SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14
Bando McGlocklin Capital Corporation
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
2. Form, Schedule or Registration Statement No.:
3. Filing Party:
4. Date Filed:
22
[BMCC Logo]
April 6, 1999
Dear Shareholder:
On behalf of the Board of Directors and management of Bando McGlocklin
Capital Corporation (the "Company"), we cordially invite you to attend the
Annual Meeting of Shareholders of the Company, to be held at 4:00 p.m. on
Thursday, May 6, 1999, in the South Grand Ballroom of the Milwaukee Athletic
Club, 758 North Broadway, Milwaukee, Wisconsin. The accompanying Notice of
Annual Meeting of Shareholders and Proxy Statement discuss the business to be
conducted at the meeting. A copy of the Company's Form 10-K is also included in
this booklet. At the meeting we shall report on Company operations and the
outlook for the year ahead.
Your Board of Directors has nominated four persons to serve as directors,
each of whom are incumbent directors. In addition, the Proxy Statement contains
a proposal to ratify or reject the selection of BDO Seidman, LLP as the
independent certified public accountants to audit the financial statements of
the Company for the fiscal year ending December 31, 1999.
The Board of Directors recommends that you vote your shares for the
director nominees and to ratify the selection of BDO Seidman, LLP as the
independent certified public accountants.
We encourage you to attend the meeting in person. Whether or not you plan
to attend, however, please complete, sign and date the enclosed proxy and return
it in the accompanying postage-paid return envelope as promptly as possible.
This will ensure that your shares are represented at the meeting.
We look forward with pleasure to seeing and visiting with you at the
meeting.
Very truly yours,
BANDO McGLOCKLIN CAPITAL
CORPORATION
/s/George R. Schonath
George R. Schonath
President and Chief Executive Officer
[BMCC Logo]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 6, 1999
TO THE SHAREHOLDERS OF BANDO McGLOCKLIN CAPITAL CORPORATION
Notice is hereby given that the Annual Meeting of Shareholders of Bando
McGlocklin Capital Corporation (the "Company"), will be held in the South Grand
Ballroom of the Milwaukee Athletic Club, 758 North Broadway, Milwaukee,
Wisconsin, on Thursday, May 6, 1999 at 4:00 p.m., for the purpose of considering
and voting upon the following matters:
1. To elect four (4) directors, two (2) of whom will be elected by
holders of the Preferred Stock, to hold office until the next annual
meeting of shareholders and until their successors are duly elected and
qualified.
2. To ratify or reject the selection of BDO Seidman, LLP as the
independent certified public accountants to audit the financial
statements of the Company for the fiscal year ending December 31, 1999.
3. To consider and act upon such other business as may properly
come before the meeting or any adjournments or postponements thereof.
The Board of Directors is not aware of any other business to come before
the meeting. Shareholders of record at the close of business on March 22, 1999,
are the shareholders entitled to vote at the meeting and any adjournments or
postponements thereof.
By Order of the Board of Directors
/s/George E. Schonath
George R. Schonath
President and Chief Executive Officer
Pewaukee, Wisconsin
April 6, 1999
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED IF MAILED WITHIN THE UNITED STATES.
[BMCC Logo]
W239 N1700 Busse Road
P.O. Box 190
Pewaukee, Wisconsin 53072
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 6, 1999
This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors of Bando McGlocklin Capital Corporation (the
"Company") of proxies to be used at the annual meeting of shareholders which
will be held in the South Grand Ballroom of the Milwaukee Athletic Club, 758
North Broadway, Milwaukee, Wisconsin, on Thursday, May 6, 1999 at 4:00 p.m., and
all adjournments or postponements thereof (the "Annual Meeting"), for the
purposes set forth in the attached Notice of Annual Meeting of Shareholders.
Voting Rights and Proxy Information
Execution of a proxy given in response to this solicitation will not
affect a shareholder's right to attend the Annual Meeting and to vote in person.
Presence at the Annual Meeting of a shareholder who has signed a proxy does not
in itself revoke a proxy. Any shareholder giving a proxy may revoke it at any
time before it is exercised by giving notice thereof to the Company in writing
or in open meeting.
