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.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
- --------------------------------------------------------------------------------
Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (set forth the amount on which the filing
fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
March 30, 2005
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 (the
"Meeting") to be held at the Company's corporate offices located at 53 1st
Street, S.W., Wells, Minnesota on Wednesday, April 27, 2005, 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 be asked to vote upon the election of
two directors of the Company and to ratify the appointment of McGladrey &
Pullen, LLP as the Company's independent auditors for the fiscal year ending
December 31, 2005.
Whether or not you plan to attend the Meeting, please sign and date the
enclosed form of proxy 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.
Sincerely,
/s/Lonnie R. Trasamar
---------------------
Lonnie R. Trasamar
President and Chief Executive Officer
- --------------------------------------------------------------------------------
WELLS FINANCIAL CORP.
53 FIRST STREET, S.W.
WELLS, MINNESOTA 56097
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 27, 2005
- --------------------------------------------------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of Wells Financial Corp. (the "Company") will be held at the
Company's corporate offices located at 53 1st Street, S.W., Wells, Minnesota on
April 27, 2005, 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. To ratify the appointment of McGladrey & Pullen, LLP as the
independent auditors for the Company for the fiscal year
ending December 31, 2005; 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 23, 2005 are entitled to notice of and
to vote at the Meeting and any adjournments thereof.
You are requested to sign and date the enclosed form of proxy which is
solicited by the Board of Directors and mail it promptly in the enclosed
envelope. 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.
EACH STOCKHOLDER, WHETHER OR NOT HE OR SHE PLANS TO ATTEND THE MEETING,
IS REQUESTED TO SIGN, DATE, AND MAIL THE ENCLOSED FORM OF PROXY 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
------------------
Richard Mueller
Secretary
Wells, Minnesota
March 30, 2005
- --------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROXY STATEMENT
OF
WELLS FINANCIAL CORP.
53 FIRST STREET, S.W.
WELLS, MINNESOTA 56097
- --------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
APRIL 27, 2005
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GENERAL
- --------------------------------------------------------------------------------
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
Company's corporate offices located at 53 1st Street, S.W., Wells, Minnesota on
April 27, 2005, 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 30, 2005 to those stockholders entitled to vote at the Meeting.
All properly executed written proxies that are delivered pursuant to
this proxy statement will be voted on all matters that properly come before the
Meeting for a vote. If your signed proxy specifies instructions with respect to
matters being voted upon, your shares will be voted in accordance with your
instructions. If no instructions are specified, your shares will be voted (a)
FOR the election of directors named in Proposal 1, (b) FOR Proposal 2
(ratification of independent auditors), and (c) in the discretion of the proxy
holders, as to any other matters that may properly come before the Meeting.
- --------------------------------------------------------------------------------
VOTING AND REVOCABILITY OF PROXIES
- --------------------------------------------------------------------------------
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. A proxy will not be voted if a stockholder attends the
Meeting and votes in person.
As to the election of directors, as set forth in Proposal 1, the proxy
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
nominees being proposed. Directors are elected by a plurality of votes of the
shares present, in person or represented by proxy, at a meeting and entitled to
vote in the election of directors, without regard to either (i) broker non-votes
or (ii) proxies as to which authority to vote for the nominee being proposed is
withheld. The proxy confers discretionary authority on the persons named therein
to vote with respect to the election of any person as a director should the
nominee be unable to serve, or for good cause, will not serve.
As to the ratification of independent auditors as set forth in Proposal
2, by checking the appropriate box, a stockholder may: (i) vote "FOR" the item,
(ii) vote "AGAINST" the item, or (iii) vote to "ABSTAIN" on such item. Unless
otherwise required by law, Proposal 2 and any other 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.
- --------------------------------------------------------------------------------
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
- --------------------------------------------------------------------------------
Stockholders of record as of the close of business on March 23, 2005
("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 1,037,988 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.
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
Shares of
Amount and Nature of Common Stock
Name and Address of Beneficial Owner Beneficial Ownership Outstanding
- ------------------------------------ -------------------- -----------
Opportunity Partners 100,898 (1) 9.7%
60 Heritage Drive
Pleasantville, NY 10570
Wells Federal Bank, fsb (the "Bank") 99,501 (2) 9.6%
Employee Stock Ownership Plan
53 First Street, S.W.
Wells, Minnesota 56097
- ------------------------
(1) Based on a 13D filed with the Securities and Exchange Commission on
November 18, 2004.
