[MID CONTINENT BANCSHARES, INC. LETTERHEAD]
December 20, 1996
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of Mid Continent
Bancshares, Inc., I cordially invite you to attend the Annual Meeting of
Stockholders (the "Meeting") to be held at the El Dorado Country Club, 1100
Country Club Lane, El Dorado, Kansas, on January 23, 1997, at 2:00 p.m. The
attached Notice of Annual Meeting and Proxy Statement describe the formal
business to be transacted at the Meeting. During the Meeting, I 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.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE
ENCLOSED PROXY CARD AND RETURN 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 the Meeting. YOUR VOTE IS VERY IMPORTANT.
Sincerely,
/s/ Richard T. Pottorff
Richard T. Pottorff
Chairman of the Board, President,
and Chief Executive Officer
Mid Continent Bancshares, Inc.
MID CONTINENT BANCSHARES, INC.
124 WEST CENTRAL
EL DORADO, KANSAS 67042
(316) 321-2700
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 23, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of Mid Continent Bancshares, Inc. ("the Company"), will be held at
the El Dorado Country Club, 1100 Country Club Lane, El Dorado, Kansas, on
January 23, 1997, at 2:00 p.m.
A proxy card and a proxy statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon the
following matters:
1. The election of three directors of the Company; and
2. The ratification of the appointment of Deloitte & Touche LLP as
independent auditors of Mid Continent Bancshares, Inc. for the fiscal
year ending September 30, 1997.
The transaction of such other matters as may properly come before the Meeting or
any adjournments thereof may also be acted upon. The Board of Directors is not
aware of any other business to come before the Meeting. Any action may be taken
on 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 December 5, 1996
are the stockholders entitled to vote at the Meeting and any adjournments
thereof.
EACH STOCKHOLDER, WHETHER OR NOT HE OR SHE PLANS TO ATTEND THE MEETING, IS
REQUESTED TO SIGN, DATE, AND RETURN THE ENCLOSED 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/ Cheryl A. Wilkerson
Cheryl A. Wilkerson
Secretary
El Dorado, Kansas
December 20, 1996
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE 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
MID CONTINENT BANCSHARES, INC.
124 WEST CENTRAL
EL DORADO KANSAS 67042
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 23, 1997
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Mid Continent Bancshares, Inc. (the
"Company") to be used at the Annual Meeting of Stockholders of the Company which
will be held at the El Dorado Country Club, 1100 Country Club Lane, El Dorado,
Kansas, on January 23, 1997, 2:00 p.m. local time. The accompanying Notice of
Meeting and this Proxy Statement are being first mailed to stockholders on or
about December 20, 1996. The Company holds all of the outstanding stock of
Mid-Continent Federal Savings Bank (the "Savings Bank").
At the Meeting, stockholders will consider and vote upon (i) the election
of three directors, and (ii) the ratification of the appointment of Deloitte &
Touche LLP as independent auditors of the Company for the fiscal year ending
September 30, 1997. The Board of Directors of the Company (the "Board" or the
"Board of Directors") knows of no additional matters that will be presented for
consideration at the Meeting. Execution of a proxy, 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.
VOTING AND REVOCABILITY OF PROXIES
Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted at
the Meeting and all adjournments thereof. Proxies may be revoked by written
notice to the Secretary of the Company at the address 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. Proxies solicited by the Board of Directors will be voted in
accordance with the directions given therein. Where no instructions are
indicated, proxies will be voted "FOR" the nominees for directors set forth
below and "FOR" the other listed proposal. The proxy confers discretionary
authority on the persons named therein to vote with respect to the election of
any person as a director where the nominee is unable to serve, or for good cause
will not serve, and matters incident to the conduct of the Meeting.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Stockholders of record as of the close of business on December 5, 1996
(the "Record Date"), are entitled to one vote for each share of common stock of
the Company ("Common Stock") then held. As of the Record Date, the Company had
2,016,750 shares of Common Stock issued and outstanding.
The articles of incorporation of the Company ("Articles of Incorporation")
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. Beneficial ownership is determined pursuant
to the definition in the Articles of Incorporation and includes shares
beneficially owned by such person or any of his or her affiliates or associates
(as defined in the Articles of Incorporation), 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 issuer 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. In the event there are not sufficient votes for a quorum or to ratify
any proposals at the time of the Meeting, the Meeting may be adjourned in order
to permit the further solicitation of proxies.
As to the election of directors, 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 one or more of the nominees being
proposed. Under Kansas law and the Company's Bylaws, directors are elected by a
plurality of votes cast, without respect to either (i) Broker Non-Votes (shares
for which a broker indicates on the proxy that it does not have discretionary
authority as to such shares to vote on such matter) or (ii) proxies as to which
authority to vote for one or more of the nominees being proposed is withheld.
As to the ratification of independent auditors as set forth in Proposal II
by checking the appropriate box, a stockholder may: vote "FOR" the item, (ii)
vote "AGAINST" the item, or (iii) "ABSTAIN" with respect to the item. Under the
Company's Articles of Incorporation and Bylaws, unless otherwise required by
law, all 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.
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 "1934 Act"). The following table sets
forth, as of the Record Date, certain information as to the Common Stock
beneficially owned by persons and groups in excess of 5% of the Common Stock and
the ownership of all executive officers and directors of the Company as a group.
Management knows of no person other than those set forth below who owns more
than 5% of the outstanding shares of Common Stock at the Record Date.
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Percent of Shares of
Amount and Nature of Common Stock
Name and Address of Beneficial Owner Beneficial Ownership Outstanding
- ------------------------------------ -------------------- --------------------
Mid-Continent Federal Savings Bank
Employee Stock Ownership Plan Trust ("ESOP")
124 West Central
El Dorado, Kansas (1) 135,266 6.7%
Wellington Management Company
75 State Street
Boston, Massachusetts (2) 231,400 11.5%
First Financial Fund, Inc.
One Seaport Plaza - 25th Floor
New York, NY 10292 (3) 181,000 9.0%
All Directors and Executive Officers as a Group
(8 persons)(4) 288,985 13.7%
- ----------------------------------
(1) The ESOP purchased such shares for the exclusive benefit of plan employee
participants with funds borrowed from the Company. These shares are held
in a suspense account and will be allocated among ESOP participants
annually on the basis of compensation as the ESOP debt is repaid. The ESOP
Trustee must vote all shares allocated to participant accounts under the
ESOP as directed by participants. Unallocated shares and shares for which
no timely voting directors is received will be voted by the ESOP Trustee
as directed by the ESOP Committee. As of the Record Date, 19,666 shares
have been allocated under the ESOP to participant accounts.
(2) Based on a Schedule 13G dated February 1996. Amount shown may include some
or all of the shares of Common Stock held by First Financial Fund, Inc.
(3) Based on a Schedule 13G dated February 1996.
(4) 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 effectively exercise sole voting and investment power,
unless otherwise indicated. Includes options that may be exercised within
60 days of the Record Date to purchase 82,325 shares of Common Stock held
by executive officers and directors granted under the Mid Continent
Bancshares, Inc. 1994 Stock Option Plan (the "1994 Stock Option Plan").
Includes 39,102 shares of Common Stock held by the Mid-Continent Federal
Savings Bank Management Stock Bonus Plan (the "Management Stock Bonus
Plan") over which shares individuals in the named group exercise shared
voting and investment power. Excludes 131,671 shares (135,266 shares minus
3,595 shares allocated to executive officers) held by the ESOP over which
certain directors, as trustees to the ESOP, exercise shared voting and
investment power. Such individuals disclaim beneficial ownership with
respect to such shares held by the ESOP.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the 1934 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, on Forms
3, 4, and 5, with the Securities and Exchange Commission and to
-3-
provide copies of those Forms 3, 4, and 5 to the Company. The Company is not
aware of any beneficial owner, as defined under Section 16(a), 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 that no Forms 5 were
required, the Company believes that all Section 16(a) filing requirements
applicable to its executive officers and directors were complied with during the
fiscal year ended September 30, 1996.
PROPOSAL I - ELECTION OF DIRECTORS
The Articles of Incorporation require that directors be divided into three
classes, as nearly equal in number as possible, each class to serve for a three
year period, with approximately one-third of the directors elected each year.
The Board of Directors currently consists of six members. Three directors will
be elected at the Meeting, two to serve for a three-year term, and one to serve
for a one-year term, as noted below, or until his successor has been elected and
qualified.
Should the number of directors of the Company be reduced, the
directorship(s) eliminated shall be allocated among classes appropriate so that
the number of directors in each class is as specified in the immediately
preceding paragraph. Notwithstanding the foregoing, no decrease in the number of
directors shall have the effect of shortening the term of any incumbent
director.
