SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
[ X ] Filed by the registrant
[ ] Filed by a party other than the registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
Webster City Federal Bancorp
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
<PAGE>
[letterhead Webster City Federal Bancorp]
March 15, 2000
Dear Stockholder:
You are cordially invited to attend the 2000 Annual Meeting of Stockholders of
Webster City Federal Bancorp ("Webster City Federal" or the "Company"). The
Annual Meeting will be held at the offices of Webster City Federal, 820 Des
Moines Street, Webster City, Iowa, at 1:00 p.m., Iowa time, on April 19, 2000.
The enclosed Notice of Annual Meeting and Proxy Statement describe the formal
business to be transacted. During the Annual Meeting, we will also report on the
operations of the Company. Directors and officers of the Company, as well as a
representative of our independent auditors, will be present to respond to any
questions that stockholders may have.
The business to be conducted at the Annual Meeting includes the election of two
directors and the ratification of the appointment of KPMG as auditors for the
Company's 2000 fiscal year.
The Board of Directors of the Company has determined that the matters to be
considered at the Annual Meeting are in the best interest of the Company and its
stockholders. For the reasons set forth in the Proxy Statement, the Board of
Directors unanimously recommends a vote "FOR" each matter to be considered.
On behalf of the Board of Directors, we urge you to sign, date and return the
enclosed proxy card as soon as possible, even if you currently plan to attend
the Annual Meeting. This will not prevent you from voting in person, but will
assure that your vote is counted if you are unable to attend the meeting. Your
vote is important, regardless of the number of shares that you own.
Sincerely,
/s/Phyllis A. Murphy
- --------------------
Phyllis A. Murphy
President and Chief Executive Officer
<PAGE>
WEBSTER CITY FEDERAL BANCORP
820 Des Moines Street
Webster City, Iowa 50595
(515) 832-3071
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
To Be Held On April 19, 2000
Notice is hereby given that the Annual Meeting of Webster City Federal
Bancorp (the "Company" or "Webster City Federal") will be held at the offices of
Webster City Federal, 820 Des Moines Street, Webster City, Iowa, on April 19,
2000 at 1:00 p.m., Iowa time.
A Proxy Card and a Proxy Statement for the Annual Meeting are enclosed.
The Annual Meeting is for the purpose of considering and acting upon:
1. The election of two directors of the Company;
2. The ratification of the appointment of KPMG as auditors for
the Company for the fiscal year ending December 31, 2000; and
such other matters as may properly come before the Annual Meeting, or any
adjournments thereof. The Board of Directors is not aware of any other business
to come before the Annual Meeting.
Any action may be taken on the foregoing proposals at the Annual
Meeting on the date specified above, or on any date or dates to which the Annual
Meeting may be adjourned. Stockholders of record at the close of business on
February 29, 2000, are the stockholders entitled to vote at the Annual Meeting,
and any adjournments thereof.
EACH STOCKHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE ANNUAL MEETING,
IS REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WITHOUT DELAY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN BY THE STOCKHOLDER MAY BE
REVOKED AT ANY TIME BEFORE IT IS EXERCISED. A PROXY MAY BE REVOKED BY FILING
WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A DULY EXECUTED PROXY
BEARING A LATER DATE. ANY STOCKHOLDER PRESENT AT THE ANNUAL MEETING MAY REVOKE
HIS OR HER PROXY AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE ANNUAL
MEETING. HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN
YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER IN
ORDER TO VOTE PERSONALLY AT THE ANNUAL MEETING.
By Order of the Board of Directors
/s/Kathie R. Highland
---------------------
Kathie R. Highland
Secretary
Webster City, Iowa
March 15, 2000
- --------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE ANNUAL MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED WITHIN THE UNITED STATES.
- --------------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
WEBSTER CITY FEDERAL BANCORP
820 Des Moines Street
Webster City, Iowa 50595
(515) 832-3071
ANNUAL MEETING OF STOCKHOLDERS
April 19, 2000
This Proxy Statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of Webster City Federal Bancorp
("Webster City Federal" or the "Company") to be used at the Annual Meeting of
Stockholders of Webster City Federal (the "Annual Meeting"), which will be held
at the offices of Webster City Federal, 820 Des Moines Street, Webster City,
Iowa, on April 19, 2000, at 1:00 p.m., Iowa Time, and all adjournments of the
Annual Meeting. The accompanying Notice of Annual Meeting of Stockholders and
this Proxy Statement are first being mailed to stockholders on or about March
15, 2000.
At the Annual Meeting, stockholders will vote on the election of two
directors of the Company and on the ratification of the appointment of the
Company's auditors for 2000.
REVOCATION OF PROXIES
Stockholders who execute proxies in the form solicited hereby retain
the right to revoke them in the manner described below. Unless so revoked, the
shares represented by such proxies will be voted at the Annual Meeting and all
adjournments thereof. Proxies solicited on behalf of the Board of Directors of
the Company will be voted in accordance with the directions given thereon. Where
no instructions are indicated, validly executed proxies will be voted "FOR" the
proposals set forth in this Proxy Statement for consideration at the Annual
Meeting.
Proxies may be revoked by sending written notice of revocation to the
Secretary of the Company, at the address of the Company shown above. The
presence at the Annual Meeting of any stockholder who had given a proxy shall
not revoke such proxy unless the stockholder delivers his or her ballot in
person at the Annual Meeting or delivers a written revocation to the Secretary
of the Company prior to the voting of such proxy.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Holders of record of the Company's common stock, par value $.10 per
share (the "Company Common Stock") as of the close of business on February 29,
2000 (the "Record Date") are entitled to one vote for each share then held. As
of the Record Date, the Company had 1,940,781 shares of Company Common Stock
issued and outstanding, 1,150,000 of which were held by WCF Financial, M.H.C.
(the "Mutual Holding Company"), and 790,781 of which were held by stockholders
other than the Mutual Holding Company. The presence in person or by proxy of a
majority of the outstanding shares of Company Common Stock entitled to vote is
necessary to constitute a quorum at the Annual Meeting. Broker non-votes will
not be counted as shares present and entitled to vote for the purposes of
establishing a quorum.
Directors are elected by a plurality of votes cast. The affirmative
vote of holders of a majority of the total votes present at the Annual Meeting
in person or by proxy is required for approval of Proposal II. Management of the
Company anticipates that shares of Company Common Stock owned by the Mutual
Holding Company will be voted in favor of the nominees for director and in favor
of Proposal II. The affirmative vote of such shares would ensure the election of
such nominees and the approval of such Proposal II.
<PAGE>
================================================================================
THE SECURITIES ISSUED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION, THE OFFICE OF THRIFT SUPERVISION, THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY STATE SECURITIES AUTHORITY, NOR HAS
ANY SUCH COMMISSION, OFFICE OR AUTHORITY PASSED ON THE ACCURACY OR ADEQUACY OF
THIS PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A FEDERAL OFFENSE.
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR
DEPOSITS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENT AGENCY.
================================================================================
Persons and groups who beneficially own in excess of five percent of
the Company Common Stock are required to file certain reports with the
Securities and Exchange Commission ("SEC") regarding such ownership pursuant to
the Securities Exchange Act of 1934 (the "Exchange Act"). The following table
sets forth, as of the Record Date, the shares of Company Common Stock
beneficially owned by directors and nominees individually, by executive officers
individually, by executive officers and directors as a group and by each person
who was the beneficial owner of more than five percent of the outstanding shares
of Company Common Stock on the Record Date.
