MOUND CITY FINANCIAL SERVICES, INC.
Cross Reference Sheet
Form S-4, Part I
Item Number Location in Prospectus
1 FACING PAGE OF REGISTRATION STATEMENT;
OUTSIDE FRONT COVER PAGE OF PROSPECTUS
2 TABLE OF CONTENTS
3 SUMMARY
4 SUMMARY; THE REORGANIZATION; COMPARISON OF
BANK STOCK WITH HOLDING COMPANY STOCK
5 Not applicable
6 MOUND CITY FINANCIAL SERVICES, INC.; MOUND
CITY BANK
7 Not applicable
8 THE REORGANIZATION
9 MOUND CITY FINANCIAL SERVICES, INC.; MOUND
CITY BANK
10 Not applicable
11 Not applicable
12 Not applicable
13 Not applicable
14 MOUND CITY FINANCIAL SERVICES, INC.;
COMPARISON OF BANK STOCK WITH HOLDING COMPANY
STOCK
15 Not applicable
16 Not applicable
17 MOUND CITY BANK; COMPARISON OF BANK STOCK
WITH HOLDING COMPANY STOCK
18 THE REORGANIZATION; MOUND CITY FINANCIAL
SERVICES, INC.; MOUND CITY BANK; RIGHTS OF
DISSENTING SHAREHOLDERS OF BANK
19 Not applicable
<PAGE>
December 3, 1996
<R/>
To the Shareholders of Mound City Bank:
Mound City Bank ("Bank") will hold a special meeting of its
shareholders on
January 9, 1997,<R/> at 7:00 p.m. Central
Standard Time, at the Governor Dodge Motor Inn Convention Center,
300 W. Highway 151, Platteville, Wisconsin.
This meeting is of great importance to Bank shareholders,
because you will be asked to consider and approve the formation
of a one-bank holding company for the Bank. A bank holding
company is a corporation that owns most or all of the stock of a
bank. If a bank holding company is approved for the Bank, the
Bank shareholders would have their Bank stock exchanged for
holding company stock. The Bank shareholders would become the
holding company shareholders, and the holding company would
become the sole shareholder of the Bank. The formation of a bank
holding company would not involve any sale of the Bank.
A Wisconsin corporation, Mound City Financial Services,
Inc., has been formed at the direction of Bank management to
serve as a holding company for the Bank. Mound City Financial
Services, Inc.'s current Board of Directors is identical to the
Bank's Board of Directors. If the holding company structure is
approved for the Bank, the Bank shareholders will become
shareholders of Mound City Financial Services, Inc., which would
become the sole shareholder of the Bank.
More than 150 one-bank holding companies have been formed
throughout Wisconsin. The Board of Directors believes that a
holding company would be beneficial to the Bank and to its
shareholders, because it would enable the Bank to:
1. Respond rapidly and effectively to changes that may
occur in the future in the laws and regulations governing banks
and bank-related activities;
2. Be better able to acquire other banks, to be operated
either as branches of the Bank or as separate banks, in areas not
now served by the Bank;
3. Offer bank-related services, through nonbanking
affiliates to be acquired or created in the future, to present
Bank customers and other members of the public;
4. Provide a potential market for the stock of the holding
company;
5. Meet any future capital requirements, that are not
provided by the future earnings of the Bank, through borrowings
by the holding company that are repaid by nontaxable dividends
from the Bank; and
6. Compete more effectively with other bank holding
companies.
If the holding company is approved, shareholders of the Bank
will receive one (1) share of holding company stock for each
share of Bank stock.
This letter is followed by a formal notice of the special
meeting of shareholders and a Prospectus/Proxy Statement
("Prospectus"). The Prospectus serves two purposes. First, it
is the proxy statement of the Bank which describes the proposed
transaction and asks you to send in your Proxy to vote on the
holding company at the special meeting of shareholders. A form
of Proxy is enclosed separately (on blue paper). Second, it is a
Prospectus of the holding company which describes the holding
company and its stock.
Financial statements for the Bank prepared in accordance
with generally accepted accounting principles and dated December
31, 1995 and September 30, 1996 are also included in this
mailing.
THE BOARD OF DIRECTORS OF THE BANK UNANIMOUSLY RECOMMENDS
APPROVAL OF THE HOLDING COMPANY FORMATION. ALL OF THE BANK'S
DIRECTORS HAVE INDICATED THEIR INTENTION TO VOTE IN FAVOR OF
MOUND CITY FINANCIAL SERVICES, INC. AS A HOLDING COMPANY FOR THE
BANK. THE BOARD OF DIRECTORS URGES YOU TO READ THE ENCLOSED
PROSPECTUS CAREFULLY, AND HOPES THAT YOU CHOOSE TO JOIN THEM IN
APPROVING THE HOLDING COMPANY FORMATION.
Please return the enclosed Proxy to ensure that your shares
are represented in the voting on this transaction. IN ORDER TO
APPROVE THE HOLDING COMPANY, THE AFFIRMATIVE VOTE OF A MAJORITY
OF ALL OF THE OUTSTANDING SHARES OF THE BANK WILL BE NEEDED.
YOUR VOTE IS IMPORTANT REGARDLESS OF HOW MANY SHARES YOU OWN.
PLEASE SIGN AND RETURN THE PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE, EVEN IF YOU PLAN TO ATTEND THE MEETING. If you do
attend the meeting, you may at that time revoke your proxy and
vote your shares in person at the meeting.
The Directors believe that the formation of a holding
company is an important step forward for the Bank. If you have
questions about the holding company or the Prospectus, please
call me at (608) 348-2685.
Very truly yours,
Robert J. Just, Jr., President
<PAGE>
MOUND CITY BANK
25 East Pine Street
Platteville, Wisconsin 53818
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD
JANUARY 9, 1997<R/>
A special meeting of shareholders of Mound City Bank (the
"Bank") will be held on Thursday,
January 9, 1997,<R/> at the
Governor Dodge Motor Inn Convention Center, 300 W. Highway 151,
Platteville, Wisconsin, at 7:00 p.m. Central Standard Time, for
the following purposes:
1. To vote on the following resolution:
RESOLVED, that the formation of a bank holding company
for Mound City Bank, pursuant to the terms and conditions of
an Agreement and Plan of Reorganization between Mound City
Bank and Mound City Financial Services, Inc. and a Merger
Agreement between Mound City Bank and New Mound City Bank,
whereby (i) Mound City Bank will become a wholly-owned
subsidiary of Mound City Financial Services, Inc., and (ii)
shareholders of Mound City Bank will become shareholders of
Mound City Financial Services, Inc., is hereby authorized
and approved.
2. To transact such other business as may properly come
before the meeting or any adjournments thereof.
At this meeting, holders of record of common stock of the
Bank at the close of business on November 25, 1996 will be
entitled to vote. A majority of the issued and outstanding
shares of the Bank must be voted in favor of the above resolution
in order to permit the holding company formation to proceed.
Shareholders and beneficial shareholders are or may be
entitled to assert dissenters' rights under Sections 221.0706
through 221.0718 of the Wisconsin Statutes. A copy of those
sections is attached to the following Proxy Statement/Prospectus
as Exhibit C.
THE BOARD OF DIRECTORS OF THE BANK BELIEVES THAT THE
PROPOSED HOLDING COMPANY IS IN THE BEST INTERESTS OF THE BANK AND
ITS SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS OF
THE BANK VOTE "FOR" THE PROPOSED HOLDING COMPANY.
By Order of the Board of Directors
_______________________________,
Donna J. Hoppenjan, Cashier
December 3, 1996R/
<PAGE>
MOUND CITY BANK
PROXY STATEMENT
MOUND CITY FINANCIAL SERVICES, INC.
3,600 SHARES
COMMON STOCK
PROSPECTUS
Special Meeting of Mound City Bank
Shareholders to be held January 9, 1997
<R/>
This Proxy Statement is being furnished to the shareholders
of Mound City Bank, Platteville, Wisconsin, in connection with
the solicitation of proxies by the Board of Directors of Mound
City Bank for use at the special meeting of shareholders to be
held on
January 9, 1997<R/>. At that meeting, the
shareholders of Mound City Bank will consider and vote upon the
proposed acquisition of Mound City Bank by Mound City Financial
Services, Inc. by means of a reorganization.
Under its Articles of Incorporation, Mound City Financial
Services, Inc. ("Holding Company") will have a right of first
refusal to purchase shares of its stock at the price and on the
terms and conditions offered to any Holding Company shareholder
by a prospective purchaser. Such a limitation does not currently
exist on the stock of Mound City Bank ("Bank"). The right of
first refusal will apply to Holding Company shares in the hands
of all shareholders, including subsequent transferees.
Certificates evidencing shares of the Holding Company's stock
will bear a legend describing the right of first refusal. The
Holding Company's right to purchase may limit a shareholder's
ability to sell shares to other purchasers. The right of first
refusal might also limit the formation of a market for the stock
outside the Holding Company. See "COMPARISON OF BANK STOCK WITH
HOLDING COMPANY STOCK--Market for the Stock."
The Holding Company's Articles of Incorporation contain
certain other provisions that may have an effect of delaying,
deferring or preventing a change in control of the Holding
Company. The Holding Company's Articles establish a classified
board of directors and establish additional voting requirements
for mergers and similar transactions. These provisions and the
right of first refusal provision may be amended only by the
affirmative vote of not less than 75% of the outstanding shares
of voting stock of the Holding Company. See "MOUND CITY
FINANCIAL SERVICES, INC.--Certain Anti-Takeover and
Indemnification Provisions."
____________________________________________
Mound City Financial Services, Inc. has filed a Registration
Statement on Form S-4 pursuant to the Securities Act of 1933, as
amended, covering the shares of Mound City Financial Services,
Inc. common stock to be issued in connection with the
reorganization. These materials constitute the Prospectus of
Mound City Financial Services, Inc. to the shareholders of Mound
City Bank.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO PURCHASE THE SECURITIES OFFERED
HEREBY IN ANY JURISDICTION WHERE, OR TO OR FROM ANY PERSON TO
WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION OF ANY
OFFER. IN THOSE JURISDICTIONS THE SECURITIES OR BLUE SKY LAWS OF
WHICH REQUIRE THIS OFFER TO BE MADE BY A LICENSED BROKER OR
DEALER, THIS OFFER MAY BE MADE ON BEHALF OF MOUND CITY FINANCIAL
SERVICES, INC. ONLY BY REGISTERED BROKERS OR DEALERS WHO ARE
LICENSED UNDER THE LAWS OF SUCH JURISDICTIONS.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, THE INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY DISTRIBUTION OF THE SECURITIES TO WHICH THIS
PROSPECTUS RELATES SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF MOUND
CITY FINANCIAL SERVICES, INC. OR MOUND CITY BANK SINCE THE DATE
OF THIS PROSPECTUS. MOUND CITY FINANCIAL SERVICES, INC. IS
REQUIRED TO ADVISE SHAREHOLDERS OF ANY FUNDAMENTAL CHANGE
AFFECTING THE TERMS OF THE TRANSACTION BETWEEN MOUND CITY BANK
AND MOUND CITY FINANCIAL SERVICES, INC.
THE SECURITIES BEING OFFERED ARE NOT SAVINGS ACCOUNTS OR
DEPOSITS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
<R/>
__________________________________________
THE SHARES OF MOUND CITY FINANCIAL SERVICES, INC. COMMON
STOCK TO BE ISSUED IN THE REORGANIZATION HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS
THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
____________________________________________
The date of this Proxy Statement/Prospectus is December 3, 1996.
<R/>
<PAGE>
TABLE OF CONTENTS
Page
SUMMARY i
INTRODUCTION 1
THE REORGANIZATION 2
General 2
Reasons for the Reorganization 2
Summary of the Reorganization 4
Special Meeting of Shareholders 5
Operation of the Bank Following the Reorganization 7
Accounting Treatment of the Transaction 7
Conditions Precedent to the Reorganization 7
Closing Date 8
Resales of Holding Company Stock by "Affiliates" 9
Tax Considerations 9
Securities Regulation 14
Resale of Holding Company Common Stock 15
Expenses of Reorganization 15
RIGHTS OF DISSENTING SHAREHOLDERS OF BANK 15
MOUND CITY FINANCIAL SERVICES, INC. 17
History, Business, and Properties 17
Management 17
Principal Shareholders 19
Description of Holding Company's Common Stock 19
Executive Compensation 19
Transactions with Related Parties 19
Certain Anti-Takeover and Indemnification
Provisions 19
MOUND CITY BANK 22
History, Business and Properties 22
Management 25
Business Background of Directors and Executive Officers 27
Executive Compensation 32
Director Compensation 32
Board Review of Management Compensation 33
Principal Shareholders 33
Description of the Stock of the Bank 33
Transactions with Related Parties 33
Indemnification of Directors and Officers 34
Shares of the Stock Owned or Controlled by Management 34
Recommendation of the Bank's Board of Directors 35
COMPARISON OF BANK STOCK WITH HOLDING COMPANY STOCK 35
Authorized Shares and Par Value 35
Voting Rights 36
Dividends 37
Market for the Stock 39
Value 42
Other 42
SUPERVISION AND REGULATION 43
General 43
Banking Regulation 44
Capital Requirements for the Holding
Company and the Bank 45
Loan Limits to Borrowers 46
Recent Regulatory Developments 46
Available Information 50
LEGAL MATTERS 50
<R/>
EXHIBIT A Agreement and Plan of Reorganization
EXHIBIT B Tax Opinion of Boardman, Suhr, Curry & Field
EXHIBIT C Sections 221.0706 through 221.0718 of the
Wisconsin Statutes
EXHIBIT D Articles of Incorporation of Mound City
Financial Services, Inc.
<PAGE>
SUMMARY
The following is a summary of certain information contained
elsewhere in this Prospectus/Proxy Statement. This summary is
necessarily incomplete and selective, and is qualified in its
entirety by reference to the more detailed information contained
elsewhere in this Prospectus/Proxy Statement. Shareholders are
urged to review carefully the entire Prospectus/Proxy Statement
including the Exhibits.
Parties Mound City Financial Services, Inc.
("Holding Company")
25 East Pine Street
Platteville, Wisconsin 53818
(608) 348-2685
Mound City Bank ("Bank")
25 East Pine Street
Platteville, Wisconsin 53818
(608) 348-2685
The Holding Company, a Wisconsin corporation, was organized
at the request of the management of the Bank for the purpose of
becoming a one-bank holding company for the Bank. The Holding
Company is currently in the organizational stage and has no
operating history. See "MOUND CITY FINANCIAL SERVICES, INC.--
History, Business, and Properties." The Bank is a bank chartered
under the laws of the State of Wisconsin and has been operating
as a commercial bank with its main office in Platteville,
Wisconsin, since 1915. The Bank also operates a branch office in
Belmont, Wisconsin, which was opened in 1935, and a branch office
in Cuba City, Wisconsin, which was opened in 1992. The Bank
offers comprehensive banking services to the residential,
commercial, industrial and agricultural areas that it serves.
These services include agricultural, commercial, real estate and
personal loans; checking, savings and time deposits; investments,
individual retirement accounts, and trust services. See "MOUND
CITY BANK--History, Business, and Properties."
The Reorganization
The Board of Directors of the Bank proposes to form a bank
holding company for the Bank. The Holding Company will acquire
all the outstanding shares of the Bank through a reorganization
("Reorganization"). As a result of the Reorganization, the
Holding Company will be owned by the former Bank shareholders and
the Bank will become a wholly-owned subsidiary of the Holding
Company. No change in the compensation or benefits of Bank
Directors or Executive Officers is contemplated as a result of
the Holding Company formation. The Holding Company will not be
required to file reports with the SEC pursuant to the Securities
Exchange Act of 1934. However, the Holding Company will provide
its shareholders, on a voluntary basis, with the same types of
reports as are currently provided by the Bank to Bank
shareholders. See "AVAILABLE INFORMATION." For more information
about the Reorganization, see "THE REORGANIZATION -- Summary of
the Reorganization" and the Agreement and Plan of Reorganization
attached as Exhibit A.
<R/>
Special Meeting of Shareholders
A special meeting of the shareholders of the Bank will be
held on
January 9, 1997<R/> at 7:00 p.m., Central Time, at the
Governor Dodge Motor Inn Convention Center, 300 W. Highway 151,
Platteville, Wisconsin. The purpose of the meeting is to
consider and vote upon the formation of a bank holding company
pursuant to the Agreement and Plan of Reorganization.
Shareholders of record as of the close of business on November
25, 1996 will be entitled to vote at the meeting. The
affirmative vote of the holders of a majority of the outstanding
Bank stock will be required to approve the transaction.
Directors and executive officers of the Bank own or control,
directly or indirectly, approximately 11.5% of the outstanding
Bank stock. See "THE REORGANIZATION--Special Meeting of
Shareholders."
Recommendation of the Bank's Board of Directors
The Board of Directors of the Bank believes that the
proposed Reorganization will benefit the Bank and is in the best
interests of its shareholders. Accordingly, the Board recommends
that its shareholders vote their Bank shares to approve the
Reorganization. See "THE REORGANIZATION--Reasons for the
Reorganization" and "MOUND CITY BANK--Recommendation of the
Bank's Board of Directors."
Effect on Bank Shareholders
Subject to certain limitations and dissenters' rights
provided by law, on the effective date of the Reorganization each
share of Bank common stock outstanding immediately prior to the
effective date will be exchanged for one share of Holding Company
stock, and the Bank shareholders will become the shareholders of
the Holding Company.
Dissenters' Rights
Under certain provisions of the Wisconsin Statutes, holders
of Bank stock have the right to dissent from the Reorganization
and obtain payment of the fair value of their shares in cash if
they (i) deliver to the Bank before the vote is taken written
notice of the shareholder's or beneficial shareholder's intent to
demand payment for his or her shares if the proposed
Reorganization is effectuated, and refrain from voting his or her
shares in favor of the proposed Reorganization, (ii) demand
payment in writing before the date stated in the dissenters'
notice, (iii) surrender their Bank stock certificates, and (iv)
take certain other actions. See "RIGHTS OF DISSENTING
SHAREHOLDERS OF BANK."
Federal Income Tax Consequences
The Reorganization has been structured with the intent that
it qualify for federal income tax purposes as a tax-free
transaction, so that shareholders of the Bank will recognize no
gain or loss on the exchange of their Bank stock for Holding
Company stock. Exhibit B to this Prospectus is an opinion of
counsel that the Reorganization is a tax-free transaction. The
opinion of counsel will not be binding on the Internal Revenue
Service. See "THE REORGANIZATION--Tax Considerations."
Date of the Reorganization
The Reorganization will take place as promptly as
practicable after receipt of all necessary approvals of
governmental agencies and authorities and satisfaction of certain
other terms and conditions. See "THE REORGANIZATION--Closing
Date."
Conditions for the Reorganization
The Reorganization is conditioned upon approval by the
Wisconsin Department of Financial Institutions Division of
Banking, the Federal Reserve Board, the Federal Deposit Insurance
Corporation, and a majority of the outstanding stock of the Bank,
and upon other terms and conditions. The Bank will close its
transfer records twenty (20) days prior to the closing date.
Until the Bank's transfer records are closed, Bank shareholders
may sell or otherwise transfer their Bank stock. The
Reorganization will close no later than June 30, 1997, unless
otherwise agreed in writing by the parties. See "THE
REORGANIZATION -- Conditions Precedent to the Reorganization."
The Holding Company and the Bank may amend, modify or waive
certain conditions if, in the opinion of the Boards of Directors
of the Holding Company and the Bank, the action would not have a
material adverse effect on the benefits intended for holders of
Holding Company stock.
<R/>
Right of First Refusal and Certain
Other Anti-Takeover Provisions
The Articles of Incorporation of the Holding Company contain
a provision giving the Holding Company a right of first refusal
to purchase shares of its stock at a price and on the terms and
conditions offered to a shareholder by a prospective purchaser.
Transactions within a shareholder's immediate family and
stock pledges are permitted (although the stock so transferred or
pledged remains subject to the right of first refusal).<R/> The
right of first refusal may limit a shareholder's ability to sell
shares to purchasers other than the Holding Company. In
addition, the right of first refusal may reduce the likelihood of
another buyer obtaining control of the Holding Company through
the acquisition of large blocks of Holding Company stock. See
"COMPARISON OF BANK STOCK WITH HOLDING COMPANY STOCK--Market for
the Stock."
The Holding Company's Articles of Incorporation contain
certain other provisions that may have an effect of delaying,
deferring or preventing a change in control of the Company. The
Articles of Incorporation provide that the Board of Directors
shall consist of three classes of directors, each serving for a
three-year term ending in a successive year. This provision may
make it more difficult to effect a takeover of the Holding
Company because an acquiring party would generally need two
annual meetings of shareholders to elect a majority of the Board
of Directors. The Articles of Incorporation also require the
affirmative vote of 75% of the outstanding shares of voting stock
to approve certain fundamental changes such as mergers or
consolidations of the Holding Company or the sale or lease of all
or substantially all of the Holding Company's assets, unless such
changes have received advance approval of 75% of the Company's
directors, in which case the required vote is a majority.
The Holding Company's Articles of Incorporation further
provide that the provisions of the Articles establishing the
Holding Company's classified board of directors, establishing
additional voting requirements, and giving the Holding Company a
right of first refusal to purchase its stock may be amended only
by the affirmative vote of not less than 75% of the outstanding
shares of voting stock of the Holding Company. See "MOUND CITY
FINANCIAL SERVICES, INC.--Certain Anti-Takeover and
Indemnification Provisions."
By contrast with the Holding Company, the bank is not subject
to anti-takeover provisions in its Articles of Incorporation,
Bylaws or under applicable banking law.
<R/>
<PAGE>
__________________________________________
PROXY STATEMENT
AND
PROSPECTUS
__________________________________________
INTRODUCTION
Mound City Financial Services, Inc. ("Holding Company") is a
business corporation organized at the request of the management
of the Mound City Bank ("Bank") for the purpose of the
reorganization. See "MOUND CITY FINANCIAL SERVICES, INC." The
Bank is a state-chartered bank that has been operating as a
commercial bank with its main office in Platteville, Wisconsin,
since 1915. See "MOUND CITY BANK."
The reorganization is being conducted for the purpose of
forming a holding company for the Bank, according to a plan of
reorganization approved by the Board of Directors of the Holding
Company and by the Board of Directors of the Bank. See "THE
REORGANIZATION--Summary of the Reorganization." The Board of
Directors of the Bank believes that the formation of a bank
holding company will benefit the Bank and its shareholders. See
"THE REORGANIZATION--Reasons for the Reorganization" and "MOUND
CITY BANK-- Recommendation of the Bank's Board of Directors."
This Prospectus contains information intended to help each
Bank shareholder decide whether to vote to approve the formation
of a bank holding company. See, for example, "COMPARISON OF BANK
STOCK WITH HOLDING COMPANY STOCK." The Board of Directors of the
Holding Company urges each Bank shareholder to carefully read the
entire Prospectus.
THE REORGANIZATION
General
The reorganization is designed to offer shareholders of
Mound City Bank ("Bank") the opportunity to form a bank holding
company. Pursuant to the reorganization, the following steps
have already occurred:
1. Mound City Financial Services, Inc. ("Holding
Company"), a Wisconsin business corporation, has been
incorporated for the purpose of participating in the
reorganization and becoming a bank holding company.
2. The Board of Directors of the Bank and the Board of
Directors of the Holding Company have adopted and
approved an Agreement and Plan of Reorganization.
The following steps, among others, remain to be completed
pursuant to the reorganization (see "THE REORGANIZATION --
Conditions Precedent to the Reorganization"):
1. The shareholders of the Bank must approve the
reorganization by the affirmative vote of a majority of
the outstanding Bank stock.
2. The Federal Reserve Board must approve the Holding
Company's application to become a bank holding company
under the Bank Holding Company Act of 1956, as amended.
3. The Wisconsin Department of Financial Institutions
Division of Banking must approve the reorganization.
4. The Federal Deposit Insurance Corporation must approve
the reorganization.
Reasons for the Reorganization
The Board of Directors of the Bank recommends the
reorganization because it believes that a bank holding company
will offer opportunities to the Bank to compete more effectively
and to expand its services in type, in number, and in
geographical scope. In addition, the Board believes that the
formation of a holding company will provide benefits to the
shareholders and to its community.
Flexibility. The proposed reorganization will, in the
opinion of the Board, better prepare the Bank for responding
flexibly and efficiently to future changes in the laws and
regulations governing banks and bank-related activities. Often,
opportunities arise for bank holding companies that are not
available to banks. The bank holding company corporate structure
may prove valuable in taking advantage of any new opportunities
in banking and bank-related fields that are made available by
deregulation or otherwise.
Market for the Stock. Under Wisconsin law, a
state-chartered bank is prohibited from holding or purchasing
more than 10% of its own stock, except in certain limited
circumstances. Therefore, any Bank shareholder who desires to
sell his or her Bank stock must generally locate a person willing
to purchase the stock. In the past, there has been a limited
market for Bank stock, making it difficult for a seller to find a
buyer, particularly if the seller owns a large number of shares
that would require a substantial purchase price.
The Holding Company will not be prohibited by law from
purchasing Holding Company stock, unless such a purchase would
make the Holding Company insolvent. The Holding Company may
therefore become a potential buyer of that stock. Selling
shareholders are required to offer their shares first to the
Holding Company under its right of first refusal. The Holding
Company will not be required to purchase stock, but may do so in
the discretion of its Board of Directors. In the event that the
Holding Company fails to exercise its right of first refusal,
selling shareholders may typically be required to locate a
prospective purchaser for their shares on a person-to-person
basis. For more information about the Holding Company's ability
to purchase stock, see "COMPARISON OF BANK STOCK WITH HOLDING
COMPANY STOCK -- Market for the Stock."
<R/>
Expansion. The principal means for a bank to seek continued
growth, apart from utilizing more fully the business potential
within its present market area, is by use of the holding company
structure to reach into other geographic markets. After the
reorganization, the Holding Company will be able to, and may,
subject to approval of regulatory authorities, create new banks
or acquire existing banks anywhere in Wisconsin and neighboring
states. The Holding Company has no present plans to acquire any
such banks.
Diversification. The proposed bank holding company offers
the ability to diversify the business of the Bank by creating or
acquiring corporations engaged in bank-related activities.
Diversification into bank-related activities is governed by the
Bank Holding Company Act of 1956, as amended, and the regulations
of the Federal Reserve Board promulgated pursuant to that Act.
The range of activities in which a holding company may engage
through nonbank subsidiaries includes, subject to approval of the
Federal Reserve Board, loan service companies, mortgage
companies, independent trust companies, small loan and factoring
companies, equipment leasing companies, credit life and
disability insurance companies, and certain insurance, advisory,
and brokerage operations. The Holding Company may in the future
engage directly or through subsidiaries in one or more of those
activities. However, the timing and extent of those operations
by the Holding Company will depend on many factors, including
competitive and financial conditions existing in the future as
well as the then financial condition of the Holding Company and
the Bank.
Capital Requirements. The proposed reorganization will also
provide, in the opinion of the Board, greater flexibility in
meeting financing needs of the Bank or other banks or
corporations acquired by the Holding Company. Currently, there
is no need for the Bank to obtain additional capital. If the
need for additional capital should arise, however, those capital
requirements of the Bank could be obtained through borrowings by
the Holding Company, which would then be paid to the Bank by the
Holding Company as a capital contribution or as a purchase of
additional Bank stock. The loan to the Holding Company would be
paid with dividends received from the Bank, which would not be
taxable to the Holding Company if it holds at least 80% of the
Bank stock. The interest expense incurred by the Holding Company
on the loan could be used to offset Bank earnings on a
consolidated federal income tax return.
General. The Board believes that greater overall strength
will result to the Bank through the formation of the Holding
Company. The formation of the Holding Company is not part of a
plan or effort to adversely affect any shareholder, or to unduly
benefit any shareholder, director, or officer. Except for those
shareholders who exercise dissenters' rights, the proportionate
interests of the Bank shareholders in the Holding Company stock
will be identical to their current proportionate interests in the
Bank stock.
Summary of the Reorganization
The Holding Company intends to acquire all of the
outstanding stock of the Bank through a reorganization. To
perform the reorganization, the Holding Company will organize a
new bank, called New Mound City Bank ("New Bank"), as a
wholly-owned subsidiary of the Holding Company. New Bank will
not conduct any banking business or any other business. It will
have no employees, no liabilities, no operations, and (except for
a nominal capital contribution required by law) no assets. It
will be a "shell" corporation, and will be incorporated for the
sole purpose of assisting in the reorganization.
To perform the reorganization, the Bank will be merged into
the New Bank. The stock of the Bank now held by the shareholders
will be converted into the Holding Company stock at the rate of
one share of the Holding Company stock for each one share of Bank
stock that they currently own. Therefore, the Bank shareholders
will become shareholders of the Holding Company. In addition, by
virtue of the merger of the Bank into the New Bank, the Bank will
become a wholly-owned subsidiary of the Holding Company.
Currently, the Bank shareholders own all 3,600 shares of the
Bank's stock. After the reorganization, the Holding Company will
own the Bank, and the former Bank shareholders will own the
Holding Company, as follows:
<PAGE>
Current After Reorganization
Shareholders Shareholders
3,600 shares 3,600 shares (100%) of
(100%)of Bank stock Holding Company stock
Holding Company
3,600 shares (100%) of
Bank stock
Bank
Bank
Special Meeting of Shareholders
Section 221.0702 of the Wisconsin Statutes requires that at
least a majority of the outstanding stock of a state-chartered
bank approve a merger of that bank. Because the reorganization
will be conducted as a merger of the New Bank and the Bank, that
requirement must be fulfilled.
A vote on the proposed holding company will be taken at the
special meeting of shareholders of the Bank, to be held on
January 9, 1997,<R/> at 7:00 p.m., Central Time, at the
Governor Dodge Motor Inn Convention Center, 300 W. Highway 151,
Platteville, Wisconsin. The close of business on November 25,
1996, has been fixed as the record date for the determination of
shareholders entitled to notice of and to vote at the meeting.
On that date there were outstanding and entitled to vote 3,600
shares of Bank stock. Each outstanding share of Bank stock
entitles the record holder to one vote on all matters to be acted
upon at the meeting. The presence at the meeting in person or by
proxy of the holders of a majority of the issued and outstanding
shares of Bank stock entitled to vote will constitute a quorum
for the transaction of business. The affirmative vote of 1,801
of the issued and outstanding shares of Bank stock is required to
approve the holding company. The Bank's articles of
incorporation and bylaws as well as applicable law do not appear
to address the issue of whether a vote for abstention is treated
as a "yes" vote or "no" vote. Accordingly, for purposes of
counting votes at this special meeting of shareholders,
abstentions (that is, proxies on which the box labeled "Abstain"
has been checked) are treated as "no" votes.
Also for
purposes of counting votes at the special meeting of
shareholders, broker non-votes are treated as abstentions and
therefore as "no" votes. <R/>Abstentions are not treated as "no"
votes for purposes of dissenters' rights.
THE BOARD OF DIRECTORS OF THE BANK UNANIMOUSLY RECOMMENDS
THAT HOLDERS OF BANK STOCK VOTE "FOR" THE TRANSACTION. See
"MOUND CITY BANK--Recommendations of the Bank's Board of
Directors." As of the date of this Prospectus, the directors and
executive officers of the Bank owned or controlled 414 shares, or
approximately 11.5%, of the Bank stock outstanding. See "MOUND
CITY BANK--Management." The directors and officers of Bank have
indicated that they will vote to approve the transaction, and are
soliciting proxies from Bank shareholders.
A shareholder may vote his or her shares in person or by
proxy. Each shareholder is encouraged to return the enclosed
Proxy (on blue paper), even if he or she intends to attend the
meeting. All properly executed proxies not revoked will be voted
at the meeting in accordance with the instructions on the proxy.
Proxies containing no instructions will be voted "FOR" approval
of the holding company. On any other matters properly brought
before the meeting and submitted to a vote, all proxies will be
voted in accordance with the judgment of the persons voting the
proxies. A proxy may be revoked at any time before it is voted,
either by written notice filed with the Cashier of the Bank or
with the acting secretary of the meeting or by oral notice given
by the shareholder to the presiding officer during the meeting.
The presence of a shareholder who has filed his or her proxy
shall not of itself constitute a revocation. Failure to submit a
proxy or to vote at the meeting has the same effect as a negative
vote for purposes of approving or disapproving the
reorganization.
Wisconsin law provides appraisal rights to holders of Bank
stock who dissent from the merger, if statutory procedures are
followed. See "RIGHTS OF DISSENTING SHAREHOLDERS OF BANK."
Operation of the Bank Following the Reorganization
The Holding Company anticipates that, following the
reorganization, the business of the Bank will be conducted
substantially unchanged from the manner in which it is now being
conducted. The Bank's name will not be changed.
The Holding
Company anticipates that the Bank will be operated under
substantially the same management, and no changes in personnel or
compensation of Bank officers or directors are anticipated as a
result of the reorganization. <R/>After the reorganization, the
Bank will continue to be subject to regulation and supervision by
regulatory authorities, to the same extent as currently
applicable. See "SUPERVISION AND REGULATION." The Bank will
continue to prepare an annual report in the same format as in
prior years, and the Holding Company will send to all of its
shareholders a consolidated annual report, in a similar format as
that used in the Bank's report. The Holding Company will convene
an annual meeting of its shareholders, at a similar time and for
similar purposes as the Bank's annual meeting.
<PAGE>
Accounting Treatment of the Transaction
The reorganization will be treated as a "pooling of
interests" for accounting purposes. Accordingly, under generally
accepted accounting principles, the assets and liabilities of the
Bank will be recorded in the financial statements of the Holding
Company at their carrying values at the Effective Date.
Conditions Precedent to the Reorganization
The Agreement and Plan of Reorganization (Exhibit A)
provides that the consummation of the reorganization is subject
to certain conditions that have not yet been met, including, but
not limited to, the following:
1. No investigation, action, suit or proceeding before any
court or any governmental or regulatory authority shall
have been commenced or threatened seeking to restrain,
prevent or change the reorganization or otherwise
arising out of or concerning the reorganization.
2. The application by the Holding Company to be a
registered bank holding company under the Bank Holding
Company Act of 1956, as amended, must have been
approved by the Federal Reserve Board.
3. The Wisconsin Department of Financial Institutions
Division of Banking must have granted all required
approvals for consummation of the reorganization.
4. The Federal Deposit Insurance Corporation must have
granted all required approvals for consummation of the
reorganization.
5. The reorganization must have been approved by a
majority of shareholders of the outstanding Bank stock.
6. The Holding Company and the Bank must have received an
opinion from counsel for the Holding Company and the
Bank to the effect that the transaction will be a
tax-free reorganization for the organizations and
participating Bank shareholders. (That opinion is
attached to this Prospectus as Exhibit B.)
7. No change shall have occurred or be threatened in the
business, financial condition or operations of the Bank
that, in the judgment of the Holding Company, is
materially adverse.
8. No more than ten percent (10%) of the Bank stock (360
shares or fewer) shall be "dissenting shares" pursuant
to the exercise of dissenters' rights.
9. The reorganization must be completed by June 30, 1997,
unless extended by both the Bank and the Holding
Company.
These conditions are for the sole benefit of the Holding Company
and the Bank, and may be asserted by them or may be waived or
extended by them, in whole or in part, at any time or from time
to time. Any determination by the Holding Company and the Bank
concerning the events described above shall be final and binding.
It is anticipated that these conditions will be met. Any
waiver or extension of conditions not met will be approved only
if, in the opinion of the Boards of Directors of the Holding
Company and the Bank, the action would not have a material
adverse effect on the benefits intended for holders of the
Holding Company stock under the reorganization. The
reorganization may be terminated and abandoned by the mutual
consent of the Board of Directors of the Holding Company and the
Board of Directors of the Bank at any time prior to the closing
date.
Closing Date
The closing of the reorganization shall take place on a
date, the "Closing Date," to be selected by the Holding Company,
at the offices of the Bank, 25 East Pine Street, Platteville,
Wisconsin; provided, however, that the Closing Date shall be a
date no later than thirty (30) days after all conditions have
been met and all approvals, consents and authorizations for the
valid and lawful consummation of the reorganization have been
obtained.
The Bank will close its transfer records twenty
(20) days prior to the closing date for a period through and
including the Closing Date. Until the Bank's transfer records
are closed, Bank shareholders may sell or otherwise transfer
their Bank stock.<R/>
On the Closing Date, all of the Bank shareholders' right,
title and interest in and to the shares of the Bank stock,
without any action on the part of the shareholders, shall
automatically become and be converted into a right only to
receive the Holding Company stock. Commencing on the Closing
Date, the Holding Company shall issue and deliver the Holding
Company stock to the shareholders as set forth in the Agreement
and Plan of Reorganization (Exhibit A).
The Closing Date shall be no later than June 30, 1997,
unless that date is extended by mutual written agreement of the
parties.
<R/>
Resales of Holding Company Stock by Affiliates
Under the federal securities laws there are certain
restrictions on resales of Holding Company stock received in the
reorganization by persons who are deemed to be an "affiliate" of
the Bank. In general, an affiliate for these purposes would
include directors and executive officers and any person who,
individually or through a group, is deemed to control the Bank.
Members of a family may be regarded as members of a group if, by
acting in concert, they would have the power to control the Bank.
"Control" may be evidenced by ownership of 10% or more of the
voting securities of the Bank. Certificates for shares of
Holding Company stock received by an affiliate in the
reorganization will carry a legend referring to the restrictions
on resale. Specifically, that legend will state:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE
MAY BE OFFERED AND SOLD ONLY IF REGISTERED
PURSUANT TO THE PROVISIONS OF THE SECURITIES
ACT OF 1933 OR IF AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.
In addition, the Holding Company will issue stop-transfer
instructions to the Holding Company transfer agent with respect
to such certificates. Neither the Bank nor the Holding Company
will register the shares of Holding Company stock for resale, and
any such registration shall be at the expense and instance of any
shareholder desiring such registration.
This Prospectus may not be used by an affiliate of the Bank
or the Holding Company for the resale of Holding Company stock
received pursuant to the reorganization.
Tax Considerations
Corporate Income Tax. After the reorganization, the Holding
Company will own at least 80% of the outstanding stock of the
Bank. This will permit the Holding Company to file a
consolidated federal income tax return with the Bank. The filing
of a consolidated federal income tax return will permit the
deduction of any interest expense the Holding Company may incur
as an expense against the income of the Bank, and any dividend
paid to the Holding Company by the Bank on the shares of the
Bank's capital stock held by the Holding Company would not be
taxable as income to the Holding Company. In addition, the
ability to file a consolidated federal income tax return may
increase the cash flow available to the Holding Company to meet
its obligations. The State of Wisconsin does not permit
consolidated income tax returns.
The creation of the Holding Company creates a separate
taxpayer under the Internal Revenue Code. The Holding Company,
through its consolidated tax return with the Bank and any other
subsidiaries that may be formed or acquired in the future, will
be required to pay federal and state income taxes on its net
income. Immediately after the formation of the Holding Company,
the principal income to the Holding Company will be dividends
from the Bank. Those dividends will not be taxable income to the
Holding Company as long as the Holding Company holds at least 80%
of the outstanding Bank stock. Therefore, until such time as the
Holding Company generates substantial income from sources other
than Bank dividends, it is not anticipated that it will incur any
significant tax liability.
As a separate taxpayer, the Holding Company may incur a
separate tax on any liquidation of the Holding Company or on an
acquisition of the Holding Company's assets by a third party.
Therefore, a liquidation of the Holding Company or a sale of Bank
stock by the Holding Company could generate a double-level tax, a
tax on the Holding Company and a tax on the Holding Company
shareholders. A double-level tax can be avoided, however, if the
third party acquires the Holding Company stock for cash or
acquires Holding Company stock or Bank stock in a tax-free
reorganization.
Individual Income Tax. The Holding Company has been advised
by its counsel, Boardman, Suhr, Curry & Field, Madison,
Wisconsin, that as a result of the transaction contemplated by
the reorganization, for federal income tax purposes: (i) no gain
or loss will be recognized to the Bank shareholders on the
conversion of their shares of Bank stock into shares of Holding
Company stock; (ii) the income tax basis of the shares of Holding
Company stock in the hands of the Bank shareholders will be the
same as their basis in the shares of the Bank stock; and (iii)
the holding period of the shares of Holding Company stock in the
hands of the Bank shareholders will include the holding period of
the shares of the Bank stock, provided the shares of the Bank
stock constituted a capital asset as of the time of the
reorganization. A copy of that opinion is attached hereto as
Exhibit B (which opinion also includes matters pertaining to
corporate tax consequences of the reorganization). Counsel is
also of the opinion that the same treatment will apply for
Wisconsin income tax purposes.
The opinion is based on the following representations of the
Holding Company and the Bank:
1. The fair market value of the Holding Company stock
received by each shareholder will be approximately equal to the
fair market value of the Bank stock surrendered in exchange.
2. There is no plan or intention by the shareholders who
own one percent (1%) or more of the Bank stock, and to the best
of the knowledge of the management of the Bank, there is no plan
or intention on the part of the remaining shareholders to sell,
exchange, or otherwise dispose of the Holding Company stock to be
received in the transaction in an amount that would reduce the
shareholders' ownership of Holding Company stock to a number of
shares having a value, as of the effective date of the
transaction, of less than 50 percent of the total value of Bank
stock outstanding immediately before the transaction. For
purposes of the tax opinion, "management" means the Board of
Directors and executive officers of each organization as
identified in this Registration Statement.
3. New Mound City Bank ("New Bank"), as the surviving
corporation, will acquire and hold after the merger at least 90
percent of the fair market value of the net assets and at least
70 percent of the fair market value of the gross assets of the
Bank as of the time immediately prior to the transaction. (For
purposes of this representation, all payments to dissenters,
reorganization expenses, and all redemptions and distributions
(except for normal dividends) made by the Bank immediately before
the merger and which are part of the plan of reorganization will
be considered as assets held by the Bank immediately prior to the
merger.)
4. Prior to the transaction, the Holding Company will own
all of the issued and outstanding stock of the New Bank.
5. The New Bank has no plan or intention to issue an
additional class of stock or to issue additional shares of its
common stock that would result in the Holding Company's ownership
of less than 80% of the New Bank's common stock.
6. The Holding Company has no plan or intention to:
(a) Liquidate the New Bank;
(b) Merge the New Bank with or into another bank or
corporation;
(c) Cause the New Bank to sell or to otherwise dispose
of any of the Bank's assets, except in the ordinary course of
business; or
(d) Sell or otherwise dispose of any New Bank stock.
7. At the time of the transaction, the New Bank will not
have outstanding any warrants, options, convertible securities,
or any other type of right pursuant to which any person could
acquire stock in the New Bank.
8. The Bank is not under the jurisdiction of a court in a
Title 11 (bankruptcy) or similar case.
9. Following the transaction, the New Bank will continue
the historic business of the Bank or use a significant portion of
the Bank's historic business assets in a business.
10. On the date of the transaction, the fair market value
of the assets of the Bank will exceed the sum of its liabilities
plus the liabilities, if any, to which the assets are subject.
11. The liabilities of the Bank assumed by the New Bank,
and the liabilities to which the transferred assets of the Bank
are subject, have been incurred in the ordinary course of Bank's
business.
12. The Holding Company has no plan or intention to redeem
or otherwise reacquire any of its stock issued in the
transaction.
13. The Holding Company, the Bank, the New Bank, and the
shareholders will pay their respective expenses, if any, incurred
in connection with the transaction.
14. There is no intercorporate indebtedness between the
Holding Company, the Bank, or the New Bank which will be issued,
acquired, or settled at a discount.
15. No stock of the New Bank will be issued in the
transaction.
16. The management of the Holding Company and of the Bank
are not aware of any facts that might adversely affect the
determination that the transaction is a tax-free reorganization.
17. There are good business reasons for the transaction.
Based on these representations, legal counsel is of the
opinion that, under current law,
(1) The proposed merger will constitute a reorganization
within the meaning of Section 368(a)(1)(A) by reason of
Section 368(a)(1)(D) of the Internal Revenue Code of
1986, as amended, and Chapter 71 of the Wisconsin
Statutes. The reorganization will not be disqualified
by reason of the fact that Holding Company common stock
is used in the transaction. (Internal Revenue Code
Section 368(a)(2)(D).)
(2) No gain or loss will be recognized to the Bank on the
transfer of substantially all of its assets to the New
Bank in exchange for Holding Company common stock and
the assumption by the New Bank of the liabilities of
the Bank.
(3) No gain or loss will be recognized to the Holding
Company or the New Bank upon the receipt by the New
Bank of substantially all of the assets of the Bank in
exchange for Holding Company common stock and the
assumption by the New Bank of the liabilities of the
Bank.
(4) The basis of the Bank assets in the hands of the New
Bank will be the same as the basis of those assets in
the hands of the Bank immediately prior to the proposed
transaction.
(5) The holding period of the assets of the Bank in the
hands of the New Bank will include the period during
which such assets were held by the Bank.
(6) The basis of the New Bank stock in the hands of the
Holding Company will be increased by an amount equal to
the basis of the Bank assets acquired by the New Bank
in the transaction, and will be decreased by the amount
of liabilities of the Bank assumed by the New Bank and
the amount of liabilities to which the acquired assets
of the Bank are subject.
(7) No gain or loss will be recognized by the shareholders
on the exchange of their Bank common stock for Holding
Company common stock; provided, however, that no
opinion is expressed with respect to Bank shareholders
who dissent from the transaction and receive cash for
their Bank stock.
(8) The income tax basis of the Holding Company common
stock to be received by the shareholders will be the
same as the basis of the Bank common stock surrendered
in exchange.
(9) The holding period of the Holding Company common stock
to be received by the shareholders will include the
period during which the Bank common stock surrendered
in exchange was held, provided that the Bank common
stock is held as a capital asset on the date of the
exchange.
No tax rulings from the Internal Revenue Service have been
obtained, and the opinion of counsel will not be binding on the
Internal Revenue Service. Therefore, shareholders may find it
advisable to consult their own counsel as to the specific tax
consequences to them under the federal tax laws, as well as any
consequences under applicable state or local tax laws.
Shareholders who exercise dissenters' rights and receive
cash for their Bank stock should be aware that that transaction
will be a taxable transaction for federal and state income tax
purposes, and those shareholders are urged to consult their tax
advisors to determine the tax consequences to them under the
federal tax laws, as well as any consequence under applicable
state or local tax laws. The opinion of counsel attached as
Exhibit B does not pertain to cash payments received pursuant to
the reorganization.
Securities Regulation
The offer to enter into this exchange offer is not being
made to (nor can it be accepted from or on behalf of) holders of
Bank stock in any jurisdiction in which the making of the offer
or the acceptance thereof would not be in compliance with the
securities laws of such jurisdiction. The Holding Company is
not, and shall not be, obligated to acquire any shares of Bank
stock, or issue or deliver any shares of its common stock, in any
jurisdiction in which the agreement to do so would not be in
compliance with the securities laws of such jurisdiction.
However, the Holding Company, at its discretion, may take such
action as it may deem necessary or desirable to comply with the
securities laws of any such jurisdiction.
This transaction may be registered in certain states,
according to the laws of those states. No securities
commissioner, securities department, or similar office of any
state has approved or disapproved the Holding Company stock to be
issued in the reorganization or has passed upon the accuracy or
adequacy of this Prospectus. Any representation to the contrary
may be a criminal offense.
Resale of Holding Company Common Stock
The Holding Company stock issued in the exchange has been
registered under the Securities Act of 1933, as amended, and may
be traded by a shareholder subject to the Holding Company's right
of first refusal. See "COMPARISON OF BANK STOCK WITH HOLDING
COMPANY STOCK--Market For the Stock." Shareholders who, at the
Effective Date, are "affiliates" of the Bank and are affiliates
of the Holding Company at the time of the proposed resale are
subject to additional restrictions on the resale of their shares.
See "REORGANIZATION--Resales of Holding Company Stock by
Affiliates.'"
Expenses of Reorganization
If the reorganization is consummated, the Holding Company
and the Bank will assume and pay their respective costs and
expenses, if any, incurred in connection with the reorganization.
If the reorganization is not consummated, all costs and expenses
will be paid by the Bank. It is estimated that those costs and
expenses will be approximately $45,000.
RIGHTS OF DISSENTING SHAREHOLDERS OF BANK
Sections 221.0706 through 221.0718 of the Wisconsin
Statutes, the full text of which is attached hereto as Exhibit C,
set forth the procedure to be followed by any shareholder of the
Bank who wishes to dissent from the reorganization and obtain the
value of his or her shares of Bank stock in cash in lieu of
Holding Company stock pursuant to the reorganization.
Shareholders should refer to Exhibit C because the following
description does not purport to be a complete summary of those
sections.
In order to exercise such dissenters' rights, a Bank
shareholder (1) must deliver to the Bank before the vote is taken
written notice of the shareholder's or beneficial shareholder's
intent to demand payment for his or her shares if the proposed
reorganization is effectuated, and refrain from voting his or her
shares in favor of the proposed reorganization, and (2) must
demand payment in writing and certify whether he or she acquired
beneficial ownership of the shares before the date specified in
the dissenters' notice, which demand must be received by the date
stated in the dissenters' notice, which may not be fewer than 30
days nor more than 60 days after the date on which the
dissenters' notice is delivered. That written demand must be
accompanied by the surrender of the dissenting shareholder's Bank
stock certificates. The written demand should be addressed to:
Robert J. Just, Jr., President, Mound City Bank, 25 East Pine
Street, Platteville, Wisconsin 53818. The law does not provide
for a dissent with respect to less than all of the shares
beneficially owned by a shareholder.
As soon as the reorganization takes place or upon receipt of
a payment demand, whichever is later, the Bank shall pay each
shareholder or beneficial shareholder who has complied with the
demand requirements the amount that the Bank estimates to be the
fair value of the dissenter's shares, plus accrued interest. The
payment shall be accompanied by, among other things, the Bank's
latest available financial statements, a statement of the Bank's
estimate of the fair value of the shares, and an explanation of
how the interest was calculated.
If the dissenter believes that the amount so paid is less
than the fair value of his or her shares or that the interest due
is incorrectly calculated, the dissenter may notify the Bank of
the dissenter's estimate of the fair value of his or her shares
and the amount of interest due, and demand payment of his or her
estimate, less any payment received. A dissenter waives his or
her right to demand payment unless the dissenter notifies the
Bank of his or her demand in writing within 30 days after the
Bank makes or offers payment for the dissenter's shares.
If a demand for payment then remains unsettled, the Bank
shall bring a special proceeding within 60 days after receiving
the dissenter's payment demand and petition the court to
determine the fair value of the shares and accrued interest. If
the Bank does not bring the special proceeding within the 60-day
period, it shall pay each dissenter whose demand remains
unsettled the amount demanded. Fees and costs of the court
proceeding will be allocated by the court pursuant to statutory
guidelines.
MOUND CITY FINANCIAL SERVICES, INC.
History, Business, and Properties
The Holding Company was incorporated as a Wisconsin business
corporation under the Wisconsin Business Corporation Law, Chapter
180 of the Wisconsin Statutes, in September, 1996, at the
direction of the management of the Bank. The Holding Company was
formed to acquire the Bank stock and to engage in business as a
bank holding company under the Bank Holding Company Act of 1956,
as amended (the "Act"). A true and correct copy of the Articles
of Incorporation of the Holding Company is attached as Exhibit D.
A copy of the Holding Company's bylaws will be provided to any
Bank shareholder upon request.
The Holding Company is in the organizational and
developmental stage, and has no earnings or history of operation.
The Holding Company has no employees, no current business, and
owns no property, except that the Holding Company will own all of
the stock of the New Bank immediately prior to the
reorganization. It has not issued any stock. It is not a party
to any legal proceedings.
The Holding Company has no present plans to engage in any
activities other than as a holding company for the capital stock
of the Bank. The Holding Company's management, however, believes
that the opportunities available to a bank holding company for
diversification of its business and raising of capital cause the
bank holding company to be a more advantageous form of operation
than a bank. The Holding Company may examine and may pursue
opportunities from time to time that arise for expansion of its
operations and activities. See "THE REORGANIZATION - Reasons for
the Reorganization."
Management
Development and management of the Holding Company will be
dependent upon the efforts and skills of the following
individuals, who constitute the initial executive officers and
directors of the Holding Company:
Name and Age Position with Principal Shares of
Percentage
Holding Occupation Holding
(Approx.)
Company Company (1)
Wilson J. Director Auto Dealer 65 1.81%
Boldt, 82
Barry J. Director Grocer 5 .139
Brodbeck, 40
Keith R. Director Restaurant 5 .139
Buchert, 51 Owner
Donna J. Secretary Banker 2 .056
Hoppenjan, 38
Robert J. President/CEO, Banker 38 1.06
Just, Jr., 49 Director
W. Phil Director Attorney 128 3.56
Karrmann, 56
Richard J. Director Insurance 25 .694
Kopp, 51 Agency Owner
Richard L. Vice Retired 34 .944
McWilliams, 59 President, Chiropractor
Director
James D. Director Retired 60 1.67
Soles, 72 Retailer
Douglas W. Director Farmer 9 .25
Speth, 60
TOTALS 371
10.31%
[FN]
(1) Represents the aggregate number of shares which would be
owned of record individually and jointly, or by a spouse or
children residing at the same address, and the shares which any
such person controls the right to vote, after the reorganization.
The beneficial owners are listed on page 27, footnote 1.
Each of the directors and executive officers named has had
the same principal occupation or employment for the past five
years. Each of the directors and executive officers named has
served in the capacity listed above since the incorporation of
the Holding Company in September, 1996. The initial term of
office for Messrs. Brodbeck, Just and Kopp is one year; for
Messrs. Buchert, Karrmann and McWilliams two years; and for
Messrs. Boldt, Soles and Speth three years. Thereafter the term
of office for all directors shall be three years. The term of
office for each of the executive officers named above is one
year. Please refer to page 27 of this Prospectus for a
description of the business background of the directors and
executive officers named above.
Principal Shareholders
After the reorganization, the persons beneficially owning 5%
or more of Holding Company common stock will be the same persons
who currently own 5% or more of the Bank stock. See "MOUND CITY
BANK--Principal Shareholders."
Description of Holding Company's Common Stock
The Holding Company's authorized capital stock consists of
300,000 shares, all of one class, designated as common stock,
none of which shares, as of the date hereof, is issued or
outstanding. The maximum number of shares of the Holding
Company's common stock which will be issued to the holders of
Bank stock, upon the terms and subject to the conditions of the
reorganization, is 3,600 shares. The Holding Company currently
has no plans to sell, distribute, or otherwise issue the
remaining 296,400 shares of authorized but unissued stock. The
excess 296,400 shares have been authorized at this time to
provide the Holding Company with greater flexibility to entertain
the acquisition of another bank or business, and to otherwise
expand or diversify its business in the future.
For more information about the Holding Company's common
stock, see "COMPARISON OF BANK STOCK WITH HOLDING COMPANY STOCK."
Executive Compensation
Since its incorporation, the Holding Company has not paid
any remuneration to any of its directors or executive officers.
No changes in remuneration to any of its directors or officers
are planned. To date, the Holding Company has not established
standards or other arrangements by which its directors are
compensated for services as directors, including any additional
amounts payable for committee participation or special
assignments and no such arrangements are currently contemplated.
No profit-sharing plan or any other benefit plan exists or is
contemplated for the Holding Company.
<R/>
Transactions with Related Parties
The Holding Company has not engaged in any transactions or
entered into any contracts with any of its directors or executive
officers. No such transactions or contracts are anticipated at
this time by the Holding Company.
Certain Anti-Takeover and Indemnification Provisions
The Holding Company's Articles of Incorporation give the
Holding Company a right of first refusal to purchase shares of
its stock at a price and on the terms and conditions offered to a
shareholder by a prospective purchaser.
Transactions within a
shareholder's immediate family and stock pledges are permitted
(although the stock so transferred or pledged remains subject to
the right of first refusal). <R/>The right of first refusal may
limit a shareholder's ability to sell shares to purchasers other
than the Holding Company. In addition, the right of first
refusal may reduce the likelihood of another buyer obtaining
control of the Holding Company through the acquisition of large
blocks of Holding Company stock. The Bank's Articles of
Incorporation do not contain a comparable provision. See
"COMPARISON OF BANK STOCK WITH HOLDING COMPANY STOCK--Market for
the Stock."
The Holding Company's Articles of Incorporation contain
certain other provisions that may have an effect of delaying,
deferring or preventing a change in control of the Holding
Company. Such provisions could also result in the Holding
Company being less attractive to a potential acquiror. The
Articles of Incorporation provide that the Board of Directors
shall consist of three classes of directors, each serving for a
three-year term ending in a successive year. This provision may
make it more difficult to effect a takeover of the Holding
Company because an acquiring party would generally need two
annual meetings of shareholders to elect a majority of the Board
of Directors. As a result, a classified Board of Directors may
discourage proxy contests for the election of directors or
purchasers of a substantial block of stock by preventing such a
shareholder or purchaser from obtaining control of the Board of
Directors in a relatively short period of time. For information
relating to the initial classes of directors of the Holding
Company, see "MOUND CITY FINANCIAL SERVICES, INC.--Management."
The Articles of Incorporation also require the affirmative
vote of 75% of the outstanding shares of voting stock to approve
certain fundamental changes such as mergers or consolidations of
the Holding Company or the sale of all or substantially all of
the Holding Company's assets, unless such changes have received
advance approval of 75% of the Holding Company's directors, in
which case the required vote is a majority.
In addition, the Articles of Incorporation provide that the
provisions of the Articles of Incorporation establishing the
Holding Company's classified board of directors, establishing
additional voting requirements, and providing the Holding Company
with a right of first refusal to purchase its stock may be
amended only by the affirmative vote of not less than 75% of the
outstanding shares of voting stock of the Holding Company.
As set forth in Sections 180.0850 through 180.0859 of the
Wisconsin Statutes, the bylaws of the Holding Company require
that the Holding Company indemnify a director or officer from all
reasonable expenses and liabilities asserted against, incurred
by, or imposed on that person in any proceeding to which he or
she is made or threatened to be made a party by reason of being
or having been an officer or director of the Holding Company.
Indemnification will not be made if the person breached a duty to
the Holding Company in one of the following ways: (a) a wilful
failure to deal fairly with the Holding Company in a matter in
which the director or officer has a material conflict of
interest; (b) a violation of criminal law, unless the person had
reasonable cause to believe his or her conduct was lawful or had
no reasonable cause to believe his or her conduct was unlawful;
(c) a transaction from which the person derived improper personal
profit; or (d) wilful misconduct. The right to indemnification
includes, in some circumstances, the right to receive
reimbursement of costs and expenses in such a proceeding as they
are incurred.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be available to
directors, officers, and controlling persons of the Holding
Company pursuant to the foregoing provisions of its bylaws, or
otherwise, the Holding Company has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act.
The Holding Company may purchase insurance against
liabilities asserted against its directors, officers, employees,
or agents whether or not it has the power to indemnify them
against such liabilities under the provisions of its bylaws or
pursuant to applicable law. Indemnification insurance for
directors, officers, employees, and agents of the Holding Company
has not been purchased either by such persons or by the Holding
Company.
MOUND CITY BANK
History, Business, and Properties
The Bank was chartered by the Wisconsin Commissioner of
Banking in 1915. In September of 1935, the Bank opened a paying
and receiving station at Belmont, Wisconsin. This station is
still operated today as a branch of the Bank. On July 1, 1992,
the Bank purchased the fixed assets and assumed the deposit
liabilities of the Anchor Savings and Loan Association branch
office in Cuba City, Wisconsin. From July 1 of 1992 to July 1 of
1996, deposits at the Cuba City branch have grown from $3.75
million to $11.37 million, and loan volume has grown from $4.66
million to $10.4 million.
The Bank offers comprehensive banking services to the
residential, commercial, industrial, and agricultural areas that
it serves. Services include agricultural, commercial, real
estate and personal loans; checking, savings, and time deposits;
and other customer services, such as safe deposit facilities.
The Bank also offers alternative investments, individual
retirement accounts and trust services. Drive-up banking is
available at the Belmont and Cuba City branches, as well as the
newly completed Motor Branch in Platteville. Full-service
lending is available at every location. 24-hour telephone
banking has been available since 1995 and the Bank intends to
offer full-service home banking prior to year-end 1997.
The Bank's local community for Community Reinvestment Act
purposes comprises a 15-mile radius from a point located on U. S.
Highway 151 at the Lafayette County/Grant County line. The
Bank's loan portfolio, as of June 30, 1996, consisted of the
following:
Loan Category Volume (.000s) Percent of Portfolio
Consumer Loans 4,328 5.67%
Commercial Loans 28,173 36.89
Agricultural Loans 15,367 20.12
Residential Real Estate 27,548 36.08
Municipal, etc. 945 1.24
Totals 76,361 100.00%
The following schedule indicates loan and deposit volume
distribution for the local area zip codes, as of June 30, 1996:
<TABLE>
<CAPTION>
City, Town, Deposits Percent Loans Percent
Village (000s) of Total (000s) of Total
<S> <C> <C> <C> <C>
Belmont 53510 11,257 11.65% 3,538 4.63%
Benton 53803 744 .77 505 .66
Cuba City 12,720 13.16 8,393 10.99
53807
Darlington 1,016 1.05 169 .22
53530
Dickeyville 551 .57 469 .61
53808
East Dubuque 519 .54 25 .03
61025
Hazel Green 2,754 2.85 769 1.01
53811
Kieler 53812 334 .40 17 .02
Lancaster 2,406 2.49 2,484 3.25
53813
Livingston 559 .59 464 .61
53554
Mineral 955 .99 793 1.04
Point 53565
Montfort 177 .18 312 .41
53569
Platteville 49,528 51.23 43,859 57.44
53818
Potosi 53820 1,428 1.48 785 1.03
Rewey 53580 680 .70 953 1.25
Shullsburg 571 .59 229 .30
53586
Stitzer 149 .15 4 .01
53825
All Other 10,254 10.61 12,593 16.49
Totals $96,672 100.00% 76,361 100.00%
</TABLE>
The general banking business in the State of Wisconsin is
characterized by a high degree of competition. The principal
methods of competition among commercial banks are price
(including interest rates paid on deposits, interest rates
charged on borrowings, and fees charged) and service (including
convenience and quality of service rendered to customers). In
addition to competition among commercial banks, banks face
significant competition from non-banking financial institutions,
including savings and loan associations, credit unions, small
loan companies, and insurance companies.
There are two other commercial banks, one savings bank and
one credit union located in Platteville. The Bank's competition
comes from those institutions and others located near
Platteville. Insurance companies, mortgage bankers, and
brokerage firms provide additional competition for certain
banking services. The Bank also competes for interest-bearing
funds with issuers of commercial paper and other securities,
including the United States Government.
There are no pending or threatened legal proceedings known
to the Bank that, in the opinion of the directors and officers of
the Bank, may be materially adverse to the Bank's financial
condition, business, or operations. There are no material
pending or threatened legal proceedings known to the Bank in
which any director, executive officer, or affiliate of the Bank
(or any associate of any of them) has a material interest that is
adverse to the Bank.
The Bank's principal banking office is located at 25 East
Pine Street, Platteville, Wisconsin, in a facility built in 1977.
This 11,000 square foot facility was constructed in 1977. In
1996, an addition and complete remodeling has resulted in a new
22,000 square foot facility. The Bank also operates a 3,400
square foot Motor Branch, constructed in 1995 and located at 90
South Second Street, directly across from the main office. The
Bank's branch facilities are located at 112 Mound Avenue, in
Belmont, Wisconsin, and 200 South Main Street, in Cuba City,
Wisconsin. Both branches offer full-service banking, including a
drive-up. On June 30, 1996, the Bank's staff included 16
officers, 27 full-time and 7 part-time employees. There are a
total of 224 shareholders of the Bank.
<PAGE>
Management
The following persons constitute the executive officers and
directors of the Bank:
<TABLE>
<CAPTION>
Name and Age Position with Served Number of
Percentage
Bank/Number of Since Shares of
(Approx.)
Years at Bank Stock (1)
<S> <C> <C> <C> <C>
John R. Vice President 1986 6 .167%
Arendt, 49 Commercial
Lending, 10 yrs
Wilson J. Director, 20 yrs 1976 65 1.81
Boldt, 82
Barry J. Director, .5 yrs Jan. 1996 5(2) .139
Brodbeck, 40
Keith Director, 2 yrs 1994 5 .139
Buchert, 51
Donna J. Cashier, Vice 1977 2 .056
Hoppenjan, 38 President Retail
Services, 19 yrs
David D. Vice President 1960 32 .889
Jones, 56 Marketing and
Business Devel-
opment, 36 yrs.
Robert J. Director, 1971 38 1.06
Just, Jr., 49 President/CEO,
25 yrs
W. Phil Director, 24 yrs 1972 128 3.56
Karrmann, 56
Richard J. Director, 8 yrs 1988 25 .694
Kopp, 51
Richard L. Vice President, 1981 34 .944
McWilliams, 59 Director,
Chairman, 15 yrs
James D. Director, 37 yrs 1959 60 1.67
Soles, 72
Douglas W. Director, 20 yrs 1976 9 .25
Speth, 60
Joseph L. Vice President/ 1985 5 .139
Witmer, 39 Sr. Loan Officer,
11 yrs
TOTALS 414
11.50%
<FN>
<FN1>
(1) Represents the aggregate number of shares owned of record
individually
and jointly, or by a spouse or children residing at the same
address, and
the shares which any such person controls the right to vote. The
beneficial
owners are as follows:
Robert J. Just, Jr.: Spouse, Joan Just
Wilson J. Boldt: Spouse, Vera Boldt
Donna J. Hoppenjan: Spouse, Rick Hoppenjan
David D. Jones: Spouse, Mary Lou Jones
W. Phil Karrmann: Spouse, Barbara Karrmann
Richard J. Kopp: with Patrice T. Kopp, Trustees of the Kopp
Trust
Richard L. McWilliams: Spouse, Patricia McWilliams
James D. Soles: Spouse, Maxine Soles
<FN2>
(2) In addition, Mr. Brodbeck is a beneficiary of the Richard W.
Brodbeck
Family Trust, Gus Harms, Trustee. The Trust owns 56 shares.
</TABLE>
The term of office for all directors is one year. The
directors are elected at the annual meeting of the shareholders
of the Bank. All executive officers are appointed to their
respective positions for a one-year period by the Board of
Directors at the annual meeting of the Bank. There are no family
relationships among any of the directors, executive officers or
key personnel of the Holding Company or the Bank.
Business Background of Directors and Executive Officers
John R. Arendt (Vice President Commercial Lending) - Mr.
Arendt was hired as an Assistant Vice President - Lending in July
of 1986. A graduate of the University of Wisconsin - Eau Claire,
Mr. Arendt brought extensive lending experience to this position,
having served as a Loan Officer with the Farm Credit System for
six years. He was promoted to Vice President of Commercial
Lending in December of 1995. Under his leadership, the
Commercial Lending Department has grown from just over $6,000,000
in December of 1986 to over $28,000,000 as of June 30, 1996.
Wilson J. Boldt (Director) - A lifelong resident of
Platteville, Mr. Boldt has been in business in the Platteville
area for over 50 years. He has been the owner/operator of the
Pioneer Ford and Mercury dealership in Platteville since 1961.
Mr. Boldt has been an active participant in the Platteville
Chamber of Commerce and other civic groups. He received the
Outstanding Community Service Award in 1978 and was named
Business Person of the Year in 1980 by the Platteville Chamber of
Commerce. He has served as Council President of the Lutheran
Church of Peace, Secretary of the Platteville Park Board for ten
years, and served on the Board of Review for the City of
Platteville for 15 years. He also served on the Board of
Directors of the University of Wisconsin - Platteville Foundation
for six years. Mr. Boldt has been a director of Mound City Bank
since 1976.
Barry J. Brodbeck (Director) - A native of Platteville, Mr.
Brodbeck is Vice President of Human Resources of Brodbeck
Enterprises, Inc., Platteville, Wisconsin, the parent company of
Dick's Supermarkets, and has been associated with that company
since 1982. A 1979 graduate of Hillsdale College in Hillsdale,
Michigan, Mr. Brodbeck has served as Chairman of the Board of
Directors of Cornell University Distance Education and as
Chairman of the Board of Trustees for Southwest Health Center in
Platteville. Mr. Brodbeck was first elected to the Bank's Board
of Directors in January of 1996.
Keith R. Buchert (Director) - Mr. Buchert is the
owner/operator of three area restaurants: Country Kitchen of
Platteville; Country Kitchen of Columbus, Wisconsin; and the
Timbers, of Platteville. He is a past member of the Franchisee
Advisory Board of Country Kitchen of Wisconsin. Active in
community affairs, he has served as Council President of the
Lutheran Church of Peace and is Past President of the Platteville
Area Chamber of Commerce. Mr. Buchert was honored in 1993 as the
Small Business Person of the Year by the Platteville Chamber of
Commerce and in 1995 he and his spouse were named Citizens of the
Year by the Platteville Journal. Mr. Buchert is also active in
Ducks Unlimited and is responsible for the creation of the
Friends of Conservation Scholarship program. Mr. Buchert has
served on the Mound City Bank Board of Directors since June of
1994.
Donna J. Hoppenjan (Vice President - Retail Services) - Mrs.
Hoppenjan began employment with the Bank in June of 1977 as a
teller and has had experience in every phase of the retail
operations of the Bank. She served as Internal Auditor from 1988
until her promotion to Vice President in January of 1995. She
has been responsible for leadership in many Bank projects,
including the acquisition and conversion of the branch office in
Cuba City, Wisconsin, and the construction and occupation of the
Motor Branch facility and newly remodeled main office in
Platteville, Wisconsin. She is responsible for general
operations, including but not limited to Human Resources,
Education and Training, and Compliance. She currently serves as
Cashier and Secretary to the Bank's Board of Directors.
David D. Jones (Vice President - Marketing and Business
Development) - Mr. Jones has been employed by the Bank since May
of 1960 and has extensive experience in all operational functions
of the Bank. His current responsibilities include Marketing and
Business Development, as well as Consumer lending, Payroll
Management and Community Reinvestment Act compliance. Mr. Jones
has a long history of successful community involvement, including
leadership roles with the Platteville Jaycees, the Platteville
Optimists, the United Way of Platteville, and numerous youth
groups. An active member of his church, he also served as
President of the Platteville Chamber of Commerce in 1991 and
received a Distinguished Service Award for community service from
the Platteville Jaycees in 1975.
Robert J. Just, Jr. (President, Chief Executive Officer,
Director) - Mr. Just has been employed with the Mound City Bank
since August of 1971. A graduate of the University of Wisconsin
- - Platteville and the Graduate School of Banking in Madison, Mr.
Just has served as President and a Director of Mound City Bank
since November of 1986. Under his leadership, the Bank has
expanded its market area with the acquisition of the Cuba City
branch office and has expanded its facilities in Platteville with
the construction of the new Motor Branch and main office
facility. During his tenure as President, the Bank's assets have
grown by more than 70%, from $64,500,000 in 1986 to over
$110,000,000 in 1996. Active in the community, Mr. Just has
served as Chairman for the United Way, Chairman of the Board of
Directors of Southwest Health Center in Platteville, and
President of the Platteville Jaycees. He has also served on the
Board of Directors of the Platteville Chamber of Commerce, and as
Treasurer of the University of Wisconsin - Platteville Alumni
Association for five years. He received the Distinguished
Service Award for community service from the Platteville Jaycees
in 1981.
W. Phil Karrmann (Director) - A Platteville native and
partner in the Law Firm of Karrmann, Buggs and Baxter, Mr.
Karrmann received his law degree from the University of Wisconsin
Law School in 1964. Mr. Karrmann has also been active in the
community, including chairing the United Way drive and serving as
Director of the University of Wisconsin - Platteville Foundation.
He has served as a member of the Board and Treasurer of the
Platteville School District and as Past Director and President of
the Wisconsin School Attorneys Association. He has also served
as Legal Counsel for the Wisconsin Auctioneers Association. Mr.
Karrmann has served as a member of the Board of Directors of
Mound City Bank since 1972.
Richard J. Kopp (Director) - A native of Platteville and
graduate of the University of Wisconsin - Platteville, Mr. Kopp
has been the owner/operator of the House of Insurance since May
of 1972. He has served as a Director of the Platteville Area
Industrial Development Corporation, Platteville Chamber of
Commerce, and as President of the Platteville Golf and Country
Club. He has also served on the City of Platteville Police and
Fire Commission and its Planning Commission. Currently he is
serving as a Director for the Independent Insurance Agents of
Wisconsin. An active member of St. Mary's Church in Platteville,
Mr. Kopp has been a director of Mound City Bank since 1988.
Richard L. McWilliams (Vice President, Chairman,
Director) - A native of Platteville, Dr. McWilliams received his
Chiropractic Degree from Palmer Chiropractic College in 1959. He
had been a partner in Chiropractic Associates in Platteville
since 1960. He has served two years on the Platteville Common
Council and played a role in the establishment of the Platteville
Area Industrial Development Corporation. He is a past recipient
of the Distinguished Service Award for community service. Dr.
McWilliams has been a member of the Board of Directors of the
Bank since 1981 and has served as Chairman of the Board since May
of 1994.
James D. Soles (Director) - A native of Platteville, Mr.
Soles was the owner/operator of Dewey's Shoe Store, on Main
Street in Platteville, from 1949 until his retirement in 1987.
Mr. Soles has been active in the business community, and was
named Business Person of the Year by the Platteville Chamber of
Commerce in 1986. He has served on the Board of Directors for
Mound City Bank since 1959.
Douglas W. Speth (Director) - A native of Belmont,
Wisconsin, Mr. Speth managed a 264-acre beef and crop farming
operation in Elk Grove Township. Mr. Speth has served as
Director with Mound City Bank since 1976.
Joseph L. Witmer (Vice President and Sr. Loan Officer) - A
graduate of the University of Wisconsin - Platteville in 1979,
Mr. Witmer began employment with the Bank as an Assistant Vice
President for Agricultural Lending in January of 1985. He was
previously employed for four years as a Lending Officer with Farm
Credit Services. Promoted to Vice President and Sr. Loan Officer
in December of 1991, he is responsible for the overall management
of the Bank's lending operations. The Bank's overall asset
quality has improved dramatically under his leadership and the
Bank has enjoyed a more than 65% growth in total loans
outstanding since 1991. Mr. Witmer is very active in community
affairs, having served in leadership roles with the Platteville
Jaycees and the Platteville Optimists. He has served as a
Director and President of the Platteville Chamber of Commerce and
has served a term as Council person on the Platteville Common
Council. Mr. Witmer graduated from the University of Wisconsin
Graduate School of Banking in August of 1995.
Executive Compensation
The following table outlines the annual compensation and
estimated annual benefits payable upon retirement to Mr. Just for
services rendered in his capacity as President and Chief
Executive Officer ("CEO") of the Bank:
<TABLE>
<CAPTION>
Summary Compensation Table
Name and Principal Year Salary($)(1) Bonus($)
Other($)(2)
Position
<S> <C> <C> <C> <C>
Robert J. Just, Jr., 1995 $88,596.50 $4,140.00
$11,781.16
President/CEO
1994 $86,670.00 $5,884.82
$11,713.56
1993 $81,961.92 $3,447.00
$11,713.56
<FN>
<FN1>
(1) "Salary" includes 401(k) contributions made by the Bank on
behalf of
Mr. Just.
<FN2>
(2) "Other" includes meeting attendance fees of $8,200 in 1995,
$8,250 in
1994, and $8,250 in 1993. This item also includes health
insurance
premiums paid by the Bank in the amount of $3,037.92 in
1995,
$2,930.40 in 1994, and $2,930.40 in 1993.
</TABLE>
In 1992, the Bank entered into a Salary Continuation
Agreement with President and CEO Robert J. Just, Jr. The
agreement calls for continued compensation of $40,000 per year
for 17 years upon retirement or, in specific cases, termination
of employment of Mr. Just. Normal retirement is defined as age
60. The contractual benefit is being funded with the purchase of
life insurance policies owned by the Bank insuring Mr. Just.
Director Compensation
Outside directors receive $300 per meeting attended for
regularly scheduled monthly Board of Directors meetings. They
also receive $125 for each Committee meeting (averaging two per
month or 24 per year) and an annual $500 bonus. Board members
are also eligible for the Bank's health insurance plan and the
Bank pays 75% of the monthly premium for this coverage. The
current cost to the Bank for health insurance coverage for
outside directors is $3,109.68 per participating director per
year.
The only inside director is President and CEO Robert J.
Just, Jr. Until June 30, 1996, Mr. Just received the same
meeting attendance fees as outside directors but did not receive
the annual director bonus. As of July 1, 1996, no meeting
attendance fees are paid Mr. Just over and above his regular
salary.
Board Review of Management Compensation
The entire Board of Directors reviews and determines the
compensation for the officers of the Bank. The Compensation
Committee of the Board is responsible for making specific
compensation recommendations to the Board. The Compensation
Committee consists of Messrs. Brodbeck, Just, Kopp, McWilliams,
and Soles. Mr. Just is the only executive officer who is a
member of the Board of Directors and thus participates in the
decisions concerning compensation.
Principal Shareholders
As of the date of this Prospectus, the following persons are
the only persons (including any "group" as used in Section
13(d)(3) of the Securities Exchange Act of 1934) known to the
Bank to be the beneficial owner of more than five percent of the
Bank's outstanding capital stock:
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership (Approx.)
E. R. Clare 10 .0%
1300 West Camp
Platteville, WI
53818-1512
E. R. and Mariam T. 906 (1) 26.0
Clare Trusts
Patrick M. Clare, Trustee
465 South Court Street
Platteville, WI
53818-3511
TOTAL 916 26.0%
[FN]
(1) Ownership as indicated in the stock ledger of the Bank as of
September 30, 1996. The Bank states, on information and belief,
that E.R. Clare and/or his spouse and lineal descendants are
beneficiaries of the Trusts.
Description of the Stock of the Bank
As of the date hereof, the Bank is authorized to issue 4,000
shares of common stock, all of one class, of which 3,600 shares
are issued and outstanding. The Bank has approximately 224
shareholders of record. For further information about the stock,
see "COMPARISON OF BANK STOCK WITH HOLDING COMPANY STOCK."
Transactions with Related Parties
The Bank has had in the ordinary course of business, and
will continue to have in the future, banking transactions such as
personal and business loans with its directors, officers, and/or
the owners of more than ten percent of the Bank and Holding
Company stock. Such loans are now and will continue to be on the
same terms, including collateral and interest rate, as those
prevailing at the same time for comparable transactions with
others of similar credit standing and do not and will not in the
future involve more than normal risks of collectibility or
present other unfavorable features.
At no time during 1993, 1994, and 1995 did or has the
maximum aggregate direct and indirect extensions of credit to any
director, executive officer or 10% shareholder, and to his or her
respective related interest, exceeded fifteen percent (15%) of
the Bank's capital. From time to time, the Bank has entered into
nonbanking business transactions with entities with which some of
its directors are affiliated. Those transactions have been at
arm's length and have been at competitive prices.
Indemnification of Directors and Officers
Wisconsin law governing indemnification of the Bank's
directors, officers, and employees is substantially similar to
the law governing indemnification of the Holding Company's
directors, officers, and employees. For a brief discussion of
that law, see "MOUND CITY FINANCIAL SERVICES, INC.--Certain
Anti-Takeover and Indemnification Provisions."
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to
directors, officers, and controlling persons of the Bank pursuant
to the foregoing provisions, or otherwise, the Bank has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act.
The Bank has purchased insurance insuring the Bank, its
directors and officers, against liabilities asserted against its
directors and officers subject to certain conditions and
limitations. Expenses of an officer or director in such a
proceeding may be advanced based upon her or his agreement to
repay such expenses if it is determined that he or she is not
entitled to indemnification. If the officer or director is
successful on the merits his expenses shall be paid; otherwise
indemnification can only be made upon a showing that he or she
met the applicable standard of conduct as determined by a court,
a quorum of disinterested directors, by independent legal
counsel, or by the shareholders.
Shares of the Stock Owned or Controlled by Management
As of the date hereof, the executive officers and directors
of the Bank own or control, directly or indirectly, 414 shares,
or approximately 11.5%, of the total Bank stock outstanding.
The Holding Company has no knowledge or information as to
the existence of any contract, arrangement, or understanding
among the above-named persons with respect to the shares of the
Bank stock. To the knowledge of the Holding Company no person
above named has any material interest in the transaction proposed
by the reorganization, direct or indirect, other than in their
status as shareholders.
Recommendation of the Bank's Board of Directors
The Board of Directors of the Bank recommends that all
shareholders vote to approve the reorganization. The decision of
the Board of Directors of the Bank to recommend the
reorganization to the shareholders is based on their belief that
the Bank's affiliation with the Holding Company is in the best
interest of the Bank and its shareholders.
Such belief is based on a number of factors, including
recent and historical transactions in the Bank's capital stock,
the Board of Directors' knowledge of the business, operations,
properties, assets, earnings and prospects of the Bank, and the
advantages provided by a holding company corporate organizational
structure. The Board of Directors of the Bank did not attach a
relative weight to the factors it considered in reaching its
decision, but considering all factors made the determination to
recommend the reorganization to the shareholders. See "THE
REORGANIZATION--Reasons for the Reorganization."
COMPARISON OF BANK STOCK
WITH HOLDING COMPANY STOCK
Authorized Shares and Par Value
The Bank is authorized to issue 4,000 shares of capital
stock, all of one class, designated as common stock, of which
3,600 shares are issued and outstanding. The Holding Company is
authorized to issue 300,000 shares of capital stock, all of one
class, designated as common stock. No Holding Company stock has
been issued. Either the Bank or the Holding Company could
increase the amount of authorized stock at any time by an
amendment to its Articles of Incorporation approved by its
shareholders.
The Holding Company will issue less than the full amount of
its 300,000 authorized shares in the reorganization. The Holding
Company has no specific plans at this time regarding the sale or
distribution of any authorized but unissued shares.
Voting Rights
Each share of Bank stock has one vote on all matters
presented to the shareholders of the Bank. Each act by the
shareholders of the Bank requires a majority vote, except as
otherwise provided by law. Bank shareholders are not entitled to
cumulative voting in the election of directors. Similarly, each
share of the Holding Company stock has one vote on all matters
presented to the shareholders of the Holding Company. Each act
by the shareholders of the Holding Company requires a majority
vote, except as otherwise provided by law. The Holding Company
will not have cumulative voting in the election of directors.
There are many similarities in the voting requirements
imposed by the Wisconsin banking laws as compared to the
Wisconsin general corporate laws. For example, under both the
Wisconsin Banking Law and the Wisconsin Business Corporation Law,
a vote of the majority of the outstanding stock is required to
approve a merger. Similarly, under both the Wisconsin Banking
Law and the Wisconsin Business Corporation Law, a vote of the
majority of the outstanding stock can amend the articles of
incorporation.
All of the directors of the Bank are elected at each
respective annual meeting. Currently, the shareholders of the
Bank elect the Bank's Board of Directors at the Bank's annual
meeting of shareholders held within the first 90 days of each
calendar year. Bank shareholders exercise direct control over
the Bank's affairs by election of the Bank's directors and by the
right to vote on other Bank matters from time to time. Bank
directors may be removed by the affirmative vote of a majority of
the outstanding shares entitled to vote for the election of such
director, taken at a special meeting called for that purpose.
If the proposed reorganization is consummated, the
shareholders who receive Holding Company stock will elect the
Holding Company Board of Directors. The Board of Directors of
the Holding Company will initially consist of nine members. The
Board will be divided into three classes as nearly equal in
number as possible. Each year the term of office of one class of
directors will expire. After initial terms of one, two, and
three years, respectively, successors to the directors in that
class will be elected at the annual meeting of shareholders for a
term of three years and until their successors are duly elected
and qualified. Elections to the offices currently held by
Messrs. Brodbeck, Just and Kopp will take place at the 1997
annual meeting of shareholders. No Holding Company directors may
be removed, with or without cause, except by an affirmative vote
of seventy-five percent (75%) of the directors or of the
outstanding shares entitled to vote.
The officers of the Holding Company will be elected annually
by the Holding Company Board of Directors. The officers of the
Holding Company will vote the shares of Bank stock held by the
Holding Company, and therefore will elect the Bank Board of
Directors, acting pursuant to the instructions of the Board of
Directors of the Holding Company.
There is no requirement that the Boards of the Bank and of
the Holding Company be identical. Shareholders of the Holding
Company will exercise direct control over the Holding Company by
election of the Holding Company directors and by other voting
rights, and therefore will exercise indirect control over the
Bank. The direct control of the Bank stock will be exercised by
the Holding Company Board of Directors, who are obligated to act
in the best interests of the Holding Company shareholders.
Dividends
The Bank has paid cash dividends on its common stock each
year since 1988, and expects to continue to pay dividends in the
future. Recent dividends have been as follows:
Dividend
Year Paid Per Share
1992 $60.00
1993 $65.00
1994 $65.00
1995 $70.00
1996 $75.00
It is the intention of the Board of Directors of the Holding
Company to pay cash dividends on its common stock at least
annually. Substantially all of the Holding Company's assets will
consist of its investment in the Bank, and immediately after the
reorganization the availability of funds for dividends to be paid
by the Holding Company will depend primarily upon the receipt of
dividends from the Bank. Dividends of the Holding Company will
also be dependent on future earnings, the financial condition of
the Holding Company and its subsidiaries, and other factors.
Whether the dividends, if any, paid by the Holding Company
in the future will be equal to, less than, or more than the
dividends paid by the Bank in the past cannot be predicted.
However, it is unlikely that dividends paid by the Holding
Company in the initial few years of operation would be
significantly larger than the dividends paid by the Bank in prior
years, and such dividends may not be as large. If the Holding
Company incurs indebtedness, such as expenses for the
reorganization or a loan to purchase Holding Company stock, Bank
dividends received by the Holding Company will be applied toward
that indebtedness, at least in part, rather than be paid to
Holding Company shareholders as dividends from the Holding
Company.
Under the Wisconsin Banking Law, the Board of Directors of a
bank may declare and pay a dividend from its undivided profits in
an amount they consider expedient. The Board of Directors shall
provide for the payment of all expenses, losses, required
reserves, taxes, and interest accrued or due from the bank before
the declaration of dividends from undivided profits. If
dividends declared and paid in either of the two immediately
preceding years exceeded net income for either of those two years
respectively, the bank may not declare or pay any dividend in the
current year that exceeds year-to-date net income except with the
written consent of the Department of Financial Institutions
Division of Banking.
A bank's dividends may not in any way impair or diminish the
capital of the bank other than by reducing undivided profits. If
a dividend is paid that does not comply with this limitation,
every shareholder receiving the dividend is liable to restore the
full amount of the dividend unless the capital is subsequently
made good. If the Board of Directors of a bank pays dividends
when the bank is insolvent or in danger of insolvency, or not
having reason to believe that there were sufficient undivided
profits to pay the dividends, the members of the Board of
Directors are jointly and severally liable to the creditors of
the bank at the time of declaring dividends in an amount equal to
twice the amount of the dividends.
Federal regulators have authority to prohibit a bank from
engaging in any action deemed by them to constitute an unsafe or
unsound practice, including the payment of dividends. In
addition to the foregoing, Wisconsin business corporations such
as the Holding Company are prohibited by Wisconsin law from
paying dividends while they are insolvent or if the payment of
dividends would render them unable to pay debts as they come due
in the usual course of business.
Market for the Stock
(a) In General: As of November 15, 1996, the Bank had 224
shareholders of record. No established public trading market
exists for the Bank stock. The stock is infrequently traded, and
the current market for the stock is limited. The Bank is
prohibited by law from holding or purchasing more than 10% of its
own shares except in limited circumstances.
<R/>
Similarly, there will be no established public trading
market for Holding Company stock. Unlike the Bank, however, the
Holding Company will generally be able to purchase its own
shares. In some circumstances, a bank holding company may not
purchase its own shares without giving prior notice to the
Federal Reserve Board. Specifically, if the Holding Company
desires to purchase as much as 10% (in value) of its own stock in
any 12-month period, it may be required in some instances to
obtain approval for so doing from the Federal Reserve Board.
Otherwise, the Holding Company is restricted by sound business
judgment, its prior commitments, and the consolidated financial
condition of the Holding Company and its subsidiaries. In no
event may a Wisconsin corporation purchase its own shares when
the corporation is insolvent or when such a purchase would make
it insolvent.
Although the Holding Company may generally, in the Board's
discretion, purchase shares of its stock, it is not obligated to
do so. In the event that the Holding Company fails to exercise
its right of first refusal, a selling shareholder may be required
to locate a prospective buyer for his or her shares on a person-
to-person basis.
<R/>
(b) Right of First Refusal: Pursuant to Article 5C of its
Articles of Incorporation, the Holding Company shall have a right
of first refusal to purchase any shares of its stock at the price
and on the terms and conditions offered to any Holding Company
shareholder by a prospective purchaser. Shareholders should
refer to Article 5C of the Articles of Incorporation, attached as
Exhibit D. The following description does not purport to be a
comprehensive statement of the terms of the Holding Company's
right of first refusal.
(i) Summary of the Provision. The right of first
refusal shall apply to all sales, assignments, or dispositions of
any right, title or interest in or to Holding Company shares,
whether voluntary or by operation of law, except for (1)
transactions between a shareholder and his or her spouse, a
member of his or her immediate family or lineal descendants of
his or her immediate family, and (2) any pledge of Holding
Company stock. For purposes of transactions described in (1),
"immediate family" shall mean a shareholder's children,
ancestors, brothers and sisters (whether by full or half blood),
the spouses of such brothers and sisters, and the lineal
decedents of the shareholder's spouse. Transferees in either of
the transactions described in (1) or (2) shall be subject to the
Holding Company's right of first refusal. The Holding Company is
not obligated to make any purchases of the Holding Company stock,
but may do so at the discretion of its Board of Directors.
In the event a shareholder (the "Selling Shareholder"),
desires to dispose of his or her shares of stock, or any portion
thereof (the "Offered Shares"), other than in a transaction of
the type described in (1) or (2) above, without first obtaining
the written consent of the Holding Company, the Selling
Shareholder, first, shall give the Holding Company written notice
of his or her intent to do so, stating the identity of the
proposed transferee of the Offered Shares, the number of Offered
Shares the Selling Shareholder proposes to transfer, the proposed
consideration for the Offered Shares and the other terms and
conditions of the proposed transfer of the Offered Shares. The
Holding Company shall have a right of first refusal to acquire
all, but not less than all, of the Offered Shares for the
consideration and on the other terms and conditions offered by
the proposed transferee and as contained in the written notice
given to the Holding Company by the Selling Shareholder. The
Holding Company shall exercise its right to acquire the Offered
Shares by giving written notice to the Selling Shareholder,
indicating the number of Offered Shares it will acquire, within
thirty (30) days following receipt of the written notice from the
Selling Shareholder. If the Holding Company does not exercise
its acquisition rights within that time period, the Selling
Shareholder shall be free for a period of thirty (30) days
thereafter to transfer all of the Offered Shares to the
transferee identified in the written notice to the Holding
Company, at the same consideration and on the same terms and
conditions set forth in the notice. After giving notice of the
intended transfer, the Selling Shareholder shall refrain from
participating as an officer, director or shareholder of the
Holding Company with respect to the Holding Company's decision on
whether or not to acquire the Offered Shares unless requested by
the other shareholders holding a majority of the Holding
Company's outstanding shares of capital stock, not including the
shares held by the Selling Shareholder. As a condition precedent
to the effectiveness of any transfer of Offered Shares, the
transferee shall agree in writing to be bound by all of the terms
and conditions of the Holding Company's right of first refusal.
Each certificate representing shares of Holding Company
stock shall bear a legend in substantially the following form:
"The shares represented by this
certificate and any sale, transfer,
or other disposition thereof are
restricted under and subject to the
terms and conditions contained in
Article 5C of the Corporation's
Articles of Incorporation, a copy of
which is on file at the offices of
the Corporation."
The provisions of the Holding Company's Articles of
Incorporation relating to this right of first refusal may not be
amended, altered or repealed except by the affirmative vote of
the holders of at least 75% of the shares of Holding Company
stock.
(ii) Potential Anti-Takeover and Other Effects. The
Holding Company's right of first refusal may reduce the ability
of third parties to obtain control of the Holding Company. In
particular, the Holding Company's right to match the price
offered by a prospective buyer might make acquisitions of large
blocks of Holding Company stock by other buyers more difficult.
The right of first refusal might also discourage tender offers,
proxy contests, or other attempts to gain control of the Holding
Company through the acquisition of voting stock. Shareholders
who might support the takeover of the Holding Company in a given
situation could amend, alter or repeal the right-of-first-refusal
provision only by obtaining an affirmative vote of 75% of the
issued and outstanding shares.
Because of these effects, this provision may render
removal of current management by a new owner less likely. This
could be the case whether or not such removal would be beneficial
to shareholders generally. Another overall effect of the
provision may be to limit shareholder participation in
transactions such as tender offers.
Whether the right of first refusal serves as an
advantage to management or to shareholders depends on the
particular circumstances. In a hostile tender offer, for
example, members of management and shareholders who support the
present ownership may benefit from the provision, while
shareholders desirous of participating in the tender offer or
removing management would be disadvantaged.
The Holding Company's Articles of Incorporation contain
provisions having anti-takeover effects in addition to the
right-of-first-refusal provision described above. See "MOUND
CITY FINANCIAL SERVICES, INC. -- Certain Anti-Takeover and
Indemnification Provisions."
(iii) Reasons for the Right of First Refusal. The
Boards of Directors of the Holding Company and the Bank believe
that giving the Holding Company a right of first refusal to
purchase shares of its stock is in the best interests of the
Holding Company and its shareholders and the Bank. One of the
purposes of forming a holding company for the Bank is to enable
the Bank to continue under local control. The proposed right of
first refusal effectuates this purpose by providing a mechanism
for assuring local control of the Holding Company and the Bank.
The proposal is not the result of Bank management's knowledge of
any specific effort to obtain control of the Bank by means of a
merger, tender offer, solicitation in opposition to management or
otherwise. Nevertheless, the Boards of Directors are concerned
that, without this provision and the other anti-takeover
provisions described herein, local control of the Bank may not be
achieved over the long term.
Value
As of September 30, 1996, the per share book value of the
Bank stock, according to the Bank's internal financial
statements, was $2,739.16. An appraisal of the Bank stock
prepared for Bank management by Bankers' Service Corporation as
of March 31, 1996 estimated the value of the stock as it relates
to minority share transactions at $2,643 per share, or 102% of
unadjusted book value and 10x weighted average earnings. To the
best knowledge of the Bank, there have been 40 different
transfers of Bank stock, involving a total of 318 shares of Bank
stock, between January 1, 1994 and the date of this Prospectus.
To the best of the Bank's knowledge, most of those transactions
were conducted at a price ranging from approximately $1,475 to
approximately $1,575 per share.
At least initially, the value of one share of Holding
Company stock will be equivalent to the value of a share of Bank
stock. There is no assurance, however, that those values will
remain equivalent, particularly if the Holding Company should
acquire another bank or establish a non-banking subsidiary to
conduct a banking-related business. Bank stock will not reflect
the value of any other Holding Company subsidiaries that may be
established in the future.
Other
(a) Liquidation Rights: The Shareholders of the Bank and
the Holding Company are entitled to share pro rata in the net
assets of the organization, after payment of all liabilities, if
the organization is ever liquidated.
(b) Preemptive Rights: Shareholders of the Bank do not
have preemptive rights to acquire additional shares of the
organization that may be issued in the future. Shareholders of
the Holding Company likewise will not have preemptive rights.
Authorized but unissued shares of Holding Company stock may be
issued for cash or other consideration on authorization of the
Board of Directors for proper corporate purposes.
(c) Conversion Rights: Neither the Bank stock nor the
Holding Company stock is convertible into any other security.
(d) Call: Neither the Bank stock nor the Holding Company
stock is subject to any call or redemption rights on the part of
the organization.
(e) Assessability: All of the Bank and Holding Company
stock issued or to be issued is or will be fully paid and
nonassessable, except as provided by law. The Wisconsin Business
Corporation Law imposes a statutory liability on shareholders of
every corporation up to an amount equal to the par value of their
shares, and to the consideration for which their shares without
par value were issued, for all debts owing to employees of the
corporation for services performed for such corporation, but not
exceeding six months' service in any one case.
SUPERVISION AND REGULATION
General
Financial institutions and their holding companies are
extensively regulated under federal and state law. Consequently,
the growth and earnings performance of the Holding Company and
the Bank can be affected not only by management decisions and
general economic conditions, but also by the statutes
administered by, and the regulations and policies of, various
governmental regulatory authorities including, but not limited
to, the Federal Reserve Board, the Federal Deposit Insurance
Corporation ("FDIC"), the Wisconsin Department of Financial
Institutions Division of Banking, the Internal Revenue Service,
federal and state taxing authorities, and the Securities and
Exchange Commission (the "SEC"). The effect of such statutes,
regulations and policies can be significant, and cannot be
predicted with a high degree of certainty.
Federal and state laws and regulations generally applicable
to financial institutions and their holding companies regulate,
among other things, the scope of business, investments, reserves
against deposits, capital levels relative to operations, the
nature and amount of collateral for loans, the establishment of
branches, mergers, consolidations and dividends. The system of
supervision and regulation applicable to the Holding Company and
the Bank establishes a comprehensive framework for their
respective operations and is intended primarily for the
protection of the FDIC's deposit insurance funds and the
depositors, rather than the shareholders, of the Bank.
The following references to material statutes and
regulations affecting the Holding Company and the Bank are brief
summaries thereof and do not purport to be complete, and are
qualified in their entirety by reference to such statutes and
regulations. Any change in applicable law or regulations may
have a material effect on the business of the Holding Company and
the Bank.
Banking Regulation
The Holding Company, if the reorganization is successful,
will be a bank holding company subject to the supervision of the
Board of Governors of the Federal Reserve System under the Bank
Holding Company Act of 1956, as amended (the "Act"). In
accordance with Federal Reserve Board policy, the Holding Company
will be expected to act as a source of financial strength to the
Bank and to commit resources to support the Bank in circumstances
where the Holding Company might not do so absent such policy. As
a bank holding company, the Holding Company will be required to
file with the Board of Governors annual reports and such
additional information as the Board of Governors may require
pursuant to the Act. The Board of Governors may make
examinations of the Holding Company and its subsidiary. Because
the Bank will be chartered under Wisconsin law, the Holding
Company will also be subject to the examination, supervision,
reporting and enforcement requirements of the Wisconsin
Department of Financial Institutions Division of Banking.
The Act requires every bank holding company to obtain the
prior approval of the Board of Governors before it may acquire
direct or indirect ownership of more than five percent (5%) of
the voting securities or substantially all of the assets of any
bank. The Act limits the activities by bank holding companies to
managing, controlling, and servicing their subsidiary banks and
to engaging in certain non-banking activities which have been
determined by the Board of Governors to be closely related to
banking. Similarly, the Act, with specified exceptions relating
to permissible non-banking activities, forbids holding companies
from acquiring voting control (generally, 25% or more of the
voting power) of any company which is not a bank. Some of the
activities that the Board of Governors has determined by
regulation to be closely related to banking are making or
servicing loans, leasing real and personal property where the
lease serves as the functional equivalent of an extension of
credit, making investments in corporations or projects designed
primarily to promote community welfare, acting as an investment
or financial advisor, providing data processing services, and
acting as an insurance agent or broker, as those activities are
defined and limited by the regulation.
Subsidiary banks of a bank holding company are subject to
certain restrictions imposed by the Federal Reserve Act on any
extensions of credit to the bank holding company or any of its
subsidiaries, on investments in the stock or other securities
thereof, and on the taking of such stock or securities as
collateral for loans to any borrower. Further, under the Act and
regulations of the Board of Governors, a bank holding company and
its subsidiaries are prohibited from engaging in certain tie-in
arrangements in connection with any extension of credit or
provision of any property or services. The Board of Governors
possesses cease and desist powers over bank holding companies and
their non-banking subsidiaries if their actions represent an
unsafe or unsound practice or a violation of law.
The Bank is a Wisconsin-chartered bank. Its deposit
accounts are insured by the Bank Insurance Fund (the "BIF") of
the FDIC, except that the deposits of the Cuba City branch
acquired from Anchor Savings and Loan Association are insured by
the Savings Association Insurance Fund ("SAIF"). As a BIF- and
SAIF-insured, Wisconsin-chartered bank, the Bank is subject to
the examination, supervision, reporting and enforcement
requirements of the Wisconsin Department of Financial
Institutions Division of Banking, as the chartering authority for
Wisconsin banks, and the FDIC, as administrator of the BIF. Areas
subject to regulation by the authorities include reserves,
investments, loans, mergers, issuance of securities, payment of
dividends, establishment of branches, and other aspects of
banking operations.
Capital Requirements for the
Holding Company and the Bank
The Federal Reserve Board and the FDIC use capital adequacy
guidelines in their examination and regulation of bank holding
companies and banks. If capital falls below minimum guideline
levels, a bank holding company may, among other things, be denied
approval to acquire or establish additional banks or non-bank
businesses.
The Federal Reserve Board and the FDIC's capital guidelines
establish the following minimum regulatory capital requirements
for bank holding companies: a risk-based requirement expressed
as a percentage of total risk-weighted assets, and a leverage
requirement expressed as a percentage of total assets. The
risk-based requirement consists of a minimum ratio of total
capital to a total risk-weighted assets of 8%, of which at least
one-half must be Tier 1 capital (which consists principally of
shareholders' equity). The leverage requirement consists of a
minimum ratio of Tier 1 capital to total assets of 3% for the
most highly rated companies, with minimum requirements of 4% to
5% for all others.
As of September 30, 1996, on a pro forma basis, the Holding
Company's ratio of total capital to risk-weighted assets was
12.2%, its ratio of Tier 1 capital to risk-weighted assets was
11.0%, and its ratio of Tier 1 capital to average assets was
8.2%. Also, as of September 30, 1996, the Bank's ratio of total
capital to risk-weighted assets was 13.5%, its ratio of Tier 1
capital to risk-weighted assets was 12.2%, and its ratio of Tier
1 capital to average assets was 9.1%.
<R/>
The risk-based and leverage standards presently used by the
Federal Reserve Board and the FDIC are minimum requirements, and
higher capital levels will be required if warranted by the
particular circumstances or risk profiles of individual banking
organizations. Further, any banking organization experiencing or
anticipating significant growth would be expected to maintain
capital ratios, including tangible capital positions (i.e., Tier
1 capital less all intangible assets), well above the minimum
levels.
The Federal Reserve Board's regulations provide that the
foregoing capital requirements will generally be applied on a
bank-only (rather than a consolidated) basis in the case of a
bank holding company with less than $150 million in total
consolidated assets.
FDIC Deposit Insurance Premiums
<R/>
The Bank pays deposit insurance premiums to the FDIC based
on a risk-based assessment system established by the FDIC for all
institutions insured by the Bank Insurance Fund of the FDIC
("BIF"). In addition, the Bank pays separate deposit insurance
premiums to the FDIC on the deposits of the Bank; a Cuba City
branch, which, by virtue of having been acquired from Anchor
Savings and Loan Association, are insured by the Savings
Association Insurance Fund of the FDIC ("SAIF").
<R/>
Pursuant to a final rule adopted by the FDIC in October
1996, institutions holding SAIF-insured deposits are subject to a
special assessment to capitalize the SAIF at its target
designated reserve ratio. The bank's special assessment is
$21,397.18, payable on November 27, 1996.
<R/>
Beginning January 1, 1997, and for each of the years 1997,
1998, and 1999, the Bank will pay premiums on its BIF-insured
deposits at the rate of 1.29% and on its SAIF-insured deposits at
the rate of 6.44%. Currently the Bank's SAIF-insured deposits
constitute approximately 5% of the Bank's total deposits, or (at
a maximum) roughly $4,478,000. The premiums assessable on that
amount of deposit in 1997 for both BIF and SAIF insurance would
be approximately $2,883, of which approximately $2,306 would be
attributable to the SAIF assessment. Under current legislation,
BIF- and SAIF-insured deposits will be assessed at the same rate
beginning January 1, 2000.
<R/>
Loan Limits to Borrowers
Generally, under the Wisconsin Banking Law, a
Wisconsin-chartered bank may make to any one borrower total loans
and extensions of credit not fully secured by collateral having a
market value at least equal to the loan in an amount not to
exceed 20% of the capital of the bank. Bank holding companies
are not subject to specific limitations on loans to one borrower.
However, bank holding company lending activities require the
prior approval of the Federal Reserve Board under Regulation Y.
Recent Regulatory Developments
On September 23, 1994, the "Riegle Community Development and
Regulatory Improvement Act of 1994" (the "Riegle Act") was signed
into law. The provisions of Title III of the Riegle Act are
intended to reduce the paperwork and regulatory burdens of
federally-insured financial institutions and their holding
companies. These provisions require the federal banking
regulators, among other things: (i) to consider the burdens and
benefits to depository institutions and their customers of
proposed regulatory and administrative requirements; (ii) within
two years of the enactment of the Riegle act, to eliminate from
their regulations and written supervisory policies regulatory
inconsistencies, outmoded or duplicative requirements and
unwarranted constraints on credit availability and to adopt
uniform requirements to implement common statutory schemes or
regulatory concerns; (iii) to create a unified examination
process for financial institutions subject to the jurisdiction of
more than one regulator; (iv) within six months of enactment of
the Riegle Act, to establish an internal regulatory appeals
process by which regulated institutions may obtain review of
agency determinations relating to such matters as examination
ratings, adequacy of loan loss reserves and significant loan
classifications; (v) to streamline the quarterly call report
format; and (vi) in considering revisions to risk-based capital
requirements, to ensure that the standards take into account the
size, activities and reporting burdens of institutions. The
Riegle Act also gives the federal banking agencies greater
flexibility with respect to the implementation and enforcement of
certain provisions of the Federal Deposit Insurance Corporation
Improvement Act of 1991 ("FDICIA"), including the FDICIA
provisions regarding safety and soundness standards, examination
frequency and independent audit requirements.
In addition, on September 29, 1994, the "Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994" (the
"Riegle-Neal Act") was signed into law. Effective September 29,
1995, the Riegle-Neal Act allows bank holding companies to
acquire banks located in any state in the United States without
regard to geographic restrictions or reciprocity requirements
imposed by state law, but subject to certain conditions,
including limitations on the aggregate amount of deposits that
may be held by the acquiring holding company and all of its
insured depositor institution affiliates. Effective June 1, 1997
(or earlier if expressly authorized by applicable state law), the
Riegle-Neal Act allows banks to establish interstate branch
networks through acquisitions of other banks, subject to certain
conditions, including certain limitations on the aggregate amount
of deposits that may be held by the surviving bank and all of its
insured depository institution affiliates. The establishment of
de novo interstate branches or the acquisition of individual
branches of a bank in another state (rather than the acquisition
of an out-of-state bank in its entirety) is allowed by the
Riegle-Neal Act only if specifically authorized by state law.
The legislation allows individual states to "opt-out" of certain
provisions of the Riegle-Neal Act by enacting appropriate
legislation prior to June 1, 1997. As a result of the delayed
effective dates of the interstate banking provisions of the
Riegle-Neal Act, and the need for state legislation action to
permit earlier interstate transactions and authorize de novo
interstate branching, the Riegle-Neal Act is not expected to have
an immediate significant impact on the Holding Company or the
Bank. Over time, however, the provisions of the Riegle-Neal Act
may increase competition in the market served by the Holding
Company and the Bank.
Under FDICIA, as implemented by final regulations adopted by
the FDIC, FDIC-insured state banks are prohibited, subject to
certain exceptions, from making or retaining equity investments
of a type, or in an amount, that are not permissible for a
national bank. FDICIA, as implemented by FDIC regulations, also
prohibits FDIC-insured state banks and their subsidiaries,
subject to certain exceptions, from engaging as principal in any
activity that is not permitted for a national bank or its
subsidiary, respectively, unless the bank meets, and continues to
meet, its minimum regulatory capital requirements and the FDIC
determines the activity would not pose a significant risk to the
deposit insurance fund of which the bank is a member.
Impermissible investments and activities must be divested or
discontinued within certain time frames set by the FDIC in
accordance with FDICIA. These restrictions are not currently
expected to have a material impact on the operations of the Bank.
Available Information
<R/>
The Holding Company has filed with the Securities and
Exchange Commission ("SEC"), Washington, D.C., a Registration
Statement
No. 333-14825 <R/>on Form S-4 under the Securities
Act of 1933, for the registration of Holding Company stock to be
issued in the reorganization. This Prospectus constitutes the
Prospectus that was filed as a part of that registration
statement.
The Bank currently is not subject to the requirements of the
Securities Exchange Act of 1934 ("Exchange Act"), and files no
reports or proxy statements with the SEC pursuant thereto. After
consummation of the reorganization, the Holding Company will be
subject to the reporting requirements of the Exchange Act,
pursuant to Section 15(d) thereof, but the Holding Company's duty
to file such reports is automatically suspended as to each fiscal
year at the beginning of which the Holding Company's stock is
held by fewer than 300 shareholders. Immediately upon completion
of the reorganization, the Holding Company's stock will be held
by no more than 224 shareholders.
Accordingly, the
Holding Company will not for the foreseeable future file reports
or proxy statements with the SEC. However, the Holding Company
will voluntarily provide shareholders with reports of the same
nature, and with the same frequency, as are currently provided
by the Bank to Bank shareholders.<R/>
The SEC maintains a Web site, http://www.sec.gov, that
contains filings made electronically with the SEC, including
those of the Holding Company.
<R/>
LEGAL MATTERS
Certain legal matters in connection with the reorganization
will be passed upon for the Holding Company and the Bank by
Boardman, Suhr, Curry & Field, One South Pinckney Street,
Madison, Wisconsin 53701-0927.
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT and Plan of Reorganization ("Agreement") is
made on ________________, 1996, by and between MOUND CITY BANK, a
state banking organization ("Bank"), and MOUND CITY FINANCIAL
SERVICES, INC., a Wisconsin corporation ("Corporation").
RECITALS
The parties consider it advantageous to form a one-bank
holding company, which will be the Corporation, to own all of the
outstanding stock of the Bank. To form the holding company, the
Corporation will organize a wholly-owned subsidiary bank, called
New Mound City Bank, a state banking organization ("New Bank").
Bank will then merge with and into New Bank, leaving New Bank as
the survivor, and converting the outstanding stock of Bank into
stock of the Corporation, so that the shareholders of Bank will
become the shareholders of the Corporation.
This reorganization is comprised of the organization of New
Bank and the merger of Bank into New Bank, as the surviving
entity (the "merger"). Pursuant to the terms of this Agreement,
and a Merger Agreement between Bank and New Bank (to be executed
after New Bank is formed), as of the Effective Date of the
Merger, each of the then issued and outstanding shares of Bank
Common Stock ("Bank Common") will be converted into one share of
the authorized but previously unissued common stock of the
Corporation ("Corporation Common").
NOW, THEREFORE, the parties do adopt this plan of
reorganization and agree as follows:
1. Merger. Subject to compliance with all requirements of
law and the terms and conditions set forth in this Agreement,
Bank will be merged with and into New Bank.
(a) Effective Date; Surviving Bank. The Effective
Date of this Merger (the "Effective Date") shall be the date set
forth in the Merger Agreement. At the Effective Date, Bank shall
be merged with and into New Bank, the separate existence of Bank
shall cease and New Bank, as the surviving corporation (the
"Surviving Bank"), shall succeed to and possess all of the
properties, rights, privileges, immunities, and powers, and shall
be subject to all the liabilities, obligations, restrictions, and
duties, of Bank and New Bank.
(b) Charter Number. With the consent of the Wisconsin
Department of Financial Institutions ("DFI"), the charter number
of the Bank prior to the Effective Date shall be the charter
number of the Surviving Bank.
(c) Articles of Incorporation; Name. From and after
the Effective Date and until thereafter amended as provided by
law, the Articles of Incorporation of the Surviving Bank shall be
the Articles of Incorporation of Bank, as amended or restated,
and the name of Surviving Bank shall be that of Bank.
(d) Bylaws. From and after the Effective Date and
until thereafter amended as provided by law, the Bylaws of Bank
in effect immediately prior to the Effective Date shall
constitute the Bylaws of Surviving Bank.
(e) Directors and Officers. From and after the
Effective Date and until their respective successors are elected,
the members of the Board of Directors and the officers of
Surviving Bank shall consist of those persons who are serving as
directors and officers of Bank immediately prior to the Effective
Date.
(f) Conversion of Stock. As of the Effective Date, by
virtue of the merger and without any action on the part of the
shareholders of Bank, all of the Bank Common outstanding
immediately prior to the Effective Date shall cease to exist and
shall be converted into Corporation Common, at the rate of one
(1) share of Corporation Common for each one (1) share of Bank
Common. As of the Effective Date, by virtue of the merger and
without any action on the part of the shareholders of New Bank,
all of the New Bank common stock outstanding immediately prior to
the Effective Date shall cease to exist and shall be converted to
3,600 shares of common stock of the Surviving Bank, $100 par
value.
(g) Transmittal Procedure. Bank will close its
transfer records on a date twenty (20) days prior to the
Effective Date for a period through and including the Effective
Date. When the Effective Date is established, the date of
closing of transfer records will also be set, and the
shareholders of Bank will be notified of such. Bank will make
every reasonable effort to have its shareholders of record tender
their certificates for Bank Common to the Exchange Agent at least
three (3) days prior to the Effective Date. Bank will serve as
the Exchange Agent for this transaction. On the Effective Date,
the Corporation shall provide to Bank, and Bank shall mail or
deliver to its shareholders, stock certificates of Corporation
Common to which those shareholders are entitled by reason of the
merger; provided, however, that no Corporation Common certificate
shall be mailed or delivered to a Bank shareholder who is
eligible to exercise dissenter's rights or who has not delivered
to Bank all certificates of Bank Common owned by such shareholder
(or if a certificate has been lost, an indemnity bond or other
agreement satisfactory to the Corporation).
Until so delivered to Bank, each outstanding
certificate which prior to the Effective Date represented shares
of Bank Common will be deemed for all purposes to evidence only
the right to receive the ownership of the shares of Corporation
Common into which such Bank Common has been converted; provided,
however, that until such Bank Common certificates are so
delivered to Bank, no dividend payable on Corporation Common at
any time after the Effective Date shall be paid to the holder of
such undelivered certificate. Upon the delivery of such
certificate after the Effective Date, the Corporation shall pay,
without interest, any unpaid dividends by reason of the preceding
sentence to the record holder thereof, and Bank shall deliver the
stock certificate for Corporation Common.
(h) Dissenting Shares of Bank. If any shares of Bank
Common are dissenting shares, Bank shall proceed according to
applicable law to determine and pay the fair value of those
dissenting shares. "Dissenting shares" shall mean each
outstanding share of Bank Common as to which the holder has
strictly complied with the provisions of applicable law in order
effectively to withdraw from Bank and obtain the right to receive
the fair value of his or her shares of Bank Common.
As of the Effective Date or the date that the last
action is taken to exercise dissenter's rights, whichever is
later, dissenting shares shall, by virtue of the merger, cease to
represent any ownership interest or ownership rights to the Bank
or the Corporation, and shall be converted into the right to
receive fair value of those shares as provided by law.
(i) Business. From and after the Effective Date, the
business of the Surviving Bank shall be that of a state bank,
conducted at the offices of Bank where located immediately prior
to the Effective Date.
(j) Assets and Liabilities. From and after the
Effective Date, the Surviving Bank shall be liable for all
liabilities of New Bank and Bank; and all deposits, debts,
liabilities, and contracts of New Bank and Bank, respectively,
matured or unmatured, whether accrued, absolute, contingent or
otherwise, and whether or not reflected or reserved against on
balance sheets, books of account or records of New Bank or Bank,
shall be those of the Surviving Bank and shall not be released or
impaired by reason of the merger; and all rights of creditors and
other obligees and all liens on property of either New Bank or
Bank shall be preserved unimpaired. Further, all rights,
franchises and interests of New Bank and Bank, respectively, in
and to every type of property (real, personal and mixed) and
choices in action shall be transferred to and vested in Surviving
Bank by virtue of such merger without any deed or other transfer,
and Surviving Bank, without any order or other action on the part
of any court or otherwise, shall hold and enjoy all rights of
property, franchises and interests, including appointments,
designations and nominations, and all other rights and interests
in every fiduciary capacity, in the same manner and to the same
extent as such rights, franchises and interests were held or
enjoyed by New Bank and Bank, respectively, on the Effective
Date.
(k) Tax Consequences. The parties intend and desire
that the merger shall be treated for income tax purposes as a
forward triangular merger under Section 368(a)(1)(A) and Section
368(a)(2)(D) of the Internal Revenue Code. The parties shall act
in all respects consistently with that intent.
(l) Shareholder Approvals. This Agreement and Plan of
Reorganization will be submitted to the respective shareholders
of Bank and New Bank for ratification and confirmation at
shareholder meetings to be called and held in accordance with the
applicable provisions of law and the respective Articles of
Incorporation and Bylaws of Bank and New Bank. Each shareholder
meeting shall be called as soon as reasonably possible. Bank and
New Bank will proceed expeditiously and cooperate fully in the
procurement of any other consents and approvals and in the taking
of any other action, and the satisfaction of all other
requirements prescribed by law or otherwise, necessary for
consummation of the merger. The Corporation, as sole shareholder
of New Bank, shall vote its stock in New Bank to approve the
merger and the transactions set forth in this Agreement.
(m) Regulatory Approvals. The parties shall prepare
and submit for filing any and all applications, filings, and
registrations with, and notifications to, all federal and state
authorities required for the merger to be consummated as
contemplated by this Agreement. Thereafter, the parties shall
pursue all such applications, filings, registrations, and
notifications diligently and in good faith, and shall file such
supplements, amendments, and additional information in connection
therewith as may be reasonably necessary for the merger to be
consummated.
(n) Merger Agreement. The Corporation shall form New
Bank promptly following execution of this Agreement and shall
cause New Bank to execute the Merger Agreement attached hereto as
Exhibit A. Within three days after execution by New Bank, Bank
shall execute the Merger Agreement.
2. Representations and Warranties by Bank. Bank
represents and warrants to the Corporation that this Agreement
has been approved by the Board of Directors of Bank, and upon
approval by the shareholders of Bank will be fully authorized by
all necessary corporation action.
3. Representations and Warranties by the Corporation. The
Corporation represents and warrants to Bank that the shares of
the Corporation Common to be delivered to Bank shareholders
pursuant to this Agreement will, upon issuance, be duly and
validly authorized and issued and fully paid and nonassessable
voting shares, except as otherwise required by law, and will
constitute all of the issued and outstanding shares of the
Corporation as of the Effective Date.
4. Closing. Subject to the satisfaction of all closing
conditions contained herein or their waiver, the closing shall
occur on the Effective Date, which will be within thirty (30)
days after the satisfaction of the last closing condition. The
Closing shall take place at the offices of Bank, or at such other
place as the Corporation and Bank may hereafter agree.
5. Conditions to Obligations of Both Parties. The
obligations of each party to be performed on the Effective Date
shall be subject to the following conditions unless waived in
writing by the parties:
(a) Regulatory Approval. On or before the Effective
Date, Bank shall have received the approval from those regulatory
agencies whose approval of the merger is required and any
mandatory waiting period(s) associated with such approval(s)
shall have expired.
(b) No Litigation. At the Effective Date, no
litigation or governmental investigation shall have been
commenced or, to the best knowledge of the Corporation or Bank,
threatened or proposed, which would have a material, adverse
effect on the value of Bank or an adverse effect on the ability
of any party to close this transaction, or which arises out of or
concerns the transactions contemplated by this Agreement.
(c) Closing Not Later Than June 30, 1997. The closing
of the transactions contemplated hereunder shall have occurred on
or before June 30, 1997, unless such date is extended by mutual
written agreement of the parties.
(d) Shareholder Approval. This Agreement shall have
been approved and adopted by the shareholders of Bank and of New
Bank in such manner as required by law.
(e) Tax Opinion. The parties shall have received a
written opinion of tax counsel that the transactions contemplated
by this Agreement and the Merger Agreement will constitute a
tax-free reorganization under the provisions of Sections
368(a)(1)(A) and 368(a)(2)(D) of the Internal Revenue Code with
respect to those shareholders of Bank who will receive
Corporation Common in the merger.
(f) Securities Law Compliance. The Corporation Common
stock to be issued in the merger shall have been registered,
qualified or exempted under all applicable federal and state
securities laws, and there shall have been no stop order issued
or threatened by the SEC or any state that suspends the
effectiveness of any such registration, qualification, or
exemption.
6. Conditions to Obligations of Corporation and New Bank.
The obligations of the Corporation and New Bank to be performed
on the Effective Date shall be subject to the following
conditions unless waived in writing by the Corporation and New
Bank:
(a) Representations and Warranties True; Covenants and
Obligations Performed. All representations and warranties of
Bank shall be true and correct in all material respects on the
Effective Date, and Bank shall have performed all acts required
of it under the terms of this Agreement.
(b) Dissenting Shares. There shall be not more than
ten percent (10%) of the total outstanding shares of Bank that as
of the Effective Date are eligible to elect dissenter's rights by
reason of having complied with the procedures required by
applicable law.
(c) No Material Adverse Change. The assets, business,
operation, and prospects of Bank shall not have been materially
and adversely affected by a loss or destruction not fully
compensated by insurance, by any governmental proceeding or
action, or by any other event or occurrence, which in the
reasonable judgment of the Corporation would defeat or frustrate
the purposes of the reorganization or otherwise make the
reorganization undesirable.
7. Conditions to Obligations of Bank. The obligations of
Bank to be performed on the Effective Date shall be subject to
the following conditions unless waived in writing by Bank: all
representations and warranties of the Corporation shall be true
and correct in all material respects on the Effective Date, and
the Corporation and New Bank shall have performed all acts
required of them under the terms of this Agreement.
8. Additional Covenants of the Parties.
(a) Cooperation. The parties will fully cooperate
with each other and their respective counsels and accountants in
connection with any steps to be taken as part of their
obligations under this Agreement, including without limitation,
the preparation of financial statements and the supplying of
information in connection with the preparation of regulatory
applications.
(b) Expenses. All costs and expenses and charges
incurred by a party hereto shall be borne by such party,
including the fees of their respective accountants and attorneys;
provided, however, that if the merger is not consummated for any
reason, all costs and expenses incurred by the Corporation and
New Bank shall be paid by Bank.
(c) Affiliates. The parties acknowledge that (i)
shares of Corporation Common received in the reorganization by
persons who are affiliates of the parties for purposes of Rule
145, promulgated by the Securities and Exchange Commission
pursuant to the Securities Act of 1933, are subject to certain
restrictions on the public resale of such shares; (ii)
certificates evidencing shares of Corporation Common received by
affiliates pursuant to the reorganization shall carry a legend
referring to Rule 145 and the transfer restrictions imposed
thereunder; and (iii) such shares shall be subject to
stop-transfer instructions to the Corporation's transfer agent.
For purposes of Rule 145 an "affiliate" means a person who was,
as of the date of consummation of the reorganization, an
executive officer of Bank, or a director of Bank, or a person
deemed to control Bank (including without limitation a Bank
shareholder owning more than 10% of the Bank stock outstanding).
Neither Bank nor the Corporation is obligated to register shares
of Corporation Common for resale, and any such registration shall
be at the expense and instance of any shareholder, including an
affiliate, desiring such registration.
9. Termination. This Agreement and merger may be
terminated and abandoned upon prompt written notice to the other
party before the Effective Date, notwithstanding authorization
and adoption of this Agreement by the shareholders of one or both
of Bank and New Bank:
(a) By mutual consent of Bank and the Corporation
through their Boards of Directors;
(b) By Bank at any time after June 30, 1997 (or such
later date as shall have been agreed to in writing by the
parties) if any of the conditions provided for in Paragraphs 5 or
7 of this Agreement have not been met and have not been waived in
writing by Bank; or
(c) By the Corporation at any time after June 30, 1997
(or such later date as shall have been agreed to in writing by
the parties) if any of the conditions provided for in Paragraphs
5 or 6 of this Agreement have not been met and have not been
waived in writing by the Corporation.
10. Miscellaneous.
(a) Assignment. This Agreement and the rights,
interests, and benefits hereunder shall not be assigned,
transferred, or pledged in any way, and shall not be subject to
execution, attachment, or similar process. Any attempt to
assign, transfer, pledge, or make any other disposition of this
Agreement or of the rights, interests, and benefits contrary to
the foregoing provision, or the levy of any attachment or similar
process thereupon, shall be null and void and without effect.
(b) Waiver. No failure or delay of any party in
exercising any right or power given to it under this Agreement
shall operate as a waiver thereof. No waiver of any breach of
any provision of this Agreement shall constitute a waiver of any
prior, concurrent, or subsequent breach. No waiver of any breach
or modification of this Agreement shall be effective unless
contained in a writing executed by both parties.
(c) Entire Agreement. This Agreement supersedes any
other representations or agreement, whether written or oral, that
may have been made or entered into by the Corporation, Bank, New
Bank or by any officer or officers of such parties relating to
the acquisition of Bank, or its assets or business, by the
Corporation. This Agreement constitutes the entire agreement by
the parties, and there are no agreements or commitments except as
set forth herein.
(d) Amendment. This Agreement may be modified or
amended only by a written agreement executed by duly authorized
officers of both parties.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date and year first above
written.
ATTEST: MOUND CITY BANK
_______________________ By:________________________________
ATTEST: MOUND CITY FINANCIAL SERVICES, INC.
_______________________ By:________________________________
<PAGE>
MERGER AGREEMENT
MERGER AGREEMENT ("Merger Agreement") made this _____ day of
__________________, 1996, by and between MOUND CITY BANK, a state
banking organization ("Bank"), and New MOUND CITY BANK, a state
banking organization ("New Bank").
WITNESSETH
WHEREAS, Bank and Mound City Financial Services, Inc.
("Corporation") have entered into an Agreement and Plan of
Reorganization dated _____________, 1996 ("Agreement"), pursuant
to which Bank has agreed to merge with and into the Corporation's
wholly-owned subsidiary, New Bank, in a forward triangular
merger; and
WHEREAS, Bank and New Bank wish to agree on the terms of the
merger now that New Bank has been formed;
NOW, THEREFORE, the parties agree as follows:
1. Incorporation of Plan of Reorganization. The terms and
conditions of the Agreement are incorporated herein by reference
in their entirety, and made a part of this Merger Agreement with
the same effect as if New Bank had been a party to the Agreement.
2. Cooperation. New Bank shall cooperate with Bank to
achieve a prompt consummation of the transactions contemplated in
the Agreement, and shall perform all actions necessary or
convenient to be performed by it for that purpose.
3. Articles of Incorporation. Effective as of the time
this merger shall become effective as specified in the Agreement,
the articles of incorporation of that bank resulting from the
merger of Bank and New Bank shall read in their entirety as
stated in the attached Articles of Incorporation.
4. Capital Stock. The amount of capital stock of New Bank
shall be $50,000, divided into 500 shares of common stock, each
of $100 par value. At the time the merger shall become
effective (and after the temporary capitalization of the interim
bank has been returned to the Corporation), the resulting bank
shall have $____________ in capital, a surplus of $____________,
and undivided profits of $____________, adjusted, however, for
earnings and expenses between _________, 199__, and the Effective
Date of the merger. At the time the merger shall become
effective, the 500 shares of New Bank stock then outstanding
shall be converted into 3,600 shares, each of $100 par value, of
the resulting bank.
5. Effective Date. The Effective Date of the Merger shall
be _________________.
IN WITNESS WHEREOF, the parties have executed this Merger
Agreement by their proper corporate officers duly authorized to
execute this Agreement, as of the date first above written.
[S] [C]
Attest: MOUND CITY BANK
_________________________ By_________________________________
Attest: NEW MOUND CITY BANK
_________________________ By_________________________________
<PAGE>
EXHIBIT B
TAX OPINION OF BOARDMAN, SUHR, CURRY & FIELD
[SPECIMEN]
_______________, 1996
The Board of Directors
Mound City Financial Services, Inc.
25 East Pine Street
Platteville, Wisconsin 53818
The Board of Directors
Mound City Bank
P.O. Box 263
Platteville, Wisconsin 53818
Gentlemen:
You have requested that we render an opinion as to the tax
consequences to Mound City Financial Services, Inc. ("Holding
Company"), Mound City Bank ("Bank"), New Mound City Bank ("New
Bank"), and the shareholders ("Shareholders") of the Bank of a
corporate reorganization to form a one-bank holding company, as
described in an Agreement and Plan of Reorganization dated
_______________, 1996 between Holding Company and Bank
("Agreement") and in a certain Prospectus/Proxy Statement dated
____________________.
We acknowledge that this opinion is provided for the benefit
and guidance of the Shareholders as well as for the benefit and
guidance of Holding Company and Bank.
In making this opinion, we have relied on the Agreement, the
Prospectus/Proxy Statement, and the Merger Agreement (to be
executed between Bank and New Bank), and on the truth and
completeness of the warranties, representations, statements, and
facts contained in those documents. We have also relied upon the
truth and completeness of the following representations by
Holding Company and Bank:
1. The fair market value of the Holding Company stock
received by each Shareholder will be approximately equal to the
fair market value of the Bank stock surrendered in exchange.
2. There is no plan or intention by the Shareholders who
own one percent (1%) or more of the Bank stock, and to the best
of the knowledge of the management of Bank, there is no plan or
intention on the part of the remaining Shareholders to sell,
exchange, or otherwise dispose of the Holding Company stock to be
received in the transaction in an amount that would reduce the
Shareholders' ownership of Holding Company stock to a number of
shares having a value, as of the effective date of the
transaction, of less than 50 percent of the total value of Bank
stock outstanding immediately before the transaction. For
purposes of this letter, "management" shall mean the Board of
Directors and executive officers of each organization as
identified in the Registration Statement.
3. New Bank, as the surviving corporation, will acquire
and hold after the merger at least 90 percent of the fair market
value of the net assets and at least 70 percent of the fair
market value of the gross assets of Bank as of the time
immediately prior to the transaction. (For purposes of this
representation, all payments to dissenters, reorganization
expenses, and all redemptions and distributions (except for
normal dividends) made by Bank immediately before the merger and
which are part of the plan of reorganization will be considered
as assets held by Bank immediately prior to the merger.)
4. Prior to the transaction, Holding Company will own all
of the issued and outstanding stock of New Bank.
5. New Bank has no plan or intention to issue an
additional class of stock or to issue additional shares of its
common stock that would result in the Holding Company's ownership
of less than 80% of New Bank's common stock.
6. Holding Company has no plan or intention to:
(a) Liquidate New Bank;
(b) Merge New Bank with or into another bank or
corporation;
(c) Cause New Bank to sell or to otherwise dispose of
any of the Bank's assets, except in the ordinary
course of business; or
(d) Sell or otherwise dispose of any New Bank stock.
7. At the time of the transaction, New Bank will not have
outstanding any warrants, options, convertible securities, or any
other type of right pursuant to which any person could acquire
stock in New Bank.
8. Bank is not under the jurisdiction of a court in a
Title 11 (bankruptcy) or similar case.
9. Following the transaction, New Bank will continue the
historic business of Bank or use a significant portion of Bank's
historic business assets in a business.
10. On the date of the transaction, the fair market value
of the assets of Bank will exceed the sum of its liabilities plus
the liabilities, if any, to which the assets are subject.
11. The liabilities of Bank assumed by New Bank, and the
liabilities to which the transferred assets of Bank are subject,
have been incurred in the ordinary course of Bank's business.
12. Holding Company has no plan or intention to redeem or
otherwise reacquire any of its stock issued in the transaction.
13. Holding Company, Bank, New Bank, and the Shareholders
will pay their respective expenses, if any, incurred in
connection with the transaction.
14. There is no intercorporate indebtedness between Holding
Company, Bank, or New Bank which will be issued, acquired, or
settled at a discount.
15. No stock of New Bank will be issued in the transaction.
16. The management of Holding Company and of Bank are not
aware of any facts that might adversely affect the determination
that the transaction is a tax-free reorganization.
17. There are good business reasons for the transaction.
We have not undertaken to verify independently any of the
factual matters upon which we rely in providing this opinion.
Moreover, we have assumed that no changes have occurred or will
occur with respect to the documents described above or the
representations set forth in paragraphs 1 through 17 above.
Based upon and subject to the foregoing, it is our opinion
under current law that for federal and State of Wisconsin income
tax purposes:
(1) The proposed merger will constitute a reorganization
within the meaning of Section 368(a)(1)(A) by reason of
Section 368(a)(1)(D) of the Internal Revenue Code of
1986 and Chapter 71 of the Wisconsin Statutes. The
reorganization will not be disqualified by reason of
the fact that Holding Company common stock is used in
the transaction. (Internal Revenue Code Section
368(a)(2)(D).)
(2) No gain or loss will be recognized to Bank on the
transfer of substantially all of its assets to New Bank
in exchange for Holding Company common stock and the
assumption by New Bank of the liabilities of Bank.
(3) No gain or loss will be recognized to Holding Company
or New Bank upon the receipt by New Bank of
substantially all of the assets of Bank in exchange for
Holding Company common stock and the assumption by New
Bank of the liabilities of Bank.
(4) The basis of the Bank assets in the hands of New Bank
will be the same as the basis of those assets in the
hands of Bank immediately prior to the proposed
transaction.
(5) The holding period of the assets of Bank in the hands
of New Bank will include the period during which such
assets were held by Bank.
(6) The basis of the New Bank stock in the hands of Holding
Company will be increased by an amount equal to the
basis of the Bank assets acquired by New Bank in the
transaction, and will be decreased by the amount of
liabilities of Bank assumed by New Bank and the amount
of liabilities to which the acquired assets of Bank are
subject.
(7) No gain or loss will be recognized by the Shareholders
on the exchange of their Bank common stock for Holding
Company common stock; provided, however, that no
opinion is expressed with respect to Bank shareholders
who dissent from the transaction and receive cash for
their Bank stock.
(8) The income tax basis of the Holding Company common
stock to be received by the Shareholders will be the
same as the basis of the Bank common stock surrendered
in exchange.
(9) The holding period of the Holding Company common stock
to be received by the Shareholders will include the
period during which the Bank common stock surrendered
in exchange was held, provided that the Bank common
stock is held as a capital asset on the date of the
exchange.
Our opinion is limited to the specific issues addressed. We
express no opinion and make no representation, and no inference
is intended or should be drawn from any statement in this letter,
as to any other issues involving the transaction.
BOARDMAN, SUHR, CURRY & FIELD
<PAGE>
EXHIBIT C
SECTION 221.0706 THROUGH 221.0718
OF THE WISCONSIN STATUTES
Wisconsin Acts (Advance)
1995 WISCONSIN ACT 336
221.0706 Right to dissent.
(1) MANDATORY DISSENTERS' RIGHTS. A shareholder or beneficial
shareholder may dissent from, and obtain payment of the fair
value of his or her shares in the event of, any of the following
corporate actions:
(a) Consummation of a plan of merger to which the issuer
bank is a party.
(b) Consummation of a plan of share exchange if the issuer
bank's shares will be acquired, and the shareholder or the
shareholder holding shares on behalf of the beneficial
shareholder is entitled to vote on the plan.
(c) Except as provided in sub. (2), any other corporate
action taken pursuant to a shareholder vote to the extent that
the articles of incorporation, the bylaws or a resolution of the
board of directors provides that the voting or nonvoting
shareholder or beneficial shareholder may dissent and obtain
payment for his or her shares.
(2) PERMISSIVE DISSENTERS' RIGHTS. The articles of incorporation
may allow a shareholder or beneficial shareholder to dissent from
an amendment of the articles of incorporation and obtain payment
of the fair value of his or her shares if the amendment
materially and adversely affects rights in respect of a
dissenter's shares because it does any of the following:
(a) Alters or abolishes a preferential right of the shares.
(b) Creates, alters or abolishes a right in respect of
redemption, including a provision respecting a sinking fund for
the redemption or repurchase, of the shares.
(c) Alters or abolishes a preemptive right of the holder of
shares to acquire shares or other securities.
(d) Excludes or limits the right of the shares to vote on
any matter or to cumulate votes, other than a limitation by
dilution through issuance of shares or other securities with
similar voting rights.
(e) Reduces the number of shares owned by the shareholder
or beneficial shareholder to a fraction of a share if the
fractional share so created is to be acquired for cash under
Section 221.0506.
(3) RIGHTS OF DISSENTER. A shareholder or beneficial shareholder
entitled to dissent and obtain payment for his or her shares
under Sections 221.0701 to 221.0718 may not challenge the
corporate action creating his or her entitlement unless the
action is unlawful or fraudulent with respect to the shareholder,
beneficial shareholder or issuer bank.
221.0707 Dissent by shareholders and beneficial shareholders.
(1) PARTIAL EXERCISE OF DISSENTERS' RIGHTS. A shareholder may
assert dissenters' rights as to fewer than all of the shares
registered in his or her name only if the shareholder dissents
with respect to all shares beneficially owned by any one person
and notifies the bank in writing of the name and address of each
person on whose behalf he or she asserts dissenters' rights. The
rights of a shareholder, who asserts dissenters' rights under
this subsection as to fewer than all of the shares registered in
his or her name, are determined as if the shares as to which he
or she dissents and his or her other shares were registered in
the names of different shareholders.
(2) RIGHTS OF BENEFICIAL SHAREHOLDERS. A beneficial shareholder
may assert dissenters' rights as to shares held on his or her
behalf only if the beneficial shareholder does all of the
following:
(a) Submits to the bank the shareholder's written consent
to the dissent not later than the time that the beneficial
shareholder asserts dissenters' rights.
(b) Submits the consent under par. (a) with respect to all
shares of which he or she is the beneficial shareholder.
221.0708 Notice of dissenters' rights.
(1) ACTION AT SHAREHOLDER MEETING. If proposed corporate action
creating dissenters' rights under Section 221.0706 is submitted
to a vote at a shareholders' meeting, the meeting notice shall
state that shareholders and beneficial shareholders are or may be
entitled to assert dissenters' rights under Sections 221.0701 to
221.0718 and shall be accompanied by a copy of those sections.
(2) ACTION WITHOUT SHAREHOLDER VOTE. If corporate action
creating dissenters' rights under Section 221.0706 is authorized
without a vote of shareholders, the bank shall notify, in writing
and in accordance with Section 221.0103, all shareholders
entitled to assert dissenters' rights that the action was
authorized and send them the dissenters' notice described in
Section 221.0710.
221.0709 Notice of intent to demand payment.
(1) METHOD OF ASSERTING DISSENTERS' RIGHTS. If proposed
corporate action creating dissenters' rights under Section
221.0706 is submitted to a vote at a shareholders' meeting, a
shareholder or beneficial shareholder who wishes to assert
dissenters' rights shall do all of the following:
(a) Deliver to the issuer bank before the vote is taken
written notice that complies with Section 221.0103 of the
shareholder's or beneficial shareholder's intent to demand
payment for his or her shares if the proposed action is
effectuated.
(b) Refrain from voting his or her shares in favor of the
proposed action.
(2) FAILURE TO COMPLY. A shareholder or beneficial shareholder
who fails to comply with sub. (1) is not entitled to payment for
his or her shares under Sections 221.0701 to 221.0718.
221.0710 Dissenters' notice.
(1) WHEN REQUIRED. If a proposed corporate action creating
dissenters' rights under Section 221.0706 is authorized at a
shareholders' meeting, the bank shall deliver a written
dissenters' notice to all shareholders and beneficial
shareholders who satisfied Section 221.0709 (1).
(2) TIMING AND CONTENT OF NOTICE. The dissenters' notice shall
be sent no later than 10 days after the corporate action is
authorized at a shareholders' meeting or without a vote of
shareholders, whichever is applicable, and all necessary
regulatory approvals are obtained. The dissenters' notice shall
comply with Section 221.0103 and shall include or have attached
all of the following:
(a) A statement indicating where the shareholder or
beneficial shareholder must send the payment demand and where and
when certificates for certificated shares must be deposited.
(b) For holders of uncertificated shares, an explanation of
the extent to which transfer of the shares will be restricted
after the payment demand is received.
(c) A form for demanding payment that includes the date of
the first announcement to news media or to shareholders of the
terms of the proposed corporate action and that requires the
shareholder or beneficial shareholder asserting dissenters'
rights to certify whether he or she acquired beneficial ownership
of the shares before that date.
(d) A date by which the bank must receive the payment
demand, which may not be fewer than 30 days nor more than 60 days
after the date on which the dissenters' notice is delivered.
(e) A copy of Sections 221.0701 to 221.0718.
221.0711 Duty to demand payment.
(1) MANNER OF DEMANDING PAYMENT. A shareholder or beneficial
shareholder who is sent a dissenters' notice described in Section
221.0710, or a beneficial shareholder whose shares are held by a
nominee who is sent a dissenters' notice described in Section
221.0710, must demand payment in writing and certify whether he
or she acquired beneficial ownership of the shares before the
date specified in the dissenters' notice under Section
221.0710(2)(c). A shareholder or beneficial shareholder with
certificated shares must also deposit his or her certificates in
accordance with the terms of the notice.
(2) EFFECT OF DEMAND ON HOLDERS OF CERTIFICATED SHARES. A
shareholder or beneficial shareholder with certificated shares
who demands payment and deposits his or her share certificates
under sub. (1) retains all other rights of a shareholder or
beneficial shareholder until these rights are canceled or
modified by the effectuation of the corporate action.
(3) EFFECT OF FAILURE TO DEMAND. A shareholder or beneficial
shareholder with certificated or uncertificated shares who does
not demand payment by the date set in the dissenters' notice, or
a shareholder or beneficial shareholder with certificated shares
who does not deposit his or her share certificates where required
and by the date set in the dissenters' notice, is not entitled to
payment for his or her shares under Sections 221.0701 to
221.0718.
221.0712 Restriction on uncertificated shares.
(1) WHEN TRANSFER RESTRICTIONS PERMITTED. The issuer bank may
restrict the transfer of uncertificated shares from the date that
the demand for payment for those shares is received until the
corporate action is effectuated or the restrictions released
under Section 221.0714.
(2) EFFECT OF DEMAND ON HOLDERS OF UNCERTIFICATED SHARES. The
shareholder or beneficial shareholder who asserts dissenters'
rights as to uncertificated shares retains all of the rights of a
shareholder or beneficial shareholder, other than those
restricted under sub. (1), until these rights are canceled or
modified by the effectuation of the corporate action.
221.0713 Payment.
(1) WHEN PAYMENT MADE. Except as provided in Section 221.0715,
as soon as the corporate action is effectuated or upon receipt of
a payment demand, whichever is later, the bank shall pay each
shareholder or beneficial shareholder who has complied with
Section 221.0711 the amount that the bank estimates to be the
fair value of his or her shares, plus accrued interest.
(2) MATERIAL TO ACCOMPANY PAYMENT. The payment shall be
accompanied by all of the following:
(a) The bank's latest available financial statements,
including a balance sheet as of the end of a fiscal year ending
not more than 16 months before the date of payment, an income
statement for that year, a statement of changes in shareholders'
equity for that year and the latest available interim financial
statements, if any.
(b) A statement of the bank's estimate of the fair value of
the shares.
(c) An explanation of how the interest was calculated.
(d) A statement of the dissenter's right to demand payment
under Section 221.0716 if the dissenter is dissatisfied with the
payment.
(e) A copy of Sections 221.0701 to 221.0718.
221.0714 Failure to take action.
(1) ACTION NOT TAKEN. If an issuer bank does not effectuate the
corporate action within 60 days after the date set under Section
221.0710 for demanding payment, the issuer bank shall return the
deposited certificates and release the transfer restrictions
imposed on uncertificated shares.
(2) ACTION TAKEN AT A LATER DATE. If, after returning deposited
certificates and releasing transfer restrictions, the issuer bank
effectuates the corporate action, the bank shall deliver a new
dissenters' notice under Section 221.0710 and repeat the payment
demand procedure.
221.0715 After-acquired shares.
(1) WITHHOLDING FOR AFTER-ACQUIRED SHARES. A bank may elect to
withhold payment required by Section 221.0713 from a dissenter
unless the dissenter was the beneficial owner of the shares
before the date specified in the dissenters' notice under Section
221.0710(2)(c) as the date of the first announcement to news
media or to shareholders of the terms of the proposed corporate
action.
(2) PAYMENT. To the extent that the bank elects to withhold
payment under sub. (1) after effectuating the corporate action,
the bank shall estimate the fair value of the shares, plus
accrued interest, and shall pay this amount to each dissenter who
agrees to accept it in full satisfaction of his or her demand.
The bank shall send with its offer a statement of its estimate of
the fair value of the shares, an explanation of how the interest
was calculated, and a statement of the dissenter's right to
demand payment under Section 221.0716 if the dissenter is
dissatisfied with the offer.
221.0716 Procedure if dissenter is dissatisfied with payment or
offer.
(1) RIGHTS OF DISSENTER. A dissenter may, in the manner provided
in sub. (2), notify the bank of the dissenter's estimate of the
fair value of his or her shares and the amount of interest due,
and demand payment of his or her estimate, less any payment
received under Section 221.0713, or reject the offer under
Section 221.0715 and demand payment of the fair value of his or
her shares and interest due, if any of the following applies:
(a) The dissenter believes that the amount paid under
Section 221.0713 or offered under Section 221.0715 is less than
the fair value of his or her shares or that the interest due is
incorrectly calculated.
(b) The bank fails to make payment under Section 221.0715
within 60 days after the date set under Section 221.0710 for
demanding payment.
(c) The issuer bank, having failed to effectuate the
corporate action, does not return the deposited certificates or
release the transfer restrictions imposed on uncertificated
shares within 60 days after the date set under Section 221.0710
for demanding payment.
(2) WAIVER OF RIGHTS. A dissenter waives his or her right to
demand payment under this section unless the dissenter notifies
the bank of his or her demand under sub. (1) in writing within 30
days after the bank makes or offers payment for his or her
shares. The notice shall comply with Section 221.0103.
<PAGE>
221.0717 Court action.
(1) WHEN SPECIAL PROCEEDING REQUIRED. If a demand for payment
under Section 221.0716 remains unsettled, the bank shall bring a
special proceeding within 60 days after receiving the payment
demand under Section 221.0716 and petition the court to determine
the fair value of the shares and accrued interest. If the bank
does not bring the special proceeding within the 60-day period,
it shall pay each dissenter whose demand remains unsettled the
amount demanded.
(2) WHERE PROCEEDING TO BE BROUGHT. The bank shall bring the
special proceeding in the circuit court for the county where its
principal office or, if none in this state, its registered office
is located. If the bank is a foreign bank without a registered
office in this state, it shall bring the special proceeding in
the county in this state in which was located the registered
office of the issuer bank that merged with or whose shares were
acquired by the foreign bank.
(3) PARTIES TO THE PROCEEDING. The bank shall make all
dissenters, whether or not residents of this state, whose demands
remain unsettled parties to the special proceeding. Each party to
the special proceeding shall be served with a copy of the
petition as provided in Section 801.14.
(4) JURISDICTION. The jurisdiction of the court in which the
special proceeding is brought under sub. (2) is plenary and
exclusive. The court may appoint one or more persons as
appraisers to receive evidence and recommend a decision on the
question of fair value. An appraiser has the power described in
the order appointing him or her or in any amendment to the order.
The dissenters are entitled to the same discovery rights as
parties in other civil proceedings.
(5) JUDGEMENTS. Each dissenter made a party to the special
proceeding is entitled to judgment for any of the following:
(a) The amount, if any, by which the court finds the fair
value of his or her shares, plus interest, exceeds the amount
paid by the bank.
(b) The fair value, plus accrued interest, of his or her
shares acquired on or after the date specified in the dissenters'
notice under Section 221.0710(2)(c), for which the bank elected
to withhold payment under Section 221.0715.
221.0718 Court costs and counsel fees.
(1) ASSESSMENT OF AND LIABILITY FOR COSTS.
(a) Notwithstanding Sections 814.01 to 814.04, the court in
a special proceeding brought under Section 221.0717 shall
determine all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the court
and shall assess the costs against the bank, except as provided
in par. (b).
(b) Notwithstanding Sections 814.01 and 814.04, the court
may assess costs against all or some of the dissenters, in
amounts that the court finds to be equitable, to the extent that
the court finds the dissenters acted arbitrarily, vexatiously or
not in good faith in demanding payment under Section 221.0716.
(2) WHEN LIABLE FOR FEES AND COSTS. The parties shall bear their
own expenses of the proceeding, except that, notwithstanding
Sections 814.01 to 814.04, the court may also assess the fees and
expenses of counsel and experts for the respective parties, in
amounts that the court finds to be equitable, as follows:
(a) Against the bank and in favor of any dissenter if the
court finds that the bank did not substantially comply with
Sections 221.0708 to 221.0716.
(b) Against the bank or against a dissenter, in favor of
any other party, if the court finds that the party against whom
the fees and expenses are assessed acted arbitrarily, vexatiously
or not in good faith with respect to the rights provided by this
chapter.
(3) PAYMENT OF COUNSEL AND EXPERTS FROM RECOVERY.
Notwithstanding Sections 814.01 to 814.04, if the court finds
that the services of counsel and experts for any dissenter were
of substantial benefit to other dissenters similarly situated,
the court may award to these counsel and experts reasonable fees
to be paid out of the amounts awarded the dissenters who were
benefited.
<PAGE>
EXHIBIT D
ARTICLES OF INCORPORATION OF
MOUND CITY FINANCIAL SERVICES, INC.
ARTICLES OF INCORPORATION
Stock (for profit)
Executed by the undersigned for the purpose of forming a
Wisconsin for-profit corporation under Chapter 180 of the
Wisconsin Statutes repealed and recreated by 1989 Wis. Act 303:
ARTICLE 1. Name of Corporation: Mound City Financial
Services, Inc.
ARTICLE 2. The Corporation shall be authorized to issue
300,000 shares.
ARTICLE 3. The street address of the initial registered
office is: 25 East Pine Street, Platteville, Wisconsin 53818
ARTICLE 4. The name of the initial registered agent at the
above registered office is: Robert J. Just, Jr.
ARTICLE 5. Other provisions (OPTIONAL):
Article 5 continued on attached pages incorporated by reference.
ARTICLE 6. Executed on August 5, 1996.
Name and complete address of each incorporator:
Robert J. Just, Jr.
President
Mound City Bank
25 East Pine Street, Box 263
Platteville, WI 53818
/s/ Robert J. Just, Jr.
(Incorporator Signature)
This document was drafted by John E. Knight.
DFI CORP FILE ID NO. M046562
Document stamped Received August 29, 1996, 3:30 P.M. by State of
Wisconsin, Department of Financial Institutions.
Document stamped Filed September 6, 1996 by State of Wisconsin,
Department of Financial Institutions.
Mound City Financial Services, Inc.
<PAGE>
Article 5. (CONTINUED):
A. The number of directors shall not be less than seven
(7) nor more than nine (9), the exact number of directors to be
determined from time to time by resolution adopted by a majority
of the entire Board of Directors, and such exact number shall be
nine (9) until otherwise determined by resolution adopted by a
majority of the entire Board of Directors. As used in this
Article 5 "entire Board of Directors" means the total number of
directors which the Corporation would have if there were no
vacancies.
The Board of Directors shall be divided into three (3)
classes of nearly equal in number as may be, with the term of
office of one class expiring each year. At the first annual
meeting of the shareholders, directors of the first class (Class
I) shall be elected to hold office for a term expiring at the
next succeeding annual meeting, directors of the second class
(Class II) shall be elected to hold office for a term expiring at
the second succeeding annual meeting and directors of the third
class (Class III) shall be elected to hold office for a term
expiring at the third succeeding annual meeting. Subject to the
foregoing, at each annual meeting of shareholders, directors
chosen to succeed those terms then expired shall be elected for a
term of office expiring at the third succeeding annual meeting of
shareholders after their election, so that the term of one class
of directors shall expire each year. Any vacancies on the Board
of Directors for any reason, and any newly created directorships
resulting from any increase in the number of directors, may be
filled by the Board of Directors, acting by a majority of the
directors then in office, although less than a quorum. Each
director shall hold office until the next election of the class
for which such director shall have been elected or appointed and
until his or her successor shall be elected and qualified or
until his or her death, or until he or she shall resign or shall
have been removed in the manner hereinafter provided. No
decrease in the number of directors shall shorten the term of any
incumbent director.
The names and addresses of the persons who are to serve as
directors until the first annual meeting of the shareholders or
until their successors are elected and shall qualify are:
Wilson J. Boldt Barry J. Brodbeck
715 N. Second 949 Stonebridge Road
Platteville, WI 53818 Platteville, WI 53818
Keith R. Buchert Robert J. Just, Jr.
110 Virgin Avenue P.O. Box 303
Platteville, WI 53818 Platteville, WI 53818
W. Phil Karrmann Richard J. Kopp
1690 County Road B 100 Highpoint Circle
Platteville, WI 53818 Platteville, WI 53818
James D. Soles Douglas W. Speth
150 South Hickory St. 15021 Highway 126
Platteville, WI 53818 Belmont, WI 53510
Richard L. McWilliams
P.O. Box 55
Platteville, WI 53818
No director of the Corporation shall be removed from office
with or without cause unless such removal is approved either by
the holders of seventy-five percent (75%) of the common stock of
the Corporation outstanding at the time a determination is made
or by the affirmative vote of seventy-five percent (75%) of the
directors in office at the time the determination is made.
B. Except as otherwise expressly provided in this Article
5B: (i) any merger or consolidation of the Corporation with or
into any other corporation; (ii) any share exchange in which a
corporation, person or entity acquires the issued or outstanding
shares of capital stock of the Corporation pursuant to a vote of
shareholders; (iii) any sale, exchange or other disposition of
all or substantially all of the assets of the Corporation,
including, but not limited to, the stock of any subsidiary
organization held by the Corporation to or with any other
corporation, person or entity; or (iv) any transaction similar
to, or having similar effect as, any of the foregoing
transactions, shall require the affirmative vote of the holders
of at least seventy-five percent (75%) of the shares of the
capital stock of the Corporation issued and outstanding and
entitled to vote.
The provisions of this Article 5B shall not apply to any
transaction described above in clauses (i), (ii), (iii) or (iv)
of this Article 5B, (a) which has been approved by resolution
adopted by seventy-five percent (75%) of the entire Board of
Directors of the Corporation at any time prior to the
consummation thereof, or (b) with another corporation or entity
if a majority of the outstanding shares of stock of such other
corporation or entity is owned of record or beneficially directly
or indirectly by the Corporation or its subsidiaries. If the
provisions of this Article 5B do not apply because of clauses (a)
or (b) in this paragraph, the transactions described in clauses
(i), (ii), (iii) or (iv) in the first paragraph of this Article
5B shall require the affirmative vote of the holders of at least
a majority of the shares of the Stock of the Corporation issued
and outstanding and entitled to vote or as otherwise required by
law.
The Board of Directors of the Corporation shall have the
power and duty to determine for purposes of this Article 5B, on
the basis of information then known to it, whether any sale,
exchange or other disposition of part of the assets of the
Corporation involves substantially all of the assets of the
Corporation. Any such determination by the Board of Directors
shall be conclusive and binding for all purposes of this Article
5B.
C. Shareholders of the Corporation's capital stock, herein
the "Stock," may not sell, transfer, assign, encumber, pledge,
hypothecate, or in any way dispose of or alienate any of their
shares of the Stock, or any right, title or interest therein,
whether voluntarily or by operation of law, or by gift or
otherwise, without the prior written consent of the Corporation.
Provided, however, that the prior written consent of the
Corporation shall not be required as to: (i) any transaction
between a shareholder and his or her spouse, a member of his or
her immediate family or any lineal descendant thereof; or (ii)
any pledge or hypothecation of shares of the Stock, provided,
that as a condition precedent to the effectiveness of either of
the transactions described in (i) or (ii) herein, the transferee
in any such transaction shall be bound by all of the terms and
conditions of this Article 5C.
In the event a shareholder, herein the "Selling
Shareholder", desires to dispose of his or her shares of Stock,
or any portion of it, called the "Offered Shares", other than in
a transaction of the type described in (i) or (ii) above, without
first obtaining the written consent of the Corporation, the
Selling Shareholder, first, shall give the Corporation written
notice of his or her intent to do so, stating in the notice the
identity of the proposed transferee of the Offered Shares, the
number of Offered Shares the Selling Shareholder proposes to
transfer, the proposed consideration for the Offered Shares and
the other terms and conditions of the proposed transfer of the
Offered Shares. The Selling Shareholder shall include with the
written notice given to the Corporation under this paragraph a
copy of the written offer to purchase the Offered Shares. The
Corporation shall have a right of first refusal to acquire all,
but not less than all, of the Offered Shares for the
consideration and on the other terms and conditions offered by
the proposed transferee and as contained in the written notice
given to the Corporation by the Selling Shareholder. The
Corporation shall exercise its right to acquire the Offered
Shares by giving written notice to the Selling Shareholder,
indicating the number of Offered Shares it will acquire, within
thirty (30) days following receipt of the written notice of the
Selling Shareholder. In the event the Corporation does not
exercise its acquisition rights within the time period as
provided herein with respect to all of the Offered Shares, the
Selling Shareholder shall be free for a period of thirty (30)
days thereafter to transfer all of the Offered Shares to the
transferee identified in the written notice to the Corporation,
and at the same consideration and on the same terms and
conditions as set forth in such written notice. After giving any
notice of intended transfer of any shares of the Stock pursuant
to this Article 5C, the Selling Shareholder, unless requested by
the other shareholders of the Corporation holding a majority of
the Corporation's outstanding shares of capital stock, not
including the shares of the Stock held by the Selling
Shareholder, shall refrain from participating as an officer,
director or shareholder of the Corporation with respect to the
Corporation's decision on whether or not to acquire the Offered
Shares and, if so requested to participate, the Selling
Shareholder shall cooperate with the other shareholders and the
Corporation in every reasonable way to effectuate the purpose of
this Article 5C. Except as provided in this Article 5C, the
Selling Shareholder shall be bound by the restrictions and
limitations imposed by this Article 5C after any notice of a
desire to transfer is given and whether or not any such transfer
actually occurs. As a condition precedent to the effectiveness
of any transfer of Offered Shares to any person or entity, such
transferee shall agree in writing to be bound by all of the terms
and conditions of this Article 5C.
Each certificate representing shares of the Stock shall have
endorsed thereon a legend in substantially the following form:
The shares represented by this
certificate and any sale, transfer,
or other disposition thereof are
restricted under and subject to the
terms and conditions contained in
Article 5C of the Corporation's
Articles of Incorporation, a copy of
which is on file at the offices of
the Corporation.
Any attempted or purported sale, transfer, assignment,
encumbrance, pledge, hypothecation or other disposition or
alienation of any of the shares of the Stock by a shareholder in
violation of this Article 5C shall be null, void and ineffectual,
and shall not operate to transfer any right, title or interest
whatsoever in or to such shares of the Stock.
D. The provision of this Article 5, may not be amended,
altered or repealed except by the affirmative vote of holders of
at least seventy five percent (75%) of the shares of the capital
stock of the Corporation issued and outstanding and entitled to
vote, at any regular or special meeting of the shareholders if
notice of the proposed amendment, alteration or repeal be
contained in the notice of meeting.<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Officers and Directors.
Sections 180.0850 through 180.0859 of the Wisconsin Statutes
permit and in some cases require indemnification of directors,
officers, employees, and agents of a Wisconsin corporation. In
general, such indemnification is required unless the person
violates a duty of loyalty or a duty of care as specifically set
forth in the statutes. Section 180.0851, Wis. Stats.
Article VII of the registrant's bylaws provide for
indemnification of officers and directors under terms and
conditions that follow the statutory language cited above. A
complete copy of the bylaws is included in Exhibit 3 hereto.
Item 21. Exhibits and Financial Statement.
Schedules
(a) Exhibits. The following exhibits are submitted:
Exhibit No. Description
2 Agreement and Plan of Reorganization (set
forth as an exhibit to the Prospectus)
3 Articles of Incorporation (set forth as an
exhibit to the Prospectus) and bylaws of
Mound City Financial Services, Inc.
4 Specimen stock certificate of Mound City
Financial Services, Inc.
5 Opinion of Boardman, Suhr, Curry & Field
8 Tax Opinion of Boardman, Suhr, Curry & Field
(set forth as an exhibit to the Prospectus)
10 Executive Employee Salary Continuation
Agreement for Robert J. Just, Jr.
23 Consent of Boardman, Suhr, Curry & Field
(included in opinion)
99 Form of Proxy for shareholders of Mound City
Bank
(b) No financial statement schedules are required to be
filed with regard to Mound City Financial Services, Inc. or Mound
City Bank.
Item 22. Undertakings.
(1) The registrant will file, during any period in which it
offers or sells securities, a post-effective amendment to this
registration statement to:
(i) Include any prospectus required by section
10(a)(3) of the Securities Act of 1933, as amended ("Act");
(ii) Reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or together, represent a fundamental change in the
information in the registration statement; and
(iii) Include any additional or changed material
information on the plan of distribution.
(2) For determining liability under the Act, the registrant
will treat each post-effective amendment as a new registration
statement of the securities offered, and the offering of the
securities at that time to be the initial bona fide offering.
(3) The registrant will file a post-effective amendment to
remove from registration any of the securities that remain unsold
at the end of the offering.
(4) The undersigned registrant hereby undertakes to respond
to requests for information that is incorporated by reference
into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this
Form, within one business day of receipt of such request, and to
send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the
registration statement through the date of responding to the
request.
(5) The undersigned registrant hereby undertakes to supply
by means of a post-effective amendment all information concerning
a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration
statement when it became effective.
(6) Insofar as indemnification for liabilities arising
under the Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the SEC such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against liability
arising under the Act (other than the payment by the registrant
of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant has duly caused this
Amendment to
<R/>Registration Statement No.
333-14825 <R/>to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of Platteville, State of Wisconsin, on the
26th <R/>day
of
November<R/>, 1996.
MOUND CITY FINANCIAL SERVICES, INC.
By:
/s/ Robert J. Just, Jr.
<R/>
Robert J. Just, Jr., President
Pursuant to the requirements of the Securities Act of 1933,
this
Amendment to <R/>Registration Statement No.
333-
14825 <R/>has been signed by the following persons in the
capacities and on the dates indicated
on November 26,
1996.<R/>
Signature Title(s) Date
* Director
<R/>
Wilson J. Boldt
* Director
<R/>
Barry J. Brodbeck
* Director
<R/>
Keith R. Buchert
* Secretary
<R/>
Donna J. Hoppenjan
* President/CEO,
Director
<R/>
Robert J. Just, Jr.
* Director
<R/>
W. Phil Karrmann
* Director
<R/>
Richard J. Kopp
* Vice President,
Chairman/Director
<R/>
Richard L. McWilliams
* Director
<R/>
James D. Soles
* Director
<R/>
Douglas W. Speth
* Robert J. Just, Jr., by signing his name hereto, does hereby
sign this document on behalf of himself and on behalf of each of
the other directors named above pursuant to powers of attorney
duly executed by such other persons.
R/
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________
FORM S-4
REGISTRATION STATEMENT
Under
The Securities Act of 1933
__________
MOUND CITY FINANCIAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
E X H I B I T S
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INDEX TO EXHIBITS
Exhibit No. Description
2 Agreement and Plan of Reorganization (set
forth as an exhibit to the Prospectus)
3 Articles of Incorporation (set forth as an
exhibit to the Prospectus) and bylaws of
Mound City Financial Services, Inc.
4 Specimen stock certificate of Mound City
Financial Services, Inc.
5 Opinion of Boardman, Suhr, Curry & Field
8 Tax Opinion of Boardman, Suhr, Curry & Field
(set forth as an exhibit to the Prospectus)
10 Executive Employee Salary Continuation
Agreement for Robert J. Just, Jr.
23 Consent of Boardman, Suhr, Curry & Field
(included in opinion)
99 Form of Proxy for shareholders of Mound City
Bank
MOUND CITY FINANCIAL SERVICES, INC.
ARTICLE I. OFFICES
The principal office of the Corporation shall be located in
the City of Platteville, Grant County, Wisconsin.
ARTICLE II. SHAREHOLDERS
SECTION l. Annual Meeting. The annual meeting of the
Shareholders shall be held at such place, on such date, and at
such time as the Board of Directors shall each year fix for the
purposes of electing Directors and for the transaction of such
other business as may come before the meeting. If the election
of Directors is not held on the day designated for any annual
meeting of the Shareholders, or at any adjournment thereof, the
Board of Directors shall cause the election to be held at a
special meeting of the Shareholders as soon thereafter as may be
convenient.
SECTION 2. Special Meetings. Special meetings of the
Shareholders, for any purpose, unless otherwise prescribed by
statute, may be called by the President or the Board of
Directors, and shall be called by the President at the request of
Shareholders owning, in the aggregate, not less than ten percent
(10%) of all the outstanding shares of the Corporation entitled
to vote at the meeting, provided that such Shareholders deliver a
signed and dated written demand to the Corporation, describing
the purpose(s) for which the meeting is to be held.
SECTION 3. Place of Meeting. The President may designate
any place, either within or without the State of Wisconsin, as
the place of meeting for any annual meeting or for any special
meeting called by the Board of Directors. If no designation is
made, or if a special meeting is otherwise called, the place of
meeting shall be the principal office of the Corporation in the
State of Wisconsin. Any meeting may be adjourned to reconvene at
any place designated by vote of a majority of the shares
represented at the meeting.
SECTION 4. Notice of Meeting. Written notice stating the
place, day and hour of the meeting, and, in case of a special
meeting, the purpose for which the meeting is called, shall be
delivered not less than ten (10) days (unless a longer period is
required by law) nor more than sixty (60) days before the date of
the meeting, either personally or by mail, by or at the direction
of the President or the Secretary, to each Shareholder of record
entitled to vote at the meeting. If mailed, the notice shall be
deemed to be delivered when deposited in the United States mail,
addressed to the Shareholder at his or her address as it appears
on the stock record books of the Corporation, postage prepaid.
SECTION 5. Quorum; Manner of Acting. Except as otherwise
provided by law, the Articles of Incorporation or these Bylaws, a
majority of the outstanding shares of the Corporation entitled to
vote, represented in person or by proxy, shall constitute a
quorum at a meeting of Shareholders and a majority of votes cast
at any meeting at which a quorum is present shall be decisive of
any motion, except that each Director shall be elected by a
plurality of the votes cast by the shares entitled to vote.
Though less than a quorum of the outstanding shares are
represented at a meeting, a majority of the shares so represented
may adjourn the meeting from time to time without further notice.
At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been
transacted at the original meeting.
SECTION 6. Closing of Transfer Books or Fixing of Record
Date. For the purpose of determining Shareholders entitled to
notice of or to vote at any meeting of Shareholders or any
adjournment thereof, or Shareholders entitled to receive payment
of any dividend, or in order to make a determination of
Shareholders for any other proper purpose, the Board of Directors
may provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, sixty (60) days.
If the stock transfer books shall be closed for the purpose of
determining Shareholders entitled to notice of or to vote at a
meeting of Shareholders, such books shall be closed for at least
ten (10) days immediately preceding such meeting. In lieu of
closing the stock transfer books, the Board of Directors may fix
in advance a date as the record date for any such determination
of Shareholders, such date in any case to be not more than sixty
(60) days and, in case of a meeting of Shareholders, not less
than ten (10) days prior to the date on which the particular
action, requiring such determination of Shareholders, is to be
taken. If the stock transfer books are not closed and no record
date is fixed for the determination of Shareholders entitled to
notice of or to vote at a meeting of Shareholders, or
Shareholders entitled to receive payment of a dividend, the close
of business on the date next preceding the date on which notice
of the meeting is mailed or the date on which the resolution of
the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of
Shareholders. When a determination of Shareholders entitled to
vote at any meeting of Shareholders has been made as provided in
this section, such determination shall be applied to any
adjournment thereof except where the determination has been made
through the closing of the stock transfer books and the stated
period of closing has expired.
SECTION 7. Proxies. At all meetings of Shareholders, a
Shareholder entitled to vote may vote by proxy appointed in
writing by the Shareholder or by his or her duly authorized
attorney in fact. Proxies shall be filed with the Secretary of
the Corporation before or at the time of the meeting. No proxy
shall be valid after eleven (11) months from the date of its
execution, unless otherwise provided in the proxy. A proxy may
be revoked at any time before it is voted, either by written
notice filed with the Secretary of the Corporation or the acting
secretary of the meeting, or by oral notice given by the
Shareholder to the presiding officer during the meeting. The
Board of Directors shall have the power and authority to make
rules establishing presumptions as to the validity and
sufficiency of proxies. Proxies may be subject to the
examination by any Shareholder at the meeting, and all proxies
shall be filed and preserved.
SECTION 8. Voting of Shares. Each outstanding share
entitled to vote shall be entitled to one (l) vote upon each
matter submitted to a vote at a meeting of Shareholders, except
to the extent that the voting rights of the shares of any class
or classes are limited or denied by the Articles of
Incorporation.
SECTION 9. Voting of Shares by Certain Shareholders.
Shares standing in the name of another corporation may be voted
either in person or by proxy, by the president of such
corporation or any other officer appointed by such president. A
proxy executed by any principal officer of such other corporation
or assistant thereto shall be conclusive evidence of the signer's
authority to act, in the absence of express notice to this
Corporation, given in writing to the Secretary of this
Corporation, of the designation of some other person by the board
of directors or the bylaws of such other corporation. A
Shareholder whose shares are pledged shall be entitled to vote
such shares until the shares have been transferred into the name
of the pledgee, and thereafter the pledgee shall be entitled to
vote the shares so transferred.
SECTION 10. Waiver of Notice by Shareholders. Whenever any
notice is required to be given to any Shareholder of the
Corporation under the Articles of Incorporation, these Bylaws or
any provision of law, a waiver of such notice, in writing, signed
at any time (whether before or after the time of meeting) by the
Shareholder entitled to such notice, shall be deemed equivalent
to the giving of such notice. A waiver with respect to any
matter of which notice is required under any provision of Chapter
180, Wisconsin Statutes, shall contain the same information as
would have been required to be included in the notice, except the
time and place of meeting.
ARTICLE III. BOARD OF DIRECTORS
SECTION l. General Powers. The business and affairs of the
Corporation shall be managed by its Board of Directors.
SECTION 2. Number of Directors. The number of Directors of
the Corporation shall be not less than seven (7) nor more than
nine (9), the exact number of Directors to be determined from
time to time by resolution adopted by a majority of the entire
Board of Directors, and such exact number shall be nine (9) until
otherwise determined by resolution adopted by a majority of the
entire Board of Directors. As used in this Section, "entire
Board of Directors") means the total number of Directors which
the Corporation would have if there were no vacancies. Whenever
the authorized number of Directors is increased between annual
meetings of the Shareholders, a majority of the Directors then in
office shall then have the power to elect such new Directors for
the balance of a term and until their successors are elected and
qualified. Any decrease in the authorized number of Directors
shall not become effective until the expiration of the term of
the Directors then in office unless, at the time of such
decrease, their shall be vacancies on the Board which were being
eliminated by the decrease.
SECTION 3. Nominations for Director. Nominations for
election to the Board of Directors may be made by the Board of
Directors or by a Shareholder of any outstanding class of stock
of the Corporation entitled to vote for the election of
Directors. Nominations, other than those made by the Board of
Directors, shall be made in writing and shall be delivered or
mailed to the President of the Corporation not less than ten (10)
days nor more than fifty (50) days prior to any meeting of
Shareholders called for the election of Directors, provided,
however, that if less than twenty-one (21) days' notice of the
meeting is given to the Shareholders, such nominations shall be
mailed or delivered to the President of the Corporation not later
than the close of business on the seventh day following the day
on which the notice of meeting was mailed. Such notification
shall contain the following information to the extent known to
the notifying Shareholder: (a) the name and address of each
proposed nominee; (b) the principal occupation of each proposed
nominee; (c) the name and residence address of the notifying
Shareholder; and (d) the number of shares of the capital stock of
the Corporation owned by the notifying Shareholder. Nominations
not made in accordance herewith may, in his or her discretion, be
disregarded by the chairman of the Shareholders meeting, and upon
his or her instructions, the vote tellers may disregard all votes
cast for each such nominee.
SECTION 4. Election and Term. The Directors shall be
elected by the Shareholders at the regular annual meeting of
Shareholders. Each Director shall hold office until the next
election of the class for which such Director shall have been
elected and until his or her successor has been elected or until
his or her death, resignation or removal in the manner provided
in this Article. The Board of Directors shall be divided into
three (3) classes as nearly equal in number as possible, with the
term of office of one class expiring each year. Directors of the
first class (Class I) shall be elected to hold office for a term
expiring at the next succeeding annual meeting, Directors of the
second class (Class II) shall be elected to hold office for a
term expiring at the second succeeding annual meeting, and
Directors of the third class (Class III) shall be elected to hold
office for a term expiring at the third succeeding annual
meeting. Subject to the foregoing, at each annual meeting of the
Shareholders, Directors chosen to succeed those terms then
expired shall be elected for a term of office expiring at the
third succeeding annual meeting of Shareholders after their
election, so that the term of one class of Directors shall expire
each year. The persons receiving the greatest number of votes
(up to the number of Directors then to be elected) shall be the
persons elected.
The provisions of this Section may not be amended, altered
or repealed except by the affirmative vote of holders of at least
seventy-five percent (75%) of the shares of the capital stock of
the Corporation issued and outstanding and entitled to vote, at
any regular or special meeting of the Shareholders if the notice
of the proposed amendment, alteration or repeal is contained in
the notice of meeting.
SECTION 5. Regular Meetings. The Board of Directors may
provide, by resolution, the time and place, either within or
without the State of Wisconsin, for the holding of regular
meetings of the Board of Directors without other notice than such
resolution.
SECTION 6. Special Meetings. Special meetings of the Board
of Directors may be called at any time by or at the request of
the President, and shall be called at the request of three or
more directors. The person or persons authorized to call special
meetings of the Board of Directors may fix any place, either
within or without the State of Wisconsin, as the place for
holding any special meeting of the Board of Directors called by
them.
SECTION 7. Notice. Notice of any special meeting shall be
given at least forty-eight (48) hours in advance of the meeting
by written notice delivered personally or mailed to each Director
at his or her business address, or by telegram. If mailed, the
notice shall be deemed to be delivered when deposited in the
United States mail so addressed with postage prepaid. If notice
is given by telegram, it shall be deemed to be delivered when the
telegram is delivered to the telegraph company. Whenever any
notice is required to be given to any Director of the Corporation
under the Articles of Incorporation, these Bylaws or any
provision of law, a waiver of such notice, in writing, signed at
any time (whether before or after the time of meeting) by the
Director entitled to such notice, shall be deemed equivalent to
the giving of such notice. The attendance of a Director at a
meeting shall constitute a waiver of notice of that meeting,
except where a Director attends a meeting and at the meeting
objects to the transaction of any business because the meeting is
not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting
of the Board of Directors need be specified in the notice or
waiver of notice of such meeting.
SECTION 8. Quorum. Except as otherwise provided by law,
the Articles of Incorporation, or these Bylaws, a majority of the
number of Directors then in office shall constitute a quorum for
the transaction of business at any meeting of the Board of
Directors, but a majority of the Directors present (though less
than such quorum) may adjourn the meeting from time to time
without further notice.
SECTION 9. Participation in Meetings By Conference
Telephone. Members of the Board of Directors, or of any
committee of the Board, may participate in a meeting of such
Board or committee by means of conference telephone or similar
communication equipment by which all persons participating in the
meeting can hear each other and such participation shall
constitute presence in person at such meeting. All participating
Directors shall be informed that a meeting is taking place at
which official business may be transacted by conference telephone
or similar communication equipment.
SECTION 10. Manner of Acting. The act of the majority of
the Directors then in office shall be the act of the Board of
Directors, unless the act of a greater number is required by law,
the Articles of Incorporation, or these Bylaws.
SECTION 11. Removal and Resignation. No Director of the
Corporation shall be removed from office with or without cause
unless such removal is approved either by the holders of seventy-
five percent (75%) of the shares of the capital stock of the
Corporation issued and outstanding and entitled to vote or by the
affirmative vote of seventy-five percent (75%) of the Directors
in office at the time the determination is made. A Director may
resign at any time by filing a written resignation with the
Secretary of the Corporation.
The provisions of this Section may not be amended, altered
or repealed except by the affirmative vote of holders of at least
seventy-five percent (75%) of the shares of the capital stock of
the Corporation issued and outstanding and entitled to vote, at
any regular or special meeting of the Shareholders if the notice
of the proposed amendment, alteration or repeal is contained in
the notice of meeting.
SECTION 12. Vacancies. Any vacancy occurring in the Board
of Directors, including a vacancy created by an increase in the
number of Directors, may be filled until the next succeeding
annual Shareholders' meeting by the affirmative vote of a
majority of the Directors then in office.
SECTION 13. Compensation. The Board of Directors,
irrespective of any personal interest of any of its members, may
establish reasonable compensation of all Directors for services
to the Corporation as Directors, officers or otherwise, or may
delegate such authority to an appropriate committee. The Board
of Directors also shall have authority to provide for, or to
delegate authority to, an appropriate committee to provide for
reasonable pensions, disability or death benefits, and other
benefits or payments, to Directors, officers and employees and to
their estates, families, dependents, or beneficiaries on account
of prior services rendered to the Corporation.
SECTION 14. Presumption of Assent. A Director of the
Corporation who is present at a meeting of the Board of Directors
or a committee thereof at which action on any corporate matter is
taken shall be presumed to have assented to the action taken
unless the dissent or abstention of the Director shall be entered
in the minutes of the meeting or unless the Director shall file a
written dissent to such action with the person acting as the
Secretary of the meeting before adjournment or shall forward such
dissent by certified mail to the Secretary of the Corporation
immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a Director who voted in favor of such
action.
SECTION 15. Committees. The Board of Directors may
designate one or more committees, each committee to consist of
three or more Directors elected by the Board of Directors, which
to the extent provided in said resolution shall have and may
exercise, when the Board of Directors is not in session, the
powers of the Board of Directors in the management of the
business and affairs of the Corporation, except action in respect
to dividends to Shareholders, election of the principal officers,
action under or pursuant to the Articles of Incorporation,
amendment, alteration or repeal of these Bylaws, or the removal
or filling of vacancies in the Board of Directors or committees
created pursuant to this section. The Board of Directors may
elect one or more of its members as alternate members of any such
committee who may take the place of any absent member or members
at any meeting of such committee, upon request by the President
or upon request by the chairman of such meeting. Each such
committee shall fix its own rules governing the conduct of its
activities and shall make such reports to the Board of Directors
of its activities as the Board of Directors may request.
SECTION 16. Informal Action Without Meeting. Any action
required or permitted by the Articles of Incorporation, these
Bylaws, or any provision of law to be taken by the Board of
Directors at a meeting or by resolution may be taken without a
meeting if a consent in writing, setting forth the action so
taken, is signed by all of the Directors then in office.
ARTICLE IV. OFFICERS
SECTION l. Number, Election and Term of Office. The
principal Officers of the Corporation shall be a President, a
Vice President, and a Secretary, each of whom shall be elected by
the Board of Directors. Such other Officers and Assistant
Officers as may be deemed necessary may be elected or appointed
by the Board of Directors. Any two or more offices may be held
by the same person. Each Officer shall hold office until his or
her successor shall have been duly elected or until his or her
death or until he or she resigns or is removed in the manner
provided below.
SECTION 2. Removal. Any Officer or agent elected or
appointed by the Board of Directors may be removed by the Board
of Directors whenever in its judgment the best interests of the
Corporation will be served thereby. Any such removal shall be
without prejudice to the contract rights, if any, of the person
being removed. Election or appointment shall not of itself
create contract rights.
SECTION 3. Vacancies. A vacancy in any principal office
because of death, resignation, removal, disqualification, or
otherwise, shall be filled by the Board of Directors.
SECTION 4. President. The President shall be the principal
executive officer of the Corporation and, subject to the control
of the Board of Directors, shall in general supervise and control
all of the business and affairs of the Corporation. The
President shall, when present, preside at all meetings of the
Shareholders and of the Board of Directors. The President shall
have authority, subject to such rules as may be prescribed by the
Board of Directors, to appoint such agents and employees of the
Corporation as he shall deem necessary, to prescribe their
powers, duties and compensation, and to delegate authority to
them. Such agents and employees shall hold office at the
discretion of the President. The President shall have authority
to sign, execute, and acknowledge, on behalf of the Corporation,
all deeds, mortgages, bonds, stock certificates, contracts,
leases, reports, and all other documents or instruments necessary
or proper to be executed in the course of the Corporation's
regular business, or which shall be authorized by resolution of
the Board of Directors. Except as otherwise provided by law or
the Board of Directors, the President may authorize any Vice
President or other Officer or agent of the Corporation to sign,
execute, and acknowledge such documents or instruments in his
place and stead. In general, the President shall perform all
duties incident to the office of President and such other duties
as may be prescribed by the Board of Directors from time to time.
SECTION 5. The Vice President. In the case of the removal
of the President from office, or death or resignation, the powers
and duties of the office shall devolve upon the Vice President,
who shall perform all duties of the office until a meeting of the
directors is held and a President is elected. The Board of
Directors shall empower a Vice President to discharge the duties
of the President in the event of absence or disability of the
President. In general, the Vice President shall perform all
duties incident to the office of Vice President and such other
duties as may be prescribed by the Board of Directors and the
President from time to time.
SECTION 6. The Secretary. The Secretary shall: (a) keep
the minutes of the Shareholders' and of the Board of Directors'
meetings in one or more books provided for that purpose; (b) see
that all notices are duly given in accordance with the provisions
of these Bylaws or as required by law; (c) be custodian of the
corporate records; (d) keep a register of the post office address
of each Shareholder which shall be furnished to the Secretary by
such Shareholder; (e) sign with the President, or Vice President,
certificates for shares of the Corporation, the issuance of which
shall have been authorized by resolution of the Board of
Directors; (f) have general charge of the stock transfer books of
the Corporation; and (g) in general, perform all duties incident
to the office of Secretary and have such other duties and
exercise such authority as from time to time may be designated or
assigned to the Secretary by the President or by the Board of
Directors.
SECTION 7. Compensation. The compensation of the Officers
shall be fixed from time to time by the Board of Directors and no
Officer shall be prevented from receiving such compensation by
reason of the fact that he or she is also a Director of the
Corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION l. Contracts. The Board of Directors may authorize
any Officer or Officers, agent or agents, to enter into any
contract or execute and deliver any instrument in the name of and
on behalf of the Corporation, and such authorization may be
general or confined to specific instances.
SECTION 2. Loans. No loans may be contracted on behalf of
the Corporation and no evidences of indebtedness may be issued in
its name unless authorized by or under the authority of a
resolution of the Board of Directors. Such authorization may be
general or confined to specific instances.
SECTION 3. Checks, Drafts, Etc. All checks, drafts, or
other orders for the payment of money, notes, or other evidences
of indebtedness issued in the name of the Corporation shall be
signed by such Officer or Officers, agent or agents of the
Corporation and in such manner as shall from time to time be
determined by or under the authority of a resolution of the Board
of Directors.
SECTION 4. Deposits. All funds of the Corporation not
otherwise employed shall be deposited from time to time to the
credit of the Corporation in such banks, trust companies, or
other depositories as may be selected by or under the authority
of the Board of Directors.
SECTION 5. Voting of Securities Owned by this Corporation.
Subject always to the specific directions of the Board of
Directors, (a) any shares or other securities issued by any other
corporation and owned or controlled by this Corporation may be
voted at any meeting of security holders of such other
corporation by the President of this Corporation if he be
present, or, in his absence, by the Vice President of this
Corporation, and (b) whenever, in the judgment of the President,
or in his absence, the Vice President, it is desirable for this
Corporation to execute a proxy or written consent in respect to
any shares or other securities issued by any other corporation
and owned by this Corporation, such proxy or consent shall be
executed in the name of this Corporation by the President or Vice
President of this Corporation, without necessity of any
authorization by the Board of Directors, affixation of corporate
seal or countersignature or attestation by another officer. Any
person or persons designated in the manner above stated as the
proxy or proxies of this Corporation shall have full right,
power, and authority to vote the shares or other securities
issued by such other corporation and owned by this Corporation
the same as such shares or other securities might be voted by
this Corporation.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION l. Certificates for Shares. Certificates
representing shares of the Corporation shall be in such form as
shall be determined by the Board of Directors. Each certificate
shall be signed by the President and by the Secretary. All
certificates for shares shall be consecutively numbered or
otherwise identified. The name and address of the person to whom
the shares represented thereby are issued, with the number of
shares and date of issue, shall be entered on the stock transfer
books of the Corporation. All certificates surrendered to the
Corporation for transfer shall be canceled and no new
certificates shall be issued until the former certificates for a
like number of shares shall have been surrendered and canceled,
except that in case of a lost, destroyed, or mutilated
certificate a new one may be issued therefor upon such terms and
indemnity to the Corporation as the Board of Directors may
prescribe.
SECTION 2. Transfer of Shares. Transfer of shares of the
Corporation shall be made only on the stock transfer books of the
Corporation by the holder of record or by his or her legal
representative, who shall furnish proper evidence of authority to
transfer, or by the holder's attorney authorized by power of
attorney duly executed and filed with the Secretary of the
Corporation, and on surrender for cancellation of the certificate
for such shares. The person in whose name shares stand on the
books of the Corporation shall be deemed by the Corporation to be
the owner thereof for all purposes.
SECTION 3. Restriction Upon Transfer. The face or reverse
side of each certificate representing shares shall bear a
conspicuous notation of any restriction imposed by the
Corporation upon the transfer of such shares.
SECTION 4. Lost, Destroyed or Stolen Certificates. Where
the owner claims that his or her certificate for shares has been
lost, destroyed or wrongfully taken, a new certificate shall be
issued in place thereof if the owner (a) so requests before the
Corporation has notice that such shares have been acquired by a
bona fide purchaser, (b) files with the Corporation a sufficient
indemnity bond, and (c) satisfies such other reasonable
requirements as the Board of Directors may prescribe.
SECTION 5. Consideration for Shares. The shares of the
Corporation may be issued for such consideration as shall be
fixed from time to time by the Board of Directors. The
consideration to be paid for shares may be paid in whole or in
part in money, in other property, tangible or intangible, or in
labor or services actually performed for the Corporation. When
payment of the consideration for which shares are to be issued
shall have been received by the Corporation, such shares shall be
deemed to be fully paid and nonassessable by the Corporation,
except as required by law. No certificate shall be issued for
any share until such share is fully paid.
SECTION 6. Stock Regulations. The Board of Directors shall
have the power and authority to make all such further rules and
regulations not inconsistent with the statutes of the State of
Wisconsin as it may deem expedient concerning the issue, transfer
and registration of certificates representing shares of the
Corporation.
ARTICLE VII. LIABILITY AND INDEMNIFICATION OF
DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS; INSURANCE
SECTION 1. Liability of Directors. No Director shall be
liable to the Corporation, its Shareholders, or any person
asserting rights on behalf of the Corporation or its
Shareholders, for damages, settlements, fees, fines, penalties,
or other monetary liabilities arising from a breach of, or a
failure to perform, any duty resulting solely from his or her
status as a Director of the Corporation (or from his or her
status as a director, officer, partner, trustee, member of any
governing or decision-making committee, employee or agent of
another corporation or foreign corporation, partnership, joint
venture, trust or other enterprise, including service to an
employee benefit plan, which capacity the Director is or was
serving in at the Corporation's request while a Director of the
Corporation) to the fullest extent not prohibited by law, as the
same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent such amendment permits the
Corporation to further limit or eliminate the liability of a
Director than the law permitted the Corporation to provide prior
to such amendment); provided, however, that this limitation on
liability shall not apply where the breach or failure to perform
constitutes (a) a willful failure to deal fairly with the
Corporation or its Shareholders in connection with a matter in
which the Director has a material conflict of interest; (b) a
violation of criminal law, unless the Director had reasonable
cause to believe his or her conduct was lawful or no reasonable
cause to believe his or her conduct was unlawful; (c) a
transaction from which the Director derived an improper personal
benefit; or (d) willful misconduct.
SECTION 2. Liability of Officers. No Officer shall be
liable to the Corporation for any loss or damage suffered by it
on account of any action taken or omitted to be taken by him or
her as an officer of the Corporation (or as an officer, director,
partner, trustee, member of any governing or decision-making
committee, employee or agent of another corporation or foreign
corporation, partnership, joint venture, trust or other
enterprise, including service to an employee benefit plan, which
capacity the Officer is or was serving in at the Corporation's
request while being an Officer of the Corporation) in good faith,
if such person (a) exercised and used the same degree of care and
skill as a prudent person would have exercised or used under the
circumstances in the conduct of his or her own affairs, or (b)
took or omitted to take such action in reliance upon information,
opinions, reports or statements prepared or presented by: (1) an
officer or employee of the Corporation whom the officer believed
in good faith to be reliable and competent in the matters
presented, or (2) legal counsel, public accountants and other
persons as to matters the officer believed in good faith were
within the person's professional or expert competence.
SECTION 3. Indemnification of Directors, Officers,
Employees and Agents.
(a) Right of Directors and Officers to
Indemnification. Any person shall be indemnified and held
harmless to the fullest extent permitted by law, as the same may
exist or may hereafter be amended (but, in the case of any such
amendment, only to the extent such amendment permits the
Corporation to provide broader indemnification rights than the
law permitted the Corporation to provide prior to such
amendment), from and against all reasonable expenses (including
fees, costs, charges, disbursements, attorney fees and any other
expenses) and liability (including the obligation to pay a
judgment, settlement, penalty, assessment, forfeiture or fine,
including an excise tax assessed with respect to an employee
benefit plan) asserted against, incurred by or imposed on him or
her in connection with any action, suit or proceeding, whether
civil, criminal, administrative or investigative ("proceeding")
to which he or she is made or threatened to be made a party by
reason of his or her being or having been a Director or Officer
of the Corporation (or by reason of, while serving as a Director
or Officer of the Corporation, having served at the Corporation's
request as a director, officer, partner, trustee, member of any
governing or decision-making committee, employee or agent of
another corporation or foreign corporation, partnership, joint
venture, trust or other enterprise, including service to an
employee benefit plan); provided, however, in situations other
than a successful defense of a proceeding, the Director or
Officer shall not be indemnified where he or she breached or
failed to perform a duty to the Corporation and the breach or
failure to perform constitutes (a) a willful failure to deal
fairly with the Corporation or its Shareholders in connection
with the matter in which the Director or Officer has a material
conflict of interest; (b) a violation of criminal law, unless the
Director or Officer had reasonable cause to believe his or her
conduct was lawful or no reasonable cause to believe his or her
conduct was unlawful; (c) a transaction from which the Director
or Officer derived an improper personal benefit; or (d) willful
misconduct. Such rights to indemnification shall include the
right to be paid by the Corporation reasonable expenses as
incurred in defending such proceeding; provided, however, that
payment of such expenses as incurred shall be made only upon such
person delivering to the Corporation (a) a written affirmation of
his or her good faith belief that he or she has not breached or
failed to perform his or her duties to the Corporation, and (b) a
written undertaking, executed personally or on his or her behalf,
to repay the allowance to the extent it is ultimately determined
that such person is not entitled to indemnification under this
provision. The Corporation may require that the undertaking be
secured and may require payment of reasonable interest on the
allowance to the extent that it is ultimately determined that
such person is not entitled to indemnification.
(b) Right of Director or Officer to Bring Suit. If a
claim under subsection (a) is not paid in full by the Corporation
within 30 days after a written claim has been received by the
Corporation, the claimant may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim
and, if successful in whole or in part, the claimant shall be
entitled to be paid also the reasonable expense of prosecuting
such claim. It shall be a defense to any such action (other than
an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition
where the required undertaking has been tendered to the
Corporation) that the claimant has not met the standards of
conduct under this Section which make it permissible for the
Corporation to indemnify the claimant for the amount claimed, but
the burden of proving such defense shall be on the Corporation.
(c) Indemnification For Intervention, Etc. The
Corporation shall not, however, indemnify a Director or Officer
under this Section for any liability incurred in a proceeding
otherwise initiated (which shall not be deemed to include
counter-claims or affirmative defenses) or participated in as an
intervenor by the person seeking indemnification unless such
initiation of or participation in the proceeding is authorized,
either before or after its commencement, by the affirmative vote
of the majority of the Directors in Office.
(d) Right of Employees and Agents to Indemnification.
The Corporation by its Board of Directors may on such terms as
the Board deems advisable indemnify and allow reasonable expenses
of any employee or agent of the Corporation with respect to any
action taken or failed to be taken in his or her capacity as such
employee or agent.
SECTION 4. Contract Rights; Amendment or Repeal. All
rights under this Article shall be deemed a contract between the
Corporation and the Director or Officer pursuant to which the
Corporation and the Director or Officer intend to be legally
bound. Any repeal, amendment or modification of this Article
shall be prospective only as to conduct of a Director or Officer
occurring thereafter, and shall not affect any rights or
obligations then existing.
SECTION 5. Scope of Article. The rights granted by this
Article shall not be deemed exclusive of any other rights to
which a Director, Officer, employee or agent may be entitled
under any statute, agreement, vote of Shareholders or
disinterested Directors or otherwise. The indemnification and
advancement of expenses provided by or granted pursuant to this
Article shall continue as to a person who has ceased to be a
Director or Officer in respect to matters arising prior to such
time, and shall inure to the benefit of the heirs, executors,
administrators and personal representatives of such a person.
SECTION 6. Insurance. The Corporation may purchase and
maintain insurance, at its expense, to protect itself and any
person who is a Director, Officer, employee or agent of the
Corporation or is or was serving at the request of the
Corporation as a director, officer, partner, trustee, member of
any governing or decision-making committee, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, including service to an employee benefit plan,
against any liability asserted against that person or incurred by
that person in any such capacity, or arising out of that person's
status as such, whether or not the Corporation would have the
power to indemnify such person against such expense, liability or
loss under this Article.
SECTION 7. Prohibited Indemnification and Insurance. Not-
withstanding any other Section in this Article, the Corporation
shall not be required to indemnify and may not purchase and
maintain insurance if such indemnification or insurance is
prohibited under applicable federal law or regulation, but shall
indemnify and may purchase and maintain insurance in accordance
with this Article to the extent such indemnification and
insurance is not prohibited under applicable federal law or
regulation.
ARTICLE VIII. TRANSACTIONS WITH
CORPORATION; DISALLOWED EXPENSE
SECTION 1. Transactions with the Corporation. Any contract
or other transaction between the Corporation and one or more of
its Directors, or between the Corporation and any firm of which
one or more of its Directors are members or employees, or in
which they are interested, or between the Corporation and any
corporation or association of which one or more of its Directors
are Shareholders, members, directors, officers, or employees, or
in which they are interested, shall be valid for all purposes,
notwithstanding the presence of such Director or Directors at the
meeting of the Board of Directors of the Corporation, which acts
upon, or in reference to, such contract or transaction, and
notwithstanding his or their participation in such action, if the
fact of such interest shall be disclosed or known to the Board of
Directors and the Board of Directors shall, nevertheless,
authorize, approve and ratify such contract or transaction by a
vote of a majority of the Directors present, such interested
Director or Directors to be counted in determining whether a
quorum is present, but not counted in calculating the majority of
such quorum necessary to carry such vote. This Section shall not
be construed to invalidate any contract or other transaction
which would otherwise be valid under the common and statutory law
applicable thereto.
SECTION 2. Reimbursement of Disallowed Expenses. In the
event any payment (either as compensation, interest, rent,
expense reimbursement or otherwise) to any Officer, Director or
Shareholder which is claimed as a deduction by this Corporation
for federal income tax purposes shall subsequently be determined
not to be deductible in whole or in part by this Corporation, the
recipient shall reimburse the Corporation for the amount of the
disallowed payment, provided that this provision shall not apply
to any expense where the Board, in its sole discretion,
determines such disallowance (including any concession of such
issue by the Corporation in connection with the settlement of
other issues in a disputed case) is manifestly unfair and
contrary to the facts. For purposes of this provision, any such
payment shall be determined not to be deductible when and only
when either (a) the same may have been determined by a court of
competent jurisdiction and either the Corporation shall not have
appealed from such determination or the time for perfecting an
appeal shall have expired or (b) such disallowed deduction shall
constitute or be contained in a settlement with the Internal
Revenue Service which settlement may have been authorized by the
Board of Directors.
ARTICLE IX. FISCAL YEAR
The fiscal year of the Corporation shall begin on the 1st
day of January and end on the 31st day of December in each year.
ARTICLE X. DIVIDENDS
The Board of Directors may from time to time declare, and
the Corporation may pay, dividends on its outstanding shares in
the manner and upon the terms and conditions provided by law and
its Articles of Incorporation.
ARTICLE XI. SEAL
The Corporation shall not have a corporate seal, and all
formal corporate documents shall carry the designation "No Seal"
along with the signature of the Officers.
ARTICLE XII. AMENDMENT
SECTION 1. By Shareholders. Except as otherwise provided
in Article III, Sections 3, 4 and 11, these Bylaws may be
altered, amended or repealed and new Bylaws may be adopted by the
Shareholders by affirmative vote of not less than a majority of
the outstanding shares of the Corporation entitled to vote.
SECTION 2. By Directors. Except as otherwise provided in
Article III, Sections 3, 4 and 11, these Bylaws may also be
altered, amended or repealed and new Bylaws may be adopted by the
Board of Directors by affirmative vote of not less than a
majority of the directors then in office; but no Bylaw adopted by
the Shareholders shall be amended or repealed by the Board of
Directors if the Bylaw so adopted so provides.
SECTION 3. Implied Amendments. Any action taken or
authorized by the Shareholders which would be inconsistent with
the Bylaws then in effect but is taken or authorized by
affirmative vote of not less than the number of shares required
to amend the Bylaws so that the Bylaws would be consistent with
such action shall be given the same effect as though the Bylaws
had been temporarily amended or suspended so far, but only so
far, as is necessary to permit the specific action so taken or
authorized.
SPECIMEN
STOCK CERTIFICATE
NUMBER: SHARES:
RESTRICTED STOCK
Incorporated under the laws of the State of Wisconsin.
MOUND CITY FINANCIAL SERVICES, INC.
Authorized Common 300,000 Shares No Par Value
This certifies that ______________________ is the owner of
______________________ (common shares--no par value) full paid
and non-assessable transferable on the books of the Corporation
in person or by duly authorized Attorney upon surrender of this
Certificate properly endorsed.
IN WITNESS WHEREOF the said Corporation has caused this
Certificate to be signed by its duly authorized officers and
sealed with the Seal of the Corporation this _____ day of
___________ A.D., 19___.
____________________________ _____________________________
Secretary President
ON REVERSE:
FOR VALUE RECEIVED, _____ hereby sell, assign and transfer
unto ______________________________________________ __________
Shares represented by the within Certificate, and do hereby
irrevocably constitute and appoint _____________________________
Attorney to transfer the said Shares on the books of the within
named Corporation with full power of substitution in the
premises.
Dated ______________________, 19___.
In presence of:
____________________________ ______________________________
THE SHARES REPRESENTED BY THIS CERTIFICATE AND ANY
SALE, TRANSFER, OR OTHER DISPOSITION THEREOF ARE
RESTRICTED UNDER AND SUBJECT TO THE TERMS AND
CONDITIONS CONTAINED IN ARTICLE 5(C) OF THE
CORPORATION'S ARTICLES OF INCORPORATION, A COPY OF
WHICH IS ON FILE AT THE OFFICES OF THE CORPORATION.
SPECIMEN
October 17, 1996
Mound City Financial Services, Inc.
25 East Pine Street
Platteville, Wisconsin 53818
Reference is made to the Registration Statement on Form S-4
(the "Registration Statement") to be filed by Mound City
Financial Services, Inc. (the "Corporation") with the Securities
and Exchange Commission (the "Commission") pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), with
respect to shares of Common Stock of the Corporation, no par
value, issuable by the Corporation in connection with a
reorganization ("Common Stock"), as described in the Prospectus
included in the Registration Statement.
As counsel to the Corporation for purposes of the
reorganization, we are familiar with the Articles of
Incorporation and the Bylaws of the Corporation. We also have
examined, or caused to be examined, such other documents and
instruments and have made, or caused to be made, such further
investigation as we have deemed necessary or appropriate to
render this opinion.
Based upon the foregoing, it is our opinion that:
(1) The Corporation is duly incorporated and validly
existing as a corporation under the laws of the State
of Wisconsin.
(2) The shares of Common Stock of the Corporation when
issued upon consummation of the reorganization and
delivered to the shareholders of Mound City Bank in
accordance with the provisions of the Agreement and
Plan of Reorganization dated_______________, 1996 will
be validly issued, fully paid and non-assessable under
applicable Wisconsin law, except for statutory
liability under Section 180.0622(2)(b) of the Wisconsin
Business Corporation Law.
We hereby consent to the use of this opinion as Exhibit 5 to
the Registration Statement, and we further consent to the use of
our name in the Registration Statement under the captions "Legal
Matters" and "Tax Considerations." In giving this consent, we do
not admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act or the Rules and
Regulations of the Commission issued thereunder.
[S] [C]
BOARDMAN, SUHR, CURRY & FIELD
EXECUTIVE EMPLOYEE SALARY CONTINUATION AGREEMENT
FOR
ROBERT J. JUST, JR.
THIS AGREEMENT is made as of this 14th day of May, 1992,
between Mound City Bank, a Wisconsin banking corporation (the
"Company") and Robert J. Just, Jr. (the "Participant").
WHEREAS, the Participant is an executive employee of the
Company and as such has materially contributed to the Company's
position, and
WHEREAS, the Company wishes to establish this Agreement for
purposes of promoting in the Participant the strongest interest
in the successful operation of the Company and increased
efficiency in his or her work and to provide the Participant
benefits upon retirement, death, disability or other termination
of employment, in consideration of services to be performed after
the date of this Agreement but prior to his or her retirement.
NOW, THEREFORE, in consideration of the premises, the
parties hereto agree as follows:
1. Definitions.
1.1 Administrative Committee. "Administrative Committee"
shall mean the committee appointed pursuant to Section 4 of this
Agreement.
1.2 Age. "Age" shall mean the age of the person as of his
or her last birthday.
1.3 Change in Control. "Change in Control" shall mean the
first to occur of any of the following events: (a) any person or
entity becomes, subsequent to the date of this Agreement, the
beneficial owner, directly or indirectly of 51% or more of the
then issued and outstanding voting stock of the Company (and, for
the purposes hereof, a person will be considered to be a
beneficial owner of such stock if such person, directly or
indirectly, through any contract, arrangement, understanding,
relationship, or otherwise has or shares voting power, which
includes the power to vote or to direct the voting of such stock,
or investment power, which includes the power to dispose or to
direct the disposition of such stock), (b) the Company merges or
consolidates with or reorganizes with or into any other
corporation or corporations other than its affiliates or engages
in any other similar business combination or reorganization, or
(c) the Company sells, assigns or transfers all or substantially
all of its business and assets, in one or a series of related
transactions, except any such sales to affiliates.
1.4 Disability. "Disability" shall mean, if the
Participant is insured under a life insurance policy, the
premiums for which are paid by the Company, and which policy
contains a "waiver of premiums" benefit, the definition of total
disability contained in the insurance policy. If the Participant
is not insured under such a life insurance policy, the Company
shall, in its complete and sole discretion, determine whether the
Participant is disabled for the purposes of this Agreement.
1.5 Discharge for Cause. "Discharge for Cause" shall mean
the termination of the Participant's employment with the Company
because of (a) the Participant's willful and continued failure to
substantially perform his or her duties (other than any such
failure resulting from his or her incapacity due to physical or
mental illness), after a demand for substantial performance is
delivered to him or her by the Company which specifically
identifies the manner in which the Company believes he or she has
not substantially performed his or her duties; (b) any willful
act of misconduct by the Participant; (c) a criminal conviction
of the Participant for any act involving the business and affairs
of the Company or for any act involving dishonesty, breach of
trust or a violation of the banking laws of the State of
Wisconsin or the United States; (d) a criminal conviction of the
Participant for commission of a felony; or (e) the removal of the
Participant by a regulatory agency. For purposes of this
definition, no act or failure to act on the Participant's part
will be considered "willful" unless done or omitted by him or her
not in good faith and without reasonable belief that his or her
act or omission was in the best interest of the Company.
1.6 Normal Retirement Date. "Normal Retirement Date" shall
mean the first day of the month following the month in which the
Participant reaches age 60.
1.7 Termination of Employment. "Termination of Employment"
shall mean the Participant's ceasing to be employed by the
Company for any reason whatsoever, voluntary or involuntary,
including by reason of death or disability.
2. Eligibility.
The Participant is eligible for the benefits provided herein
in accordance with the terms of this Agreement upon the execution
hereof.
The Participant shall cease to be a Participant at
Termination of Employment. However, the employment of the
Participant shall not be deemed to be terminated by reason of an
approved leave of absence granted in accordance with uniform
rules applied in a non-discriminatory manner.
3. Payment of Benefits.
3.1 Benefits For Termination Upon Normal Retirement Date.
Upon the Participant's Termination of Employment on the
Normal Retirement Date for reasons other than death or Discharge
for Cause, the Company shall pay to the Participant, as
compensation for services rendered prior to such date, the sum of
$40,000 per year, payable in monthly installments of $3,333 each,
commencing on the first day of the month coincident with or next
following the date of Termination of Employment and continuing on
the first day of each month until a total of 204 monthly payments
are made to the Participant or the Participant's beneficiary per
Section 3.6(b).
3.2 Benefits For Termination After Normal Retirement Date.
Upon the Participant's Termination of Employment after the
Normal Retirement Date for reasons other than death or Discharge
for Cause, the Company shall pay to the Participant as
compensation for services rendered prior to such date, the normal
retirement benefit described in Section 3.1 above, increased by
5% per year or .416% for each month that the Participant's
Termination of Employment is deferred beyond the Normal
Retirement Date.
3.3 Benefits Upon Disability.
Upon the Participant's Termination of Employment prior to
the Normal Retirement Date due to Disability, no separate
provision is made for a disability benefit under this Agreement.
However, in the event of such Participant's death while disabled
prior to reaching the Normal Retirement Date, such Participant's
beneficiary shall receive the survivor's benefits described in
Section 3.5(a). In the event the Participant lives to the Normal
Retirement Date, the Participant shall thereupon receive the
normal retirement date benefit described in Section 3.1.
3.4 Other Terminations of Employment.
(a) Voluntary Termination of Employment prior to the
Normal Retirement Date or Discharge for Cause at any time.
Except as provided in subparagraph (c), upon the Participant's
voluntary Termination of Employment prior to reaching the Normal
Retirement Date, for reasons other than death or Disability, or
upon the Participant's Discharge for Cause at any time, the
Company shall not be obligated to pay any benefit to the
Participant pursuant to this Agreement, and the Participant shall
have no further right to receive any benefit hereunder.
(b) Involuntary Termination of Employment prior to the
Normal Retirement Date other than because of death, Disability or
Discharge for Cause. Except as provided in subparagraph (c),
upon the Participant's involuntary Termination of Employment
prior to the Normal Retirement Date for reasons other than death,
Disability, or Discharge for Cause, the Company shall pay to the
Participant, as compensation for services rendered prior to such
Termination of Employment, the sum of $40,000 per year, payable
in monthly installments of $3,333 each, commencing on the first
day of the month coincident with or next following the date of
such Termination of Employment and continuing on the first day of
each month thereafter until a total of 144 total monthly payments
are made to the Participant or the Participant's beneficiary per
Section 3.5(b). For purposes of this subsection 3.4(b), the
Participant shall be deemed to have incurred an involuntary
Termination of Employment covered by this subsection if he or she
quits employment as a result of the Company's significantly
lessening either his or her title, duties, responsibilities,
compensation or altering his or her situs of employment, without
his or her consent. The Participant's compensation shall be
deemed to be significantly lessened if any cut-back is imposed
except as a part of an overall cut-back applied proportionately
to all of the Company's management employees or if the
Participant fails to receive periodic increases substantially
proportionate to and coincident with the increases granted to
management employees.
(c) Termination of Employment at or after a Change in
Control. If a Participant incurs a voluntary or involuntary
Termination of Employment prior to reaching the Normal Retirement
Date, for reasons other than death, Disability or Discharge for
Cause, but on or after the occurrence of a Change in Control, and
in connection with such change, the Participant's title, duties,
responsibilities or compensation is significantly lessened or his
or her situs of employment is changed, without his or her
consent, the Company shall pay to the Participant, as
compensation for services rendered prior to such event, the sum
of $40,000 per year, payable in monthly installments of $3,333
each, commencing on the first day of the month coincident with or
next following the date of such Termination of Employment and
continuing on the first day of the month thereafter until a total
of 144 monthly payments are made to the Participant or the
Participant's beneficiary per Section 3.5(b). For purposes
hereof, the standards set forth in subparagraph (b) above with
respect to what constitutes a significant lessening of
compensation shall apply.
(d) Limitations on Compensation.
(i) In the event that the benefits payable to the
Participant under Section 3.4(c) ("Severance Benefits"), or any
other payments or benefits received or to be received by the
Participant from the Company (whether payable pursuant to the
terms of this Agreement, any other plan, agreement or arrangement
with the Company or any corporation ("Affiliate") affiliated with
the Company within the meaning of Section 1504 of the Internal
Revenue Code of 1954, as amended (the "Code"), in the opinion of
tax counsel selected by the Company's independent auditors,
constitute "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and the present value of such "parachute
payments" equals or exceeds three (3) times the average of the
annual compensation payable to the Participant by the Company (or
an Affiliate) and includable in the Participant's gross income
for federal income tax purposes for the five (5) calendar years
preceding the year in which a change in ownership or control of
the Company occurred ("Base Amount"), such Severance Benefits
shall be reduced to an amount the present value of which (when
combined with the present value of any other payments or benefits
otherwise received or to be received by the Participant from the
Company (or an Affiliate) that are deemed "parachute payments")
is equal to 2.99 times the Base Amount, notwithstanding any other
provision to the contrary in this Agreement. The Severance
Benefits shall not be reduced if (A) the Participant shall have
effectively waived his receipt or enjoyment of any such payment
or benefit which triggered the applicability of this Section
3.4(d), or (B) in the opinion of such tax counsel, the Severance
Benefits (in its full amount or as partially reduced, as the case
may be) plus all other payments or benefits which constitute
"parachute payments" within the meaning of Section 280G(b)(2) of
the Code are reasonable compensation for services actually
rendered, within the meaning of Section 280G(b)(4) of the Code,
and such payments are deductible by the Company. The Base Amount
shall include every type and form of compensation includable in
the Participant's gross income in respect of his employment by
the Company (or an Affiliate), except to the extent otherwise
provided in temporary or final regulations promulgated under
Section 280G(b) of the Code. For purposes of this Section
3.4(d), a "change in ownership or control" shall have the meaning
set forth in Section 280G(b) of the Code and any temporary or
final regulations promulgated thereunder. The present value of
any non-cash benefits or any deferred cash payment shall be
determined by the Company's independent auditors in accordance
with the principles of Sections 280G(b)(3) and (4) of the Code.
(ii) The Participant shall have the right to
request that the Company obtain a ruling from the Internal
Revenue Service ("Service") as to whether any or all payments or
benefits determined by such tax counsel are, in the view of the
Service, "parachute payments" under Section 280G. If a ruling is
sought pursuant to the Participant's request, no Severance
Benefits payable under this Agreement shall be made to the
Participant until after fifteen (15) days from the date of such
ruling. For purposes of this Subsection 3.4(d)(ii), the
Participant and the Company agree to be bound by the payments
under Section 280G. If the Service declines, for any reason, to
provide the ruling requested, the tax counsel's opinion provided
under Subsection 3.4(d)(i) with respect to what payments or
benefits constitute "parachute payments" shall control, and the
period during which the Severance Benefits may be deferred shall
be extended to a date fifteen (15) days from the date of the
Service's notice indicating that no ruling would be forthcoming.
(iii) In the event that Section 280G, or any
successor statute, is repealed, this Section 3.4(d) shall cease
to be effective on the effective date of such repeal. The
parties to this Agreement recognize that final Treasury
Regulations under Section 280G of the Code may affect the amounts
that may be paid under this Agreement and agree that, upon
issuance of such final Regulations, this Agreement may be
modified as in good faith deemed necessary in light of the
provisions of such Regulations to achieve the purposes of this
Agreement, and that consent to such modifications shall not be
unreasonably withheld.
(e) Non-Competition Covenant and Termination of
Benefits. The Participant agrees that during the three (3) year
period after a Termination of Employment for which the
Participant is receiving benefits pursuant to this Agreement, he
shall not directly or indirectly, as agent, employee, officer,
director, trustee, partner, proprietor or otherwise become
engaged by, render advice or assistance to, or be employed on a
compensated basis without the prior written consent of the
Company by any person or entity which competes in Grant County,
Wisconsin, with the business of the Company (a "Competitor").
The Participant acknowledges that these restrictions on
competition are reasonable and are necessary to protect the
interests of the Company.
If following Participant's Termination of Employment
pursuant to paragraph 3.4(b) or 3.4(c), Participant receives
compensation, directly or indirectly, as agent, employee,
consultant, partner or in any other capacity for services
provided to or employment by any person or entity other than a
Competitor, the benefits payable under this Agreement during any
such month shall be reduced by amounts received by or to be paid
to the Participant during such month by the other person or
entity.
If after a Termination of Employment for which the
Participant is receiving benefits pursuant to this Agreement, the
Participant receives compensation, directly or indirectly, as
agent, employee, consultant, partner or in any other capacity for
services provided to or employment by a Competitor, all benefits
otherwise payable under this Agreement shall thereupon cease, and
the Participant shall have no further right to receive any
benefit hereunder.
3.5 Survivorship Benefits.
(a) Prior to commencement of normal retirement
benefits. If a Participant dies while in the service of the
Company or after a Termination of Employment due to Disability
and while disabled, but prior to commencement of any benefit
payments under this Agreement, the Company shall pay to the
Participant's beneficiary a survivor's benefit of 204 equal
monthly installments of $3,333 each commencing on the first day
of the month after the Participant's death and continuing on the
first day of each month thereafter until all such payments are
completed. In the event a beneficiary dies before receiving all
the survivor's benefit payments, the remaining payments shall be
paid to the legal representative of the beneficiary's estate.
Payment of the survivor's benefit shall relieve the Company of
the obligation to pay any other benefit which the Participant
would have otherwise received, under the terms of this Agreement.
(b) After commencement of benefits. If the
Participant dies after any benefit payments have commenced, but
prior to receiving all of the scheduled number of monthly
payments, the Company shall pay the remaining monthly payments to
the Participant's beneficiary. In the event a beneficiary dies
before receiving all the remaining payments, the then remaining
payments shall be paid to the legal representative of the
beneficiary's estate.
3.6 Receipts of Payments: Designation of Beneficiary. All
payments to be made by the Company shall be made to the
Participant, if living. In the event of the Participant's death
prior to the receipt of all benefit payments, all subsequent
payments to be made under this Agreement shall be to the
beneficiary or beneficiaries of the Participant. The Participant
shall designate the beneficiary by filing a written notice of
such designation with the Company in such form as the Company may
prescribe. The Participant may revoke or modify said designation
at any time by a further written designation. The Participant's
beneficiary designation shall be deemed automatically revoked in
the event of the death of the beneficiary or, if the beneficiary
is the Participant's spouse, in the event of dissolution of
marriage. If no designation shall be in effect at the time when
any benefits payable under this Agreement shall become due, the
beneficiary shall be the spouse of the Participant, or if no
spouse is then living, the legal representative of the
Participant's estate.
4. Administration and Interpretation of this Agreement.
The Board of Directors shall appoint an Administrative Committee
consisting of three (3) or more persons to administer and
interpret this Agreement. Interpretation by the Administrative
Committee shall be final and binding upon the Participant. The
Administrative Committee may adopt rules and regulations relating
to this Agreement as it may deem necessary or advisable for the
administration thereof, but may not reduce benefits without
consent of the Participant.
5. Claims Procedure. If the Participant or the
Participant's beneficiary (hereinafter referred to as a
"Claimant") is denied all or a portion of an expected benefit
under this Agreement for any reason, he or she may file a claim
with the Administrative Committee. The Administrative Committee
shall notify the Claimant within sixty (60) days of allowance or
denial of the claim, unless the Claimant receives written notice
from the Administrative Committee prior to the end of the sixty
(60) day period stating that special circumstances require an
extension of the time for decision. The notice of the
Administrative Committee's decision shall be in writing, sent by
mail to Claimant's last known address, and, if a denial of the
claim, must contain the following information:
(a) the specific reasons for the denial;
(b) specific reference to pertinent provisions of this
Agreement on which the denial is based; and
(c) if applicable, a description of any additional
information or material necessary to perfect the claim, an
explanation of why such information or material is necessary, and
an explanation of the claims review procedure.
6. Review Procedure.
(a) A Claimant is entitled to request a review of any
denial of his or her claim by the Administrative Committee. The
request for review must be submitted in writing within sixty (60)
days of mailing of notice of the denial. Absent a request for
review within the 60-day period, the claim will be deemed to be
conclusively denied. The Claimant or his or her representative
shall be entitled to review all pertinent documents, and to
submit issues and comments orally and in writing.
(b) If the request for review by a Claimant concerns
the interpretation and application of the provisions of this
Agreement and the Company's obligations, then the review shall be
conducted by a separate committee consisting of three (3) persons
designated or appointed by the Administrative Committee. The
separate committee shall afford the Claimant a hearing and the
opportunity to review all pertinent documents and submit issues
and comments orally and in writing and shall render a review
decision, together with specific reasons for the decision and
reference to the pertinent provisions of this Agreement.
7. Life Insurance and Funding. The Company in its
discretion may apply for and procure as owner and for its own
benefit, insurance on the life of the Participant, in such
amounts and in such forms as the Company may choose. The
Participant shall have no interest whatsoever in any such policy
or policies, but at the request of the Company he or she shall
submit to medical examinations and supply such information and
execute such documents as may be required by the insurance
company or companies to whom the Company has applied for
insurance.
The rights of the Participant, or his or her beneficiary, or
estate, to benefits under this Agreement shall be solely those of
an unsecured creditor of the Company. Any insurance policy or
other assets acquired by or held by the Company in connection
with the liabilities assumed by it pursuant to this Agreement
shall not be deemed to be held under any trust for the benefit of
the Participant, his or her beneficiary, or his or her estate, or
to be security for the performance of the obligations of the
Company but shall be, and remain, a general, unpledged, and
unrestricted asset of the Company.
If this Agreement is funded through insurance on the life of
the Participant, then in the event of such Participant's death
during the first two (2) years after the effective date of this
Agreement, or if such Participant's death was a result of suicide
or if such Participant made any material misstatement or failed
to make a material disclosure of information in any documentation
which the Participant is requested to complete in connection with
this Agreement, then no death benefits under the terms of this
Agreement will be payable, unless and to the extent that the
Board of Directors of Company, in their absolute discretion, may
otherwise determine.
8. Assignment of Benefits. Neither the Participant nor
any other beneficiary under this Agreement shall have any right
to assign the right to receive any benefits hereunder, and in the
event of any attempted assignment or transfer, the Company shall
have no further liability hereunder.
9. Employment Not Guaranteed by Agreement. Neither this
Agreement nor any action taken hereunder shall be construed as
giving a Participant the right to be retained as an Executive
Employee or as an employee of the Company for any period.
10. Taxes. The Company shall deduct from all payments made
hereunder all applicable federal or state taxes required by law
to be withheld from such payments.
11. Amendment and Termination. The Board of Directors may,
at any time, amend or terminate this Agreement, provided that the
Board may not reduce or modify any benefit in pay status to the
Participant or beneficiary hereunder or any benefit that would
become payable hereunder if the Participant were to have died or
were to have been involuntarily terminated under Section 3.4(b)
hereof on the day prior to such action by the Board, without the
prior written consent of the Participant.
The Company is entering into this Agreement upon the
assumption that certain existing tax laws will continue in effect
in substantially their current form. In the event of any changes
in Federal law relating to and allowing the tax-free accumulation
of earnings within a life insurance policy, the income tax-free
payment of proceeds from life insurance policies or any other law
which would result in a material adverse impact upon the
Company's ability to perform its obligations under this
Agreement, the Company shall have an option to terminate or
modify this Agreement subject to the protections afforded
Participant in the preceding paragraph above.
12. Construction. This Agreement shall be construed
according to the laws of the State of Wisconsin.
13. Form of Communication. Any election, application,
claim, notice or other communication required or permitted to be
made by a Participant to the Company shall be made in writing and
in such form as the Company shall prescribe. Such communication
shall be effective upon mailing, if sent by first class mail,
postage prepaid, and addressed to the Company's office at 25 East
Pine Street, Platteville, Wisconsin, 53818.
14. Captions. The captions at the head of a section or
paragraph of this Agreement are designed for convenience of
reference only and are not to be resorted to for the purpose of
interpreting any provision of this Agreement.
15. Severability. The invalidity of any portion of this
Agreement shall not invalidate the remainder thereof, and the
remainder shall continue in full force and effect.
16. Binding Effect. This Agreement shall be binding upon
and shall inure to the benefit of the Company and the
Participant, and each of their successors, heirs, personal
representatives and permitted assigns. No sale of substantially
all of the Company's assets shall be made without the buyer
expressly assuming the obligation of this Agreement. The Company
further agrees that it will not be a party to any merger,
consolidation or reorganization unless and until its obligations
hereunder are expressly assumed by the successor or successors.
IN WITNESS WHEREOF, this Agreement has been executed by the
parties as of the date first set forth above.
ATTEST: MOUND CITY BANK
_________________________ By:________________________________
Its Vice President & Chairman
of the Board
ATTEST:
_________________________ ___________________________________
Robert J. Just, Jr., Participant
PROXY
SPECIAL MEETING OF SHAREHOLDERS
Know all men by these presents that I, the undersigned
shareholder in Mound City Bank, do hereby appoint W. Phil
Karrmann and Wilson J. Boldt, and each of them individually, or
_____________________,* my true and lawful attorney, substitute,
and proxy, with power of substitution, for me and in my name to
vote at the Special Meeting of Shareholders of Mound City Bank,
to be held on December 19, 1996, or at any adjournment of that
meeting, with all powers I should have if personally present,
hereby revoking all proxies heretofore given. I acknowledge that
I have received a Notice of Special Meeting of Shareholders and a
Proxy Statement relating to the meeting. I hereby direct that
the person(s) designated above vote as follows:
(1) FOR [ ] AGAINST [ ] ABSTAIN [ ]
the following resolution:
RESOLVED, that the formation of a bank holding
company for Mound City Bank, pursuant to the terms and
conditions of an Agreement and Plan of Reorganization
between Mound City Bank and Mound City Financial
Services, Inc. and a Merger Agreement between Mound
City Bank and New Mound City Bank, whereby (i) Mound
City Bank will become a wholly-owned subsidiary of
Mound City Financial Services, Inc., and (ii)
shareholders of Mound City Bank will become
shareholders of Mound City Financial Services, Inc., is
hereby authorized and approved.
(2) In his/her discretion as to any other matters that may
properly come before the meeting or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
REORGANIZATION.
This proxy, when properly signed, will be voted in the
manner directed by the undersigned shareholder. If the manner in
which to vote is not supplied, the undersigned shareholder will
be deemed to have designated a vote "FOR" the formation of the
bank holding company.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
PLEASE SIGN, DATE AND RETURN THIS PROXY, USING THE ENCLOSED
ENVELOPE. Please sign exactly as your name appears on your stock
certificates. When shares are held by joint tenants, both should
sign. When signing as attorney, executor, administrator,
trustee, or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or
other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Dated: ________________________, 1996.
___________________________________
Signature
___________________________________
Signature if held jointly, or title
[FN]
* If a name is inserted here, only that person will be entitled
to vote the proxy.
