[MIDLAND CAPITAL HOLDINGS CORPORATION]
September 28, 1998
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of Midland Capital
Holdings Corporation (the "Company"), we cordially invite you to attend the
first Annual Meeting of Stockholders of the Company (the "Meeting"). The Company
became the holding company of Midland Federal Savings and Loan Association on
July 23, 1998. The Meeting will be held at 2:00 p.m., on October 21, 1998, at
the main office of the Company located at 8929 S. Harlem Avenue, Bridgeview,
Illinois.
In addition to the election of two directors of the Company,
stockholders are being asked to ratify the appointment of Cobitz, VandenBerg &
Fennessy as auditors for the Company. Accordingly, your Board of Directors
unanimously recommends that you vote for each of these proposals.
We encourage you to attend the Meeting in person. Whether or not you
plan to attend, however, please read the enclosed Proxy Statement and then
complete, sign and date the enclosed proxy and return it in the accompanying
postpaid return envelope as promptly as possible. This will save the Company
additional expense in soliciting proxies and will ensure that your shares are
represented at the Meeting.
Thank you for your attention to this important matter.
Very truly yours,
/s/PAUL ZOGAS
-------------
Paul Zogas
Chairman of the Board,
President and Chief
Executive Officer
<PAGE>
MIDLAND CAPITAL HOLDINGS CORPORATION
8929 South Harlem Avenue
Bridgeview, Illinois 60455
(708) 598-9400
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on October 21, 1998
Notice is hereby given that the First Annual Meeting of Stockholders
(the "Meeting") of Midland Capital Holdings Corporation (the "Company") will be
held at 2:00 p.m., on October 21, 1998, at the main office of the Company
located at 8929 S. Harlem Avenue, Bridgeview, Illinois. The Company became the
holding company of Midland Federal Savings and Loan (the "Association") on July
23, 1998.
A proxy card and a Proxy Statement for the Meeting are enclosed. The
Meeting is for the purpose of considering and acting upon:
1. The election of two directors of the Company; and
2. The ratification of the appointment of Cobitz, VandenBerg &
Fennessy as independent accountants of the Company for the
fiscal year ending June 30, 1999; and
such other matters as may properly come before the Meeting or any adjournments
or postponements thereof. The Board of Directors is not aware of any other
business to come before the Meeting.
Any action may be taken on any one of the foregoing proposals at the
Meeting on the date specified above, or on any date or dates to which the
Meeting may be adjourned or postponed. Stockholders of record at the close of
business on September 18, 1998 are the stockholders entitled to vote at the
Meeting and any adjournments or postponements thereof. A complete list of
stockholders entitled to vote at the Meeting will be available at the main
office of the Company during the ten days prior to the Meeting, as well as at
the Meeting.
You are requested to complete, sign and date the enclosed form of
proxy, which is solicited on behalf of the Board of Directors, and to mail it
promptly in the enclosed postage paid return envelope. The proxy will not be
used if you attend and vote at the Meeting in person.
By Order of the Board of Directors
/s/Paul Zogas
-------------
Paul Zogas
Chairman of the Board, President
and Chief Executive Officer
Bridgeview, Illinois
September 28, 1998
- --------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A PRE-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED
WITHIN THE UNITED STATES.
- --------------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
MIDLAND CAPITAL HOLDINGS CORPORATION
8929 South Harlem Avenue
Bridgeview, Illinois 60455
(708) 598-9400
ANNUAL MEETING OF STOCKHOLDERS
October 21, 1998
This Proxy Statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of Midland Capital Holdings
Corporation (the "Company") to be used at the First Annual Meeting of
Stockholders of the Company (the "Meeting"), to be held at the main office of
the Company located at 8929 S. Harlem Avenue, Bridgeview, Illinois, on October
21, 1998 at 2:00 p.m., and at all adjournments or postponements of the Meeting.
The Company became the holding company of Midland Federal Savings and Loan
Association (the "Association") on July 23, 1998. The accompanying Notice of
Meeting, proxy card and this Proxy Statement are first being mailed to
stockholders on or about September 28, 1998. Certain of the information provided
herein relates to the Association, a wholly-owned subsidiary of the Company.
At the Meeting, the stockholders of the Company are being asked to
consider and vote upon (i) the election of two directors of the Company; and
(ii) the ratification of the appointment of Cobitz, VandenBerg & Fennessy as the
Company's independent accountants for the fiscal year ending June 30, 1999. Your
Board of Directors unanimously recommends that you vote for each of management's
nominees for election as directors and for the ratification of the appointment
of Cobitz, VandenBerg & Fennessy.
Vote Required and Proxy Information
All shares of common stock, par value $.01 per share, of the Company
(the "Common Stock") represented at the Meeting by properly executed proxies
received prior to or at the Meeting, and not revoked, will be voted at the
Meeting in accordance with the instructions thereon. If no instructions are
indicated, properly executed proxies will be voted for the nominees and the
adoption of the proposals set forth in this Proxy Statement. The Company does
not know of any matters, other than as described in the Notice of Meeting, that
are to come before the Meeting. If any other matters are properly presented at
the Meeting for action, the persons named in the enclosed form of proxy and
acting thereunder will have the discretion to vote on such matters in accordance
with their best judgment.
Directors shall be elected by a plurality of the votes present in
person or represented by proxy at the Meeting and entitled to vote on the
election of directors. Votes withheld and broker non-votes will have no effect
on the election of directors. The ratification of the appointment of auditors
requires the affirmative vote of a majority of the votes cast on the proposal.
Proxies marked to abstain will have the same effect as votes against the
proposal to ratify the appointment of independent accountants. Broker non-votes
will have no effect on this proposal. One-third of the shares of the Common
Stock, present in person or represented by proxy, shall constitute a quorum for
purposes of the Meeting. Abstentions and broker non-votes are counted for
purposes of determining a quorum.
<PAGE>
A proxy given pursuant to this solicitation may be revoked at any time
before it is voted. Proxies may be revoked by: (i) filing with the Secretary of
the Company at or before the Meeting a written notice of revocation bearing a
later date than the proxy; (ii) duly executing a subsequent proxy relating to
the same shares and delivering it to the Secretary of the Company at or before
the Meeting; or (iii) attending the Meeting and voting in person (although
attendance at the Meeting will not in and of itself constitute revocation of a
proxy). Any written notice revoking a proxy should be delivered to Charles
Zogas, Secretary, at the address stated above.
<PAGE>
Voting Securities and Principal Holders Thereof
Stockholders of record as of the close of business on September 18,
1998, will be entitled to one vote for each share then held. As of that date,
the Company had 363,975 shares of Common Stock issued and outstanding. The
following table sets forth information regarding share ownership of: (i) those
persons or entities known by management to beneficially own more than five
percent of the Company's Common Stock, (ii) the Company's Chief Executive
Officer, and each other executive officer whose salary and bonus for fiscal 1998
exceeded $100,000 (the "Named Officers") and (iii) all directors, nominees and
executive officers of the Company and the Association as a group.
<TABLE>
<CAPTION>
Beneficial Owner Shares Beneficially Owned Percent of Class
---------------- ------------------------- ----------------
<S> <C> <C>
Over 5% Beneficial Owners
Algerd A. Brazis, Director 21,725(1) 5.94%
8929 South Harlem Avenue
Bridgeview, Illinois 60455
Jeffrey S. Halis 34,399(2) 9.45%
500 Park Avenue
Fifth Floor
New York, New York 10022
Richard A. Horstman 20,000(3) 5.49%
31 Boulder Wood Drive
Bernardsville, New Jersey 07924
Named Officers
Paul Zogas, Chairman of the Board, 82,899(4) 22.77%
President and Chief Executive Officer
8929 South Harlem Avenue
Bridgeview, Illinois 60455
Charles Zogas, Director, Executive Vice 82,899(4) 22.77%
President and Secretary
8929 South Harlem Avenue
Bridgeview, Illinois 60455
Directors and executive officers 210,313(5) 56.45%
of the Company as a group
(6 persons)
</TABLE>
- ---------------
(1) The above information is as reported in a Schedule 13D dated July 31,
1998, by the above-referenced person plus an aggregate of 1,725 shares
under options issued pursuant to the Stock Option Plan. Mr. Brazis
reported shared voting and investment power with his wife and the
Algerd A. and Aldona Brazis Loving Trust.
(2) The above information is as reported in a Schedule 13D dated July 6,
1993.
(3) The above information is as reported in a Schedule 13D dated September
9, 1993.
