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
MID-WISCONSIN FINANCIAL SERVICES, INC.
(Name of Registrant as Specified In Its Charter)
NOT APPLICABLE
(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)(1) 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>
MID-WISCONSIN FINANCIAL SERVICES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
_______________
The annual meeting of shareholders of Mid-Wisconsin Financial
Services, Inc. will be held at Simek Recreational Center, 1037 W. Broadway
Avenue, Medford, Wisconsin, on April 28, 1998, at 5:00 p.m.* for the
following purposes:
1. To elect three Class III directors for terms which will expire at
the annual meeting of shareholders to be held in 2001;
2. To approve the appointment of Wipfli Ullrich Bertelson LLP as
independent auditors for the year ending December 31, 1998; and
3. To transact such other business as may properly come before the
meeting.
PLEASE PROMPTLY VOTE, SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE
ENCLOSED ENVELOPE.
*Registration will begin at 4:30 p.m. to allow the meeting to begin
promptly at 5:00 p.m.
March 27, 1998
BY ORDER OF THE BOARD OF
DIRECTORS
RUTH M. ZULEGER
Ruth M. Zuleger
Secretary
____________________________
A PROXY CARD AND POSTAGE FREE ENVELOPE ARE ENCLOSED.
<PAGE>
PROXY STATEMENT
MID-WISCONSIN FINANCIAL SERVICES, INC.
132 WEST STATE STREET
MEDFORD, WISCONSIN 54451
MARCH 27, 1998
SOLICITATION OF PROXIES
The enclosed proxy is solicited by the Board of Directors of Mid-
Wisconsin Financial Services, Inc. (the "Company") for use at the annual
meeting of shareholders to be held at 5:00 p.m., at Simek Recreational
Center, 1037 W. Broadway Avenue, Medford, Wisconsin, on April 28, 1998,
and at any adjournment thereof (the "Annual Meeting").
In addition to solicitation by mail, officers, directors and employees
of the Company and its subsidiaries, none of whom will be compensated for
such services, may solicit proxies in person or by telephone, facsimile,
electronic mail or other forms of communication. Expenses in connection
with the solicitation of proxies, including the reasonable expenses of
brokers, fiduciaries and other nominees in forwarding proxy material to
beneficial owners of the Company's common stock, will be borne by the
Company.
VOTING OF PROXIES
Each holder of the Company's common stock is entitled to one vote in
person or by proxy for each share held of record on all matters to be
voted upon at the Annual Meeting. Only shareholders of record on March 3,
1998 (the "Record Date") are entitled to notice of and to vote at the
Annual Meeting.
With respect to the election of directors, shareholders may vote in
favor of the nominees specified on the accompanying form of proxy or may
withhold their vote. Votes that are withheld will be excluded entirely
from the voting for directors and will have no effect. The nominees
receiving the largest number of votes will be elected as directors of the
Company.
On all matters other than the election of directors, shareholders may
vote in favor of a proposal, against a proposal or abstain from voting.
Abstentions on any matter presented to the Annual Meeting will be treated
as shares that are present and entitled to vote for purposes of
determining whether a quorum is present, but such abstentions shall be
treated as unvoted for purposes of determining whether the matter has been
approved by the shareholders. Approval of the appointment of auditors or
any other proposal (other than the election of directors) which may come
before the Annual Meeting requires the affirmative vote of the majority of
the votes cast, in person or by proxy, at the Annual Meeting.
-1-
Brokers who hold shares of the Company's common stock in street name
for customers may have discretionary authority to vote on certain matters
when they have not received instructions from beneficial owners, but may
<PAGE>
not have authority to vote the shares on other matters. As to matters for
which the broker cannot vote shares held in street name, the shares will
be recorded as a "broker non-vote". Shares reported as broker non-votes
will not be considered present and entitled to vote with respect to the
matter and will not be counted for purposes of determining whether a
quorum is present.