<TABLE>
<CAPTION>
Amount of Shares
Owned and Nature Percent of Shares
Name and Address of of Beneficial of Bank Common Stock
Beneficial Owners Ownership (1) Outstanding
----------------- ------------- -----------
<S> <C> <C>
Directors and Officers (2)
Donald I. Newman 19,489 1.02%
Ellis S. Swon 16,700 .86
Dr. Carroll E. Haynes 12,250 .64
Dennis J. Tasler 45,233 2.33
Phyllis A. Murphy 10,000 .52
All Directors and Executive Officers 105,722 5.45
as a Group (7 persons) (3)
Principal Stockholders:
WCF Financial, M.H.C 1,150,000 59.26
820 Des Moines Street
Webster City, Iowa 50595
</TABLE>
(1) In accordance with Rule 13d-3 under the Exchange Act, a person is deemed to
be the beneficial owner for purposes of this table, of any shares of
Company Common Stock if he has shared voting or investment power with
respect to such security, or has a right to acquire beneficial ownership at
any time within 60 days from the Record Date. As used herein, "voting
power" is the power to vote or direct the voting of shares and "investment
power" is the power to dispose or direct the disposition of shares.
Includes all shares held directly as well as by spouses and minor children,
in trust and other indirect ownership, over which shares the named
individuals effectively exercise sole or shared voting and investment
power.
(2) The mailing address for each person listed is 820 Des Moines Street,
Webster City, Iowa 50595.
(3) The Company's executive officers and directors are the executive officers
and directors of WCF Financial, M.H.C.
2
<PAGE>
MARKET INFORMATION
The Company Common Stock is listed on the Nasdaq "SmallCap" market
under the symbol "WCFB." As of the Record Date, there were approximately five
market makers for Company Common Stock, 228 stockholders of record (excluding
the number of persons or entities holding stock in street name through various
brokerage firms), and 1,940,781 shares outstanding, which includes shares held
by the Mutual Holding Company. The following table sets forth market price and
dividend information for the Company Common Stock in each full quarterly period
for the past two complete fiscal years.
Quarter Ended High Low Dividends Paid
- ------------- ---- --- --------------
1999
- ----
1st Quarter $ 16.875 $ 14.75 $.20
2nd Quarter $ 15.75 $ 13.75 $.20
3rd Quarter $ 15.75 $ 13.75 $.20
4th Quarter $ 15.625 $ 12.75 $.20
1998
- ----
1st Quarter $ 21.25 $ 20.00 $.20
2nd Quarter $ 21.75 $ 18.25 $.20
3rd Quarter $ 18.50 $ 12.50 $.20
4th Quarter $ 17.00 $ 14.25 $.20
PROPOSAL I--ELECTION OF DIRECTORS
The Company's Board of Directors is currently composed of five members.
The Company's bylaws provide that approximately one-third of the directors are
to be elected annually. Directors of the Company are generally elected to serve
for a three-year period or until their respective successors shall have been
elected and shall qualify. Two directors will be elected at the Annual Meeting
to serve for a three-year period and until his successor shall have been elected
and shall qualify. The Board of Directors has nominated to serve as director
Ellis S. Swon and Dennis J. Tasler. Both Mr. Swon and Mr. Tasler are currently
members of the Board of Directors. Nominations by stockholders may be made to
the Secretary of the Company, in writing, at least five days prior to the date
of the Annual Meeting. Upon delivery to the Secretary, such nominations shall be
posted in each office of the Company. Ballots bearing the names of all persons
nominated by the Nominating Committee and by stockholders shall be provided for
use at the Annual Meeting.
3
<PAGE>
The table below sets forth certain information regarding the
composition of the Company's Board of Directors, including the terms of office
of Board members. 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 the
nominee) will be voted at the Annual Meeting for the election of the nominees
identified below. If the nominees are unable to serve, the shares represented by
all such proxies will be voted for the election of such substitute as the Board
of Directors may recommend. At this time, the Board of Directors knows of no
reason why the nominees might be unable to serve, if elected. Except as
indicated herein, there are no arrangements or understandings between the
nominee and any other person pursuant to which such nominee was selected.
<TABLE>
<CAPTION>
Shares of Company
Common Stock
Positions Beneficially
Held in the Director Current Term Owned on Percent
Name (1) Age Company Since (2) to Expire Record Date (3) of Class
-------- --- ------- --------- --------- --------------- --------
<S> <C> <C> <C> <C> <C> <C>
NOMINEES
Ellis S. Swon 78 Director and Chairman 1958 2000 16,700 *
of the Board
Dennis J. Tasler 60 Director 1985 2000 45,233 2.33
DIRECTORS CONTINUING IN OFFICE
Dr. Carroll E. Haynes 67 Director 1967 2001 12,250 *
Phyllis A. Murphy 49 President and Chief 1995 2001 10,000 *
Executive Officer
Donald I. Newman 63 Director 1988 2002 19,489 1.02
</TABLE>
- ---------------
* Less than 1%.
(1) The mailing address for each person listed is 820 Des Moines Street,
Webster City, Iowa 50595. Each of the persons listed as a director of the
Company is also a director of Webster City Federal Savings Bank, the
Company's savings association subsidiary, as well as the Bank's service
subsidiary and WCF Financial, M.H.C., which owns the majority of the issued
and outstanding shares of Company Common Stock.
(2) Reflects initial appointment to the Board of Directors of Webster City
Federal Savings Bank.
(3) See definition of "beneficial ownership" in the table under "Voting
Securities and Principal Holders Thereof."
The principal occupation during the past five years of each director of
the Company is set forth below. References to the Company include, where
applicable, Webster City Federal Savings Bank, which reorganized to form the
Company as its holding company in July 1999. All directors have held their
present positions for five years unless otherwise stated.
Dr. Carroll E. Haynes, a Director of the Company, retired in October of
1999. He was a self-employed dentist for
40 years.
<PAGE>
Phyllis A. Murphy was appointed President and Chief Executive Officer
of the Company on January 1, 1999. Ms. Murphy previously served as Executive
Vice President and the Chief Operating Officer and Personnel Officer of the
Company. She was also the Secretary of the Company and Compliance Officer. She
has been with the Company since 1971.
Donald I. Newman, a Director of the Company, retired as President and
Chief Executive Officer of the Company, effective December 31, 1998. Mr. Newman
had been an executive officer of the Company for 10 years.
Ellis S. Swon, Director and Chairman of the Board, is retired. From
1950 to 1990, Mr. Swon was employed in various positions at the Company,
including President and Chief Executive Officer.
Dennis J. Tasler, a Director of the Company, is Chief Executive Officer
and majority stockholder of Tasler, Inc., Webster City, Iowa.
<PAGE>
Ownership Reports by Officers and Directors
The common stock of the Company is registered pursuant to Section 12(g)
of the Exchange Act. The officers and directors of the Company and beneficial
owners of greater than 10% of the Company Common Stock ("10% beneficial owners")
are required to file reports on Forms 3, 4 and 5 with the SEC disclosing
beneficial ownership and changes in beneficial ownership of the Company Common
Stock. SEC rules require disclosure in the Company's Proxy Statement and Annual
Report on Form 10-KSB of the failure of an officer, director or 10% beneficial
owner of the Company Common Stock to file a Form 3, 4 or 5 on a timely basis.
During the year ended December 31, 1999, no officer or director failed to timely
file any Forms 3, 4, or 5.
Meetings and Committees of the Board of Directors
The business of the Company's Board of Directors is conducted through
meetings and activities of the Board and its committees. During the year ended
December 31, 1999, the Board of Directors held twelve regular and one special
meeting. During the year ended December 31, 1999, no director attended fewer
than 75% of the total meetings of the Board of Directors of the Company and
committees on which such director served.
The Audit Committee consists of Directors Haynes (Chairman), Swon,
Tasler and Newman. This committee meets annually with the Company's auditing
firm and is on call when deemed necessary. The Audit Committee met one time
during the year ended December 31, 1999.
The Company does not have a standing compensation or nominating
committee; the full Board of Directors
acts as such committees.
The ESOP Committee consists of Directors Haynes, Tasler and Swon and
administers the Company's Employee Stock Ownership Plan. This Committee met one
time in 1999.
The Stock Benefits Committee administers the Company's Stock Option
Plan and is composed of Directors Swon, Tasler and Haynes. This Committee did
not meet in 1999.
