SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN
PROXY STATEMENT
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:
[X] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
FIRST MANISTIQUE CORPORATION
(Name of registrant as specified in its charter)
FIRST MANISTIQUE CORPORATION
(Name of person(s) filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X ] $125 per Exchange Act Rules 0-11(c)(l)(ii), 14a-6(i)(l), or 14a-6(i)(2)
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule, or registration statement no.:
(3) Filing party:
(4) Date filed:
Preliminary Proxy Statement
Dated February , 1996
FIRST MANISTIQUE CORPORATION
P.O. Box 369, 130 South Cedar Street
Manistique, Michigan 49854
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 16, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Annual Meeting") of First Manistique Corporation (the "Corporation"), a
Michigan corporation, will be held on April 16, 1996, at 5 p.m. at Howard
Johnsons, Manistique, Michigan, for the following purposes:
1. To elect three (3) directors, each to hold office for a three year
term.
2. To consider and act upon a proposal to approve an amendment to the
Restated Articles of Incorporation of the Corporation to increase
its authorized common stock.
3. To consider and act upon a proposal to approve amendments to the
Restated Articles of Incorporation of the Corporation relating to
continuity of management.
4. To consider and act upon a proposal to approve an amendment to the
Corporation's Restated Articles of Incorporation with respect to the
required evaluation by directors of certain transactions.
5. To consider and act upon a proposal to approve a deferred
compensation, deferred stock, and current stock purchase plan for
nonemployee directors.
6. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed March 15, 1996, as the record date for
the determination of shareholders entitled to notice of and to vote at the
meeting or any adjournment thereof.
By order of the Board of Directors
FRED LAMUTH, Secretary
Your vote is important. Even if you plan to attend the meeting, please
date and sign the enclosed proxy form, indicate your choice with respect
to the matters to be voted upon, and return it promptly in the enclosed
envelope. Note that if the stock is held in more than one name, that
all parties must sign the proxy form.
Dated: March , 1996
FIRST MANISTIQUE CORPORATION
P.O. Box 369, 130 South Cedar Street
Manistique, Michigan 49854
PROXY STATEMENT
This Proxy Statement and the enclosed proxy are furnished in connection
with the solicitation of proxies by the Board of Directors of First Manistique
Corporation (the "Corporation"), a Michigan bank holding Corporation, to be
voted at the Annual Meeting of Shareholders of the Corporation to be held on
Tuesday, April 16, 1996, at 5 p.m., at Howard Johnsons, Manistique, Michigan,
or at any adjournment or adjournments thereof, for the purposes set forth in
the accompanying Notice of Annual Meeting of Shareholders and in this Proxy
Statement.
VOTING AT THE MEETING
This Proxy Statement has been mailed on or about March , 1996, to
all holders of record of common stock of the Corporation as of the record
date. The Board of Directors of the Corporation has fixed the close of
business on March 15, 1996, as the record date for the determination of
shareholders entitled to notice of and to vote at the Annual Meeting of
Shareholders and any adjournment thereof.
The Corporation has only one class of commonstock and one class of
preferred stock. There are presently 702,988 shares of common stock of the
Corporation outstanding and no shares of preferred stock outstanding. Each
outstanding share will entitle the holder thereof to one vote on each
separate matter presented for vote at the meeting. Votes cast at the meeting
and submitted by proxy are counted by the inspectors of the meeting, who are
appointed by the Corporation.
If a Proxy in the enclosed form is properly and executed and returned to
the Corporation, the share as represented by the Proxy will be voted at the
Annual Meeting and any adjournment thereof. If a shareholder specifies a
choice, the Proxy will be voted as specified. If no choice is specified, the
shares represented by the Proxy will be voted for the election of all of the
nominees named in the Proxy Statement and for the proposals set forth in this
Proxy Statement, and in accordance with the judgment of the persons named as
proxies with respect to any other matter which may come before the meeting.
A proxy may be revoked before exercise by notifying the Chairman of the Board
in writing or in open meeting, by submitting a proxy of a later date or
attending the meeting and voting in person. All shareholders are encouraged
to date and sign the enclosed proxy form, indicate your choice with respect
to the matters to be voted upon, and return it to the Corporation.
ELECTION OF DIRECTORS
The Bylaws of the Corporation provide for a Board of Directors consisting
of a minimum of five (5) and a maximum of fifteen (15) members. The Bylaws
also provide for the division of the Board of Directors into three (3) classes
of nearly equal size with staggered three year terms of office. Three persons
have been nominated for election to the Board, each to serve three (3) year
terms expiring at the 1999 Annual Meeting of Shareholders. The Board has
nominated Michael C. Henricksen, John P. Miller, and Ronald G. Ford, all
of whom are incumbent directors previously elected by the Corporation's
shareholders.
Unless otherwise directed by a shareholder's proxy, the persons named as
proxy holders in the accompanying proxy will vote for the nominees named
above. In the event any of such nominees shall become unavailable, which is
not anticipated, the Board of Directors in its discretion may designate
substitute nominees, in which event the enclosed proxy will be voted for such
substitute nominees. Proxies cannot be voted for a greater number of persons
than the number of nominees named.
A plurality of the votes cast at the meeting is required to elect the
nominees as directors of the Corporation. As such, the three individuals who
receive the largest number of votes cast at the meeting will be elected as
directors. Shares not voted at the meeting, whether by abstention, broker
nonvote, or otherwise, will not treated as votes cast at the meeting.
The Board of Directors recommends a vote FOR the election of all the
persons nominated by the Board.
INFORMATION ABOUT DIRECTORS AND DIRECTOR NOMINEES
The following information relating to the principal occupation or
employment has been furnished to the Corporation by the respective directors
and director nominees. Each of those persons have been engaged in the
occupations stated below for more than five years.
Nominees for Election as Directors for Terms Expiring in 1999
Age
Director of
Corporation Since
Michael C. Henricksen. . . . . . . . . . . . . . . 53 1988
Co-Owner, Satellite Services, Inc.,
a service company
John P. Miller . . . . . . . . . . . . . . . . . . 57 1976
Owner, Peoples Store Co., Inc. (Retail
Clothing)
Ronald G. Ford . . . . . . . . . . . . . . . . . . 48 1987
President, First Northern Bank & Trust,
First Manistique Corporation, First
Manistique Agency, First Northern Services
and First Rural Relending Co.
Directors Whose Terms Expire in 1998
Stanley J. Gerou II. . . . . . . . . . . . . . . . 47 1989
Owner, Gerou Excavating, Inc.
Loren Hulsizer . . . . . . . . . . . . . . . . . . 64 1994
Retired President of Bank of Stephenson
Thomas G. King . . . . . . . . . . . . . . . . . . 43 1987
Owner, King's Motel
John Lindroth. . . . . . . . . . . . . . . . . . . 40 1987
President, Superior State Agency, Inc.
(Insurance Agency)
Directors Whose Terms Expire in 1997
Charles B. Beaulieu. . . . . . . . . . . . . . . . 58 1984
Owner, Beaulieu Funeral Home, Inc.
John B. Clark. . . . . . . . . . . . . . . . . . . 73 1980
Owner, John B. Clark Sales & Service
(Machine Sales), Owner, John B. Clark
Forest Products (Timber Broker)
Ernest D. King . . . . . . . . . . . . . . . . . . 72 1975
President, King's Fish Market, Inc.
C. Ronald Durfina. . . . . . . . . . . . . . . . . 51 1992
Owner, Balsam Shop, Inc., HRD, Inc.,
Island Leasing, Inc., and Mackinaw
Island Hospitality, Inc., companies
involved in tourism.
The Board of Directors of the Corporation has an Audit Committee comprised
of J. Clark, Chairman, C. Beaulieu, R. Durfina, M. Henricksen, and S. Gerou.
Five meetings of the Committee were held during 1995. This Committee is
responsible for the recommendation of the independent accounting firm to be
engaged for the external audit, directing and supervising investigations into
matters relating to audit functions, reviewing with independent auditors the
plan and results of the external audit, the establishment and continued
supervision of internal auditing procedures, reviewing the degree of
independence of the auditors and reviewing the adequacy of internal accounting
controls.
The Personnel Committee is comprised of Chairman J. Lindroth, T. King,
S. Gerou, and William Putvin (who will be retiring as a director as of this
year's Annual Shareholder Meeting), which performs functions similar to those
of a compensation committee. Five meetings of this committee were held in
1995. This Committee is responsible for recommending annually to the Board
the salary of the President and CEO. This Committee additionally reviews
with management the annual projected salary ranges and recommends those for
Board approval. This Committee also annually reviews the written Personnel
Policy and audits the employee benefit package annually.
The Nominating Committee of the Board, comprised of T. King, Chairman,
M. Henricksen, J. Miller, L. Hulsizer, W. Putvin, and J. Lindroth, held two
meetings during the year. The Board also has an Executive Committee comprised
of E. King, Chairman, M. Henricksen, and R. Ford. This Committee handles
strategic planning for the Corporation and its subsidiaries.
The Board of Directors of the Corporation held a total of four meetings
and two special meetings during 1995. No director attended less than 75
percent of the aggregate number of meetings of the Board of Directors and
the Committees on which he served. There are no family relationships between
or among any of the directors, nominees or executive officers of the
Corporation, other than Ernest and Thomas King, who are father and son.
REMUNERATION OF DIRECTORS
The directors of the Corporation each receive an annual fee of $1,250.
Directors are not paid for attendance at meetings of the Board or committees
on which they serve. Some of the directors also serve on the Board of
Directors of the Bank, for which they are paid an annual fee of $7,200,
except for the Chairman who receives an annual fee of 9,600. No compensation
is paid for attendance at Bank Board or Committee meetings. In November
1984, the Corporation adopted a deferred compensation plan for certain senior
management employees and directors that provide for benefit payments to the
participant and his or her family upon retirement or death. The plan allows
the deferral of director fees and compensation in return for the payment of
certain defined monthly benefits payable upon termination of one's service as
a director or officer of the Corporation. Benefits under this plan may be
funded by life insurance policies, with the premiums paid for by the
Corporation. Any benefits payable under this plan are unsecured and payable
out of the general assets of the Corporation.