(2) The Bank's Employee Stock Ownership Plan ("ESOP") purchased such shares for
the exclusive benefit of ESOP participants. These shares are held in a
suspense account.
2
- --------------------------------------------------------------------------------
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- --------------------------------------------------------------------------------
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,
2004.
- --------------------------------------------------------------------------------
PROPOSAL 1 - ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------
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.
Randel I. Bichler and Dale E. Stallkamp 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.
3
Year First Current Shares of Common Stock Percent
Elected or Term to Beneficially Owned of
Name Age(1) Appointed(2) Expire As of March 23, 2005 (3)(4) Class
- ---- ------ ------------ ------- --------------------------- --------
COMPANY'S NOMINEES FOR TERM TO EXPIRE IN 2008
Randel I. Bichler 60 1998 2005 23,612 (6)(9) 2.2%
Dale E. Stallkamp 59 1999 2005 43,248 (8) 4.0%
DIRECTORS CONTINUING IN OFFICE
Lonnie R. Trasamar 50 2002 2006 7,266(5) *
Gerald D. Bastian 64 1986 2006 29,360 2.7%
Richard Mueller 55 1986 2007 23,680 (6)(7) 2.2%
David Buesing 58 1998 2007 20,623 (6)(7) 1.9%
NAMED EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
James D. Moll 54 -- -- 16,126 (10) 1.5%
All directors and executive officers
of the Company as a group (7 persons) 163,915 (11) 14.5%
- -----------------------------------
* Less than 1%.
(1) At December 31, 2004.
(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 3,500 shares of Common Stock.
(6) Excludes 99,501 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,
all shares had been allocated to employees under the ESOP and there
were 24,509 shares in the MSBP.
(7) Includes exercisable options to purchase 9,000 shares of Common Stock.
(8) Includes exercisable options to purchase 17,748 shares of Common Stock.
(9) Includes exercisable options to purchase 13,374 shares of Common Stock.
(10) Includes exercisable options to purchase 2,200 shares of Common Stock.
(11) Includes exercisable options to purchase 55,497 shares of Common Stock.
4
Executive Officers of the Company
The following individuals were executive officers of the Company as of
December 31, 2004:
Name Age (1) Positions Held With The Company and Bank
---- ------- ----------------------------------------
Lonnie R. Trasamar 50 President and Chief Executive Officer
Gerald D. Bastian 64 Vice President and Director
James D. Moll 54 Treasurer and Chief Financial Officer
- ---------------------------
(1) At December 31, 2004.
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.
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 (Judge Advocate General
Corp) as a Lt. Colonel in 1997. He currently serves as Chairman of the Board of
the Company and Vice Chairman of the Board of the Bank.
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.
Lonnie R. Trasamar was appointed as President and Chief Executive
Officer of the Company and the Bank effective March 1, 2002. Mr. Trasamar was
appointed director of the Company in November 2002. Prior to joining the
Company, Mr. Trasamar was in the commercial banking and real estate fields both
as a Chief Financial Officer of a ten-bank holding company and as an independent
businessman. Mr. Trasamar also served as Chairman, President and Chief Executive
Officer of MidAmerica Bank South in Mankato and Blue Earth, Minnesota.
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. 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.
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.
5
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 also a Director of the
Precast/Prestressed Concrete Institute and a past Director of the Associated
General Contractors of Minnesota.
Named Executive Officers Who Are Not Directors
James D. Moll, CPA, has been, since December 1994, the Chief Financial
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 managed 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, 2004, the Board of Directors of the
Company held 12 regular meetings and 4 special meetings. 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, 2004.
The Compensation Committee, a standing committee, consists of the
present non-employee members of the Board of Directors of the Company. Mr.
Trasamar, a non-voting advisory member of the committee, advises the committee
on compensation matters for employees other than himself. The Compensation
Committee met 3 times during the year ended December 31, 2004.
The Audit Committee currently consists of Directors Bichler, 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 met 11
times during the year ended December 31, 2004. 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 activities of the Company as may be directed
by the Board of Directors.
The Board of Directors has not determined that any member of its Board
is an Audit Committee Financial Expert as that term is defined in the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The Board does not
believe that the background and experience of any current member of the Audit
Committee meets the requirements of the Exchange Act definition of an "Audit
Committee Financial Expert."
Report of the Audit Committee. For the fiscal year ended December 31,
2004, the Audit Committee (i) reviewed and discussed the Company's audited
financial statements with management, (ii) discussed with Company's independent
auditor, McGladrey & Pullen, LLP ("McGladrey"), all matters required to be
discussed under Statement on Auditing Standards No. 61., and (iii) received from
McGladrey disclosures
6
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 for the fiscal year ended December 31, 2004.
Audit Committee:
Randel I. Bichler
Dale E. Stallkamp
David Buesing
Audit Fees. The aggregate fees billed by McGladrey for professional
services rendered for the audit of the Company's annual consolidated financial
statements, for the review of the consolidated financial statements included in
the Company's Quarterly Reports on Form 10-QSB, and for the review of the
Company's SEC filings for the fiscal years ended December 31, 2004 and 2003 were
$132,670 and $112,677 respectively.
Audit Related Fees. The aggregate fees billed by McGladrey for
assurance and related services related to the audit of the annual financial
statements and to the review of the quarterly financial statements for the years
ended December 31, 2004 and 2003 were $963 and $7,030, respectively.
Tax Fees. The aggregate fees billed by RSM McGladrey, Inc. for
professional services rendered for tax compliance, tax advice or tax planning
for the years ended December 31, 2004 and 2003 were $11,125 and $8,120,
respectively.
All Other Fees. The aggregate fees billed by RSM McGladrey, Inc. for
professional services rendered for services or products other than those listed
under the captions "Audit Fees," "Audit-Related Fees," and "Tax Fees" for the
years ended December 31, 2004 and 2003 were $235 and $2,835 respectively, and
consisted of general consulting services.
The Audit Committee's current practice on pre-approval of services
performed by the independent auditors is to approve annually all audit services
and, on a case-by-case basis, all permitted non-audit services to be provided by
the independent auditors during the fiscal year. The Audit Committee reviews
each non- audit service to be provided and assesses the impact of the service on
the auditor's independence. In addition, the Audit Committee may pre-approve
other non-audit services during the year on a case-by-case basis. No services
were approved pursuant to the de minimus exception of the Sarbanes-Oxley Act of
2002.
Director Nomination Process
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 2004, consists of the entire
Board of Directors. The Board feels it is appropriate for the directors to serve
this function without forming a standing committee because the Company has a
relatively small Board, making action by committee unnecessary for purposes of
managing nominations. Because the committee is not a standing committee, the
Company does not have a nominating committee charter.
The Company does not currently pay fees to any third party to identify
or evaluate or assist in identifying or evaluating potential nominees. The
Committee's process for identifying and evaluating potential nominees includes
soliciting recommendations from directors and officers of the Company and its
wholly-owned subsidiary, Wells Federal Bank. Additionally, the Committee will
consider persons
7
recommended by stockholders of the Company in selecting the Committee's nominees
for election. There is no difference in the manner in which the Committee
evaluates persons recommended by directors or officers and persons recommended
by stockholders in selecting Board nominees.
To be timely, a stockholder's notice shall be delivered to, or mailed
and received at, the principal executive offices of the Corporation not less
than 60 days prior to the anniversary date of the immediately preceding annual
meeting of stockholders of the Corporation. Recommendations should identify the
submitting stockholder, the person recommended for consideration and the reasons
the submitting stockholder believes such person should be considered, as well as
the specific information set forth in the Company's Articles of Incorporation. 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
Committee believes potential directors should be knowledgeable about the
business activities and market areas in which the Company and its subsidiaries
engage.
Stockholder Communications
The Board of Directors does not have a formal process for stockholders
to send communications to the Board. In view of the infrequency of stockholder
communications to the Board of Directors, the Board does not believe that a
formal process is necessary. Written communications received by the Company from
stockholders are shared with the full Board no later than the next regularly
scheduled Board meeting. The Board encourages, but does not have a formal policy
that requires, directors to attend the annual meeting of stockholders. All of
the Board's members attended the 2004 annual meeting of stockholders.
- --------------------------------------------------------------------------------
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 2004, Vice Chairman Bichler
received $1,450 per month. All other members of the Board of Directors of the
Bank, except for Mr. Lonnie Trasamar, received $1,100 per month, regardless of
attendance at Board meetings. For 2004, non-employee directors received between
$100 and $350 per committee meeting attended ($27,400 in the aggregate) for
Audit, Employment Enhancement, Commercial Credit, Building Site and Compensation
Committee meetings. For the year ended December 31, 2004, fees paid to directors
totaled $106,600.
Executive Compensation
Summary Compensation Table. The following table sets forth the
compensation awarded to or earned by the Chief Executive Officer and other
highly compensated officers for the years ended December 31, 2002, 2003 and
2004, as applicable. No other executive officer of the Bank or the Company had a
salary and bonus during such period that exceeded $100,000 for services rendered
in all capacities to the Bank or the Company in the aggregate.
8
Annual Compensation (1)
-----------------------
Name and Other Annual All Other
Principal Position Year Salary Bonus Compensation(2) Compensation
- ------------------- ---- ------------ ----- ------------ ------------
Lonnie R. Trasamar 2004 $ 128,500 $ 43,096 $ -- $ 17,483(3)
President and Chief 2003 124,800 62,400 -- 23,772
Executive Officer 2002 112,923 60,000 -- 6,920
Gerald D. Bastian 2004 $ 80,000 $ 8,515 $ 13,200 $ 14,406(4)
Vice President 2003 107,913 14,216 13,200 18,955
2002 105,979 11,205 12,000 28,483
James D. Moll 2004 $ 102,000 $ 17,125 $ -- $ 8,911(5)
Chief Financial Officer 2003 99,778 24,882 -- 12,847
2002 95,615 23,925 -- 22,773
James R. Sauer 2004 $ 90,000 $ 15,019 $ -- $ 8, 062(6)
Chief Operations Officer 2003 85,800 21,450 -- 11,276
2002 81,935 20,625 -- 19,674
- -------------------------
(1) All compensation was paid by the Bank.
(2) Constitutes Bank directors' fees
(3) Consists of $8,623 and $8,622 of health, life, and disability insurance
premiums paid on behalf of Mr. Trasamar for the years ended December
31, 2004 and 2003, respectively. For the year ended December 31, 2004,
the amount includes an allocation of 154 shares under the ESOP, valued
at the closing per share market price of $32.50 on December 31, 2004.
For the year ended December 31, 2004, Mr. Trasamar had 4,025 shares of
unvested restricted stock which had a value of $130,813 (based on the
closing price of $32.50 on December 31, 2004). Dividends on shares of
restricted stock are held in arrears and paid upon vesting of the
applicable award. For the year ended December 31, 2004, includes $3,855
in matching funds for the 401(k) Plan.
(4) Consists of $8,524, $8,515 and $7,300 of health, life, and disability
insurance premiums paid on behalf of Mr. Bastian for the years ended
December 31, 2004, 2003 and 2002, respectively. For the years ended
December 31, 2004, 2003 and 2002, the amount includes an allocation of
93, 267 and 1,016 shares under the ESOP, valued at the closing per
share market prices of $32.50, $30.00 and $20.85 on December 31, 2004,
2003 and 2002, respectively. As of December 31, 2004, Mr. Bastian had
481 shares of unvested restricted stock which had a value of $15,633
(based on the closing market price of $32.50 on December 31, 2004).
Dividends on shares of restricted stock are held in arrears and paid
upon vesting of the applicable award. For the year ended December 31,
2004, includes $2,857 in matching funds for the 401(k) Plan.
(5) Consists of $2,371, $2,360 and $1,694 of health, life, and disability
insurance premiums paid on behalf of Mr. Moll for the years ended
December 31, 2004, 2003 and 2002, respectively. For the years ended
December 31, 2004, 2003 and 2002, the amount includes an allocation of
107, 273 and 1,011 shares under the ESOP, valued at the closing per
share prices of $32.50, $30.00 and $20.85 on December 31, 2004, 2003
and 2002, respectively. As of December 31, 2004, Mr. Moll had 1,260
shares of unvested restricted stock which had a value of $40,950 (based
on the closing price of $32.50 on December 31, 2004). Dividends on
shares of restricted stock are held in arrears and paid upon vesting of
the applicable award. For the year ended December 31, 2004, includes
$3,067 in matching funds for the 401(k) Plan.
(6) Consists of $2,300, $2,276 and $1,597 of health, life and disability
insurance premiums paid on behalf of Mr. Sauer for the years ended
December 31, 2004, 2003 and 2002, respectively. For the years ended
December 31, 2004, 2003 and 2002, the amount includes an allocation of
94, 234 and 867 shares under the ESOP, valued at the closing per share
prices of $32.50, $30.00 and $20.85 on December 31, 2004, 2003 and
2002, respectively. As of December 31, 2004, Mr. Sauer had 1,098 shares
of unvested restricted stock which had a value of $35,685 (based on the
closing price of $32.50 on December 31, 2004). Dividends on shares of
restricted stock are held in arrears and paid upon vesting of the
applicable award. For the year ended December 31, 2004, includes $2,700
in matching funds for the 401(k) Plan.
9
Stock Awards
The following table sets forth information concerning options granted
to each of the named executive officers of the Company who were awarded options
during the fiscal year ended December 31, 2004.
Option Grants in Last Fiscal Year
---------------------------------
Individual Grants
---------------------------------------------------------------
Number Percent of Total
of Options Granted
Options to Employees in Exercise Price Expiration
Name Granted Fiscal Year ($/Share) Date
---- ------- ----------- --------- ----------
Lonnie R. Trasamar 3,500 44% $33.38 3/16/14
James D. Moll 2,200 28% $33.38 3/16/14
James R. Sauer 2,200 28% $33.38 3/16/14
The following table sets forth information concerning options held by
the named executives as of December 31, 2004. The Company has not granted to the
named executive officers any stock appreciation rights.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options/SARs in-the-Money Options/SARs
Acquired on Value at Fiscal Year-End at Fiscal Year-End
Exercise Realized (#) ($)
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
- --------------------------------------------------------------------------------------------------------------------------------
Lonnie R. Trasamar 3,131 34,723 3,500 / 6,561 -- / 76,108 (1)
James D. Moll -- -- 2,875 / 675 12,906 / 12,906 (2)
James R. Sauer -- -- 2,470 / 270 5,162 / 5,162 (2)
- ----------------------
(1) Based upon an exercise price of $20.90 per share and the closing market
price of $32.50 at December 31, 2004.
(2) Based upon an exercise price of $13.38 per share and the closing market
price of $32.50 as of December 31, 2004.
10
- --------------------------------------------------------------------------------
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------------------------------
The Bank had no "interlocking" relationships existing on or after
January 1, 2004 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.
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.
- --------------------------------------------------------------------------------
PROPOSAL 2 -- RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
McGladrey & Pullen, LLP were the Company's independent auditors for
fiscal 2004. The Board of Directors has appointed McGladrey & Pullen, LLP to be
its accountants for the fiscal year ending December 31, 2005, subject to
ratification by the Company's stockholders. The engagement of McGladrey &
Pullen, LLP was approved in advance by the Audit Committee. 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.
Ratification of the appointment of the independent auditors requires
the affirmative vote of a majority of the votes cast by the stockholders of the
company at the meeting. The Board of Directors recommends that stockholders vote
"FOR" the ratification of the appointment of McGladrey & Pullen, LLP as the
Company's independent auditors for the 2005 fiscal year.
- --------------------------------------------------------------------------------
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 30, 2005. 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 15, 2006, 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.
11
- --------------------------------------------------------------------------------
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 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.
- --------------------------------------------------------------------------------
ANNUAL REPORTS
- --------------------------------------------------------------------------------
The Company's Annual Report to Stockholders for the year ended December
31, 2004, including financial statements, will be mailed on March 30, 2005 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
for the year ended December 31, 2004. 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 30, 2005
12
- --------------------------------------------------------------------------------
WELLS FINANCIAL CORP.
- --------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
APRIL 27, 2005
- --------------------------------------------------------------------------------
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
Company's corporate offices located at 53 1st Street, S.W., Wells, Minnesota on
April 27, 2005, at 4:00 p.m., local time and at any and all adjournments
thereof, as follows:
FOR WITHHELD
--- --------
1. The election as director of the nominees for
director listed below, each for a three-year term: |_| |_|
Randel I. Bichler
Dale E. Stallkamp
INSTRUCTIONS: To withhold your vote for any individual nominee,
-------------
insert the nominee's name on the line provided below.
---------------------------------------------------------------------
FOR AGAINST ABSTAIN
--- ------- -------
2. To ratify the appointment of
McGladrey & Pullen, LLP as independent
auditors for the Company
for the 2005 fiscal year. |_| |_| |_|
The Board of Directors recommends a vote "FOR" each of the listed proposals.
- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
SIGNED PROXY WILL BE VOTED "FOR" THE PROPOSALS STATED. 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
30, 2005 and the 2004 Annual Report to Stockholders.
|_| Please check here if you plan to attend the Meeting.
Dated: , 2005
------------------------------------
- ---------------------------------------- ----------------------------------
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.
- --------------------------------------------------------------------------------