Directors' Compensation
Members of the Board of Directors each received fees of $500 per month
and $300 for each meeting attended during the year ended December 31, 1999.
Directors' Deferred Fee Plan. All directors of the Company are eligible
to participate in the Deferred Fee Plan by deferring all or any portion of their
director's fees until termination of service as a director of the Company. Upon
a director's termination of service, the director's account balance will be
paid, at the option of the Company, in either a lump sum or annual installments
over a period of up to 10 years. If a director dies before receiving his or her
entire account balance, the remaining balance will be paid to his or her
designated beneficiary or to his or her estate. Amounts deferred under the
Deferred Fee Plan continue to be a part of the Company's general fund. Interest
on amounts deferred are calculated at the prime rate (as published in the Wall
Street Journal on January 1 of each year) plus 100 basis points. The interest
rate paid for the year ended December 31, 1999 was 8.75 percent. The Company's
interest expense for the Deferred Fee Plan was $45,783 for the year ended
December 31, 1999. Fees deferred under the Plan for the year ended December 31,
1999 were $29,400.
5
<PAGE>
Executive Compensation
The following table sets forth for the years ended December 31, 1999, 1998, and
1997, certain information as to the total remuneration paid by the Company to
the named executive officer of the Company.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Long-Term
Compensation Compensation Awards
--------------------------------- -------------------------------
Years
Ended Other Restricted
December Annual Stock Options/ All Other
Name and 31, Salary Bonus Compensation Award(s) SARs Compensation
Principal Position (1) ($)(2) ($) ($)(3) ($) (#) Payouts ($)(4)
- ---------------------- ---- ------ --- ------ --- --- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Phyllis A. Murphy 1999 $80,000 $500 $9,600 -0- -0- -0- $198
President and Chief 1998 66,000 500 9,000 -0- -0- -0- 251
Executive Officer 1997 62,500 500 9,000 -0- 9,750 -0- 261
</TABLE>
- ------------
(1) Ms. Murphy was appointed President and Chief Executive Officer in January
1999. Previously, she served as Executive Vice President, Chief Operating
Officer and Personnel Officer. No other executive officer received salary
and bonuses that in the aggregate exceeded $100,000 in the years ended
December 31, 1999, 1998 and 1997.
(2) Amount shown is gross earnings before pre-tax medical insurance paid by
officer which is not taxable.
(3) Includes Directors' fees paid for attendance at Board Meetings of the
Company.
(4) Includes payments for premiums made pursuant to a life insurance policy
maintained on the named executive officer under the Company's life
insurance plan for employees.
Benefits
Severance Agreements. The Company has entered into severance agreements
(the "Severance Agreements") with Phyllis A. Murphy, the President and Chief
Executive Officer of the Company, Stephen L. Mourlam, Executive Vice President
and Treasurer of the Company and Kyle R. Swon, Senior Vice President of the
Company. The Severance Agreements provide for certain benefits in the event of a
change of control of the Company or the Mutual Holding Company. The Severance
Agreements are available to certain full-time officers of the Company who have
been specifically approved by resolution of the Board of Directors to be
eligible to enter into the Severance Agreements.
Following a change of control of the Mutual Holding Company or the
Company, as defined in the Severance Agreement, the executive officer shall be
entitled to a payment under the Severance Agreement if the executive officer
terminates employment following any demotion, loss of title, office or
significant authority, reduction in his or her annual compensation or benefits,
or relocation of his or her principal place of employment by more than 30 miles.
In the event that Phyllis Murphy is entitled to receive payments
pursuant to her Severance Agreement, she shall receive a cash payment of up to a
maximum of three times her annual compensation prior to termination of
employment, plus life and medical coverage for a period of up to 36 months from
the date of termination.
<PAGE>
In the event that Mr. Mourlam or Mr. Swon is entitled to receive
payments pursuant to the executive officer's Severance Agreement, the executive
officer shall receive a cash payment up to a maximum of two times the annual
compensation prior to termination of employment, plus life and medical coverage
for a period of up to 24 months from the date of termination.
Defined Benefit Plan. The Company participates in a noncontributory
multiple-employer defined benefit plan ("Retirement Plan"). All employees age 21
or older are eligible to accrue benefits under the Retirement Plan. As
necessary, the Company contributes an amount to the Retirement Plan to satisfy
the actuarially determined
6
<PAGE>
minimum funding requirements in accordance with the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
The Retirement Plan provides a benefit to or on behalf of each covered
employee upon normal retirement at or after age 65. An employee's retirement
benefit under the Retirement Plan is determined by formula and is equal to two
percent times the employee's years of service with the Company multiplied by the
average of his highest consecutive five years' salary. For these purposes,
"salary" is defined as a participant's basic annual salary rate as of each
January 1, exclusive of special payments such as overtime, bonuses and fees. An
employee who defers the receipt of a retirement benefit will have his benefit
increased by .8% for each month of deferral beyond normal retirement age (with a
maximum increase of 48%). A participant will receive a reduced benefit upon
early retirement, disability or death. Retirement benefits are payable in
various annuity forms as well as in the form of a single lump sum payment. The
regular form of all retirement benefits (normal, early or disability) includes
not only a retirement allowance, but also a lump sum retirement death benefit
which is 12 times the annual retirement allowance less the sum of such allowance
payments made before death. All retirement allowances continue for life even
though under the regular form there would be no death benefit payable after 12
years. Upon termination of employment other than as specified above, a
participant who was employed by the Company for a minimum of five years is
eligible to receive his or her vested accrued benefit commencing on such
participant's normal retirement date. For the plan year ended June 30, 1999, the
Company did not make a contribution to the Retirement Plan because the Plan was
fully funded at such date.
The following table indicates the annual retirement benefit that would
be payable under the Retirement Plan upon retirement at age 65 in plan year
1998, expressed in the form of a single life annuity for the final average
salary and benefit service classification specified below.
<TABLE>
<CAPTION>
YEARS OF BENEFIT SERVICE AT RETIREMENT
High 5-Year ------------------------------------------------------------------------------
Average Salary 15 20 25 30 35 40
-------------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
$25,000 $ 7,500 $10,000 $12,500 $15,000 $17,500 $20,000
$50,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000
$75,000 $22,500 $30,000 $37,500 $45,000 $52,500 $60,000
$100,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000
$150,000 $45,000 $60,000 $75,000 $90,000 $105,000 $120,000
</TABLE>
The following table sets forth the years of credited service (i.e.,
benefit service) as of June 30, 1999, for the individual named in the cash
compensation table. Years of Name Credited Service
<TABLE>
<CAPTION>
<S> <C>
Phyllis A. Murphy............................................ 22
</TABLE>
<PAGE>
Employee Stock Ownership Plan and Trust. Webster City Federal Savings
Bank (the "Bank") established an Employee Stock Ownership Plan and Related Trust
("ESOP") for eligible employees in connection with the reorganization of the
Bank to stock form and subsequent stock offering (the "Offering"). The ESOP is a
tax-qualified plan subject to the requirements of ERISA of 1974 ("ERISA") and
the Internal Revenue Code of 1986 (the "Code"). Employees with a 12-month period
of employment with the Bank during which they worked at least 1,000 hours and
who have attained age 21 are eligible to participate. As part of the Offering,
the ESOP borrowed funds from an unrelated third party lender to finance the
purchase of 4% of the Bank Common Stock subsequent to the Offering,
7
<PAGE>
or 37,800 shares. Collateral for the loan is the Common Stock purchased by the
ESOP. The loan was repaid in 1999 and all ESOP shares have now been allocated to
employees.
Stock Option Plan. The Bank adopted a Stock Option Plan (the "Stock
Option Plan") in 1996 for the award of options in the Bank Common Stock to
certain employees and nonemployee directors of the Bank and the Mutual Holding
Company. The Stock Option Plan authorized the grant of stock options and limited
rights to purchase an aggregate of 95,000 shares. Pursuant to the Stock Option
Plan, grants may be made of (i) options to purchase Bank Common Stock intended
to qualify as incentive stock options under Section 422 of the Code, (ii)
options that do not so qualify, and (iii) limited rights that are exercisable
only upon the change in control of the Bank or the Mutual Holding Company.
Nonemployee directors are eligible only to receive nonstatutory options. Upon
formation of the Company in July 1999, the Company Common Stock was substituted
for Bank Common Stock on a one-for-one basis for future awards under the Stock
Option Plan.
The grant of awards under the Stock Option Plan is determined by the
Stock Benefits Committee, a committee of the Board of Directors consisting of
nonemployee directors of the Company.
Stock options granted pursuant to the Stock Option Plan are exercisable
in three equal annual installments of 331/3% commencing one year from the date
of grant; provided, however, that all options will be 100% exercisable in the
event the optionee terminates his service due to normal retirement, death or
disability, or in the event of a change in control of the Mutual Holding Company
or the Company.
Pursuant to the Stock Option Plan, each nonemployee director of the
Company has received an option to purchase 4,750 shares of Company Common Stock.
All options were granted at an exercise price of $12.75 per share, which was the
trading price of the Bank Common Stock on the date the Stock Option Plan was
approved by stockholders of the Bank. Options exercisable for 14,250 shares of
Company Common Stock have been reserved for future issuance under the Plan. The
exercise price of any option granted under the Stock Option Plan may be paid in
cash or Company Common Stock.
Set forth below is certain information concerning options outstanding
to the Company's Chief Executive Officer at December 31, 1999.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
Number of Unexercised Value of Unexercised
Options at In-the-Money Options at
Year-End Year-End (1)
------------------------- -------------------------
Shares Acquired Value Exercisable/Unexercisable Exercisable/Unexercisable
Name upon Exercise Realized (#) ($)
---- ------------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Phyllis A. Murphy...... -- -- 7,0000/0 15,750/0
</TABLE>
- ------------------------------------
<PAGE>
(1) Equals the difference between the aggregate exercise price of such options
and the aggregate fair market value of the shares of Company Common Stock
that would be received upon exercise, assuming such exercise occurred on
December 31, 1999, at which date shares of Company Common Stock were quoted
on the Nasdaq SmallCap Market at $15.00.
Transactions with Certain Related Persons
Current federal law requires that all loans or extensions of credit by
the Bank to executive officers and directors must be made on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with the general public and must not involve
more than the normal risk of repayment or present other unfavorable features.
Federal law also limits the amount of credit the Bank may extend
8
<PAGE>
to its executive officers, its directors and its affiliates and the types of
permitted collateral for such credit, and prescribes terms and conditions for
such transactions deemed to be consistent with safe and sound banking practices.
However, federal regulations permit executive officers and directors to receive
the same terms through benefit or compensation plans that are widely available
to other employees, as long as the director or executive officer is not given
preferential treatment compared to the other participating employees. The Bank
has established a conflict of interest policy requiring that all loans made to
directors be made in the ordinary course of business on the same terms and
conditions as the Bank would make to any other customer in the ordinary course
of business, and that such loans not involve more than a normal risk of
collectibility or present any unfavorable features. With respect to non-director
executive officers, the Bank's policy is to permit reduced rates and/or the
waiver or reduction of points on loans, provided the same terms are made
available to other non-executive employees of the Bank.
As of December 31, 1999 the Bank's directors or executive officers had
loans outstanding from the Bank totaling $715,000 in the aggregate. All such
loans were made by the Bank in compliance with federal law and the
above-described policies.
PROPOSAL II--RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has approved the engagement of
KPMG to be the Company's auditors for the year ending December 31, 2000, subject
to the ratification of the engagement by the Company's stockholders. At the
Annual Meeting, stockholders will consider and vote on the ratification of the
engagement of KPMG for the Company's fiscal year ending December 31, 2000. A
representative of KPMG is expected to attend the Annual Meeting to respond to
appropriate questions and to make a statement if he so desires.
