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:
<PAGE>
MICHIGAN FINANCIAL CORPORATION
[LOGO GRAPHIC]
101 WEST WASHINGTON STREET
MARQUETTE, MICHIGAN 49855
March 23, 1998
To the Stockholders:
The 1998 Annual Meeting of Stockholders will be held at the Holiday Inn, U.S.
Highway 41 West, Marquette, Michigan, on Tuesday, April 28, 1998 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 1997 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
<PAGE>
MICHIGAN FINANCIAL CORPORATION
[LOGO GRAPHIC]
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 28, 1998 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 March 2, 1998 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 23, 1998
<PAGE>
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 28, 1998, at
1:30 p.m., local time, and any adjournment thereof .
This Proxy Statement has been mailed on or about March 23, 1998, 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 subsidiary 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
March 2, 1998, 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 5,877,601 shares of common stock of the Corporation
outstanding as of March 2, 1998. 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. Verrette 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 47 Vice President, Angeli Foods Company 1992
Kenneth F. Beck 60 Senior Vice President, Treasurer, and Secretary; 1986
Michigan Financial Corporation
Gary L. Butryn 51 President and General Manager, Mead Publishing 1991
Paper Division, Mead Corporation
Willard M. Carne 65 Owner, Carne's Amoco Service 1985
Howard L. Cohodas 53 Chairman and President, Michigan Financial 1974
Corporation
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
- --------------------- ----- --------------------------------------------------- ---------
<S> <C> <C> <C>
Willard L. Cohodas 83 Executive Vice President, Cohodas Bros. Co. of 1972
Michigan, Real Estate and Investments
Clarence R. Fisher 58 Chairman and President, Upper Peninsula Energy 1994
Corporation and Upper Peninsula Power Company
Hugh C. Higley, Jr. 52 Senior Vice President, Interstate Welding Sales 1987
Corporation
David Holli 60 President, Holli Forest Products, Inc. 1988
Daniel H. Lori 51 Owner, D N Lori Associates, Inc. Office Equipment 1991
Sales and Services
Wayne Nasi 49 President, Wayne Nasi Construction Co., Inc. 1997
Fred M. Saigh 77 Chairman, First National Underwriters, Inc. 1986
James L. Smith 58 President, MFC First National Bank, Escanaba 1980
William C. Verrette 58 Chairman, Champion, Inc., Construction, Ready Mix
Concrete Production, and Equipment Supply and
Distribution
</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 subsidiary 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 1997. Each
director attended 75% or more of the total number of meetings held during 1997
by the Board of Directors or committees thereof on which the director served,
except for Mr. Angeli, who attended 50% of the meetings.
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, Lori, and Nasi. This Committee held four
meetings in 1997. 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, Fisher,
Higley, and Holli, which performs functions similar to those of a Compensation
Committee. This Committee held two meetings in 1997. 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.
<PAGE>
MANAGEMENT REMUNERATION AND TRANSACTIONS
REMUNERATION
The following table sets forth compensation for the three years ended December
31, 1997 of the chief executive officer and of each executive officer whose
total remuneration exceeded $100,000, paid or expensed by the Corporation or its
subsidiaries, during calendar year 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION AWARDS
ANNUAL COMPENSATION ----------------------
------------------------ 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 1997 $190,192 $71,366 0 $3,069
Chief Executive Officer 1996 181,138 67,602 8,400 2,067
1995 172,000 47,767 8,400 1,723
Kenneth F. Beck 1997 104,969 39,625 0 3,069
Chief Financial Officer 1996 100,755 38,723 5,250 2,419
1995 97,100 27,889 5,250 1,212
Ward L. Rantala 1997 81,223 30,443 0 2,322
Vice President -- Human Resources 1996 76,823 29,360 4,200 1,761
1995 73,500 21,024 4,200 873
</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 exercises by the named
executive officers for the year ended December 31, 1997 and options held by each
of them at year end.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR END OPTION VALUES
<TABLE>
<CAPTION>
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 8,400 16,800 $114,744 $123,480
Kenneth F. Beck N/A N/A 5,250 10,500 71,715 77,176
Ward L. Rantala N/A N/A 4,200 8,400 57,372 61,740
</TABLE>
<PAGE>
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 1998 in specified remuneration and years-of-service classifications. At
December 31, 1997 Mr. H. Cohodas had 27 years of service under the plan, Mr.
Beck 19 years, and Mr. Rantala 27 years. The benefit amounts listed in the table
are not subject to reduction for social security benefits or other amounts.
ANNUAL BENEFIT FOR YEARS OF SERVICE INDICATED
HIGHEST CONSECUTIVE 5 YEAR -------------------------------------------------
AVERAGE REMUNERATION 15 YRS. 20 YRS. 25 YRS. 30 YRS. AND OVER
- --------------------------- --------- --------- --------- --------------
$ 100,000 $27,082 $36,109 $45,136 $54,164
150,000 42,082 56,109 70,136 84,164
200,000 45,081 60,109 75,136 90,164
250,000 45,081 60,109 75,136 90,164
300,000 45,081 60,109 75,136 90,164
350,000 45,081 60,109 75,136 90,164
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, subsidiary bank performance and
individual performance. Corporate performance and subsidiary 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.
<PAGE>
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 30% of an executive's base salary, to
be paid out over a three year measurement period. In years prior to 1998, a
maximum of 40% of an executive's base salary could be awarded. Up to 20% may be
earned during the first year of the period and up to 5% in each of the next two
years. In years prior to 1998, the respective amounts could have been up to 20%
and 10%. 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.
The Committee's practice has been to meet each December to consider awards and
to grant options at that time. During 1997, the members decided to defer that
process until January, 1998, in order to have a better basis for evaluation. It
is expected that future awards, if any, will be granted during the month of
January each year.
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.
<PAGE>
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.
By the Personnel Committee: Gary L. Butryn, Chairman, Clarence R. Fisher, Hugh
C. Higley, Jr., David Holli.
REMUNERATION OF DIRECTORS
Directors of the Corporation who are not employees of the Corporation or its
subsidiaries are paid $750 quarterly plus $875 per meeting of the Board of
Directors attended and $300 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 subsidiary banks in the ordinary course of business
during 1997. 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.
<PAGE>
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, 1997. The graph
assumes that the value of an investment in MFC and each index was $100 at
January 1, 1993 and that all dividends were reinvested on a quarterly basis.
[LINE GRAPH]
(1) The Media General Index is compiled by Media General Financial Services, a
financial data publisher. The index is composed of 74 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
-----------------------------------------------
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
MFC 100 129.50 182.24 279.21 242.68 348.17
INDUSTRY INDEX (MEDIA GENERAL) 100 104.36 97.33 141.95 188.44 297.47
BROAD MARKET (NASDAQ) 100 119.95 125.94 163.35 202.99 248.30
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of March 2, 1998 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
& INVESTMENT & INVESTMENT BENEFICIALLY PERCENT
NAME & ADDRESS POWER POWER OWNED (NOTE) OF CLASS (NOTE)
- ------------------------- ------------- ------------------ ---------------- ----------------
<S> <C> <C> <C> <C>
Howard L. Cohodas 224,620 1,131,091(1) 1,355,711 23.1%
Marquette, Michigan
MFC First National Bank 444,161 457,990 902,151(2) 15.3
Marquette, Michigan
Willard L. and Lois W. 881,272(3) 881,272 15.0
(wife) Cohodas
Marquette, Michigan
Lawrence C. Frank 216,943 623,427(4) 840,370 14.3
Yakima, Washington
Paul E. Oberman 19,215 445,139(5) 464,354 7.9
Englewood, Colorado
Sylvia Cohodas 441,628(6) 441,628 7.5
Longboat Key, Florida
</TABLE>
- ------------------
NOTE - THE ACTUAL TOTAL NUMBER OF SHARES OVER WHICH THE PERSONS NAMED IN THE
ABOVE TABLE HAVE VOTING AND/OR INVESTMENT POWER IS 2,939,543, WHICH
REPRESENTS 50.0% OF THE TOTAL OUTSTANDING SHARES; OF THIS TOTAL,
COHODAS FAMILY MEMBERS NAMED IN THE TABLE HAVE VOTING AND/OR INVESTMENT
POWER OVER 2,040,147 SHARES OR 34.7% OF THE TOTAL OUTSTANDING SHARES.
(1) Includes 404,364 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 435,564 shares with sole voting power
pursuant to a voting agreement under (6) below.
(2) Consists of 155,507 shares under the MFC Employee Savings and Stock
Ownership Plan, 147,339 shares held for one member of the Cohodas family not
shown in the table above, and 599,305 shares held by trusts or in similar
accounts for 221 customers other than members of the Cohodas family.
(3) Includes 260,984 shares owned but included in a voting agreement under (5)
below and 404,364 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 404,364 shares with shared voting power included in a voting
agreement with Howard L. Cohodas and Willard L. Cohodas of Marquette,
Michigan.
(5) Consists exclusively of 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 435,564 shares owned but included in a voting agreement with
Howard L. Cohodas of Marquette, Michigan and 6,064 shares included in a
voting agreement between Howard L. Cohodas and Willard L. Cohodas of
Marquette, Michigan, and Lawrence C. Frank of Yakima, Washington.
<PAGE>
The following table sets forth certain information as of March 2, 1998 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 5,740 1,305 7,045 *
Kenneth F. Beck 14,168 11,550 25,718 *
Gary L. Butryn 210 630 840 *
Willard M. Carne 245 16,264 16,509 *
Howard L. Cohodas 224,620 1,131,091(2) 1,355,711 23.1%
Willard L. Cohodas 881,272(3) 881,272 15.0%
Clarence R. Fisher 647 1,443 2,090 *
Hugh C. Higley, Jr. 1,276 1,276 *
David Holli 2,322 1,132 3,454 *
Daniel H. Lori 7,414 7,414 *
Wayne Nasi 210 840 1,050 *
Ward L. Rantala 2,068 799 2,867 *
Fred M. Saigh 23,262 23,262 *
James L. Smith 2,523 1,290 3,813 *
William C. Verrette 1,591 1,591 *
All Directors and
Executive Officers as
a Group (15 persons) 255,620 1,458,004 1,713,624 29.2%
</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 that one report with respect to one acquisition
transaction was filed late on behalf of Mr. H. Cohodas. This inadvertent
discrepancy was corrected promptly upon being brought to Mr. Cohodas' attention.
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.
<PAGE>
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
and its subsidiaries for 1997. As of this date, auditors have not yet been
appointed for 1998. The Audit Committee has not completed its review of audit
costs for 1997 and has not recommended auditors for 1998 to the Board of
Directors.
Prior to 1996, the firm of Ernst & Young LLP served as auditors of the
Corporation. On May 29, 1996, after a review of proposals from several firms and
an evaluation of the needs of the Corporation and the capabilities of the
candidates, the Corporation dismissed the firm of Ernst & Young and appointed
Crowe, Chizek and Company as auditors for 1996. The change of independent
accountants was approved by the Corporation's Board of Directors and its Audit
Committee.
During the year ending December 31, 1995, and the subsequent period from January
1, 1996, through the date hereof, 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, if not resolved to its satisfaction, would have caused Ernst & Young to
make reference thereto in its report on the financial statements for 1995. Ernst
& Young's report on the financial statements for 1995 did not contain an adverse
opinion or a disclaimer of opinion nor was it qualified or modified as to
uncertainty, audit scope or accounting principles.
A representative of Crowe, Chizek and Company 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 1999 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 23, 1998 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 23, 1998
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MICHIGAN FINANCIAL CORPORATION
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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 Proxy 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 MARCH 2, 1998 AT THE ANNUAL
MEETING OF STOCKHOLDERS TO BE 101 WEST WASHINGTON STREET--MARQUETTE, MICHIGAN
49855 HELD ON APRIL 28, 1998 OR ANY ADJOURNMENT THEREOF.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE CONTRARY BELOW) 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, J. Smith, and W.C. Verrette.
(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
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MICHIGAN FINANCIAL CORPORATION
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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 _______________________ 1998
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SIGNATURE
__________________________________
SIGNATURE IF HELD JOINTLY
PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE
