a result of cancellation of Choice Stock Options, exercising dissenter’s rights generally will recognize gain or loss in an amount equal to the difference between the cash received and the U.S. Shareholder’s adjusted tax basis in the shares of Choice common stock surrendered by such shareholder,. Any taxable gain to a U.S. Shareholder on the exchange of Choice common stock will generally be treated as capital gain, either long-term or short-term capital gain depending on such shareholder’s holding period for the Choice common stock. Each holder of Choice common stock who contemplates exercising statutory dissenters’ or appraisal rights should consult its tax advisor as to the possibility that all or a portion of the payment received pursuant to the exercise of such rights will be treated as dividend income.
Tax Consequences to Nicolet and Choice.   Neither Nicolet nor Choice will recognize taxable gain or loss as a result of the merger, except for, in the case of Choice, gain, if any, that has been deferred in accordance with the consolidated return regulations.
Tax Implications to Non-U.S. Shareholders
For purposes of this discussion, the term “Non-U.S. Shareholder” means a beneficial owner of Choice common stock (other than an entity treated as a partnership for U.S. federal income tax purposes) that is not a U.S. Shareholder. The rules governing the U.S. federal income taxation of Non-U.S. Shareholders are complex, and no attempt will be made herein to provide more than a limited summary of those rules.
Tax Consequences to Non-U.S. Shareholders.   Any gain a Non-U.S. Shareholder recognizes from the exchange of Choice common stock for cash in the merger generally will not be subject to U.S. federal income taxation unless (a) the gain is effectively connected with a trade or business conducted by the Non-U.S. Shareholder in the United States, or (b) in the case of a Non-U.S. Shareholder who is an individual, such shareholder is present in the United States for 183 days or more in the taxable year of the sale and other conditions are met. Non-U.S. Shareholders described in (a) above will be subject to tax on gain recognized at applicable U.S. federal income tax rates and, in addition, Non-U.S. Shareholders that are corporations (or treated as corporations for U.S. federal income tax purposes) may be subject to a branch
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profits tax equal to 30% (or a lesser rate under an applicable income tax treaty) on their effectively connected earnings and profits for the taxable year, which would include such gain. Non-U.S. Shareholders described in (b) above will be subject to a flat 30% tax on any gain recognized, which may be offset by U.S. source capital losses.
Dividends Paid with Respect to Nicolet Common Stock.   As a result of the merger, current shareholders of Choice common stock will hold Nicolet common stock. Dividends paid to Non-U.S. Shareholders (to the extent paid out of Nicolet’s current or accumulated earnings and profits, as determined for U.S. federal income tax purposes) with respect to such shares of Nicolet common stock will be subject to withholding at a 30% rate or such lower rate as may be specified by an applicable income tax treaty unless the dividends are effectively connected with the conduct of a trade or business within the United States and, if certain tax treaties apply, are attributable to a U.S. permanent establishment, as discussed below. Even if a Non-U.S. Shareholder is eligible for a lower treaty rate, Nicolet will generally be required to withhold at a 30% rate (rather than the lower treaty rate) on dividend payments unless Nicolet has received a valid IRS Form W-8BEN or other documentary evidence establishing entitlement to a lower treaty rate with respect to such payments. If a Non-U.S. Shareholder holds the Nicolet common stock through a foreign financial institution or other foreign non-financial entity, a 30% withholding tax will be imposed on dividends paid to such “foreign financial institution” or other foreign non-financial entity unless (i) the foreign financial institution undertakes certain diligence and reporting obligations or (ii) the foreign non-financial entity either certifies it does not have any substantial U.S. owners or furnishes identifying information regarding each substantial U.S. owner.
If a Non-U.S. Shareholder’s actual income tax liability is less than the amount withheld, due to withholding at a rate in excess of a reduced rate for which the Non-U.S. Shareholder may be eligible under a tax treaty or otherwise, the Non-U.S. Shareholder it may be able to obtain a refund of or credit for any amounts withheld in excess of the applicable rate. Investors are encouraged to consult with their own tax advisers regarding the possible implications of these withholding requirements.
Dividends that are effectively connected with the conduct of a trade or business within the United States and, if certain tax treaties apply, are attributable to a U.S. permanent establishment, are not subject to withholding tax, but instead are subject to U.S. federal income tax on a net income basis at applicable graduated rates. Special certification and disclosure requirements must be satisfied for effectively connected income to be exempt from withholding. Any such effectively connected dividend received by a Non-U.S. Shareholder that is a corporation for U.S. federal income tax purposes may be subject to an additional branch profits tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty.
Tax Consequences if the Merger Does Not Qualify as a Reorganization
If the merger fails to qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code, and if the parties to the merger waive this condition to closing and consummate the merger, the merger will be a fully taxable transaction to Choice and the shareholders of Choice common stock. For federal income tax purposes, the Merger will be deemed to be a sale of assets by Choice followed by a distribution of the sale proceeds by Choice to its shareholders in complete liquidation of Choice. Accordingly, Choice will recognize income, gain, loss, or deduction generally equal to the difference between (i) the sum of the total consideration received in the merger and Choice’s liabilities deemed assumed and (ii) the Choice’s adjusted tax basis in its assets. U.S. Shareholders will recognize gain or loss measured by the difference between the total consideration received in the merger and such shareholders’ tax basis in the shares of Choice common stock surrendered in the merger. Each shareholder of Choice common stock is urged to consult its tax advisor regarding the manner in which gain or loss should be calculated among different blocks of Choice common stock surrendered in the merger. The aggregate tax basis in the shares of Nicolet common stock received pursuant to the merger will be equal to the fair market value of such Nicolet common stock as of the closing date of the merger. The holding period of such shares of Nicolet common stock will begin on the date immediately following the closing date of the merger.
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Backup Withholding and Information Reporting
In general, information reporting requirements may apply to the cash payments made to shareholders of Choice common stock in connection with the merger, unless an exemption applies. Backup withholding may be imposed on the above payments at a rate of 24% if a U.S. Shareholder or Non-U.S. Shareholder (i) fails to provide a taxpayer identification number or appropriate certificates, or (ii) otherwise fails to comply with all applicable requirements of the backup withholding rules.
Any amounts withheld from payments to shareholders of Choice common stock under the backup withholding rules are not an additional tax and will be allowed as a refund or credit against your applicable U.S. federal income tax liability, provided the required information is furnished to the Internal Revenue Service. Both U.S. Shareholders and Non-U.S. Shareholders should consult their own tax advisors regarding the application of backup withholding based on their particular circumstances and the availability and procedure for obtaining an exemption from backup withholding.
Medicare Tax on Net Investment Income
U.S. Shareholders are subject to a 3.8% Medicare tax on certain net investment income earned by individuals, estates and trusts, including any gain recognized in connection with merger of Choice and Nicolet. In the case of an individual, the tax will be imposed on the lesser of  (i) the shareholder’s net investment income, or (ii) the amount by which the shareholder’s modified adjusted gross income exceeds a certain threshold (which is $250,000 in the case of married individuals filing jointly, $125,000 in the case of married individuals filing separately, and $200,000 in all other cases).
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CERTAIN DIFFERENCES IN RIGHTS OF SHAREHOLDERS
To the extent that they receive Nicolet common stock as merger consideration, Choice’s shareholders will become Nicolet shareholders following completion of the merger. Their rights as shareholders will then be governed by Nicolet’s articles of incorporation and bylaws rather than by Choice’s articles of incorporation and bylaws.
Nicolet and Choice are both corporations organized under the laws of the State of Wisconsin. The corporate affairs of Nicolet and Choice are governed generally by the provisions of the Wisconsin Business Corporation Law (the “WBCL”). The following is a summary of differences between the rights of Choice shareholders and Nicolet shareholders not described elsewhere in this proxy statement-prospectus. The summary is necessarily general, and it is not intended to be a complete statement of all differences affecting the rights of shareholders. It is qualified in its entirety by reference to the WBCL, as well as the articles of incorporation and bylaws of each corporation. Choice shareholders should consult their own legal counsel with respect to specific differences and changes in their rights as shareholders that would result from the proposed merger.
Authorized Capital Stock
Nicolet.   Nicolet’s articles of incorporation authorize it to issue 30,000,000 shares of common stock, $0.01 par value, and 10,000,000 shares of preferred stock, no par value, with such preferences, limitations and relative rights as determined by the board of directors. As of June 30, 2019, 9,351,359 shares were issued (including 23,939 shares of restricted stock granted but not yet vested under the Nicolet Stock Plans), 9,327,420 shares were outstanding, and no shares were treasury shares; and (ii) 10,000,000 shares of Nicolet’s preferred stock, no par value per share, of which: (i) 14,964 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A, are authorized, but no shares are outstanding; (ii) 748 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series B, are authorized but no shares are outstanding; and (iii) 24,400 shares of Non-Cumulative Perpetual Preferred Stock, Series C, are authorized, but no shares are outstanding.
As of June 30, 2019, no shares of Nicolet capital stock were reserved for issuance except for: (i) 1,610,407 shares of Nicolet Common Stock reserved for issuance pursuant to future awards under Nicolet Stock Plans, (ii) 1,479,657 shares of Nicolet Common Stock reserved for issuance in connection with outstanding stock options, restricted stock, or other equity awards under a Nicolet Stock Plan; (iii) 141,082 shares of Nicolet Common Stock reserved for issuance under Nicolet’s 401(k) plan; (iv) 64,634 shares of Nicolet Common Stock reserved for issuance pursuant to Nicolet’s 2009 Deferred Compensation Plan for Non-Employee Directors; and (v) 145,494 shares of Nicolet Common Stock reserved for issuance under the Nicolet Bankshares, Inc. Employee Stock Purchase Plan.
Choice.   Choice’s articles of incorporation authorize it to issue 10,000,000 shares of common stock, $1.00 par value, and 500,000 shares of preferred stock, $1.00 par value. As of June 30, 2019, there were 2,729,015 shares of Choice common stock issued and 2,400,921 shares outstanding and no shares of the authorized preferred stock were issued or outstanding. As of June 30, 2019, there were 118,783 shares of Choice common stock underlying Choice Stock Options.
Composition and Election of the Board of Directors
Nicolet.   Nicolet’s articles of incorporation and bylaws provide that the board of directors shall consist of not fewer than two nor more than 25 directors, with the exact number of directors to be set by resolution of the board. Its articles of incorporation provide for the election of directors by cumulative voting, which means that the number of votes each common shareholder may cast is determined by multiplying the number of shares he, she or it owns by the number of directors to be elected. Those votes may be cumulated and cast for a single candidate or may be distributed among two or more candidates in the manner selected by the shareholder.
Choice.   Choice’s bylaws provide that the number of directors constituting the board of directors shall be 9 and that (a) the board of directors, and (b) if specified in a preferred stock resolution, the holders of Choice preferred stock shall have the power to increase or decrease the number of directors by resolution (provided, however, that no decrease may have the effect of shortening the term of any incumbent director).
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The articles of incorporation provide that the number of directors shall not be less than three. Directors are elected by a plurality vote. The articles of incorporation do not provide for cumulative voting. Choice’s bylaws provide that each director serves for a term of three years and until his or her successor is elected and qualified, unless the director is removed, resigns, becomes unable to serve or dies. The bylaws also provide for a staggered board, comprised of three classes, each class’s term expiring on the third succeeding annual meeting after their election.
Director Nominations
Nicolet.   Under Nicolet’s bylaws, either directors or shareholders may nominate persons for election as Nicolet directors. Nominations that are not made by or on behalf of Nicolet’s management must be delivered in writing to Nicolet’s President no less than 14 and no more than 50 days before the meeting at which directors will be elected. If less than 21 days’ notice of such meeting is given, then the delivery deadline for the shareholder’s written notice is the close of business on the seventh day after the date on which notice of the meeting was mailed. The shareholder’s nomination must specify (to the extent known to the shareholder) the nominee’s name, address and principal occupation; the number of shares of capital stock that will be voted in favor of the nominee; and the nominating shareholder’s name, address and beneficial ownership of Nicolet capital stock.
Choice.   Under Choice’s bylaws, either directors or shareholders may nominate persons for election to the board of directors. Nominations made by or on behalf of an existing shareholder shall be made by notice in writing, delivered or mailed to the secretary of the corporation not less than 60 days nor more than 270 days preceding the annual meeting. All shareholder notices, whether for director nominations or other proposals to be heard at an annual meeting, must contain in writing (a) the name and address of the shareholder or beneficial owner giving notice, (b) the class and number of shares of Choice capital stock which are owned by such shareholder or beneficial owner, (c) the date such shareholder or beneficial owner acquired such shares, and (d) a representation that shareholder is a shareholder of record and will remain such through the record date of the shareholders meeting in question. Shareholder notices relating to nomination for election to the board of directors must contain in writing, in addition to the abovementioned requirements, (i) the proposed nominee’s written consent to being named in Choice’s proxy statement as a director nominee and to serve as a director if nominated, (ii) the proposed nominee’s name, age, and business and residence addresses, (iii) the principal occupation of the proposed nominee, (iv) the class and number of shares of Choice capital stock beneficial owned by the proposed nominee, (v) a description of all arrangements between the shareholder or beneficial owner on whose behalf the nomination is made and the proposed nominee regarding such nomination, and (vi) such other information relating the proposed nominee as required to be disclosed by the proxy rules set forth in Regulation 14A under the Securities and Exchange act of 1934, as amended. The chairperson of the meeting may, in the chairperson’s discretion, discard any nominations deemed not to be made in accordance with these requirements.
Director Qualifications
Nicolet.   Under Nicolet’s bylaws, no person shall be eligible to be elected a director at any meeting of shareholders held on or after the date he or she attains age 72. The board of directors, at its discretion, may waive the age limitation or establish a greater age from time to time. Nicolet’s bylaws do not impose any other specific qualification requirements on directors.
Choice.   Choice’s bylaws provide that directors do not need to be residents of Wisconsin nor do they need to be shareholders of Choice capital stock. Choice’s articles of incorporation and bylaws do not impose any other specific qualification requirements on directors.
Board Committees
Nicolet.   Under the WBCL, unless the articles of incorporation or bylaws provide otherwise, a board of directors may create one or more committees, appoint members of the board of directors to serve on the committees and designate other members of the board of directors to serve as alternates. The WBCL provides that a committee may exercise the authority of the full board of directors except that it cannot approve or recommend to shareholders matters that require shareholder approval under the WBCL and it
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cannot adopt, amend or repeal a corporate bylaw. In addition to these restrictions, Nicolet’s bylaws provide that no board committee may approve dividends, fill board or committee vacancies without express authorization by the full board, amend the articles of incorporation, approve a plan of merger not requiring shareholder approval, approve the reacquisition of outstanding Nicolet capital stock except pursuant to parameters established by the full board, or approve the issuance of capital stock except to the extent authorized by the full board.
Choice.   Choice’s bylaws allow the board of directors to create one or more committees by a resolution approved by either a majority of directors in office at the time. Any committee created shall consist of two or more directors and shall, unless otherwise provided by the board of directors, serve at the pleasure of the board of directors. A committee may exercise, when the board of directors is not in session, any of the powers of the board of directors, except that a committee may not: (i) authorize distributions; (ii) approve or propose to shareholders action requiring shareholder approval; (iii) fill vacancies on the board of directors or any board committees; (iv) amend the articles of incorporation; (v) adopt amend or repeal the bylaws; (vi) approve a plan of merger not requiring shareholder approval; (vii) authorize or approve reacquisition of shares except by a formula or method under the direction of the board of directors; and (viii) authorize or approve the issuance or sale of shares or make determinations and designation of rights preferences and limitations of a class or series of shares unless within limits prescribed by the board of directors. The standing committees shall include an audit committee and a compensation committee.
Board Vacancies
Nicolet.   The WBCL provides that unless the articles of incorporation provide otherwise, if a vacancy occurs on the board of directors it may filled by any of the following: (i) the shareholders; (ii) the board of directors; or (iii) if the directors remaining in office constitute fewer than a quorum of the board, the directors, by the affirmative vote of a majority of all directors remaining in office. If the vacant office was held by a director elected by a voting group of shareholders, only the holders of shares of that voting group may vote to fill the vacancy if it is filled by shareholders, and only the remaining directors elected by that voting group may vote to fill the vacancy if it is filled by the directors. A vacancy that will occur at a specific later date may be filled before the vacancy occurs, but the new directors may not take office until the vacancy occurs. Nicolet’s bylaws provide that any vacancy on the board, including a vacancy resulting from an increase in the number of directors, shall be filled by a majority of the board of directors then in office, although less than a quorum, and any directors so chosen shall hold office for the remaining term of directors of the class to which he or she has been elected and until election of his or her duly qualified successor.
Choice.   Choice’s bylaws provide that any vacancy on the board, including a vacancy including a vacancy created by an increase in the number of directors, may be filled by the shareholders or the board of directors. If the directors remaining in office constitute fewer than a quorum, the directors may fill the vacancy by a majority vote of the remaining directors in office. If a vacancy was held by a director elected by a voting group of shareholders, only the holders of shares of that voting group may vote to fill the vacancy.
Director Removal
Nicolet.   Directors may be removed for cause by the affirmative vote of the holders of a majority of the outstanding shares of Nicolet common stock entitled to vote in the election of directors, except that a director may not be removed if a number of cumulative votes sufficient to elect him or her is cast against his or her removal. Removal must be voted upon at a special shareholders’ meeting called for that purpose, and any vacancy so created may be filled by majority vote of the remaining directors. “Cause” is defined as conviction of a felony, a demand for removal by regulatory authorities or a determination by two-thirds of the directors then in office (excluding the director whose removal is being sought) that the director’s conduct was inimical to the best interests of Nicolet.
Choice.   Choice’s bylaws provide that any director or the entire board of directors may be removed, with or without cause, by the shareholders if the number of votes cast to remove the director(s) exceeds the number cast not to remove him or her. If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove that director.
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Advance Notice of Shareholder Proposals
Nicolet.   Nicolet’s bylaws provide that in addition to any other requirements generally applicable to matters to be brought before an annual meeting of shareholders under Nicolet’s articles of incorporation or bylaws or the WBCL, a Nicolet shareholder who wishes to present a matter for consideration at such meeting must notify Nicolet’s Corporate Secretary in writing no later than 60 days before the meeting. The shareholder’s notice must specify the nature and reason for the business proposed to be conducted; the shareholder’s name, address and beneficial ownership of Nicolet stock; and any material interest of the shareholder in the matter proposed for consideration. See “Director Nominations” above for special provisions relating to shareholder nominations of candidates for the board of directors.
Choice.   See “Director Nominations” above for special provisions relating to shareholder notices and shareholder nominations of candidates for the board of directors. In addition to the abovementioned requirements for shareholder notice, notice relating to any business proposed to bring before an annual meeting shall contain a brief description of the nature of the business, the reasons for conducting such business and any material interest in such business of such requesting shareholder and beneficial owner.
Meetings of Shareholders
Nicolet.   Nicolet’s bylaws provide that annual meetings of shareholders will be held at such date as may be specified by the board of directors or Corporate Secretary. Subject to any contrary requirements of the WBCL, special meetings of shareholders may be called by either Nicolet’s Chief Executive Officer or President at the direction of the board of directors or by the holder(s) of at least 10% of Nicolet’s outstanding stock. Nicolet’s bylaws require at least ten and not more than sixty days’ notice of any meeting of shareholders.
Choice.   Choice’s bylaws provide that the annual meeting of the shareholders shall be held at any place designated by the board of directors. The articles of incorporation and bylaws do not provide any restrictions on time and place of the annual meeting. Special meetings of the shareholders may be called only by (i) the chairman, (ii) the secretary or any officer at the direction of the board of directors pursuant to a resolution, or (iii) written demand of the holders of not less than 10% of all the shares entitled to vote on the issue proposed for the meeting.
Shareholder Vote Requirements
Nicolet.   Except as described under “Board of Directors” above and “Mergers, Consolidations and Sales of Assets” below, and unless a greater number of votes is required under Nicolet’s articles of incorporation or the WBCL, a matter voted upon by Nicolet shareholders will be approved if more votes are cast in favor of a matter than against it, assuming a quorum is present.
Choice.   Except as described under “Board of Directors” above, and unless a greater number of votes is required under the WBCL, a matter voted upon by a quorum of Choice shareholders will be approved if the votes cast within the voting group favoring the action exceed the votes cast opposing the action. A majority of the votes entitled to be cast by shares entitled to vote as a separate voting group on a matter, whether represented in person or by proxy, constitutes a quorum. Additionally, Choice shares owned by another corporation (directly or indirectly) are not entitled to vote if this corporation owns (directly or indirectly) sufficient shares to elect a majority of the directors of such other corporation.
Mergers, Consolidations and Sales of Assets
Nicolet.   Nicolet’s articles of incorporation provide that any merger or share exchange of Nicolet with or into any other corporation, or any sale, lease, exchange or other disposition of substantially all of its assets to any other person or entity will require the approval of either: (i) two-thirds of the directors then in office and a majority of the outstanding shares entitled to vote; or (ii) a majority of the directors then in office and two-thirds of the outstanding shares entitled to vote.
Nicolet’s articles of incorporation require that, in considering an offer of another party to make a tender or exchange offer for any equity security of Nicolet; to merge, effect a share exchange or otherwise combine Nicolet with any other corporation; or purchase or otherwise acquire all or substantially all of the
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assets of Nicolet, the board, in determining what is in the best interests of Nicolet and its shareholders, give due consideration to all relevant factors, including, without limitation, (a) the short-term and long-term social and economic effects on the employees, customers, shareholders and other constituents of Nicolet and its subsidiaries, and on the communities within which Nicolet and its subsidiaries operate (it being understood that Nicolet National Bank is charged with providing support to and being involved in the communities it serves); and (b) the consideration being offered by the other party in relation to the then-current value of Nicolet in a freely negotiated transaction and in relation to the board’s then-estimate of the future value of Nicolet as an independent entity.
Choice.   Choice’s articles of incorporation and bylaws do not impose any restrictions or require any additional shareholder approval for any merger or consolidation of Choice. The WBCL provides that a sale of substantially all of the assets of a corporation requires approval by a majority of all of the votes entitled to be cast on the transaction.
Indemnification
Nicolet.   Nicolet’s bylaws provide for the mandatory indemnification of a director, officer, employee or agent of Nicolet (or a person concurrently serving in such a capacity with another entity at Nicolet’s request), to the extent such person has been successful on the merits or otherwise in the defense of any threatened, pending or completed civil, criminal, administrative or investigative action, suit, arbitration or other proceeding brought by or in the right of Nicolet or by any other person or entity to which such person is a party because he or she is a director, officer, employee or agent, for all reasonable fees, costs, charges, disbursements, attorneys’ fees and other expenses incurred in connection with proceeding. In all other cases, Nicolet shall indemnify a director or officer of Nicolet, and may indemnify an employee or agent of Nicolet, against all liability and reasonable fees, costs, charges, disbursements, attorneys’ fees and other expenses incurred by such person in any proceeding brought by or in the right of Nicolet or by any other person or entity to which such person is a party because he or she is a director, officer, employee or agent, unless it has been proven by final adjudication that such person breached or failed to perform a duty owed to Nicolet that constituted:

a willful failure to deal fairly with Nicolet or its shareholders in connection with a matter in which the director, officer, employee or agent has a material conflict of interest;

a violation of criminal law, unless the director, officer, employee or agent had reasonable cause to believe his or her conduct was lawful or no reasonable cause to believe his or her conduct was unlawful;

a transaction from which the director, officer, employee or agent derived an improper personal profit; or

willful misconduct.
Unless modified by written agreement, the determination as to whether indemnification is proper shall be made in accordance with the WBCL. The right to indemnification under Nicolet’s bylaws may only be amended by the vote of two-thirds of the outstanding shares of Nicolet capital stock entitled to vote on the matter. Nicolet is authorized to purchase and maintain insurance on behalf of its directors, officers, employees or agents in connection with the foregoing indemnification obligations.
Choice.   Choice’s bylaws provide, in accordance with the WBCL, for the mandatory indemnification of a director, officer, employee or agent, to the extent that he or she has been successful on the merits or otherwise in the defense of a proceeding, for all reasonable expenses incurred in the proceeding if the director or officer was a party because he or she is or was a director, officer, employee or agent of the corporation. Choice’s bylaws also provide for indemnification in other instances pursuant to but not required by the WBCL (with no requirement that the director of officer be successful on the merits or otherwise), unless the director, officer, employee or agent is personally liable because the director or officer breached or failed to perform a duty that he or she owes to the corporation and the breach or failure to perform constitutes any of the following:

a willful failure to deal fairly with the corporation or its shareholders in connection with a matter in which the director, officer, employee or agent has a material conflict of interest;
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a violation of the criminal law, unless the director, officer, employee or agent had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful;

a transaction from which the director, officer, employee or agent derived an improper personal profit; or

willful misconduct.
The determination as to whether indemnification is proper shall be made in accordance with the WBCL. Choice may grant additional rights to indemnification and reimbursement of expenses. Indemnification in other circumstances shall be at the discretion of the board of directors and in accordance with the WBCL. Choice is authorized to purchase and maintain insurance on behalf of its directors, officers, employees or agents in connection with the foregoing indemnification obligations. Choice’s bylaws also provide for indemnification and allowance of expenses in connection with a proceeding involving securities regulation.
The merger agreement provides that Nicolet will assume Choice’s indemnification obligations after the merger.
Amendments to Articles of Incorporation and Bylaws
Nicolet.   Nicolet’s articles of incorporation may be amended as provided in the WBCL, which provides that unless the articles of incorporation, bylaws or WBCL requires a higher vote, and subject to any rights of a class to vote separately on the amendment under the WBCL, an amendment to the articles of incorporation will be approved if the number of votes cast in favor of the amendment exceed the votes cast against it.
Nicolet’s bylaws may be amended by the shareholders or by majority vote of the board of directors, except as otherwise provided in the WBCL and except as specified under “Indemnification” above. The WBCL requires shareholder approval for an amendment to any shareholder-adopted bylaw that states that the board may not amend it. Additionally, a bylaw that fixes a greater or lower quorum requirement or a greater voting requirement for shareholders may not be adopted, amended or repealed by the board of directors. A bylaw that fixes a greater or lower quorum requirement or a greater voting requirement for the board of directors may be amended or repealed as follows: (i) if originally adopted by the shareholders, only by the shareholders, unless the bylaw also permits board approval of the amendment, or (ii) if originally adopted by the board of directors, either by the shareholders or by the board of directors.
Choice.   Choice’s articles of incorporation may only be amended by the affirmative vote of the holders of a majority of the stock entitled to vote.
Choice’s bylaws may be amended either by the shareholders or, to the extent permitted by WBCL, by the board of directors. Bylaws amended by the board of directors may be altered amended, or repealed by the shareholders entitled to vote. The adoption or amendment of a bylaw that adds, changes or deletes a greater or lower quorum requirement or a greater voting requirement for shareholders must meet the same quorum requirement and be adopted by the same vote and voting groups required to take action under the quorum and voting requirement then in effect. Amendment to the bylaws providing for indemnification rights requires a vote of not less than two-thirds of Choice’s outstanding capital stock entitled to vote on such matters.
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DISSENTERS’ RIGHTS
The following discussion is not a complete description of the law relating to dissenters’ rights available to holders and beneficial holders of Choice and Nicolet common stock under Wisconsin law. This description is qualified in its entirety by the full text of the relevant provisions of the WBCL, which are reprinted in their entirety as Appendix C to this proxy statement-prospectus. If you desire to exercise dissenters’ rights, you should review carefully the WBCL and consult a legal advisor before electing or attempting to exercise these rights.
General
Pursuant to the provisions of sections 180.1301 to 180.1331 of the WBCL, holders and beneficial holders of Choice common stock have the right to dissent from the merger and to receive the fair value of their shares in cash. Holders and beneficial holders of Choice common stock who fulfill the requirements of the WBCL summarized below and set forth in Appendix C will be entitled to assert dissenters’ rights in connection with the merger. Shareholders or beneficial shareholders considering initiation of a dissenters’ proceeding should review this section and should also review Appendix C in its entirety. A dissenters’ proceeding may involve litigation.
Preliminary Procedural Steps
Pursuant to the provisions of the WBCL, if the merger is consummated, in order to exercise dissenter’s rights you must have:

given to Choice, prior to the vote at the special meeting with respect to the approval of the merger, written notice of your intent to demand payment for your shares of common stock (hereinafter referred to as “shares”);

not voted in favor of the merger; and

complied with the other statutory requirements summarized below.
If you have perfected your dissenters’ rights and the merger is consummated, you will receive the fair value of your shares as of the effective date of the merger. A shareholder or beneficial shareholder who fails to deliver written notice of his, her or its intent to demand payment for his, her or its shares if the merger is consummated in accordance with the requirements of the WBCL is not entitled to payment for his or her shares pursuant to the provisions of the WBCL and will only be entitled to receive the merger consideration as provided in the merger agreement.
Brokers or others who hold shares in their name that are beneficially owned by others may assert dissenters’ rights as to fewer than all of the shares registered in your name only if they dissent with respect to all shares beneficially owned by any one person and notify Choice in writing of the name and address of each person on whose behalf they are asserting dissenters’ rights. The rights of a shareholder who asserts dissenters’ rights as to fewer than all of the shares registered in his, her or its name are determined as if the shares as to which that holder dissents and that holder’s other shares were registered in the names of different shareholders.
Written Dissent Demand
Voting against the merger will not independently satisfy the written demand requirement. In addition to not voting in favor of the merger, if you wish to preserve the right to dissent and seek appraisal, you must give a separate written notice of your intent to demand payment for your shares if the merger is effected.
Any written notice of intent to dissent to the merger, satisfying the requirements discussed above, should be addressed to Choice Bancshares, Inc., 1041 North Westhaven Drive, Oshkosh, Wisconsin 54904, Attn: Corporate Secretary. The written notice must be delivered to Choice prior to the special meeting.
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Dissenters’ Notice
If the shareholders of Choice approve the merger at the special meeting, Choice (or Nicolet as its successor) must deliver a written dissenters’ notice (the “Dissenters’ Notice”) to all Choice shareholders who satisfy the foregoing requirements. The Dissenters’ Notice must be sent no later than ten days after the date that the merger is approved by Choice’s shareholders and must:

state where dissenting shareholders should send the demand for payment and where and when dissenting shareholders should deposit certificates for the shares;

inform holders of uncertificated shares as to what extent transfer of these shares will be restricted after the demand for payment is received;

include a form for demanding payment that includes the date of the first announcement to news media or to shareholders of the terms of the merger and requires the shareholder or beneficial shareholder asserting dissenters’ rights to certify whether he, she or it acquired beneficial ownership of the shares prior to that date;

set a date by which Choice (or Nicolet as its successor) must receive the demand for payment (which date may not be fewer than 30 nor more than 60 days after the Dissenters’ Notice is delivered); and

be accompanied by a copy of sections 180.1301 to 180.1331 of the WBCL.
A shareholder or beneficial shareholder who receives the Dissenters’ Notice or a beneficial shareholder whose shares are held by a nominee who is sent a Dissenters’ Notice must demand payment and certify as to his or her ownership of the shares in accordance with the Dissenters’ Notice. A shareholder or beneficial shareholder who holds certificated shares must also deposit his, her or its share certificates with Choice (or Nicolet as its successor) in accordance with the terms of the Dissenters’ Notice.
A dissenting shareholder or beneficial shareholder who demands payment and deposits his, her or its share certificate in accordance with the terms of the Dissenters’ Notice will retain all of the rights of a shareholder or beneficial shareholder, respectively, until those rights are canceled or modified by the consummation of the merger. Choice may restrict the transfer of uncertificated shares from the date that the demand for payment for those shares is received until the merger is effected or the restrictions released, in the event that it does not consummate the merger.
A shareholder or beneficial shareholder with certificated or uncertificated shares who does not demand payment by the date set forth in the Dissenters’ Notice is not entitled to payment for his, her or its shares under sections 180.1301 to 180.1331 of the WBCL. A shareholder or beneficial shareholder with certificated shares who does not deposit his, her or its share certificates where required and by the date set forth in the Dissenters’ Notice is not entitled to payment for his, her or its shares under sections 180.1301 to 180.1331 of the WBCL. Choice (or Nicolet as its successor) may elect to withhold payment from a dissenter and instead make an offer of payment if that dissenter was not the beneficial owner of his, her or its shares prior to the date specified in the Dissenters’ Notice as the date on which the first announcement of the merger was made to the news media or to Choice’s shareholders.
Payment
Except as described below, Choice (or Nicolet as its successor) must, as soon as the merger is effected or upon receipt of a payment demand, whichever is later, pay each shareholder who has complied with the payment demand and deposit requirements described above the amount Choice (or Nicolet as its successor) estimates to be the fair value of the shares, plus accrued interest. The offer of payment must be accompanied by:

recent financial statements of Choice;

a statement of the estimate of the fair value of the shares;

an explanation of how the interest was calculated;
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a statement of the dissenter’s right to demand payment under section 180.1328 of the WBCL if the dissenter is dissatisfied with the payment; and

a copy of sections 180.1301 to 180.1331 of the WBCL.
If the merger is not consummated within 60 days after the date set for demanding payment and depositing share certificates, Choice must return the deposited certificates and release the transfer restrictions imposed on uncertificated shares. Choice (or Nicolet as its successor) must send a new Dissenters’ Notice if the merger is consummated after the return of certificates and any dissenting shareholders must repeat the payment demand procedure described above.
Section 180.1328 of the WBCL provides that a dissenter may notify Choice (or Nicolet as its successor) in writing of his, her or its own estimate of the fair value of such holder’s shares and the interest due, and may demand payment of such holder’s estimate, less any payment received from Choice (or Nicolet as its successor), if:

he or she believes that the amount paid or offered by Choice (or Nicolet as its successor) is less than the fair value of his or her shares or that Choice (or Nicolet as its successor) has calculated incorrectly the interest due;

Choice (or Nicolet as its successor) fails to make payment within 60 days after the date set in the Dissenters’ Notice for demanding payment; or

Choice, having failed to consummate the merger, does not return the deposited certificates or release the transfer restrictions imposed on uncertificated shares within 60 days after the date set for demanding payment in the Dissenters’ Notice.
A dissenting shareholder waives his, her or its right to demand payment of his, her or its own estimate of fair value and interest under sections 180.1328 unless such dissenting shareholder provides Choice (or Nicolet as its successor) with notice of his, her or its demand, in conformance with the notice requirements of section 180.0141, within 30 days after Choice (or Nicolet as its successor) making or offering of payment for the dissenting shareholder’s shares.
Litigation
If a demand for payment under section 180.1328 remains unsettled, Choice (or Nicolet as its successor) must commence a nonjury equity valuation proceeding in the Circuit Court of Winnebago County, Wisconsin (in the case of Choice) or Brown County, Wisconsin (in the case of Nicolet), within 60 days after having received the payment demand under section 180.1328 and must petition the court to determine the fair value of the shares and accrued interest. If Choice (or Nicolet as its successor) does not commence the proceeding within those 60 days, the WBCL requires Choice (or Nicolet as its successor) to pay each dissenting shareholder whose demand remains unsettled the amount demanded. Choice (or Nicolet as its successor) is required to make all dissenting shareholders whose demands remain unsettled parties to the proceeding and to serve a copy of the petition upon each of them.
The jurisdiction of the court in which the proceeding is brought is plenary and exclusive. The court may appoint one or more appraisers to receive evidence and to recommend a decision on fair value. An appraiser has the powers delegated to such appraiser in the court order appointing him or her or in any amendment to the order. Dissenters are entitled to the same discovery rights as parties in other civil proceedings.
Each dissenting shareholder made a party to the proceeding is entitled to judgment for the amount, if any, by which the court finds the fair value of such holder’s shares, plus interest, exceeds the amount paid or offered, as applicable, by Choice (or Nicolet as its successor).
The court in an appraisal proceeding commenced under the foregoing provision must determine the costs of the proceeding, excluding fees and expenses of attorneys and experts for the respective parties, and must assess those costs against Choice (or Nicolet as its successor), except that the court may assess the costs against all or some of the dissenting shareholders to the extent the court finds they acted arbitrarily, vexatiously, or not in good faith in demanding payment under section 180.1328 of the WBCL. The court also may assess the fees and expenses of attorneys and experts for the respective parties against Choice (or
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Nicolet as its successor) if the court finds Choice (or Nicolet as its successor) did not substantially comply with the requirements of the WBCL, or against either Choice (or Nicolet as its successor) or a dissenting shareholder if the court finds that such party acted arbitrarily, vexatiously, or not in good faith with respect to the rights provided by the WBCL.
If the court finds that the services of attorneys or experts for any dissenter were of substantial benefit to other dissenters similarly situated, the court may award those attorneys’ reasonable fees out of the amounts awarded the dissenters who were benefited.
This is a summary of the material rights of a dissenting shareholder and is qualified in its entirety by reference to the applicable portions of the WBCL, which are included as Appendix C to this proxy statement-prospectus. If you intend to dissent from approval of the merger, you should review carefully the text of Appendix C and should also consult with your attorney. We will not give you any further notice of the events giving rise to dissenters’ rights or any steps associated with perfecting dissenters’ rights, except as indicated above or otherwise required by law.
We have not made any provision to grant you access to any of the corporate files of Nicolet or Choice, except as may be required by the WBCL, or to obtain legal counsel or appraisal services at the expense of Choice (or Nicolet as its successor).
Any dissenting shareholder who perfects his, her or its right to be paid the “fair value” of his, her or its shares will recognize taxable gain or loss upon receipt of cash for such shares for federal income tax purposes. See “Material U.S. Federal Income Tax Consequences of the Merger” at page 44.
You must do all of the things described in this section and as set forth in the WBCL in order to preserve your dissenters’ rights and to receive the fair value of your shares in cash (as determined in accordance with those provisions). If you do not follow each of the steps as described above, you will have no right to receive cash for your shares as provided in the WBCL and you will only be entitled to receive the merger consideration as provided in the merger agreement. In view of the complexity of these provisions of Wisconsin law, shareholders of Choice who are considering exercising their dissenters’ rights should consult their legal advisors.
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Selected Historical Consolidated Financial Data of Nicolet
The following table presents Nicolet’s selected historical consolidated financial data as of and for the years ended December 31, 2014 through 2018 and for the six months ended June 30, 2019 and 2018. The selected financial data as of December 31, 2014 through 2018 is derived from Nicolet’s audited consolidated financial statements and related notes included in Nicolet’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “Nicolet Form 10-K”) incorporated by reference into this proxy statement-prospectus and should be read in conjunction with the consolidated financial statements and related notes, along with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in the Nicolet Form 10-K. The selected financial data as of and for the six months ended June 30, 2019 and 2018 is derived from Nicolet’s unaudited consolidated financial statements and related notes included in Nicolet’s Quarterly Report on Form 10-Q for the period ended June 30, 2019 (the “Nicolet Form 10-Q”) incorporated by reference into this proxy statement-prospectus and should be read in conjunction with the consolidated financial statements and related notes, along with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in the Nicolet Form 10-Q. See “Where You Can Find Additional Information” on page 62.
The selected historical consolidated financial data of Nicolet includes the effect of mergers and other acquisition transactions from the date of each merger or other transaction, including the acquisitions of First Menasha Bancshares, Inc. on April 28, 2017 and Baylake Corp. on April 29, 2016.
As of and for the
Six Months Ended
June 30
As of and for the Years Ended December 31
2019
2018
2018
2017
2016
2015
2014
(Unaudited)
(dollars in thousands except per share data)
INCOME STATEMENT:
Interest income
$ 67,729 $ 61,330 $ 125,537 $ 109,253 $ 75,467 $ 48,597 $ 48,949
Interest expense
11,310 8,653 18,889 10,511 7,334 7,213 7,067
Net interest income
56,419 52,677 106,648 98,742 68,133 41,384 41,882
Provision for loan losses
500 1,020 1,600 2,325 1,800 1,800 2,700
Net interest income after provision
for loan losses
55,919 51,657 105,048 96,417 66,333 39,584 39,182
Noninterest income
27,746 19,063 39,509 34,639 26,674 17,708 14,185
Noninterest expense
48,486 45,093 89,758 81,356 64,942 39,648 38,709
Income before income tax expense 
35,179 25,627 54,799 49,700 28,065 17,644 14,658
Income tax expense
6,185 6,163 13,446 16,267 9,371 6,089 4,607
Net income
28,994 19,464 41,353 33,433 18,694 11,555 10,051
Less: Net income attributable to noncontrolling interest
178 150 317 283 232 127 102
Net income attributable to Nicolet Bankshares, Inc.
28,816 19,314 41,036 33,150 18,462 11,428 9,949
Less: preferred stock dividends
633 212 244
Net income available to common shareholders
$ 28,816 $ 19,314 $ 41,036 $ 33,150 $ 17,829 $ 11,216 $ 9,705
Earnings per common share:
Basic
$ 3.06 $ 1.99 $ 4.26 $ 3.51 $ 2.49 $ 2.80 $ 2.33
Diluted
$ 2.97 $ 1.93 $ 4.12 $ 3.33 $ 2.37 $ 2.57 $ 2.25
Book value per common share
$ 44.11 $ 38.43 $ 40.72 $ 37.09 $ 32.26 $ 23.42 $ 21.34
Common shares outstanding
9,327,420 9,642,834 9,495,265 9,818,247 8,553,292 4,154,377 4,058,208
Financial Ratios:
Return on average assets
1.91% 1.31% 1.38% 1.25% 0.95% 0.96% 0.84%
Return on average equity
14.61% 10.66% 11.04% 9.96% 8.16% 10.20% 9.18%
Return on average common equity 
14.61% 10.66% 11.04% 9.96% 8.20% 12.35% 11.55%
Average equity to average assets
13.11% 12.30% 12.48% 12.57% 11.69% 9.45% 9.10%
Net interest margin
4.16% 3.98% 4.04% 4.30% 4.01% 3.88% 3.89%
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MARKET PRICE AND DIVIDEND INFORMATION
Nicolet
Nicolet common stock is currently traded on the Nasdaq Capital Market under the symbol “NCBS.” As of June 30, 2019, Nicolet had approximately 2,100 shareholders of record. The closing price of Nicolet common stock was $61.13 per share on June 26, 2019, the last trading day before public announcement of the merger.
Nicolet has not paid any dividends on its common stock since its inception in 2000. Nicolet anticipates that its earnings, if any, will be held for purposes of enhancing its capital. No assurances can be given that any dividends on Nicolet’s common stock will be declared in the future or, if declared, what the amount of such dividends will be or whether such dividends will continue for future periods.
Choice
Choice’s common stock is quoted on the OTC Pink under the symbol “CBKW.” Quotations on the OTC Pink reflect inter-dealer prices, without retail mark-up, mark-down or commissions, and may not represent actual transactions. As of the record date, Choice had approximately 700 shareholders of record. The following table sets forth, for the periods indicated, the high and low reported sale prices per share of Choice common stock. The market for Choice’s common stock has been illiquid and irregular, and historical transactions in its stock have been sporadic. Further, Choice has not paid any dividends on its common stock since its inception in 2006. The closing price of Choice common stock was $21.25 per share on June 26, 2019, the last trading day before public announcement of the merger.
High
Low
2019
Third Quarter (through August 28, 2019)
$ 32.05 $ 29.00
Second Quarter
31.00 20.00
First Quarter
21.40 18.00
2018
Fourth Quarter
$ 20.00 $ 18.00
Third Quarter
20.50 19.25
Second Quarter
21.50 19.75
First Quarter
23.00 20.00
2017
Fourth Quarter
$ 20.75 $ 18.85
Third Quarter
20.00 18.85
Second Quarter
22.75 18.35
First Quarter
18.35 15.24
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CHOICE SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth certain information regarding the beneficial ownership of Choice common stock as of June 30, 2019 by (1) each director and executive officer of Choice, (2) each person who is known by Choice to own beneficially 5% or more of Choice common stock, and (3) all directors and executive officers as a group. Unless otherwise indicated, based on information furnished by such stockholders, management of Choice believes that each person has sole voting and dispositive power over the shares indicated as owned by such person.
Name
Title
Common Stock
Beneficially
Owned(1)
Percentage
Beneficially
Owned(2)
Kenneth Balda
Director 119,767(3) 4.99%
Stephen Ford
Director 29,150(4) 1.21%
Paul Getchel
Director 32,050(3) 1.33%
John Glynn
Executive Vice President & CFO 69,587(5) 2.90%
Dr. Michael Hanneman
Director 38,750(3) 1.61%
Dr. David Janssen
Director 62,913(3) 2.62%
Stanley Leedle
Director, Executive Vice President 86,083(6) 3.58%
Thomas Muza
Director 36,910(3) 1.54%
Rodney Oilschlager
Director, Chairman of Board 36,910(3) 1.54%
James Poeschl
Director 30,950(4) 1.29%
Jeffrey Rogge
Director 51,202(3) 2.13%
Thomas Rusch
Director 70,548(3) 2.94%
Fred Siemers
Executive Vice President & CCO 7,166(7) *
J. Scott Sitter
Director, President & CEO 121,013(3) 5.04%
Arend Stam
Director 29,450(3) 1.23%
John Supple
Director 28,750(3) 1.20%
Gerald Thiele
Director 39,570(4) 1.64%
Mark Troudt
Director 72,872(3) 3.03%
All Directors and executive officers as a group, consisting of 18 persons:
963,641(8) 39.60%
Richard Gabert
Former Director 68,064(9) 2.83%
*
Less than 1%
(1)
For all persons listed, the number includes shares held directly by, jointly with, or in trust for the benefit of, the person’s spouse and dependent children, which are reported on the presumption that the individual may share voting and/or investment power because of the family relationship.
(2)
Shares subject to currently-exercisable stock options are treated as outstanding for the purpose of computing the number and percentage of outstanding securities of the class owned by each individual and for all directors and executive officers as a group, but not for the purpose of computing the percentage of class owned by any other person.
(3)
Includes 150 vested stock options.
(4)
Includes 7,500 vested stock options.
(5)
Includes 833 vested stock options.
(6)
Includes 983 vested stock options.
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(7)
Includes 6,666 vested stock options.
(8)
Includes 32,782 vested stock options
(9)
Information for Mr. Gabert is included in the table because he was a Director of the Company during 2018; however, Mr. Gabert’s beneficial ownership is not included in the total for All Directors and Executive Officers as a Group due to his resignation from his position with the Company in January 2019.
As reflected in the above table, the directors, director nominees and executive officers of the Company represent 39.60% beneficial ownership of the Company’s common stock as of June 30, 2019.
OTHER MATTERS
Choice’s management team is not aware of any other matters to be brought before their special shareholders’ meeting. However, if any other matters are properly brought before the meeting, the persons named in the enclosed proxy card will have discretionary authority to vote all proxies with respect to such matters in accordance with their judgment.
EXPERTS
The consolidated financial statements of Nicolet Bankshares, Inc. as of December 31, 2018 and 2017 and for each of the years in the three-year period ended December 31, 2018 and the effectiveness of internal control over financial reporting as of December 31, 2018 incorporated in this Prospectus by reference from the Annual Report on Form 10-K for the year ended December 31, 2018 have been audited by Porter Keadle Moore, LLC an independent registered public accounting firm, as stated in their report thereon, incorporated herein by reference, and have been incorporated in this Prospectus and Registration Statement in reliance upon such report and upon the authority of such firm as experts in accounting and auditing.
LEGAL MATTERS
Bryan Cave Leighton Paisner LLP will deliver prior to the effective time of the merger their opinions to Nicolet and Choice, respectively, as to certain United States federal income tax consequences of the merger. Please see the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 44 of this proxy statement-prospectus. The validity of the Nicolet common stock to be issued in connection with the merger will be passed upon for Nicolet by Kate Lombardi, Vice President Human Resources/Legal Counsel of Nicolet National Bank. As of June 30, 2019, Ms. Lombardi beneficially owned shares of Nicolet common stock representing less than 1% of the total outstanding shares of Nicolet common stock. Certain additional legal matters relating to the merger will be passed upon for Nicolet by Bryan Cave Leighton Paisner LLP and for Choice by Reinhart Boerner Van Deuren, s.c.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
Nicolet has filed a registration statement on Form S-4 with the SEC that registers the Nicolet common stock to be issued in the merger to Choice shareholders. This proxy statement-prospectus is a part of that registration statement and constitutes a prospectus of Nicolet and a proxy statement of Choice for its special shareholders’ meeting. As allowed by SEC rules and regulations, this proxy statement-prospectus does not contain all of the information in the registration statement.
Nicolet files reports, proxy statements, and other information with the SEC under the Exchange Act. The SEC maintains a web site that contains such reports, proxy statements and other information about public companies, including Nicolet’s filings. The internet address of that site is http://www.sec.gov. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Nicolet’s internet address is www.nicoletbank.com. The information on Nicolet’s website is not part of this proxy statement-prospectus. You may obtain copies of the information that Nicolet files with the SEC, free of charge, by going to Nicolet’s website under the “Investor Relations” tab.
The SEC allows Nicolet to “incorporate by reference” the information that it files with the SEC, which means that Nicolet and Choice can disclose important information to you by referring to Nicolet’s filings with the SEC. The information incorporated by reference is considered a part of this proxy statement- prospectus, and certain information that Nicolet files later with the SEC will automatically update and supersede the information in this proxy statement-prospectus.
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Nicolet incorporates by reference the following documents Nicolet has filed with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, other than information in these documents that is not deemed to be filed with the SEC:

Nicolet’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on March 8, 2019;

Nicolet’s Quarterly Reports on Form 10-Q for the periods ended March 31, 2019 and June 30, 2019 filed with the SEC on May 3, 2019 and August 2, 2019, respectively;

The description of Nicolet’s common stock contained in Nicolet’s registration statement on Form 8-A, as filed with the SEC on February 22, 2016, and any amendment or report filed for the purpose of updating such description;

Nicolet’s Current Reports on Form 8-K* filed with the SEC on January 15, 2019, May 16, 2019, June 27, 2019, and July 16, 2019; and

Any document Nicolet may file* under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of this document.
* We are not incorporating and will not incorporate by reference into this proxy statement-prospectus, past or future information on reports furnished or that will be furnished under Items 2.02 and/or 7.01 of, or otherwise with, Form 8-K.
If you would like to request documents, please do so by October 11, 2019 to receive them before the Choice special meeting.
Nicolet has supplied all of the information contained in this proxy statement-prospectus relating to Nicolet and its subsidiaries. Choice has supplied all of the information relating to Choice and its subsidiaries.
Choice shareholders should rely only on the information contained or incorporated by reference in this proxy statement-prospectus to vote on the proposals in connection with the merger. We have not authorized anyone to provide you with information that is different from what is contained in this proxy statement-prospectus. This proxy statement-prospectus is dated August 29, 2019. You should not assume that the information contained in this proxy statement-prospectus is accurate as of any other date other than such date, and neither the mailing of this proxy statement-prospectus nor the issuance of Nicolet common stock as contemplated by the merger agreement will create any implication to the contrary.
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Appendix A​
AGREEMENT AND PLAN OF MERGER

BETWEEN

NICOLET BANKSHARES, INC.

AND

CHOICE BANCORP, INC.

JUNE 26, 2019

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