In order to ratify the selection of KPMG as the auditors for the year
ending December 31, 2000, the proposal must receive at least a majority of the
votes cast, either in person or by proxy, in favor of such ratification. The
Board of Directors recommends a vote "FOR" the ratification of KPMG as auditors
for the 2000 fiscal year.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials
for next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's executive office, 820
Des Moines Street, Webster City, Iowa 50595, no later than November 17, 2000.
Any such proposals shall be subject to the requirements of the proxy rules
adopted under the Exchange Act. Any such proposals will also be subject to the
requirements of the proxy rules adopted under the Exchange Act.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Annual Meeting other than the matters described above in this Proxy Statement.
However, if any matters should properly come before the Annual Meeting, it is
intended that holders of the proxies will act as directed by a majority of the
Board of Directors, except for matters related to the conduct of the Annual
Meeting, as to which they shall act in accordance with their best judgment.
<PAGE>
MISCELLANEOUS
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 solicitations
by mail, directors, officers and regular employees of the Company may solicit
proxies personally or by telegraph or telephone without additional compensation.
9
<PAGE>
A copy of the Company's Report on Form 10-KSB for the year ended
December 31, 1999 will be furnished without charge to stockholders as of the
Record Date upon written request to Phyllis A. Murphy, President and Chief
Executive Officer, Webster City Federal, 820 Des Moines Street, Webster City,
Iowa 50595.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Kathie R. Highland
---------------------
Kathie R. Highland
Secretary
Webster City, Iowa
March 15, 2000
<PAGE>
REVOCABLE PROXY
WEBSTER CITY FEDERAL BANCORP
[ X ] PLEASE MARK VOTES
AS IN THIS EXAMPLE
Annual Meeting of Stockholders
April 19, 2000
The undersigned hereby appoints the official proxy committee consisting of
the entire Board of Directors (other than those members of the Board of
Directors nominated for election) with full powers of substitution to act as
attorneys and proxies for the undersigned to vote all shares of Common Stock of
Webster City Federal Bancorp that the undersigned is entitled to vote at the
Annual Meeting of Stockholders ("Annual Meeting") to be held at the offices of
the Company, 820 Des Moines Street, Webster City, Iowa, on April 19, 2000, at
1:00 p.m. The official proxy committee is authorized to cast all votes to which
the undersigned is entitled as follows:
1. The election as director of the nominees listed below:
Ellis S. Swon
Dennis J. Tasler
With- For All
For hold Except
[ ] [ ] [ ]
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
2. The ratification of the appointment of KPMG LLP as auditors for the year
ending December 31, 2000.
For Against Abstain
[ ] [ ] [ ]
PLEASE CHECK BOX IF YOU PLAN TO ATTEND THE ANNUAL MEETING. [ ]
The Board of Directors recommends a vote "FOR" each of the listed proposals.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED ABOVE. IF ANY OTHER
BUSINESS IS PRESENTED AT SUCH ANNUAL MEETING, THIS PROXY WILL BE VOTED BY THE
MAJORITY OF THE BOARD OF DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS
KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. WEBSTER CITY FEDERAL BANCORP
_________________________________________
Date
_________________________________________
Stockholder sign above
_________________________________________
Co-holder (if any) sign above
<PAGE>
Detach above card, sign, date and mail in postage paid envelope provided.
Should the above-signed be present and elect to vote at the Annual Meeting or
at any adjournment thereof and after notification to the Secretary of the
Company at the Annual Meeting of the stockholder's decision to terminate this
proxy, then the power of said attorneys and proxies shall be deemed terminated
and of no further force and effect. This proxy may also be revoked by sending
written notice to the Secretary of the Company at the address set forth on the
Notice of Annual Meeting of Stockholders, or by the filing of a later proxy
prior to a vote being taken on a particular proposal at the Annual Meeting.
The above-signed acknowledges receipt from the Company prior to the execution
of this proxy of a notice of the Annual Meeting, a proxy statement dated March
15, 2000, and audited financial statements.
Please sign exactly as your name appears 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 COMPLETE AND DATE THIS PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