All shares of Common Stock and Preferred Stock represented at the meeting
by properly executed proxies received prior to or at the meeting, and not
revoked, will be voted at the meeting in accordance with the instructions
thereon. The shares represented by executed but unmarked proxies will be voted
FOR the persons nominated for election as directors, FOR the ratification of the
selection of BDO Seidman, LLP (the "Independent Auditors") as the independent
certified public accountants for the fiscal year ending December 31, 1999 and on
such other business or matters which may properly come before the Annual Meeting
in accordance with the best judgment of the persons named as proxies in the
enclosed form of proxy. A majority of the shares of the Common Stock, 6-2/3
cents par value (the "Common Stock"), and the Series A Adjustable Rate
Cumulative Preferred Stock, $.01 par value (the "Preferred Stock"), as one
class, present in person or represented by proxy and entitled to vote, shall
constitute a quorum for purposes of the meeting. Abstentions and broker
non-votes will be counted for purposes of determining a quorum but will not
affect the vote required for approval of the election of directors or any
proposal. Other than the election of directors and the ratification of the
Independent Auditors, the Board has no knowledge of any matters to be presented
for action by the shareholders at the Annual Meeting.
Only holders of record of Common Stock and Preferred Stock at the close
of business on March 22, 1999, are entitled to vote at the Annual Meeting and at
any adjournment or postponement thereof. Holders of Preferred Stock are entitled
to vote, as a separate voting class, for the election of two (2) directors of
the Company. In addition to a quorum of the shares of Common Stock and Preferred
Stock, as one class, a separate quorum representing a majority of the shares of
Preferred Stock shall be necessary in connection with the voting for such
directors. In addition, holders of Preferred Stock are entitled to vote with
holders of Common Stock, as one voting class, for the election of the remaining
two (2) directors of the Company and the ratification of the Independent
Auditors. On March 22, 1999, the Company had outstanding and entitled to vote
3,689,102 shares of Common Stock and 674,791 shares of Preferred Stock. The
record holder of each outstanding share is entitled to one vote. For all other
matters, the affirmative vote of a majority of the votes cast in person or by
proxy with a quorum present shall constitute shareholder approval.
The Board of Directors would like to have all shareholders represented at
the meeting. Whether or not you plan to attend, please complete, sign and date
the enclosed proxy and return it in the accompanying postpaid return envelope as
promptly as possible. A proxy given pursuant to this solicitation may be revoked
at any time before it is voted. Proxies may be revoked by: (i) duly executing
and delivering to the Secretary of the Company a later dated proxy relating to
the same shares prior to the exercise of such proxy, (ii) filing with the
Secretary of the Company at or before the meeting a written notice of revocation
bearing a later date than the proxy, or (iii) attending the meeting and voting
in person (although attendance at the meeting will not in and of itself
constitute revocation of a proxy). Any written notice revoking a proxy should be
delivered to Susan J. Hauke, Secretary, at W239 N1700 Busse Road, P.O. Box 190,
Pewaukee, Wisconsin 53072.
Proposal No. 1 - ELECTION OF DIRECTORS
At the Annual Meeting, the holders of Preferred Stock will elect, voting
as a separate class, two (2) directors of the Company to hold office until the
next annual meeting and until their successors are duly elected and qualified.
Unless the holders of Preferred Stock otherwise specify, the shares represented
by the proxies received for the election of two (2) directors will be voted in
favor of the election as directors of Robert A. Cooper and David A. Geraldson.
The holders of the Common Stock and the Preferred Stock will elect, voting as
one class, two (2) directors of the Company to hold office until the next annual
meeting and until their successors are duly elected and qualified. Unless the
shareholders otherwise specify, the shares represented by the proxies received
for the election of two (2) directors will be voted in favor of the election as
directors of Peter A. Fischer and Albert O. Nicholas. Proxies of holders of
Common Stock cannot be voted for more than two (2) persons and proxies of
holders of Preferred Stock cannot be voted for more than four (4) persons. The
Board has no reason to believe that any of the listed nominees will be unable or
unwilling to serve as a director if elected. However, in the event that any of
the nominees should be unable or for good cause unwilling to serve, the shares
represented by proxies received will be voted for substitute nominees selected
by the Board. Directors will be elected by a plurality of the
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votes cast at the Annual Meeting (assuming a quorum for each vote is present).
Consequently, any shares not voted at the Annual Meeting, whether due to
abstentions, broker non-votes or otherwise, will have no impact on the election
of directors. Votes will be tabulated by inspectors of election appointed by the
Board.
The following table sets forth certain information, as of March 31, 1999,
about the Board's nominees for election as directors of the Company. Except as
otherwise noted, each nominee has engaged in the principal occupation or
employment and held the offices shown for more than the past five years. The
table provides information as of March 31, 1998, as to the age, principal
occupation, background for the last five years and period of service as a
director for each person.
Principal Occupation;
Director Office, if any, Held in
Name Since Age the Company; Other Directorships
Robert A. Cooper 1987 72 Senior Vice President of Dain Rauscher
Incorporated (a securities brokerage
firm) since September 1988; Executive
Vice President and a Director of
Milwaukee Financial Group, Inc. (a
financial services holding company)
from its incorporation in 1986 until
its acquisition by Dain Bosworth
Incorporated in September 1988;
Chairman of the Board of The Milwaukee
Company (a securities brokerage firm
and the principal subsidiary of
Milwaukee Financial Group, Inc.) from
1978 to September 1988.
Peter A. Fischer 1983 56 Associate Pastor of Portview Christian
Center, Port Washington, Wisconsin
since 1992; a former Director, and from
1981 to 1989, the President and Chief
Executive Officer of Medalist
Industries, Inc. (a manufacturer of
industrial and consumer products); a
former Director of Gehl Company (a
manufacturer and distributor of
agricultural and light industrial and
construction equipment).
David A. Geraldson 1983 68 President since 1993 and prior thereto
Secretary and Treasurer of Precision
Gears, Inc. (a manufacturer of gears,
splined shafts, speed reducers and worm
gear winches).
-3-
Principal Occupation;
Director Office, if any, Held in
Name Since Age the Company; Other Directorships
Albert O. Nicholas 1995 68 Chairman of the Board and Chief
Executive Officer since 1998 and
Director and President since 1967 of
Nicholas Company, Inc., a registered
investment advisor; and President and a
director of six registered investment
companies of which Nicholas Company,
Inc. is the investment advisor. Mr.
Nicholas is also a director of C2,
Inc., a provider of refrigerated and
non-refrigerated warehousing services.
All of the Company's directors will hold office until the next annual
meeting of shareholders and until their respective successors are duly elected
and qualified. There are no arrangements or understandings between the Company
and any other person pursuant to which any of the Company's directors have been
selected for their respective positions.
THE BOARD RECOMMENDS THE FOREGOING NOMINEES FOR ELECTION AS DIRECTORS AND
URGES THE HOLDERS OF PREFERRED STOCK TO VOTE "FOR" MESSRS. COOPER AND GERALDSON
AND URGES EACH SHAREHOLDER TO VOTE "FOR" MESSRS. FISCHER AND NICHOLAS. SHARES
REPRESENTED AT THE ANNUAL MEETING BY EXECUTED BUT UNMARKED PROXIES WILL BE VOTED
"FOR" ALL APPROPRIATE NOMINEES.
BOARD OF DIRECTORS
The Board has standing Compensation and Audit Committees, but does not
have a nominating committee. The Compensation Committee, which presently
consists of Messrs. Nicholas, Fischer, Geraldson and Cooper, had one meeting
during the fiscal year ended December 31, 1998. The Compensation Committee
advises the Board on matters relating to the compensation of the Company's
directors, officers and other managerial personnel, including salary rates,
participation in any incentive bonus plans, fringe benefits, the grant of stock
options under the Company's 1997 Stock Option Plan and the 1990 and 1993
Incentive Stock Option Plans and other forms of compensation.
