EXHIBIT (a)(1)(A)
MID-WISCONSIN FINANCIAL SERVICES, INC.
132 West State Street
Medford, WI 54551
OFFER TO PURCHASE
90,557 SHARES
OF COMMON STOCK, PAR VALUE $.10 PER SHARE,
PURCHASE PRICE: $25.50 PER SHARE
OUR OFFER AND YOUR RIGHT TO WITHDRAW YOUR SHARES WILL EXPIRE AT 5:00
P.M., CENTRAL STANDARD TIME, ON WEDNESDAY, JANUARY 31, 2001, UNLESS
THE OFFER IS EXTENDED.
We are offering to purchase up to 90,557 shares of our common stock
in a tender offer at a price of $25.50 per share. You may accept our
offer and tender all or part of your stock by following the
instructions in this Offer to Purchase and the enclosed Transmittal
Form. Our offer is subject to the terms and conditions described in
this document and related Transmittal Form.
Our common stock is quoted on the OTC Bulletin Board under the
symbol "MWFS." On November 30, 2000, the bid and ask quotations were
$21.50 and $26.00, respectively. There is no active trading market for
the Company's common stock and such prices may not reflect actual
trades. See section 7.
OUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THIS OFFER. HOWEVER,
NEITHER WE NOR OUR BOARD MAKES ANY RECOMMENDATION TO YOU AS TO WHETHER
TO TENDER OR NOT TENDER YOUR SHARES. YOU MUST MAKE THE DECISION TO
TENDER ALL OR ANY OF YOUR SHARES. SEE SECTION 10 CONCERNING THE TENDER
OF SHARES BY OUR DIRECTORS OR EXECUTIVE OFFICERS.
DECEMBER 15, 2000
TABLE OF CONTENTS
SUMMARY 1
INTRODUCTION 5
THE OFFER 5
1. Number of Shares; Proration 5
2. Purpose of the Offer; Certain Effects of the Offer 7
3. Procedures for Tendering Stock 8
<PAGE>
4. Withdrawal Rights 10
5. Purchase of Stock and Payment of Purchase Price 11
6. Certain Conditions of the Offer 12
7. Price Range of Stock; Dividends 14
8. Source and Amount of Funds 14
9. Certain Financial and Other Information Concerning
Mid-Wisconsin 15
10. Interests of Directors and Officers; Transactions
and Arrangements Concerning Stock 18
11. Effects of the Offer on the Market for Stock;
Registration under the Exchange Act 18
12. Certain Legal Matters; Regulatory Approvals 19
13. Certain Federal Income Tax Consequences 19
14. Extension of Offer; Termination; Amendment 22
15. Fees and Expenses 23
16. Miscellaneous 24
ADDITIONAL COPIES
You may obtain additional copies of this Offer to Purchase, the
Transmittal Form and other tender offer materials without charge.
Please call (800) 643-9472 or (715) 748-8300 to request additional
copies or if you have any questions and requests for assistance.
You may also contact your local broker, dealer, commercial bank,
trust company or other nominee for assistance concerning our offer.
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SUMMARY
WE ARE PROVIDING THIS SUMMARY FOR YOUR CONVENIENCE. IT HIGHLIGHTS
MATERIAL INFORMATION CONTAINED IN THIS DOCUMENT, BUT IT DOES NOT
DESCRIBE ALL OF THE DETAILS OF OUR OFFER TO PURCHASE YOUR SHARES TO THE
SAME EXTENT THEY ARE DESCRIBED IN THE BODY OF THIS DOCUMENT. WE URGE
YOU TO READ THE ENTIRE DOCUMENT AND THE TRANSMITTAL FORM CAREFULLY.
Our address is: Mid-Wisconsin Financial Services, Inc.
132 West State Street
Medford, WI 54551
Our telephone and fax numbers are: Telephone: 800-643-9472
Fax: 715-748-6553
In this document, the terms "we," "us," "our" and "Mid-Wisconsin"
refer to Mid-Wisconsin Financial Services, Inc. Unless otherwise
noted, these terms also include our wholly-owned subsidiary,
Mid-Wisconsin Bank.
Some common questions about the tender offer and our answers
follow:
Q: WHO IS OFFERING TO PURCHASE MY SHARES?
A: Mid-Wisconsin Financial Services, Inc. We are offering to purchase
up to 90,557 shares of our outstanding common stock from our
shareholders. SEE SECTION 1.
<PAGE>
Q: WHAT IS THE PURCHASE PRICE?
A: We are offering to purchase your shares for $25.50 per share. SEE
SECTION 1.
Q: HOW AND WHEN WILL I BE PAID?
A: You will be paid the purchase price, in cash, without interest, as
soon as practicable after the expiration of the offer and the
acceptance of the shares for payment. There may be tax
consequences to receiving this payment. SEE SECTIONS 1, 3, 5 AND
13.
Q: HOW MANY SHARES WILL YOU PURCHASE?
A: We will purchase up to 90,557 shares in our offer, or approximately
5% of our outstanding common stock. We also reserve the right to
purchase additional shares up to 2% of the outstanding shares,
subject to applicable legal requirements. Our offer is not
conditioned on any minimum number of shares being tendered. SEE
SECTION 1.
Q: DO I HAVE TO TENDER ALL OF MY SHARES?
A: No. Our offer is completely voluntary on your part. You may
specify on the Transmittal Form the number of shares you wish to
tender. If your stock certificate represents more shares than you
wish to tender, we will issue you a new certificate for the shares
you do not tender. SEE SECTION 3.
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Q: WILL YOU PURCHASE ALL OF THE SHARES I TENDER TO YOU?
A: Yes, unless shareholders tender more than 90,557 shares. If more
than 90,557 shares are tendered we will purchase shares based on
the following order of priority:
<circle> First, we will purchase shares from all holders of "odd
lots" of less than 100 shares who properly tender all of
their shares.
<circle> Second, we will purchase shares from all other shareholders
who properly tender shares on a pro rata basis. As a result,
we will purchase the same percentage of shares from each
tendering shareholder in this second category. We will
announce this proration percentage, if it is necessary,
after our offer expires.
As we noted above, we may also choose to purchase an additional 2% of
the outstanding shares, subject to applicable legal rules. SEE SECTION
1.
Q: HOW MUCH TIME DO I HAVE TO DECIDE WHETHER TO TENDER MY SHARES?
A: You may tender your shares until our offer expires. As of the date
of this document, the offer is scheduled to expire on Wednesday,
January 31, 2001, at 5:00 p.m., Central Standard Time, but we may
choose to extend it at any time. We cannot assure you that we will
extend our offer or, if we extend it, for how long it will be
extended. SEE SECTIONS 1 AND 14.
<PAGE>
Q: HOW WILL I KNOW IF THE OFFER IS EXTENDED BEYOND JANUARY 31, 2001?
A: If our offer is extended, we will make a public announcement before
9:00 a.m., Central Standard Time, on the first business day after
the offer was scheduled to expire. SEE SECTION 14.
Q: HOW DO I TENDER MY SHARES?
A: To tender all or any part of your shares, you should EITHER:
<circle> complete and sign a Transmittal Form (or a copy) and
either mail or deliver to us:
<circle> the Transmittal Form with any required signature guarantee and
any other required documents, AND
<circle> the stock certificates for your tendered Shares
- OR -
<circle> request a broker, dealer, commercial bank, trust company or
other nominee to complete the transaction for you.
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If you have shares registered in the name of a broker, dealer,
commercial bank, trust company or other nominee, you must contact that
broker, dealer, commercial bank, trust company or other nominee if you
desire to tender your shares. SEE SECTION 3.
Q: CAN I CHANGE MY MIND AFTER I HAVE TENDERED MY SHARES?
A: Yes. If you tender your shares and change your mind, you may
withdraw your shares at any time before our offer expires. In
addition, after our offer expires, if we have not accepted for
payment the shares you have tendered to us, you may withdraw your
shares at any time after 5:00 p.m., Central Standard Time, on
Tuesday, February 13, 2001. SEE SECTION 4.
To withdraw your shares, you must deliver a written notice of your
withdrawal to us before the withdrawal deadlines described in the
preceding paragraph. Your notice of withdrawal must specify your
name, the number of shares to be withdrawn and the name of the
registered holder of the shares. Some additional requirements
apply if the certificates for shares to be withdrawn have been
delivered to us. You may give us notice in writing by mail,
courier delivery, personal delivery or by facsimile. SEE SECTION
3. Our address and facsimile numbers are set forth on page 1.
Q: HOW WILL YOU PAY FOR THE SHARES?
A: We will need a maximum of $2,309,204 to purchase 90,557 shares. We
have sufficient cash to be able to pay for all shares tendered
without borrowing funds. SEE SECTION 8.
Q: IS YOUR OFFER SUBJECT TO ANY CONDITIONS?
A: Yes. Our obligation to accept and pay for your tendered shares is
conditioned upon the satisfaction or waiver of the conditions
described in Section 6 of this document. SEE SECTION 6.
Q: HAS THE BOARD APPROVED OR RECOMMENDED THIS OFFER?
A: Our Board has approved the offer. However, neither we nor our
<PAGE>
Board makes any recommendation regarding whether you should tender
or not tender your shares. You must decide whether to tender your
shares and, if so, how many shares to tender. You should discuss
whether to tender your shares with your broker or other financial
or tax advisor. In connection with his retirement planning, a
director who will retire on December 31, 2000, expects to tender
some of his shares in our offer. SEE SECTION 10.
Q: WHAT IS THE RECENT MARKET PRICE FOR MID-WISCONSIN STOCK?
A: Prices for our common stock are quoted on the OTC Bulletin Board.
On November 30, 2000, the bid was $21.50 and the ask was $26.00.
The last reported sales price reported for our stock on the OTC
Bulletin Board was $22.00 per share on November 30, 2000. We urge you
to obtain more current market quotations for your shares. SEE SECTION
7.
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Q: WILL I HAVE TO PAY A BROKERAGE COMMISSION OR STOCK TRANSFER TAX IF
I TENDER MY SHARES?
A: If you are a registered shareholder and tender your shares directly
to us, you will not need to pay any brokerage commissions. If you
hold shares through a broker or bank, however, you should ask your
broker or bank to see if you will be charged a fee to tender your
shares. SEE SECTION 3.
If you instruct us in the Transmittal Letter to make the payment
for the shares to the registered holder, you will not incur any
stock transfer tax. SEE SECTION 5.
Q: WHAT ARE THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF
SELLING MY STOCK IN THE TENDER OFFER?
A: Generally, you will be subject to United States federal income
taxation when you receive cash from us in exchange for the shares
you tender. The cash you receive will be treated either as:
<circle> a sale or exchange eligible for capital gains
treatment; or
<circle> a dividend subject to ordinary income tax rates.
We believe that most of our shareholders will be able to report the
sale as a capital gains transaction. SEE SECTION 13.
Q: WHO CAN ANSWER MY QUESTIONS ON THE TENDER OFFER?
A: If you have questions about the tender offer, please telephone Gene
Knoll, William Weiland, or Mary Sarver at 800-643-9472 or
715-748-8300.
WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION TO OUR
SHAREHOLDERS AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM
TENDERING SHARES PURSUANT TO THE OFFER. WE HAVE NOT AUTHORIZED ANY
PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN
CONNECTION WITH THE OFFER ON OUR BEHALF. DO NOT RELY ON ANY SUCH
RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATIONS, IF GIVEN OR
MADE, AS HAVING BEEN AUTHORIZED BY US.
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<PAGE>
INTRODUCTION
We invite our shareholders to tender up to 90,557 shares of our
common stock to us at a price of $25.50 upon the terms and subject to
the conditions described in this document and in the related
Transmittal Form.
Our Board of Directors believes that the offer is in the best
interests of Mid-Wisconsin. See Section 2. If you desire liquidity,
the offer provides you with an opportunity to sell all or a portion of
your shares without the usual transaction costs associated with open
market sales. If you do not accept the offer, your proportionate
interest in our equity, and thus in our future earnings and assets,
will increase subject to our right to issue additional shares and other
equity securities in the future.
THE OFFER
1. NUMBER OF SHARES; PRORATION.
Subject to the terms and conditions described in this document, we
will purchase up to 90,557 shares of our common stock at a price of
$25.50 per share. All shares must be validly tendered and not
withdrawn in accordance with Section 4 prior to the Expiration Date.
The term "Expiration Date" means 5:00 p.m., Central Standard Time, on
Wednesday, January 31, 2001, or such later date as we determine as the
period of time during which our offer will remain open. If we extend
our offer, the term "Expiration Date" will mean the latest time and
date at which the offer, as so extended by us, expires. See Section 14
for a description of our right to extend, delay, terminate or amend the
offer.
We reserve the right, in our sole discretion, to purchase more than
90,557 shares pursuant to the offer. In accordance with applicable
regulations of the Securities and Exchange Commission (the
"Commission"), we may purchase an additional amount of shares not to
exceed 2% of the outstanding shares without amending or extending the
offer. See Section 14.
Certificates for all shares tendered and not purchased pursuant to
the offer will be returned to the tendering shareholders at our expense
as promptly as practicable following the Expiration Date. See
"Proration," page 6.
PRIORITY OF PURCHASES
If more than 90,557 shares (or any greater number of shares as we
may elect to purchase pursuant to the offer) have been validly tendered
and not withdrawn, we will purchase validly tendered and not withdrawn
shares on the basis set forth below:
<circle> FIRST, we will purchase all shares tendered and not
withdrawn prior to the Expiration Date by any Odd Lot
Holder who tenders all shares beneficially owned by such
Odd Lot Holder; and
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<PAGE>
<circle> SECOND, after purchase of all Odd Lot shares, we will
purchase all other shares tendered and not withdrawn
prior to the Expiration Date, on a pro rata basis as
described below.
ODD LOTS
For purposes of the offer, the term "Odd Lot shares" means all
shares validly tendered prior to the Expiration Date and not withdrawn
by an Odd Lot Holder. An "Odd Lot Holder" is any person:
<circle> who beneficially owned fewer than 100 shares as of the
close of business on December 15, 2000, and continues to
beneficially own fewer than 100 shares as of the Expiration
Date, and
<circle> who checks the appropriate box on the Transmittal Form.
This preference is not available to Odd Lot Holders who do not tender
all of their shares or to beneficial holders of an aggregate of 100 or
more shares, even if such holders have separate accounts or
certificates representing fewer than 100 shares.
PRORATION
In the event that more than 90,557 shares are tendered (or more
than the maximum number of shares we will purchase if we decide to
purchase more than 90,557 shares), the shares we will purchase from any
one shareholder (other than Odd Lot Holders) will be pro rated. We
will determine the proration factor as soon as practicable following
the Expiration Date. We will first purchase all Odd Lot shares
tendered by Odd Lot Holders Proration for each shareholder who is not
an Odd Lot Holder, will be based on the ratio of the number of shares
tendered by each shareholder and not withdrawn to the total number of
shares tendered by all shareholders, other than Odd Lot Holders, and
not withdrawn. Any fractional shares resulting from the proration
factor will be rounded up to the next full share. Because of the
difficulty in determining the number of shares properly tendered and
not withdrawn, and because of the Odd Lot procedure, we do not expect
that we will be able to announce the final proration factor or commence
payment for any shares purchased pursuant to the offer until
approximately three business days after the Expiration Date.
As described in Section 13, the number of shares that we will
purchase from a shareholder may affect the federal income tax
consequences to the shareholder of such purchase and therefore may be
relevant to a shareholder's decision whether to tender shares. Part II
of the Transmittal Form affords each tendering shareholder the
opportunity to designate the order of priority in which shares tendered
are to be purchased in the event of proration.
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2. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.
THE FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS WHICH
INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS MAY DIFFER
MATERIALLY FROM THE RESULTS DISCUSSED IN THE FORWARD-LOOKING
<PAGE>
STATEMENTS. FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE INCLUDE, BUT
ARE NOT LIMITED TO, THE MATTERS DISCUSSED BELOW AS WELL AS IN PART I OF
OUR FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999, UNDER THE CAPTION
"CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION" AND THE
FACTORS DESCRIBED IN OUR OTHER FILINGS WITH THE COMMISSION.
Our common stock is not listed on a national exchange or traded in
an active public market. Although the shares are quoted on the OTC
Bulletin Board, quotations may not reflect actual trades as
transactions are sporadic and do not reflect an active trading market
for the shares. Shareholders cannot always find a ready buyer for
their shares on the public market if they desire to sell or reduce
their holdings in the shares. The offer provides shareholders who are
considering a sale of all or a portion of their shares with the
opportunity to liquidate all or a portion of their holdings at a price
which management believes reflects the current fair market value for
such shares. The offer also provides an opportunity for shareholders
to sell shares for cash without the usual transaction costs associated
with market sales. In addition, Odd Lot Holders (shareholders owning
fewer than 100 shares) whose shares are purchased pursuant to the offer
will avoid the payment of brokerage commissions and any applicable odd
lot discounts payable on a sale of their shares. The offer also allows
shareholders to sell a portion of their shares while retaining a
continuing equity interest in Mid-Wisconsin.
We believe that the offer will be accretive to earnings per share
(on both a basic and a diluted basis) in the fiscal year ending
December 31, 2000, but there can be no assurance to that effect.
Our Board believes that our stock has recently been undervalued in
the limited trading market which exists and, given the level of capital
currently maintained by us and Mid-Wisconsin Bank, that the purchase of
shares is an attractive use of our financial resources and in the best
interest of its shareholders.
Shareholders who do not accept the offer will increase their
proportionate interest in our equity, and thus in our future earnings
and assets, subject to our right to issue additional shares and other
equity securities in the future.
TREASURY STOCK AND POSSIBLE REISSUANCE
Stock we acquire pursuant to the offer will be retained as treasury
stock by us (unless and until we determine to retire such stock) and
will be available for us to issue without further shareholder action
(except as required by applicable law or, if retired, the rules of any
securities exchange or over-the-counter market on which our stock is
listed in the future). Stock may be reissued for many purposes,
including, but not limited to, the acquisition of other businesses, the
raising of additional capital for use in our business and the
satisfaction of obligations under existing or future stock option and
employee benefit plans. We have no current plans for issuance of the
stock repurchased pursuant to the offer.
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OTHER TENDERS OR PURCHASES
We may in the future purchase additional stock on the open market or
<PAGE>
in private transactions. We may also conduct additional tender offers.
Any such purchases may be on the same terms as, or on terms that are
more or less favorable to shareholders than, the terms of the offer.
However, Rule 13e-4 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), generally prohibits us and our
affiliates from purchasing any stock, other than pursuant to the offer,
until at least ten business days after the expiration or termination of
the offer. Any possible future purchases by us will depend on several
factors including, without limitation, the market price of the stock,
the results of the offer, our business and financial position, and
general economic and market conditions.
3. PROCEDURES FOR TENDERING STOCK.
PROPER TENDER OF STOCK
For stock to be validly tendered pursuant to the offer, you must
comply with the instructions set forth in the Transmittal Form and
deliver the properly completed Transmittal Form, the certificates for
your stock, and any other documents required by the Transmittal Form to
us prior to the Expiration Date.
YOU MAY ELECT THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING
CERTIFICATES FOR STOCK, THE TRANSMITTAL FORM AND ANY OTHER REQUIRED
DOCUMENTS. YOU ASSUME ALL RISKS ASSOCIATED WITH PROPER DELIVERY. IF
DELIVERY IS BY MAIL, THEN REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
SIGNATURE GUARANTEES
A signature guarantee IS NOT REQUIRED if the Transmittal Form is
signed by the registered holder(s) of the stock being tendered OR stock
is tendered for the account of a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company (not a savings bank
or a savings and loan association) having an office, branch or agency
in the United States (each of these entities is referred to as an
"Eligible Institution").
A signature guarantee IS REQUIRED if the registered holder has
completed the "Special Delivery Instructions" or the "Special Payment
Instructions" in Part V of the Transmittal Form. See Instruction 6 of
the Transmittal Form. For example, if a certificate for stock is
registered in the name of a person other than the person executing a
Transmittal Form, or if payment is to be made to a person other than
the registered holder, then the certificate must be endorsed or
accompanied by an appropriate stock power. The stock power must be
signed exactly as the name of the registered holder appears on the
certificate or stock power guaranteed by an Eligible Institution.
-8-
FEDERAL INCOME TAX BACKUP WITHHOLDING
Under the federal income tax backup withholding rules, unless an
exemption applies under applicable law and regulations, 31% of the
<PAGE>
gross proceeds payable to you or another payee pursuant to the offer
must be withheld by us and remitted to the Internal Revenue Service.
This withholding is not required if you or the other payee provides the
appropriate taxpayer identification number (employer identification
number or social security number) to us and certifies that such number
is correct. IF YOU ARE AN INDIVIDUAL AND YOU TENDER STOCK, YOU SHOULD
COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 (INCLUDED AS PART OF THE
TRANSMITTAL FORM) TO AVOID BACKUP WITHHOLDING. Certain shareholders
(including, among others, all corporations and certain foreign
shareholders) are not subject to these backup withholding requirements.
See Instruction 10 of the Transmittal Form.
YOU ARE URGED TO CONSULT YOUR OWN TAX ADVISORS REGARDING THE
APPLICATION OF FEDERAL INCOME TAX WITHHOLDING REQUIREMENTS. For a
discussion of certain federal income tax consequences to tendering
shareholders, see Section 13.
DETERMINATION OF VALID TENDER
All questions as to the number of shares of stock to be accepted
and the validity, form, eligibility (including time of receipt) and
acceptance of any tender of stock (including proper completion of the
Transmittal Form) will be determined by us, in our sole discretion.
Our determination will be final and binding on all parties. We reserve
the absolute right to reject any or all tenders of any stock that we
determine are not in appropriate form or if we determine that
acceptance of the shares may be unlawful. We also reserve the absolute
right to waive any of the conditions of the offer or any defect or
irregularity in any tender with respect to any particular shares of
stock or any particular shareholder. We will not consider any
particular tender of stock to have been properly made until all defects
or irregularities have been cured by the tendering shareholder or
waived by us. We are not obligated to give you notice of any defects
or irregularities in tenders. Neither we nor any of our directors,
officers, employees or agents will incur any liability for failure to
give any such notice.
YOUR REPRESENTATIONS AND WARRANTIES; OUR ACCEPTANCE CONSTITUTES AN
AGREEMENT
You will have accepted the terms of our offer if you tender stock
and submit a properly completed Transmittal Form. Your tender and
completion of the Transmittal Form also means that you are making the
following representations and warranties to us:
<circle> you have a "net long position" in the stock being
tendered within the meaning of Exchange Act Rule 14e-4;
<circle> the tender of the stock complies with Rule 14e-4;
<circle> you have full power and authority to execute the
Transmittal Form and tender the stock; and
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<circle> we will acquire good and marketable title free and
clear of all liens, security interests, charges,
encumbrances or other obligations and that the stock is
not subject to any adverse claims.
<PAGE>
It is a violation of Rule 14e-4 for you, directly or indirectly, to
tender stock for your own account unless, at the time of tender and at
the end of the proration period or period during which stock is
accepted by lot (including any extensions thereof),
<circle> you have a net long position equal to or greater than the
amount of the stock tendered, and
<circle> you will deliver the stock or cause stock to be delivered
in accordance with the terms of the offer.
Rule 14e-4 provides a similar restriction applicable to the tender or
guarantee of a tender on behalf of another person. Our acceptance for
payment of stock tendered pursuant to the offer will constitute a
binding agreement between you and us upon the terms and conditions of
the offer.
4. WITHDRAWAL RIGHTS.
Stock tendered pursuant to the offer may be withdrawn at any time
prior to the Expiration Date. Unless we have accepted tendered stock
for payment after the Expiration Date, you may also withdraw the stock
at any time after 5:00 p.m. Central Standard Time, on Tuesday, February
13, 2001.
For a withdrawal to be effective, a written notice of withdrawal
must be received by us before the applicable deadlines described in the
preceding paragraph. You may deliver your withdrawal in person, by
mail, courier delivery, or personal delivery to the address specified
on page 1 or by facsimile to the fax number specified on page 1. Any
notice of withdrawal must include your name, the name of the registered
holder (if different from your name), the number of shares of stock
tendered, and the number of shares to be withdrawn. If the
certificates for stock to be withdrawn have been delivered to us, then,
prior to the release of such certificates, you must also submit the
serial numbers shown on the particular certificates for stock to be
withdrawn and the signature on the notice of withdrawal must be
guaranteed by an Eligible Institution (except in the case of stock
tendered by an Eligible Institution). We will determine, in our sole
discretion, all questions as to the form and validity (including time
of receipt) of notices of withdrawal. Our determination will be final
and binding. We are not be obligated to give notice of any defects or
irregularities in any notice of withdrawal. Neither we, nor any of our
directors, officers or employees will incur liability for failure to
give any such notice.
You may not rescind a withdrawal. If the Expiration Date has not
occurred, withdrawn stock may be validly retendered prior to the
Expiration Date by again following one of the procedures described in
Section 3.
If we extend the offer, if we are delayed in the purchase of stock,
or if we are unable to purchase stock pursuant to the offer for any
reason, then, without prejudice to our rights under the offer, we may,
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subject to applicable law, retain tendered stock on our behalf, and
such stock may not be withdrawn except to the extent tendering
<PAGE>
shareholders are entitled to withdrawal rights as described in this
Section 4.
5. PURCHASE OF STOCK AND PAYMENT OF PURCHASE PRICE.
As promptly as practicable following the Expiration Date, we will
accept for payment and pay for (and thereby purchase) stock validly
tendered and not withdrawn prior to the Expiration Date. In accordance
with applicable regulations of the Commission, we may purchase an
additional amount of stock not to exceed 2% of the outstanding stock
pursuant to the offer without amending or extending the offer. If:
<circle> we increase or decrease the price to be paid for our
stock in our offer, or
<circle> we increase the number of shares being sought in the
offer by more than 2% of the outstanding stock), and
<circle> in either case, the offer is scheduled to expire at
any time earlier than the 10th business day from, and
including, the date that notice of such increase or
decrease is first published, sent or given in the manner
specified in Section 14,
the offer will be extended until the expiration of such period of 10
business days.
We will pay for all of the stock accepted for payment pursuant to
the offer as soon as practicable after the Expiration Date. In all
cases, payment for stock tendered and accepted for payment pursuant to
the offer will be made promptly (subject to possible delay in the event
of proration), but only after timely receipt by us of certificates for
stock and all properly completed documents required by this offer.
In the event of proration, we will determine the proration factor
and pay for those tendered shares accepted for payment as soon as
practicable after the Expiration Date. We do not expect to be able to
announce the final results of any proration and commence payment for
stock purchased until approximately three business days after the
Expiration Date. Certificates for all stock tendered and not purchased
due to proration or because the Transmittal Form was not properly
completed will be returned to the tendering shareholder as promptly as
practicable after the Expiration Date without expense to the tendering
shareholders. Under no circumstances will interest on the purchase
price be paid by us because of any delay in making payment. In
addition, if certain events occur, we may not be obligated to purchase
stock pursuant to the offer. See Section 6.
In most cases, we will pay or cause to be paid all stock transfer
taxes, if any, payable on the transfer to us of stock purchased
pursuant to the offer. If, however, payment of the purchase price is
to be made to, or (in the circumstances permitted by the offer) if
unpurchased stock is to be registered in the name of, any person other
than the registered holder(s), or if tendered certificates are
registered in the name of any person other than the person(s) signing
the Transmittal Form, the amount of all stock transfer taxes, if any
<PAGE>
(whether imposed on the registered holder(s) or such other person or
otherwise) payable on account of
-11-
the transfer to such person will be deducted from the purchase price
unless satisfactory evidence of the payment of the stock transfer
taxes, or exemption therefrom, is submitted.
6. CERTAIN CONDITIONS OF THE OFFER.
Our obligation to accept your stock or to pay for your stock is
subject to certain conditions. Notwithstanding any other provision of
our offer, we will not be required to accept for payment or pay for any
shares tendered, and may terminate or amend and may postpone (subject
to the requirements of the Exchange Act for prompt payment for or
return of shares tendered) the acceptance for payment of shares
tendered, if at any time after December 15, 2000, and before we have
made payment for any of the shares, any of the following shall have
occurred:
<circle> there shall have been threatened, instituted or pending
any action or proceeding by any government or governmental,
regulatory or administrative agency or authority or tribunal
or any other person, domestic or foreign, or before any
court, authority, agency or tribunal that:
<circle> challenges the acquisition of stock pursuant to the offer or
otherwise in any manner relates to or affects the offer;
<circle> in our reasonable judgment, could materially and adversely
affect our business, condition (financial or other), income,
operations or prospects, taken as a whole, or otherwise
materially impair in any way the contemplated future conduct
of our business or materially impair the offer's contemplated
benefits to us;
<circle> there shall have been any action threatened, pending or
taken, or approval withheld, or any statute, rule,
regulation, judgment, order or injunction threatened,
proposed, sought, promulgated, enacted, entered, amended,
enforced or deemed to be applicable to the offer or to us by
any legislative body, court, authority, agency or tribunal
which, in our sole judgment, would or might directly or
indirectly:
<circle> make the acceptance for payment of, or payment for, some or
all of the shares illegal or otherwise restrict or prohibit
consummation of the offer;
<circle> delay or restrict us or render us unable, to accept for
payment or pay for some or all of the shares;
<circle> materially impair the contemplated benefits of the offer to
us; or
<circle> materially affect our business, condition (financial or
other), income, operations or prospects, taken as a whole, or
otherwise materially impair in any way the contemplated
future conduct of our business of the Company;
<PAGE>
<circle> it has been publicly disclosed or we have learned that:
<circle> any person or "group" (within the meaning of Section 13(d)(3)
of the Exchange Act) has acquired or proposes to acquire
beneficial ownership of more than 5% of our outstanding
shares whether through the acquisition of stock, the
formation of a group, the grant of any option or right, or
otherwise (other than as disclosed in a Schedule 13D or 13G
-12-
on file with the Commission (the "Commission") on December
15, 2000); or
<circle> any such person or group that on or prior to December 15,
2000, had filed such a schedule with the Commission
thereafter shall have acquired or shall propose to acquire,
whether through the acquisition of stock, the formation of a
group, the grant of any option or right, or otherwise,
beneficial ownership of additional shares representing 2% or
more of the outstanding shares;
<circle> there has occurred:
<circle> any general suspension of trading in, or limitation on prices
for, securities on any national securities exchange or in the
over-the-counter market;
<circle> any significant decline in the market price of our stock or
in the general level of market prices of equity securities in
the United States or abroad;
<circle> any change in the general political, market, economic or
financial condition in the United States or abroad that could
have a material adverse effect on our business, condition
(financial or otherwise), income, operations, prospects or
ability to obtain financing generally or the trading in our
stock;
<circle> the declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States or any
limitation on, or any event which, in our reasonable
judgment, might affect the extension of credit by lending
institutions in the United States;
<circle> the commencement of a war, armed hostilities or other
international or national calamity directly or indirectly
involving the United States; or
<circle> in the case of any of the foregoing existing at the time of
the commencement of the offer, in our reasonable judgment, a
material acceleration or worsening thereof;
<circle> a tender or exchange offer with respect to some or all of
our stock (other than the offer, or a merger, acquisition or
other business combination proposal for Mid-Wisconsin, shall
have been proposed, announced or made by another person or
group (within the meaning of Section 13(d) (3) of the
Exchange Act);
<PAGE>
<circle> there has occurred any event or events that has resulted, or
may in our reasonable judgment result, directly or
indirectly, in an actual or threatened change in our
business, condition (financial or other), income, operations,
stock ownership or prospects; and, in our reasonable
judgment, such event or events make it undesirable or
inadvisable to proceed with the offer or with such acceptance
for payment.
The foregoing conditions are for our sole benefit and may be
asserted by us regardless of the circumstances (including any action or
inaction by our) giving rise to any such condition and may be waived by
us, in whole or in part, at any time and from time to time in our sole
discretion. Our failure at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right
-13-
which may be asserted at any time and from time to time. Any
determination by us concerning the events described above will be final
and binding on all parties.
7. PRICE RANGE OF STOCK; DIVIDENDS.
Prices for our stock are quoted on OTC Bulletin Board. Prices are
also published periodically in THE MILWAUKEE JOURNAL SENTINEL. The
following table sets forth, for the periods indicated, the high and low
bid quotations on the OTC Bulletin Board and the dividends per share
for the periods indicated. The quotations reflect bid prices, without
retail mark-up, mark-down or commissions, and may not necessarily
represent actual transactions. There is no active established trading
market for our stock.
<TABLE>
<CAPTION>
2000 1999 1998
QUOTATIONS QUOTATIONS QUOTATIONS
Divi- Divi- Divi-
QUARTER HIGH LOW DENDS(1) QUARTER HIGH LOW DENDS(2) QUARTER HIGH LOW DENDS(3)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1st $27.50 $27.00 $.20 1st $27.38 $25.50 $.17 1st $27.50 $27.25 $.15
2nd 27.00 27.00 .60 2nd 27.38 27.38 .60 2nd 28.00 27.50 .15
3rd 26.00 25.75 .20 3rd 27.38 27.38 .20 3rd 30.00 27.50 .17
4th* 24.00 21.50 .20 4th 27.50 27.50 .20 4th 27.50 23.00 .34
<FN>
* Through November 21, 2000.
(1) The $.60 per share dividend declared in the second quarter of
2000 includes a special dividend of $.40 per share.
(2) The $.60 per share dividend declared in the second quarter of
1999 includes a special dividend of $.40 per share.
(3) The $.34 per share dividend declared in the fourth quarter of
1998 includes a special dividend of $.17 per share.
</TABLE>
<PAGE>
During the two-year period ending on December 15, 2000, we
purchased a total of 54,572 shares of our common stock at prices
ranging from $27.00 to $27.50 per share. Information on purchases by
quarter is set forth below:
<TABLE>
<CAPTION>
QUARTER NO. OF SHARES AVERAGE PURCHASE PRICE
<S> <C> <C> <C>
1998 4th 0 -
1999 1st{(1)} 39,304 $27.50
2nd 0 -
3rd 0 -
4th 0 -
2000 1st 15,268 $27.00
2nd 0 -
3rd 0 -
4th 0 -
<FN>
{(1)} Purchases made pursuant to tender offer dated December 14, 1998.
</TABLE>
8. SOURCE AND AMOUNT OF FUNDS.
Assuming that we purchase 90,557 shares of our stock pursuant to
the offer at a purchase price of $25.50 per share, we expect the
maximum amount required to purchase stock pursuant to the offer and to
pay related taxes, fees, and expenses will be approximately $2,323,716,
which we expect to be available from our general corporate funds.
-14-
9. CERTAIN FINANCIAL AND OTHER INFORMATION CONCERNING
MID-WISCONSIN.
GENERAL
We are a Wisconsin corporation and own all of the stock of Mid-
Wisconsin Bank. We are a registered one-bank holding company under the
Bank Holding Company Act of 1956 and file periodic reports with the
Board of Governors of the Federal Reserve System (the "Federal Reserve
Board").
Mid-Wisconsin Bank operates 11 offices in northern and central
Wisconsin. The Bank offers a full range of banking, insurance, trust,
discount brokerage, and financial products and services.
Our office is located at the main office of Mid-Wisconsin Bank, 132
West State Street, Medford, Wisconsin 54451.
You may find additional information about the various reports filed
by us under "Additional Information" in this Section 9.
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
Set forth below is certain summary historical consolidated
financial information. The historical financial information has been
derived from the consolidated financial statements included in our
Annual Report on Form 10-K for the years ended December 31, 1999, and
1998 and from the unaudited consolidated financial statements included
<PAGE>
in our Quarterly Reports on Form 10-Q for the periods ended September
30, 2000, and September 30, 1999, respectively, which have been
prepared on a basis substantially consistent with the audited financial
statements, and reflect, in the opinion of management, all adjustments
necessary to a fair presentation of the financial position and results
of operations for such periods. The results for the nine months ended
September 30, 2000, are not necessarily indicative of the results for
the full year. The information presented below should be read in
conjunction with our consolidated financial statements and notes
thereto incorporated herein by reference. More comprehensive financial
information is included in such financial statements, and the financial
information which follows is qualified in its entirety by reference to
such financial statements, related notes and the audit report contained
therein, copies of which may be obtained as set forth below under
"Additional Information" in this Section 9.
-15-
<TABLE>
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS EXCEPT PER SHARE DATA)
<CAPTION>
Nine Months Ended Fiscal Year Ended
SEPT. 30, 2000 SEPT. 30, 1999 DEC. 31, 1999 DEC. 31, 1998
INCOME STATEMENT
<S> <C> <C> <C> <C>
Income before extraordinary items $2,406,607 $2,450,367 $3,348,117 $3,248,084
Net Income 2,406,607 2,450,367 3,348,117 3,248,084
BALANCE SHEET
Total assets $319,055,878 $297,362,084 $307,683,588 $280,478,820
Total indebtedness (borrowings) 49,414,070 42,017,836 45,919,665 25,488,031
Stockholders' equity 29,033,126 28,299,989 28,498,637 29,570,084
PER SHARE
Basic and diluted earnings per share $1.33 $1.34 $1.83 $1.74
Ratio of earnings to fixed charges $1.35 $1.48 $1.49 $1.48
Book value per share $16.04 $15.52 $15.62 $15.89
</TABLE>
SUMMARY UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
The following summary unaudited consolidated pro forma financial
information gives effect to the purchase of stock pursuant to the offer
and the payment of related taxes, fees and expenses based on the
assumptions described in the Notes to Summary Unaudited Consolidated
Pro Forma Financial Information below, as if such transactions had
occurred on the first day of each of the periods presented, with
respect to operating statement data, and on September 30, 2000, and
December 31, 1999, with respect to balance sheet data. The summary of
unaudited consolidated pro forma financial information should be read
in conjunction with the summary of historical consolidated financial
information incorporated herein by reference and does not purport to be
indicative of the results that would actually have been obtained, or
results that may be obtained in the future, or the financial condition
that would have resulted, if the purchase of the stock pursuant to the
<PAGE>
offer, and the payment of related taxes, fees and expenses, had been
completed at the dates indicated.
-16-
<TABLE>
SUMMARY UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<CAPTION>
Pro Forma Pro Forma
SEPTEMBER 30, 2000 DECEMBER 31, 1999
INCOME STATEMENT
<S> <C> <C>
Income before extraordinary items $2,407 $3,334
Net Income 2,407 3,334
BALANCE SHEET
Total assets $316,823 $305,360
Total indebtedness (borrowings) 49,414 45,920
Stockholders' equity 26,800 26,175
PER SHARE
Basic and diluted earnings per share $ 1.40 $ 1.83
Ratio of earnings to fixed charges 1.35 1.48
Book value per share 15.59 15.09
<FN>
Notes to Summary Unaudited Consolidated Pro Forma Financial Information
(1)The pro forma information assumes a repurchase of 90,557 shares at
$25.50 per share at December 31, 1999 and expenses relating to the
offer of $14,512.
(2)Treasury stock is accounted for under the cost method.
(3)Dividends paid in 2000 were adjusted for treasury stock.
</TABLE>
ADDITIONAL INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission. You can
inspect and copy these reports, proxy statements and other information
at the public reference facilities of the SEC, in Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549; 7 World Trade Center, Suite 1300,
New York, New York 10048; and Suite 1400, Citicorp Center, 500 W.
Madison Street, Chicago, Illinois 60661-2511. You can also obtain
copies of these materials from the public reference section of the SEC
at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. The SEC also maintains a web site that
contains reports, proxy and information statements and other
information regarding registrants that file electronically with
the SEC (HTTP://WWW.SEC.GOV).
Pursuant to Exchange Act Rule 13e-4, we have filed with the
Commission an Issuer Tender Offer Statement on Schedule TO which
contains additional information with respect to the offer. Our
Schedule TO, including the exhibits and any amendments thereto, may be
<PAGE>
examined, and copies may be obtained, at the same places and in the
same manner as is set forth in the preceding paragraph with respect to
information concerning us.
-17-
10. INTERESTS OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS
CONCERNING STOCK.
As of November 30, 2000, we had 1,811,144 shares of stock issued and
outstanding. Options with respect to 421 shares were exercisable
within 60 days of such date. The 90,557 shares of stock that we are
offering to purchase represent 5% of the stock then outstanding. As of
December 15, 2000, our directors and executive officers as a group (13
persons) beneficially owned an aggregate of 178,974 shares of stock
representing approximately 9.88% of the outstanding stock.
We have been advised that Ronald D. Isaacson, a director of Mid-
Wisconsin, intends to tender up to 5,500 shares, the majority of which
are held in an individual retirement account. Mr. Isaacson will retire
from our Board on December 31, 2000, and the intended tender of stock
will be done in connection with Mr. Isaacson's retirement planning. If
Mr. Isaacson tenders 5,500 shares to us pursuant to the offer, he will
continue to beneficially own 17,163 shares of our stock. If we
purchase 90,557 shares pursuant to the offer and Mr. Isaacson tenders
5,500 shares in connection with his retirement planning, our directors
and executive officers as a group would own beneficially approximately
10.08% of our outstanding stock immediately after the offer.
Except as described herein, neither we, nor, to the best of our
knowledge, any of our directors or executive officers, nor any
affiliates of any of the foregoing, had any transactions in the stock
during the 60 business days prior to the date hereof. On November 30,
2000, Gene C. Knoll exercised options granted in 1996 with respect to
538 shares at an option price of $19.50 per share.
Except for outstanding options to purchase stock granted from time
to time to certain employees (including executive officers) on certain
fixed dates pursuant to our 1991 and 1999 stock option plans and except
as otherwise described herein, neither we nor, to the best of our
knowledge, any of our affiliates, directors or executive officers is a
party to any contract, arrangement, understanding or relationship with
any other person relating, directly or indirectly, to the offer with
respect to any of our securities including, but not limited to, any
contract, arrangement, understanding or relationship concerning the
transfer or the voting of any such securities, joint ventures, loan or
option arrangements, puts or calls, guaranties of loans, guaranties
against loss or the giving or withholding of proxies, consents or
authorizations.
11. EFFECTS OF THE OFFER ON THE MARKET FOR STOCK; REGISTRATION UNDER
THE EXCHANGE ACT.
Our purchase of stock pursuant to the offer will reduce the number
of shares that might otherwise be traded publicly and may reduce the
number of shareholders. We believe that our purchase of stock pursuant
to the offer will not result in the stock becoming eligible for
deregistration under the Exchange Act.
-18-
<PAGE>
Our stock is not currently a "margin security" under the rules of
the Federal Reserve Board.
12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
We are required to provide prior notice to the Federal Reserve Board
if the gross consideration to be paid for our stock, when added to the
amount paid for other purchases of stock, during the preceding
twelve-month period is equal to 10% or more of our consolidated net
worth. We do not believe that such prior notice requirement is
applicable to the offer and no other regulatory approval is required to
purchase the stock pursuant to the offer.
13. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
GENERAL
The following is a discussion of the material United States federal
income tax consequences to shareholders with respect to a sale of
shares pursuant to our offer. The discussion is based upon the
provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), Treasury regulations, Internal Revenue Service ("IRS") rulings
and judicial decisions, all in effect as of the date hereof and all of
which are subject to change (possibly with retroactive effect) by
subsequent legislative, judicial or administrative action. The
discussion does not address all aspects of United States federal income
taxation that may be relevant to a particular shareholder in light of
the shareholder's particular circumstances or to certain types of
holders subject to special treatment under the United States federal
income tax laws (such as certain financial institutions, tax-exempt
organizations, life insurance companies, dealers in securities or
currencies, employee benefit plans or shareholders holding the shares
as part of a conversion transaction, as part of a hedge or hedging
transaction, or as a position in a straddle for tax purposes). In
addition, the discussion below does not consider the effect of any
foreign, state, local or other tax laws that may be applicable to
particular shareholders. The discussion assumes that the shares are
held as "capital assets" within the meaning of Section 1221 of the
Code. We have neither requested nor obtained a written opinion of
counsel or a ruling from the IRS with respect to the tax matters
discussed below.
YOU SHOULD CONSULT YOUR OWN TAX ADVISOR AS TO THE PARTICULAR
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO YOU OF TENDERING
SHARES PURSUANT TO THE OFFER AND THE APPLICABILITY AND EFFECT OF ANY
STATE, LOCAL OR FOREIGN TAX LAWS AND RECENT CHANGES IN APPLICABLE TAX
LAWS.
CHARACTERIZATION OF THE SURRENDER OF SHARES PURSUANT TO THE OFFER TO
PURCHASE
If you surrender shares to us pursuant to the offer, it will be a
taxable transaction for United States federal income tax purposes and
may also be a taxable transaction under applicable state, local and
foreign tax laws. The United States federal income tax consequences
may vary depending upon your particular facts and circumstances. Under
Section 302 of the Code, the surrender of shares by you pursuant to the
<PAGE>
offer will be treated as a "sale or exchange" of such shares for United
States federal income tax purposes if the receipt of cash upon
-19-
surrender (1) is "substantially disproportionate" with respect to you,
(2) results in a "complete redemption" of your interest in the Company,
or (3) is "not essentially equivalent to a dividend" with respect to
you (each as described below).
If any of the above three tests is satisfied, and the surrender of
the shares is therefore treated as a "sale or exchange" of such shares
for United States federal income tax purposes, you will recognize gain
or loss equal to the difference between the amount of cash received by
you and your tax basis in the shares surrendered pursuant to the offer.
Any such gain or loss will be capital gain or loss, and will be long
term capital gain or loss if the shares have been held for more than
one year.
If none of the above three tests is satisfied, you will be treated
as having received a distribution by us with respect to your shares in
an amount equal to the cash received by you pursuant to the offer. The
distribution will be treated as a dividend taxable as ordinary income
to the extent of our current or accumulated earnings and profits for
tax purposes. The amount of the distribution in excess of our current
or accumulated earnings and profits will be treated as a return of your
tax basis in the shares, and then as gain from the sale or exchange of
the shares. If you are treated as having received a distribution by us
with respect to your shares, your basis in your remaining shares will
generally be adjusted to take into account the return of your basis in
the shares tendered.
CONSTRUCTIVE OWNERSHIP
In determining whether any of the three tests under Section 302 of
the Code is satisfied, you must take into account not only the shares
that are actually owned by you, but also shares that are constructively
owned by you within the meaning of Section 318 of the Code. Under
Section 318 of the Code, you may constructively own shares actually
owned, and in some cases constructively owned, by certain related
individuals or entities and shares that you have the right to acquire
by exercise of an option or by conversion.
PRORATION
Contemporaneous dispositions or acquisitions of shares by a
shareholder or related individuals or entities may be deemed to be part
of a single integrated transaction and may be taken into account in
determining whether any of the three tests under Section 302 of the
Code has been satisfied. You should be aware that because proration
may occur in the offer, even if all the shares actually and
constructively owned by you are tendered pursuant to the offer, fewer
than all of these shares may be purchased by us. Thus, proration may
affect whether the surrender by you will meet any of the three tests
under Section 302 of the Code.
SECTION 302 TESTS
Generally, the receipt of cash by you will be "substantially
<PAGE>
disproportionate" if the percentage of our outstanding shares actually
and constructively owned by you immediately following the surrender of
shares pursuant to the offer is less than 80% of the percentage of the
outstanding shares actually and constructively owned by you immediately
before the sale of shares pursuant to the offer. You should consult
-20-
your tax advisors with respect to the application of the "substantially
disproportionate" test to your particular situation.
The receipt of cash by you will be a "complete redemption" if either
(1) you own no shares of our stock either actually or constructively
immediately after the shares are surrendered pursuant to the offer, or
(2) you actually own no shares of our stock immediately after the
surrender of shares pursuant to the offer and, with respect to shares
constructively owned by you immediately after the offer, you are
eligible to waive (and effectively waive) constructive ownership of all
such shares under procedures described in Section 302(c) of the Code.
A director, officer or employee of Mid-Wisconsin is not eligible to
waive constructive ownership under the procedures described in Section
302(c) of the Code.
Even if the receipt of cash by you fails to satisfy the
"substantially disproportionate" test or the "complete redemption"
test, you may nevertheless satisfy the "not essentially equivalent to a
dividend" test if your surrender of shares pursuant to the offer
results in a "meaningful reduction" in your interest in the Company.
Whether the receipt of cash by you will be "not essentially equivalent
to a dividend" will depend upon your individual facts and
circumstances. The IRS has indicated in published rulings that even a
small reduction in the proportionate interest of a small minority
shareholder in a publicly held corporation who exercises no control
over corporate affairs may constitute such a "meaningful reduction."
If you are expecting to rely upon the "not essentially equivalent to a
dividend" test, you should consult your own tax advisors as to its
application in your particular situation.
CORPORATE SHAREHOLDER DIVIDEND TREATMENT
If a sale of shares by a corporate shareholder is treated as a
dividend, the corporate shareholder may be entitled to claim a
deduction equal to 70% or more of the dividend under Section 243 of the
Code, subject to other applicable limitations. Corporate shareholders
should, however, consider the effect of Section 246(c) of the Code,
which disallows a dividends-received deduction with respect to stock
that is held for 45 days or less. For this purpose, the length of time
a taxpayer is deemed to have held stock may be reduced by periods
during which the taxpayer's risk of loss with respect to the stock is
diminished by reason of the existence of certain options or other
transactions. Moreover, under Section 246A of the Code, if a corporate
shareholder has incurred indebtedness directly attributable to an
investment in shares, the dividends-received deduction may be reduced.
In addition, amounts received by a corporate shareholder pursuant to
the offer that are treated as a dividend may constitute an
"extraordinary dividend" under Section 1059 of the Code. The
"extraordinary dividend" rules of the Code are highly complicated.
<PAGE>
Accordingly, any corporate shareholder that might have a dividend as a
result of the sale of shares pursuant to the offer should review the
"extraordinary dividend" rules to determine the applicability and
impact of such rules to it.
-21-
ADDITIONAL TAX CONSIDERATIONS
The distinction between long-term capital gains and ordinary income
is relevant because, in general, individuals currently are subject to
taxation at a reduced rate on their "net capital gain" (i.e., the
excess of net long-term capital gains over net short-term capital
losses) for the year. Tax rates on long-term capital gain for
individual shareholders vary depending on the shareholders' income and
holding period for the shares. In particular, reduced tax rates apply
to gains recognized by an individual from the sale of capital assets
held for more than one year (currently 20% or less).
SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING
ANY POSSIBLE IMPACT ON THEIR OBLIGATION TO MAKE ESTIMATED TAX PAYMENTS
AS A RESULT OF THE RECOGNITION OF ANY CAPITAL GAIN (OR THE RECEIPT OF
ANY ORDINARY INCOME) CAUSED BY THE SURRENDER OF ANY SHARES TO US
PURSUANT TO THE OFFER TO PURCHASE.
BACKUP WITHHOLDING
See Section 3 with respect to the application of the United States
federal income tax backup withholding.
14. EXTENSION OF OFFER; TERMINATION; AMENDMENT.
We expressly reserve the right, in our sole discretion, at any time
and from time to time and for any reason, to extend the period of time
during which the offer is open. If we extend the offer, it will also
delay acceptance for payment of, and payment for, any stock. We may
extend our offer by giving oral or written notice of extension to you
and making a public announcement.
We also expressly reserve the right, in our sole discretion, to
terminate the offer and not accept for payment or pay for any stock not
theretofore accepted for payment or paid for. We may also, subject to
applicable law, postpone payment for stock upon the occurrence of any
of the conditions specified in Section 6. We must give oral or written
notice of such termination or postponement to you and make a public
announcement. Our reservation of the right to delay payment for stock
which has accepted for payment is limited by Exchange Act Rule
13e-4(f)(5) which requires that we must pay the consideration offered
or return the stock tendered promptly after termination or withdrawal
of a tender offer.
Subject to compliance with applicable law, we further reserve the
right, in our sole discretion, and for any reason, to amend the offer
in any respect (including, without limitation, by decreasing or
increasing the consideration offered to holders of stock or by
decreasing or increasing the number of shares of our stock being sought
in the offer). Amendments to the offer may be made at any time and
from time to time and will be effective upon public announcement by us.
<PAGE>
Public announcement, in the case of an extension, must be issued no
later than 9:00 a.m., Central Standard Time, on the next business day
after the last previously scheduled or announced Expiration Date. Any
public announcement made
-22-
pursuant to the offer will be disseminated promptly to shareholders in
a manner reasonably designed to inform shareholders of such change.
If we materially change the terms of the offer or the information
concerning the offer, or if we waive a material condition of the offer,
we will extend the offer to the extent required by Exchange Act Rules
13e-4(d)(2) and 13e-4(e)(2). These rules require that the minimum
period during which an offer must remain open following material
changes in the terms of the offer or information concerning the offer
(other than a change in price or a change in percentage of securities
sought) will depend on the facts and circumstances, including the
relative materiality of such terms or information. If (1) we increase
or decrease the price to be paid for stock or the number of shares of
our stock being sought in the offer and, in the event of an increase in
the number of shares of our stock being sought, such increase exceeds
2% of the outstanding stock, and (2) the offer is scheduled to expire
at any time earlier than the 10th business day from, and including, the
date that notice of an increase or decrease is first published, sent or
given in the manner specified in this Section 14, the offer will then
be extended until the expiration of such 10 business days.
15. FEES AND EXPENSES.
We will not pay fees or commissions to any broker, dealer or other
person for soliciting tenders of stock pursuant to the offer. We will,
however, upon request, reimburse brokers, dealers and commercial banks
for customary mailing and handling expenses incurred by such persons in
forwarding the offer and related materials to the beneficial owners of
stock held by any such person as a nominee or in a fiduciary capacity.
No broker, dealer, commercial bank or trust company has been authorized
to act as our agent for purposes of the offer.
We will pay or cause to be paid all stock transfer taxes, if any,
on our purchase of stock unless payment of the purchase price is to be
made to, or stock not tendered or not purchased is to be registered in
the name of, any person other than the registered holder; or if
tendered stock is registered in the name of any person other than the
person who executes the Transmittal Form.
<TABLE>
We estimate that we will incur the following fees and expenses in
connection with the offer:
<CAPTION>
<S> <C>
Filing fees $ 462
Legal fees 12,500
Printing costs 1,250
Miscellaneous 300
Total $14,512
</TABLE>
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<PAGE>
16. MISCELLANEOUS.
We are not aware of any jurisdiction where the making of the offer
is not in compliance with applicable law. If we become aware of any
jurisdiction where the making of the offer is not in compliance with
any valid applicable law, we will make a good faith effort to comply
with such law. If, after such good faith effort, we cannot comply with
such law, the offer will not be made to (nor will tenders be accepted
from or on behalf of) the holders of stock residing in such
jurisdiction. In any jurisdiction the securities or blue sky laws of
which require the offer to be made by a licensed broker or dealer, the
offer shall be deemed to be made on our behalf by one or more
registered brokers or dealers license under the laws of such
jurisdiction.
MID-WISCONSIN FINANCIAL SERVICES, INC.
December 15, 2000
FACSIMILE COPIES OF THE TRANSMITTAL FORM WILL BE ACCEPTED FROM
ELIGIBLE INSTITUTIONS. THE TRANSMITTAL FORM AND CERTIFICATES FOR
STOCK AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT OR DELIVERED BY
EACH SHAREHOLDER OR HIS OR HER BROKER, DEALER, COMMERCIAL BANK, TRUST
COMPANY OR OTHER NOMINEE TO US.
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