Registration No. ______________
- - -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
- - -------------------------------------------------------------------------------
BLOOMER BANCSHARES, INC.
(Exact name of registrant as specified in its Charter)
WISCONSIN Applied For 6711
- - ------------------------ -------------------------- ---------------------
(State of Incorporation) (I.R.S. Employer I.D. No.) Primary Standard
Industrial Classifi-
cation Code No.)
1401 MAIN STREET
BLOOMER, WISCONSIN 54724
(715) 568-1100
(Address and telephone number of principal executive offices)
- - -------------------------------------------------------------------------------
RALPH J. WERNER JOHN E. KNIGHT
1401 Main Street Boardman, Suhr, Curry & Field
Bloomer, WI 54724 One S. Pinckney Street, Suite 410
(715) 568-1100 Post Office Box 927
Madison, WI 53701-0927
(Name, address, telephone no.
of agent for service) (Copy of Notices)
- - -------------------------------------------------------------------------------
Approximate date of commencement of proposed sale of the securities to the
public: upon consummation of the reorganization.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission acting pursuant to said section 8(a),
may determine.
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
Title of each class of Amount to be Proposed maximum Proposed maximum
securities to be registered offering price per aggregate offering Amount of
registered unit* price* registration fee
- - ------------- ------------- ------------------ ------------------ ----------------
Common Stock, $1 6,000 $1,369.69 $8,218,140.00 $2,490.34
par value
<FN>
*Based on the book value of the common stock of Peoples State Bank on March 31, 1997, estimated solely for purposes of
calculating the registration fee pursuant to Rule 457(f)(2).
</FN>
</TABLE>
<PAGE>
BLOOMER BANCSHARES, 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 BLOOMER BANCSHARES, INC.; PEOPLES STATE BANK
7 Not applicable
8 THE REORGANIZATION
9 BLOOMER BANCSHARES, INC.; PEOPLES STATE BANK
10 Not applicable
11 Not applicable
12 Not applicable
13 Not applicable
14 BLOOMER BANCSHARES, INC.; COMPARISON OF BANK STOCK WITH
HOLDING COMPANY STOCK
15 Not applicable
16 Not applicable
17 PEOPLES STATE BANK; COMPARISON OF BANK STOCK WITH HOLDING
COMPANY STOCK
<PAGE>
18 THE REORGANIZATION; BLOOMER BANCSHARES, INC.; PEOPLES STATE
BANK; RIGHTS OF DISSENTING SHAREHOLDERS OF BANK
19 Not applicable
<PAGE>
_______________, 1997
To the Shareholders of Peoples State Bank:
Peoples State Bank ("Bank") will hold a special meeting of its
shareholders on _____________, 1997, at ____ _.m. Central Daylight Savings Time,
at 1401 Main Street, Bloomer, 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, Bloomer Bancshares, Inc., has been formed at
the direction of Bank management to serve as a holding company for the Bank.
Bloomer Bancshares, 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 Bloomer Bancshares, 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.
<PAGE>
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, 1996 and March 31, 1997,
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 BLOOMER BANCSHARES, 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 (715) 568-1100.
Very truly yours,
Dr. Ralph J. Werner, President
<PAGE>
PEOPLES STATE BANK
1401 Main Street
Bloomer, Wisconsin 55724
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD _________, 1997
A special meeting of shareholders of Peoples State Bank (the "Bank") will
be held on __________________, at 1401 Main Street, Bloomer, Wisconsin, at ____
_.m. Central Daylight Savings Time, for the following purposes:
1. To vote on the following resolution:
RESOLVED, that the formation of a bank holding company for Peoples
State Bank, pursuant to the terms and conditions of an Agreement and
Plan of Reorganization between Peoples State Bank and Bloomer
Bancshares, Inc., and a Merger Agreement between Peoples State Bank
and New Peoples State Bank, whereby (i) Peoples State Bank will become
a wholly-owned subsidiary of Bloomer Bancshares, Inc., and (ii)
shareholders of Peoples State Bank will become shareholders of Bloomer
Bancshares, 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 ______________, 1997, 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
-------------------------------
Lyndon Peterson, Cashier
__________, 1997
<PAGE>
PEOPLES STATE BANK
PROXY STATEMENT
-------------------------------
BLOOMER BANCSHARES, INC.
6,000 SHARES
COMMON STOCK
PROSPECTUS
Special Meeting of Peoples State Bank
Shareholders to be held _________, 1997
This Proxy Statement is being furnished to the shareholders of Peoples
State Bank, Bloomer, Wisconsin, in connection with the solicitation of proxies
by the Board of Directors of Peoples State Bank for use at the special meeting
of shareholders to be held on _________, 1997. At that meeting, the shareholders
of Peoples State Bank ("Bank") will consider and vote upon the proposed
acquisition of Peoples State Bank by Bloomer Bancshares, Inc. ("Holding
Company") by means of a reorganization.
Under its Articles of Incorporation, the 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 the 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
80% of the outstanding shares of voting stock of the Holding Company. See
"BLOOMER BANCSHARES, INC. - Certain Anti-Takeover and Indemnification
Provisions."
------------------------------------------
Bloomer Bancshares, Inc. has filed a Registration Statement on Form S-4
pursuant to the Securities Act of 1933, as amended, covering the shares of
Bloomer Bancshares, Inc. common stock to be issued in connection with the
reorganization. These materials constitute the Prospectus of Bloomer Bancshares,
Inc. to the shareholders of Peoples State Bank.
<PAGE>
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 BLOOMER BANCSHARES, 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 BLOOMER BANCSHARES, INC. OR PEOPLES
STATE BANK SINCE THE DATE OF THIS PROSPECTUS. BLOOMER BANCSHARES, INC. IS
REQUIRED TO ADVISE SHAREHOLDERS OF ANY FUNDAMENTAL CHANGE AFFECTING THE TERMS OF
THE TRANSACTION BETWEEN PEOPLES STATE BANK AND BLOOMER BANCSHARES, 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.
----------------------------------------
THE SHARES OF BLOOMER BANCSHARES, 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 __________, 1997.
<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 6
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 13
Resale of Holding Company Common Stock 14
Expenses of Reorganization 14
RIGHTS OF DISSENTING SHAREHOLDERS OF BANK 14
BLOOMER BANCSHARES, INC. 15
History, Business, and Properties 15
Management 16
Principal Shareholders 17
Description of Holding Company's Common Stock 17
Executive Compensation 17
Transactions with Related Parties 17
Certain Anti-Takeover and Indemnification Provisions 18
PEOPLES STATE BANK 19
History, Business and Properties 19
Management 22
Business Background of Directors and Executive Officers 24
Executive Compensation 24
Director Compensation 24
Board Review of Management Compensation 24
Principal Shareholders 24
<PAGE>
Description of the Stock of the Bank 25
Transactions with Related Parties 25
Indemnification of Directors and Officers 25
Shares of the Stock Owned or Controlled by Management 26
Recommendation of the Bank's Board of Directors 26
Financial Statements 27
COMPARISON OF BANK STOCK WITH HOLDING COMPANY STOCK 27
Authorized Shares and Par Value 27
Voting Rights 27
Dividends 28
Market for the Stock 29
Value 32
Other 33
SUPERVISION AND REGULATION 33
General 33
Banking Regulation 34
Capital Requirements for the Holding Company and the Bank 35
FDIC Deposit Insurance Premiums 36
Loan Limits to Borrowers 36
Recent Regulatory Developments 36
AVAILABLE INFORMATION 38
LEGAL MATTERS 38
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 Bloomer Bancshares, 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 Bloomer Bancshares, Inc.
1401 Main Street
Bloomer, Wisconsin 54724
(715) 568-1100
Peoples State Bank
1401 Main Street
Bloomer, Wisconsin 54724
(715) 568-1100
Bloomer Bancshares, Inc. ("Holding Company"), a Wisconsin corporation, was
organized at the request of the management of Peoples State Bank ("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 "BLOOMER BANCSHARES, 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 Bloomer, Wisconsin, since 1911. 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 "PEOPLES STATE 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 Securities and
Exchange Commission ("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
i
<PAGE>
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.
Special Meeting of Shareholders
A special meeting of the shareholders of the Bank will be held on
_________, 1997, at ____ _.m., Central Daylight Savings Time, at 1401 Main
Street, Bloomer, 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
_________, 1997, 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 21.05% 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 "PEOPLES STATE 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 Closing Date of the Reorganization each share of Bank common stock
outstanding immediately prior to the Closing 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."
ii
<PAGE>
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. 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 _________, 1997,
unless otherwise agreed in writing by the parties. 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. 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.
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). 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. Such a limitation does not
iii
<PAGE>
currently exist on the stock of the Bank. 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 80% 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 80% 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 80% of the outstanding shares of
voting stock of the Holding Company. See "BLOOMER BANCSHARES, INC. - Certain
Anti-Takeover and Indemnification Provisions."
By contrast with the Holding Company, the Bank is not subject to these
latter provisions in its Articles of Incorporation, Bylaws, or under applicable
banking law.
iv
<PAGE>
------------------------------------------
PROXY STATEMENT
AND
PROSPECTUS
------------------------------------------
INTRODUCTION
Bloomer Bancshares, Inc. ("Holding Company") is a business corporation
organized at the request of the Board of Directors of the Peoples State Bank
("Bank") for the purpose of the reorganization. See "BLOOMER BANCSHARES, INC."
The Bank is a state-chartered bank that has been operating as a commercial bank
with its main office in Bloomer, Wisconsin, since 1911. See "PEOPLES STATE
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 "PEOPLES STATE 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.
<PAGE>
THE REORGANIZATION
General
The reorganization is designed to offer shareholders of Peoples State Bank
("Bank") the opportunity to form a bank holding company. Pursuant to the
reorganization, the following steps have already occurred:
1. Bloomer Bancshares, Inc. ("Holding Company"), a Wisconsin business
corporation, has been incorporated for the purpose of participating in the
reorganization and becoming a bank holding company; and
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; and
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.
2
<PAGE>
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, however, but may do so in the discretion of its
Board of Directors. In certain circumstances, approval by the Federal Reserve
Board may be required for the purchase of Holding Company stock. 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."
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.
3
<PAGE>
Capital Requirements. The proposed reorganization will also provide, in the
opinion of the Board, greater flexibility in meeting the 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 Peoples State 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
Holding Company stock at the rate of one share of 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 6,000 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:
4
<PAGE>
CURRENT AFTER REORGANIZATION
Shareholders Shareholders
- - ------------------------- --------------------------------
6,000 shares 6,000 shares (100%) of
(100%)of Bank Holding Company stock
stock
Holding Company
--------------------------------
6,000 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 ___________, 1997, at ____ _.m.,
Central Daylight Savings Time, at 1401 Main Street, Bloomer, Wisconsin. The
close of business on ___________, 1997, 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 6,000 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 3,001 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. Abstentions are not treated
as "no" votes for purposes of dissenters' rights.
5
<PAGE>
THE BOARD OF DIRECTORS OF THE BANK UNANIMOUSLY RECOMMENDS THAT HOLDERS OF
BANK STOCK VOTE "FOR" THE TRANSACTION. See "PEOPLES STATE 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 1,263 shares,
or approximately 21.05%, of the Bank stock outstanding. See "PEOPLES STATE 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. 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.
6
<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 attached to this
Prospectus as Exhibit B to the effect that the transaction will be a
tax-free reorganization for the organizations and participating Bank
shareholders;
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;
7
<PAGE>
8. no more than ten percent (10%) (600 shares or fewer) of the Bank stock
shall be "dissenting shares" pursuant to the exercise of dissenters'
rights; and
9. the reorganization must be completed by December 31, 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, 1401
Main Street, Bloomer, 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.
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 December 31, 1997, unless that date
is extended by mutual written agreement of the parties.
8
<PAGE>
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.
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.
9
<PAGE>
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 Bank
shareholder will be approximately equal to the fair market value of the Bank
stock surrendered in the exchange.
2. There is no plan or intention by the shareholders of the Bank 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
10
<PAGE>
remaining shareholders to sell, exchange, or otherwise dispose of a number of
shares of Holding Company stock received in the transaction that would reduce
the shareholders' ownership of Holding Company stock to a number of shares
having a value, as of the date of the transaction, of less than fifty percent
(50%) of the value of all of the formerly outstanding Bank stock as of the same
date. For purposes of this representation, shares of Bank stock exchanged for
cash or other property, surrendered by dissenters or exchanged for cash in lieu
of fractional shares of Holding Company stock will be treated as outstanding
Bank stock on the date of the transaction. Moreover, shares of Holding Company
stock held by Bank shareholders and otherwise sold, redeemed or disposed of
prior or subsequent to the transaction will be considered in making this
representation.
3. New Peoples State Bank ("New Bank") will acquire at least ninety percent
(90%) of the fair market value of the net assets and at least seventy percent
(70%) of the fair market value of the gross assets held by the Bank immediately
prior to the transaction. For purposes of this representation, amounts paid by
the Bank to dissenters, amounts paid by the Bank to shareholders who receive
cash or other property, Bank assets used to pay its reorganization expenses, and
all redemption and distributions (except for regular, normal dividends) made by
the Bank immediately preceding the transfer, will be included as assets of the
Bank held immediately prior to the transaction.
4. Prior to the transaction, the Holding Company will be in control of the
New Bank within the meaning of ss. 368(c)(1) of the Internal Revenue Code.
5. Following the transaction, the New Bank will not issue additional shares
of its stock that would result in the Holding Company losing control of the New
Bank within the meaning of ss. 368(c)(1) of the Internal Revenue Code.
6. The Holding Company has no plan or intention to reacquire any of its
stock issued in the transaction.
7. The Holding Company has no plan or intention to liquidate the New Bank;
to merge the New Bank with and into another bank or corporation; to sell or
otherwise dispose of the stock of the New Bank; or to cause the New Bank to sell
or to otherwise dispose of any of the Bank's assets acquired in the transaction,
except for dispositions made in the ordinary course of business or transfers
described in ss. 368(a)(2)(C) of the Internal Revenue Code.
8. The liabilities of the Bank assumed by the New Bank, and the liabilities
to which the transferred assets of the Bank are subject, were incurred by the
Bank in the ordinary course of its business.
9. Following the transaction, the New Bank will continue the historic
business of the Bank or use a significant portion of the Bank's business assets
in a business.
11
<PAGE>
10. The Holding Company, the New Bank, the Bank, and the shareholders will
pay their respective expenses, if any, incurred in connection with the
transaction.
11. There is no intercorporate indebtedness existing between the Holding
Company and the Bank or between the New Bank and the Bank that was issued,
acquired or will be settled at a discount.
12. No two parties to the transaction are investment companies as defined
in ss. 368(a)(2)(F)(iii) and (iv) of the Internal Revenue Code.
13. The Bank is not under the jurisdiction of a court in a Title 11
(bankruptcy) or similar case within the meaning of ss. 368(a)(3)(A) of the
Internal Revenue Code.
14. The fair market value of the assets of the Bank transferred to the New
Bank will equal or exceed the sum of the liabilities assumed by the New Bank,
plus the amount of liabilities, if any, to which the transferred assets are
subject.
15. No stock of the New Bank will be issued in 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)(2)(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.
12
<PAGE>
(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 the 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
13
<PAGE>
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 Closing 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 $40,000.
RIGHTS OF DISSENTING SHAREHOLDERS OF BANK
Sections 221.0706 through 221.0718 of the Wisconsin Statutes, the full text
of which is attached to this Prospectus 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
14
<PAGE>
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: Dr. Ralph J. Werner, President, Peoples State Bank, 1401 Main
Street, Bloomer, Wisconsin 53724. 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.
BLOOMER BANCSHARES, 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 April, 1997, at the direction of the Board of Directors 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 to this Prospectus 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,
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<PAGE>
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:
<TABLE>
<CAPTION>
Shares of
Position with Principal Holding Percentage
Name and Age Holding Company Occupation Company(1) (Approx)
<S> <C> <C> <C> <C>
Albin E. Borgeson, 56 Director Banker 13 .22%
H. Robert Hanson, 69 Director Retired 5 .08
George R. Helton, 71 Director Retired 164 2.73
James L. Irwin, 49 Secretary, Director Banker 15 .25
Bob Kuhn, 71 Director Owner, Bloomer 5 .08
Farm Products
Dean Rosenbrook, 60 Director Farmer 0 .00
George A. Webb, 70 Vice President, Retired 15 .25
Director
Ralph J. Werner, 74 President, Director Retired 1,046 17.43
====== ======
TOTALS 1,263 21.05%
<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 22, footnote 1.
</FN>
</TABLE>
16
<PAGE>
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 April, 1997. The initial term
of office for Messrs. Irwin and Rosenbrook is one year; for Messrs. Borgeson,
Kuhn and Webb, two years; and for Messrs. Hanson, Helton and Werner, 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 23 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 "PEOPLES STATE BANK - Principal Shareholders."
Description of Holding Company's Common Stock
The Holding Company's authorized capital stock consists of 6,000 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
6,000 shares.
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.
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.
17
<PAGE>
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). 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 bylaws 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 "BLOOMER BANCSHARES, INC. Management."
The Articles of Incorporation also require the affirmative vote of 80% 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 80% 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 80% 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
18
<PAGE>
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 willful 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.
PEOPLES STATE BANK
History, Business, and Properties
The Bank was chartered by the Wisconsin Commissioner of Banking in 1911.
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 and individual retirement accounts.
The Bank's local community for Community Reinvestment Act purposes
comprises a 15- mile radius from a point located at 1401 Main Street, Bloomer,
Wisconsin. The Bank's loan portfolio, as of March 31, 1997, consisted of the
following:
19
<PAGE>
Loan Category Volume (.000s) Percent of Portfolio
Consumer Loans 4,715 11.27%
Commercial Loans 9,581 22.91%
Agricultural Loans 11,955 28.58%
Residential Real Estate 14,624 34.96%
Municipal, etc. 953 2.28%
-======= ========
TOTALS $41,828 100.00%
The following schedule indicates loan and deposit volume distribution for
the local area zip codes, as of March 31, 1997:
<TABLE>
<CAPTION>
City, Town, Deposits Percent of Total Loans (000s) Percent of Total
Village (000s)
<S> <C> <C> <C> <C>
54724 12,859 74% 29,322 76.27%
54729 521 3% 1,089 2.83%
54730 1,216 7% 2,319 6.04%
54732 348 2% 499 1.30%
54757 2,432 14% 5,211 13.56%
======== ===== ======== ========
TOTALS $17,376 100% $38,440 100.00%
</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.
20
<PAGE>
There are two other commercial banks and one savings bank located in
Bloomer. The Bank's competition comes from those institutions and others located
near Bloomer. 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 office is located at 1401 Main Street, Bloomer, Wisconsin, in a
facility built in 1958 and subsequently expanded and remodeled. On December 31,
1996, the Bank's staff included four officers, 20 full-time and eight part-time
employees. There are a total of 96 shareholders of the Bank.
21
<PAGE>
Management
The following persons constitute the executive officers and directors of
the Bank:
<TABLE>
<CAPTION>
Position with Number of
Bank/Number of Shares of Percentage
Name and Age Years at Bank Served Since Stock (1) (Approx.)
<S> <C> <C> <C> <C>
Albin E. Borgeson, 56 Vice President, 1988
Director, 7 13 .22%
H. Robert Hanson, 69 Director, 16 1981 5 .08
George R. Helton, 71 Director, 10 1987 164 2.73
James L. Irwin, 49 CEO, Senior 1987 15 .25
Executive Vice
President,
Director, 10
Bob Kuhn, 71 Director, 16 1981 5 .08
Lyndon Peterson, 45 Cashier, 2 1995 0 .00
Dean Rosenbrook, 60 Director, 1 1996 0 .00
George A. Webb, 70 Vice President, 1987 15 .25
Director, 11
Ralph J. Werner, 74 President, 1981
Director, 16 1,046(2) 17.43
====== ======
TOTALS 1,263 21.05%
<FN>
(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:
Albin E. Borgeson: Spouse, Marsha M. Borgeson
George R. Helton: Spouse, Shirley A. Helton
James L. Irwin: Spouse, Kathleen A. Irwin
Ralph J. Werner: Spouse, Bonna M. Werner
</FN>
<FN>
(2) Ralph J. and Bonna M. Werner are the trustees of the Ralph J. Werner Trustee or Bonna M. Werner Trustee, FBO Werner
Rev. Grantor Trust, which owns 1026 shares of Bank stock. These shares are included in the shares listed.
</FN>
</TABLE>
22
<PAGE>
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
Albin E. Borgeson began working for the Bank in 1988 as a Vice President
and Director. Before that time, he worked in AVP-Lending at Farmers & Merchant
Bank in Greenwood, Wisconsin.
H. Robert Hanson is a life-long resident of the Bloomer area and has been
self-employed as a dairy farmer all his life. He has been a director of the Bank
since 1981.
George R. Helton is a life-long resident of the Bloomer area and is a
retired Chippewa County highway worker. He has been a director of the Bank since
1987.
James L. Irwin received a B.A. in agribusiness from the University of
Wisconsin-River Falls in 1971. He began working for the Bank in 1987. Since 1987
he has been Chief Executive Officer, Senior Executive Vice President and a
director.
Bob Kuhn has been self-employed as the owner of Bloomer Farm Products since
1974. He has been a director of the Bank since 1981.
Lyndon Peterson was a self-employed farmer between 1980 and 1990. Between
1990 and 1995, he was a banker at the First American Bank in Colfax, Wisconsin
and became the Cashier at Peoples State Bank in 1995.
Dean Rosenbrook has been self-employed as a farmer since 1961. In 1996, he
became a director of the Bank.
George A. Webb is a life-long farmer. He became the Vice President and a
director of the Bank in 1987.
Ralph J. Werner is a retired dentist. He received his dentistry degree from
the University of Minnesota. From 1945 through 1992, he owned his own practice.
Between 1966 and 1992, he was a full professor at the University of Minnesota
School of Dentistry and between 1980 and 1992, he was a full professor at the
University of Chicago School of Dentistry. From 1972 until 1994, he was
Secretary-Treasurer of the Academy of Dentistry. He has been the President and a
director of the Bank since 1981.
23
<PAGE>
Executive Compensation
The following tables outline the annual compensation and estimated annual
benefits payable upon retirement to Mr. Irwin for services rendered in his
capacity as Chief Executive Officer ("CEO") of the Bank:
<TABLE>
<CAPTION>
Summary Compensation Table
Name and Principal Position Year Salary($)(1) Bonus($) Other($)(2)
<S> <C> <C> <C> <C>
James L. Irwin, CEO 1996 42,659.98 1,782.20 2,668.44
James L. Irwin, CEO 1995 41,406.71 25,511.85 2,515.20
James L. Irwin, CEO 1994 40,172.08 14,265.00 2,443.44
<FN>
(1) "Salary" includes 401(k) contributions made by the Bank on behalf of Mr. Irwin.
</FN>
<FN>
(2) "Other" includes health insurance premiums paid by the Bank in the amount of $2,668.44 in 1996, $2,515.20 in
1995, and $2,443.44 in 1994.
</FN>
</TABLE>
Director Compensation
Directors receive $7,000 annually for their services. Albin E. Borgeson,
Ralph J. Werner and James L. Irwin also receive 1.5% of the net profit. George
A. Webb receives .75% of the net profit and the remainder of the directors
equally share .75% of the net profit.
Board Review of Management Compensation
The entire Board of Directors reviews and determines the compensation for
the officers of the Bank.
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:
24
<PAGE>
Amount and Nature of Percent
Name and Address of Beneficial Owner Beneficial Ownership (Approx.)
G.E. Bleskacek Trust 393 6.55%
Archie and Ardella Pecha 708 11.80%
Ralph J. and Bonna M. Werner 1,046 17.43%
TOTAL 2,147 35.78%
Description of the Stock of the Bank
As of the date hereof, the Bank is authorized to issue 6,000 shares of
common stock, all of one class, of which 6,000 shares are issued and
outstanding. The Bank has approximately 96 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 1994, 1995 and 1996, 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 "BLOOMER BANCSHARES, INC. - Certain Anti-Takeover and
Indemnification Provisions."
25
<PAGE>
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, 1,263 shares, or approximately 21.05%, 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."
26
<PAGE>
Financial Statements
Financial statements prepared in conformity with generally accepted
accounting principles will accompany this Prospectus.
COMPARISON OF BANK STOCK
WITH HOLDING COMPANY STOCK
Authorized Shares and Par Value
The Bank is authorized to issue 6,000 shares of capital stock, all of one
class, designated as common stock, of which all 6,000 shares are issued and
outstanding. The Holding Company is authorized to issue 6,000 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.
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 the articles
of incorporation or 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 can amend the
articles of incorporation, except as otherwise provided by the Holding Company's
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.
27
<PAGE>
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 eight
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. No Holding Company directors may be removed, with or
without cause, except by an affirmative vote of seventy-five percent (80%) 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 1944,
and expects to continue to pay dividends in the future. Recent dividends have
been as follows:
Dividend
Year Paid Per Share
1992 $54
1993 $60
1994 $69
1995 $71
1996 $73
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
28
<PAGE>
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 May 1997, the Bank had 96 shareholders of record. No
established public trading market exists for the Bank stock. The stock is
29
<PAGE>
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.
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.
(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
30
<PAGE>
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 also give the Holding Company a copy of the written offer. 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 80% 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
31
<PAGE>
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 80% 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 "BLOOMER BANCSHARES, 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 March 31, 1997, the per share book value of the Bank stock, according
to the Bank's internal financial statements, was $1,369.69. An appraisal of the
Bank stock prepared for Bank's Board of Directors by Bankers' Service
Corporation as of March 31, 1997, estimated the value of the stock as it relates
to minority share transactions at $1,390 per share, or 101% of unadjusted book
value and 9.4 X weighted average earnings.
A sale of the Bank was negotiated by the Bank's Board of Directors in 1995
but rejected by the shareholders in 1996. As of June 30, 1995, the value per
share, according to an independent valuation, was $1,953.70.
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To the best knowledge of the Bank, there have been 110 different transfers
of Bank stock, involving a total of 3,191 shares of Bank stock, between January
1, 1994, and the date of this Prospectus. All of those transactions were
conducted between family members and the Bank has no knowledge of the sale
prices.
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.
(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
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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
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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. As a BIF-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
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(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 March 31, 1997, on a pro forma basis, the Holding Company's ratio of
total capital to risk-weighted assets was 22%, its ratio of Tier 1 capital to
risk-weighted assets was 21%, and its ratio of Tier 1 capital to average assets
was 11%. Also as of March 31, 1997, the Bank's ratio of total capital to
risk-weighted assets was 22%, its ratio of Tier 1 capital to risk- weighted
assets was 21%, and its ratio of Tier 1 capital to average assets was 11%.
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
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"). 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 minimum rate for top rated banks. The premiums assessable in
1997 for BIF insurance would be approximately $8,321.84.
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
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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.
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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
The Holding Company has filed with the Securities and Exchange Commission
("SEC"), Washington, D.C., a Registration Statement (No. _________) 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 96 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.
The SEC maintains a Web site, http://www.sec.gov, that contains filings
made electronically with the SEC, including those of the Holding Company.
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.
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EXHIBIT A
AGREEMENT AND PLAN OF SHARE EXCHANGE
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT and Plan of Reorganization ("Agreement") is made on
________________, 1997, by and between PEOPLES STATE BANK, a state banking
organization ("Bank"), and BLOOMER BANCSHARES, 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 Peoples State 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.
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(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 6,000 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).
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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
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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.
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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 December 31, 1997. The closing of the
transactions contemplated hereunder shall have occurred on or before
December 31, 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.
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(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.
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(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 December 31, 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 December 31, 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.
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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: PEOPLES STATE BANK
_______________________ By:________________________________
ATTEST: BLOOMER BANCSHARES, INC.
_______________________ By:________________________________
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EXHIBIT A
MERGER AGREEMENT
MERGER AGREEMENT ("Merger Agreement") made this _____ day of
__________________, 1997, by and between PEOPLES STATE BANK, a state banking
organization ("Bank"), and New PEOPLES STATE BANK, a state banking organization
("New Bank").
WITNESSETH
WHEREAS, Bank and Bloomer Bancshares, Inc. ("Corporation") have entered
into an Agreement and Plan of Reorganization dated _____________, 1997
("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 6,000 shares, each of $100 par value, of the resulting bank.
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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.
Attest: PEOPLES STATE BANK
_________________________ By_________________________________
Attest: NEW PEOPLES STATE BANK
_________________________ By_________________________________
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EXHIBIT B
TAX OPINION OF BOARDMAN, SUHR, CURRY & FIELD
<PAGE>
SPECIMEN
____________________, 1997
The Board of Directors
Bloomer Bancshares, Inc.
1401 Main Street
Bloomer, WI 54724
The Board of Directors
Peoples State Bank
1401 Main Street
Bloomer, WI 54724
Gentlemen:
You have requested that we render an opinion as to the tax consequences to
Bloomer Bancshares, Inc. ("Holding Company"), Peoples State Bank ("Bank"), New
Peoples State 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 _______________,
1997, between the Holding Company and the Bank ("Agreement") and in a certain
Prospectus/Proxy Statement dated _____________, 1997.
We acknowledge that this opinion is provided for the benefit and guidance
of the Holding Company and Bank.
In making this opinion, we have relied on the Agreement, the
Prospectus/Proxy Statement, the Merger Agreement (to be executed between the
Bank and the 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 of the
Holding Company and the Bank:
1. The fair market value of the Holding Company stock received by each Bank
shareholder will be approximately equal to the fair market value of the Bank
stock surrendered in the exchange.
2. There is no plan or intention by the shareholders of the Bank 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 a number of
shares of Holding Company stock received in the transaction that would reduce
the shareholders' ownership of Holding Company stock to a number of shares
having a value, as of the date of the transaction, of less than fifty percent
(50%) of the value of all of the formerly outstanding Bank stock as of the same
<PAGE>
Page 2
date. For purposes of this representation, shares of Bank stock exchanged for
cash or other property, surrendered by dissenters or exchanged for cash in lieu
of fractional shares of Holding Company stock will be treated as outstanding
Bank stock on the date of the transaction. Moreover, shares of Holding Company
stock held by Bank shareholders and otherwise sold, redeemed or disposed of
prior or subsequent to the transaction will be considered in making this
representation.
3. New Peoples State Bank ("New Bank") will acquire at least ninety percent
(90%) of the fair market value of the net assets and at least seventy percent
(70%) of the fair market value of the gross assets held by the Bank immediately
prior to the transaction. For purposes of this representation, amounts paid by
the Bank to dissenters, amounts paid by the Bank to shareholders who receive
cash or other property, Bank assets used to pay its reorganization expenses, and
all redemption and distributions (except for regular, normal dividends) made by
the Bank immediately preceding the transfer, will be included as assets of the
Bank held immediately prior to the transaction.
4. Prior to the transaction, the Holding Company will be in control of the
New Bank within the meaning of Section 368(c)(1) of the Internal Revenue Code.
5. Following the transaction, the New Bank will not issue additional shares
of its stock that would result in the Holding Company losing control of the New
Bank within the meaning of Section 368(c)(1) of the Internal Revenue Code.
6. The Holding Company has no plan or intention to reacquire any of its
stock issued in the transaction.
7. The Holding Company has no plan or intention to liquidate the New Bank;
to merge the New Bank with and into another bank or corporation; to sell or
otherwise dispose of the stock of the New Bank; or to cause the New Bank to sell
or to otherwise dispose of any of the Bank's assets acquired in the transaction,
except for dispositions made in the ordinary course of business or transfers
described in Section 368(a)(2)(C) of the Internal Revenue Code.
8. The liabilities of the Bank assumed by the New Bank, and the liabilities
to which the transferred assets of the Bank are subject, were incurred by the
Bank in the ordinary course of its business.
9. Following the transaction, the New Bank will continue the historic
business of the Bank or use a significant portion of the Bank's business assets
in a business.
10. The Holding Company, the New Bank, the Bank, and the shareholders will
pay their respective expenses, if any, incurred in connection with the
transaction.
<PAGE>
Page 3
11. There is no intercorporate indebtedness existing between the Holding
Company and the Bank or between the New Bank and the Bank that was issued,
acquired or will be settled at a discount.
12. No two parties to the transaction are investment companies as defined
in Section 368(a)(2)(F)(iii) and (iv) of the Internal Revenue Code.
13. The Bank is not under the jurisdiction of a court in a Title 11
(bankruptcy) or similar case within the meaning of Section 368(a)(3)(A) of the
Internal Revenue Code.
14. The fair market value of the assets of the Bank transferred to the New
Bank will equal or exceed the sum of the liabilities assumed by the New Bank,
plus the amount of liabilities, if any, to which the transferred assets are
subject.
15. No stock of the New Bank will be issued in 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 15 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)(2)(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.
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Page 4
(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.
Our opinion is limited to 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
SECTIONS 221.0706 THROUGH 221.0718
OF THE WISCONSIN STATUTES
<PAGE>
Wisconsin Acts (Advance)
1995 WISCONSIN ACT 336
October 16, 1996
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 s. 221.0506.
(3) RIGHTS OF DISSENTER. A shareholder or beneficial shareholder entitled to
dissent and obtain payment for his or her shares under ss. 221.0701 to 221.0718
may not challenge the corporate action creating his or her entitlement unless
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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 s. 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 ss. 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 s. 221.0706 is authorized without a vote of shareholders, the bank
shall notify, in writing and in accordance with s. 221.0103, all shareholders
entitled to assert dissenters' rights that the action was authorized and send
them the dissenters' notice described in s. 221.0710.
221.0709 Notice of intent to demand payment. (1) METHOD OF ASSERTING DISSENTERS'
RIGHTS. If proposed corporate action creating dissenters' rights under s.
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:
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(a) Deliver to the issuer bank before the vote is taken written notice that
complies with s. 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 ss.
221.0701 to 221.0718.
221.0710 Dissenters' notice. (1) WHEN REQUIRED. If a proposed corporate action
creating dissenters' rights under s. 221.0706 is authorized at a shareholders'
meeting, the bank shall deliver a written dissenters' notice to all shareholders
and beneficial shareholders who satisfied s. 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 s.
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 ss. 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 s.
221.0710, or a beneficial shareholder whose shares are held by a nominee who is
sent a dissenters' notice described in s. 221.0710, must demand payment in
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writing and certify whether he or she acquired beneficial ownership of the
shares before the date specified in the dissenters' notice under s. 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 ss. 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 s. 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 s. 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 s. 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.
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(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 s. 221.0716 if
the dissenter is dissatisfied with the payment.
(e) A copy of ss. 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 s.
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 s. 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 s. 221.0713 from a dissenter
unless the dissenter was the beneficial owner of the shares before the date
specified in the dissenters' notice under s. 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 s. 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 s. 221.0713, or reject the offer under s. 221.0715 and
demand payment of the fair value of his or her shares and interest due, if any
of the following applies:
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(a) The dissenter believes that the amount paid under s. 221.0713 or offered
under s. 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 s. 221.0715 within 60 days after the
date set under s. 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 s. 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 s. 221.0103.
221.0717 Court action. (1) WHEN SPECIAL PROCEEDING REQUIRED. If a demand for
payment under s. 221.0716 remains unsettled, the bank shall bring a special
proceeding within 60 days after receiving the payment demand under s. 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 s. 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.
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(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 s. 221.0710 (2) (c),
for which the bank elected to withhold payment under s. 221.0715.
221.0718 Court costs and counsel fees. (1) ASSESSMENT OF AND LIABILITY FOR
COSTS. (a) Notwithstanding ss. 814.01 to 814.04, the court in a special
proceeding brought under s. 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 ss. 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 s. 221.0716.
(2) WHEN LIABLE FOR FEES AND COSTS. The parties shall bear their own expenses of
the proceeding, except that, notwithstanding ss. 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 ss. 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 ss. 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.
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<PAGE>
EXHIBIT D
ARTICLES OF INCORPORATION
OF BLOOMER BANCSHARES, INC.
<PAGE>
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: Bloomer Bancshares, Inc.
ARTICLE 2. The Corporation shall be authorized to issue 6,000 shares.
ARTICLE 3. The street address of the initial registered office is: 1401
Main Street, Bloomer, Wisconsin 54724
ARTICLE 4. The name of the initial registered agent at the above registered
office is: Ralph J. Werner
ARTICLE 5. Other provisions (OPTIONAL): Article 5 continued on attached
pages incorporated by reference.
ARTICLE 6. Executed on March 31, 1997.
Name and complete address of each incorporator:
Ralph J. Werner President
Peoples State Bank
1401 Main Street
Bloomer, WI 54724
/s/ Ralph J. Werner
-----------------------------
(Incorporator Signature)
This document was drafted by John E. Knight.
DFI CORP FILE ID NO. B039145
Document stamped Received April 7, 1997, 3:54 P.M. by State of
Wisconsin, Department of Financial Institutions.
Document stamped Filed April 11, 1997, by State of Wisconsin,
Department of Financial Institutions.
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Bloomer Bancshares, Inc.
ARTICLES OF INCORPORATION
Article 5. (CONTINUED):
A. The number of directors shall not be less than six (6) 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 eight (8) 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:
Albin E. Borgeson H. Robert Hanson
7110 - 178th Street 13428 County HWY Q
Chippewa Falls, WI 54729 Bloomer, WI 54724
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Dean Rosenbrook George R. Helton
16562 State HWY 40 1708 - 16th Avenue
Bloomer, WI 54724 Bloomer, WI 54724
James L. Irwin Bob Kuhn
E7601 - 1290th Avenue 16078 - 93rd Avenue
Ridgeland, WI 54763 Chippewa Falls, WI 54729
George Webb Ralph J. Werner
11971 County HWY AA P.O. Box 177
Bloomer, WI 54724 Menomonie, WI 54751
No director of the Corporation shall be removed from office with or without
cause unless such removal is approved either by the holders of eighty percent
(80%) of the common stock of the Corporation outstanding at the time a
determination is made or by the affirmative vote of eighty percent (80%) 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 eighty percent (80%) 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 eighty percent (80%) 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.
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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
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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 provisions of this Article 5, may not be amended, altered or
repealed except by the affirmative vote of holders of at least eighty percent
(80%) 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.
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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 Bloomer Bancshares, Inc.
4 Specimen stock certificate of Bloomer Bancshares, Inc.
5 Opinion of Boardman, Suhr, Curry & Field
8 Tax Opinion of Boardman, Suhr, Curry & Field (set forth as
an exhibit to the Prospectus)
23 Consent of Boardman, Suhr, Curry & Field (included in
opinion)
99 Form of Proxy for shareholders of Peoples State Bank
(b) No financial statement schedules are required to be filed with regard
to Bloomer Bancshares, Inc. or Peoples State Bank.
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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
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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 Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Bloomer, State of
Wisconsin, on the 6th day of June, 1997.
BLOOMER BANCSHARES, INC.
By:
/s/ Ralph J. Werner
Dr. Ralph J. Werner, President
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities
indicated on the 6th day of June, 1997.
Signature Title(s)
/s/ Albin E. Borgeson Director
Albin E. Borgeson
/s/ H. Robert Hanson Director
H. Robert Hanson
/s/ George R. Helton Director
George R. Helton
/s/ James L. Irwin Secretary, Director
James L. Irwin
/s/ Bob Kuhn Director
Bob Kuhn
/s/ Dean Rosenbrook Director
Dean Rosenbrook
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/s/ George A. Webb Vice President, Director
George A. Webb
/s/ Ralph J. Werner President, Director
Ralph J. Werner
POWER OF ATTORNEY
Know all men by these presents, that each person whose signature appears
below constitutes and appoints Ralph J. Werner and James L. Irwin, and each of
them, his true and lawful attorney-in-fact and agent, with full power of
substitution, and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or any of them, or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, as
amended, this Registration Statement was signed by the following persons in the
capacities indicated on _____________________, 1997.
Signature Title(s)
/s/ Albin E. Borgeson Director
Albin E. Borgeson
/s/ H. Robert Hanson Director
H. Robert Hanson
/s/ George R. Helton Director
George R. Helton
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/s/ James L. Irwin Secretary, Director
James L. Irwin
/s/ Bob Kuhn Director
Bob Kuhn
/s/ Dean Rosenbrook Director
Dean Rosenbrook
/s/ George A. Webb Vice President, Director
George A. Webb
/s/ Ralph J. Werner President, Director
Ralph J. Werner
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM S-4
REGISTRATION STATEMENT
Under
The Securities Act of 1933
----------
BLOOMER BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
E X H I B I T S
<PAGE>
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 Bloomer Bancshares, Inc.
4 Specimen stock certificate of Bloomer Bancshares, Inc.
5 Opinion of Boardman, Suhr, Curry & Field
8 Tax Opinion of Boardman, Suhr, Curry & Field (set forth as
an exhibit to the Prospectus)
23 Consent of Boardman, Suhr, Curry & Field (included in
opinion)
99 Form of Proxy for shareholders of Peoples State Bank
EXHIBIT 3(ii)
BYLAWS OF
BLOOMER BANCSHARES, INC.
<PAGE>
BYLAWS OF
BLOOMER BANCSHARES, INC.
ARTICLE I. OFFICES
The principal office of the Corporation shall be located in the City of
Bloomer, Chippewa 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.
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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
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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 1. 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 six (6) 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 eight (8) 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
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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)
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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 eighty percent (80%) 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
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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 eighty percent (80%) of the shares of the capital stock
of the Corporation issued and outstanding and entitled to vote or by the
affirmative vote of eighty percent (80%) 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 eighty percent (80%) 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
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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 1. 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
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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.
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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 1. 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
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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 1. 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 or Vice 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.
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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)
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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
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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 counterclaims 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.
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(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. Notwithstanding 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.
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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.
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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.
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EXHIBIT 4
STOCK CERTIFICATE
<PAGE>
SPECIMEN
STOCK CERTIFICATE
NUMBER: SHARES:
RESTRICTED STOCK
Incorporated under the laws of the State of Wisconsin.
BLOOMER BANCSHARES, INC.
Authorized Common 6,000 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.
EXHIBIT 5
OPINION OF BOARDMAN, SUHR, CURRY & FIELD
<PAGE>
SPECIMEN
_______________, 1997
Bloomer Bancshares, Inc.
1401 Main Street
Bloomer, Wisconsin 54724
Reference is made to the Registration Statement on Form S-4 (the
"Registration Statement") to be filed by Bloomer Bancshares, 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 Peoples State Bank in accordance with the provisions of the
Agreement and Plan of Reorganization dated_______________, 1997, 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.
BOARDMAN, SUHR, CURRY & FIELD
EXHIBIT 99
PROXY
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PROXY
SPECIAL MEETING OF SHAREHOLDERS
Know all men by these presents that I, the undersigned shareholder in
Peoples State Bank, do hereby appoint __________________________________, 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 Peoples State Bank, to be
held on ___________, 1997, 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 Peoples
State Bank, pursuant to the terms and conditions of an Agreement and Plan
of Reorganization between Peoples State Bank and Bloomer Bancshares, Inc.
and a Merger Agreement between Peoples State Bank and New Peoples State
Bank, whereby (i) Peoples State Bank will become a wholly-owned subsidiary
of Bloomer Bancshares, Inc., and (ii) shareholders of Peoples State Bank
will become shareholders of Bloomer Bancshares, 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
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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: ________________________, 1997.
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Signature
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Signature if held jointly, or title
* If a name is inserted here, only that person will be entitled to vote the
proxy.
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