<PAGE>
(4) The above information is reported in a Schedule 13D dated July 29,
1998, by the above-referenced persons. Each person reported sole voting
and investment power with respect to the shares held by them.
(5) Includes shares held directly, held in retirement accounts, held by
certain members of the named individuals' families, or held by trusts
of which the named individuals may be deemed to have sole or shared
voting or dispositive power. Includes 8,625 shares of all directors and
executive officers as a group, which are subject to options currently
exercisable or which will become exercisable within 60 days of June 30,
1998, granted under the Stock Option Plan. Also includes 4,138
restricted shares of all directors and executive officers as group,
which were awarded under the Bank Incentive Plan and Trust (BIP).
2
<PAGE>
I. ELECTION OF DIRECTORS
General
The Company's Board of Directors consists of six members. The Board of
Directors is divided into three classes, each of which contains one-third of the
Board of Directors. One-third of the directors is elected annually. Directors of
the Company are generally elected to serve for a three-year period or until
their respective successors are elected and qualified.
The table below sets forth certain information regarding the present
members and nominees of the Company's Board of Directors. The Board of Directors
acting as the nominating committee has recommended and approved the nominees
identified in the following table. Mr. Paul Zogas and Mr. Jonas Vaznelis have
been nominated for terms of three years. It is intended that the proxies
solicited on behalf of the Board of Directors (other than proxies in which the
vote is withheld as to a nominee) will be voted at the Meeting FOR the election
of the nominees identified below. If a nominee is unable to serve, the shares
represented by all valid proxies will be voted for the election of such
substitute nominee as the Board of Directors may recommend. At this time, the
Board of Directors knows of no reason why the nominees may be unable to serve,
if elected. Except as disclosed herein, there are no arrangements or
understandings between the nominees and any other person pursuant to which the
nominees were selected.
<TABLE>
<CAPTION>
Shares of
Position(s) Held Common Stock Percent
in the Company Director Term to Beneficially of
Name Age(1) and the Association Since(2) Expire Owned(3) Class
---- ------ ------------------- -------- ------ -------- -----
<S> <C> <C> <C> <C> <C>
NOMINEES
Paul Zogas 43 Chairman of the Board, 1982 2001 82,899 22.77%
President and Chief
Executive Officer
Jonas Vaznelis 78 Director 1977 2001 3,925 1.07%
DIRECTORS CONTINUING IN OFFICE
Richard Taylor 48 Director and Vice President 1990 1999 7,140 1.94%
Michael J. Kukanza 38 Director 1996 1999 11,725 3.21%
Charles Zogas 44 Director, Executive Vice 1983 2000 82,899 22.77%
President and Secretary
Algerd Brazis 83 Director 1976 2000 21,725 5.94%
</TABLE>
- ---------------
(1) At June 30, 1998.
(2) Includes service as a director of the Association.
(3) Amounts include shares held directly as well as shares held by certain
members of the named individuals' families with respect to which shares
the respective directors may be deemed to have sole or shared voting
and/or investment power. Also includes 1,725, 1,725, 3,450 and 1,725
shares subject to options granted under the Stock Option Plan to Mr.
Vaznelis, Mr. Brazis, Mr. Taylor and Mr. Kukanza, respectively, which
are currently exercisable or which will become exercisable within 60
days of June 30, 1998. Also includes 1,724, 1,724 and 690 restricted
shares awarded under the BIP to Mr. P. Zogas, Mr. C. Zogas and Mr.
Taylor, respectively.
<PAGE>
The business experience of each director of the Company is set forth
below. All directors have held their present position for at least five years
unless otherwise indicated.
Paul Zogas. Mr. Zogas has been Chairman of the Board, President and
Chief Executive Officer since 1983, and a Director since 1982. Mr. Zogas holds a
BA degree in Economics from the University of Michigan in Ann Arbor, and a Juris
Doctor degree from De Paul University College of Law in Chicago. Mr. Zogas
provides legal services from time to time to private clients, and serves as
Director of Midland Business Systems, Inc., a computer sales, service and
consulting company located in Chicago, Illinois. Mr. Zogas is the brother of
Charles Zogas.
3
<PAGE>
Jonas Vaznelis. Mr. Vaznelis retired as the owner and President of
Gifts International located in Chicago, Illinois, in 1995. Mr. Vaznelis is a
member of the Lithuanian Community Council of Chicago, Illinois, and the
Lithuanian Foundation, Inc. He is also a committee member of the Board of Zoning
Appeals for Beverly Shores, Indiana.