Richard T. Pottorff, Kenneth B. Dellett, and Ron J. McGraw have been
nominated by the Board of Directors to serve as directors. Messrs. Pottorff,
Dellett, and McGraw are currently members of the Board. It is intended that the
persons named in the proxies solicited by the Board will vote for the election
of the named nominees. If a nominee is unable to serve, the shares represented
by all valid proxies will be voted for the election of such substitute 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 a nominee
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 Savings Bank, the expiration date of their current term as a director,
and the number and percentage of shares of the Common Stock beneficially owned.
Each director of the Company is also a member of the Board of Directors of the
Savings Bank.
Shares of
Year First Current Common Stock
Elected or Term to Beneficially Owned Percent
Name Age(1) Appointed(2) Expire (3)(4)(5) of Class
- ---- ------ ------------ ------- ----------- --------
BOARD NOMINEES FOR TERM TO EXPIRE IN 2000
Richard T. Pottorff 62 1978 1997 69,495(6) 3.4%
Kenneth B. Dellett 66 1975 1997 33,737(7) 1.7%
BOARD NOMINEE FOR TERM TO EXPIRE IN 1998
Ron J. McGraw 57 1981 1997 43,545(7) 2.2%
-4-
DIRECTORS CONTINUING IN OFFICE
Thomas C. Hand 66 1986 1999 32,737(7) 1.6%
Donald Adlesperger 67 1994 1999 21,000 1.0%
Larry R. Goddard 50 1994 1998 46,799(8) 2.3%
- ------------------------------
(1) At September 30, 1996.
(2) Refers to the year the individual first became a director of the Company
or the Savings Bank. All directors of the Savings Bank during January 1994
became directors of the Company when it was incorporated in January 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 effectively exercise sole voting and investment power,
unless otherwise indicated.
(4) Beneficial ownership as of the Record Date.
(5) Excludes shares of Common Stock held by the Management Stock Bonus Plan
over which Directors Dellett, Hand and McGraw exercise shared voting and
dispositive power solely by reason of serving as a trustee.
(6) Includes 25,262 shares of Common Stock that may be acquired through the
exercise of stock options which are currently exercisable or become
exercisable within 60 days of the Record Date.
(7) Excludes 135,266 shares of Common Stock held under the ESOP for which such
individual serves as a member of the ESOP Committee or as an ESOP Trustee.
Excludes 36,405 shares of Common Stock held by the Management Stock Bonus
Plan (39,102 shares minus 2,697 shares that have been granted to but
remain unvested for the individual) for which such individual serves as a
trustee. Such individual disclaims beneficial ownership with respect to
such shares held in a fiduciary capacity. Includes 11,241 shares of Common
Stock that may be acquired through the exercise of stock options which are
currently exerciseable or become exerciseable within 60 days of the Record
Date.
(8) Includes 16,270 shares of Common stock that may be acquired through the
exercise of stock options which are currently exercisable or become
exercisable within 60 days of the Record Date.
The principal occupation for the last five years of each director and each
nominee for director of the Company is set forth below.
Richard T. Pottorff has served as a Director and Officer of the Savings
Bank since 1978 and of the Company since its incorporation in January 1994. Mr.
Pottorff is also a past Director of the FHLB of Topeka and has served as a
member of the El Dorado Chamber of Commerce, the Wichita Association of Real
Estate Brokers and the Wichita Homebuilders Association. In addition, Mr.
Pottorff is the Chairman of the Federal and State Affairs Committee of the
Heartland Community Bankers Association. Mr. Pottorff is also a past Chairman of
the Heartland Community Bankers Association.
Kenneth B. Dellett has been a Director of the Savings Bank since 1975 and
of the Company since its incorporation in January 1994. Dr. Dellett is retired
from being self employed as a physician. He is a past member of the El Dorado
Chamber of Commerce. Dr. Dellett is also a member of the University of Kansas
Medical Alumni Association and the Kansas City Society of Ophthalmology and
Otolaryngology.
-5-
Ron J. McGraw has been a Director of the Savings Bank since 1981 and of the
Company since its incorporation in January 1994. Mr. McGraw is also President,
Chairman of the Board and a majority owner of Sunflower Roofing, Inc., a roofing
contractor. Mr. McGraw was a Board member of the Susan B. Allen Memorial
Hospital for 15 years and a Member of the El Dorado Chamber of Commerce.
Thomas C. Hand has served as a Director of the Savings Bank since 1986 and
of the Company since its incorporation in January 1994. Mr. Hand is the
President, Chief Executive Officer and majority owner of OTASCO of El Dorado,
Inc., a real estate company doing business as Hand Realty Company. He is the
past President of the Board of Directors of the Susan B. Allen Hospital and is
currently the Secretary/Treasurer of the El Dorado Area Hospital Services
Foundation.
Donald Adlesperger has served as a Director of the Savings Bank and the
Company since 1994. Mr. Adlesperger is President of Triple A Builders Supply,
which includes stores in El Dorado, Augusta, and Newton, and also the Big A
Supply Wholesale Electric Store in El Dorado. Mr. Adlesperger is a Past
Commissioner for the City of El Dorado.
Larry R. Goddard has been with the Savings Bank since 1978 and has served
as a Director of the Savings Bank and the Company since 1994. Mr. Goddard is a
past President of the Mid-West Savings Conference and has served as Chairman of
the Real Estate Mortgage Committee of the Heartland Community Bankers
Association. He is also a member of the Lions Club, a member of the Partners in
Education, a director of El Dorado, Inc., and a member of the Community Action
for Retail & Revitalization Board.
Meetings and Committees of the Board of Directors
The Board of Directors of the Company conducts its business through
meetings of the Board and through activities of its committees. All committees
act for both the Company and the Savings Bank. During the fiscal year ended
September 30, 1996, the Board of Directors 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 Savings Bank or the Company and committees during
the time such director served during the fiscal year ended September 30, 1996.
The Company's full Board of Directors acts as a nominating committee for
selecting the management nominees for election as directors in accordance with
the Company's Bylaws. This is not a standing committee. In its deliberations,
the Nominating Committee considers the candidate's knowledge of the banking
business and involvement in community, business and civic affairs, and also
considers whether the candidate would allow the Board to continue its geographic
diversity that provides for adequate representation of each of its market areas.
A stockholder recommending a nominee must provide written notice delivered to,
or mailed and received at, the Secretary of the Company not less than 60 days
prior to the anniversary date of the immediately preceding annual meeting of
stockholders of the Company. The notice must set forth certain information,
including but not limited to name, age, business, and residence address and
ownership interest of both the stockholder and the nominee, as set forth more
fully in Article 7.F of the Articles of Incorporation. During fiscal year 1996,
the Board of Directors met one time as the Nominating Committee.
The Audit Committee is comprised of Directors Dellett, McGraw, Hand and
Adlesperger. The Audit Committee annually selects the independent auditors and
meets with the accountants to discuss the
-6-
annual audit. The Audit Committee is further responsible for internal controls
for financial reporting. The Audit Committee, a standing committee, met four
times in fiscal year 1996.
Directors' Compensation
Each member of the Board of Directors of the Savings Bank currently is
paid a fee of $900 per month plus $200 for each meeting attended, except that
President Richard T. Pottorff and Executive Vice President Larry Goddard receive
only the $900 Director's fee. Each non-employee member of the Company's Board of
Directors receives a Director's fee of $100 per quarter. The Savings Bank paid a
total of $74,400 and the Company paid a total of $1,600 in director's fees for
the fiscal year ended September 30, 1996.
Outside Director Consultation and Retirement Plan. The Savings Bank's
Board adopted a consultation and retirement plan (the "Consultation Plan") to
provide retirement benefits to directors of the Savings Bank who are not
officers or employees ("Outside Directors"), which became effective on January
1, 1995. The Outside Directors have provided expertise in enabling the Savings
Bank to experience successful growth and profitability. The Consultation Plan
will help to insure that the Savings Bank has the continued services of these
persons as directors to assist in the conduct of the Savings Bank's business
affairs in the future. Any director who has served as an Outside Director for at
least ten years as of January 1, 1994, is a participant in the Consultation
Plan. Within 30 days of a participant's termination as a director with the
Savings Bank upon attainment of the mandatory retirement age 75, any participant
who has agreed to provide consulting services to the Savings Bank thereafter
shall be designated as a consulting director. A consulting director will be paid
a $300 monthly stipend under the Consultation Plan for a period of 120 months.
If the consulting director shall not survive to receive all 120 payments, such
payments shall nevertheless be made to the surviving spouse, if applicable, or
secondarily to the participant's estate. At the expiration of the period for
which the participant is entitled to benefits, his status as a consulting
director shall cease. In the event of the death, disability, or retirement on or
after age 65 of a director having completed at least 10 years of service or in
the event of a change of control of the Savings Bank or the Company whereby a
director shall no longer remain a director of the Savings Bank or the successor
entity, then benefits payable shall commence as if such director shall have
actually attained age 75. The Consultation Plan is unfunded. All benefits
payable under the plan will be paid by the Savings Bank from current assets.
There are no tax consequences to either the director or the Savings Bank prior
to payment of benefits. Upon receipt of payment of benefits, the director will
recognize taxable ordinary income in the amount of such payment received and the
Savings Bank will be entitled to recognize a tax-deductible compensation
expense.
Stock Awards. On January 27, 1995, the stockholders of the Company
approved the Mid Continent Bancshares, Inc. 1994 Stock Option Plan ("1994 Stock
Option Plan") and the Mid-Continent Federal Savings Bank Management Stock Bonus
Plan ("Management Stock Bonus Plan"). Pursuant to the terms of the 1994 Stock
Option Plan, each non-employee director received (as of the date of stockholder
approval) options to purchase 11,241 shares of Common Stock. Under the
Management Stock Bonus Plan, each non-employee director (as of the date of
stockholder approval these directors were Directors Dellett, Hand, and McGraw)
received 4,496 shares of restricted stock. Options granted to these non-employee
directors became exercisable on the grant date. Restricted stock granted to
these non-employee directors vested 20% on June 27, 1995 and an additional 20%
annually thereafter.
-7-
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 of the
Company for the fiscal years provided below. The Company has no full-time
employees, relying upon employees of the Savings Bank for the limited services
required by the Company. All compensation shown in the following table was paid
by the Savings Bank.
Long Term Compensation
Annual Compensation Awards
------------------------------------- -----------------------
Securities
Restricted Underlying
Name and Other Annual Stock Options/ All Other
Principal Position Year Salary Bonus Compensation(1) Awards($)(2) SARs(#) Compensation(4)
- ------------------ ---- --------- ------- --------------- ------------ ---------- ---------------
Richard T. Pottorff 1996 $ 114,500 $33,911 $13,885 $ -- -- $21,905
President and Chief 1995 $ 114,500 $ 5,250 $ 2,581 $192,312(3) 37,895 $11,090
Executive Officer 1994 $ 114,500 $55,024 $ 2,692 $ -- -- $ 1,691
Larry R. Goddard 1996 $ 86,000 $24,889 $12,911 $ -- -- $17,395
Chief Operating 1995 $ 86,000 $ 3,321 $ 2,519 $147,933(3) 24,405 $ 8,155
Officer and Chief 1994 $ 82,800 $39,320 $ 2,301 $ -- -- $ 1,245
Financial Officer
Harold G. Siemens 1996 $ 84,400 $16,504 $3,000 $ -- -- $14,860
Senior Vice 1995 $ 82,000 $ 2,526 $3,000 $ 72,803(3) 10,606 $ 7,533
President-Lending 1994 $ 78,800 $31,045 $3,120 $ -- -- $ 1,081
- ------------------------
(1) Includes the value of certain other benefits, such as travel expenses,
automobile allowances, and club membership fees. For fiscal year 1996, for
each of Messrs. Pottorff and Goddard, includes $10,800 in director's fees.
(2) On September 30, 1996, Mr. Pottorff had 9,836 shares, Mr. Goddard had 7,554
shares, and Mr. Siemens had 3,718 shares, of restricted stock in the
aggregate which had a total value of $186,884, $143,526, and $70,642,
respectively (calculated by multiplying the aggregate number of restricted
stock by the Common Stock's closing market price as of the last day of the
1996 fiscal year). Dividends are paid on the restricted stock awarded.
(3) Calculated by multiplying the number of shares of restricted stock by the
closing price of $11.75 on January 27, 1995, the date of grant.
(4) For Mr. Pottorff, for fiscal year 1994, consists of the Savings Bank's
contribution to its 401(k) Savings Plan of $1,691; for fiscal year 1995,
consists of an allocation of 485.67 shares of Common Stock under the ESOP
valued at $5,342 (based upon the Common Stock's closing price of $11.00 on
December 30, 1994), the Savings Bank payment to the pension plan of $4,365,
and the dollar value of insurance premiums paid by the Savings Bank of
$1,383; and for fiscal year 1996, consists of an allocation of 904.33
shares of Common Stock under the ESOP valued at $16,730 (based upon the
Common Stock's closing price of $18.50 on December 29, 1995), the Savings
Bank payment to the pension plan of $3,792, and the dollar value of
insurance premiums paid by the Savings Bank of $1,383. For Mr. Goddard, for
fiscal year 1994, consists of the Savings Bank's contribution to its 401(k)
Savings Plan of $1,245; for fiscal year 1995, consists of an allocation of
398.06 shares of Common Stock under the ESOP valued at $4,379 (based upon
the Common Stock's closing price of $11.00 on December 30, 1994), the
Savings Bank payment (footnotes continued on following page)
-8-
(footnotes continued from prior page)
to the pension plan of $3,566, and the dollar value of insurance premiums
paid by the Savings Bank of $210; and for fiscal year 1996, consists of an
allocation of 785.04 shares of Common Stock under the ESOP valued at
$14,523 (based upon the Common Stock's closing price of $18.50 on December
29, 1995), the Savings Bank payment to the pension plan of $2,597, and the
dollar value of insurance premiums paid by the Savings Bank of $275. For
Mr. Siemens, for fiscal year 1994, consists of the Savings Bank's
contribution to its 401(k) Savings Plan of $1,081; for fiscal year 1995,
consists of an allocation of 369.51 shares of Common Stock under the ESOP
valued at $4,065 (based upon the Common Stock's closing price of $11.00 on
December 30, 1994), the Savings Bank payment to the pension plan of
$3,306, and the dollar value of insurance premiums paid by the Savings
Bank of $162; and for fiscal year 1996, consists of an allocation of
652.11 shares of Common Stock under the ESOP valued at $12,064 (based upon
the Common Stock's closing price of $18.50 on December 29, 1995), the
Savings Bank payment to the pension plan of $2,542, and the dollar value
of insurance premiums paid by the Savings Bank of $254.
Employment Agreements. The Savings Bank has entered into an employment
agreement with Richard T. Pottorff, President and Chief Executive Officer. The
employment agreement is for a term of three years and has a base salary of
$114,500. The employment agreement is terminable by the Savings Bank for just
cause. Just cause is defined in the agreement as termination by reason of
personal dishonesty; incompetence; willful misconduct; breach of a fiduciary
duty involving personal profit; intentional failure to perform stated duties;
willful violation of any law, rule, regulation (other than traffic violations or
similar offenses); entering into a final cease-and-desist order; or material
breach of any provision of the agreement. If the agreement is terminated for
just cause, Mr. Pottorff only receives his salary up to the date of termination.
If the Savings Bank terminates the agreement without just cause, Mr. Pottorff is
entitled to a continuation of salary from the date of termination through the
remaining term of the agreement.
The agreement provides that in the event of involuntary termination of
employment in connection with, or within one year after, any change in control
of the Company or the Savings Bank not approved by two-thirds of the Board of
Directors, Mr. Pottorff will be paid a lump sum equal to 2.99 times his average
taxable compensation paid during the five years prior to the change in control.
If a lump sum payment had been made as of September 30, 1996, Mr. Pottorff would
have received a payment of up to $484,100. The payment would be an expense to
the Savings Bank, reducing net income and the Savings Bank's capital by that
amount. The employment agreement can be renewed at the end of the 36 month term
if the Board of Directors determines that Mr. Pottorff has met the Board's
requirements and standards.
The Savings Bank has entered into a nearly identical agreement with Larry
R. Goddard that provides for a base salary of $86,000 and, if a lump sum had
been paid as of September 30, 1996 due to a change in control, Mr. Goddard would
have received a payment of up to $354,500.
1994 Stock Option Plan. The purpose of the 1994 Stock Option Plan is to
provide additional incentive to certain officers, directors, and key employees
by facilitating their purchase of a stock interest in the Company. The 1994
Stock Option Plan became effective on January 27, 1995 and provides for a term
of ten years, after which no awards may be made, unless earlier terminated by
the Board of Directors pursuant to the terms of the 1994 Stock Option Plan.
-9-
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
- ---------------------------------------------------------------------------------------------------------
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options/SARs in-the-Money Options/SARs
Acquired on Value at Fiscal Year-End at Fiscal Year-End (1)
Exercise Realized (#) ($)
Name (#) ($) Exercisable/Unexercisale Exercisable/Unexercisable
- ----------------------------------------------------------------------------------------------------------
Richard T. Pottorff 0 $0 12,631 / 25,264 $91,575 / $183,164
Larry R. Goddard 0 $0 8,135 / 16,270 $59,979 / $117,958
Harold G. Siemens 0 $0 3,535 / 7,071 $25,629 / $ 51,265
- -------------------------------
(1) Based upon the difference between an exercise price of $11.75 and the
closing price of the Common Stock on September 30, 1996 of $19.00.
Pension Plan. The Savings Bank sponsors a tax-qualified defined benefit
pension plan (the "Pension Plan"). All full-time employees of the Savings Bank
are eligible to participate after working 1,000 hours during one year of service
and attainment of age 21. A qualifying employee becomes fully vested in the
Pension Plan upon completion of five years of service. The Pension Plan is
intended to comply with ERISA.
The Pension Plan provides for monthly payments to each participating
employee at normal retirement age (age 65). The monthly benefits payable under
the Pension Plan are equal to, for all plan years after 1976, 2.35% of the first
$833 of monthly compensation during the plan year plus 2.95% of that portion of
monthly compensation during the plan year that exceeds $833. A participant may
elect an early retirement at age 60 with 10 years of service, and may elect to
receive a reduced monthly benefit. Benefits are paid for a period of up to 180
months following retirement. The Pension Plan also provides for payments in the
event of disability or death. The estimated annual benefits payable upon the
retirement of Mr. Pottorff (at normal retirement age) is $61,237. Benefits are
payable in the form of various annuity alternatives, including a joint and
survivor option, or in a lump-sum amount. Benefits under the Pension Plan are
not subject to offset for Social Security benefits.
Compensation Committee Interlocks and Insider Participation
For the fiscal year ended September 30, 1996, the Compensation Committee
consisted of Messrs. Pottorff, Dellett, McGraw, Hand, and Adlesperger. The
Compensation Committee, a standing committee, meets annually and reviews
performance, industry salary surveys and the recommendations of management
concerning compensation prior to the time such matters are considered by the
Board of Directors. Mr. Richard T. Pottorff is the Chairman of the Board,
President and Chief Executive Officer of the Savings Bank and Company. Mr.
Pottorff does not participate in Compensation Committee matters involving his
compensation.
Report of the Compensation Committee on Executive Compensation
The executive officers of the Company and the Savings Bank consist of Mr.
Richard T. Pottorff (President, Chief Executive Officer), Larry R. Goddard
(Executive Vice President, Chief Operating Officer and Chief Financial Officer),
and Harold G. Siemens (Senior Vice President).
-10-
The Compensation Committee meets annually to review compensation paid to
executive officers and to determine the compensation levels for all employees.
The Compensation Committee reviews various published surveys of compensation
paid to employees performing similar duties for depository institutions and
their holding companies, with a particular focus on the level of compensation
paid by comparable institutions in and around the Company's market area,
including institutions with total assets of between $100 million and $300
million. Although the Compensation Committee does not specifically set
compensation levels for executive officers based on whether particular financial
goals have been achieved by the Company the Compensation Committee does consider
the overall profitability of the Company when making these decisions. With
respect to each particular employee, his or her particular contributions to the
Company over the past year are also evaluated.
During the fiscal year ended September 30, 1996, Richard T. Pottorff,
President and Chief Executive Officer, received an increase in salary from
$114,500 to $116,900. The Compensation Committee considers the annual
compensation paid to chief executive officers of financial institutions in the
State of Kansas and surrounding states with assets of between $100 million and
$300 million and the individual job performance of such individual in
consideration of its specific salary decision with respect to compensation to be
paid to the President in the future.
Compensation Committee for the fiscal year ended September 30, 1996:
Richard T. Pottorff
Kenneth B. Dellett
Ron J. McGraw
Thomas C. Hand
Donald Adlesperger
Stock Performance Graph
Set forth below is a stock performance graph comparing the cumulative
total shareholder return on the Common Stock with (a) the total return index for
domestic companies listed on the Nasdaq Stock Market and (b) the total return
index for banks listed on the Nasdaq Stock Market. These total return indices of
the Nasdaq Stock Market are computed by the Center for Research in Securities
Prices ("CRSP") at the University of Chicago. All three investment comparisons
assume the investment of $100 as of June 27, 1994 (the date of initial issuance
of the Common Stock) and the reinvestment of dividends when paid. In the stock
performance graph below, the periods compared were June 27, 1994 and the
Company's fiscal year ends of September 30, 1994, 1995, and 1996.
-11-
There can be no assurance that the Company's future stock performance will
be the same or similar to the historical stock performance shown in the graph
below. The Company neither makes nor endorses any predictions as to stock
performance.
[GRAPHIC OMITTED-PLOTTING POINTS BELOW]
============================================================================
6/27/94 9/30/94 9/30/95 9/30/96
- ----------------------------------------------------------------------------
CRSP Nasdaq U.S. Index $100.00 $110.26 $152.47 $180.72
- ----------------------------------------------------------------------------
CRSP Nasdaq Bank Index $100.00 $102.12 $128.76 $164.60
- ----------------------------------------------------------------------------
Mid Continent Bancshares, Inc. $100.00 $115.00 $189.86 $198.78
============================================================================
-12-
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Savings Bank, like many financial institutions, has followed a policy
of granting various types of loans to officers, directors and employees. The
loans have been made in the ordinary course of business and on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with the Savings Bank's other customers, and do
not involve more than the normal risk of collectibility, nor present other
unfavorable features. All loans by the Savings 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 Savings Bank.
PROPOSAL II -- RATIFICATION OF APPOINTMENT OF AUDITORS
Deloitte & Touche LLP was the Company's independent public accountant for
the 1996 fiscal year. The Board of Directors has approved the selection of
Deloitte & Touche LLP as its auditors for the 1997 fiscal year, subject to
ratification by the Company's stockholders. Representatives of Deloitte & Touche
LLP will not be present at the Meeting to respond to stockholders' questions,
and as a result will not have an opportunity to make a statement at the Meeting.
Ratification of the appointment of the 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 Deloitte & Touche LLP as the Company's
auditors for the 1997 fiscal year.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above 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.
MISCELLANEOUS
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. 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.
The Company's 1996 Annual Report to Stockholders, including financial
statements, will be mailed to all stockholders of record as of the close of
business on December 5, 1996. Any stockholder who has not received a copy of the
Company's 1996 Annual Report may obtain a copy by writing to the Secretary of
the Company. The Company's 1996 Annual Report is not to be treated as a part of
the proxy solicitation material or as having been incorporated herein by
reference.
-13-
STOCKHOLDER PROPOSALS
In order to be eligible 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
124 West Central, El Dorado, Kansas 67042, no later than August 22, 1997. Any
such proposals shall be subject to the requirements of the proxy rules adopted
under the 1934 Act.
FORM 10-K
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE
RECORD DATE UPON WRITTEN REQUEST TO THE SECRETARY, MID CONTINENT BANCSHARES,
INC., 124 WEST CENTRAL, EL DORADO, KANSAS 67042.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Cheryl A. Wilkerson
Cheryl A. Wilkerson
Secretary
El Dorado, Kansas
December 20, 1996
-14-
MID CONTINENT BANCSHARES, INC.
124 WEST CENTRAL
EL DORADO, KANSAS 67042
(316) 321-2700
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 23, 1997
The undersigned hereby appoints the Board of Directors of Mid Continent
Bancshares, Inc. (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 El
Dorado Country Club, 1100 Country Club Lane, El Dorado, Kansas, on January 23,
1997, at 2:00 p.m. and at any and all adjournments thereof, in the following
manner:
FOR WITHHELD
1. The election as director of all nominees
listed below, each for a term expiring in
in year stated (except as marked to the contrary): |_| |_|
Richard T. Pottorff (2000)
Kenneth B. Dellett (2000)
Ron J. McGraw (1998)
INSTRUCTIONS: To withhold your vote for any individual nominee, insert the
nominee's name on the line provided below.
FOR AGAINST ABSTAIN
2. The ratification of Deloitte & Touche LLP
as independent auditors of Mid Continent
Bancshares, Inc. for the fiscal year ending |_| |_| |_|
September 30, 1997.
In their discretion, such attorneys and proxies are authorized to vote upon such
other business as may properly come before the Meeting or any adjournments
thereof.
The Board of Directors recommends a vote "FOR" all of the above listed
propositions.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS 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. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS
OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting, or at
any adjournments thereof, and after notification to the Secretary of the
Corporation at the Meeting of the stockholder's decision to terminate this
proxy, the power of said attorneys and proxies shall be deemed terminated and of
no further force and effect. The undersigned may also revoke this proxy by
filing a subsequently dated proxy or by notifying the Secretary of the
Corporation of his or her decision to terminate this proxy.
The undersigned acknowledges receipt from the Corporation prior to the
execution of this proxy of an annual report, a Notice of Annual Meeting of
Stockholders and a proxy statement dated December 20, 1996.
Please check here if you
Dated: , 199 |_| plan to attend the Meeting.
------------ -----
_____________________________ ____________________________
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
_____________________________ ____________________________
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this proxy. 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, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
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 ss. 240.14a-11(c) or ss. 240.14a-12
Mid-Continent Bancshares, Inc.
------------------------------------------------
(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: