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 (Amendment No. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-12
Wells Financial Corp.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (set forth the amount on which the filing
fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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IMPORTANT ANNUAL MEETING
April 18, 2001
March 15, 2001
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of Wells Financial
Corp., we cordially invite you to attend the Annual Meeting of Stockholders to
be held at the Wells Community Building at 189 Second Street, S.E., Wells,
Minnesota on Wednesday, April 18, 2001, at 4:00 p.m. local time. The attached
Notice of Annual Meeting and Proxy Statement describe the formal business to be
transacted at the Meeting. During the Meeting, we will also report on the
operations of the Company. Directors and officers of the Company will be present
to respond to any questions stockholders may have.
At the meeting, stockholders will vote upon the election of two
directors of the Company. A dissident stockholder group that calls itself the PL
Capital Group, has announced that it intends to solicit proxies for its own hand
picked nominee for director in opposition to the Company's nominees. In
addition, the PL Capital Group has submitted a non-binding stockholder
resolution to be voted on at the meeting that calls for the sale of the Company
to the highest bidder. We believe that your Board acts in the best interests of
ALL stockholders and that these hostile actions are unnecessary, disruptive and
may impede our efforts to enhance the value of the investment of all of our
stockholders.
Your Board is committed to maximizing stockholder value, and the
Company's management believes that all reasonable means to maximize stockholder
value should be pursued, including, if appropriate, the sale or merger of the
Company. However, the Board does NOT believe maximizing stockholder value would
be served by selling the Company for an inadequate price - even if that price
represents a premium to the current trading price. Accordingly, we urge you to
vote "FOR" both of the Company's nominees for director and "AGAINST" the
stockholder proposal submitted by the PL Capital Group. Please do not return any
proxy cards sent to you by the dissidents. If you have previously returned a
white dissident proxy card, you may cancel that proxy and change your vote by
mailing the enclosed TAN proxy card now. PLEASE SIGN, DATE AND PROMPTLY MAIL THE
TAN PROXY CARD TODAY.
Whether or not you plan to attend the Meeting, please sign and date the
enclosed TAN proxy card and mail it in the accompanying postage-paid return
envelope as promptly as possible. This will not prevent you from voting in
person at the Meeting, but will assure that your vote is counted if you are
unable to attend. YOUR VOTE IS VERY IMPORTANT REGARDLESS OF THE NUMBER OF SHARES
YOU OWN.
On behalf of the Board of Directors, I thank you for your continued
support. If you have any questions about voting your shares, please do not
hesitate to contact D.F. King & Co., Inc., which is assisting us, at (800)
994-3227. You may also contact us directly at (507) 553-3151.
Sincerely,
/s/Lawrence H. Kruse
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Lawrence H. Kruse
President and Chief Executive Officer
Chairman of the Board
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WELLS FINANCIAL CORP.
53 FIRST STREET, S.W.
WELLS, MINNESOTA 56097
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 18, 2001
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of Wells Financial Corp. (the "Company") will be held at the Wells
Community Building at 189 Second Street, S.E., Wells, Minnesota on April 18,
2001, at 4:00 p.m. local time. The Meeting is for the purpose of considering and
acting upon:
1. The election of two directors of the Company;
2. A stockholder proposal submitted by the PL Capital Group, as is
described in the accompanying Proxy Statement. This stockholder
proposal is opposed by your Board of Directors and you are urged
to vote AGAINST the stockholder proposal; and
3. The transaction of such other matters as may properly come before
the Meeting or any adjournments thereof. The Board of Directors
is not aware of any other business to come before the meeting.
Action may be taken on any one of the foregoing proposals at the
Meeting on the date specified above or on any date or dates to which, by
original or later adjournment, the Meeting may be adjourned. Stockholders of
record at the close of business on March 2, 2001 are entitled to notice of and
to vote at the Meeting and any adjournments thereof.
You are requested to sign and date the enclosed TAN proxy card which is
solicited by the Board of Directors and mail it promptly in the enclosed
envelope. We urge you to exercise your rights as a stockholder to vote and
participate in this process. This will not prevent you from voting in person at
the Meeting, but will assure that your vote is counted if you are unable to
attend. YOUR VOTE IS VERY IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
EACH STOCKHOLDER, WHETHER OR NOT HE OR SHE PLANS TO ATTEND THE MEETING,
IS REQUESTED TO SIGN, DATE, AND MAIL THE ENCLOSED TAN PROXY CARD WITHOUT DELAY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN BY THE STOCKHOLDER MAY BE
REVOKED BY FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A
DULY EXECUTED PROXY BEARING A LATER DATE. ANY STOCKHOLDER PRESENT AT THE MEETING
MAY REVOKE HIS OR HER PROXY AND VOTE IN PERSON ON EACH MATTER BROUGHT BEFORE THE
MEETING. HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN
YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER TO
VOTE IN PERSON AT THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Richard Mueller
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Richard Mueller
Secretary
Wells, Minnesota
March 15, 2001
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IMPORTANT: REGARDLESS OF THE NUMBER OF SHARES YOU OWN, YOUR VOTE IS IMPORTANT.
PLEASE SIGN, DATE AND MAIL YOUR PROXY CARD TODAY. A SELF- ADDRESSED ENVELOPE IS
ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
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PROXY STATEMENT
OF
WELLS FINANCIAL CORP.
53 FIRST STREET, S.W.
WELLS, MINNESOTA 56097
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ANNUAL MEETING OF STOCKHOLDERS
APRIL 18, 2001
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GENERAL
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This Proxy Statement is furnished to the holders of the common stock
("Common Stock") of Wells Financial Corp. (the "Company"). Proxies are being
solicited by the Board of Directors of the Company to be used at the Annual
Meeting of Stockholders of the Company (the "Meeting") which will be held at the
Wells Community Building at 189 Second Street, S.E., Wells, Minnesota on April
18, 2001, at 4:00 p.m. local time. This Proxy Statement and the accompanying
Notice of Meeting and proxy card are being first mailed on or about March 15,
2001 to those stockholders entitled to vote at the Meeting.
At the Meeting, stockholders will consider and vote upon the election
of two directors. In addition, stockholders will consider and vote upon a
stockholder proposal submitted by the PL Capital Group which is unanimously
opposed by the Board of Directors. The Board of Directors knows of no additional
matters to be presented for consideration at the Meeting. Execution of a TAN
proxy card, however, confers on the designated proxy holder discretionary
authority to vote the shares represented by such proxy in accordance with their
best judgment on such other business, if any, that may properly come before the
Meeting or any adjournment thereof.
The Company is not responsible for the accuracy of any information
provided by or relating to the Company which is contained in any proxy materials
filed or disseminated by the PL Capital Group, or any other statement they make.
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WHY YOU SHOULD SUPPORT YOUR COMPANY'S BOARD NOMINEES
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Your Board of Directors, including both of the Company's nominees, is
dedicated to maximizing and enhancing stockholder value, and we represent ALL
stockholders and not any single stockholder. While each director of the Company
owes a fiduciary duty to stockholders and must act accordingly, we believe that
the hand-picked nominee of the PL Capital Group may express a preference in
favor of any proposal submitted by a current or former member of the PL Capital
Group. Because your Board intends to act in the best interests of ALL
stockholders, we believe that these hostile actions are unnecessary, disruptive
and may delay or impede our efforts to maximize value for all of our
stockholders.
The proposed nominee of the PL Capital Group became a stockholder of
the Company on February 13, 2001, less than two months ago, directly owns only
100 shares of our Common Stock and is a lawyer whose banking experience appears
to be primarily in the rendering of legal advice to banking clients. We do not
believe that the proposed nominee of the PL Capital Group possesses the banking
experience and background that is necessary to change the strategic direction of
the Company that the PL Capital Group is seeking. Moreover, such nominee would
be only one of six board members and would, therefore, be limited in his ability
to influence the entire Board of Directors or implement the proposal of the PL
Capital Group to change the strategic direction of the Company. The PL Capital
Group cannot assure the Company's stockholders that their hand-picked nominee
will maximize stockholder value and cannot guarantee that he
will vote in a certain way on any particular matter that may come before the
Board of Directors of the Company. For these and other reasons, we believe that
the stockholders of the Company should vote AGAINST the proposed nominee of the
PL Capital Group and vote FOR the Company's nominees for election as directors.
You may receive a proxy statement and a white proxy card from the PL
Capital Group with respect to its own nominee for director. The PL Capital
Group's nominee has NOT been endorsed by and is NOT supported by your Board. We
urge stockholders not to return any proxy card received from the PL Capital
Group. Accordingly, please sign, date and return to us in the enclosed envelope
the TAN proxy card. Even if you have already voted the dissident's white proxy
card, you may cancel that proxy and change your vote by mailing the enclosed TAN
proxy card now.
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HOW THE BOARD IS PERFORMING FOR YOU
TO MAXIMIZE STOCKHOLDER VALUE
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The PL Capital Group began purchasing our stock in June 2000. Beginning
in July of last year, current and former members of the PL Capital Group on
several occasions expressed an interest in pursuing an acquisition of the
Company. It is important for you to know that prior to rejecting their proposal,
we obtained an independent valuation of our Company from a national investment
banking firm with expertise in the valuation of savings institutions which
indicated that the proposed purchase price for the Company was below the
Company's fair value on a sale of control basis. We rejected their overtures,
and a subsequent offer from an out-of-state financial institution, because the
proposed purchase prices for the Company, even though they potentially
represented a premium over the trading price of our stock, were inadequate based
on the valuation analysis. We have always been sensitive to the desire of
stockholders to maximize stockholder value. We do not believe, however, that
this goal will best be served by selling your Company for an inadequate price,
even if the price offered represents a premium to the current trading price of
our stock.
Your Board of Directors has employed the following strategies in its
effort to enhance the value of your investment in the Company:
o Smart Growth - We believe that growth merely for the sake of growth and
without regard to the long term benefits is extremely poor management.
Instead, we believe in smart growth.
The residential mortgage refinancing activities that began in 1998
continued into the first months of 1999. Due to the low rates on the
mortgage loans that were originated during 1998 and the first half of
1999 we succeeded in selling almost all of the loans originated during
those time periods into the secondary market. Included in the loans
originated and sold to the secondary market were loans that were
refinanced from our loan portfolio. In order to better utilize our
staff and to provide future income, loans that were sold to the
secondary market were sold on a servicing-retained basis. As rates
increased during 1999 to levels we felt were acceptable, we then began
retaining residential mortgage loans that we originated. This change in
strategy, along with the origination of other types of loans, allowed
us to increase our loan portfolio by $18.4 million to $172.7 million at
December 31, 1999 compared to $154.3 million at December 31, 1998. This
strategic growth continued during the year ended December 31, 2000. We
were able to grow our loan portfolio by an additional $18.4 million
during 2000, due mainly to an increase in real estate loans secured by
farmland, which typically have shorter maturities and higher interest
rates than loans on single family homes.
2
Overall, the Company achieved asset growth of 11.0% for the year ended
December 31, 2000. During each of the five quarters ended September 30,
2000 the Company's subsidiary, Wells Federal Bank (the "Bank"), grew at
a higher rate than the median growth rate for its peer group. The
Bank's return on equity also exceeded its peer group's return during
each quarter of that period.
o Stock Repurchases - We have consistently approved stock buy-back
programs over the past several years to build stockholder value. Since
the Company's initial public offering in 1995, we have repurchased
1,029,643 shares of our stock at a total cost of approximately $15.8
million. We believe stock repurchases at below book value are an
important part of enhancing your investment in the Company as this
increases earnings per share and book value per share.
o Dividends - Since 1997, we have paid $2,870,000 in total dividends to
our stockholders, and we expect to continue our quarterly dividend
program. Our quarterly dividend in the fourth quarter of 2000 and in
the first quarter of 2001 increased to $0.16 from $0.15 per share.
While the payment of dividends and the repurchase of our stock
decreases the book value of our stock, we believe these actions enhance
the value of our stock for the long-term investor.
o New Products and Services - To provide our customers with additional
financial services we opened an investment center in April of 1999,
enabling us to offer mutual funds, variable rate annuities and other
investments as an alternative to our traditional FDIC insured products.
We are happy to report that the investment center became profitable in
2000, one year earlier than we had anticipated. The investment center
is part of Wells Insurance Agency, a wholly-owned subsidiary of Wells
Federal Bank. We continue to look for possible agency acquisitions for
Wells Insurance Agency.
The stockholder proposal submitted by the PL Capital Group is set forth
below:
"RESOLVED, that stockholders of Wells Financial hereby inform the Board
of Directors of Wells Financial that: (1) the management and Board of Wells
Financial should solicit offers to acquire, or merge with, Wells Financial, from
all potentially interested parties, in a fair and open process; (2) the Company
should publicly disclose to stockholders the results of that process, and (3)
the stockholders of Wells Financial should be presented with an opportunity to
vote on the definitive offer with the highest value, regardless of whether Wells
Board or management feels such offer is sufficient."
Implementation of the PL Capital Group's proposal could actually be
detrimental to the objective of maximizing stockholder value. Maximizing
stockholder value does not necessarily mean immediately selling or merging the
Company. Announcing that the Company is for sale, effectively putting it on the
block for the highest bidder, is not guaranteed to result in the best price
possible - instead, it may have the opposite effect by creating a "fire sale"
atmosphere. The Board should be allowed to carefully plan and undertake a sale
or merger of the Company at an opportune time in order to obtain maximum value
for the Company and its stockholders, with due consideration given to matters
such as the management and business of the acquiring corporation and maximum
strategic development of the Company's assets.
By law, the Board has a fiduciary duty to carefully consider any bona
fide offer to acquire the Company regardless of whether a majority of
stockholders makes such a recommendation. However, the Board does not believe
that it is in the best interests of stockholders to conduct a forced sale of the
Company. As the Board seeks to maximize long-term stockholder value, it believes
that the Company's business strategy of operating a growth oriented, profitable
and independent company will result in increased worth and value for the
stockholders in the future whether or not an offer to acquire the Company is
submitted.
3
The Board feels that passage of the stockholder proposal would
significantly impair the Company's ability to negotiate with any potential
acquiror. If implemented, this proposal gives the impression to potential
acquirors that the Company's stockholders would like the Company to accept the
highest offer - even if only one offer is made. The Board believes it is unfair
to stockholders to be forced to enter into negotiations in a distress-sale
posture and that a forced sale mentality will not result in the best potential
return to stockholders. The Board of Directors is in the best position to
determine the true value of the Company and thus whether an offer is in the best
interest of the Company's stockholders.
The Board also believes the proposal would disrupt the business
operations of the Company. We believe that it would be counterproductive to
divert management time and attention from ongoing operations in an effort to
attract and evaluate, in a short time period, potential acquisition candidates.
If no fair purchase offer materializes or is consummated, it is our opinion that
management's focus on such short-term issues puts the Company's long-term
strategic position at risk.
In addition, a forced sale strategy may engender uncertainty in the
minds of employees, customers, suppliers and business partners of the Company
and may damage these relationships. As a result, the Company's business may be
impaired. The Company is a community oriented financial institution that has
developed a working relationship with many of its customers. It is our belief
that approval of the proposal would disrupt these relationships, adversely
affecting the Company's ability to conduct its business in the normal manner.
Approval of the proposal may confuse the Company's customers as to future
ownership of the Company. In addition, approval of the proposal may disrupt the
employees of the Company. Such disruption could adversely affect the Company's
effectiveness and ability to provide its services.
Approval of the proposal could cause the marketplace to mistakenly
believe that the Company will be sold and could adversely affect and increase
the volatility of the Company's stock. In seeking to maximize the long-term
stockholder value, the Board does not believe that it is in the best interests
of stockholders to take action that in our view may disrupt the price of the
common stock in the short-term possibly due to market confusion regarding an
acquisition of the Company.
FOR THE REASONS EXPLAINED ABOVE, YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE AGAINST THE STOCKHOLDER PROPOSAL.
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VOTING AND REVOCABILITY OF PROXIES
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Stockholders who execute proxies retain the right to revoke them at any
time. Proxies may be revoked by written notice delivered in person or mailed to
the Secretary of the Company at the address of the Company shown above or by the
filing of a later dated proxy prior to a vote being taken on a particular
proposal at the Meeting. If you have voted any proxy card other than a TAN proxy
card, we urge you to revoke your proxy by submitting a TAN proxy card. A proxy
will not be voted if a stockholder attends the Meeting and votes in person.
If you sign and return a TAN proxy card in the form solicited by the
Board of Directors so that we receive it before the polls are closed at the
Meeting, your votes will be cast as you have marked on the proxy form. Where no
instructions are indicated, signed proxies will be voted "FOR" the Company's
nominees and "AGAINST" the stockholder proposal submitted by the PL Capital
Group. If any other matters are properly presented for a vote, the Board may
vote your shares on such matters based on their judgment.
If any of your shares are held in the name of a brokerage firm, bank,
bank nominee or other institution on the record date, only that entity can vote
your shares and only upon its receipt of your specific
4
instructions. Accordingly, please contact the person responsible for your
account at such entity and instruct that person to execute and return the TAN
proxy card on your behalf. You should also sign, date and mail the voting
instruction form your broker or banker sends you when you receive it. Please do
this for each account you maintain to ensure that all of your shares are voted.
REMEMBER, YOUR LATEST DATED PROXY IS THE ONLY ONE THAT COUNTS, SO
RETURN THE TAN PROXY CARD EVEN IF YOU PREVIOUSLY MAILED A WHITE PROXY TO THE PL
CAPITAL GROUP.
IF YOU HAVE ANY QUESTIONS ABOUT RETURNING YOUR TAN PROXY CARD,
PLEASE CALL: D.F. KING & CO., INC. AT (800) 994-3227. ---
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
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Stockholders of record as of the close of business on March 2, 2001
("Voting Record Date"), are entitled to one vote for each share of Common Stock
then held. As of the Voting Record Date, the Company had 1,188,121 shares of
Common Stock issued and outstanding.
The Articles of Incorporation of the Company (the "Articles") provide
that in no event shall any record owner of any outstanding Common Stock which is
beneficially owned, directly or indirectly, by a person who beneficially owns in
excess of 10% of the then outstanding shares of Common Stock (the "Limit") be
entitled or permitted to any vote with respect to the shares held in excess of
the Limit and such person may have his or her voting rights reduced below 10%.
Beneficial ownership is determined pursuant to the definition in the Articles
and includes shares beneficially owned by such person or any of his or her
affiliates or associates (as defined in the Articles), shares which such person
or his or her affiliates or associates have the right to acquire upon the
exercise of conversion rights or options, and shares as to which such person and
his or her affiliates or associates have or share investment or voting power,
but shall not include shares beneficially owned by any employee stock ownership
or similar plan of the Company or any subsidiary.
The presence in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote (after subtracting any
shares held in excess of the Limit) is necessary to constitute a quorum at the
Meeting.
As to the election of directors, the TAN proxy card being provided by
the Board enables a stockholder to vote for the election of the nominees
proposed by the Board, or to withhold authority to vote for the nominee being
proposed. Directors are elected by a plurality of votes cast, without regard to
either (i) broker non-votes or (ii) proxies as to which authority to vote for
the nominee being proposed is withheld.
As to the stockholder proposal submitted by the PL Capital Group, and
concerning all other matters that may properly come before the Meeting, by
checking the appropriate box, a stockholder may: (i) vote "FOR" the item, or
(ii) vote "AGAINST" the item, or (iii) "ABSTAIN" with respect to the item.
Unless otherwise required, such matters shall be determined by a majority of
votes cast affirmatively or negatively without regard to (a) broker non-votes,
or (b) proxies marked "ABSTAIN" as to that matter. YOUR BOARD OF DIRECTORS HAS
DETERMINED THE STOCKHOLDER PROPOSAL IS NOT IN THE BEST INTEREST OF THE
STOCKHOLDERS AND URGES YOU TO VOTE "AGAINST" IT. You may revoke any proxy you
give at any time before the polls are closed. If you want to revoke a proxy that
you may have given to the PL Capital Group, we urge you to sign, date and return
the enclosed TAN proxy card today.
5
Security Ownership of Certain Beneficial Owners
Persons and groups owning in excess of 5% of the Common Stock are
required to file certain reports regarding such ownership pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Other than as
noted below, management knows of no person or entity, including any "group" as
that term is used in Section 13(d)(3) of the Exchange Act, who or which is the
beneficial owner of more than 5% of the outstanding shares of Common Stock on
the Voting Record Date. Information concerning the security ownership of
management is included under "Information with Respect to Nominees for Director
and Directors Continuing in Office."
Percent of Shares of
Amount and Nature of Common Stock
Name and Address of Beneficial Owner Beneficial Ownership Outstanding
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Wells Federal Bank, fsb 136,033 (1) 11.4%
Employee Stock Ownership Plan
53 First Street, S.W.
Wells, Minnesota 56097
Hovde Capital, L.L.C. 117,650 (2) 9.9%
1824 Jefferson Place
Washington, D.C. 20036
Thomson Horstmann & Bryant, Inc. 88,900 (3) 7.5%
Park 80 West, Plaza Two
Saddle Brook, New Jersey 07663
P.L. Capital 103,910 (4) 8.7%
2015 Spring Road, Suite 290
Oak Brook, Illinois 60523
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(1) The Bank's Employee Stock Ownership Plan ("ESOP") purchased such shares for
the exclusive benefit of ESOP participants with funds borrowed from the
Company. These shares are held in a suspense account and are allocated
among ESOP participants annually on the basis of compensation as the ESOP
debt is repaid.
(2) Based on information provided to the Company by Hovde Capital, L.L.C.
(3) Based on an amended Schedule 13G filed with the SEC on February 7, 2001.
(4) Based on an amended Schedule 13D filed with the SEC on February 14, 2001 on
behalf of Financial Edge Fund, L.P., Financial Edge - Strategic Fund, L.P.,
PL Capital, LLC, John Wm. Palmer, Richard J. Lashley and Gary D. Pihlstrom.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent of the Common Stock, to
file reports of ownership and changes in ownership of the Common Stock, with the
Securities and Exchange Commission and to provide copies of those reports to the
Company. Other than as set forth herein, the Company is not aware of any
beneficial owner (as defined in the Exchange Act regulations) of more than ten
percent of the Common Stock.
Based upon a review of the copies of the forms furnished to the
Company, or written representations from certain reporting persons, the Company
believes that all Section 16(a) filing requirements applicable to its executive
officers and directors were complied with during the year ended December 31,
2000.
6
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INFORMATION WITH RESPECT TO THE COMPANY'S NOMINEES FOR DIRECTOR
AND DIRECTORS CONTINUING IN OFFICE
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Election of Directors
The Articles require that directors be divided into three classes, as
nearly equal in number as possible, each class to serve for a three year term,
with approximately one-third of the directors elected each year. The Board of
Directors currently consists of six members. Two directors will be elected at
the Meeting, each to serve for a three-year term, as noted below, or until
respective successors have been elected and qualified.
Richard Mueller and David Buesing have been nominated by the Board of
Directors to serve as directors. Both are currently directors of the Company and
have consented to being named in this Proxy Statement and to serve if elected.
If the nominees are unable to serve, the shares represented by all valid proxies
will be voted for the election of such substitutes as the Board of Directors may
recommend or the size of the Board may be reduced to eliminate the vacancy. At
this time, the Board knows of no reason why the nominees might be unavailable to
serve.
The following table sets forth the nominees and the directors
continuing in office, their name, age, the year they first became a director of
the Company or the Bank, the expiration date of their current term as a director
of the Company, and the number and percentage of shares of the Common Stock
beneficially owned. Currently, each director of the Company is also a member of
the Board of Directors of the Bank.
Year First Current
Elected or Term to Shares of Common Stock Percent of
Name Age(1) Appointed(2) Expire Beneficially Owned(3)(4) Class
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COMPANY'S NOMINEES FOR TERM TO EXPIRE IN 2004
Richard Mueller 51 1986 2001 16,807 (7)(8) 1.3%
David Buesing 54 1998 2001 2,000 (7) *
DIRECTORS CONTINUING IN OFFICE
Lawrence H. Kruse 68 1962 2003 64,197 (5) 5.1%
Gerald D. Bastian 60 1986 2003 37,648 (6) 3.0%
Randel I. Bichler 56 1998 2002 4,710 (7) *
Dale E. Stallkamp 55 1999 2002 20,125 1.6%
All directors and executive officers
of the Company as a group (7 persons) 155,485 (9) 12.5%
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* Less than 1%.
(1) At December 31, 2000.
(2) Refers to the year the individual first became a director of the Bank or
the Company. All directors of the Bank in December 1994 became directors of
the Company upon its formation in December 1994.
(3) Includes shares of Common Stock held directly as well as by spouses or
minor children, in trust and other indirect ownership, over which shares
the individuals exercise sole voting and/or investment power, unless
otherwise indicated.
(4) Beneficial ownership as of the Voting Record Date.
(5) Includes exercisable options to purchase 35,517 shares of Common Stock.
(6) Includes exercisable options to purchase 17,310 shares of Common Stock.
(Footnotes continued on next page.)
7
(7) Excludes 136,033 shares of Common Stock held under the Employee Stock
Ownership Plan ("ESOP") and shares held under the Management Stock Bonus
Plan ("MSBP") for which such individual serves as a member of the ESOP or
MSBP Committee or Trustee Committee. Such individual disclaims beneficial
ownership with respect to such shares held in a fiduciary capacity. The
Board of Directors or the ESOP Committee may instruct the ESOP Trustees
regarding investments of funds contributed to the ESOP. The ESOP Trustees
must vote all allocated shares held in the ESOP in accordance with the
instructions of the participating employees. Unallocated shares and
allocated shares for which no timely direction is received will be voted by
the ESOP Trustees as directed by the Board of Directors or the ESOP
Committee, subject to the ESOP Trustees' fiduciary duties. Shares held in
the MSBP are voted by the MSBP Trustees as directed by the MSBP Committee.
At the Voting Record Date, 36,210 shares had not been allocated to
employees under the ESOP and there were 24,358 shares in the MSBP.
(8) Includes exercisable options to purchase 10,935 shares of Common Stock.
(9) Excludes 122,194 shares of Common Stock held under the ESOP and MSBP that
have not been allocated to directors and executive officers. Includes
exercisable options to purchase 85,430 shares of Common Stock.
Executive Officers of the Company
The following individuals were executive officers of the Company as of
December 31, 2000:
Name Age (1) Positions Held With The Company and Bank
---- ------- ----------------------------------------
Lawrence H. Kruse 68 President, Chief Executive Officer, Chairman of the Board
of Directors
Gerald D. Bastian 60 Vice President and Director
James D. Moll 50 Treasurer and Principal Financial and Accounting Officer
- -------------
(1) At December 31, 2000.
Biographical Information
The principal business experience of each director, nominee for
director, and executive officer of the Company is set forth below. Unless
otherwise noted, all persons have held their present occupation for at least the
last five years.
Richard Mueller has been a director of the Bank since 1986 and of the
Company since its formation in December 1994. Mr. Mueller is the sole owner of
Wells Drug Co., Inc. Mr. Mueller has served as a member of the local school
board as well as a member of the Wells Chamber of Commerce. Mr. Mueller is a
first cousin of Mr. James D. Moll, an executive officer of the Company.
David Buesing has been a director of the Company since 1998. Mr.
Buesing has been employed by Wells Concrete Product since 1973. He became
President and General Manager of that company in 1982. He is a registered
engineer in Minnesota, North Dakota and Kansas. He is a past Director of the
Pre-stressed Concrete Institute and the Associated Minnesota Pre-stressed
Association.
Lawrence H. Kruse has been the President, the Chief Executive Officer,
and a director of the Company since its formation in December 1994. Mr. Kruse
has been Chief Executive Officer of the Bank since 1964 and has been employed by
the Bank since 1958. Mr. Kruse has been a director since 1962 and the Chairman
of the Board since April 1998.
Gerald D. Bastian has been the Vice President of the Bank since 1974
and a director of the Bank since 1986 and has been a Vice President and director
of the Company since its formation in December 1994.
8
Mr. Bastian is a member of Southern Minnesota Realtors, Valley Industrial
Development Corp., Mankato Area Chamber of Commerce, Bethlehem Lutheran Church,
and the Hilltop Kiwanis Club.
Randel I. Bichler has been a director of the Company and the Bank since
1998. Mr. Bichler has been engaged in the general practice of law in Wells since
1978. He retired from the United States Army Reserve as a Lt. Colonel in 1997.
Dale E. Stallkamp has been a director of the Company and the Bank since
April 1999. Mr. Stallkamp started his certified public accounting practice in
September 1972. Prior to that time he was employed by the public accounting firm
of Peat, Marwick, Mitchell.
James D. Moll, CPA, has been, since December 1994, the principal
financial and accounting officer of the Company and the Bank and, since February
1995, the Treasurer of the Company and the Bank. Prior to December 1994, Mr.
Moll was an employee of the Bank's subsidiary, Wells Insurance Agency ("WIA").
Mr. Moll has been managing WIA for more than five years. Mr. Moll is a first
cousin of Mr. Richard Mueller, a director of the Company and the Bank.
Meetings and Committees of the Board of Directors
The Board of Directors conducts its business through meetings of the
Board and through activities of its committees. Each member of the Board of
Directors also currently serves as a member of the Board of Directors of the
Bank, which meets monthly and may have special meetings.
During the year ended December 31, 2000, the Board of Directors of the
Company held 12 regular meetings and one special meeting. No director attended
fewer than 75% of the total meetings of the Board of Directors of the Company
and the committees on which such director served during the year ended December
31, 2000.
The Nominating Committee of the Company recommends nominees for
election as directors to the Board of Directors. The Nominating Committee, a
non-standing committee, which met one time during 2000, consists of the entire
Board of Directors. Although the Board of Directors will consider nominees
recommended by stockholders, it has not actively solicited recommendations from
stockholders. The Company's Articles include provisions setting forth specific
conditions under which persons may be nominated as directors of the Company at
an annual meeting of stockholders. A copy of such provisions is available upon
request to: Wells Financial Corp., 53 First Street, S.W., Wells, Minnesota
56097, Attention: Corporate Secretary.
The Compensation Committee, a standing committee, consists of the
present members of the Board of Directors of the Bank. Executive Officers of the
Bank do not participate in matters involving their compensation. Mr. Kruse, a
member of the committee, serves as President and Chief Executive Officer of the
Company and the Bank. Mr. Bastian, a member of the committee, is a Vice
President of the Company and the Bank and a branch manager of the Bank.
The Audit Committee currently consists of Directors Mueller, Stallkamp,
and Buesing, all of whom have been determined to be independent in accordance
with the requirements of the Nasdaq Stock Market.
The Audit Committee is responsible for recommending the appointment of
the Company's independent public accountants and meeting with such accountants
with respect to the scope and review of the annual audit. Additional
responsibilities of the Audit Committee are to ensure that the Board of
Directors receives objective information regarding policies, procedures and
activities of the Company with respect to auditing, accounting, internal
accounting controls, financial reporting, regulatory matters and such other
9
activities of the Company as may be directed by the Board of Directors. The
Audit Committee met five times during the year ended December 31, 2000.
The Board of Directors has reviewed, assessed the adequacy of and
approved a formal written charter for the Audit Committee. The full text of the
Charter of the Audit Committee appears as an Appendix to this Proxy Statement.
Audit Fees. For the fiscal year ended December 31, 2000, the Company
paid approximately $73,500 for professional services rendered in connection with
the audit of the annual financial statements and review of the quarterly
financial statements. All audit and review services were performed by employees
of the Company's independent auditor, McGladrey & Pullen, LLP ("McGladrey") and
no other services, including financial information systems design and
implementation, were rendered by McGladrey during the year ended December 31,
2000.
Report of the Audit Committee
For the fiscal year ended December 31, 2000, the Audit Committee (i)
reviewed and discussed the Company's audited financial statements with
management, (ii) discussed with McGladrey all matters required to be discussed
under Statement on Auditing Standards No. 61., and (iii) received from McGladrey
disclosures regarding McGladrey's independence as required by Independence
Standards Board Standard No. 1 and discussed with McGladrey its independence.
Based on the foregoing review and discussions, the Audit Committee recommended
to the Board of Directors that the audited financial statements be included in
the Company's Annual Report on Form 10-KSB for the fiscal year ended December
31, 2000.
Audit Committee:
Richard Mueller, Dale E. Stallkamp, David Buesing
- --------------------------------------------------------------------------------
DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
- --------------------------------------------------------------------------------
Director Compensation
Members of the Board of Directors of the Company are not compensated by
the Company for serving as a director. During 2000, each member of the Board of
Directors of the Bank received a fee of $950 per month regardless of attendance
at Board meetings. For 2000, non-employee directors received $100 per meeting
for Audit, ESOP and Agriculture Credit Committee meetings. For the year ended
December 31, 2000, fees paid to directors totaled $71,800.
Executive Compensation
Summary Compensation Table. The following table sets forth the cash and
non-cash compensation awarded to or earned by the Chief Executive Officer and
Vice President of the Company for the years ended December 31, 2000, 1999 and
1998. No other executive officer of the Bank or the Company had a salary and
bonus during such periods that exceeded $100,000 for services rendered in all
capacities to the Bank or the Company in the aggregate.
10
Annual Compensation(1)
--------------------------------------------
Name and Other Annual All Other
Principal Position Year Salary Bonus Compensation(2) Compensation
- ------------------- ---- ------------ ----- --------------- ------------
Lawrence H. Kruse 2000 $114,109 $1,824 $11,200 $33,910 (3)
President and Chief 1999 111,909 1,824 10,750 25,891
Executive Officer 1998 114,065 8,280 10,460 31,927
Gerald D. Bastian 2000 $98,386 $1,680 $11,200 $27,782 (4)
Vice President 1999 104,622 1,680 10,750 21,450
1998 94,710 2,100 10,460 26,947
- ------------------
(1) All compensation was paid by the Bank.
(2) Constitutes Bank directors' fees.
(3) Consists of $6,110, $5,742 and $5,136 of health, life, and disability
insurance premiums paid on behalf of Mr. Kruse for the years ended December
31, 2000, 1999, and 1998, respectively. For the years ended December 31,
2000, 1999 and 1998, the amount includes an allocation of 1,744, 1,743 and
1,701 shares under the ESOP, valued at the closing per share market prices
of $15.94, $11.56 and $15.75 on December 31, 2000, 1999 and 1998,
respectively.
(4) Consists of $6,120, $5,730 and $5,125 of health, life, and disability
insurance premiums paid on behalf of Mr. Bastian for the years ended
December 31, 2000, 1999, and 1998, respectively. For the years ended
December 31, 2000, 1999 and 1998, the amount includes an allocation of
1,359, 1,360 and 1,386 shares under the ESOP, valued at the closing per
share market prices of $15.94, $11.56 and $15.75 on December 31, 2000, 1999
and 1998, respectively. As of December 31, 2000, Mr. Bastian had 2,405
shares of restricted stock which had a value of $38,336 (based on the
closing market price of $15.94 on December 31, 2000). Dividends on shares
of restricted stock are held in arrears and paid upon vesting of the
applicable award.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
- ----------------------------------------------------------------------------------------------------------
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options/SARs in-the-Money Options/SARs
Acquired on Value at Fiscal Year-End at Fiscal Year-End(1)
Exercise Realized (#) ($)
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
- ----------------------------------------------------------------------------------------------------------
Lawrence H. Kruse -- $ -- 54,685 / -- $270,144 / $ --
Gerald D. Bastian -- $ -- 17,310 / -- $85,511 / $ --
- ------------
(1) Based upon an exercise price of $11.00 per share and the closing market
price of $15.94 as of December 31, 2000.
- --------------------------------------------------------------------------------
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------------------------------
The Bank had no "interlocking" relationships existing on or after
January 1, 2000 in which (i) any executive officer is a member of the Board of
Directors/Trustees of another entity, one of whose executive officers is a
member of the board of directors of the Bank, or where (ii) any executive
officer is a member of the compensation committee of another entity, one of
whose executive officers is a member of board of directors of the Bank.
11
The Bank, like many financial institutions, has followed a policy of
granting various types of loans to executive officers, directors, employees, or
immediate family members or affiliates thereof. All the loans have been made in
the ordinary course of business and on substantially the same terms and
conditions (including interest rates and collateral) that apply to the Bank's
other customers, and do not involve more than the normal risk of collectibility,
nor present other unfavorable features. Loans by the Bank to its directors and
executive officers are subject to Office of Thrift Supervision ("OTS")
regulations restricting loans and other transactions with affiliated persons of
the Bank. The Bank's affiliates must qualify for any loans on the same terms and
conditions that apply to other customers.
- --------------------------------------------------------------------------------
PARTICIPANTS IN THE SOLICITATION
- --------------------------------------------------------------------------------
General
Under the proxy rules of the Exchange Act, each of the Company's
directors may be deemed to be a "participant" in the Company's solicitation of
proxies. Information about the principal occupations of these individuals is set
forth herein under the caption "Information with Respect to the Company's
Nominees for Directors and Directors Continuing in Office -- Biographical
Information." Information about the ownership of the Common Stock by each
participant, including the right to acquire shares of Common Stock, is set forth
in the table herein under the caption "Information with Respect to the Company's
Nominees for Directors and Directors Continuing in Office -- Election of
Directors." Information about transactions between the Company and its directors
is set forth herein under the caption "Certain Relationships and Related
Transactions." For the purpose of this proxy statement, the business address of
each participant is 53 First Street, S.W., Wells, Minnesota 56097. Except as set
forth herein, no participant is now, or within the past year has been, a party
to any contract, arrangement or understanding with any person with respect to
any securities of the Company (including, but not limited to, joint ventures,
loan or option arrangements, puts or calls, guarantees against loss or
guarantees of profit, division of losses or profits, or the giving or
withholding of proxies).
There are no material proceedings to which any participant or any
associate of any participant is a party adverse to the Company or any of its
subsidiaries or has a material interest adverse to the Company or any of its
subsidiaries. Except as described herein, no participant and no associate of any
participant has any interest in the matters to be voted upon at the Meeting,
other than an interest, if any, as a stockholder of the Company or as an officer
or director of the Company.
Except as described herein, neither any participant nor any associate
of any participant (1) has engaged in or has a direct or indirect interest in
any transaction or series of transactions since the beginning of the Company's
last fiscal year, or in any currently proposed transaction, to which the Company
or any of its subsidiaries is a party where the amount involved was in excess of
$60,000; (2) has been indebted to the Company or any of its subsidiaries; (3)
has borrowed any funds for the purpose of acquiring or holding any securities of
the Company, or is presently, or has been within the past year, a party to any
contract, arrangement or understanding with any person with respect to either
any securities of the Company, any future employment by the Company or its
affiliates, or any further transaction to which the Company or any of its
affiliates will or may be a party; or (4) is the beneficial or record owner of
any securities of the Company or any parent or subsidiary thereof.
The following sets forth certain additional information about each
participant required to be disclosed under the Exchange Act.
12
Transactions in the Company's Securities in the Last Two Years
Listed below are the purchases and sales of the Common Stock by each
participant for the last two years. This table does not include information with
respect to stock options or restricted stock awards granted during the 1995
fiscal year to Directors Kruse, Bastian and Mueller under the Company's Stock
Option Plan or Management Stock Bonus Plan, which became fully vested during the
2000 fiscal year.
Number of Shares
of Common Stock Date of Price
Name Purchased (Sold) Transaction Per Share
---- ---------------- ----------- ---------
David Buesing 500 12/23/99 $11.50
500 1/11/00 $11.50
Randel I. Bichler 490 11/24/99 $12.75
120 5/23/00 $12.00
Richard Mueller (2,000) 4/14/00 $11.81
Lawrence H. Kruse (2,800) 3/10/99 $16.00
- --------------------------------------------------------------------------------
AUDITORS
- --------------------------------------------------------------------------------
McGladrey & Pullen, LLP was the Company's auditors for fiscal 2000. The
Board of Directors has approved the selection of McGladrey & Pullen, LLP as its
auditors for the 2001 fiscal year. A representative of McGladrey & Pullen, LLP
is not expected to be present at the Meeting and will, therefore, be unable to
respond to stockholders' questions or make a statement.
- --------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
- --------------------------------------------------------------------------------
In order to be considered for inclusion in the Company's proxy
materials for next year's Annual Meeting of Stockholders, any stockholder
proposal to take action at such meeting must be received at the Company's
executive offices at 53 First Street, S.W., P.O. Box 310, Wells, Minnesota
56097, no later than November 15, 2001. In addition, stockholder proposals must
meet other applicable criteria as set forth in the Company's bylaws in order to
be considered for inclusion in the Company's proxy materials.
The Company's Articles provide that if notice of a stockholder proposal
to take action at next year's annual meeting is not received at the Company's
main office by February 17, 2002, the proposal will not be eligible for
presentation at that meeting. In addition, stockholder proposals must meet other
applicable criteria as set forth in the Company's bylaws in order to be eligible
for presentation at next year's annual meeting.
- --------------------------------------------------------------------------------
OTHER MATTERS
- --------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described in this Proxy Statement. However, if
any other matters should properly come before the
13
Meeting, it is intended that proxies in the accompanying form will be voted in
respect thereof in accordance with the judgment of the person or persons voting
such proxies.
- --------------------------------------------------------------------------------
PERSONS MAKING THE SOLICITATION
- --------------------------------------------------------------------------------
The cost of soliciting proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees, and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. The Company has retained D.F. King &
Co., Inc. to assist in the solicitation of proxies at a cost which is not
expected to exceed $7,500, plus reimbursement of certain expenses. Actual costs,
however, may exceed estimated amounts. In addition to solicitations by mail,
directors, officers, and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without additional compensation.
- --------------------------------------------------------------------------------
ANNUAL REPORTS
- --------------------------------------------------------------------------------
The Company's Annual Report to Stockholders for the year ended December
31, 2000, including financial statements, will be mailed on March 15, 2001 to
all stockholders of record as of the Voting Record Date. Any stockholder who has
not received a copy of the Annual Report may obtain a copy, without cost, by
writing to the Secretary of the Company.
Upon written request, the Company will furnish without charge
(excluding exhibits) to any stockholder a copy of the Company's Annual Report on
Form 10-KSB for the year ended December 31, 2000. All requests should be
directed to Richard Mueller, Secretary, Wells Financial Corp., 53 First Street,
S.W., P.O. Box 310, Wells, Minnesota 56097-0310.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Richard Mueller
----------------------------------
Richard Mueller
Secretary
Wells, Minnesota
March 15, 2001
14
Appendix A
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee shall be comprised of three directors, each of whom
shall be independent directors, and free from any relationship that, in the
opinion of the Board, would interfere with the exercise of his or her
independent judgment as a member of the committee. All members of the Committee
shall have a working familiarity with basic finance and accounting practices,
and at least one member of the Committee shall have accounting or related
financial management expertise.
The members of the Committee shall be elected by the Board at the
annual organizational meeting of the Board or until their successors shall be
duly elected and qualified. Unless a Chair is elected by the full Board, the
members of the Committee may designate a Chair by majority vote of the full
Committee membership.
CHARTER AND POWERS OF THE AUDIT COMMITTEE
RESOLVED, that the charter and powers of the Audit Committee of the
Board of Directors (the "Audit Committee") shall be:
o Overseeing that management has maintained the reliability and integrity of
the accounting policies and financial reporting and disclosure practices of
the company;
o Overseeing that management has established and maintained processes to
assure that an adequate system of internal control is functioning within
the Company;
o Overseeing that management has established and maintained processes to
assure compliance by the Company with all applicable laws, regulations and
Company policy;
RESOLVED, that the Audit Committee shall have the following specific
powers and duties:
1. The Committee shall meet at least four times annually or more frequently as
may be necessary and such special meetings as may be called by the Chairman
of the Audit Committee or at the request of the independent accountants or
the General Auditor;
2. Creating an agenda for the ensuing year;
3. Reviewing the performances of the independent accountants and making
recommendations to the Board of Directors regarding the appointments or
termination of the independent accountants.
4. Conferring with the independent accounts and the internal audit staff
concerning the scope of their examinations of the books and records of the
Company and its subsidiaries; reviewing and approving the independent
accountants' annual engagement letter; annual audit plans and budgets;
directing the special intention of the auditors to specific matters or area
deemed by the Committee, or the auditors to be of specific significance;
and authorizing the auditors to perform such supplemental reviews or audits
as the Committee may deem desirable;
5. Reviewing with management, the independent accountants and internal audit
staff significant risks and exposures, audit activities and significant
findings;
15
6. Reviewing the range and cost of the audit and non-audit services performed
by the independent accountants;
7. Reviewing the Company's audited annual financial statements and the
independent accountants' opinion rendering with respect to such financial
statements, including reviewing the nature and extent of any significant
changes in accounting principles or the application therein;
8. Obtaining from the independent accounts and internal audit staff their
recommendations regarding internal controls and other matters relating to
the accounting procedure and the books and records of the Company and its
subsidiaries and reviewing the corrections of controls deemed to be
deficient;
9. Providing an independent, direct communication between the Board of
Directors, internal audit staff and independent accountants;
10. Reporting through its Chairman to Board of Directors following the meetings
of the Audit Committee;
11. Maintaining minutes or other records of the meeting and activities of the
Audit Committee;
12. Reviewing the powers of the Committee annually and reporting and making
recommendations to the Board of Directors on these responsibilities;
13. Considering such other matters in relation to financial affairs of the
Company and its accounts, and in relation to the internal and external
audit of the Company as the Audit Committee may, in its discretion,
determine to be advisable;
14. Review and update the charter periodically, at least annually as conditions
dictate.
15. Obtain from the external auditors formal written statements delineating all
relationships between the auditor and the Company consistent with ISP
Statement #1 and engage in dialogue regarding any relationships.
- --------------------------------------------------------------------------------
WELLS FINANCIAL CORP.
- --------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
APRIL 18, 2001
- --------------------------------------------------------------------------------
The undersigned hereby appoints the Board of Directors of Wells
Financial Corp. (the "Company"), or its designee, with full powers of
substitution, to act as attorneys and proxies for the undersigned, to vote all
shares of common stock of the Company which the undersigned is entitled to vote
at the Annual Meeting of Stockholders (the "Meeting"), to be held at the Wells
Community Building at 189 Second Street, S.E., Wells, Minnesota on April 18,
2001, at 4:00 p.m., local time and at any and all adjournments thereof, as
follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL NO. 1
1. The election as director of the Company's FOR WITHHELD
--- --------
nominees for director listed below, each
for a three-year term: |_| |_|
Richard Mueller
David Buesing
INSTRUCTIONS: To withhold your vote for any individual nominee, insert the
- ------------ nominee's name on the line provided below.
-----------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL NO. 2
2. "RESOLVED, that stockholders of Wells FOR AGAINST ABSTAIN
--- ------- -------
Financial hereby inform the Board of |_| |_| |_|
Directors of Wells Financial that:
(1) the management and Board of
Wells Financial should solicit offers to
acquire, or merge with, Wells Financial,
from all potentially interested parties, in
a fair and open process; (2) the Company
should publicly disclose to stockholders
the results of that process, and (3) the
stockholders of Wells Financial should be
presented with an opportunity to vote on
the definitive offer with the highest value,
regardless of whether Wells Board or
management feels such offer is sufficient."
- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
SIGNED PROXY WILL BE VOTED "FOR" PROPOSAL NO. 1 AND "AGAINST" PROPOSAL NO. 2. IF
ANY OTHER BUSINESS IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY
THOSE NAMED IN THIS PROXY IN THEIR BEST JUDGMENT.
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned acknowledges receipt from the Company, prior to the
execution of this proxy, of Notice of the Meeting, a Proxy Statement dated March
15, 2001 and the 2000 Annual Report to Stockholders.
|_| Please check here if you plan to attend the Meeting.
Dated: , 2001
-------------------------
- ---------------------------------------- ---------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
- ---------------------------------------- ---------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
Please sign exactly as your name appears on this proxy card. When signing as
attorney, executor, administrator, trustee, or guardian, please give your full
title. If shares are held jointly, each holder should sign.
- --------------------------------------------------------------------------------
PLEASE COMPLETE, SIGN, DATE, AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
- --------------------------------------------------------------------------------