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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 [ ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Midwest Federal Financial Corp.
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(Name of Registrant as Specified in Its Charter)
Midwest Federal Financial Corp.
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:(1)
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(4) Proposed maximum aggregate value of transaction:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
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March 21, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Midwest Federal Financial Corp. to be held at its main office, 1159 Eighth
Street, Baraboo, Wisconsin, on Thursday, April 24, 1997, at 3:00 p.m., Central
Time.
The attached Notice of Annual Meeting of Stockholders and Proxy
Statement describes the formal business to be transacted at the meeting.
During the meeting, we will also report on the operations of the Corporation.
Directors and officers of the Corporation will be present to respond to any
appropriate questions stockholders may have.
To ensure proper representation of your shares at the Annual Meeting,
please sign, date and return the enclosed proxy card in the enclosed
postage-prepaid envelope as soon as possible even if you currently plan to
attend the meeting. This will not prevent you from voting in person but will
assure that your vote is counted if you are unable to attend the meeting.
Sincerely,
Gary E. Wegner
President and CEO
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MIDWEST FEDERAL FINANCIAL CORP.
1159 EIGHTH STREET
P.O. BOX 450
BARABOO, WISCONSIN 53913-0450
(608) 356-7771
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 24, 1997
NOTICE IS HEREBY GIVEN, that the Annual Meeting of Stockholders
("Meeting") of Midwest Federal Financial Corp. ("Corporation") will be held at
the main office of the Corporation, 1159 Eighth Street, Baraboo, Wisconsin, on
Thursday, April 24, 1997, at 3:00 p.m., Central Time.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of two directors of the Corporation;
2. To approve an amendment to the Corporation's Articles
of Incorporation to increase the number of authorized
shares of Common Stock from 3,000,000 to 9,000,000.
3. Such other matters as may properly come before the
Meeting or any adjournments thereof.
NOTE: The Board of Directors is not aware of any other business to
come before the Meeting.
Any 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. Pursuant to the
Corporation's Bylaws, the Board of Directors has fixed the close of business on
February 28, 1997, as the record date for the determination of the stockholders
entitled to vote at the Meeting and any adjournments thereof.
You are requested to complete and sign the enclosed form of Proxy
which is solicited by the Board of Directors, and to mail it promptly in the
enclosed envelope. The Proxy will not be used if you attend the Meeting and
vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
NANCY L. BILZ
SECRETARY
Baraboo, Wisconsin
March 21, 1997
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE CORPORATION THE EXPENSE
OF FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.
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PROXY STATEMENT
OF
MIDWEST FEDERAL FINANCIAL CORP.
1159 EIGHTH STREET
P.O. BOX 450
BARABOO, WISCONSIN 53913-0450
(608) 356-7771
ANNUAL MEETING OF STOCKHOLDERS
APRIL 24, 1997
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Midwest Federal Financial Corp.
("Midwest Federal" or "Corporation") to be used at the Annual Meeting of
Stockholders ("Meeting") of the Corporation. The Meeting will be held at the
Corporation's main office, 1159 Eighth Street, Baraboo, Wisconsin, on Thursday,
April 24, 1997, at 3:00 p.m., Central Time. The accompanying Notice of Meeting
and this Proxy Statement are being first mailed to stockholders on or about
March 21, 1997.
REVOCATION 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 delivered in person or mailed to the Secretary of the
Corporation at 1159 Eighth Street, P.O. Box 450, Baraboo, Wisconsin 53913-0450,
or the filing of a later 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
of Midwest Federal 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.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Stockholders of record as of the close of business on February 28,
1997, are entitled to one vote for each share of common stock of the
Corporation ("Common Stock") then held. Stockholders are not permitted to
cumulate their votes for the election of directors. As of February 28, 1997,
the Corporation had 1,621,629 shares of Common Stock issued and outstanding.
The presence, in person or by proxy, of the holders of at least a majority of
such issued and outstanding shares shall constitute a quorum at the Meeting.
Persons and groups beneficially owning in excess of 5% of the Common
Stock are required to file certain reports disclosing such ownership pursuant
to the Securities Exchange Act of 1934, as amended ("Exchange Act"). Based
upon such reports the following table sets forth, as of February 28, 1997,
certain information as to those persons who were beneficial owners of more than
5% of the outstanding shares of Common Stock. Management knows of no persons
other than those set forth below who owned more than 5% of the outstanding
shares of Common Stock at February 28, 1997. See "Proposal I -- Election of
Directors" for information regarding
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beneficial ownership of Common Stock by the directors and nominees for
director, the executive officer named in the Summary Compensation Table and all
directors and executive officers as a group.
Name and Amount and Nature Percent of
Address of of Beneficial Common Stock
Beneficial Owner Ownership Outstanding
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Baraboo Federal
Bank, FSB Employee 193,578 11.94%
Stock Ownership
Plan Trust (1)
1159 Eighth Street
P.O. Box 450
Baraboo, WI 53913
Joyce Weigel 100,000 6.17%
5387 Mariner's Cove Drive
Unit 309
Madison, WI 53704
(1) The Baraboo Federal Bank, FSB ("Bank") Employee Stock Ownership Plan
("ESOP") purchased 207,000 shares of the Common Stock for the
exclusive benefit of participating employees with funds borrowed from
the Corporation in connection with the Bank's conversion from mutual
to stock form ("Conversion"). ESOP shares are held in a suspense
account for allocation among participants on the basis of compensation
as the loan is repaid. A committee appointed by the Board of
Directors of the Corporation ("ESOP Committee") administers the ESOP.
The ESOP Committee is composed of Gary E. Wegner, Dean Carter and
Beverly Shook. The Board of Directors has appointed Gary E. Wegner as
trustee for the ESOP ("ESOP Trustee"). The Board of Directors may
instruct the ESOP Trustee regarding investments of funds contributed
to the ESOP. The ESOP Trustee must vote all allocated shares held in
the ESOP according to the instructions of the participating employees.
Unallocated shares will be voted by the ESOP Trustee as directed by
the ESOP Committee. As of February 28, 1997, 98,691 shares held by
the ESOP were allocated to participants' accounts.
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS
The Corporation's Board of Directors is composed of seven members.
The Corporation's Bylaws provide that Directors are to be elected for terms of
three years, approximately one-third of whom are elected annually. Two
directors will be elected at the Meeting to serve for a three- year period or
until their respective successors have been elected and qualified. The
Nominating Committee has nominated for election as directors George F. McArthur
and Robert J. Schwarz. The nominees are current members of the Boards of
Directors of the Corporation and the Bank. Each director of the Corporation is
also a director of the Bank.
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If any nominee is unable to serve, the shares represented by all valid
proxies will be voted for the election of such substitute nominee as the Board
of Directors may recommend or the Board of Directors may amend the Bylaws and
reduce the size of the Board. At this time, the Board knows of no reason why
any nominee might be unavailable to serve.
The nominees must be elected by a plurality of the votes eligible to
be cast at the Meeting, provided that a quorum is present.
The following table sets forth as to each nominee for election as a
director, and as to each director continuing in office, his name, age and
principal occupation or occupations for the past five years, the year in which
he was first elected as a director and the year in which his current term as a
director expires.
Year
First Year
Elected Term
Name Age(1) Principal Occupation Director (2) Expires
---- ------ -------------------- ------------ -------
NOMINEES FOR DIRECTOR
George F. McArthur 66 Chairman of the Board of the Corporation 1967 1997
and Bank; Vice President of McArthur
Towels, Inc., Baraboo, Wisconsin
Robert J. Schwarz 60 Vice Chairman of the Board of the 1975 1997
Corporation and Bank; retired as a
principal in Schwarz Insurance Agency,
Prairie du Sac, Wisconsin
DIRECTORS CONTINUING IN OFFICE
Gary E. Wegner 47 President and Chief Executive Officer of 1988 1998
the Corporation and Bank
Albert R. Dippel 67 Retired as principal in Fishkin, Dippel & 1979 1998
Horman, Baraboo, Wisconsin, a public
accounting firm
Dr. James D. Mathers 44 Private practitioner with Medical 1992 1998
Associates, S.C., Baraboo, Wisconsin
David M. Gunderson 47 President of Gunderson Construction Co., 1990 1999
Inc., Portage, Wisconsin
John D. Jenks 64 President and Chief Executive Officer of 1978 1999
Equity Cooperative Livestock Sales,
Baraboo, Wisconsin
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(1) At December 31, 1996.
(2) Includes prior service on the Board of Directors of the Bank.