PROPOSAL TO AMEND
RESTATED ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED STOCK
The Corporation's Board of Directors has proposed that Article III of
the Corporation's Restated Articles of Incorporation ("Articles") be amended
to increase the total authorized common stock of the Corporation to 6,000,000
shares and to increase the total authorized series preferred stock of the
Corporation to 500,000 shares. Article III of the Corporation's Articles
currently provides for authorized capital stock consisting of 2,000,000 shares
of common stock and 25,000 shares of series preferred stock. No preferred
stock is presently outstanding. As of March 1, 1996, there were 702,988
shares of common stock issued and outstanding, and 46,500 shares of common
stock were reserved for issuance under the Corporation's various Stock Option
and Purchase Plans.
The proposed amendment would increase the Corporation's authorized common
stock from 2,000,000 to 6,000,000 shares and would increase the Corporation's
series preferred stock from 25,000 shares to 500,000 shares. All of the
additional shares resulting from the increase in the Corporation's authorized
common stock would be of the same class with the same dividend, voting and
liquidation rights as the shares of common stock presently outstanding. The
additional series preferred stock would, like the existing authorized series
preferred stock, be subject to the right of the Corporation's Board of
Directors to fix the terms, rights and preferences of such shares at the time
of issuance. No further authorization for issuance of common shares or
preferred shares by shareholder vote is required under the Corporation's
Articles and none would be required prior to the issuance of the additional
common or preferred shares by the Corporation. Shareholders have no
preemptive rights under the Articles to acquire any shares issued by the
Corporation, and shareholders would not acquire any such rights with respect
to any additional shares that may be issued if the proposed amendment to the
Articles is adopted.
The Board believes that the authorization of an additional 4,000,000
shares of common stock and the additional 475,000 shares of series preferred
stock would provide increased flexibility for future growth and provide the
opportunity for enhanced marketability of the Corporation's stock, although
the Board has not yet decided to issue the shares for any particular purpose.
Nevertheless, the Board of Directors believes that it is advisable to have
the additional shares of common stock and series preferred stock authorized
at this time in order to make the shares available for possible future stock
splits or stock dividends, and also to enable the Corporation, as the need
may arise, to take prompt advantage of market conditions and the availability
of favorable opportunities for future equity financing, investment
opportunities, acquisitions of other banks, bank holding companies or other
companies, or to accomplish other proper corporate purposes, without the
delay and expense incident to holding of a special meeting of the shareholders
of the Corporation for such purpose at a future date. The increase in
authorized common stock would also enhance the ability of the Board of
Directors to provide for the reservation of additional shares for potential
issuance under the Corporation's Stock Option Plan, Restricted Stock Plan or
other stock plans as a means of retaining key personnel and attracting new
personnel. The additional shares could also be issued under the new proposed
Deferred Compensation, Deferred Stock and Current Stock Purchase Plan for
Non-employee Directors. It is also possible that the additional shares of
common stock and/or series preferred stock could be utilized by the
Corporation as part of a defensive strategy to counter any hostile takeover
attempts. Shareholders should be aware that the Board of Directors has
considered in the past, and will continue to consider in the future, the
advisability of adoption of a shareholder rights plan, commonly referred to
as a "poison pill." The proposed increase in authorized shares of stock will
not have any significant impact on the decision regarding adoption of any
such rights plan, however, since the Corporation's existing preferred stock
could, without increasing the number of authorized shares, and probably
would be employed as the vehicle for implementing any such plan.
The Board of Directors of the Corporation will determine whether and on
what terms the issuance of shares of common stock or series preferred stock
may be warranted and appropriate. Presently, as noted, the Corporation has
no plan, understanding or agreement with respect to the issuance of any of the
additional shares of common stock or series preferred stock. If the proposed
amendment to increase the authorized shares of common stock and series
preferred stock is approved, the stock may be issued without further action
by the shareholders and without first offering such shares to the shareholders
for subscription. Issuance of common stock or series preferred stock
otherwise than on a prorata basis to all current shareholders would reduce
the current shareholders' proportionate ownership interests in the
Corporation.
The Board recommends that Article III of the Corporation's Articles be
amended to read as stated on Appendix A to this Proxy Statement. The change
in this Article is to increase the number of shares of authorized common
stock from 2,000,000 to 6,000,000 and to increase the number of shares of
authorized series preferred stock from 25,000 to 500,000.
The affirmative vote of the majority of the outstanding shares of common
stock, in person or by proxy, on the proposed amendment to Article III is
required for approval.
The Board of Directors recommends a vote FOR ADOPTION OF THE
PROPOSED
INCREASE IN AUTHORIZED STOCK.
PROPOSAL TO AMEND
RESTATED ARTICLES OF INCORPORATION
RELATING TO CONTINUITY OF MANAGEMENT
BACKGROUND
The Board of Directors of the Corporation has approved a number of
amendments to the Corporation's Restated Articles of Incorporation
("Articles") in addition to the amendment that would increase the
Corporation's authorized common and series preferred stock. The Board
has directed that this group of amendments be submitted to a vote at the
annual meeting. These proposed amendments are to some extent interrelated,
and the purpose of some of the amendments is to prevent the circumvention
of the desired protection afforded by other amendments. Thus, management
believes that it is appropriate to present these proposed amendments as one
related group that the shareholders must vote for or against as a single
proposal.
PURPOSE AND EFFECT OF THE PROPOSED AMENDMENTS
The purpose and intended effect of the proposed amendments are to enhance
the continuity and stability of the Corporation's management by making it more
difficult and time consuming for a third-party to gain control of the
Corporation's Board of Directors. The Board believes that this will provide
the Corporation's management with the means and opportunity to defend and
promote shareholder interests. The proposed amendments may make more
difficult or discourage an unsolicited tender offer, proxy contest or
assumption of control by a holder of a large block of the Corporation's
shares and the removal of incumbent management, even in the event that any
of these transactions are favored by shareholders of the Corporation.
With the exception of the proposal relating to evaluations required by
the Board of Directors which follows this proposal, the Board has no present
intention to put before the shareholders any other proposal which would
operate as a significant impediment to an attempt by a third-party to obtain
control of the Corporation. However, the Board has considered and may choose
to adopt a shareholder rights plan or so-called "poison pill." The
Corporation has authorized 25,000 shares of preferred stock which could be
utilized for purposes of such a plan. The proposal to increase the
Corporation's authorized stock would increase the number of authorized series
preferred shares to 500,000. Shareholder rights plans typically permit
shareholders to purchase stock of their own company or of an acquiring
company at deeply discounted prices if the transaction proposed by the
acquiring company has not been approved by the target company's board of
directors.
MICHIGAN ANTI-TAKEOVER PROVISIONS
In considering the management continuity amendments to the Corporation's
Articles, shareholders should be aware that the Michigan Business Corporation
Act ("MBCA") contains provisions intended to protect shareholders and
prohibit or discourage certain types of hostile takeover activities.
"Control Share" provisions of the MBCA. The MBCA affects the rights of
persons who acquire control in excess of the following thresholds: 20%,
33-1/3% or 50% of the voting stock ("control shares") of a Michigan
corporation such as the Corporation. The MBCA denies shareholder voting
rights to those who make purchase offers or investors who increase their
holdings above any of the control share levels, unless they are granted
voting rights by a majority of all disinterested shareholders (shareholders
excluding the bidders or owners of control shares and the corporation's
management). If the shareholders do not elect to grant voting rights
to control shares, under certain circumstances, the control shares may become
subject to redemption by the corporation. In addition, in some cases,
the control share provisions grant dissenters rights to all shareholders
other than the holder of the control shares.
"Fair Price" Provisions of the MBCA. The MBCA contains provisions
regulating certain business combinations involving Michigan corporations
such as the Corporation. Except in cases in which certain minimum price,
form of consideration and procedural requirements are satisfied or for
certain transactions that may be approved in advance by the Corporation's
Board of Directors, higher than normal voting requirements are imposed with
respect to various transactions involving persons who own 10% or more of the
Corporation's voting stock ("interested shareholders"). Transactions to
which the higher voting requirements apply require an advisory statement from
the Board of Directors of the Corporation and must be approved by not less
than 90% of the votes of each class of stock entitled to vote and by not less
than two-thirds of the votes, other than the votes of interested shareholders
who are (or whose affiliates are) a party to the proposed transaction or an
affiliate of the interested shareholder, of each class entitled to vote.
SUMMARY DESCRIPTION OF AMENDMENTS
The proposal being submitted to shareholders consists of several
amendments to the Corporation's Articles which in summary would accomplish
the following: (a) amend and incorporate in the Corporation's Articles
provisions for a Classified Board of Directors which are already contained
in the Corporation's bylaws; (b) provide for the filing of any vacancies or
new positions on the Board of Directors; (c) provide special vote requirements
with respect to removal of directors; (d) specify the procedures that
shareholders must follow in order to nominate directors; (e) specify the
notice requirement that shareholders must satisfy in order to present a
proposal for consideration at a meeting of shareholders; and (f) provide for
increased voting requirements in order to amend or repeal these provisions
or to adopt any provision inconsistent with them.
AMENDMENT TO PROVIDE FOR CLASSES OF THE BOARD OF DIRECTORS
AND
RELATED MATTERS
The Corporation currently elects its directors to three-year terms with
approximately one-third of the Board elected each year. The provisions for
electing the directors on this basis are set forth in the Corporation's
Bylaws. The Corporation's Board of Directors is proposing that the Articles
be amended by adding a new Article VII in the form of Appendix B. This new
Article will incorporate the provisions for the election of a Classified
Board into the Corporation's Articles and make certain other changes with
respect to the election of directors.
The existing Bylaws of the Corporation provide that vacancies on the
Board may be filled by a majority vote of the directors then in office, with
the director chosen to fill a vacancy to hold office until the next annual
meeting at which his or her successor is elected. The proposed Article VII
provides that vacancies on the Board may be filled only by the Board of
Directors by an affirmative vote of a majority of the "continuing directors"
(as defined below) and an eighty percent majority vote of all directors then
in office. Proposed Article VII also provides that directors chosen to fill
a vacancy hold office until the next election of the class for which the
director was chosen.
The existing Bylaws of the Corporation are silent on the subject of
removal of directors from office. Proposed Article VII provides that
directors may be removed at any time, with or without cause, but only by
either (i) the affirmative vote of a majority of the "continuing directors"
(as defined below) and at least eighty percent of the Board of Directors; or
(ii) the affirmative vote of the holders of at least eighty percent of the
voting power of the then outstanding shares. The term "continuing
directors" is defined in Appendix B, but generally means directors not
affiliated with an "interested shareholder." The term "interested
shareholder" is also defined in Appendix B, but generally means a holder
of ten percent or more of the Corporation's voting stock.
Proposed Article VII also provides that the number of directors may only
be changed by the affirmative vote of (i) eighty percent of the Board of
Directors; and (ii) a majority of the continuing directors.
Proposed Article VII also provides that a shareholder intending to
nominate a director for election at an annual meeting of the Corporation
must give written notice of such intention to the Corporation not less than
60 days, nor more than 90 days, prior to the first anniversary of the
preceding year's annual meeting (or, if the date of the annual meeting is
changed by more than 20 days from the anniversary date of the preceding
year's annual meeting, within 10 days after the date the Corporation mails
or otherwise gives notice of the date of the meeting). With respect to an
election to be held at a special meeting of shareholders called for the
purpose of electing directors, the shareholder intending to nominate a
director would be required to give written notice of that intention to the
Corporation within 10 days following the date on which notice of the special
meeting was first mailed to the shareholders by the Corporation. The proposed
amendment also requires that any notice of intention to nominate a director
must contain certain information about the proposed nominee and certain
information about the shareholderintending to make the nomination. The
Corporation may also require any proposed nominee to furnish other information
reasonably required by the Corporation to determine the proposed nominee's
qualifications to serve as a director. It is anticipated that any requests
by the Corporation for additional information will be made or confirmed in
writing, and the nominee will be asked to submit the additional information
in writing.
A classified Board, which the Corporation already has, militates against
abrupt changes in control of the Corporation by requiring at least two annual
meetings to elect a majority of the directors. In addition, although
continuity and stability in Board composition have not been problems in the
past, a classified Board serves to insure continuity and stability and
leadership in policy since approximately two-thirds of the members of the
Board at all times are likely to have had prior experience as directors of
the Corporation. Your Board of Directors believes that it is in the best
interests of the Corporation and its shareholders to continue a classified
Board and thereby promote continuity and stability of management and the
consistent implementation and advancement of the Corporation's traditional
corporate objectives and policies. The Board believes that continuity and
stability enhance the Corporation's present ability to attract competent and
qualified officers and employees for itself and its subsidiary banks to carry
out its long-term plans for expansion and growth.
Changes affected by proposed Article VII in terms of filling vacancies,
removal of directors and nominations to the Board are believed to be
consistent with preserving the continuity and stability described in the
preceding paragraph.
The purpose of the advance notice requirements for nomination by a
shareholder is to afford the Board of Directors a meaningful opportunity
to consider the qualifications of any proposed nominee and, to the extent
deemed necessary or desirable by the Board, to inform shareholders about
such qualifications. This provision, it is believed, will further the
objective of the Board to identify candidates who have the character,
education, training, experience and proven accomplishments which give promise
of significant contribution to the responsible and profitable conduct of the
Corporation's business. While the amendment does not give the Board of
Directors any power to approve or disapprove of a shareholder nomination, it
will preclude a shareholder nomination from the floor if the proper procedures
have not been followed.
The effect of a classified Board of Directors with staggered terms along
with the other changes affected by the proposed Article VII make it more
difficult to change or remove directors. The existence of a classified Board
and the other provisions included in the proposed Article VII might discourage
attempts to acquire control of the Corporation through tender offers or proxy
contests because additional time would be required to gain control of the
Board unless one acquired eighty percent of the voting stock of the
Corporation or was otherwise assured of an eighty percent majority or had
the support of eighty percent of the entire Board and a majority of the
continuing directors. Proposed Article VII is applicable to all elections
of directors and not only to contested elections or attempts to gain control
of the Board of Directors. Hence, the classified Board with staggered terms
inhibits the ability of shareholders to change directors when they may
consider change desirable quite apart from any takeover considerations.
AMENDMENT TO PROVIDE NOTICE REQUIREMENT FOR SHAREHOLDERS
TO PRESENT
PROPOSALS
AT ANNUAL MEETING OF SHAREHOLDERS
The Board of Directors recommends that the Corporation's Articles be
amended to add a new Article VIII (in the form of Appendix C), which provides
that the only business that may be conducted at an annual meeting of the
shareholders is business that has been brought before the meeting by, or at
the direction of, the majority of the directors or by any shareholder of the
Corporation (a) who provides timely notice of the proposal ("Notice of
Proposal") in writing to the secretary of the Corporation and the proposal
is a proper subject for action by shareholders under Michigan law, or (b)
whose proposal is included in the Corporation's proxy materials in compliance
with all the requirements set forth in the applicable rules and regulations
of the Securities and Exchange Commission. To be timely, a shareholder's
Notice of Proposal must be delivered to, or mailed to and received at, the
principal executive offices of the Corporation not less than thirty (30) days
prior to the date of the originally scheduled meeting, regardless of any
postponements, deferrals or adjournments of that meeting to a later date.
If, however, less than forty (40) days notice of the meeting of shareholders
is given by the Corporation, notice by theshareholder, to be timely, must be
received by the Corporation not later than the close of business on the
tenth (10th) day following the date on which notice of the scheduled meeting
was first mailed to shareholders. The shareholder's Notice of Proposal must
set forth in writing each matter the shareholder proposes to bring before
the meeting including: the name and address of the shareholder submitting
the proposal, as it appears on the Corporation's books and records; a
representation that the shareholder (i) is a holder of record of stock of
the Corporation entitled to vote at the meeting, (ii) will continue to hold
such stock through the date on which the meeting is held, and (iii) intends
to vote in person or by proxy at the meeting and to submit the proposal for
shareholder vote; a brief description of the proposal desired to be submitted
to the meeting for shareholder vote and the reasons for conducting such
business at the meeting; and a description of any financial or other interest
of such shareholder in the proposal. The secretary of the Corporation will
notify the shareholder in writing whether his or her Notice of Proposal has
been made in accordance with all the requirements of the amendment to the
Articles. The chairman of the meeting may refuse to acknowledge the proposal
of any shareholder not made in compliance with these requirements. This
provision applies only to new business and not to other reports of officers,
directors or committees of the Board of Directors.
The proposed amendment is already contained in the Corporation's Bylaws.
The Corporation's Articles and Bylaws do not contain any other provisions as
to what business may be conducted at an annual meeting. Therefore, any
business may be conducted that is specified in the notice of the annual
meeting or that is properly brought before the meeting. The determination
as to whether business (other than as specified in the notice of meeting) is
properly before the meeting would generally be made by the chairman of the
meeting at the time any such business was presented.
The proposed amendment provides an orderly procedure for the notification
of the Board of Directors of business which is to be presented at the annual
shareholder meeting. This will enable the Board of Directors to plan such
meetings and also, to the extent it deems it necessary or desirable, to
inform the shareholders, prior to the meeting, of any new business that will
be presented at the meeting. The Board will also be able to make a
recommendation or statement of its position so as to enable shareholders
to better determine whether they desire to attend the meeting or grant a
proxy to the Board of Directors as to the disposition of any such business.
The proposed amendment does not give the Board any power to approve or
disapprove the business that shareholders desire to be conducted at the
annual meeting but it does provide for a more orderly procedure for conducting
the meeting.
The proposed procedure may limit to some degree the ability of shareholders
to initiate discussion at annual shareholder meetings. It will also preclude
the conducting of business at a particular meeting if the proper notice
procedures have not been followed. This will also have the effect of
discouraging belated attempts by third-parties to begin ill-considered,
disruptive discussions at shareholder meetings. Nothing in the proposed
amendment precludes discussion by any shareholder of any business properly
brought before the meeting.
AMENDMENT TO REQUIRE A SPECIAL VOTE TO AMEND OR REPEAL
CERTAIN
PROVISIONS OF
THE ARTICLES
The Board of Directors recommends that the Corporation's Articles be
amended to add Article IX (in the form of Appendix D) which requires that in
order to amend, repeal or adopt any provision inconsistent with proposed
Articles VII, VIII or IX of the Articles of Incorporation, the affirmative
vote of at least eighty percent of the issued and outstanding shares of the
Corporation's capital stock entitled to vote in the election of directors,
voting as a single class; provided, however, that such amendment or repeal
or inconsistent provision may be made by a majority vote of such shareholders
at any meeting of the shareholders duly called and held where such amendment
has been recommended for approval by at least eighty percent of all directors
then holding office and by a majority of the "continuing directors" (as
defined in proposed Article VII).
Under the MBCA, amendments to the Articles require the approval of the
holders of a majority of the outstanding stock entitled to vote thereon, but
the law also permits a corporation to include provisions in its articles
which require a greater vote than the vote otherwise required by law for any
corporate action. The requirement of an increased shareholder vote is
designed to prevent a person holding or controlling a majority, but less
than eighty percent, of the shares of the Corporation from avoiding the
requirements of the proposed amendments by simply amending or repealing them
or adopting inconsistent provisions.
VOTE REQUIRED AND RECOMMENDATION
The affirmative vote of a majority of the outstanding shares of common
stock, in person or by proxy, on the proposal to amend the Articles relating
to continuity of management, new Articles VII, VIII and IX.
The Board of Directors recommends vote FOR ADOPTION OF THE PROPOSAL
TO AMEND RESTATED ARTICLES OF INCORPORATION RELATING TO
CONTINUITY
OF
MANAGEMENT.
PROPOSAL TO AMEND
RESTATED ARTICLES OF INCORPORATION
WITH RESPECT TO REQUIRED EVALUATIONS
BY DIRECTORS OF CERTAIN TRANSACTIONS
The Board of Directors is proposing that a new Article X be added to the
Corporation's Articles as set forth in Appendix E to this Proxy Statement.
Proposed Article X provides that the Board of Directors shall not approve
or recommend any offer (except those made by the Corporation) to make a tender
or exchange offer for the Corporation's shares, to merge or consolidate the
Corporation or to purchase substantially all the assets of the Corporation,
unless the Board of, Directors has evaluated the offer and determined that the
offer would be in compliance with applicable laws and in the best interests of
the Corporation and its shareholders. Generally, under the Michigan Business
Corporation Act, no merger or consolidation to which the Corporation is a
party and no sale of substantially all of the assets of the Corporation may
be accomplished without approval of the Corporation's Board of Directors. In
addition, as a general rule, no tender offer for the Corporation's shares
which is not approved by the Corporation's Board of Directors may be
effectuated without compliance by the offeror with the provisions of the
Michigan Fair Price Act and the Michigan Control Share Act, which are
described in the preceding section of this Proxy Statement. In addition,
any acquisition offer must comply with federal and state antitrust, banking
and securities laws.
In connection with its evaluation of compliance with laws, proposed
Article X authorizes the Board to rely on an opinion of legal counsel and to
test such compliance in legal proceedings before any appropriate court or
administrative agency. In making its evaluation of the best interests of
the Corporation and its shareholders, the Board of Directors is required to
consider such factors as it deems relevant, including: (i) the adequacy and
fairness of the consideration to be received, considering historical trading
prices for the Corporation's shares, the price that might be achieved in a
negotiated sale of the Corporation, premiums paid for the stock of other
companies in connection with similar offers and the future prospects of the
Corporation; (ii) the potential social and economic impact of the transaction
on the Corporation and its subsidiaries and their respective employees,
depositors and other customers and vendors; (iii) the potential social and
economic impact of the transaction on the communities in which the Corporation
and its subsidiaries operate; (iv) the business and financial condition and
earnings prospects of the proposed acquiring person or entity; and (v) the
competence, experience and integrity of the proposed acquiring person or
entity and its or their management.
Proposed Article X also requires a vote of eighty percent of the
Corporation's voting shares to authorize any subsequent amendment or repeal,
or adoption of any inconsistent provision, unless recommended by eighty
percent (80%) of the directors then in office, in which case the amendment
or repeal or inconsistent provision would require approval of only a majority
of the voting stock.
The Board of Directors believes that shareholders are entitled to receive
the benefits of a careful analysis with respect to offers involving proposed
business combinations and/or disposition of their shares by those who are
in a better position than the shareholders to make such evaluations, i.e.
the directors. The Board of Directors also believes that the Corporation,
through its Board, should act as a responsible citizen, and that the impact
of such transactions on the communities where the Corporation operates, the
Corporation's employees, and other affected parties, ought to be considered
in formulating advice to the Corporation's shareholders regarding such offers,
even though the interests of the Corporation's directors, employees,
depositors, customers, vendors and/or communities in such transactions may
be in conflict with the interests of shareholders. The Board of Directors
intends to use its best judgment in considering these interests. The purpose
of proposed Article X is to ensure that such evaluations will be made in
connection with recommendations to shareholders irrespective of the
composition of the Board of Directors at that time. Proposed Article X,
however, may discourage such proposals, especially if the potential offeror
feared an adverse recommendation might result, thereby depriving shareholders
of the potential for any attendant premium price for their shares. The Board
of Directors, however, believes that the advantages outweigh the
disadvantages. Reference is made to the preceding sections which discuss
the Michigan anti-takeover statute and other consideration which may affect
the acquisition of the Corporation by third parties.
The affirmative vote of the holders of a majority of the outstanding
shares of common stock of the Corporation is required for approval of the
proposed amendment to the Corporation's Articles relating to required
evaluations by directors of certain transactions.
The Board of Directors has determined that the proposed amendment is
desirable and recommends a vote FOR ADOPTION OF THE PROPOSAL TO
AMEND
RESTATED
ARTICLES OF INCORPORATION WITH RESPECT TO REQUIRED
EVALUATIONS BY
DIRECTORS OF
CERTAIN TRANSACTIONS.
PROPOSAL TO APPROVE DEFERRED COMPENSATION,
DEFERRED STOCK, AND CURRENT STOCK PURCHASE PLAN
FOR NONEMPLOYEE DIRECTORS
On February 14, 1996, the Board of Directors adopted the First Manistique
Corporation Deferred Compensation, Deferred Stock and Current Stock Purchase
Plan for Nonemployee Directors (the "Plan"), subject to shareholder approval.
The Plan, if approved by shareholders, will replace the existing Deferred
Compensation Plan for Directors. The following is a summary of the principal
features of the Plan, a copy of which is attached as Appendix F.
Purpose. The purpose of the Plan is to encourage stock ownership in the
Corporation by nonemployee directors of the Corporation and its subsidiaries,
by providing an opportunity to acquire shares of Corporation common stock or
units equivalent to Corporation common stock in lieu of the cash payment of
director fees. The Plan also permits nonemployee directors to defer the
payment of their director fees.
Eligibility and Participation. Directors of the Corporation or its
subsidiaries (that adopt the Plan) who are neither officers nor employees of
the Corporation or any of its subsidiaries, are eligible to participate in
the Plan. As of the date of this Proxy Statement, 10 members of the Board of
Directors of the Corporation and 2 directors of the Corporation's subsidiaries
are eligible to participate in the Plan.
In order to participate in the Plan, an eligible director must submit an
Election to Participate to the Corporation's President and Chief Executive
Officer no later than December 31 of the year preceding the year participation
in the Plan is to begin. For eligible directors of subsidiaries, the Election
to Participate may be filed not later than March 31, 1996, for initial
participation in the Plan in 1996. The Election to Participate will remain
in effect until the participant ceases to be eligible, until a subsequent
Election to Participate is filed revising the terms of the participant's last
election or the participant terminates his or her Election to Participate by
written notice.
The Plan requires that all of an eligible director's meeting fees and all
or a part (in integral multiples of 25%) of his or her annual retainer fees,
that would otherwise be payable in cash for the year of participation, will
be subject to allocation under the Plan. The Plan allows participants to
direct the allocation of fees to one of the following three accounts: (a)
the Current Stock Purchase Account, (b) the Deferred Cash Investment Account,
or (c) the Deferred Stock Account. Fees will be credited to the designated
account on the last day of each calendar quarter (the "Credit Date").
Amounts allocated to the Current Stock Purchase Account will be used to
acquire for the participant as many whole shares of Corporation common stock
as possible, based on the market value of such stock on the Credit Date.
Amounts allocated to the Deferred Cash Investment Account will be credited
on each Credit Date for the benefit of the participant. In addition, an
Appreciation Factor will be credited on each Credit Date on all funds held
in Deferred Cash Investment Accounts for the entire quarter as if the funds
had been invested during the quarter and earning interest at an Appreciation
Factor established from time to time by the Corporation's Board of Directors.
However, the Appreciation Factor may not exceed the prime rate of interest
charged by First Northern Bank & Trust. Under the Plan, the initial
Appreciation Factor equals the rate of interest paid by First Northern Bank &
Trust on six month certificates of deposit issued on the business day nearest
the beginning of the applicable quarter. Amounts allocated to the Deferred
Stock Account will be converted into Stock Units equal in number to the shares
of Corporation common stock that could have been purchased on the Credit Date,
based on the fair market value of the Corporation's common stock on
that date. Amounts held in this account will be credited with dividends
paid on the Corporation's common stock.
Shares Subject to the Plan. Subject to adjustment as provided in the
Plan, no more than 50,000 shares of the Corporation's common stock may be
purchased or credited under the Plan. Shares issued and delivered under
the Plan may be newly issued or shares that are purchased by the Corporation
and reissued.
Distributions. Shares acquired with fees allocated to Current Stock
Purchase Accounts will be distributed to participants promptly after the
shares are acquired. Amounts credited to Deferred Cash Investment Accounts
or the Deferred Stock Accounts may not be distributed prior to the termination
of the director's service to the Corporation or a subsidiary. Participants
may elect to receive the balance in such accounts in a lump sum or in annual
installments over a period of five years or ten years. Amounts allocated to
a Deferred Stock Account and payable in a lump sum may be paid in cash,
Corporation common stock or a combination of cash and Corporation common
stock. Amounts allocated to a Deferred Stock Account and payable in
installments will be transferred to a Deferred Cash Investment Account. All
amounts allocated or transferred to a Deferred Cash Investment Account will
be paid in cash. Pending full payout of a Deferred Cash Investment Account,
amounts credited to the account will be credited with the Appreciation Factor
in effect from time to time.
Summary of Federal Income Tax Consequences. The following paragraph
summarizes the federal income tax consequences with respect to amounts
allocated to the Current Stock Purchase Account, the Deferred Cash Investment
Account and the Deferred Stock Account under the Plan, based upon management's
understanding of the existing federal income tax laws.
Amounts allocated to the Current Stock Purchase Account will be taxable
to the participants who have directed the allocation of fees to that account
at the time the fees are credited to the account and will be deductible to the
Corporation at the same time. Directors who elect to allocate their fees to
either the Deferred Cash Investment Account or Deferred Stock Account will
not recognize taxable income at the time an Election to Participate in the
Plan is made or at the time the Corporation credits funds to those accounts.
Management understands that because an eligible director must elect to
participate in the Plan at the beginning of the plan year, none of the fees
relating to the election will be deemed earned at the time of election.
Because the amounts allocated to these accounts are not available to directors
at the time of election or allocation, directors will recognize income only
upon the delivery of common stock or cash in accordance with the distribution
requirements of the Plan. At the time of delivery, the cash and the fair
market value of the shares of common stock will be treated as ordinary income
to the receiving director. The Corporation will then be entitled to a
deduction equal to the amount of ordinary income recognized by the
participating director.
Amendment and Termination. The Board of Directors of the Corporation has
the authority at any time to terminate, suspend or amend the Plan. However
no amendment to the Plan may become effective without shareholder approval if
the amendment would increase the aggregate number of shares of common stock
which may be subject to the Plan, materially increase the benefits accruing
to the participants under the Plan, modify the eligibility requirements for
participation in the Plan, or would otherwise require shareholder approval
under Section 16 of the Securities Exchange Act of 1934.
Vote Required. The affirmative vote of a majority of the Corporation's
common stock voted at the Annual Meeting is required to approve the adoption
of the Plan. While broker nonvotes will not be treated as votes cast on
the approval of this Plan, shares voted as abstentions will be counted as
votes cast. Since a majority of the votes cast is required for approval,
the sum of any negative votes and abstentions will necessitate
offsetting affirmative votes to assure approval. Unless otherwise directed
by marking on the accompanying proxy, the proxy holders named therein
will vote for the approval of the Plan. Votes will be counted by inspectors
of election appointed by the presiding officer at the Annual Meeting. If the
Plan is not approved by shareholders, it will terminate immediately following
the annual meeting and any fees credited to accounts under the Plan will be
distributed to the participants.
The Board of Directors recommends a vote FOR THE APPROVAL OF THE
PLAN.
COMPENSATION OF EXECUTIVE OFFICERS
Committee Report on Executive Compensation
Decisions on the compensation of the Corporation's executive officers are
made by the Board's Compensation Committee comprised of nonemployee directors
consisting of Chairman J. Lindroth, T. King, W. Putvin, and S. Gerou. To
ensure this Committee's independence, the Board of Directors has used outside
consultants to assist the Committee in its deliberations. This Committee
report addresses the Corporation's compensation policies and programs for the
year ended December 31, 1995.
Base Salary - Excluding consideration of other relevant factors, which
may include individual performance, experience, expertise and tenure, the
Board intends to maintain the base salaries of the Corporation's executive
officers and senior managers within peer group levels.
Annually, the Committee recommends a base wage for the President and
Chief Executive Officer for consideration by the entire Board of Directors.
The Committee's recommendation is based upon compensation levels established
by the Corporation's peers and evaluations by consultants.
The base salaries of the Presidents of the Corporation's subsidiary banks
(the "Banks") are determined in a similar matter by the Corporation's President
and Chief Executive Officer and the Bank's respective Board of Directors. The
base salaries of all other executive officers are established by the
Corporation's President and Chief Executive Officer.
Annual Cash Incentive - To provide performance incentives and to
compensate for the reduction in base salary, the strategy provides for annual
cash awards that are payable if the Corporation and the Banks meet or exceed
annual performance objectives established by the Board of Directors.
Long-Term Incentives - To align the interests of its executive officers
and senior managers with the Corporation's shareholders, the Board's
compensation strategy provides for equity-based compensation plans under the
First Manistique Restricted Stock Plan and the 401(k) matching contribution.
Each of the Corporation's compensation plans have been adopted by the Board
of Directors, and the equity-based compensation plans have been approved by
the Corporation's shareholders.
Thomas King, John Lindroth, Stanley Gerou, II, W. Putvin
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation received by the
Corporation's Chief Executive Officer and the Corporation's other executive
officer whose annual compensation exceeded $100,000, for each of the three
years ended December 31, 1995.
Name and Annual All Other
Principal Position Year Compensation Compensation(3)
Salary(2) Bonus(2)
Ronald G. Ford 1995 $145,000 $30,340 $17,250
President and CEO 1994 $105,000 $23,800 $10,300
1993 $ 95,200 $18,062 $ 6,500
Richard B. Demers(1) 1995 $ 84,000 $16,800 $3,850
Executive Vice 1994 $ 80,000 $16,800 0
President 1993 $ 57,741 $11,798 0
(1) Mr. Demers served as the President and Chief Executive Officer of the
Bank of Stephenson from February 1994 to October 1995.
(2) Includes amounts deferred by employees under the Corporation's retirement
plan account pursuant to Section 401(k) of the Internal Revenue Code.
(3) The amounts disclosed in this column include: (a) the amounts contributed
by the Corporation to the Corporation's retirement plan, pursuant to
which substantially all employees of the Corporation participate (the
Corporation made matching contributions equal to 5 percent of each
Employee's salary reduction contribution for calendar 1995); and (b) the
dollar value of premiums paid by the Corporation for certain deferred
compensation benefits as follows:
1995 1994 1993
Mr. Ford (a) $ 7,250 $ 5,216 $ 3,850
(b) 16,000 10,000 0
Mr. Demers (a) $ 4,943 $ 3,138 $ 1,884
(b) 0 0 0
Employment Contract
Ronald G. Ford entered into an Employment Contract with First Northern
Bank & Trust, as President and CEO, effective July 1, 1994. This contract is
for a term of three years with an automatic annual one year extension unless
notice of termination is given six months before the end of the current year.
This contract provides that Mr. Ford's duties, responsibilities and
administrative authority, absent written agreement to the contrary, shall be
as President and CEO, respectively, of the Corporation and the Bank. If
Mr. Ford's employment is terminated following a change in control of the
Corporation for reasons other than his death, disability or normal retirement,
or for cause or by Ford without good reason, the contract provides that he
will be paid 20 quarter annual payments each equal to 25% of the average of
his aggregate annual base salary for the three immediately preceding years.
AGGREGATED STOCK OPTION EXERCISES IN 1995 AND YEAR-END OPTION
VALUES
The following table provides information on the exercise of stock options
during 1995 by the executives isted in the Summary Compensation Table and the
value of unexercised options at December 31, 1995. No options were granted
by the Corporation during 1995.
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Option at
Options at 12/31/91(1)
Shares 12/31/94
Acquired Value
Name on Exercise Realized Exercisable/ Exercisable/
Unexercisable Unexercisable
Ronald G. Ford . . . 0 $0 0 $0
Richard B. Demers. . 0 $0 750/0 $18,375/0
(1) Values are based on the difference between the last reported sale price
of the Corporation's common stock prior to December 31, 1995 ($62.00)
and the exercise prices of the options.
INDEBTEDNESS OF AND TRANSACTIONS WITH MANAGEMENT
Certain of the directors and officers of the Corporation have had and
are expected to have in the future, transactions with the subsidiary banks of
the Corporation, or have been directors or officers of corporations, or
members of partnerships, which have had and are expected to have in the
future, transactions with the banks. In the opinion of management, all such
transactions with officers and directors and with such corporations and
partnerships are made in the ordinary course of business and substantially
on the same terms, including interest rates and collateral, as those
prevailing at the same time for comparable transactions with other customers,
and these transactions do not involve more than normal risk of collectibility
or present other unfavorable features.
OWNERSHIP OF COMMON STOCK
The following table sets forth certain information as of February 1, 1996,
as to the common stock of the Corporation owned beneficially by each director,
each executive named in the Summary Compensation Table above, and by all
directors and executive officers of the Corporation as a group. Mr. Ernest D.
King, listed in the table below, is the only shareholder known to the
Corporation to have been the beneficial owner of more than five percent (5%)
of the Corporation's outstanding common stock as of February 1, 1996. His
mailing address is P.O. box 216, Naubinway, Michigan 49762.
Shared
Sole Voting Voting and
and Investment Investment Percent
Power(1) Power(1) of Class(2)
Charles B. Beaulieu 556.89 4,102.05 0.65%
John B. Clark 8,398.00 -- 1.18%
C. Ronald Dufina 663.39 1,661.22 0.33%
Ronald G. Ford 1,433.68 5,258.95 0.94%
Stanley Gerou 10,859.67 1.52%
Michael Henricksen 15,434.93 2.16%
Loren Hulsizer 12,050.00 1.69%
Ernest D. King 65,076.00 9.11%
Thomas G. King 7,398.37 1.04%
John Lindroth 5,227.36 0.73%
John P. Miller 11,744.07 1.64%
William E. Putvin 1,847.00 0.26%
Richard B. Demers 1,137.97 4,921.43 0.85%
All Directors and Executive
Officers as a group
(15 persons) 13,826.10 146,417.05 22.44%
(1) Includes shares with respect to which executive officers have the right
to acquire beneficial ownership of 11,000 shares under stock options
exercisable in 60 days.
(2) Calculated on the basis of the amount of shares outstanding plus 11,000
shares acquirable upon exercise of options described in the preceding
footnote.
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change
in the cumulative total shareholder return on the Corporation's common stock
with that of the cumulative total return on the NASDAQ Bank Stocks Index and
the NASDAQ Stock Market Index for the five year period ended December 31, 1995.
The following information is based on an investment of $100, on January 1, 1991,
in the Corporation's common stock, the NASDAQ Bank Stocks Index and the NASDAQ
Stock Market Index, with dividends reinvested. There has been only limited
trading in the Corporation's Common Stock, there are no market makers for such
shares, and the Corporation's common stock does not trade on any stock exchange
or on the NASDAQ market. Accordingly, the returns reflected in the following
graph and table are based on sale prices of the Corporation's stock of which
management is aware. There may have been sales at higher or lower prices of
which management is not aware.
Comparison of Five Year Cumulative Total Return
Dollars
$300
$200
$100
1990 1991 1992 1993 1994 1995
1990 1991 1992 1993 1994 1995
First Manistique Corporation 100 109 123 131 149 210
NASDAQ Bank Stocks Index 100
NASDAQ Stock Market Index 100
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The financial statements of the Corporation for the year ended
December 31, 1995, have been examined by Crowe Chizek and Corporation, LLP,
independent public accountants. A representative of Crowe Chizek and
Corporation, LLP will be at the Annual Meeting of Shareholders and will
have an opportunity to make a statement and will be available to answer
appropriate questions. Crowe, Chizek and Corporation, LLP has been
reappointed by the Board of Directors as the independent public accountants
of the Corporation and its subsidiaries for the year ending December 31, 1996.
SHAREHOLDER PROPOSALS
Any shareholder proposal to be considered by the Corporation for
inclusion in the 1997 Annual Meeting of Shareholders proxy materials must
be received by the Corporation no later than November , 1996.
OTHER BUSINESS
The Board of Directors is not aware of any matter to be presented for
action at the meeting, other than the matters set forth herein. If any other
business should come before the meeting, the Proxy will be voted in respect
thereof in accordance with the best judgment of the persons authorized
therein, and discretionary authority to do so is included in the proxy. The
cost of soliciting proxies will be borne by the Corporation. In addition to
solicitation by mail, officers and other employees of the Corporation and
its subsidiaries may solicit proxies by telephone or in person, without
compensation other than their regular compensation.
The Annual Report of the Corporation for 1995 is included with this Proxy
Statement. Copies of the report will also be available for all shareholders
attending the Annual Meeting.
Shareholders are urged to sign and return the enclosed proxy in the
enclosed envelope. A prompt response will be helpful and appreciated.
BY ORDER OF THE BOARD OF DIRECTORS
Fred Lamuth
Secretary
March , 1996
APPENDIX A
PROPOSED AMENDMENT TO ARTICLE III OF THE
ARTICLES OF INCORPORATION
ARTICLE III
The total number of shares of all classes of stock which the corporation
shall have authority to issue is 6,500,000 shares, of which 6,000,000 shares
shall be of a single class of common stock and 500,000 shares shall be series
preferred stock.
The authorized shares of common stock are all of one class with equal
voting power, and each such share shall be equal to every other such share.
The Board of Directors of the corporation may cause the corporation to issue
preferred shares in one or more series, each series to bear a distinctive
designation and to have such relative rights and preferences as shall be
prescribed by resolution of the Board. Such resolutions, when filed, shall
constitute amendments to these Articles of Incorporation.
APPENDIX B
PROPOSED AMENDMENT ADDING ARTICLE VII TO THE
RESTATED ARTICLES OF INCORPORATION WITH RESPECT
TO A CLASSIFIED BOARD OF DIRECTORS AND RELATED MATTERS
ARTICLE VII
BOARD OF DIRECTORS
Section 1. Authority and Size of Board. The business and affairs of
the corporation shall be managed by or under the direction of the Board of
Directors. The number of directors of the corporation that shall constitute
the Board of Directors shall be determined from time to time by resolution
adopted by the affirmative vote of:
A. At least eighty percent (80%) of the Board of Directors, and
B. A majority of the Continuing Directors (as hereinafter defined).
Section 2. Classification of Board and Filling of Vacancies. Subject to
applicable law, the directors shall be divided into three (3) classes, each
class to be as nearly equal in number as possible. At each annual meeting of
shareholders, the successors to the class of directors whose term shall then
expire shall be elected to hold office for a term expiring at the third
succeeding annual meeting and until their successors shall be duly elected
and qualified or their resignation or removal. Any vacancies in the Board
of Directors for any reason, and any newly created directorships resulting
from any increase in the number of directors, may be filled only by the Board
of Directors, acting by an affirmative vote of a majority of the Continuing
Directors (as hereinafter defined) and an eighty percent (80%) majority of
all of the directors then in office, although less than a quorum, and any
director so chosen shall hold office until the next election of the class for
which the director was chosen and until his successor shall be duly elected
and qualified or his resignation or removal. No decrease in the number of
directors shall shorten the term of any incumbent director.
Section 3. Removal of Directors. Notwithstanding any other provisions
of these Articles of Incorporation or the Bylaws of the corporation (and
notwithstanding the fact that some lesser percentage may be specified by law
or by these Articles of Incorporation or the Bylaws of the corporation), any
one or more directors of the corporation may be removed at any time, with or
without cause, but only by either (i) the affirmative vote of a majority of
the Continuing Directors and at least eighty percent (80%) of the Board of
Directors or (ii) the affirmative vote, at a meeting of the shareholders
called for that purpose, of the holders of at least eighty percent (80%) of
the voting power of the then outstanding shares of capital stock of the
corporation entitled to vote generally in the election of directors (the
"Voting Stock") voting together as a single class.
Section 4. Certain Definitions. For the purposes of this Article VII:
A. A "person" shall mean any individual, firm, corporation or
other entity.
B. "Interested Shareholder" shall mean any person, other than the
corporation or any Subsidiary, who or which:
(i) is the beneficial owner, directly or indirectly, of ten
percent (10%) or more of the voting power of the outstanding Voting
Stock; or
(ii) is an Affiliate of the corporation and at any time within
the two (2) year period immediately prior to the date in question
was the beneficial owner, directly or indirectly, of ten percent
(10%) or more of the voting power of the then outstanding Voting
Stock; or
(iii) is an assignee of or has otherwise succeeded to any
shares of Voting Stock which were at any time within the two (2)
year period immediately prior to the date in question beneficially
owned by any Interested Shareholder, if such assignment or
succession shall have occurred in the course of a transaction or
series of transactions not involving a public offering within the
meaning of the Securities Act of 1933.
C. A person shall be a "beneficial owner" of any Voting Stock:
(i) which such person or any of its Affiliates or Associates
(as hereinafter defined) beneficially owns, directly or indirectly; or
(ii) which such person or any of its Affiliates or Associates
has (a) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or
otherwise, or (b) the right to vote pursuant to any agreement,
arrangement or understanding; or
(iii) which are beneficially owned, directly or indirectly,
by any other person with which such person or any of its Affiliates
or Associates has any agreement, arrangement or understanding for
the purpose of acquiring, holding, voting or disposing of any shares
of Voting Stock.
D. For the purposes of determining whether a person is an
Interested Shareholder pursuant to paragraph B of this Section 4, the
number of shares of Voting Stock deemed to be outstanding shall include
shares deemed owned through application of paragraph C of this Section 4
but shall not include any other shares of Voting Stock which may be
issuable pursuant to any agreement, arrangement or understanding, or upon
exercise of conversion rights, warrants or options, or otherwise.
E. "Affiliate" or "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on the date this
Article of the Articles of Incorporation is filed with the Corporation
Division of the Michigan Department of Commerce.
F. "Subsidiary" means any corporation of which a majority of any
class of equity security is owned, directly or indirectly, by the
corporation; provided, however, that for the purposes of the definition
of Interested Shareholder set forth in paragraph B of this Section 4,
the term "Subsidiary" shall mean only a corporation of which a majority
of each class of equity security is owned, directly or indirectly,
by the corporation.
G. "Continuing Director" means any member of the Board of
Directors of the corporation (the "Board") who is unaffiliated with the
Interested Shareholder and was a member of the Board prior to the
time that the Interested Shareholder became an Interested Shareholder,
and any successor of a Continuing Director who is unaffiliated with the
Interested Shareholder and is recommended to succeed a Continuing
Director by a majority of Continuing Directors then on the Board.
Section 5. Powers of Continuing Directors. A majority of the Continuing
Directors of the corporation shall have the power and duty to determine, on
the basis of information known to them after reasonable inquiry, all facts
necessary to determine compliance with this Article VII, including without
limitation (i) whether a person is an Interested Shareholder, (ii) the number
of shares of Voting Stock beneficially owned by any person and (iii) whether
a person is an Affiliate or Associate of another; and the good faith
determination of a majority of the Continuing Directors on such matters
shall be conclusive and binding for all the purposes of this Article VII.
Section 6. Nominations for Board. Nominations for the election of
directors may be made by the Board of Directors or by a shareholder entitled
to vote in the election of directors. A shareholder entitled to vote in the
election of directors, however, may make such a nomination only if written
notice of such shareholder's intent to do so has been given, either by
personal delivery or by United States mail, postage prepaid, and received
by the Corporation (a) with respect to an election to be held at an annual
meeting of shareholders, not later than sixty (60) nor more than ninety (90)
days prior to the first anniversary of the preceding year's annual meeting
(or, if the date of the annual meeting is changed by more than twenty (20)
days from such anniversary date, within ten (10) days after the date the
Corporation mails or otherwise gives notice of the date of such meeting),
and (b) with respect to an election to be held at a special meeting of
shareholders called for that purpose, not later than the close of business
on the tenth (10th) day following the date on which notice of the special
meeting was first mailed to the shareholders by the Corporation.
Each shareholder's notice of intent to make a nomination shall set forth:
(i) the name(s) and address(es) of the shareholder who intends to make the
nomination and of the person or persons to be nominated; (ii) a representation
that the shareholder (a) is a holder of record of stock of the Corporation
entitled to vote at such meeting, (b) will continue to hold such stock
through the date on which the meeting is held, and (c) intends to appear in
person or by proxy at the meeting to nominate the person or persons specified
in the notice; (iii) a description of all arrangements or understandings
between the shareholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination is to be
made by the shareholder; (iv) such other information regarding each nominee
proposed by such shareholder as would be required to be included in a proxy
statement filed pursuant to Regulation 14A promulgated under Section 14 of
the Securities Exchange Act of 1934, as amended, as now in effect or hereafter
modified; and (v) the consent of each nominee to serve as a director of the
Corporation if so elected. The Corporation may require any proposed nominee
to furnish such other information as may reasonably be required by the
Corporation to determine the qualifications of such proposed nominee to serve
as a director.
No person shall be eligible for election as a director unless nominated
(i) by a shareholder in accordance with the foregoing procedure or (ii) by
the Board of Directors.
APPENDIX C
PROPOSED AMENDMENT ADDING ARTICLE VIII TO THE
RESTATED ARTICLES OF INCORPORATION WITH RESPECT TO
NOTICE OF SHAREHOLDER PROPOSALS
ARTICLE VIII
NOTIFICATION OF SHAREHOLDER PROPOSALS
The Board of Directors of the Corporation shall submit for consideration
and vote by the shareholders, at any meetings of the shareholders, only those
proposals that are first brought before the meeting by or at the direction
of the Board of Directors, or by any shareholder entitled to vote at such
meeting (a) who submits to the Corporation a timely Notice of Proposal in
accordance with the requirements of this Article VIII and the proposal is a
proper subject for action by shareholders under Michigan law, or (b) whose
proposal is included in the Corporation's proxy materials in compliance with
all the requirements set forth in the applicable rules and regulations in the
Securities and Exchange Commission.
Each shareholder's Notice of Proposal shall set forth:
(a) The name and address of the shareholder submitting the proposal,
as they appear on the Corporation's books and records;
(b) A representation that the shareholder (i) is a holder of record
of stock of the Corporation entitled to vote at such meeting, (ii) will
continue to hold such stock through the date on which the meeting is
held, and (iii) intends to appear in person or by proxy at the meeting
to submit the proposal for shareholder vote;
(c) A brief description of the proposal desired to be submitted to
the meeting for shareholder vote and the reasons for conducting such
business at the meeting; and
(d) A description of any financial or other interest of such
shareholder in the proposal.
A Notice of Proposal must be given, either by personal delivery or by
United States mail, postage prepaid, and received by the Corporation not less
than thirty (30) days prior to the date of the originally scheduled meeting,
regardless of any adjournments thereof to a later date; provided that, if
less than forty (40) days' notice of the meeting of shareholders is given by
the Corporation, the Notice of Proposal must be received by the Corporation
not later than the close of business on the tenth (10th) day following the
date on which the notice of the scheduled meeting was first mailed to the
shareholders.
The secretary of the Corporation shall notify a shareholder in writing
whether his or her Notice of Proposal has been made in accordance with all
the requirements of this Article VIII. The chairman of the meeting may refuse
to acknowledge the proposal of any shareholder not made in compliance with
all such requirements.
APPENDIX D
PROPOSED AMENDMENT TO RESTATED ARTICLES OF INCORPORATION
ADDING ARTICLE IX WITH RESPECT TO INCREASED VOTING
REQUIREMENTS TO AMEND OR REPEAL CERTAIN PROVISIONS
OF THE RESTATED ARTICLES OF INCORPORATION
ARTICLE IX
AMENDMENT OF ARTICLES VII, VIII OR IX
Notwithstanding anything contained in these Articles of Incorporation to
the contrary, the affirmative vote of at least 80% of the outstanding shares
of voting stock of the corporation, voting as a single class, shall be
required to amend or repeal Article VII, Article VIII or Article IX of these
Restated Articles of Incorporation or to adopt any provision inconsistent
therewith, unless, such amendment or repeal or inconsistent provision has
been recommended for approval by at least 80% of all directors then holding
office and by a majority of the Continuing Directors. The term "Continuing
Directors" is defined in Article VII.
APPENDIX E
PROPOSED ADDITION OF ARTICLE X TO THE RESTATED
ARTICLES OF INCORPORATED REQUIRING EVALUATION BY
THE BOARD OF DIRECTORS OF CERTAIN PROPOSALS
ARTICLE X
BOARD EVALUATION OF CERTAIN OFFERS
Section 1. Matters to be Evaluated. The Board of Directors of this
corporation shall not approve, adopt or recommend any offer of any person or
entity, other than the corporation, to make a tender or exchange offer for
any capital stock of the corporation, to merge or consolidate the corporation
with any other entity or to purchase or otherwise acquire all or substantially
all of the assets or business of the corporation unless and until the Board of
Directors shall have first evaluated the offer and determined that the offer
would be in compliance with all applicable laws and that the offer is in the
best interests of the corporation and its shareholders. In connection with
its evaluation as to compliance with laws, the Board of Directors may seek
and rely upon an opinion of legal counsel independent from the offeror and
it may test such compliance with laws in any state or federal court or before
any state or federal administrative agency which may have appropriate
jurisdiction. In connection with its evaluation as to the best interests of
the corporation and its shareholders, the Board of Directors shall consider
all factors which it deems relevant, including without limitation: (i) the
adequacy and fairness of the consideration to be received by the corporation
and/or its shareholders under the offer considering historical trading prices
of the corporation's stock, the price that might be achieved in a negotiated
sale of the corporation as a whole, premiums over trading prices which have
been proposed or offered with respect to the securities of other companies in
the past in connection with similar offers and the future prospects for this
corporation and its business; (ii) the potential social and economic impact
of the offer and its consummation on this corporation, and its subsidiaries
and their respective employees, depositors and other customers and vendors;
(iii) the potential social and economic impact of the offer and its
consummation on the communities in which the corporation and any subsidiaries
operate or are located; (iv) the business and financial condition and earnings
prospects of the proposed acquiror or acquirors; and (v) the competence,
experience and integrity of the proposed acquiror or acquirors and its or
their management.
Section 2. Amendment, Repeal, etc. Notwithstanding any other provision
of these Articles of Incorporation or the Bylaws of the corporation to the
contrary (and notwithstanding the fact that a lesser percentage may be
specified by law, these Articles of Incorporation or the Bylaws of the
corporation), the affirmative vote of the holders of eighty percent (80%) or
more of the outstanding shares of capital stock entitled to vote for the
election of directors, voting together as a single class, shall be required
to amend, repeal or adopt any provision inconsistent with this Article X;
provided, however, that this Article X shall be of no force or effect if the
proposed amendment, repeal or other action has been recommended for approval
by at least eighty percent (80%) of all directors then holding office.
APPENDIX F
DEFERRED COMPENSATION PLAN
FIRST MANISTIQUE CORPORATION
DEFERRED COMPENSATION, DEFERRED STOCK AND CURRENT
STOCK PURCHASE PLAN FOR NON-EMPLOYEE DIRECTORS
1. Purpose. The First Manistique Corporation Deferred Compensation,
Deferred Stock and Current Stock Purchase Plan for Non-Employee Directors
("Plan") has been adopted to provide an opportunity for each non-employee
director of First Manistique Corporation ("FMC") and FMC subsidiaries to
defer his or her director fees or to increase, on a current basis, his or her
ownership of shares of FMC's common stock.
2. Eligibility. Each director of FMC or a subsidiary of FMC which
adopts this Plan ("Subsidiary Bank") who is not an officer or employee of FMC
or of any Subsidiary Bank is eligible to participate in the Plan ("Eligible
Director").
3. Administration. The Plan shall be administered by FMC's Corporate
Executive Committee (the "Plan Administrator"), who shall have the authority
to interpret the Plan and to adopt procedures for implementing the Plan.
4. FMC Common Stock. The shares of stock subject to purchase or the
equivalent to be credited to a participant's account under the Plan shall be
the shares of FMC's common stock (the "FMC Common Stock"). Shares issued and
delivered to participants under the Plan may be either newly issued shares
or shares purchased by FMC and reissued. Subject to adjustment as described
below, the maximum number of shares of common stock that may be purchased or
credited under the Plan is . If FMC shall at any time
increase or decrease the number of its outstanding shares of FMC Common Stock
or change in any way the rights and privileges of such shares by means of the
payment of a stock dividend or any other distribution upon such shares payable
in FMC Common Stock, or through a stock split, subdivision, consolidation,
combination, reclassification, or recapitalization involving the FMC Common
Stock, or in case of the merger or consolidation of FMC with or into another
organization, then, in any such event, the numbers, rights and privileges of
the shares issuable or credited under the Plan shall be increased, decreased
or changed in like manner as if such shares had been issued and outstanding,
fully paid, and nonassessable at the time of such occurrence.
5. Compensation Affected by Participation in the Plan. An Eligible
Director may specify in his or her Election to Participate that all, but not
less than all, of an Eligible Director's meeting fees and all or part (in
integral multiples of 25%) of an Eligible Director's annual retainer fees
that would otherwise be payable in cash by FMC or a Subsidiary Bank for his
or her service for the calendar year following the year in which an Election
to Participate is filed, or in the case of an Eligible Director of a
Subsidiary Bank who files an Election to Participate between January 1 and
April 1, 1996, for that portion of the 1996 calendar year following March 31,
and for all subsequent calendar years while the Election to Participate
remains in effect, shall be subject to the terms of the Plan ("Plan Fees").
6. Election to Participate. An Eligible Director becomes a participant
in the Plan by filing an "Election to Participate" with the Plan Administrator
not later than (except as provided in the following sentence) December 31 of
the year preceding the calendar year with respect to which the Eligible
Director wishes to commence participation in the Plan. With respect
to 1996 only, an Eligible Director of a Subsidiary Bank may become a
participant in the Plan effective as of April 1, 1996, by filing an Election
to Participate not later than March 31, 1996. Once filed, the Election to
Participate shall continue to be effective (i) until the participant ceases
to be an Eligible Director, (ii) until he or she files a subsequent Election
to Participate revising any of the terms of the last election filed, or
(iii) until he or she terminates an Election to Participate in the Plan by
written notice to the Plan Administrator. Termination of participation shall
be effective immediately at the time a participant ceases to be an Eligible
Director. Other terminations of participation and changes in election shall
be effective with respect to calendar years commencing after the calendar
year in which the change in Election to Participate or termination notice
is given. An Eligible Director who has filed a notice of termination of
participation may thereafter elect to begin participating for any subsequent
calendar year or years by filing a new Election to Participate. For all
participants who are directors of FMC, all Elections to Participate must be
made in compliance with Section 16 of the Securities Exchange Act of 1934, as
amended ("Exchange Act") and the rules and regulations promulgated thereunder.
7. Contents of Election to Participate. An Election to Participat
shall be made on a form prescribed by the Plan Administrator. The Election
to Participate shall indicate the following: (i) the participant's Plan Fees;
(ii) one of the following three accounts to which the participant wishes to
have his or her Plan Fees credited (a) the Current Stock Purchase Account,
(b) the Deferred Cash Investment Account, or (c) the Deferred Stock Account;
(iii) the name or names of the participant's beneficiary or beneficiaries;
(iv) if the participant elects the Deferred Stock Account or the Deferred
Cash Investment Account, whether distributions are to be in a lump sum or in
installments; and (v) if the participant has selected the Deferred Stock
Account, whether lump sum distributions are to be made in cash, FMC Common
Stock or a combination thereof.
8. Credits to Account. On the last day of each calendar quarter (the
"Credit Date"), a participant shall receive a credit to his or her account
under the Plan in an amount equal to the participant's Plan Fees earned during
that quarter (the "Credited Amount"). Except as otherwise specifically
provided in this Plan, transfers are not permitted between accounts.
9. Current Stock Purchase Account. If a participant has in effect on
a Credit Date an Election to Participate specifying the Current Stock Purchase
Account, on that Credit Date, the Credited Amount will be credited to a
Current Stock Purchase Account for the benefit of the participant and will
be used, together with any other cash credited to the account, to acquire
directly from FMC, at a price per share equal to Fair Market Value on the
Credit Date, as many whole shares of FMC Common Stock as possible using the
funds credited to the Current Stock Purchase Account of that participant.
The shares will be issued and delivered to the participant within five (5)
business days after the Credit Date. Any Credited Amount remaining in a
participant's account will be carried forward for investment under the terms
of the Plan at the next Credit Date, unless a participant shall have terminated
his or her participation in the Plan in which case such cash balance will be
distributed to the terminated participant. Notwithstanding the foregoing, no
shares of FMC Common Stock will be purchased for the Current Stock Purchase
Account of a participant, who is a director of FMC, until the participant's
Election to Participate designating the Current Stock Purchase Account has
been in effect for at least six (6) months prior to the relevant Credit Date.
10. Credits to Deferred Cash Investment Account. If a participant has
in effect on a Credit Date an Election to Participate specifying the Deferred
Cash Investment Account, on that Credit Date, the Credited Amount will be
credited to a Deferred Cash Investment Account for the benefit of the
participant. In addition, an "Appreciation Factor" (as herein defined) will
be credited on the Credit Date to the account as to all funds that were
credited to the account for the entire quarter that ends on the Credit Date
just as if such funds had been invested during the quarter and earning at the
rate of the applicable Appreciation Factor. Initially, the Appreciation
Factor available under the Plan will be a rate of interest equal to the rate
of interest paid by First Northern Bank & Trust on its 6-month
certificates of deposit issued on the business day nearest the beginning
of the quarter for which the Appreciation Factor is to be credited. The
Appreciation Factor may be changed from time to time by resolution of the
FMC Board of Directors but it may not exceed the prime rate of interest
charged by First Northern Bank & Trust.
11. Credits to Deferred Stock Account. If a participant has in effect
on a Credit Date an Election to Participate specifying the Deferred Stock
Account, on that Credit Date, the Credited Amount will be credited to the
Deferred Stock Account for that participant and shall be converted into "FMC
Stock Units" which shall be equal in number to the number of shares (rounded
to the nearest 100th of a share) determined by dividing the Credited Amount
by the Fair Market Value of a share of FMC Common Stock on the Credit Date.
In addition, each time a dividend is paid on FMC Common Stock, a participant
shall receive a credit to his or her Deferred Stock Account. The amount of
the dividend credit shall be a number of FMC Stock Units equal to the number
of shares (rounded to the nearest 100th of a share) determined by multiplying
the dividend amount per share by the number of FMC Stock Units credited to
the participant's Deferred Stock Account as of the record date for the
dividend and dividing the product by the Fair Market Value on the dividend
payment date. Notwithstanding the foregoing, no FMC Stock Units shall be
credited to the Deferred Stock Account of a participant, who is a director
of FMC, until the participant's Election to Participate designating the
Deferred Stock Account has been in effect for at least six (6) months prior
to the relevant Credit Date.
12. Distribution of Deferred Account Balances. No amount credited to a
participant's Deferred Cash Investment Account or a participant's Deferred
Stock Account shall be distributed prior to the termination of his or her
service as an Eligible Director.
(a) Retirement-Deferred Cash Investment Account. If a participant
retires from service as an Eligible Director, the participant's Deferred
Cash Investment Account shall be distributed to the participant commencing
as of January 15 of the fiscal year of FMC which occurs after the end of the
year in which the participant retired from service as an Eligible Director.
Distribution of the Deferred Cash Investment Account may be made in a lump
sum, in five (5) annual installments or ten (10) annual installments, payable
as of January 15 of each year during the distribution period, consistent with
the participant's first filed Election to Participate, unless the Plan
Administrator, in its sole discretion, approves of a different distribution
schedule requested by the participant in a later filed Election to
Participate. A retired director's Deferred Cash Investment Account balance
during any distribution period shall continue to be adjusted by an
Appreciation Factor just as if the director had not retired. After adjusting
the retired director's Deferred Cash Investment Account by the Appreciation
Factor each year, the account balance will be divided by the number of annual
installments yet to be paid or distributed to the retired director and the
quotient will be the distribution to be made to the retired director at that
time.
(b) Retirement-Deferred Stock Account - Lump Sum Distribution.
Unless a participant haselected pursuant to his or her Election to Participate
to receive payment of his or her Deferred Stock Account in installments, FMC
Stock Units credited to the participant's Deferred Stock Account shall be
payable in full in cash or in whole shares of FMC Common Stock (together with
cash in lieu of a fractional share), or in a combination of cash and FMC Common
Stock, as elected in the participant's last filed Election to Participate, on
January 15 of the fiscal year of FMC which occurs after the end of the fiscal
year in which the participant retired from service as an Eligible Director.
Amounts distributed in cash, including cash in lieu of fractional shares,
shall be determined based upon the Fair Market Value of FMC Common Stock on
the day immediately preceding the date of payment.
(c) Retirement-Deferred Stock Account-Installment Distribution. If
a participant has elected pursuant to his or her Election to Participate to
have his or her Deferred Stock Account paid in cash in annual
installments, as of January 15 following the year in which the participant
retired from service as an Eligible Director, the cash equivalent of the FMC
Stock Units credited to the participant's Deferred Stock Account shall be
transferred to a Deferred Cash Investment Account on behalf of the retired
director and distribution shall be made in accordance with the provisions of
this Plan relating to distribution of Deferred Cash Investment Accounts in
installments. The cash equivalent transferred to the Deferred Cash Investment
Account shall be determined by converting the FMC Stock Units to a cash
balance by multiplying the number of shares deemed credited as of December 31
of the year in which the participant retired by the Fair Market Value of FMC
Common Stock on that date.
(d) Termination Other Than Retirement. If a participant's service
as an Eligible Director terminates because of his or her death or for any
other reason, other than retirement, or if a retired director dies following
his or her retirement while receiving distributions pursuant to this Plan,
the participant's entire account balance shall be distributed as of the
January 15 of FMC's fiscal year following the year in which the director
died or his or her services as an Eligible Director otherwise terminated,
provided, however, if this period is less than one (1) year, the Plan
Administrator, in its discretion, may extend the time for final distribution
up to a period of twelve (12) months following the director's death or other
termination of service.
(e) Distributions to Beneficiaries. Each participant shall have
the right to designate a beneficiary or beneficiaries to succeed to the right
to receive distributions of the participant's account maintained under this
Plan in the event of a participant's death. If a participant fails to
designate a beneficiary, or if the designated beneficiary dies without a
contingent beneficiary being designated, distribution of the participant's
account shall be made to the participant's estate. No designation of a
beneficiary shall be valid unless in writing signed by the participant, dated
and filed with the Plan Administrator. Designated beneficiaries may be
changed from time to time without consent of any prior beneficiaries upon
filing the beneficiary portion of the Election to Participate form with the
Plan Administrator.
13. Nonassignability. No right to receive payments under this Plan nor
any shares of FMC Common Stock credited to a participant's Current Stock
Purchase or Deferred Stock Account shall be assignable or transferable by
participant other than by will or the laws of descent and distribution. The
designation of a beneficiary by a participant under this Plan does not
constitute a transfer.
14. Unfunded Plan. It is intended that this Plan constitute an "unfunded
plan" with respect to the Deferred Cash Investment Accounts and the Deferred
Stock Accounts of the participants. FMC may authorize the creation of trusts
or other arrangements to meet the obligations created under the Plan as long
as FMC determines that the existence of such trusts or other arrangements is
consistent with the "unfunded" status of the Plan. Any liability of FMC to
any person with respect to any of the accounts established under the Plan
shall be based solely upon contractual obligations that may be created
pursuant to the Plan. No such obligation of FMC shall be deemed to be secured
by any pledge of, or other encumbrance on, any property of FMC. Benefits
payable under this Plan shall be an unsecured obligation of FMC, and to the
extent that any person acquires a right to receive payments or distributions
from FMC under the Plan, such right will be no greater than of any unsecured
general creditor of FMC.
15. Trust For Deferred Stock Account. If FMC so chooses, it may, as to
credits to the Deferred Stock Accounts, make contributions in cash or in
shares of FMC Common Stock to a trust. Any cash contributions shall be used
by the trustee to purchase shares of FMC Common Stock within ten (10) business
days after the deposit of the funds. The purchase of shares may be made by
the trustee in brokerage transactions or by private purchase, including
purchase from FMC. All shares held by the trust shall be held in the name of
the trustee. All FMC Common Stock or cash held in a trust shall be held on a
commingled basis and shall be subject to the claims of general
creditors of FMC. All FMC Common Stock held in any such trust shall be
voted by the trustee in its discretion.
16. Fair Market Value Defined. As long as the FMC Common Stock is not
actively traded in any recognized market, the term "Fair Market Value" as
used in this Plan shall mean the average price per share at which shares of
FMC Common Stock were bought and sold during the three (3) preceding months
in transactions known to management involving 100 or more shares between
purchasers and sellers none of whom are directors or officers of FMC or any
subsidiary of FMC. If the shares of FMC Common Stock are actively traded in
any recognized market, the "Fair Market Value" as used in the Plan shall mean
the average of the last reported sales price of FMC Common Stock as of the
close of business for each of the last twenty (20) trading days ending the
day immediately preceding the day as of which "Fair Market Value" is to be
determined.
17. Retirement Defined. As used in this Plan, the terms "retirement"
and "retire" shall mean voluntary or involuntary resignation, termination of
service based upon attainment of a mandatory retirement age or termination
of service as a result of not being reelected.
18. Rules of Construction. Headings are given to the sections of the
Plan solely as a convenience to facilitate reference. The reference to any
statute, regulation or provision of law shall be construed to refer to any
amendment to or successor of such provision of law. The Plan shall be
construed and interpreted in accordance with Michigan law. The Plan is
intended to be construed so that participation in the Plan will be exempt from
Section 16(b) of the Exchange Act pursuant to regulations and interpretations
issued from time to time by the Securities and Exchange Commission.
19. Withholding. No later than the date as of which an amount first
becomes includable in the gross income of a participant for federal income
tax purposes with respect to any participation under the Plan, the participant
shall pay to FMC, or make arrangements satisfactory to FMC regarding the
payment of, any federal, state, local or foreign taxes of any kind required
by law to be withheld with respect to such amount.
20. Regulatory Restrictions. All certificates for shares of FMC Common
Stock or other securities delivered under the Plan shall be subject to such
stock transfer orders and other restrictions as FMC may deem advisable under
the rules, regulations and other requirements of FMC, any stock exchange or
stock market upon which the FMC Common Stock is then listed or traded and
any applicable Federal, state or foreign securities law, and FMC may cause a
legend or legends to be placed on any such certificates to make appropriate
reference to such restrictions.
21. Amendment and Termination. The FMC Board of Directors may at any
time terminate, suspend or amend this Plan. However, no such action shall be
taken with respect to Plan Fees credited to the account of a participant
under this Plan prior to the time of the action unless the FMC Board of
Directors determines that the action would not be materially adverse to the
participants in the Plan. In addition, no amendment may become effective
until shareholder approval is obtained if the amendment (i) except as
expressly provided in the Plan, increases the aggregate number of shares of
FMC Common Stock that are subject to the Plan, (ii) materially increases
the benefits accruing to participants under the Plan, (iii) modifies the
eligibility requirements for participation in the Plan, or (iv) requires
approval by FMC's shareholders under Section 16 of the Exchange Act or the
rules or regulations promulgated thereunder.
22. Effective Date of Plan. The Plan will become effective on January 1,
1996; however, if the Plan is not approved by a majority of the votes cast at
a duly held meeting of the FMC shareholders at which a quorum representing a
majority of all outstanding voting stock is, either in person or by proxy,
present and voting on the Plan, on or before May 1, 1996, the Plan shall
terminate and be of no force or effect and any Plan Fees credited
to any accounts under the Plan will be immediately distributed to the
participants in accordance with their interests in their respective accounts.
First Manistique Corporation This Proxy is solicited
130 South Cedar on behalf of the
P.O. Box 369 Board of Directors
Manistique, Michigan 49854
PROXY
The undersigned hereby appoints Michael C. Henricksen and Ronald G. Ford
as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all the shares
of Common Stock of First Manistique Corporation held of record by the
undersigned on March 15, 1996, at the annual meeting of shareholders to be
held April 16, 1996, and at any adjournment thereof.
1. In the election of three directors to be elected for terms expiring in
1999
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all
nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual nominee
strike a line through the nominee's name in the list below.)
Ronald G. Ford, Michael C. Henricksen, John P. Miller
2. Proposal to amend Restated Articles of Incorporation to Increase
Authorized Stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3 Proposal to amend Restated Articles of Incorporation Relating to
Continuity of Management.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and to be Signed on Reverse Side)
(Continued from other side)
4. Proposal to amend Restated Articles of Incorporation with Respect to
required Evaluations by Directors of Certain Transactions.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. Proposal to approve Deferred Compensation, Deferred Stock, and Current
Stock Purchase Plan for Nonemployee Directors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. 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 all nominees listed in Proposal 1 and FOR Each of the
Other Proposals.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. 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 president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
__________________________ ____________________________ DATED: , 1996
Signature Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE
ENCLOSED
ENVELOPE.