A shareholder who executes the accompanying form of proxy may revoke
it at any time before it is voted by filing with the Company another duly
executed proxy bearing a later date, giving written notice to the
Secretary of the Company or oral notice to the presiding officer at the
Annual Meeting.
The persons named in the accompanying form of proxy, as members of the
Proxy Committee of the Board of Directors, will vote the shares subject to
each proxy. The proxy in the accompanying form will be voted as specified
by each shareholder, but if no specification is made, each proxy will be
voted:
(1) TO ELECT Messrs. Norman A. Hatlestad, Ronald D. Isaacson, and
James F. Melvin to terms of office as Class III directors which
will expire at the annual meeting of shareholders to be held in
2001 (see "Election of Directors");
(2) TO APPROVE the appointment of Wipfli Ullrich Bertelson LLP as the
Company's independent auditors for the year ending December 31,
1998 (see "Approval of Appointment of Auditors"); and
(3) IN THE BEST JUDGMENT of those named as proxies on the
accompanying form of proxy on any other matters to properly come
before the Annual Meeting, including approval of minutes of the
prior annual meeting, matters incident to the conduct of the
meeting and any adjournment thereof.
ELECTION OF DIRECTORS
The Company's articles of incorporation, as amended, provide that the
number of directors shall be determined by the Board of Directors pursuant
to the Company's bylaws and that directors shall be divided into three
classes to be as nearly equal in size as possible. The bylaws provide
that there shall be not less than nine nor more than eleven directors,
with the exact number to be set by the Board. One class of directors is
to be elected each year to serve a three-year term and any vacancy may be
filled by the Board until the next succeeding annual meeting of
shareholders. The Board has fixed the number of directors at eleven.
Directors may not continue to serve on the Board beyond the end of the
calendar quarter in which they attain age 65. As presently constituted,
the Board consists of four Class I and Class II directors and three Class
III directors.
-2-
At the Annual Meeting, Messrs. Norman A. Hatlestad, Ronald D.
Isaacson, and James F. Melvin will be candidates for election as Class III
directors. Each of the nominees for director has consented to serve if
elected, but in case any of the nominees is not a candidate at the Annual
Meeting, it is the intention of the proxies to vote for such substitute or
substitutes as may be designated by the Board.
<PAGE>
The following information is furnished with respect to the nominees
and all other directors:
<TABLE>
<CAPTION>
CLASS
NAME, AGE, AND YEAR
PRINCIPAL OCCUPATION IN WHICH YEAR FIRST
OR EMPLOYMENT AND TERM WILL BECAME A
OTHER AFFILIATIONS* EXPIRE DIRECTOR
Nominees
<S> <C> <C>
Norman A. Hatlestad, 56 Class III 1992
President, Big A Auto Supply 2001
RONALD D. ISAACSON, 61 Class III 1986
Vice President of the Company 2001
and Chairman of the Board of
Mid-Wisconsin Bank
JAMES F. MELVIN, 48 Class III 1996
Vice Chairman of the Board of 2001
the Company and President of
the Melvin Companies
CONTINUING DIRECTORS
JAMES N. DOUGHERTY, 60 Class I 1991
Veterinary Consultant, Miles Animal 1999
Health; previously, Vice President and
Treasurer of Medford Veterinary Clinic
ROGER B. OLSON, 63 Class I 1988
Retired, formerly President of Cherokee 1999
Garage, Inc. (implement dealer)
JAMES R. PETERSON, 61 Class I 1986
Chairman of the Board of the Company 1999
and Vice President, James Peterson
Sons, Inc. (road construction)
JACK E. WILD, 61 Class I 1996
President, Abbotsford 1999
Oil, Inc.
GENE C. KNOLL, 44 Class II 1988
President and Chief Executive Officer 2000
of the Company and President and
Chief Executive Officer of
Mid-Wisconsin Bank
-3-
KURT D. MERTENS, 42 Class II 1997
Secretary and Treasurer, Loos 2000
Machine Shop, Inc.