Richard Taylor. Mr. Taylor joined the Association in 1972. Since
joining the Association in 1972, he has held various lending positions and has
held the position of Vice President in Charge of Lending since 1982. Mr. Taylor
holds a BS degree from Illinois State University, and is also a licensed real
estate and insurance broker.
Michael J. Kukanza. Mr. Kukanza was elected to the Board of Directors
in October 1996. Mr. Kukanza is a Principal in a Chicago-based asset management
company, Compass Asset Management, L.L.C. Prior to joining Compass Asset
Management, Mr. Kukanza was Senior Vice President, Global Foreign Exchange
Options Head at NationsBanc-CRT until April 1996. While at NationsBanc-CRT Mr.
Kukanza served on the Federal Reserve Bank Foreign Exchange Advisory Committee
and held a seat on the FX Risk Management Subcommittee. Previous to that
position, Mr. Kukanza was Managing Director responsible for Global Foreign
Exchange Options at Merrill Lynch & Company based both in New York and London
from April 1989 until September 1994. Before joining Merrill Lynch, Mr. Kukanza
was a Principal in Equity Options at O'Connor & Associates, based in Chicago,
beginning in September 1982. Mr. Kukanza holds a BA degree in Economics from the
University of Chicago and has completed all graduate level courses for an MA
degree in Economics from the University of Virginia.
Charles Zogas. Mr. Zogas has been the Executive Vice President and the
Chief Operations Officer of the Association since 1982. He was elected a
Director in 1983, and also serves as Secretary and Treasurer. Mr. Zogas holds a
BS degree from the University of Notre Dame in Notre Dame, Indiana, and a Juris
Doctor degree from IIT/Chicago - Kent College of Law. Mr. Zogas also provides
legal services from time to time to private clients and serves as Director of
Midland Business Systems, Inc., a computer sales, service and consulting company
located in Chicago, Illinois.
Algerd Brazis. Mr. Brazis retired as the owner of Al's Hilltop Lounge
located in Justice, Illinois in 1983. Mr. Brazis is President of the Knights of
Lithuania Mid-America District and is an Officer of the Lithuanian Chamber of
Commerce.
Meetings and Committees of the Board of Directors
Meetings of the Association's Board of Directors are generally held on
a monthly basis. The Board of Directors met thirteen times during the fiscal
year ended June 30, 1998. No incumbent director of the Association attended
fewer than 75% of the total number of board meetings held by the Board of
Directors and the total number of meetings held by the committees of the board
of directors on which he served, during fiscal year 1998. Directors fees are
paid to directors in the amount of $650 for each regular meeting of the board
attended and $150 for each special meeting attended.
The Board of Directors has established executive, audit, loan,
asset/liability, trust, compensation, and stock option and incentive plan
committees. Non-employee directors receive a fee in the amount of $150 for each
committee meeting attended.
<PAGE>
Executive Committee. The Executive Committee, consisting of Directors
P. Zogas, C. Zogas and Brazis, meets on an as needed basis to exercise the power
of the Board in between Board meetings. This committee did not meet during the
fiscal year ended June 30, 1998.
Audit Committee. The Audit Committee, consisting of outside Directors
Brazis, Kukanza and Vaznelis, meets quarterly to review recommendations of the
internal auditor, and annually to review the annual audit by the Association's
independent public account firm. This committee met four times during the fiscal
year ended June 30, 1998.
4
<PAGE>
Loan Committee. The Loan Committee, composed of outside Directors
Vaznelis, Brazis and Taylor meets monthly to review loans in excess of officer
loan authority and to establish lending policies. This committee met twelve
times during the fiscal year ended June 30, 1998.
Asset/Liability Committee. The Asset/Liability Committee, composed of
Directors P. Zogas, C. Zogas, Kukanza and Vaznelis, meets as needed to establish
asset/liability policy. This committee did not meet during the fiscal year ended
June 30, 1998.
Trust Committee. The Trust Committee, composed of Directors P. Zogas,
C. Zogas and Vaznelis, meets quarterly to establish policies for the land trust
department and to ensure compliance with those policies. This committee met once
during the fiscal year ended June 30, 1998.
Compensation Committee. The Compensation Committee, composed of
Directors P. Zogas, Kukanza and Brazis meets at least annually to make
compensation recommendations. This committee met once during the fiscal year
ended June 30, 1998.
Stock Option and Incentive Plan Committee. The Stock Option and
Incentive Plan Committee, composed of Directors Brazis and Vaznelis, meets to
make awards under the Stock Option Plan and the BIP. This committee did not meet
during the fiscal year ended June 30, 1998.
The entire Board of Directors acts as a nominating committee for
selecting nominees for election as director. Nominations of persons for election
to the Board of Directors may be made only by or at the direction of the Board
of Directors or by any stockholder entitled to vote for the election of
directors who complies with the notice procedures set forth in the Bylaws of the
Association. While the nominating committee will consider nominees recommended
by and received from stockholders, it has neither actively solicited
recommendations from stockholders for nominees nor established any procedures
for this purpose.
5
<PAGE>
Executive Compensation
The following table sets forth information regarding compensation paid
or accrued by the Company and the Association to their Chief Executive Officer
and Executive Vice President for services rendered during the past three fiscal
years. No other executive officer made in excess of $100,000 during the year
ended June 30, 1998.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Awards
------------------------------------- ----------
Restricted
Other Annual Stock All Other
Name and Principal Salary Bonus Compensation Award(s) Compensation
Position Year ($)(1) ($) ($) ($) ($)
-------- ---- ------ --- --- --- ---
<S> <C> <C> <C> <C> <C> <C>
Paul Zogas, Chairman of the 1998 $142,809 $ --- $ --- $25,806(2) $4,087(3)
Board, President and Chief 1997 132,558 --- --- 15,085 3,778
Executive Officer 1996 112,611 --- --- --- 3,178
Charles Zogas, Director, 1998 $104,169 $ --- $7,200(4) $25,860(2) $3,145(3)
Executive Vice President 1997 100,441 --- 7,200(4) 15,085(2) 3,032
and Secretary 1996 96,600 --- 7,200(4) --- 2,914
</TABLE>
- ------------
(1) Includes directors fees paid to Mssrs. P. Zogas and C. Zogas for the
years ended June 30, 1996, 1997 and 1998 of $7,800 per year.
(2) Represents the dollar value of 862 shares of the Association's Common
Stock vested during the 1997 and 1998 fiscal year and granted pursuant
to the Bank Incentive Plan and Trust ("BIP"), based on the closing
price of the Common Stock of $17.50 on June 30, 1997 and of $30.00 on
June 30, 1998. There was a grant of 4,312 shares of stock under this
plan and they vested in five equal, annual installments. Dividends on
stock awarded in the BIP are paid to award recipients.
(3) Represents an employer contribution to Mr. P. Zogas' 401(k) account and
to Mr. C. Zogas' 401(k) account, respectively.
(4) Represents a car allowance paid to Mr. C. Zogas.
No stock appreciation rights, limited stock appreciation rights or
stock options were granted to the Named Officers during the fiscal year ended
June 30, 1998.
6
<PAGE>
The following table provides information as to stock options exercised
by the Named Officers during the fiscal year ended June 30, 1998, and the value
of the options held by the Named Officers on June 30, 1998.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
Number of Value of
Securities Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#) FY-End ($)
Shares Acquired Value -------------------------- ----------------------------
Name on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C>
Paul Zogas 8,625 90,563(1) --- --- --- ---
Charles Zogas 8,625 90,563(1) --- --- --- ---
</TABLE>
- --------------
(1) Represents the value realized upon the exercise of the options (market
price of the Common Stock less exercise price of $11.00 per share) based
on the market price of the Common Stock of $21.50 on January 8, 1998.
Employment Contracts. In fiscal 1993, the Association entered into
employment agreements with Paul Zogas and Charles Zogas for one year terms. The
employment agreements provide for an initial base salary equal to the employee's
salary in effect on the date of the contract, with annual raises to be
determined by the Board of Directors. The contracts automatically extend for one
year at each anniversary date (provided that there is a performance review of
the employee) until either the Association or the employee gives written notice
to the contrary. The contracts provide for termination upon the employee's
death, for cause or in certain events specified by regulations of the Office of
Thrift Supervision ("OTS"). Under the term of the contracts, in the event that
the subject employee is terminated in connection with a change in control, he
may be entitled to be paid for the remaining term of his contract as well as to
receive a payment equal to one year's salary. The contracts provide, among other
things, for participation in an equitable manner in employee benefits applicable
to executive personnel. The employment contracts may have an "anti-takeover"
effect that could affect a proposed future acquisition of control of the
Association by rendering it more time consuming and expensive to remove the
subject employees.
Based on their current salaries, if Messrs. P. Zogas and C. Zogas had
been terminated as of June 30, 1998, under circumstances entitling them to
severance pay as describe above, they would have been entitled to receive a lump
sum cash payments of approximately $142,809 and $104,169, respectively, in
additional to the other payments to be received based on the term remaining
under their employment agreements (as described above).
<PAGE>
Pension Plan
Defined Benefit Pension Plan. The Association sponsors a defined benefit
pension plan (the "Pension Plan"). Eligible employees participate in the Pension
Plan after they attain age 21 and following the completion of 12 months of
service, provided the employee has completed at least 1,000 hours of work during
such 12-month period. The Pension Plan is funded solely through contributions
made by the Association.
7
<PAGE>
The table below sets forth, as of June 30, 1998, estimated annual pension
benefits for individuals at age 65 payable in the form of benefit for various
levels of compensation and years of service. The figures in this table are based
upon the assumption that the individual is currently age 65 as of June 30, 1998
with a specified number of years of service. At June 30, 1998, the estimated
credited years of service of Mr. P. Zogas was 20, and of Mr. C. Zogas was 21.
<TABLE>
<CAPTION>
Average Annual
Compensation Annual Pension Benefit Based on Years of Service
------------ ------------------------------------------------------
10 20 30 40
------- ------- -------- ---------
<S> <C> <C> <C> <C>
$ 20,000 $ 2,500 $ 5,000 $ 7,500 $ 10,300
40,000 5,500 11,000 16,500 22,300
60,000 8,500 17,000 25,500 34,300
80,000 11,500 23,000 34,500 46,300
100,000 14,500 29,000 43,500 58,300
120,000 17,500 35,000 52,500 70,300
140,000 20,500 41,000 61,500 82,300
</TABLE>
Bank Incentive Plan and Trust
The Association established in 1995 a Bank Incentive Plan and Trust
("BIP"), with the approval of the OTS, in order to provide persons in key
management positions with a proprietary interest in the Association in a manner
designed to encourage such key persons to remain with the Association. The
Association contributed funds to the BIP to enable it to acquire an amount of
stock in the open market equal to 3% of the shares issued in the conversion or
10,350 shares. Such acquisition will result in an increase in the Association's
compensation expense.
The Compensation Committee of the Board of Directors of the Association
administers the BIP. Under the terms of the BIP, awards ("Awards") can be
granted to key employees in the form of shares of common stock held by the BIP.
Awards are non-transferable and non-assignable. Recipients will earn (i.e.,
become vested in), over a period of time, the shares of common stock covered by
the Award. The Compensation Committee has determined that the awards are to be
earned over a five year vesting period. Awards will be 100% vested upon
termination of employment due to death or disability (as defined in the BIP), or
following a change in the control (as defined in the BIP) of the Association. At
June 30, 1998, awards covering 10,350 shares had been issued of which 4,138
shares had vested. As of the same date, no shares remained unallocated under the
plan.
Certain Relationships and Related Transactions
The Association, like many financial institutions, has followed a
policy of granting loans to eligible officers, directors and employees for the
financing of their personal residences. Loans are made in the ordinary course of
business on substantially the same terms and conditions as those of comparable
transactions prevailing at the time, and do not involve more than the normal
risk of collectibility or present other unfavorable features. Federal law
requires that all such transactions with officers and directors be on terms and
conditions comparable to those for similar transactions with non-affiliates.
<PAGE>
No loans with reduced interest rates or fees were outstanding to any of
its directors and officers whose aggregate indebtedness exceeded $60,000 at any
time during the year ended June 30, 1998, except as follows. The Association
made a loan on March 15, 1988, in the amount of $360,000 to Charles Zogas,
Executive Vice President and Secretary, for a residential mortgage loan on his
principal residence. The points in connection with the loan were waived, and the
rate was 7.00%, as compared to market rates of 9.87% at the time the loan was
made. The outstanding balance of the loan was $307,711 at June 30, 1998, and the
largest outstanding balance since June 30, 1997, was $314,647.
8
<PAGE>
II. RATIFICATION OF THE APPOINTMENT OF AUDITORS
The Board of Directors has appointed Cobitz, VandenBerg & Fennessy to
be its auditors for the 1999 fiscal year, subject to the ratification of the
appointment by the Company's stockholders. A representative of Cobitz,
VandenBerg & Fennessy is expected to attend the Annual Meeting to respond to
appropriate questions and will have an opportunity to make a statement if he so
desires.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF COBITZ, VANDENBERG & FENNESSY AS THE
COMPANY'S AUDITORS FOR THE YEAR ENDING JUNE 30, 1999.
SHAREHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials
for next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's office, 8929 South
Harlem Avenue, Bridgeview, Illinois 60455, no later than June 1, 1999. Any such
proposals shall be subject to the requirements of the proxy rules adopted under
the Securities Exchange Act of 1934. If a proposal does not meet the above
requirements for inclusion in the Company's proxy materials, but otherwise meets
the Company's eligibility requirements to be represented at the next Annual
Meeting of Stockholders, the persons named in the enclosed form of proxy and
acting thereon will have the discretion to vote on any such proposal in
accordance with their best judgment if the proposal is received at the Company's
main office later than August 15, 1999.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than the matters described above in this Proxy Statement. However,
if any other matters should properly come before the Meeting, it is intended
that holders of the proxies will act in accordance with their best judgment.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Company Common Stock. In addition to solicitation by
mail, directors and officers of the Company and regular employees of the Company
may solicit proxies personally or by telegraph or telephone, without additional
compensation.
By Order of the Board of Directors
/s/Paul Zogas
-------------
Paul Zogas
Chairman of the Board, President
and Chief Executive Officer
Bridgeview, Illinois
September 28, 1998
9
<PAGE>
REVOCABLE PROXY
MIDLAND CAPITAL HOLDINGS CORPORATION
[ X ] PLEASE MARK VOTES AS IN THIS EXAMPLE
ANNUAL MEETING OF STOCKHOLDERS
October 21, 1998
The undersigned hereby appoints the Board of Directors of Midland Capital
Holdings Corporation (the "Company"), and its survivor, with full powers of
substitution, to act as attorney and proxy for the undersigned to vote all
shares of Common Stock of the Company which the undersigned is entitled to vote
at the Annual Meeting of Stockholders, to be held on October 21, 1998, at 2:00
P.M., and at any and all adjournments thereof, as follows:
I. The election as directors of all nominees listed (except as marked to the
contrary below):
PAUL ZOGAS (3-year term)
JONAS VAZNELIS (3-year term)
[ ] FOR [ ] WITHHOLD [ ] EXCEPT
INSTRUCTION: To withhold authority to vote for any individual nominee, mark
"Except" and write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
II. The ratification of the appointment of Cobitz, VandenBerg & Fennessy as
auditors of the Association for the fiscal year ending June 30, 1999.
In their discretion, the proxies are authorized to vote upon any other
business matters that may properly come before the Meeting or any adjournment
thereof.
The Board of Directors recommends a vote "FOR" the election of the nominees
listed above and "FOR" the ratification for the appointment of Cobitz,
VandenBerg & Fennessy.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR EACH OF THE NOMINEES LISTED ABOVE AND FOR THE
RATIFICATION FOR THE APPOINTMENT OF COBITZ, VANDENBERG & FENNESSY. IF ANY OTHER
BUSINESS IS PRESENTED AT THIS MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED
IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF
DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
<PAGE>
Please be sure to sign and date
this Proxy in the box below.
_________________________________________
Date
_________________________________________
Stockholder sign above
_________________________________________
Co-holder (if any) sign above
Detach above card, sign, date and mail in postage paid envelope provided.
MIDLAND CAPITAL HOLDINGS CORPORATION
Should the above signed be present and elect to vote at the Meeting or at any
adjournment thereof, and after notification to the Secretary of the Company at
the Meeting of the stockholder's decision to terminate this Proxy, then the
power of such attorney and proxy shall be deemed terminated and of no further
force and effect.
The above signed acknowledges receipt from the Company, prior to the execution
of this Proxy, of a Notice of the Meeting, a Proxy Statement and Company's
Annual Report to Stockholders for the fiscal year ended June 30, 1998.
Please sign exactly as your name appears above on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.
PLEASE PROMPTLY COMPLETE, DATE, SIGN ANDMAIL
THIS PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE