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SECURITIES OWNERSHIP OF MANAGEMENT
The following table sets forth, as of February 28, 1997, the number of
shares of Common stock beneficially owned by each director and nominee for
director, the executive officer named in the Summary Compensation Table, and
all directors and executive officers of the Corporation as a group. The
address of each of the persons named in the following table is: c/o Midwest
Federal Financial Corp., 1159 Eighth Street, P.O. Box 450, Baraboo, Wisconsin
53913-0450.
Shares of Common Stock
Beneficially Owned at
Name February 28, 1997 (1) Percent of Class
---- --------------------- ----------------
George F. McArthur 47,945 2.96%
Chairman of the Board
Robert J. Schwarz 49,770 3.07%
Vice Chairman of the Board
Gary E. Wegner 94,097 5.80%
President and Chief Executive
Officer and Director
Albert R. Dippel 36,750 2.27%
Director
David M. Gunderson 40,038 2.47%
Director
John D. Jenks 22,300 1.38%
Director
Dr. James D. Mathers 18,925 1.17%
Director
All directors and executive 412,780 25.45%
officers as a group (19 persons)
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(1) In accordance with Rule 13d-3 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), a person is deemed to be the beneficial
owner of shares if he has or shares voting or investment power with
respect thereto. The table, therefore, includes shares owned by spouses
and other immediate family members, shares held in retirement accounts or
funds or in trust for the benefit of the named individuals, and shares
over which the named individuals otherwise have or share voting or
investment power. In accordance with Rule 13d- 3, this table also
includes 126,826 shares of Common Stock that are subject to outstanding
stock options exercisable within 60 days of February 28, 1997; those
shares are beneficially owned by the named individuals and all other
executive officers as a group as follows: Mr. McArthur - 8,850, Mr.
Schwarz - 13,350, Mr. Wegner - 14,250, Mr. Dippel - 10,350, Mr. Gunderson
-10,350, Mr. Jenks - 13,350, Mr. Mathers - 8,175, and all other executive
officers as a group - 48,151.
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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Boards of Directors of the Corporation and Bank conduct their
business through meetings and committees of the Boards. During the fiscal year
ended December 31, 1996, the Board of Directors of the Corporation held 12
meetings and the Board of Directors of the Bank held 12 meetings. No director
of the Corporation or the Bank attended fewer than 75% of the total meetings of
the Boards and committee, on which he served during this period.
The Audit Committee, consisting of Directors Gunderson, Jenks,
Mathers, and Schwarz, reviews the Bank's budget and audit performance and
meets with the Bank's auditors. This Committee also oversees and monitors the
Bank's system of internal controls by, among other things, monitoring and
reviewing regulatory reports and the Internal Audit Department activities.
This Committee met once during the year ended December 31, 1996.
The Compensation Committee, consisting of Directors, Jenks, Schwarz,
McArthur, and Wegner, presents its recommendations to the Board of Directors
which reviews and adjusts compensation paid to the Bank's executive officers.
This committee also reviews the Bank's personnel budget and fringe benefit
policy. The recommendations of the Compensation Committee are presented to the
Board of Directors annually. This Committee met once during the year ended
December 31, 1996.
The Corporation's Bylaws provide that the Board of Directors shall act
as a nominating committee for selecting the management nominees for election as
directors. The Bylaws also provide that no nominations for directors, except
those made by the nominating committee, will be voted upon at the annual
meeting unless other nominations by stockholders are made in writing and
delivered to the Secretary of the Corporation in accordance with the provisions
of the Corporation's Certificate of Incorporation. The Certificate of
Incorporation provides that notice of a stockholder's intent to make a
nomination for director at the meeting ("stockholder notice") must be given not
less than 30 days nor more than 60 days prior to the meeting; provided,
however, that if less than 31 days notice of the meeting is given to
stockholders by the Corporation, a stockholder notice shall be delivered or
mailed, as prescribed, to the Secretary of the Corporation not later than the
close of the tenth day following the day on which notice of the meeting was
mailed to stockholders. If properly made, such nominations will be considered
by stockholders at the meeting. The Board of Directors of the Corporation met
once in its capacity as the nominating committee during the fiscal year ended
December 31, 1996.
DIRECTOR COMPENSATION
Members of the Board of Directors of the Bank receive $775 for each
monthly Board meeting attended. The Chairman of the Board of the Bank receives
$800 for each monthly meeting attended. Members of the Board of Directors of
the Corporation receive $100 for each board meeting attended. Total fees paid
to directors during the fiscal year ended December 31, 1996, were $83,100. No
additional fees are paid for service on committees of the Board of the Bank or
the Corporation.
Directors Deferred Compensation Plan. Directors may elect to defer the
directors' fees paid to them by the Bank and the Corporation until retirement
with no income tax payable by the director until retirement benefits are
received. This alternative is made available to them through a deferred
compensation plan for directors adopted by the Bank in 1980.
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If a participating director's service as a director is terminated on
or after he has attained the age of 55, the Bank shall pay an amount equal to
the fair market value of the assets in his account to him or his heirs in a
lump sum or over a period of ten years with one- tenth of the principal plus
all interest earned on the account since the date of the last payment payable
each year. The payments begin in the first year following termination. The
estimated liability under the agreement is accrued as earned by the director.
The plan contains certain hardship withdrawal provisions. The plan also
permits employees to participate in the plan at the discretion of the Board of
Directors; however, no employees other than Gary E. Wegner are currently
participating in the plan.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION INFORMATION. The following table sets forth
compensation information for the fiscal years 1994 through 1996 with respect to
the Corporation's President and Chief Executive Officer and to the Bank's next
highest paid officer whose compensation salary exceeded $100,000. The amounts
reflected in the table were paid by the Bank for services rendered to the Bank.
Officers of the Corporation do not receive any additional compensation for
serving in such capacities.
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
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SECURITIES
NAME AND OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL SALARY BONUS COMPENSATION STOCK COMPENSATION
POSITION YEAR ($) ($) ($) (1) OPTIONS(#) ($)
----------- ---- ------- ------- --------------- ---------- ----------------
Gary E. Wegner 1996 101,000 25,400 10,500 ----- 60,455 (2)
President and 1995 91,850 13,750 9,825 1,500 7,381 (3)
Chief Executive 1994 83,500 10,000 8,700 ----- 6,975 (4)
Officer
Melvin Bindl 1996 106,325 ----- ----- ----- 419 (5)
Sr. Vice 1995 ----- ----- ----- ----- 9,500 (6)
President
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(1) Director fees
(2) This number represents $2,614 in 401(k) contributions, $57,165 in
employee stock ownership contribution, and $676 for insurance premiums
paid by the bank.
(3) This number represents $2,174 in 401(k) contributions, $4,662 in
employee stock ownership contribution, and $545 for insurance premiums
paid by the bank.
(4) This number represents $1,856 in 401(k) contributions, $4,598 in
employee stock ownership contribution, and $521 for insurance premiums
paid by the bank.
(5) This number represents $419 for insurance premiums paid by the bank.
(6) This number represents a signing bonus of 1,000 shares of Midwest
Federal Financial Corp. Common Stock with a market value of $9,500.00
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The following table sets forth information regarding the fiscal
year-end values of unexercised stock options held by the named executive
officer.
Fiscal Year-End Stock Option Values
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
STOCK OPTIONS AT FISCAL IN-THE-MONEY STOCK OPTIONS
YEAR END (#) AT FISCAL YEAR END ($)(1)
------------------------------ -------------------------------
SHARES VALUE
ACQUIRED ON REALIZED
NAME EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
Gary E. Wegner 40,500 XXXXX 14,250 0 204,625 0
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(1) This amount represents the difference between the exercise price and the
market value of one share of the Corporation's Common Stock on December
31, 1996, times the number of shares.
EMPLOYMENT AGREEMENTS. The Corporation and the Bank (collectively
the "Employers") are parties to a three-year employment agreement with Messrs.
Gary E. Wegner and Melvin Bindl. Under these agreements, Mr. Wegner's 1997
salary level is $117,800 and Mr. Bindl's 1997 salary level is $66,000, which
will be paid by the Bank and may be increased at the discretion of the Board of
Directors or an authorized committee of the Board. Messrs. Wegner's and
Bindl's salaries may not be decreased during the term of employment agreement
without their prior written consent. On each anniversary of the commencement
date of the agreements, the term of the agreements may be extended by action of
the Board of Directors for an additional year unless a notice of termination of
the agreement is given. The agreements are terminable by the Employers for
just cause at any time or in certain events specified by Office of Thrift
Supervision ("OTS") regulations.
The employment agreements provide for severance payments and other
benefits in the event of involuntary termination of employment in connection
with any change in control of the Corporation. Severance payments also will be
provided on a similar basis in connection with a voluntary termination of
employment where, subsequent to a change in control, officers are assigned
duties inconsistent with their positions, duties, responsibilities and status
immediately prior to such change in control. The term "change in control" is
defined in the agreement as, among other things, any time during the period of
employment when a change of control is deemed to have occurred under OTS or a
change in the composition of a majority of the Board of Directors of the
Corporation occurs.
The severance payments from the Employers will equal 2.99 times the
average annual compensation during the then preceding five years. Such amount
will be paid within five business days following the termination of employment,
unless Messrs. Wegner and Bindl elect to receive equal monthly installments
over a three-year period. Section 280G of the Internal Revenue Code of 1986,
as amended, states that severance payments which equal or exceed three times
the base compensation of the individual are deemed to be "excess parachute
payments" if they are contingent upon a change in control. Individuals
receiving excess parachute payments are subject to a 20% excise tax on the
amount of such excess payments, and the Employers are not entitled to
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deduct the amount of such excess payments. The employment agreements provide
that if the severance payments to Messrs. Wegner and Bindl constitute parachute
payments in the opinion of counsel to the Employers, then Messr. Wegner and
Bindl may elect to receive the maximum amount of severance payments that can be
paid without constituting excess parachute payments, or if Messrs. Wegner and
Bindl did not make such election, then the Employer shall pay a lump sum cash
payment equal to 2.99 times the base compensation.
The agreements restrict Messrs. Wegner's and Bindl's right to compete
against the Employers for a period of three years from the date of termination
of their employment if they voluntarily terminate their employment, except in
the event of a change in control, or if the Employers terminate their
employment for cause.
TRANSACTIONS WITH MANAGEMENT
Effective with the passage of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, officers and directors of the Bank are
prohibited from receiving any loan or extension of credit at other than market
rates and terms. The Bank adopted a policy effective on the date of such
legislation to discontinue granting preferred loans to directors and officers.
Beginning January 1, 1990, directors, officers and employees no longer receive
any loans on preferred terms. The terms of existing loans will not change, as
allowed by the legislation. At December 31, 1996 no loans outstanding to
directors, officers and employees were on preferred terms.
PROPOSAL NO. 2 -- APPROVAL OF AMENDMENT TO ARTICLES OF
INCORPORATION TO INCREASE AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors unanimous vote adopted resolutions approving
and recommending that the shareholders adopt an amendment to Article VI of the
Corporation's Articles of Incorporation (the Articles") to increase its total
authorized capital stock from 4,000,000 to 10,000,000 shares and its authorized
common stock from 3,000,000 to 9,000,000 shares. The rights and limitations of
the Common Stock would remain unchanged under the amendment. The Common Stock
does not have preemptive rights. The Corporation's Articles also authorize
1,000,000 shares of serial preferred stock, $.01 per value per share. At
February 28, 1997, the Corporation did not have any shares of preferred stock
outstanding.
In recent years, the Corporation has declared several stock splits in
the form of stock dividends. A 2 for 1 stock split effected in the form of a
dividend was executed in May 1996 and a 3 for 2 stock split effected in the
form of a dividend was executed in May 1995.
It is felt that stock splits are beneficial to the shareholders of
Midwest Federal Financial Corp. because stock splits create more shares and
thereby create more liquidity. Midwest Federal has been rather thinly traded
since going public with 690,000 shares in July of 1992. The stock splits have
brought the total shares outstanding to over $1.6 million.
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Another advantage of the stock splits is that it has kept the price of
the stock in the $10 to $20 range, an area very affordable to the average
prospective shareholder and in a range where many banks similar to Midwest's
size trade.
Each of these stock dividends increased the Corporation's outstanding
shares of Common Stock, while concurrently reducing the number of authorized
shares of Common Stock available for future issuance. At February 28, 1997,
the Corporation had 1,621,629 shares of Common Stock issued and outstanding.
Thus, as of that date, the Corporation had 1,378,371 shares of authorized
Common Stock that were not issued.
The proposed increase in the authorized Common Stock has been
recommended by the Board of Directors to assure that an adequate supply of
authorized but unissued shares is available to provide the Corporation with
additional Common Stock for (i) general corporate needs, such as future stock
dividends or stock splits, (ii) raising additional capital to finance the
operations of the Corporation, (iii) facilitating the acquisition of other
financial institutions and (iv) providing for future equity-based compensation
for the Corporation's employees and directors. There currently are no plans or
arrangements relating to the issuance of any of the additional shares of Common
Stock proposed to authorized other than pursuant to the reservation of 160,000
shares of Common Stock under the Midwest Federal Financial Corp. 1997
Nonqualified Stock Option Plan which became effective on January 21, 1997.
All of the additional shares of authorized Common Stock would be
available for issuance without any further action by the shareholders, unless
required by the Articles, the Corporation's bylaws or applicable law. Although
the Board of Directors has no present intention of doing so, authorized but
unissued shares of Common Stock (or shares of Common Stock held as treasury
shares) could be issued, subject to applicable law and regulatory requirements
in one or more transactions that would make a takeover of the Corporation more
difficult. Issuances of Common Stock by their very nature dilute the voting
power of already outstanding stock and can, depending upon their issuance
price, dilute the economic value of outstanding stock as well.
The increase in authorized shares of Common Stock has not been
proposed for an antitakeover-related purpose, and the Board of Directors and
management have no knowledge of any current efforts to obtain control of the
Corporation. Moreover, the Board of Directors believes that the effect of
available authorized shares as an antitakeover device is limited by the Board's
duties with respect to the terms on which shares would be issued in connection
with an anticipated or proposed takeover transaction.
If the amendment to the Articles is adopted, the first sentence of the
first paragraph of Article VI of the Articles will be amended to read as
follows:
"The total number of shares of all classes of the capital stock which
the Corporation has authority to issue is 10,000,000 of which 9,000,000 shall
be common stock, $.01 par value per share, and 1,000,000 shall be serial
preferred stock, $.01 par value per share."
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The affirmative vote of a majority of the total votes eligible to be
cast at the Meeting will be required for adoption of the proposed amendment.
All of the Corporation's directors have expressed their intent to vote for the
proposal.
The Board of Directors unanimously recommends that shareholders vote
FOR the proposed increase in the authorized capital stock. Proxies received by
the Board of Directors will be voted for such proposal unless shareholders
specify a contrary choice in their proxies.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Based solely on a review of copies of Forms 3, 4 and 5
beneficial ownership reports and amendments thereto furnished to the
Corporation, the Corporation believes that its directors, officers and greater
than 10% stockholders complied with all applicable requirements of Section
16(a) of the Exchange Act during the fiscal year ended December 31, 1996.
AUDITORS
McGladrey & Pullen, LLP, Independent Public Accountants, was
the corporation's auditors for fiscal year 1996. The corporation has engaged
McGladrey & Pullen, LLP, as the Independent Public Accountants for fiscal 1997.
OTHER MATTERS
The Board of Directors of the Corporation is not aware of any business
to come before the Meeting other than the matter 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
the proxies.
FINANCIAL STATEMENTS
The Corporation's Annual Report to Stockholders, including financial
statements, has been mailed to all stockholders of record as of the close of
business on February 28, 1997. Any stockholder who has not received a copy of
such Annual Report may obtain a copy by writing to the Secretary of the
Corporation at 1159 Eighth Street, P.O. Box 450, Baraboo,Wisconsin 53913-0450.
Such Annual Report is not to be treated as part of the proxy solicitation
material or as having been incorporated herein by reference.
MISCELLANEOUS
The cost of solicitation of proxies will be borne by the Corporation.
In addition to solicitations by mail, directors, officers and regular employees
of the Corporation may solicit proxies personally or by telegraph or telephone
without additional compensation.
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14
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Corporation'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 Corporation's
main office at 1159 Eighth Street, P.O. Box 450, Baraboo, Wisconsin 53913-0450,
no later than November 21, 1997. Any such proposals shall be subject to the
requirements of the proxy rules adopted under the Exchange Act.
BY ORDER OF THE BOARD OF DIRECTORS
NANCY L. BILZ
SECRETARY
Baraboo, Wisconsin
March 21, 1997
FORM 10-KSB
A COPY OF THE FORM 10-KSB FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE RECORD DATE UPON
WRITTEN REQUEST TO NANCY L. BILZ, SECRETARY, MIDWEST FEDERAL FINANCIAL CORP.,
1159 EIGHTH STREET, P.O. BOX 450, BARABOO, WISCONSIN 53913-0450.