The Audit Committee, which presently consists of Messrs. Cooper,
Geraldson and Nicholas, held one meeting in the fiscal year ended December 31,
1998. The Audit Committee reviews with the Company's independent auditors the
plan and scope of their audit, findings and conclusions of their auditing
engagement, the Company's procedures for internal auditing, the adequacy of the
Company's system of internal controls and the accounting principles and policies
of the Company; evaluates the independence of the independent auditors and the
quality of the professional services provided by the independent auditors' and
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recommends to the Board the engagement, continuation or discharge of the
independent auditors.
The Board held four (4) meetings in the fiscal year ended December 31,
1998. Each director attended at least 75% of the aggregate of (a) the total
number of meetings of the Board and (b) the total number of meetings held by all
committees of the Board on which he served.
Directors are paid an annual retainer fee of $5,000 plus a $750 fee for
each meeting of the Board or a committee attended. There are no directors who
are officers of the Company.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock at March 31, 1999, by each
person known by the Company to be the beneficial owner of more than five percent
of the outstanding Common Stock, by each director or nominee, by each executive
officer named in the Summary Compensation Table set forth below, and by all
directors and executive officers of the Company as a group. No executive officer
or director of the Company beneficially owns any shares of Preferred Stock.
Amount and Nature of Beneficial Ownership
- -------------------------------------------------------------
Amount and
Nature of
Name of Beneficial Beneficial Percent
Owner(1) Ownership(2) of Class
- -------------------------------------------------------------
George R. Schonath 429,287(3) 11.1%
Jon McGlocklin 148,580(4) 4.0%
Robert A. Cooper 26,000(5) *
Peter A. Fischer 31,184(6) *
David A. Geraldson 74,419(7) 2.0%
Albert O. Nicholas 82,000(8) 2.2%
All executive officers
and directors as a
group
(8 persons) 794,759(9) 20.5%
- ---------------
* Less than one percent (1%).
(1) The address of each person who holds in excess of 5% of the Common Stock
identified in this table is W239 N1700 Busse Road, P.O. Box 190,
Pewaukee, Wisconsin 53072-0190.
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(2) Includes the following shares subject to stock options which were
exercisable as of or within 60 days of March 31, 1999: Mr. Schonath,
184,950 shares; Mr. McGlocklin, 7,640 shares, and all directors and
executive officers as a group, 192,590 shares.
(3) Includes (a) 794 shares held by children, (b) 212,796 shares held by the
Schonath Family Partnership for which Mr. Schonath is General Partner and
(c) 19,307 shares held by the Company's 401(k) profit sharing plan on
behalf of this individual.
(4) Includes (a) 42,314 shares held jointly with or by spouse and (b) 5,248
shares held by the Company's 401(k) profit sharing plan on behalf of this
individual.
(5) Includes 1,000 shares held jointly with or by spouse.
(6) Includes (a) 14,137 shares held jointly with or by spouse and/or by
children and (b) 8,909 shares held by a Keough plan on behalf of this
individual.
(7) Includes (a) 8,500 shares held jointly with or by spouse and (b) 52,360
shares owned by the Precision Gears, Inc. profit sharing plan for which
Mr. Geraldson acts as co-trustee.
(8) Includes 55,000 shares held by the Nicholas Equity Income Fund, Inc. (the
"Fund"), of which Mr. Nicholas disclaims beneficial ownership. Mr.
Nicholas is the President of the Fund and Chairman of the Board and Chief
Executive Officer of the Nicholas Company, Inc., the investment adviser
for the Fund.
(9) Assumes the exercise of all options which were currently exercisable as
of or exercisable within 60 days of March 31, 1999.
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors and persons who own more than 10% of the Common Stock to
file reports of ownership with the Securities and Exchange Commission and with
the exchange on which the shares of Common Stock are traded. Such persons are
also required to furnish the Company with copies of all Section 16(a) forms they
file. Based solely upon the Company's review of such forms and, if appropriate,
representations made to the Company by any such reporting person concerning
whether a Form 5 was required to be filed for the 1998 fiscal year, the Company
is not aware that any of its directors and executive officers or 10%
shareholders failed to comply with the filing requirements of Section 16(a)
during the period commencing January 1, 1998 through December 31, 1998.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation
paid for the last three fiscal years to the Company's President and Chief
Executive Officer. There were no other executive officers of the Company whose
aggregate salary and bonus exceeded $100,000 for the fiscal year ended December
31, 1998. The person named in the table below is sometimes referred to herein as
the named executive officer.
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SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------------------------------------------
Long Term
Annual Compensation Compensation Awards
(a) (b) (c) (d) (e) (f) (g) (h)
- --------------------------------------------------------------------------------------------------------------------
Restricted Securities
Other Annual Stock Underlying
Name and Salary Bonus Compensation Awards Option/SARs All Other
Principal Position Year ($)(1) ($) ($) ($) (#) Compen-sation($)
- --------------------------------------------------------------------------------------------------------------------
George R. Schonath, 1998 165,000 $-- $-- $-- $-- $ 38,098(2)
President and Chief 1997 233,750 -- -- -- 184,950 85,217(3)
Executive Officer 1996 251,019 50,000 -- -- -- 78,487(4)
- --------------------------------------------------------------------------------------------------------------------
(1) Includes amounts deferred under the Company's 401(k) plan.
(2) Represents the Company's contribution for supplemental retirement
benefits.
(3) Consists of (a) $55,987 for the Company's contribution for supplemental
retirement benefits, (b) $8,000 for the Company's contribution to the
401(k)/profit sharing plan, (c) $8,000 for the Company's contribution to
the money purchase pension plan on behalf of this individual, and (d)
$13,230 representing a cash payment of $.20 per stock option as a result of
the Company's payment of a return of capital dividend.
(4) Includes profit sharing contributions that were earned in the period July
1, 1995 to December 31, 1995, but paid in the twelve months ended December
31, 1996.
1990 and 1993 Incentive Stock Option Plans
The Company has in effect the Bando McGlocklin Capital Corporation 1990
Incentive Stock Option Plan (the "1990 Plan") and the Bando McGlocklin Capital
Corporation 1993 Incentive Stock Option Plan (the "1993 Plan") pursuant to which
there are outstanding options to purchase an aggregate of 20,920 shares held by
a senior vice-president of the Company. As of December 31, 1998, there were
68,138 and 90,000 shares of Common Stock available for issuance under the 1990
Plan and the 1993 Plan, respectively. The Compensation Committee does not intend
to issue any additional options under the 1990 Plan and the 1993 Plan. Mr.
Schonath holds no options under these plans.
1997 Stock Option Plan
The Company has in effect the 1997 Plan pursuant to which there are
outstanding options to purchase an aggregate of 184,950 shares held by George R.
Schonath. No options were granted in fiscal 1998 under the 1997 Plan. As of
December 31, 1998, there were 15,050 options available for issuance under the
1997 Plan.
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The following table sets forth information regarding the fiscal year-end
value of unexercised options held by the named executive officers. Mr. Schonath
was the only named executive officer who held options to acquire Common Stock on
December 31, 1998.
Fiscal Year-End Option Values
Number of Securities
Shares Underlying Unexercised Value of Unexercised
Acquired on Value Options at Fiscal In-the-Money Options
Name Exercise (#) Realized ($) Year-End (#) at Fiscal Year-End ($)(1)
---- ------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
George R. Schonath 0 0 184,950 -- --(1) --
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(1) The dollar values are calculated by determining the difference between
the fair market value of the underlying Common Stock and the exercise
price of the options at fiscal year-end. At December 31, 1998, the
closing price of the Common Stock Market was $9.625 which is less than
the exercise price of the options.
Compensation Committee Interlocks and Insider Participation
In November 1998, the Compensation Committee considered the compensation
packages of Mr. George R. Schonath and Mr. Jon McGlocklin, currently a senior
vice president of the Company, and decided to hire BDO Seidman, LLP to review
their compensation structure. The Compensation Committee is composed of Robert
A. Cooper, David A. Geraldson, Albert O. Nicholas and Peter A. Fischer. No
member of the Compensation Committee is a current or former officer or employee
of the Company or any of its subsidiaries. Messrs. McGlocklin and Schonath do
not participate in decisions regarding their respective compensation.
Compensation Committee Report
The Compensation Committee of the Board is responsible for all aspects of
the Company's compensation package offered to its executive officers, including
the named executive officer. The Compensation Committee determines the
compensation package (including the grant of stock options pursuant to the 1990
Plan, the 1993 Plan and the 1997 Plan) to be paid to each executive officer.
Executive Compensation Policies. The Company's executive compensation
program is intended to establish a relationship between compensation and the
Company's business strategies as well as the Company's goal of maintaining and
improving profitability and maximizing long-term shareholder value. The focus of
compensation decisions is on the achievement of long-term performance objectives
as opposed to the attainment of short-term, narrowly defined goals. The focus on
long-term performance objectives is intended to avoid unwarranted adjustments in
executive compensation based solely on short-term swings (either up or down) in
the Company's markets.
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In recommending and establishing levels of executive compensation, it is
the policy of the Compensation Committee to (a) offer competitive compensation
packages in order to attract and retain key executive officers crucial to the
Company's long-term success; (b) provide, on a limited basis, performance-based
compensation opportunities (including equity-based awards) which allow executive
officers to earn rewards for long-term strategic management and the enhancement
of shareholder value; (c) establish a relationship between executive
compensation and the Company's annual and long-term strategic goals; and (d)
provide compensation programs which recognize and reward individual initiative
and achievement.
Executive Compensation Package. As reflected under the section entitled
"Executive Compensation," the Company's executive compensation package consists
primarily of salary and to a limited extent, bonus awards and stock option
grants, as well as benefits under the employee benefits plans offered by the
Company.
The Compensation Committee awarded a base salary to its Chief Executive
Officer for the fiscal year ended December 31, 1998 of $265,000. However, since
Mr. Schonath also serves as the President and Chief Executive Officer of
InvestorsBancorp, Inc., and its wholly-owned subsidiary InvestorsBank, Mr.
Schonath's salary was allocated between the Company and InvestorsBancorp, Inc.
and InvestorsBank during 1998, so that Mr. Schonath actually received $165,000
as salary from the Company.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), limits deductibility for federal income tax purposes of compensation in
excess of $1 million paid to the Chief Executive Officer and certain executive
officers unless certain requirements are met. The Compensation Committee does
not believe that in the foreseeable future the annual compensation of any
executive officer will be subject to the limit.
Compensation Committee Members
Robert A. Cooper
David A. Geraldson
Peter A. Fischer
Albert O. Nicholas
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PERFORMANCE INFORMATION
The following graph compares on a cumulative basis change since December
31, 1993 in (a) the total shareholder return on the Common Stock, (b) the total
return of companies in the Nasdaq Stock Market Index ("Nasdaq U.S."), and (c)
the total shareholder return of companies in the Nasdaq Stocks Miscellaneous
Investing Index ("Nasdaq MI") consisting of a peer group of publicly-traded
REITs. The total return information presented in the graph assumes the
reinvestment of dividends. The graph assumes $100 was invested on December 31,
1993 in Common Stock, the Nasdaq U.S. and the Nasdaq MI.
[GRAPHIC OMITTED]
12/31/93 (1) 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
------------ -------- -------- -------- -------- --------
Bando McGlocklin Capital
Corporation $100.0 $90.5 $ 92.4 $ 89.3 $108.0 $ 97.6
Nasdaq U.S. $100.0 $97.8 $138.3 $170.0 $208.5 $293.8
Nasdaq MI $100.0 $82.9 $ 97.0 $118.6 $153.9 $130.8
- -----------------
(1) During the period from December 31, 1993 to December 31, 1996, the
Company was registered under the Investment Company Act of 1940 as a
closed-end investment company, but its shares of Common Stock were traded
on the Nasdaq Stock Market. As of January 1, 1997, the Company became a
reporting company under the Securities Exchange Act of 1934, as amended,
and its shares of common stock are still traded on the Nasdaq Stock
Market.