FRED J. SCHROEDER, 60 Class II 1986
Mayor of City of Medford; formerly 2000
Executive Vice President and
Trust Officer of Mid-Wisconsin Bank
JOHN P. SELZ, 63 Class II 1994
President, Selz Farms, Inc. 2000
<FN>
* Each director of the Company is also a director of Mid-Wisconsin Bank.
</TABLE>
<PAGE>
COMMITTEES AND COMPENSATION OF THE BOARD OF DIRECTORS
COMMITTEES
The Board of Directors annually establishes an Audit Committee. The
functions of a compensation committee are fulfilled by the Personnel
Committee of the Board of Directors of Mid-Wisconsin Bank (the "Bank"),
the Company's wholly owned subsidiary.
During 1997, Messrs. Peterson, Schroeder and Mertens served as members of
the Audit Committee. The Audit Committee held six meetings during 1997 to
review the audit of the previous fiscal year, the scope of the current
audit engagement and the range of audit and nonaudit fees.
The Board does not have a standing nominating committee. The functions
of a nominating committee are performed by the Board which will consider
nominations for directors submitted by shareholders. Recommendations
concerning nominations with pertinent background information should be
directed to the Chairman of the Board, in care of the Company. The Board
has not adopted formal procedures with respect to nominee recommendations.
In 1997, the Personnel Committee of the Bank reviewed and established
executive compensation and recommended the granting of stock options.
Messrs. Peterson, Olson and Isaacson served on the Committee during 1997.
The Committee met six times during 1997. See "Committees' Report on
Executive Compensation Policies", page 9.
During 1997, the Board of Directors met eight times. All of the
directors of the Company attended at least 75% of the aggregate number of
meetings of the Board and meetings of committees of the Board on which
they served.
DIRECTOR COMPENSATION
Directors receive an annual retainer of $1,200 from the Company and
$2,400 from the Bank in addition to board and committee meeting fees of
$250 and $100, respectively. Directors were also eligible in 1997 for
special directors' fees under a plan which provides for a maximum
-4-
payment of 60% of the directors' annual retainer. Special fees are
determined by the extent of the Company's achievement of a targeted
return on equity established by the Board of Directors prior to each
fiscal year. In 1997, directors received special fees equal to 60%
of the annual retainer. Directors received an identical percentage of
the retainer paid to Bank directors as special fees for service on the
Bank's board. Amounts earned by Mr. Knoll are included in the amounts
disclosed in the summary compensation table on page 7; see footnote
(3). During 1997, no director received more than the standard
arrangements described above.
Under the Directors' Deferred Compensation Plan, directors may elect each
year to defer fees otherwise payable in cash during the year. Amounts
deferred become payable after the director's termination of service as a
director in a lump sum or in monthly installments over a period not in
excess of 10 years. The timing and form of payments are elected by each
participating director based on deferral elections filed with the Company.
<PAGE>
During the period of deferral, deferred fees are credited with interest
each fiscal year at a rate equal to 300 basis points less than the
Company's return on equity for the preceding fiscal year. During 1997,
Messrs. Dougherty, Isaacson, Schroeder, Hatlestad, Selz, Wild and Olson
participated in the plan and deferred the director or meeting fees
otherwise payable to them.
BENEFICIAL OWNERSHIP OF COMMON STOCK
As of the close of business on the Record Date, the Company had
outstanding 1,864,122 shares of common stock.
Based on information publicly available from the Securities and Exchange
Commission, on the Record Date, no shareholder was known to the Company to
be the beneficial owner of more than 5% of the outstanding shares of the
Company's common stock.
The following table sets forth, based on statements filed with the
Securities and Exchange Commission or otherwise made to the Company, the
amount of common stock of the Company which is deemed beneficially owned
on the Record Date by each of the directors and each of the executive
officers of the Company named in the summary compensation table on page 7.
The amounts indicated include, as applicable, shares subject to options
exercisable within 60 days, shares held by spouses and minor children and
shares held indirectly in trust for the benefit of the directors and/or
their spouses, children or parents.
-5-
<TABLE>
<CAPTION>
Shares of
Common Stock Percent
Name Beneficially Owned of Class
<S> <C> <C>
James N. Dougherty 25,858 1.39%
Norman A. Hatlestad 3,464 *
Ronald D. Isaacson 36,913 1.98%
Gene C. Knoll 5,264 *
James F. Melvin 33,109 1.78%
Kurt D. Mertens 8,816 *
Roger B. Olson 2,956 *
James R. Peterson 22,760 1.22%
John P. Selz 1,200 *
Fred J. Schroeder 19,629 1.06%
Jack E. Wild 410 *
All directors, nominees and
executive officers as a group
(13 persons) 193,844 10.39%
<FN>
*Less than 1%
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and officers and persons who own more than 10% of the
Company's common stock ("reporting persons") to file reports of ownership
<PAGE>
and changes in ownership with the Securities and Exchange Commission
("SEC"). Reporting persons are also required by SEC regulations to
furnish the Company with copies of all section 16(a) forms filed by them
with the SEC. Based solely on its review of the copies of the section
16(a) forms received by it or upon written representations from certain of
these reporting persons as to compliance with the section 16(a)
regulations, the Company is of the opinion that during the 1997 fiscal
year, all filing requirements applicable under section 16 to the reporting
persons were satisfied.
-6-
EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION TABLE
The table below sets forth compensation awarded, earned or paid by the
Company and its subsidiaries for services in all capacities during the
three years ended December 31, 1997, 1996, and 1995 to the Company's Chief
Executive Officer and each other executive officer of the Company as of
December 31, 1997 whose total annual salary and bonus compensation for the
most recent fiscal year exceeded $100,000.
<TABLE>
Summary Compensation Table
<CAPTION>
Annual Compensation
Long Term
Compen-
sation
Awards
Securities
Underlying All other
Name and Other Annual Options Compensation
Principal Position Year Salary(1) Bonus(2) Compensation SARs(#) (3)(4)
<S> <C> <C> <C> <C> <C> <C>
Gene C. Knoll; 1997 $109,720 $ 34,014 $0 457 $21,608
President and CEO 1996 $111,092 $27,825 $0 538 $19,974
and a director; of 1995 $ 92,978 $19,410 $0 552 $16,265
the Company and
the Bank
<FN>
(1) Includes amounts deferred under Company's 401(k) plan in 1997 and
profit sharing plan in 1996 and 1995.
(2) Includes $19,750 earned under the Senior Officer Incentive Bonus
Plan maintained by the Bank; officers receive 50% of the bonus in
cash and the remaining 50% is deferred and paid in equal annual
installments over a period of 4 years. Mr. Knoll was paid $10,698
under the 1997 Executive Officer Bonus Plan of the Bank and $3,566
under the TeamBank Bonus Plan.
(3) Includes directors fees of $7,690 paid by the Company and the Bank.
(4) Includes contributions of $13,918 made by the Company in 1997 under
the Company's retirement plans.
</TABLE>
STOCK OPTIONS
OPTION GRANTS. The Company maintains a stock option plan pursuant to
which options to purchase the Company's common stock may be granted to key
employees. The following table presents certain information with respect
<PAGE>
to grants of stock options during 1997 to each executive officer named in
the summary compensation table.
-7-
<TABLE>
Option/SAR Grants in Last Fiscal Year
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price Appreciation
Individual Grants for Option Term
% of total
Options/
Number of SARs
Securities Granted to
Underlying Employees Exercise or
Options/SARs in Fiscal Base Price Expiration 5% 10%00
Granted (#)(1) Year ($/Sh) Date ($)(2) ($)(2)
<S> <C> <C> <C> <C> <C> <C>
Mr. Knoll 457 14.93% $24.00 12/31/01 $3,030 $6,696
<FN>
(1) Options can be exercised only between the fourth anniversary
of the date of grant and the expiration date. Optionees must
enter into an agreement with the Company that provides, among
other things, that the Company has an option to purchase the
option shares (a) during the first 180 days following
termination of employment for a reason other than voluntary
retirement or disability, (b) if the option shares are
transferred by the optionee pursuant to divorce, bankruptcy
or in any other involuntary transfer or (c) if the optionee
wishes to transfer the option shares to a third party. The
optionee has an option to sell the option shares to the
Company (a) during the first 180 days following termination
of employment for any reason or (b) if the optionee
experiences severe financial hardship.
