SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
MICHIGAN FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
MICHIGAN FINANCIAL CORPORATION
[LOGO]
101 WEST WASHINGTON STREET
MARQUETTE, MICHIGAN 49855
March 24, 1997
To the Stockholders:
The 1997 Annual Meeting of Stockholders will be held at the Holiday Inn, U.S.
Highway 41 West, Marquette, Michigan, on Tuesday, April 29, 1997 at 1:30 p.m.,
local time, in accordance with provisions of the bylaws. The formal notice and
accompanying proxy statement describe the matters to be acted upon at the
meeting.
A copy of the Corporation's Annual Report for the year 1996 is enclosed.
You are cordially invited to attend the meeting. It is important that your
shares be represented, regardless of the number you own. WE REQUEST THAT YOU
SIGN AND DATE THE ENCLOSED PROXY, INDICATE YOUR CHOICES WITH RESPECT TO THE
MATTERS TO BE VOTED UPON AND RETURN THE PROXY PROMPTLY IN THE ENCLOSED STAMPED,
SELF-ADDRESSED ENVELOPE.
Sincerely yours,
/s/ Howard L. Cohodas
HOWARD L. COHODAS
CHAIRMAN
MICHIGAN FINANCIAL CORPORATION
[LOGO]
101 WEST WASHINGTON STREET
MARQUETTE, MICHIGAN 49855
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The Annual Meeting of Stockholders of Michigan Financial Corporation will be
held at the Holiday Inn, U.S. Highway 41 West, Marquette, Michigan, on Tuesday,
April 29, 1997 at 1:30 p.m., local time, for the following purposes:
1. To elect thirteen (13) directors to hold office until the next Annual
Meeting of Stockholders and until their successors have been elected
and qualified.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record as shown on the transfer books of the Corporation at
the close of business on February 28, 1997 are entitled to notice of and to vote
at the meeting or any adjournment thereof. Stockholders are encouraged to sign
and date the enclosed proxy, indicate their choices with respect to the matters
to be voted upon and return the proxy promptly in the enclosed self-addressed
envelope.
By Order of the Board of Directors
/s/ Kenneth F. Beck
KENNETH F. BECK
SECRETARY
March 24, 1997
MICHIGAN FINANCIAL CORPORATION
101 WEST WASHINGTON STREET
MARQUETTE, MICHIGAN 49855
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Michigan Financial Corporation, 101 West Washington
Street, Marquette, Michigan 49855 (the "Corporation"), of proxies for use at the
Annual Meeting of Stockholders of the Corporation to be held at the Holiday Inn,
U.S. Highway 41 West, Marquette, Michigan, on Tuesday, April 29, 1997, at 1:30
p.m., local time, and any adjournment thereof.
This Proxy Statement has been mailed on or about March 24, 1997, to all holders
of common stock of the Corporation as of the record date.
The cost of soliciting proxies will be borne by the Corporation. In addition to
solicitations by mail, officers and regular employees of some or all of the
Corporation's member banks may solicit proxies by telephone or in person.
VOTING AT THE MEETING
The Board of Directors of the Corporation has fixed the close of business on
February 28, 1997, as the record date for the determination of stockholders
entitled to notice of and to vote at the Annual Meeting of Stockholders and any
adjournments thereof. The Corporation has only one class of common stock and no
preferred stock. There are 5,598,267 shares of common stock of the Corporation
outstanding as of February 28, 1997. Each outstanding share will entitle the
holder thereof to one vote on each separate matter presented for vote at the
meeting. If the enclosed form of proxy is executed and returned, it nevertheless
may be revoked at any time before it is exercised at the meeting. Shares may not
be voted cumulatively.
ELECTION OF DIRECTORS
The following thirteen (13) nominees are proposed to be elected at the meeting
to serve until the next annual meeting and until their successors shall be
elected and have qualified. All nominees with the exception of Mr. Nasi are
currently directors of the Corporation. The directors' terms expire as of the
annual meeting. A majority of votes cast at the meeting is necessary for
election.
In the event that any nominees shall be unable to serve, which is not now
contemplated, the proxy holders may vote for a substitute nominee. Proxies will
be voted in favor of the nominees unless authority to do so is withheld.
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
- ---- --- ------------------------------------------------------ -----
<S> <C> <C> <C>
Alfred J. Angeli 46 Vice President, Angeli Foods Company 1992
Kenneth F. Beck 59 Senior Vice President, Treasurer, and Secretary;
Michigan Financial Corporation 1986
Gary L. Butryn 50 President and General Manager, Mead Publishing Paper 1991
Division, Mead Corporation
Willard M. Carne 64 Owner, Carne's Amoco Service 1985
Howard L. Cohodas 52 Chairman and President, Michigan Financial Corporation 1974
Willard L. Cohodas 82 Executive Vice President, Cohodas Bros. Co. of
Michigan, Real Estate & Investments 1972
Clarence R. Fisher 57 Chairman and President, Upper Peninsula Energy 1994
Corporation and Upper Peninsula Power Company
Hugh C. Higley, Jr. 51 Senior Vice President, Interstate Welding Sales 1987
Corporation
David Holli 59 President, Holli Forest Products, Inc. 1988
Daniel H. Lori 50 Owner, Lori Associates, Inc. Office Equipment Sales 1991
and Services
Wayne Nasi 48 President, Wayne Nasi Construction Co., Inc.
Fred M. Saigh 76 Chairman, First National Underwriters, Inc. 1986
James L. Smith 57 President, MFC First National Bank, Escanaba 1980
</TABLE>
For the previous five years, all nominees have either been engaged in the
principal occupations specified above or in other executive positions with their
respective organizations. Directors Beck, H. Cohodas, and Smith have been
principally employed by the Corporation or a member bank during the previous
five years.
Willard L. Cohodas is an uncle of Howard L. Cohodas.
The Board of Directors held four regularly scheduled meetings in 1996. Mr.
Fisher attended fewer than 75% of the aggregate of the total number of meetings
held by the Board of Directors and all the committees of the Board of Directors
on which he served.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
VOTE FOR EACH OF THE NOMINEES
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Corporation has an Audit Committee comprised of
directors Angeli, Carne, Fisher, Holli, and Lori. This Committee held five
meetings in 1996. The Committee is responsible for the recommendation of an
independent accounting firm to be engaged for the external audit, directing and
supervising investigations into matters relating to audit functions, reviewing
with independent auditors the plan and results of the external audit, the
establishment and continued supervision of internal auditing procedures,
reviewing the degree of independence of the auditors, and reviewing the adequacy
of internal accounting controls.
The Corporation does not have Compensation or Nominating Committees. The
Corporation has a Personnel Committee comprised of directors Butryn, H. Cohodas,
Fisher, Higley, and Holli and Vice President-Human Resources, Ward L. Rantala,
which performs functions similar to those of a Compensation Committee. This
Committee held one meeting in 1996. The Committee is responsible for reviewing
the annual compensation of the officers of the Corporation and the chief
executive officers of the member banks and making recommendations to the Board
of Directors.
PERSONNEL COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
The members of the Personnel Committee during 1996 were directors Butryn, H.
Cohodas, Fisher, Higley and Holli and Vice President-Human Resources, Ward L.
Rantala. Mr. H. Cohodas is the chief executive officer of the Corporation and
also of MFC First National Bank, Marquette. In addition, he is Chairman of
the Board of each of the Corporation's member banks and its insurance
subsidiary. Mr. Rantala also serves as Vice President-Human Resources of MFC
First National Bank, Marquette. Mr. Rantala does not participate in any of
the procedures which pertain to his compensation or other related matters and
is excused from the committee meetings at such times.
MANAGEMENT REMUNERATION AND TRANSACTIONS
REMUNERATION
The following table sets forth compensation for the three years ended December
31, 1996 of the chief executive officer and of each executive officer whose
total remuneration exceeded $100,000, paid or expensed by the Corporation, its
member banks or its insurance subsidiary, during calendar year 1996.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------- -------------------
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) OPTIONS #(2) COMPENSATION(3)
--------------------------- ---- ------ -------- ------------------- ---------------
<S> <C> <C> <C> <C> <C>
Howard L. Cohodas 1996 $181,138 $67,602 8,000 $2,067
Chief Executive Officer 1995 172,000 47,767 8,000 1,723
1994 147,000 29,400 8,000 1,352
Kenneth F. Beck 1996 100,755 38,723 5,000 2,419
Chief Financial Officer 1995 97,100 27,889 5,000 1,212
1994 92,500 18,500 5,000 1,006
Ward L. Rantala 1996 76,823 29,360 4,000 1,761
Vice President -- Human Resources 1995 73,500 21,024 4,000 873
1994 69,130 13,826 4,000 712
</TABLE>
- ----------------------
(1) Consists of awards paid as determined under the Executive Incentive Plan
described on page 5.
(2) Granted pursuant to the Michigan Financial Corporation Stock Option Plan
described on page 5.
(3) Consists of employer contributions to the Employee Savings and Stock
Ownership Plan.
The following table presents information about option grants to the named
executive officers for the year ended December 31, 1996. All options granted to
the named executive officers were granted pursuant to the Michigan Financial
Corporation Stock Option Plan.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
---------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF ANNUAL
SECURITIES RATES OF STOCK PRICE
UNDERLYING PERCENT OF TOTAL APPRECIATION FOR
OPTIONS OPTIONS GRANTED EXERCISE PRICE OPTION TERM
GRANTED TO EMPLOYEES PER EXPIRATION ---------------------
NAME # IN FISCAL YEAR SHARE DATE 5% 10%
- ---- --------- ---------------- -------------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Howard L. Cohodas 8,000 17.0% $23.25 December 16, 2006 $116,974 $296,436
Kenneth F. Beck 5,000 10.6 23.25 December 16, 2006 73,109 185,273
Ward L. Rantala 4,000 8.5 23.25 December 16, 2006 58,487 148,218
</TABLE>
The following table presents information about option exercises by the named
executive officers for the year ended December 31, 1996 and options held by each
of them at year end.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR END OPTION VALUES
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT YEAR END AT YEAR END
ACQUIRED ON VALUE # $
EXERCISE REALIZED ---------------------------- -----------------------------
NAME # $ EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Howard L. Cohodas N/A N/A 0 24,000 0 $46,000
Kenneth F. Beck N/A N/A 0 15,000 0 28,750
Ward L. Rantala N/A N/A 0 12,000 0 23,000
</TABLE>
PENSION PLAN
The Corporation has a qualified defined benefit pension plan covering all
corporate and member bank employees who have at least one year of service and
have attained age 21. Retirement benefits are substantially dependent upon the
years of credited service and salary of each plan participant. The following
table sets forth estimated annual benefits payable to persons retiring at age 65
in 1997 in specified remuneration and years-of-service classifications. At
December 31, 1996 Mr. H. Cohodas had 26 years of service under the plan, Mr.
Beck 18 years, and Mr. Rantala 26 years. The benefit amounts listed in the table
are not subject to reduction for social security benefits or other amounts.
HIGHEST CONSECUTIVE 5 ANNUAL BENEFIT FOR YEARS OF SERVICE INDICATED
YEAR ---------------------------------------------------
AVERAGE REMUNERATION 15 YRS. 20 YRS. 25 YRS. 30 YRS. AND OVER
-------------------- ------- ------- ------- ----------------
$100,000 $27,253 $ 36,337 $ 45,421 $ 54,506
150,000 42,253 56,337 70,421 84,506
200,000 57,253 76,337 95,421 114,506
250,000 72,253 96,337 120,000 120,000
300,000 87,252 116,337 120,000 120,000
PERSONNEL COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION PHILOSOPHY
The Corporation applies a consistent philosophy to compensation for all
employees, including senior management. This philosophy is based on the premise
that the achievements of the Corporation result from the coordinated efforts of
all individuals working toward common objectives. The Corporation strives to
achieve those objectives through teamwork that is focused on meeting the
expectations of customers and stockholders.
The goals of the compensation program are to align compensation with business
objectives and performance, and to enable the Corporation to attract, retain and
reward executive officers who contribute to the long-term success of the
Corporation. The Corporation's compensation program for executive officers is
based on the same four principles applicable to compensation decisions for all
employees of the Corporation:
* THE CORPORATION PAYS COMPETITIVELY.
The Corporation is committed to providing a pay program that helps attract and
retain qualified industry professionals. To ensure that pay is competitive, the
Corporation compares its pay practices annually with peer group financial
institutions and establishes its pay parameters based on this review.
* THE CORPORATION PAYS FOR RELATIVE SUSTAINED PERFORMANCE.
Executive officers are rewarded based upon corporate performance, member bank
performance and individual performance. Corporate performance and member bank
performance are evaluated by reviewing the extent to which strategic and
business plan goals are met. Individual performance is evaluated by reviewing
organizational and management objectives, and the degree to which teamwork and
corporate values are fostered.
* THE CORPORATION STRIVES FOR FAIRNESS IN THE ADMINISTRATION OF PAY.
The Corporation applies its compensation philosophy system-wide. The Corporation
strives to achieve a balance of the compensation paid to a particular individual
and the compensation paid to other executives.
* THE CORPORATION BELIEVES EMPLOYEES SHOULD UNDERSTAND THE PERFORMANCE
EVALUATION AND PAY ADMINISTRATION PROCESS.
The evaluating manager gives the employee ongoing feedback on performance.
BASE SALARIES
Base salaries for new management employees are established initially by
evaluating the responsibilities of the position and the experience of the
individuals relative to salaries for comparable positions at comparable
companies within the banking industry.
Annual salary adjustments are determined by evaluating the competitive
marketplace, the performance of the Corporation, the performance of the
executive, and any change in the executive's responsibilities. Salary
adjustments are determined and normally made on a 12 month cycle. Compensation
has been and will continue to be tax deductible.
ANNUAL BONUSES
The Corporation has an executive incentive plan in which members of management
selected by the Personnel Committee participate. The plan, which is administered
by the Committee, annually may award to senior management (including Mr. H.
Cohodas, Mr. Beck, and Mr. Rantala) up to 40% of an executive's base salary, to
be paid out over a three year measurement period. Up to 20% may be earned during
the first year of the period and up to 10% in each of the next two years. The
amounts of these cash awards are determined based upon a combination of the
level of achievement by the Corporation of its strategic and operating goals and
the level of achievement of individual operating unit objectives. Awards are
determined annually after the close of each fiscal year. Failure to achieve the
objectives in any plan year not only results in no payment of the current year
incentive but also terminates any accrued incentives from prior periods.
STOCK OPTION PLAN
In 1994 the Corporation adopted a stock option plan for the Corporation's key
employees in order to foster alignment of the interests of the named executive
officers and certain other members of senior management with stockholder
interests. This plan is administered by the Personnel Committee.
The plan provides that stock options may be granted to individuals who are in
positions to most significantly influence the longer-term performance of the
Corporation. The size of stock option grants is based primarily on competitive
practice and is generally targeted to be consistent with peer group financial
institutions. However, the size of stock option awards can be adjusted upward or
downward based on a subjective evaluation of individual contributions and
potential. The Committee's objective is to deliver a competitive award
opportunity, based on the aggregate exercise price of the shares subject to the
option. As a result, the number of shares underlying stock option awards varies
and is dependent on the stock price on the date of grant.
Options are granted at the then current fair market value, and the future value
to be realized from options granted under the plan is dependent upon the extent
to which the Corporation's performance is reflected in the market price of its
common stock at the time the options are exercised in the future. The date of
exercise, and, thus the time period within which value may be realized and the
relationship of that value to the Corporation's performance, will be determined
by the individual option holder. The plan does not permit the adjustment of the
exercise price, except to recognize changes in capitalization, such as stock
splits and dividends, following the option grant.
The Committee has been advised that compensation arising from the exercise of
outstanding stock options as well as options to be granted under the plan will
be deductible for Federal income tax purposes.
CHIEF EXECUTIVE OFFICER COMPENSATION
Specifically with regard to the compensation of Mr. H. Cohodas, the
Corporation's chief executive officer since 1989, the Personnel Committee
undertook the same evaluation set forth above with respect to officers
generally. As with the other corporate officers, Mr. Cohodas's compensation
(both base salary and incentive bonus) has been increased in recent years as
profitability and overall performance of the Corporation also increased. In
granting a stock option for 8,000 shares to Mr. H. Cohodas in 1996, the
Committee considered his individual performance and the compensation practices
of the peer group.
By the Personnel Committee: Gary L. Butryn, Chairman, Howard L. Cohodas,
Clarence R. Fisher, Hugh C. Higley, Jr., David Holli, Ward L. Rantala.
REMUNERATION OF DIRECTORS
Directors of the Corporation who are not employees of the Corporation, its
member banks or insurance subsidiary are paid $750 quarterly plus $825 per
meeting of the Board of Directors attended and $275 per committee meeting
attended.
TRANSACTIONS WITH MANAGEMENT
Some of the directors and officers of the Corporation and the companies with
which they are associated were customers of, and had banking transactions with,
some of the Corporation's member banks in the ordinary course of business during
1996. In the opinion of management, all loans and commitments to loan included
in such transactions were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons, and did not involve more than normal risk of
collectibility or present other unfavorable features.
PERFORMANCE GRAPH
The graph below compares the performance of Michigan Financial Corporation
Common Stock to the Nasdaq Market Index and the Media General Index,
respectively, over the five year period ended December 31, 1996. The graph
assumes that the value of an investment in MFC and each index was $100 at
January 1, 1992 and that all dividends were reinvested on a quarterly basis.
[PLOT POINTS GRAPH]
(1) The Media General Index is compiled by Media General Financial Services, a
financial data publisher. The index is composed of 102 Nasdaq banks and bank
holding companies located in the East North Central Region.
COMPARISON OF CUMULATIVE TOTAL RETURN OF
COMPANY, INDUSTRY INDEX AND BROAD MARKET
FISCAL YEAR ENDING
----------------------------------------------------
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
MFC 100 149.54 193.44 272.08 417.03 362.07
Industry Index (Media
General) 100 129.18 134.81 125.73 183.36 243.42
Broad Market (NASDAQ) 100 100.98 121.13 127.17 164.96 204.98
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of February 28, 1997 as to common
stock of the Corporation owned of record or beneficially owned by each person
who owned more than 5% of the common stock, no par value, of the Corporation.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
-----------------------------------------------
SOLE VOTING SHARED VOTING TOTAL SHARES PERCENT
& INVESTMENT & INVESTMENT BENEFICIALLY OF CLASS
NAME & ADDRESS POWER POWER OWNED (NOTE) (NOTE)
- -------------- ------------ ------------- ------------ --------
<S> <C> <C> <C> <C>
Howard L. Cohodas
Marquette, Michigan 209,200 1,072,497(1) 1,281,697 22.9%
MFC First National Bank
Marquette, Michigan 438,698 424,065 862,763(2) 15.4
Willard L. and Lois W.
(wife) Cohodas
Marquette, Michigan 834,260(3) 834,260 14.9
Lawrence C. Frank
Yakima, Washington 201,456 588,472(4) 789,928 14.1
Paul E. Oberman
Englewood, Colorado 18,300 423,950(5) 442,250 7.9
Sylvia Cohodas
Longboat Key, Florida 421,138(6) 421,138 7.5
</TABLE>
- ------------------------
NOTE-THE ACTUAL TOTAL NUMBER OF SHARES OVER WHICH THE PERSONS NAMED IN THE
ABOVE TABLE HAVE VOTING AND/OR INVESTMENT POWER IS 2,790,938, WHICH
REPRESENTS 49.9% OF THE TOTAL OUTSTANDING SHARES.
(1) Includes 385,126 shares with shared voting power included in a voting
agreement with Willard L. Cohodas of Marquette, Michigan and Lawrence C.
Frank of Yakima, Washington, and 415,362 shares with sole voting power
pursuant to a voting agreement under (6) below.
(2) Consists of 122,099 shares under the MFC Employee Savings and Stock
Ownership Plan, 140,324 shares held for one member of the Cohodas family
not shown in the table above, and 600,340 shares held by trusts or in
similar accounts for 215 customers other than members of the Cohodas
family.
(3) Includes 248,560 shares owned but included in a voting agreement under (5)
below and 385,126 shares with shared voting power included in a voting
agreement with Howard L. Cohodas of Marquette, Michigan and Lawrence C.
Frank of Yakima, Washington.
(4) Includes 385,126 shares with shared voting power included in a voting
agreement with Howard L. Cohodas and Willard L. Cohodas of Marquette,
Michigan.
(5) Consists of 423,950 shares with sole voting power pursuant to a voting
agreement involving Willard L. Cohodas and Lois W. Cohodas of Marquette,
Michigan, Nancy C. Oberman and Paul E. Oberman of Englewood, Colorado; and
Lynn C. Stahl and Sam Stahl of San Antonio, Texas.
(6) Consists of 415,362 shares owned but included in a voting agreement with
Howard L. Cohodas of Marquette, Michigan and 5,776 shares included in a
voting agreement between Howard L. Cohodas and Willard L. Cohodas of
Marquette, Michigan, and Lawrence C. Frank of Yakima, Washington.
The following table sets forth certain information as of February 28, 1997 as to
the common stock, no par value, of the Corporation owned beneficially by each
nominee, the named executive officers, and by all nominees and named executive
officers of the Corporation as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
----------------------------------------------
SOLE VOTING SHARED VOTING TOTAL SHARES
& INVESTMENT & INVESTMENT BENEFICIALLY PERCENT
NAME POWER(1) POWER OWNED OF CLASS
- ---- ------------ ------------- ------------ --------
<S> <C> <C> <C> <C>
Alfred J. Angeli 5,171 1,207 6,378 *
Kenneth F. Beck 1,990 22,000 23,990 *
Gary L. Butryn 200 600 800 *
Willard M. Carne 234 15,490 15,724 *
Howard L. Cohodas 209,200 1,072,497(2) 1,281,697 22.9%
Willard L. Cohodas 834,260(3) 834,260 14.9%
Clarence R. Fisher 599 1,263 1,862 *
Hugh C. Higley, Jr. 1,142 1,142 *
David Holli 2,149 1,047 3,196 *
Daniel H. Lori 8,413 8,413 *
Wayne Nasi 200 800 1,000 *
Ward L. Rantala 1,507 711 2,218 *
Fred M. Saigh 9,900 12,352 22,252 *
James L. Smith 2,267 1,967 4,234 *
All Directors and
Executive Officers as
a Group (14 persons) 234,559 1,386,907 1,621,466 29.0%
</TABLE>
- ---------------------------
(1) Includes shares vested in the Employee Savings and Stock Ownership Plan for
participating employees.
(2) See note 1 on page 8 for additional information regarding the share
ownership of Mr. H. Cohodas.
(3) See note 3 on page 8 for additional information regarding the share
ownership of Mr. W. Cohodas.
*Less than 1% of the class outstanding.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under federal securities law, the Corporation's directors, certain officers, and
persons holding more than ten percent of the Corporation's common stock are
required to report, within specified monthly and annual due dates, their initial
ownership of the Corporation's common stock and all subsequent acquisitions,
dispositions or other transfers of interest in such securities, if and to the
extent reportable events occur which require reporting by such due dates. The
Corporation is required to describe in this proxy statement whether it has
knowledge that any person required to file such a report may have failed to do
so in a timely manner. In this regard, all of the Corporation's directors,
all officers subject to the reporting requirements and each beneficial owner of
more than ten percent of the Corporation's common stock satisfied such filing
requirements in full, except for Messrs. Frank and Smith, who each inadvertently
filed one late report relating to one transaction each. The foregoing is based
upon reports furnished to the Corporation and written representations and
information provided to the Corporation by the persons required to make such
filings.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The Board of Directors of the Corporation appointed the firm of Crowe, Chizek
and Company LLP, certified public accountants, as auditors for the Corporation,
its member banks and insurance subsidiary for 1996. As of this date, auditors
have not yet been appointed for 1997. The Audit Committee has not completed its
review of audit costs for 1996 and has not recommended auditors for 1997 to the
Board of Directors.
Ernst & Young LLP performed audits of the financial statements for the years
ended December 31, 1995 and 1994. Their reports did not contain an adverse
opinion or a disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles. On May 29, 1996, the
Corporation dismissed the firm of Ernst & Young as independent accountants for
the Corporation. The change of independent accountants was approved by the
Corporation's Board of Directors and its Audit Committee.
During the two years ended December 31, 1995 and from January 1, 1996 through
the effective date of the Ernst & Young termination, there have been no
disagreements between the Corporation and Ernst & Young on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements would have caused Ernst & Young to make
reference to the subject matter of such disagreements in connection with their
report.
A representative of Crowe, Chizek and Company LLP is expected to be present at
the annual meeting of stockholders, will be available to respond to appropriate
questions, and will have the opportunity to make a statement if he desires to do
so.
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Any proposals which stockholders of the Corporation intend to present at the
next annual meeting of the Corporation must be received by November 24, 1997 for
inclusion in the Corporation's proxy statement and proxy form for that meeting.
OTHER MATTERS
As of the date of the proxy statement, the Board of Directors knows of no other
matters to be brought before the meeting. However, if any other matter should be
presented upon which a vote properly may be taken, the proxy holders will act in
accordance with their best judgment.
By Order of the Board of Directors
/s/ Kenneth F. Beck
KENNETH F. BECK
SECRETARY
March 24, 1997
[LOGO] MICHIGAN FINANCIAL CORPORATION
101 WEST WASHINGTON STREET--MARQUETTE, MICHIGAN 49855
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE UNDERSIGNED HEREBY APPOINTS JAMES F. DURANCEAU, RONALD P. MAKI AND LINDA
OLGREN, OR ANY ONE OF THEM, AS PROXIES, AND HEREBY AUTHORIZES THEM TO REPRESENT
AND TO VOTE AS DESIGNATED BELOW, ALL THE SHARES OF COMMON STOCK OF MICHIGAN
FINANCIAL CORPORATION HELD ON RECORD BY THE UNDERSIGNED ON FEBRUARY 28, 1997 AT
THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 29, 1997 OR ANY
ADJOURNMENT THEREOF.
1. ELECTION OF DIRECTORS [ ] FOR all nominees listed below
(EXCEPT AS MARKED TO THE CONTRARY BELOW)
[ ] WITHHOLD AUTHORITY
to vote for nominees listed below
A. Angeli, K. Beck, G. Butryn, W. Carne, H. Cohodas, W. Cohodas, C. Fisher,
H. Higley, Jr., D. Holli, D. Lori, W. Nasi, F. Saigh, and J. Smith.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
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2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting, which the Board of
Directors did not know a reasonable time before the solicitation of the
proxy, was to be presented at the meeting.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
CONTINUED FROM OTHER SIDE
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSAL 1.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as 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
___________________________________________
SIGNATURE IF HELD JOINTLY
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE
