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
[ ] 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 Section 240.14a-11(c) or
Section 240.14a-12
Bando McGlocklin Capital 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 transaction 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>
[BMCC Logo]
April 8, 1998
Dear Shareholder:
On behalf of the Board of Directors and management of Bando
McGlocklin Capital Corporation (the "Company"), we cordially invite you to
attend the Annual Meeting of Shareholders of the Company, to be held at
4:00 p.m. on Thursday, May 7, 1998, in the Lounge Room of the Milwaukee
Athletic Club, 758 North Broadway, Milwaukee, Wisconsin. The accompanying
Notice of Annual Meeting of Shareholders and Proxy Statement discuss the
business to be conducted at the meeting. A copy of the Company's Form 10-
K is also included in this booklet. At the meeting we shall report on
Company operations and the outlook for the year ahead.
Your Board of Directors has nominated four persons to serve as
directors, each of whom are incumbent directors. In addition, the Proxy
Statement contains a proposal to approve the Bando McGlocklin Capital
Corporation 1997 Stock Option Plan.
The Board of Directors recommends that you vote your shares for
the director nominees and in favor of the proposal to approve the 1997
Stock Option Plan.
We encourage you to attend the meeting in person. Whether or
not you plan to attend, however, please complete, sign and date the
enclosed proxy and return it in the accompanying postpaid return envelope
as promptly as possible. This will ensure that your shares are
represented at the meeting.
We look forward with pleasure to seeing and visiting with you at
the meeting.
Very truly yours,
BANDO McGLOCKLIN CAPITAL
CORPORATION
/s/ George R. Schonath
George R. Schonath
President and Chief Executive Officer
<PAGE>
[BMCC Logo]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 7, 1998
TO THE SHAREHOLDERS OF BANDO McGLOCKLIN CAPITAL CORPORATION
Notice is hereby given that the Annual Meeting of Shareholders
of Bando McGlocklin Capital Corporation (the "Company"), will be held in
the Lounge Room of the Milwaukee Athletic Club, 758 North Broadway,
Milwaukee, Wisconsin, on Thursday, May 7, 1998 at 4:00 p.m., for the
purpose of considering and voting upon the following matters:
1. To elect four (4) directors, two (2) of whom will be
elected by holders of the Preferred Stock, to hold office until
the next annual meeting of shareholders and until their
successors are duly elected and qualified.
2. To consider and act upon a proposal to approve the
Bando McGlocklin Capital Corporation 1997 Stock Option Plan.
3. To consider and act upon such other business as may
properly come before the meeting or any adjournments or
postponements thereof.
The Board of Directors is not aware of any other business to
come before the meeting. Shareholders of record at the close of business
on March 27, 1998, are the shareholders entitled to vote at the meeting
and any adjournments or postponements thereof.
By Order of the Board of Directors
/s/ George R. Schonath
George R. Schonath
President and Chief Executive Officer
Pewaukee, Wisconsin
April 8, 1998
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE
OF FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED IF MAILED WITHIN THE UNITED STATES.
<PAGE>
[BMCC Logo]
W239 N1700 Busse Road
P.O. Box 190
Pewaukee, Wisconsin 53072
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 7, 1998
This Proxy Statement is furnished in connection with the
solicitation on behalf of the Board of Directors of Bando McGlocklin
Capital Corporation (the "Company") of proxies to be used at the annual
meeting of shareholders which will be held in the Lounge Room of the
Milwaukee Athletic Club, 758 North Broadway, Milwaukee, Wisconsin, on
Thursday, May 7, 1998 at 4:00 p.m., and all adjournments or postponements
thereof (the "Annual Meeting"), for the purposes set forth in the attached
Notice of Annual Meeting of Shareholders.
Voting Rights and Proxy Information
Execution of a proxy given in response to this solicitation will
not affect a shareholder's right to attend the Annual Meeting and to vote
in person. Presence at the Annual Meeting of a shareholder who has signed
a proxy does not in itself revoke a proxy. Any shareholder giving a proxy
may revoke it at any time before it is exercised by giving notice thereof
to the Company in writing or in open meeting.
All shares of Common Stock and Preferred Stock represented at
the meeting by properly executed proxies received prior to or at the
meeting, and not revoked, will be voted at the meeting in accordance with
the instructions thereon. The shares represented by executed but unmarked
proxies will be voted FOR the persons nominated for election as directors,
FOR the ratification of the Bando McGlocklin Capital Corporation 1997
Stock Option Plan (the "1997 Plan") and on such other business or matters
which may properly come before the Annual Meeting in accordance with the
best judgment of the persons named as proxies in the enclosed form of
proxy. A majority of the shares of the Common Stock, 6-2/3 cents par
value (the "Common Stock"), and the Series A Adjustable Rate Cumulative
Preferred Stock, $.01 par value (the "Preferred Stock"), as one class,
present in person or represented by proxy and entitled to vote, shall
constitute a quorum for purposes of the meeting. Abstentions and broker
non-votes will be counted for purposes of determining a quorum but will
not affect the vote required for approval of the election of directors or
any proposal. Other than the election of directors and the proposal to
approve the 1997 Plan, the Board has no knowledge of any matters to be
presented for action by the shareholders at the Annual Meeting.
Only holders of record of Common Stock and Preferred Stock at
the close of business on March 27, 1998, are entitled to vote at the
Annual Meeting and at any adjournment or postponement thereof. Holders of
Preferred Stock are entitled to vote, as a separate voting class, for the
election of two (2) directors of the Company. In addition to a quorum of
the shares of Common Stock and Preferred Stock, as one class, a separate
quorum representing a majority of the shares of Preferred Stock shall be
necessary in connection with the voting for such directors. In addition,
holders of Preferred Stock are entitled to vote with holders of Common
Stock, as one voting class, for the election of the remaining two (2)
directors of the Company and the ratification of the 1997 Plan. On
March 27, 1998, the Company had outstanding and entitled to vote 3,689,102
shares of Common Stock and 674,791 shares of Preferred Stock. The record
holder of each outstanding share is entitled to one vote. For all other
matters, the affirmative vote of a majority of the votes cast in person or
by proxy with a quorum present shall constitute shareholder approval.
The Board of Directors would like to have all shareholders
represented at the meeting. Whether or not you plan to attend, please
complete, sign and date the enclosed proxy and return it in the
accompanying postpaid return envelope as promptly as possible. A proxy
given pursuant to this solicitation may be revoked at any time before it
is voted. Proxies may be revoked by: (i) duly executing and delivering
to the Secretary of the Company a later dated proxy relating to the same
shares prior to the exercise of such proxy, (ii) filing with the Secretary
of the Company at or before the meeting a written notice of revocation
bearing a later date than the proxy, or (iii) attending the meeting and
voting in person (although attendance at the meeting will not in and of
itself constitute revocation of a proxy). Any written notice revoking a
proxy should be delivered to Susan J. Hauke, Secretary, at
W239 N1700 Busse Road, P.O. Box 190, Pewaukee, Wisconsin 53072.
ELECTION OF DIRECTORS
At the Annual Meeting, the holders of Preferred Stock will
elect, voting as a separate class, two (2) directors of the Company to
hold office until the next annual meeting and until their successors are
duly elected and qualified. Unless the holders of Preferred Stock
otherwise specify, the shares represented by the proxies received for the
election of two (2) directors will be voted in favor of the election as
directors of Robert A. Cooper and David A. Geraldson. The holders of the
Common Stock and the Preferred Stock will elect, voting as one class,
two (2) directors of the Company to hold office until the next annual
meeting and until their successors are duly elected and qualified. Unless
the shareholders otherwise specify, the shares represented by the proxies
received for the election of two (2) directors will be voted in favor of
the election as directors of Peter A. Fischer and Albert O. Nicholas.
Proxies of holders of Common Stock cannot be voted for more than two (2)
persons and proxies of holders of Preferred Stock cannot be voted for more
than four (4) persons. The Board has no reason to believe that any of the
listed nominees will be unable or unwilling to serve as a director if
elected. However, in the event that any of the nominees should be unable
or for good cause unwilling to serve, the shares represented by proxies
received will be voted for substitute nominees selected by the Board.
Directors will be elected by a plurality of the votes cast at the Annual
Meeting (assuming a quorum for each vote is present). Consequently, any
shares not voted at the Annual Meeting, whether due to abstentions, broker
non-votes or otherwise, will have no impact on the election of directors.
Votes will be tabulated by inspectors of election appointed by the Board.
The following table sets forth certain information, as of
March 31, 1998, about the Board's nominees for election as directors of
the Company. Except as otherwise noted, each nominee has engaged in the
principal occupation or employment and held the offices shown for more
than the past five years. The table provides information as of March 31,
1998, as to the age, principal occupation, background for the last five
years and period of service as a director for each person.
Principal Occupation;
Director Office, if any, Held in
Name Since Age the Company; Other Directorships
Robert A. Cooper 1987 71 Senior Vice President of Dain
Rauscher Incorporated (a securities
brokerage firm) since September
1988; Executive Vice President and
a Director of Milwaukee Financial
Group, Inc. (a financial services
holding company) from its
incorporation in 1986 until its
acquisition by Dain Bosworth
Incorporated in September 1988;
Chairman of the Board of The
Milwaukee Company (a securities
brokerage firm and the principal
subsidiary of Milwaukee Financial
Group, Inc.) from 1978 to September
1988.
Peter A. Fischer 1983 55 Associate Pastor of Portview
Christian Center, Port Washington,
Wisconsin since 1992; a former
Director, and from 1981 to 1989,
the President and Chief Executive
Officer of Medalist Industries,
Inc. (a manufacturer of industrial
and consumer products); a former
Director of Gehl Company (a
manufacturer and distributor of
agricultural and light industrial
and construction equipment).
David A. Geraldson 1983 67 President since 1993 and prior
thereto Secretary and Treasurer of
Precision Gears, Inc. (a
manufacturer of gears, splined
shafts, speed reducers and worm
gear winches).
Albert O. Nicholas 1995 67 Director and President since 1967
of Nicholas Company, Inc., a
registered investment advisor; and
President and a director of six
registered investment companies of
which Nicholas Company, Inc. is the
investment advisor.
All of the Company's directors will hold office until the next
annual meeting of shareholders and until their respective successors are
duly elected and qualified. There are no arrangements or understandings
between the Company and any other person pursuant to which any of the
Company's directors have been selected for their respective positions.
THE BOARD RECOMMENDS THE FOREGOING NOMINEES FOR ELECTION AS
DIRECTORS AND URGES THE HOLDERS OF PREFERRED STOCK TO VOTE "FOR" MESSRS.
COOPER AND GERALDSON AND URGES EACH SHAREHOLDER TO VOTE "FOR" MESSRS.
FISCHER AND NICHOLAS. SHARES REPRESENTED AT THE ANNUAL MEETING BY
EXECUTED BUT UNMARKED PROXIES WILL BE VOTED "FOR" ALL APPROPRIATE
NOMINEES.
BOARD OF DIRECTORS
The Board has standing Compensation and Audit Committees, but
does not have a nominating committee. The Compensation Committee, which
presently consists of Messrs. Fischer, Geraldson and Cooper, did not meet
or make any salary adjustments during the fiscal year ended December 31,
1997. The Compensation Committee advises the Board on matters relating to
the compensation of the Company's directors, officers and other managerial
personnel, including salary rates, participation in any incentive bonus
plans, fringe benefits, the grant of stock options under the Company's
1990 and 1993 Incentive Stock Option Plans and other forms of
compensation. If approved by shareholders at the Annual Meeting, the
Compensation Committee will administer the 1997 Plan.
The Audit Committee, which presently consists of Messrs. Cooper,
Geraldson and Nicholas, held one (1) meeting in the fiscal year ended
December 31, 1997. The Audit Committee reviews with the Company's
independent auditors the plan and scope of their audit, findings and
conclusions of their auditing engagement, the Company's procedures for
internal auditing, the adequacy of the Company's system of internal
controls and the accounting principles and policies of the Company;
evaluates the independence of the independent auditors and the quality of
the professional services provided by the independent auditors' and
recommends to the Board the engagement, continuation or discharge of the
independent auditors.
The Board held five (5) meetings in the fiscal year ended
December 31, 1997. Each director attended at least 75% of the aggregate
of (a) the total number of meetings of the Board and (b) the total number
of meetings held by all committees of the Board on which he served.
Directors are paid an annual retainer fee of $5,000 plus a $750
fee for each meeting of the Board or a committee attended. There are no
directors who are officers of the Company.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect
to the beneficial ownership of the Company's Common Stock at March 31,
1998, by each person known by the Company to be the beneficial owner of
more than five percent of the outstanding Common Stock, by each director
or nominee, by each executive officer named in the Summary Compensation
Table set forth below, and by all directors and executive officers of the
Company as a group. No executive officer or director of the Company
beneficially owns any shares of Preferred Stock.
Amount and Nature of Beneficial Ownership
Amount and
Nature of
Name of Beneficial Beneficial Percent
Owner(1) Ownership(2) of Class
George R. Schonath 510,269(3)(4) 13.2%
Jon McGlocklin 249,546(4)(5) 6.8%
Salvatore L. Bando 262,625(4)(6) 7.1%
Robert A. Cooper 21,000(7) *
Peter A. Fischer 29,388(8) *
David A. Geraldson 69,639(9) 1.9%
Albert O. Nicholas 82,000(10) 2.2%
All executive officers
and directors as a group
(8 persons) 778,461(11) 20.1%
_______________
* Less than one percent (1%).
(1) The address of each person who holds in excess of 5% of the Common
Stock identified in this table is W239 N1700 Busse Road, P.O.
Box 190, Pewaukee, Wisconsin 53072-0190.
(2) Includes the following shares subject to stock options which were
exercisable as of or within 60 days of March 31, 1998: Mr. Schonath,
184,950 shares; Mr. McGlocklin, 3,000 shares, and all directors and
executive officers as a group, 187,950 shares.