(2) Assumes price of common stock is $30.63 (5%) and $38.65 (10%)
on December 31, 2001. The actual value, if any, an optionee
will realize upon exercise of an option will depend on the
excess of the market value of the Company's common stock over
the exercise price on the date the option is exercised.
There is no assurance that the market price of the common
stock will increase as assumed for purposes of this pricing
model and no projections as to the actual future value of the
Company's common stock are intended or made.
</TABLE>
OPTION EXERCISES AND YEAR END HOLDINGS. The following table sets
forth information regarding the exercise of stock options in 1997 by the
executive officers named in the summary compensation table and the
December 31, 1997 value of unexercised stock options held by such
officers.
<PAGE>
<TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
Shares FY-End (#) FY-End ($)
Acquired on Value
Name Exercise (#) Realized ($) Unexercisable* Unexercisable*
<S> <C> <C> <C> <C>
Mr. Knoll 674 $11,121 2,151 $19,090
<FN>
*All options outstanding at December 31, 1997 were unexercisable.
</TABLE>
-8-
COMMITTEES' REPORT ON EXECUTIVE COMPENSATION POLICIES
During 1997, compensation policies were established by the Personnel
Committee of the Bank. See "Committees and Compensation of the Board of
Directors". The Personnel Committee established and reviewed base
salaries of executive officers of the Bank and was also responsible for
the administration of executive bonus and incentive programs. No salaries
or bonuses are paid by the Company to executive officers.
The compensation program for executive officers may include various
grants under the Company's stock option plan. The Company's stock option
plan is administered by a separate committee appointed by the Board of
Directors. The stock option plan committee generally considers
recommendations of the Personnel Committee with respect to grants, but the
stock option plan committee has full discretion and control over whether a
grant will be made and the amount and terms of any such grant. Insofar as
this report includes a description of the compensation policies relating
to the stock option plan, this report is a joint report of the Personnel
Committee and of the stock option plan committee.
This report describes the policies of the Personnel Committee, the
stock option plan committee and the Company as in effect in 1997.
Policies in effect from time to time for years after 1997 may change as
circumstances change and the committees deem it appropriate to revise the
Company's compensation programs.
GENERAL. The executive compensation policies are designed to attract
and retain individuals who have experience in banking or who otherwise
have particular training or skills which will satisfy particular
requirements of the Company and the Bank and to reward job performance
which the Personnel Committee believes to be at or above the level
expected of the Bank's executive officers. The total compensation paid to
executive officers and the retirement and other fringe benefit programs
are designed to offer a level of compensation which is competitive with
other Wisconsin banks or bank holding companies of comparable size. Few
of the bank holding companies used for purposes of compensation
comparisons are included in the 567 financial institutions or bank holding
companies which comprise the Nasdaq Bank Stock Index of bank holding
companies' stock performance under the heading "Stock Price Performance
Graph". In making compensation comparisons, the Personnel Committee
<PAGE>
attempts to use only those bank holding companies or banks whose size and
operations are similar to the Company. Few, if any, of those bank holding
companies or banks are publicly traded or included in the Nasdaq Bank
Stock Index. Given the disparity in size between financial institutions
and the fact that many, but not all, bank holding company executives also
serve as executive officers of bank subsidiaries, it is difficult to draw
exact comparisons with the compensation policies of other bank holding
companies or banks. The determination of appropriate compensation levels
by the Personnel Committee is, therefore, subjective.
The Bank's overall compensation policy is designed so that
approximately 20% to 35% of each executive officer's maximum compensation
is directly tied to the performance of the Bank through a combination of
annual incentive bonuses which are based on each fiscal year's financial
performance and stock based incentive programs which reflect the
performance of the Company's common stock.
-9-
BASE SALARIES. The Personnel Committee considers and reviews a
general survey of bank or financial industry compensation prepared by the
Wisconsin Bankers Association and Sheshunoff Bank Data, an independent
provider of data concerning financial institutions, in order to gauge the
relationship of the Bank's base salary levels to the levels of comparable
financial institutions. Base salaries of the Company's executive officers
primarily reflect the services performed for the respective Bank or
holding company operations for which the individual has principal
management responsibilities.
Annual increases in base salary are determined by the overall
objective of maintaining competitive salary levels, more general factors
such as the rate of inflation and individual job performance. Individual
job performance, including satisfaction of individual performance
objectives and goals and the accomplishment of specified programs in
appropriate cases, is the most important factor considered by the
Personnel Committee in determining appropriate increases in base
compensation.
During 1997, the Company's Chief Executive Officer ("CEO") established
individual performance objectives and goals for executive officers other
than himself, including the accomplishment of specified programs in
appropriate cases, and reviewed each individual's performance in
relationship to those criteria with the Personnel Committee and the Board
of Directors of the Company. Based on such performance evaluations, the
CEO made recommendations to the Personnel Committee with respect to
increases in the base salary of the executive officers. The Company's
Board of Directors makes the final determination of the executive
officers' base salaries.
The CEO's base salary is reviewed by the Personnel Committee on the
same basis as that of the Company's other executive officers, except that
in 1997, it was the Boards of Directors of the Bank and of the Company
which established individual performance objectives for the CEO and
reviewed his accomplishment of those objectives. The Company's Board of
Directors makes the final determination of the CEO's base salary.
INCENTIVE COMPENSATION BASED ON FINANCIAL PERFORMANCE OF THE COMPANY
AND INDIVIDUAL PERFORMANCE. During 1997, executive officers of the
Company participated in two incentive compensation plans of the Bank in
<PAGE>
their capacities as executive officers of the Bank. The Company did not
maintain a separate incentive program for executive officers. Under the
incentive bonus plan for executive officers of the Bank, executive
officers were eligible to receive a specified percentage of base salary as
a bonus. The percentage used to determine the amount of an individual's
bonus was based on a schedule of graduated rates which, in turn, was based
upon the Bank's current year return on equity and the Bank officer's level
of responsibility. Maximum bonuses for executive officers in 1997 ranged
from 12% to 24% of an individual's base salary, with prorated amounts
payable based on the applicable Bank's return on equity for the year. The
criteria of the plan and the amount of bonuses which may be paid are set
annually by the Bank's Board of Directors. Executive and other Bank
officers receive 50% of each bonus in cash and the remaining 50% is
deferred and paid in equal annual installments over a period of four
years.
-10-
Executive officers also participated in the Bank's TeamBank Bonus Plan
which is maintained for all Bank employees. The TeamBank Bonus Plan is
intended to promote shareholder value and bonuses are based on achievement
of four key performance indicators. The bonuses payable under the
TeamBank Bonus Plan are expected to range from approximately 3% to
approximately 17% of base salary on an annual basis.
In 1997, a bonus was paid to Mr. Knoll and one other officer of the
Bank based upon the achievement of a minimum number of specified criteria
involving Bank growth, personnel cost and various operational performance
criteria. Under the plan, Mr. Knoll was eligible for a maximum bonus of
12% of salary based on satisfaction of the specific criteria set forth in
the plan.
STOCK BASED COMPENSATION. Executive officers of the Company and
employees of the Bank were eligible in 1997 to participate in the
Company's 1991 Employee Stock Option Plan. The stock option plan is
administered by a committee appointed by the Board of Directors of the
Company. The stock option plan committee has not established formal
criteria by which the size of plan grants are determined, but does
consider the amount and terms of each grant already held by an executive
officer in determining the size and amount of any new grant. The value of
options granted under the plan are related to the long-term performance of
the Company's common stock and therefore provide an identity of interests
between the Company's executive officers and its shareholders.
The stock option plan committee may impose conditions or restrictions
as to exercise or vesting of grants under the plan. All options must have
an option price equal to the fair market value of the shares on the date
the option is granted. Unless otherwise provided by the committee,
options are not exercisable before the fourth, or after the fifth,
anniversary of the date of grant. Optionees must enter into an agreement
with the Company that provides for certain repurchase rights for the
Company and the right to sell option stock to the Company. See footnote
(1) to table entitled "Option/SAR Grants in Last Fiscal Year", page 8.
PERSONNEL COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. During
1997, the Personnel Committee consisted of directors of the Bank. The
Personnel Committee met at various times throughout the 1997 fiscal year
to review and establish executive compensation levels and programs. No
member of the Committee was an employee of the Company or the Bank in 1997
<PAGE>
other than Mr. Isaacson. See "Committees and Compensation of the Board of
Directors".
<TABLE>
<CAPTION>
1991 STOCK OPTION PLAN COMMITTEE PERSONNEL COMMITTEE
<S> <C> <C>
JAMES R. PETERSON ROGER B. OLSON JAMES R. PETERSON
KURT D. MERTENS JAMES N. DOUGHERTY RONALD D. ISAACSON
NORMAN A. HATLESTAD JOHN P. SELZ ROGER B. OLSON
JACK E. WILD JAMES F. MELVIN
FRED J. SCHROEDER
</TABLE>
-11-
STOCK PRICE PERFORMANCE GRAPH
The following graph and table compares the yearly percentage change in
the cumulative total shareholder return on the Company's common stock for
the five year period beginning December 31, 1992 with two published
indices. The University of Chicago Center for Research in Security Prices
("CRSP") Nasdaq Bank Stock Index indicates the performance of the stock of
567 financial institutions or bank holding companies over the five year
period. The Media General Financial Services Nasdaq Stock Market
indicates the performance of all stocks which were traded on the Nasdaq
Stock Market during the entire five year period. The graph and table
assume that the value of an initial investment in the Company's common
stock and each index on December 31, 1992 was $100 and that all dividends
were reinvested. Prices of the Company's common stock represent the
average of bid and ask quotations from one market maker in the common
stock through August, 1997 and two market makers after such date; there is
no active established trading market in the Company's common stock.
[Stock Price Performance Graph deleted pursuant to Rule 304(d) of
Regulation S-T. Data reported in the graph is also reported in the
following tabular form in the proxy statement delivered to shareholders.]
-12-
<TABLE>
<CAPTION>
Value of Hypothetical Investment
December 31,
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
Mid-Wisconsin Financial
Services, Inc. $100.00 $129.35 $151.40 $189.98 $240.70 $281.15
MG Nasdaq Market Index $100.00 $104.36 $ 97.33 $141.95 $188.44 $297.47
CRSP Nasdaq Bank Stock
Index $100.00 $119.95 $125.94 $163.35 $202.99 $248.30
<FN>
*There is no active established trading market for the Company's
common stock. The prices listed indicate the average of bid and
ask quotations from the market makers in the Company's stock.
</TABLE>
CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS
During 1997, in the ordinary course of business, directors and
officers of the Company and its subsidiaries and many of their associates
<PAGE>
and the firms for which they serve as directors and officers conducted
banking transactions with the Bank. All employees of the Bank are
eligible to borrow up to a maximum of $50,000 at rates that are adjusted
quarterly to an amount equal to the sum of (1) the average rate paid by
the Bank on certificates of deposit, (ii) 1.5%, and (iii) the FDIC premium
rate on deposits. All other loans to directors and officers and to
persons or firms affiliated with such directors and officers were made at
substantially the same interest rates as those prevailing at the time for
comparable transactions with unrelated persons. All loans made to such
directors and officers and their affiliates were subject to substantially
the same collateral requirements, did not involve more than normal risk of
collectability, and did not present other unfavorable features as compared
to loans made to unrelated persons. Management expects that transactions
such as those described above will continue in the future.
APPROVAL OF THE
APPOINTMENT OF INDEPENDENT AUDITORS
At the Annual Meeting, shareholders will be asked to approve the
appointment of the firm of Wipfli Ullrich Bertelson LLP as independent
auditors to audit the books, records and accounts of the Company for the
fiscal year ending December 31, 1998. The firm has served as the
Company's auditors since 1990. The Company has a policy of reviewing the
provision of professional and other services to the Company based on such
factors as the cost, timeliness and quality of the services provided.
Pursuant to this policy, the Company has retained the right to appoint a
different firm of independent auditors to audit the Company for the 1998
fiscal year if such appointment is deemed in the best interests of the
Company.
Representatives of Wipfli Ullrich Bertelson LLP will be present at the
Annual Meeting and will have an opportunity to make a statement or respond
to appropriate questions.
-13-
SHAREHOLDER PROPOSALS
If any shareholder desires to submit a proposal for inclusion in the
proxy statement to be used in connection with the Annual Meeting to be
held in 1999, the proposal must be in proper form and received by the
Company no later than November 27, 1998.
OTHER MATTERS
At this date, there are no other matters management intends to present
or has reason to believe others will present to the Annual Meeting. If
other matters now unknown to the management come before the meeting, the
members of the Proxy Committee of the Board of Directors will vote in
accordance with their judgment.
CORPORATE SUMMARY ANNUAL REPORT
The 1997 Summary Annual Report, which includes condensed consolidated
financial statements for the years ended December 31, 1997, 1996 and 1995,
has been mailed concurrently with this proxy statement to shareholders as
<PAGE>
of the Record Date. The 1997 Summary Annual Report and the 1997 Form 10-K
Annual Report do not constitute a part of this proxy statement.
March 27, 1998
BY ORDER OF THE BOARD OF
DIRECTORS
RUTH M. ZULEGER
Ruth M. Zuleger
Secretary
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY.
-14-
<PAGE>
MID-WISCONSIN FINANCIAL SERVICES, INC.
PROXY SOLICITED BY DIRECTORS FOR ANNUAL MEETING
APRIL 28, 1998
The undersigned, having received the notice of annual meeting, proxy
statement, and annual report for the year ended December 31, 1997, hereby
appoint(s) James N. Dougherty, Kurt D. Mertens and Fred J. Schroeder and
each of them, with full power of substitution, proxies of the undersigned
to vote all shares of the undersigned in Mid-Wisconsin Financial Services,
Inc. at the annual meeting of shareholders to be held on April 21, 1997
and at any adjournments thereof.
THE DIRECTORS RECOMMEND A VOTE FOR THE ELECTION OF EACH NOMINEE AND
THE APPROVAL OF AUDITORS.
1. Election of Class III directors: NORMAN A. HATLESTAD, RONALD D.
ISAACSON, AND JAMES F. MELVIN
FOR each nominee listed above ___ WITHHOLD AUTHORITY ___
(except as marked to the contrary below) to vote for all nominees
listed above
(Instruction: To withhold authority to vote for any individual
nominee(s), print the name of the nominee on the space provided:
______________________________________________________________
2. Approval of appointment of Wipfli Ullrich Bertelson LLP as independent
auditors for the year ending December 31, 1998.
FOR ___ AGAINST ___ ABSTAIN ___
UNLESS OTHERWISE SPECIFIED IN THE SQUARES PROVIDED, THE PROXIES SHALL
VOTE FOR THE ELECTION OF THE NOMINEES LISTED ABOVE AND THE APPROVAL
OF THE APPOINTMENT OF AUDITORS.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
<PAGE>
(CONTINUED FROM OTHER SIDE)
Please sign exactly as name appears below.
When shares are held by joint tenants,
both should sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give full
title. 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.
______________________________________
Signature
______________________________________
Signature if held jointly
Dated __________________________, 1998
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