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RELATED PARTY TRANSACTIONS
The Company and InvestorsBancorp., Inc., together with its wholly-owned
subsidiary, InvestorsBank (the "Bank"), share common offices and personnel. The
Company and the Bank purchase loan participations from each other from time to
time and, pursuant to a Management Services and Allocation of Expenses
Agreement, by and between the Company and the Bank, the Bank performs certain
loan servicing and administration services to the Company. Additional
transactions may be expected to take place in the future. All outstanding loans,
commitments to loan, transactions in repurchase agreements and loan
participation and servicing relationships, in the opinion of management, were
made in the ordinary course of business, on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons and did not involve more than the
normal risk of collectibility or present other unfavorable features. The Bank
received an aggregate of $775,892 in loan servicing and administration fees from
the Company in 1998. The Bank also subleases space for its main offices from the
Company. The annual rent payable by the Bank under the lease, including real
estate taxes, utilities and furnishings, is approximately $127,000, which
represents the Bank's pro rata share of the Company's occupancy expense. The
Company believes the terms of the lease with the Bank are on substantially the
same terms and conditions as could be obtained from unrelated third parties.
Messrs. George R. Schonath, the Company's President and Chief Executive
Officer, and Jon McGlocklin, the Company's Senior Vice President, owned SKBM,
Inc., a company which provided management services to Bando McGlocklin Real
Estate Investment Corp., a Wisconsin corporation ("BMREIC"). In 1998 BMREIC
merged with and into Bando McGlocklin Small Business Lending Corporation
("BMSBLC"), a wholly-owned subsidiary of the Company (the "Merger"). In 1998
BMSBLC paid approximately $555,379 to SKBM, Inc. as part of the Merger and in
cancellation of the management services contract.
On February 11, 1998, the Board of Directors of the Company approved a
downward adjustment of $1.67 in the exercise price of the stock options that
were granted to Mr. Schonath pursuant to the 1997 Plan on February 3, 1997 and
June 25, 1997. The downward adjustment was to reflect the Company's 1997 return
of capital dividend.
Proposal No. 2 - Ratification of Appointment of Independent Auditors
The Board of Directors has appointed the firm of BDO Seidman, LLP as
independent auditors to audit the books, records, and accounts of the Company
and its subsidiaries for the year ending December 31, 1999, and proposes that
the shareholders ratify such appointment. BDO Seidman, LLP acted as independent
auditors for the year ended December 31, 1998. A representative of BDO Seidman,
LLP is expected to attend the Annual meeting, will have the opportunity to make
a statement, and will be available to respond to appropriate questions.
-11-
The vote necessary to ratify the appointment of independent auditors is
governed by Section 180.0725(3) of the Wisconsin Business Corporation Law, which
provides that a matter will be approved if a quorum is present and the number of
votes cast in favor of the matter exceed the number of vote cast in opposition
thereto. Accordingly, a shareholder will be deemed "present" at the Meeting by
proxy because the shareholder has returned a proxy (even if the proxy card
contains no instructions as to voting with respect to the ratification of the
appointment of independent auditors, abstains from voting thereon, or
constitutes a broker "non-vote" with respect thereto). However, unless the
shareholder votes "for" or "against" the ratification of the appointment of
independent auditors, the shareholder's vote will not be counted.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF BDO SEIDMAN, LLP AS INDEPENDENT AUDITORS FOR
THE FISCAL YEAR ENDING DECEMBER 31, 1999.
Proposal No. 3 - Other Matters
The matters in the foregoing Notice of Meeting and Proxy Statement are,
as far as the Board of Directors knows, the only matters which will be presented
for consideration at the Annual Meeting. If any other matters properly come
before the Annual Meeting, the individuals names in the accompanying Proxies
will vote on them, in accordance with their best judgement exercising the
authority conferred thereby.
MISCELLANEOUS
Shareholder Proposals
Any proposals of shareholders intended to be presented at the 2000 Annual
Meeting of Shareholders must be received by the Secretary of the Company at its
principal executive offices at W239 N1700 Busse Road, P.O. Box 190, Pewaukee,
Wisconsin 53072, on or before December 10, 1998, to be considered for inclusion
in the Company's Proxy Statement and proxy relating to such meeting.
Additionally, if the Company receives notice of a shareholder proposal after
February 23, 2000, the persons named in the proxies solicited by the Board of
Directors for the 2000 Annual Meeting may exercise discretionary voting power
with respect of such proposal.
-12-
Solicitation Expenses
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitation by mail,
directors, officers and regular employees of the Company and/or the Bank may
solicit proxies personally or by telegraph or telephone without additional
compensation.
BY ORDER OF THE BOARD OF
DIRECTORS
/s/George E. Schonath
George R. Schonath
President and Chief Executive Officer
Pewaukee, Wisconsin
April 6, 1999
-13-
COMMON STOCK
Bando McGlocklin Capital Corporation
W239 N1700 Busse Road
P.O. Box 190
Pewaukee, Wisconsin 53072
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints George R. Schonath and Jon McGlocklin and each
of them, as Proxies with power of substitution (to act jointly or if only one
acts then by that one) and hereby authorizes them to represent and to vote as
designated on the reverse all of the shares of Common Stock of Bando McGlocklin
Capital Corporation held of record by the undersigned on March 22, 1999, at the
annual meeting of shareholders to be held on May 6, 1999, or at any adjournment
or postponement thereof.
(Continued on reverse side)
-------------------------
SEE REVERSE SIDE
-------------------------
-------
Please Mark your
X vote as in this
example.
-------
The Board of Directors recommends a vote FOR the following proposals:
1. ELECTION OF DIRECTORS:
|_| FOR all nominees listed below |_| WITHHOLD AUTHORITY to
(except as marked to the contrary vote for all nominees
below) listed below
Nominees:
Peter A. Fischer
Albert O. Nicholas
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below:)
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
_____________________________________________________
This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. If no direction is made, this proxy will be voted
"FOR" the election of the Board's nominees and "FOR" item 2.
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE
2. To ratify or reject the selection of BDO Seidman, LLP as the independent
certified public accountants to audit the financial statements of the Company
for the fiscal year ending December 31, 1999.
For Against Abstain
| | | | | |
SIGNATURE DATE , 1999
------------------------------- ----------
SIGNATURE DATE , 1999
-------------------------------- ----------
IF HELD JOINTLY
NOTE: Please sign exactly as your name appears hereon. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign in full corporate name by the President
or other authorized officer. If a partnership, please sign in partnership name
by authorized person.
PREFERRED STOCK
Bando McGlocklin Capital Corporation
W239 N1700 Busse Road
P.O. Box 190
Pewaukee, Wisconsin 53072
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints George R. Schonath and Jon McGlocklin and each
of them, as Proxies with power of substitution (to act jointly or if only one
acts then by that one) and hereby authorizes them to represent and to vote as
designated on the reverse all of the shares of Preferred Stock of Bando
McGlocklin Capital Corporation held of record by the undersigned on March 22,
1999, at the annual meeting of shareholders to be held on May 6, 1999, or at any
adjournment or postponement thereof.
(Continued on reverse side)
-------------------------
SEE REVERSE SIDE
-------------------------
-------
Please Mark your
X vote as in this
example.
-------
The Board of Directors recommends a vote FOR the following proposals:
1. ELECTION OF DIRECTORS: 2. To ratify or reject the selection
of BDO Seidman, LLP as the
(i) Directors elected by holders of independent certified public
Preferred Stock and Common Stock accountants to audit the financial
voting together statements of the Company for the
fiscal year ending December 31,
1999
For Against Abstain
|_| |_| |_|
|_| FOR all nominees listed below |_| WITHHOLD AUTHORITY to
(except as marked vote for all nominees
to the contrary below) listed below
Nominees:
Peter A. Fischer
Albert O. Nicholas
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that This proxy when properly executed will be voted in the manner directed
herein by the nominee's name in the space provided below:) undersigned
shareholder. If no direction is made, this proxy will be voted "FOR" the
election of the Board's nominees and "FOR" item 2.
_____________________________________ PLEASE SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED
(ii) Directors elected by holders of ENVELOPE
Preferred Stock voting as a
separate class.
Nominees:
Robert A. Cooper
David A. Geraldson
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below:)
SIGNATURE DATE , 1999
------------------------------- ----------
SIGNATURE DATE , 1999
-------------------------------- ----------
IF HELD JOINTLY
NOTE: Please sign exactly as your name appears hereon. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by the President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.