(3) Includes (a) 794 shares held by children, (b) 293,778 shares held by
the Schonath Family Partnership for which Mr. Schonath is General
Partner and (c) 19,307 shares held by the Company's 401(k) profit
sharing plan on behalf of this individual.
(4) Includes a total of 146,097 shares held by BMS Investment
Corporation, a Wisconsin corporation, all of the outstanding capital
stock of which is owned by Messrs. Bando and McGlocklin and by the
Schonath Family Partnership. Mr. Bando's address is c/o Milwaukee
Brewers Baseball Club, P.O. Box 3099, Milwaukee,
Wisconsin 53201-3099.
(5) Includes (a) 42,314 shares held jointly with or by spouse and
(b) 5,248 shares held by the Company's 401(k) profit sharing plan on
behalf of this individual.
(6) Includes (a) 54,005 shares held jointly with or by spouse and/or by
children and (b) 6,031 shares held by the Company's 401(k) profit
sharing plan on behalf of this individual only.
(7) Includes 1,000 shares held jointly with or by spouse.
(8) Includes (a) 13,267 shares held jointly with or by spouse and/or by
children and (b) 5,760 shares held by a Keough plan on behalf of this
individual.
(9) Includes (a) 7,977 shares held jointly with or by spouse and
(b) 49,138 shares owned by the Precision Gears, Inc. profit sharing
plan for which Mr. Geraldson acts as co-trustee.
(10) Includes 55,000 shares held by the Nicholas Equity Income Fund, Inc.
(the "Fund"), of which Mr. Nicholas disclaims beneficial ownership.
Mr. Nicholas is President of the Fund and of Nicholas Company, Inc.,
the investment adviser for the Fund.
(11) Assumes the exercise of all options which were currently exercisable
as of or exercisable within 60 days of March 31, 1998. The number of
shares reflected as beneficially owned by all directors and executive
officers does not include the shares owned by Mr. Bando.
Section 16(a) of the Exchange Act requires the Company's
executive officers and directors and persons who own more than 10% of the
Common Stock to file reports of ownership with the Securities and Exchange
Commission and with the exchange on which the shares of Common Stock are
traded. Such persons are also required to furnish the Company with copies
of all Section 16(a) forms they file. Based solely upon the Company's
review of such forms and, if appropriate, representations made to the
Company by any such reporting person concerning whether a Form 5 was
required to be filed for the 1997 fiscal year, the Company is not aware
that any of its directors and executive officers or 10% shareholders
failed to comply with the filing requirements of Section 16(a) during the
period commencing January 1, 1997 through December 31, 1997.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the
compensation paid for the last three fiscal years to the Company's
President and Chief Executive Officer. There were no other executive
officers of the Company whose aggregate salary and bonus exceeded $100,000
for the fiscal year ended December 31, 1997. The person named in the
table below is sometimes referred to herein as the named executive
officer.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term
Annual Compensation Compensation Awards
(a) (b) (c) (d) (e) (f) (g) (h)
Securities
Other Annual Restricted Underlying All Other
Name and Salary Bonus Compensation Stock Option/SARs Compen-
Principal Position Year ($)(1) ($) ($) Awards($) (#) sation($)
<S> <C> <C> <C> <C> <C> <C> <C>
George R. Schonath, 1997 $233,750 $ - $ - $ - 184,950 $ 85,217(2)
President and Chief 1996 251,019 50,000 - - - 78,487(3)
Executive Officer 1995 226,018 10,750 - - - 155,913(4)
(1) Includes amounts deferred under the Company's 401(k) plan.
(2) Consists of (a) $55,987 for the Company's contribution for supplemental retirement benefits, (b) $8,000 for the Company's
contribution to the 401(k)/profit sharing plan, (c) $8,000 for the Company's contribution to the money purchase pension
plan on behalf of this individual, and (d) $13,230 representing a cash payment of $.20 per stock option as a result of
the Company's payment of a return of capital dividend.
(3) Includes profit sharing contributions that were earned in the period July 1, 1995 to December 31, 1995, but paid in the
twelve months ended December 31, 1996.
(4) Includes profit sharing contributions that were earned in the period July 1, 1994 to December 31, 1994, but paid in the
twelve months ended December 31, 1995.
</TABLE>
1990 and 1993 Incentive Stock Option Plans
The Company has in effect the Bando McGlocklin Capital
Corporation 1990 Incentive Stock Option Plan (the "1990 Plan") and the
Bando McGlocklin Capital Corporation 1993 Incentive Stock Option Plan (the
"1993 Plan") pursuant to which there are outstanding options to purchase
an aggregate of 20,920 shares held by a senior vice-president of the
Company. As of December 31, 1997, there were 68,138 and 90,000 shares of
Common Stock available for issuance under the 1990 Plan and the 1993 Plan,
respectively. If the 1997 Plan is approved by the shareholders, the
Compensation Committee does not intend to issue any additional options
under the 1990 Plan and the 1993 Plan. Mr. Schonath holds no options
under these plans.
1997 Stock Option Plan
The Company has in effect the 1997 Plan pursuant to which
options to purchase Common Stock may be granted to key employees
(including executive officers) of the Company and its subsidiaries. The
following table presents certain information as to grants of stock options
made during fiscal 1997 to Mr. Schonath. No such options may be exercised
without approval of the 1997 Plan by the shareholders. No other executive
officer was granted options in fiscal 1997.
<TABLE>
Option Grants in 1997 Fiscal Year
<CAPTION>
Individual Grants
Percent of
Number of Total
Securities Options
Underlying Granted to Exercise Potential Realizable Value
Options Employees or Base at Assumed Annual Rates
Granted in Fiscal Price Expiration of Stock Price Appreciation
(#)(1) Year ($/Share) Date For Option Term(2)
Name
<S> <C> <C> <C> <C> <C> <C>
George R. 108,802 57% $10.83 02/02/07 $741,042.68 $1,877,947.64
Schonath 76,148 40% 11.83 06/25/07 566,527.67 1,435,692.36
_______________
(1) The options reflected in the table (which are nonstatutory options for purposes of the Internal Revenue Code of 1986, as
amended) were granted on February 3, 1997 and June 25, 1997. Such options were immediately vested on the date of grant.
(2) The potential realizable values set forth under the columns represent the difference between the stated option exercise
price and the market value of the Common Stock based on certain assumed rates of stock price appreciation and assuming
that the options are exercised on their stated expiration date; the potential realizable values set forth do not take
into account applicable tax and expense payments which may be associated with such option exercises. Actual realizable
value, if any, will be dependent on the future stock price of the Common Stock on the actual date of exercise, which may
be earlier then the stated expiration date. The 5% and 10% assumed rates of stock price appreciation over the ten-year
exercise period of the options used in the table above are mandated by rules of the Securities and Exchange Commission
and do not represent the Company's estimate or projection of the future price of the Common Stock on any date. There can
be no assurance that the stock price appreciation rates for the Common Stock assumed for purposes of this table will
actually be achieved.
</TABLE>
The following table sets forth information regarding the fiscal year-
end value of unexercised options held by the named executive officers.
Mr. Schonath was the only named executive officer who held options to
acquire Common Stock on December 31, 1997.
<TABLE>
Fiscal Year-End Option Values
<CAPTION>
Number of Securities
Shares Underlying Unexercised Value of Unexercised
Acquired on Value Options at Fiscal In-the-Money Options
Name Exercise (#) Realized ($) Year-End (#) at Fiscal Year-End ($)(1)
Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
George R. Schonath 11,440 $ 64,350 184,950 - $77,679 -
______________
(1) The dollar values are calculated by determining the difference between the fair market value of the
underlying Common Stock and the exercise price of the options at fiscal year-end.
</TABLE>
Compensation Committee Interlocks and Insider Participation
In November 1996, the Compensation Committee considered and
approved the compensation packages of Mr. George R. Schonath and
Mr. Jon McGlocklin, currently a senior vice president of the Company. The
Compensation Committee is composed of Robert A. Cooper, David A. Geraldson
and Peter A. Fischer. No member of the Compensation Committee is a
current or former officer or employee of the Company or any of its
subsidiaries. Messrs. McGlocklin and Schonath do not participate in
decisions regarding their respective compensation.
Compensation Committee Report
The Compensation Committee of the Board is responsible for all
aspects of the Company's compensation package offered to its executive
officers, including the named executive officer. The Compensation
Committee determines the compensation package (including the grant of
stock options pursuant to the 1990 Plan, the 1993 Plan and the 1997 Plan)
to be paid to each executive officer.
Executive Compensation Policies. The Company's executive
compensation program is intended to establish a relationship between
compensation and the Company's business strategies as well as the
Company's goal of maintaining and improving profitability and maximizing
long-term shareholder value. The focus of compensation decisions is on
the achievement of long-term performance objectives as opposed to the
attainment of short-term, narrowly defined goals. The focus on long-term
performance objectives is intended to avoid unwarranted adjustments in
executive compensation based solely on short-term swings (either up or
down) in the Company's markets.
In recommending and establishing levels of executive
compensation, it is the policy of the Compensation Committee to (a) offer
competitive compensation packages in order to attract and retain key
executive officers crucial to the Company's long-term success; (b)
provide, on a limited basis, performance-based compensation opportunities
(including equity-based awards) which allow executive officers to earn
rewards for long-term strategic management and the enhancement of
shareholder value; (c) establish a relationship between executive
compensation and the Company's annual and long-term strategic goals; and
(d) provide compensation programs which recognize and reward individual
initiative and achievement.
Executive Compensation Package. As reflected under the section
entitled "Executive Compensation," the Company's executive compensation
package consists primarily of salary and to a limited extent, bonus awards
and stock option grants, as well as benefits under the employee benefits
plans offered by the Company.
The Compensation Committee awarded a base salary increase to its
Chief Executive Officer for the fiscal year ended December 31, 1997 from
$237,038 to $265,000. However, since Mr. Schonath also serves as the
President and Chief Executive Officer of InvestorsBancorp, Inc., and its
wholly-owned subsidiary InvestorsBank, Mr. Schonath's salary was allocated
between the Company and InvestorsBancorp, Inc. and InvestorsBank during
1997, so that Mr. Schonath actually received $233,750 as salary from the
Company.
Based on the criteria enumerated above, the Compensation
Committee awarded options to purchase 184,950 shares of common stock to
its Chief Executive Officer at prices equal to the fair market value of
the Common Stock on the dates of grant.
Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), limits deductibility for federal income tax purposes of
compensation in excess of $1 million paid to the Chief Executive Officer
and certain executive officers unless certain requirements are met. The
Compensation Committee does not believe that in the foreseeable future the
annual compensation of any executive officer will be subject to the limit.
Compensation Committee Members
Robert A. Cooper
David A. Geraldson
Peter A. Fischer
PERFORMANCE INFORMATION
The following graph compares on a cumulative basis change since
December 31, 1992 in (a) the total shareholder return on the Common Stock,
(b) the total return of companies in the Nasdaq Stock Market Index
("Nasdaq U.S."), and (c) the total shareholder return of companies in the
Nasdaq Stocks Miscellaneous Investing Index ("Nasdaq MI") consisting of a
peer group of publicly-traded REITs. The total return information
presented in the graph assumes the reinvestment of dividends. The graph
assumes $100 was invested on December 31, 1992 in Common Stock, the Nasdaq
U.S. and the Nasdaq MI.
[Performance Graph]
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
Bando McGlocklin
Capital Corporation $100 $140 $126 $129 $125 $151
Nasdaq U.S. $100 $115 $112 $159 $195 $240
Nasdaq MI $100 $143 $119 $139 $170 $221
_________________
(1) During the period from December 31, 1992 to December 31, 1996, the
Company was registered under the Investment Company Act of 1940 as a
closed-end investment company, but its shares of Common Stock were
traded on the Nasdaq Stock Market. As of January 1, 1997, the
Company is a reporting company under the Securities Exchange Act of
1934, as amended, and its shares of common stock are still traded on
the Nasdaq Stock Market.
RELATED PARTY TRANSACTIONS
The Company and InvestorsBank (the "Bank") purchase loan
participations from each other from time to time and, pursuant to a
Management Services and Allocation of Expenses Agreement, by and between
the Company and the Bank, the Bank performs certain loan servicing and
administration services to the Company. Additional transactions may be
expected to take place in the future. All outstanding loans, commitments
to loan, transactions in repurchase agreements and loan participation and
servicing relationships, in the opinion of management, were made in the
ordinary course of business, 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
the normal risk of collectibility or present other unfavorable features.
The Bank received an aggregate of $229,285 in loan servicing and
administration fees from the Company in 1997. The Bank also subleases
space for its main offices from the Company. The Company leases its
office space from Bando McGlocklin Real Estate Investment Corp.
("BMREIC"). The annual rent payable by the Bank under the sublease,
including real estate taxes, utilities and furnishings, is approximately
$120,000, which represents the Bank's pro rata share of the Company's
occupancy expense. The Company believes the terms of the sublease with
the Bank are on substantially the same terms and conditions as could be
obtained from unrelated third parties. Messrs. George R. Schonath, the
Company's President and Chief Executive Officer, and Jon McGlocklin, the
Company's Senior Vice President, own SKBM, Inc., a company which provides
management services to BMREIC. In 1997, BMREIC paid approximately
$362,000 to SKBM, Inc. for such services.
It is anticipated that, subject to the approval of BMREIC's
shareholders, BMREIC will merge into Bando McGlocklin Small Business
Lending Corporation ("BMSBLC"), a wholly-owned subsidiary of the Company,
for cash consideration of $10.65 per share. If such merger is approved,
it is anticipated that SKBM, Inc. shall provide management services to
BMSBLC under an agreement substantially similar to the current agreement
with BMREIC.
During fiscal 1997, the Company and Mr. Schonath agreed to
terminate the incentive stock options to purchase (a) 17,160 shares of
common stock at $8.00 per share granted to Mr. Schonath under the 1990
Plan, (b) 37,548 shares of common stock at $13.25 per share granted to Mr.
Schonath under the 1990 Plan and (c) 10,000 shares of common stock at
$14.50 per share granted to Mr. Schonath under the 1993 Plan (the
"Canceled Options"). The Canceled Options were not currently exercisable
and the Company made an aggregate cash payment of $96,928.50 to Mr.
Schonath, which equaled the aggregate excess of the fair market value of
one share of common stock on the date of cancellation over the exercise
price multiplied by the number of option shares that were canceled.
APPROVAL OF THE 1997 PLAN
General
The Board has unanimously adopted the 1997 Plan contingent upon
shareholder approval at the Annual Meeting. The aggregate number of
shares authorized for issuance under the 1997 Plan is 200,000 (subject to
adjustment in order to prevent dilution in certain cases described below).
As of the date of this Proxy Statement, options covering an aggregate of
184,950 shares were outstanding under the 1997 Plan. The 1997 Plan
provides that no employee was permitted to be granted options that could
result in the employee receiving more than 185,000 shares of Common Stock
in any single fiscal year (subject to adjustment in order to prevent
dilution in certain cases as described below).
The 1997 Plan was adopted by the Board on February 3, 1997 and
was amended on June 25, 1997.
The text of the 1997 Plan, is set forth in Appendix A to this
Proxy Statement. A description of the 1997 Plan is set forth below and is
qualified in its entirety by reference to the complete text of the 1997
Plan.
Purpose of the 1997 Plan
The 1997 Plan permits the grant of options to purchase shares of
Common Stock to key employees (including officers) of the Company and its
subsidiaries. The purpose of the 1997 Plan is to promote the best
interests of the Company and its shareholders by providing key employees
of the Company and its subsidiaries with an opportunity to acquire a
proprietary interest in the Company. It is intended that the 1997 Plan
will promote continuity of management and increased incentive and personal
interest in the welfare of the Company by employees of the Company and its
subsidiaries. It is intended that only nonqualified stock options may be
issued pursuant to the 1997 Plan.
Administration
The 1997 Plan is administered by the Compensation Committee of
the Board, which must consist of at least two directors of the Company,
each of whom shall qualify as a "non-employee director" within the meaning
of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, or
any successor rule or regulation and an "outside director" within the
meaning of Section 162(m) of the Code and any regulations promulgated
thereunder. If at any time the Compensation Committee shall not be in
existence or not consist of directors who are qualified as "non-employee
directors" and "outside directors" as defined above, the Board shall
administer the 1997 Plan.
The Compensation Committee has full authority and discretion,
subject to the express provisions of the 1997 Plan, to determine with
respect to employees, among other things, (a) the employees to whom, and
the price at which, options will be granted, (b) the option period (which
may not exceed ten years), (c) the number of shares subject to each
option, and (d) the other terms and conditions of any option granted under
the 1997 Plan.
Eligibility
Options may be granted under the 1997 Plan to key employees of
the Company or its subsidiaries (including officers and employee-directors
of the Company or its subsidiaries).
Approximately two persons are currently eligible to receive
option grants under the 1997 Plan.
Awards Under the 1997 Plan; Available Shares
The maximum number of shares of Common Stock for which options
are permitted to be granted under the 1997 Plan is 200,000, subject to
adjustment in order to prevent dilution in certain cases as described
below. In the event that all or any portion of an option granted under
the 1997 Plan expires unexercised, is canceled or terminates, the shares
then subject to such option will again be available for the granting of
additional options under the 1997 Plan. The 1997 Plan provides that no
employee participant may be granted options that could result in such
employee receiving more than 185,000 shares of Common Stock in any single
fiscal year under the 1997 Plan, subject to adjustment to prevent dilution
in certain cases described below.
Terms of Options
Grants to Employees
The option price per share of any option granted to an employee
is to be determined by the Compensation Committee, but may not be less
than 100% of the fair market value of a share of Common Stock on the date
the option is granted. Unless otherwise determined by the Compensation
Committee to the extent permitted by the 1997 Plan, the fair market value
of a share of Common Stock on the date of grant will be equal to the last
sale price of the Common Stock on The Nasdaq Stock Market on the trading
date preceding the date on which the option is granted. The last sale
price of the Common Stock on The Nasdaq Stock Market on March 31, 1998 was
$11.50 per share.
Options granted to employees may be exercised in whole or in
part at any time after the date of grant, except as limited by, among
other provisions, any vesting period set forth in the applicable option
agreement. An option granted under the 1997 Plan to an employee generally
may be exercised only while the recipient is an employee of the Company or
a subsidiary thereof and only if the employee has been continuously so
employed since the date the option was granted. The term of each option
shall be as determined by the Compensation Committee.
Payment of Exercise Price; Nonassignability
The purchase price for shares of Common Stock acquired upon
exercise of options under the 1997 Plan must be paid (a) by delivery of
cash and/or securities of the Company having a then Fair Market Value
equal to the option price or (b) by delivery (including by fax) to the
Company or its designated agent of an executed irrevocable option exercise
form together with irrevocable instructions to a broker-dealer to sell or
margin a sufficient portion of the shares and deliver the sale or margin
loan proceeds directly to the Company to pay for the option price. No
shares of Common Stock will be issued under the 1997 Plan until full
payment therefor has been made.
Options granted under the 1997 Plan are not transferable or
assignable otherwise than by will or by the laws of descent and
distribution and may be exercised during the life of the participant only
by the participant, except that a participant may, to the extent allowed
by the Compensation Committee and in a manner specified by the
Compensation Committee, (a) designate in writing a beneficiary to exercise
the option after the employee's death and (b) transfer any option.
Capital Adjustments
In the event of a capital adjustment resulting from a stock
dividend (other than a stock dividend in lieu of an ordinary cash
dividend), stock split, reorganization, spin-off, split-up or distribution
of assets to shareholders, recapitalization, merger, consolidation, return
of capital, combination or exchange of shares or the like, the number of
shares of Common Stock subject to the 1997 Plan, the limit imposed on the
number of options that may be granted to any one participant and the
number of shares under option in outstanding option agreements will be
adjusted in a manner consistent with such capital adjustment; provided,
however, that no such capital adjustment will require the Company to sell
any fractional shares and the adjustment will be limited accordingly. The
option price of any shares subject to an outstanding option agreement will
be adjusted so that there will be no change in the aggregate exercise
price payable upon exercise of any such option. The determination of the
Compensation Committee as to any capital adjustment is final.
Amendment and Termination
The Board may at any time and from time to time amend, suspend
or terminate the 1997 Plan; provided, however, that shareholder approval
of any amendment must also be obtained if then required by (i) the Code or
any rules promulgated thereunder (to enable the Company to comply with
Section 162(m) of the Code), or (ii) the listing requirements of any
principal securities exchange or market on which the Common Stock is then
traded (in order to maintain the listing or quotation of the shares
thereon). No amendment or termination of the 1997 Plan may, without the
participant's consent, adversely affect any of the rights of such
participant under any option previously granted to such participant.
Termination of the Plan shall not affect the rights of such Participant
Withholding
Under the 1997 Plan, the Company may deduct and withhold from
any cash otherwise payable to a participant (whether payable as salary,
bonus or other compensation) such amount as may be required to satisfy the
Company's obligation to withhold Federal, state or local taxes. In the
event such amount withheld is insufficient for such purpose, the Company
may require the participant to pay to the Company an amount necessary to
satisfy the obligation to withhold any such taxes. The Compensation
Committee has discretionary authority to permit a participant who is an
employee to satisfy the Company's withholding tax requirements by electing
to have the Company withhold shares of Common Stock otherwise issuable to
such participant.
Certain Federal Income Tax Consequences
The grant of a stock option under the 1997 Plan will create no
income tax consequences to the participant or the Company. A participant
who is granted a nonstatutory stock option will generally recognize
ordinary income at the time of exercise in an amount equal to the excess
of the fair market value of the Common Stock at such time over the
exercise price. The Company will be entitled to a deduction in the same
amount and at the same time as ordinary income is recognized by the
participant. A subsequent disposition of the Common Stock will give rise
to a capital gain or loss to the extent the amount realized from the sale
differs from the tax basis, i.e., the fair market value of the Common
stock on the date of exercise. The capital gain or loss will be long-term
capital gain or loss if the Common Stock has been held for more than one
year from the date of exercise.
Awards Under the 1997 Plan
The following table sets forth information with respect to
awards that were granted under the 1997 Plan during fiscal 1997 and,
through the date of this Proxy Statement, during fiscal 1998 to the
various individuals and groups identified below. All of such awards
consisted of nonstatutory stock options which were immediately vested.
The options have per share exercise prices ranging from $10.83 to $11.83.
Plan Benefits
Number of Shares
Name and Position Subject to Options
George R. Schonath
President and Chief Executive Officer . . . . . 184,950
All named executive officers as a group (1 person) 184,950
All non-employee directors as a group
(4 persons) . . . . . . . . . . . . . . . . . . 0
All employees (other than named executive
officers) as a group (1 person) . . . . . . . . 0(1)
_______________
(1) Other than Mr. Schonath, no other officer was granted options under
the 1997 Plan during fiscal 1997.
The Company cannot currently determine the options that may be
granted to eligible participants under the 1997 Plan in the future. Such
determinations will be made from time to time by the Compensation
Committee.
Vote Required to Approve the 1997 Plan, as Amended
Assuming that a quorum is present, the affirmative vote of the
holders of a majority of the shares of Common Stock and Preferred Stock,
voting as a single class, represented and voted at the Annual Meeting with
respect to the 1997 Plan is required to approve the 1997 Plan. Any shares
not voted at the Annual Meeting with respect to the 1997 Plan (whether as
a result of broker non-votes or otherwise, except abstentions) will have
no impact on the vote. Shares of Common Stock and Preferred Stock as to
which holders abstain from voting will be treated as votes against the
1997 Plan.
THE BOARD RECOMMENDS A VOTE "FOR" THE 1997 PLAN. SHARES OF
COMMON STOCK AND PREFERRED STOCK REPRESENTED AT THE ANNUAL MEETING BY
EXECUTED BUT UNMARKED PROXIES WILL BE VOTED "FOR" THE 1997 PLAN.
MISCELLANEOUS
Independent Auditors
On December 22, 1997, the Company notified Price Waterhouse LLP
that it would be dismissed as the Company's independent accountant upon
completion of the audit of the restated financial statements for the
period ended December 31, 1996. The financial statements for the period
ended December 31, 1996 were restated to reflect the deregistration of the
Company, effective January 2, 1997, as an investment company under the
Investment Company Act of 1940, and were filed in the Company's 1997 Form
10-K.
The reports of Price Waterhouse LLP on the financial statements
of the Company for either of the past two fiscal years, including the
restatement described above, did not contain any adverse opinion or any
disclaimer of opinion, and were not qualified or modified as to
uncertainty, audit scope, or accounting principles.
The dismissal of Price Waterhouse LLP was approved by the audit
committee of the Board of Directors.
In connection with its audits for the two most recent fiscal
years, and through December 22, 1997, there have been no disagreements
with Price Waterhouse LLP on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure,
which disagreements, if not resolved to the satisfaction of Price
Waterhouse LLP, would have caused it to make reference to the subject
matter of the disagreements in connection with its report on the financial
statements for such years.
On December 22, 1997, the independent accounting firm of BDO
Seidman, LLP was engaged by the Company to audit its financial statements
for the fiscal year ended December 31, 1997 and it is anticipated that
such firm will be similarly appointed to act for the fiscal year ending
December 31, 1998. Representatives of BDO Seidman, LLP are expected to be
present at the Annual Meeting and will have the opportunity to make a
statement if they so desire. Such representatives are also expected to be
available to respond to appropriate questions.
Shareholder Proposals
Any proposals of shareholders intended to be presented at the
1999 Annual Meeting of Shareholders must be received by the Secretary of
the Company at its principal executive offices at W239 N1700 Busse Road,
P.O. Box 190, Pewaukee, Wisconsin 53072, on or before December 9, 1998, to
be considered for inclusion in the Company's Proxy Statement and proxy
relating to such meeting.
Solicitation Expenses
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 Common Stock. In
addition to solicitation by mail, directors, officers and regular
employees of the Company and/or the Bank may solicit proxies personally or
by telegraph or telephone without additional compensation.
Other Matters
The Board of Directors is not aware of any business to come
before the meeting other than those matters described in this Proxy
Statement. However, if any other matter should properly come before the
meeting, holders of the proxies will act in accordance with their best
judgment.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ George R. Schonath
George R. Schonath
President and Chief Executive Officer
Pewaukee, Wisconsin
April 8, 1998
<PAGE>
Appendix A
BANDO McGLOCKLIN CAPITAL CORPORATION
1997 STOCK OPTION PLAN
1. Purpose. The purpose of the Bando McGlocklin Capital
Corporation 1997 Stock Option Plan (the "Plan") is to induce key employees
to remain in the employ of Bando McGlocklin Capital Corporation (the
"Company") or of any subsidiary of the Company as hereinafter defined, and
to encourage such employees to secure or increase on reasonable terms
their stock ownership in the Company. The Board of Directors of the
Company (the "Board") believes that the Plan will promote continuity of
management and increased incentive and personal interest in the welfare of
the Company by those who are primarily responsible for shaping and
carrying out the long-range plans of the Company and securing its
continued growth and financial success. It is intended that only
nonqualified stock options may be issued pursuant to the Plan.
2. Effective Date of the Plan. The effective date of the Plan
is the date of its adoption by the Board, February 3, 1997, subject to the
approval and ratification of the Plan by the shareholders of the Company,
and any and all grants made under the Plan prior to such approval shall be
subject to such approval.
3. Stock Subject to Plan.
(a) Plan Limit. Subject to adjustment in accordance with the
provisions of Section 7, shares of the Company's common stock, 6-2/3 cents
par value per share, not to exceed 200,000 shares, may be issued pursuant
to the Plan. Such shares may be authorized and unissued or treasury
shares. If any options expire, are canceled, or terminate for any reason
without having been exercised in full, the shares subject to the
unexercised portion thereof shall again be available for the purposes of
the Plan.
(b) Employee Limit. No Employee shall receive in any single
fiscal year of the Company options for more than 185,000 shares of stock,
subject to adjustment in accordance with the provisions of Section 7.
Determinations under this Section shall be made in a manner that is
consistent with the exemption for performance-based compensation provided
by Section 162(m) of the Internal Revenue Code of 1986 (the "Code") and
any regulations promulgated thereunder.
4. Administration. The Plan shall be administered by the
Board and/or the Compensation Committee of the Board (the "Committee")
consisting of not less than two directors, each of whom shall qualify as a
"non-employee director" within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any
successor rule or regulation, and an "outside director" within the meaning
of Section 162(m) of the Code and any regulations promulgated thereunder.
If at any time the Committee shall not be in existence or not consist of
directors who are qualified as "non-employee directors" and "outside
directors" as defined above, the Board shall administer the Plan. To the
extent permitted by applicable law, the Board may, in its discretion,
delegate to another committee of the Board or to one or more senior
officers of the Company any or all of the authority and responsibility of
the Committee with respect to options to participants other than
participants who are subject to the provisions of Section 16 of the
Exchange Act. To the extent that the Board has delegated to such other
committee or one or more officers the authority and responsibility of the
Board and/or Committee, all references to the Committee herein shall
include such other committee or one or more officers.
Subject to the express provisions of the Plan, the Committee and
the Board each shall have authority to establish such rules and
regulations as they deem necessary or advisable for the proper
administration of the Plan, and, in their discretion, to determine those
key employees to whom and the price at which options will be granted, the
time or times at which options will be granted, the exercise periods,
limitations on exercise, the number of shares to be subject to each option
and any other terms, limitations, conditions and restrictions on options
as the Committee or the Board, in its discretion, deems appropriate. In
making such determinations, the Committee and the Board may take into
account the nature of the services rendered by the respective employees,
their present and potential contributions to the success of the Company or
its subsidiaries as defined in Section 424(f) of the Code ("Subsidiary" or
"Subsidiaries"), and such other factors as the Committee or the Board in
its discretion shall deem relevant. Subject to the express provisions of
the Plan, the Committee and the Board each shall also have authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it, to determine the terms and provisions of the respective
option agreements (which need not be identical), to waive any conditions
or restrictions with respect to any option and to make all other
determinations necessary or advisable for the administration of the Plan.
The Committee and Board determinations on the matters referred to in this
Section 4 shall be conclusive.
5. Eligibility. Options may be granted to any key employee
("Employee") of the Company and of any of its present and future
Subsidiaries including any such Employee who is also an officer or
director of the Company or any of its Subsidiaries.
6. Grants of Options.
(a) Grant. Subject to the provisions of the Plan, the
Committee and the Board each may grant stock options to Employees in such
amounts as they shall determine. The Committee and the Board each shall
have full discretion to determine the terms and conditions (including
vesting) of all options. More than one option may be granted to the same
Employee.
(b) Option Price. The per share option price, as determined by
the Committee or Board, shall be an amount not less than 100% of the fair
market value of the stock on the trading date immediately prior to the
date such option is granted, as such fair market value is determined by
such methods or procedures as shall be established from time to time by
the Committee or Board ("Fair Market Value").
(c) Option Period. The term of each option shall be as
determined by the Committee or Board.
(d) Exercise of Option. The Committee or Board shall prescribe
the manner in which an Employee may exercise an option which is not
inconsistent with the provisions of this Plan. An option may be
exercised, subject to limitations on its exercise and the provisions of
subparagraph (g), from time to time, only by (i) providing written notice
of intent to exercise the option with respect to a specified number of
shares, and (ii) payment in full to the Company of the option price at the
time of exercise. Payment of the option price may be made (i) by delivery
of cash and/or securities of the Company having a then Fair Market Value
equal to the option price, or (ii) by delivery (including by fax) to the
Company or its designated agent of an executed irrevocable option exercise
form together with irrevocable instructions to a broker-dealer to sell or
margin a sufficient portion of the shares and deliver the sale or margin
loan proceeds directly to the Company to pay for the option price.
(e) Transferability of Option. The options are not
transferable otherwise than by will or the laws of descent and
distribution, and may be exercised during the life of the Employee only by
the Employee, except that an Employee may, to the extent allowed by the
Committee or Board and in a manner specified by the Committee or Board,
(a) designate in writing a beneficiary to exercise the option after the
Employee's death, and (b) transfer any option.
(f) Termination of Employment. In the event an Employee leaves
the employ of the Company and/or its Subsidiaries whether voluntarily or
by reason of dismissal, disability or retirement, all rights to exercise
an option shall terminate immediately unless otherwise determined by the
Committee or Board or provided in the option agreement granted to such
Employee.
7. Capital Adjustment Provisions. In the event that the
Committee or Board shall determine that any dividend or other
distribution, stock split, reorganization, merger, consolidation, spin-
off, recapitalization, split-up, combination or exchange of shares, return
of capital adjustment or other similar corporate transaction or event
affects the shares of common stock of the Company such that an adjustment
is determined by the Committee or Board to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Committee or Board
may, in such manner as it may deem equitable, adjust any or all of the
aggregate number and class of shares available under this Plan, the number
and class of shares subject to each outstanding option, and the exercise
price for shares subject to each outstanding option. No such adjustment
shall change the aggregate option price for the shares covered by any
option agreement or require the Company to sell any fractional shares, and
the adjustment with respect to each option agreement shall be limited
accordingly.
8. Termination and Amendment of Plan. The Plan shall
terminate on February 3, 2007, unless sooner terminated as hereinafter
provided. The Board may at any time terminate the Plan, or amend the Plan
as it shall deem advisable including (without limiting the generality of
the foregoing) any amendments deemed by the Board to be necessary or
advisable to assure the Company's deduction under Section 162(m) of the
Code for all options granted under the Plan and to assure conformity with
any requirements of other state or federal laws or regulations; provided,
however, that shareholder approval of any amendment of the Plan shall also
be obtained if otherwise required by (i) the Code or any rules promulgated
thereunder (in order to enable the Company to comply with the provisions
of Section 162(m) of the Code), or (ii) the listing requirements of any
principal securities exchange or market on which the shares are then
traded (in order to maintain the listing or quotation of the shares
thereon). No termination or amendment of the Plan may, without the
consent of the Employee, adversely affect the rights of such Employee
under any option previously granted. Termination of the Plan shall not
affect the rights of Employees under options granted before termination
and all unexpired options shall continue in force and operation after
termination of the Plan except as they may lapse or be terminated by their
own terms and conditions.
9. Rights of Employees. Nothing in this Plan or in any
options shall interfere with or limit in any way the right of the Company
and any of its Subsidiaries to terminate any Employee's employment at any
time, nor confer upon any Employee any right to continue in the employ of
the Company or any of its subsidiaries.
10. Rights as a Shareholder. An Employee shall have no rights
as a shareholder with respect to shares covered by any option until the
date of issuance of the stock certificate to such Employee and only after
such shares are fully paid. No adjustment will be made for dividends or
other rights for which the record date is prior to the date such stock is
issued.
11. Tax Withholding. The Company may deduct and withhold from
any cash otherwise payable to an Employee such amount as may be required
for the purpose of satisfying the Company's obligation to withhold
Federal, state or local taxes in connection with any option. Further, in
the event the amount so withheld is insufficient for such purpose, the
Company may require that the Employee pay to the Company upon its demand
or otherwise make arrangements satisfactory to the Company for payment of
such amount as may be requested by the Company in order to satisfy its
obligation to withhold any such taxes.
An Employee may be permitted to satisfy the Company's
withholding tax requirements by electing to have the Company withhold
shares of stock otherwise issuable to the Employee. The election shall be
made in writing and shall be made according to such rules and in such form
as the Committee or Board may determine.
12. Miscellaneous. The grant of any option under the Plan may
also be subject to other provisions as the Committee or Board determines
appropriate, including, without limitation, provisions for (a) one or more
means to enable Employees to defer recognition of taxable income relating
to options, which means may provide for a return to an Employee on amounts
deferred as determined by the Committee or Board; (b) the purchase of
stock under options in installments; and (c) compliance with federal or
state securities laws and stock exchange or market requirements.
13. Agreements. Options granted pursuant to the Plan shall be
evidenced by written agreements in such form as the Committee or Board
shall from time to time adopt.
14. Powers of Company Not Affected. The existence of the Plan
shall not affect in any way the right or power of the Company or its
shareholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's
capital structure or its business, or any merger or consolidation of the
Company, or any issuance of bonds, debentures, preferred or prior
preference stock ahead of or affecting the stock or the rights thereof, or
dissolution or liquidation of the Company, or any sale or transfer of all
or any part of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.
15. Requirements of Law. The granting of options and the
issuance of shares of stock upon the exercise of an option shall be
subject to all applicable laws, rules and regulations, and to such
approvals by any governmental agencies or national securities exchanges or
markets as may be required.
16. Governing Law. The Plan and all determinations made and
actions taken pursuant thereto shall be governed by and construed in
accordance with the internal laws of the State of Wisconsin.
<PAGE>
Bando McGlocklin Capital Corporation COMMON STOCK
W239 N1700 Busse Road
P.O. Box 190
Pewaukee, Wisconsin 53072
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints George R. Schonath and Jon McGlocklin and
each of them, as Proxies with power of substitution (to act jointly or if
only one acts then by that one) and hereby authorizes them to represent
and to vote as designated on the reverse all of the shares of Common Stock
of Bando McGlocklin Capital Corporation held of record by the undersigned
on March 27, 1998, at the annual meeting of shareholders to be held on
May 7, 1998, or at any adjournment or postponement thereof.
(Continued on reverse side)
SEE REVERSE
SIDE
<PAGE>
Please Mark your
[X] vote as in this
example.
The Board of Directors recommends a vote FOR the following proposals:
1. ELECTION OF DIRECTORS: [ ] FOR all nominees [ ] WITHHOLD AUTHORITY
listed below to vote for all
(except as marked nominees listed
to the contrary below) below
Nominees:
Peter A. Fischer
Albert O. Nicholas
(INSTRUCTIONS: To withhold authority 3.IN THEIR DISCRETION, THE
to vote for any individual nominee, PROXIES ARE AUTHORIZED TO VOTE
write that nominee's name in the space UPON SUCH OTHER BUSINESS AS MAY
provided below:) PROPERLY COME BEFORE THE MEETING.
This proxy when properly executed
will be voted in the manner
directed herein by the undersigned
shareholder. If no direction is
made, this proxy will be voted
2. Approval of the Bando McGlocklin "FOR" the election of the Board's
Capital Corporation 1997 Stock nominees and "FOR" item 2.
Option Plan.
For Against Abstain
[_] [_] [_] PLEASE SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE
SIGNATURE ________ DATE ______, 1998 SIGNATURE ________ DATE ____, 1998
IF HELD JOINTLY
NOTE: Please sign exactly as your name appears hereon. When signing
as attorney, executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign
in full corporate name by the President or other authorized
officer. If a partnership, please sign in partnership name by
authorized person.
<PAGE>
Bando McGlocklin Capital Corporation PREFERRED STOCK
W239 N1700 Busse Road
P.O. Box 190
Pewaukee, Wisconsin 53072
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints George R. Schonath and Jon McGlocklin and
each of them, as Proxies with power of substitution (to act jointly or if
only one acts then by that one) and hereby authorizes them to represent
and to vote as designated on the reverse all of the shares of Preferred
Stock of Bando McGlocklin Capital Corporation held of record by the
undersigned on March 27, 1998, at the annual meeting of shareholders to be
held on May 7, 1998, or at any adjournment or postponement thereof.
(Continued on reverse side)
SEE REVERSE
SIDE
<PAGE>
[X] Please Mark your
vote as in this
example.
The Board of Directors recommends a vote FOR the following proposals:
[ ] FOR all [_] WITHHOLD
1. ELECTION OF nominees listed AUTHORITY to vote
DIRECTORS: below (except for all nominees
as marked to listed below
the contrary below)
(i) Directors elected by holders of Preferred
Stock and Common Stock voting together.
Nominees:
Peter A. Fischer and Albert O. Nicholas
(INSTRUCTIONS: To withhold authority to vote
for any individual nominee, write that
nominee's name in the space provided below:)
-----------------------------------------------
(ii) Directors elected by holders of
Preferred Stock voting as a separate class.
Nominees:
Robert A. Cooper and David A. Geraldson
(INSTRUCTIONS: To withhold authority 3. IN THEIR DISCRETION, THE PROXIES
to vote for any individual nominee, ARE AUTHORIZED TO VOTE UPON SUCH
write that nominee's name in the OTHER BUSINESS AS MAY PROPERLY
space provided below:) COME BEFORE THE MEETING.
-------------------------------------
This proxy when properly executed
2. Approval of the Bando McGlocklin will be voted in the manner
Capital Corporation 1997 Stock directed herein by the
Option Plan. undersigned shareholder. If no
direction is made, this proxy
will be voted "FOR" the election
For Against Abstain of the Board's nominees and "FOR"
[_] [_] [_] item 2.
PLEASE SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE
SIGNATURE ___________ DATE _____, 1998 SIGNATURE _______ DATE ______1998
IF HELD JOINTLY
NOTE: Please sign exactly as your name appears hereon. When signing as
attorney, executor, administrator, trustee or guardian, please give
full title as such. If a corporation, please sign in full corporate
name by the President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
