<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] 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 Rule 14a-11(c) or Rule 14a-12
D & N FINANCIAL CORPORATION
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which 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> 2
D&N FINANCIAL CORPORATION
400 QUINCY STREET
HANCOCK, MICHIGAN 49930
(906) 482-2700
------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 30, 1998
------------
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of D&N Financial Corporation ("D&N" or the "Corporation") will be
held at the Franklin Square Inn located at 820 Shelden Avenue, Houghton,
Michigan, on Thursday, April 30, 1998, at 2:00 p.m. (Eastern Daylight Time). A
Proxy Card and a Proxy Statement for the Meeting are enclosed. The Meeting is
for the purpose of:
I. Electing three directors of the Corporation;
II. Ratifying the appointment of Coopers & Lybrand L.L.P. as independent
auditors for the Corporation for the fiscal year ending December 31,
1998; and
III. Transacting such other business as may properly come before the Meeting
or any adjournments or postponements thereof.
The Board of Directors is not aware of any other business to come before
the Meeting. Any action may be taken on any one of the foregoing proposals at
the Meeting on the date specified above, or on any date or dates to which the
Meeting may be adjourned or postponed. Stockholders of record at the close of
business on March 10, 1998 will be entitled to vote the number of shares held of
record in their names on that date.
A complete list of stockholders entitled to vote at the Meeting will be
available for examination by any stockholder for any purpose relevant to the
Meeting between 8:00 a.m. and 5:00 p.m. on working days at the 901 W. Sharon
Avenue, Suite 1, Houghton, Michigan office of D&N Bank, for a period of ten days
prior to the Meeting.
You are requested to fill in and sign the enclosed form of proxy which is
solicited on behalf of the Board of Directors, and to mail it promptly in the
enclosed envelope. The proxy will not be used if you attend and vote at the
Meeting in person.
By Order of the Board of Directors
LINDA K. KORPELA
LINDA K. KORPELA
Corporate Secretary
Hancock, Michigan
March 26, 1998
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE CORPORATION THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED, POSTAGE-PREPAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
<PAGE> 3
PROXY STATEMENT
OF
D&N FINANCIAL CORPORATION
400 QUINCY STREET
HANCOCK, MICHIGAN 49930
(906) 482-2700
ANNUAL MEETING OF STOCKHOLDERS
APRIL 30, 1998
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of D&N Financial Corporation,
a Delaware corporation ("D&N" or the "Corporation"), for use at its 1998 Annual
Meeting of Stockholders to be held on Thursday, April 30, 1998, at 2:00 p.m.
(Eastern Daylight Time), at the Franklin Square Inn located at 820 Shelden
Avenue, Houghton, Michigan, and at any adjournments or postponements thereof
(the "Meeting"). This Proxy Statement and the accompanying Notice of Meeting and
Proxy Card are first being mailed to stockholders of the Corporation on or about
March 26, 1998. Certain of the information provided herein relates to D&N Bank
(the "Bank"), a wholly owned subsidiary of the Corporation.
Proxies solicited on behalf of the Board of Directors of the Corporation
will be voted in accordance with the directions given therein. Where no
instructions are indicated, proxies will be voted "FOR" the proposals set forth
in this Proxy Statement for consideration at the Meeting. The Corporation does
not know of any matters, other than as described in the Notice of Meeting, that
are to be properly presented at the Meeting. If any other matters are properly
presented at the Meeting for action, the persons named in the enclosed proxy and
acting thereunder will have the discretion to vote on such matters in accordance
with their best judgment.
A proxy given pursuant to this solicitation may be revoked at any time
before it is voted. Proxies may be revoked by: (i) duly executing and delivering
to the Secretary of the Corporation a later dated proxy relating to the same
shares prior to the exercise of such proxy, (ii) filing with the Secretary of
the Corporation at or before the Meeting a written notice of revocation bearing
a later date than the proxy, or (iii) attending the Meeting and voting in person
(although attendance at the Meeting will not in and of itself constitute
revocation of a proxy). Any written notice revoking a proxy should be delivered
to Linda K. Korpela, Corporate Secretary, 400 Quincy Street, Hancock, Michigan
49930.
Proxies marked as abstaining will be treated as present for purposes of
determining a quorum at the Meeting, and will be counted as present and entitled
to vote on any matter as to which abstention is indicated. Proxies returned by
brokers as "non-votes" on behalf of shares held in street name, because the
beneficial owners' discretion has been withheld as to one or more matters on the
agenda for the Meeting, will be treated as present for purposes of determining a
quorum for the Meeting, but will not be counted as voting on any matter as to
which a non-vote is indicated on the broker's proxy.
VOTE REQUIRED FOR APPROVAL OF PROPOSALS
Directors shall be elected by a plurality of the shares present in person
or represented by proxy at the Meeting and entitled to be voted on the election
of directors.
Approval of the ratification of Coopers & Lybrand L.L.P. as auditors for
the Corporation for the fiscal year ending December 31, 1998 requires the
affirmative vote of at least a majority of shares present in person or
represented by proxy at the Meeting and entitled to be voted on the matter.
1
<PAGE> 4
VOTING SECURITIES AND CERTAIN HOLDERS THEREOF
Stockholders of record as of the close of business on March 10, 1998 will
be entitled to one vote for each share then held. As of such date, there were
9,120,324 shares of common stock (the "Common Stock") outstanding and entitled
to vote.
Set forth below is certain information as of March 10, 1998, as to (i)
those persons who were known by the Corporation to own beneficially more than 5%
of the Common Stock of the Corporation and (ii) the shares of Common Stock
beneficially owned by the executive officers named below and all directors and
executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
------------------------------------ -------------------- ----------
<S> <C> <C>
Heartland Advisors, Inc. ................................... 722,680(1) 7.92
790 North Milwaukee Street
Milwaukee, Wisconsin 53202
Mellon Bank Corporation..................................... 526,853(2) 5.78
Mellon Bank, N.A.
The Dreyfus Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
George J. Butvilas, President
and Chief Executive Officer............................... 249,767(3) 2.67
D&N Financial Corporation and D&N Bank
Alfred J. Sliwinski, Executive Vice President/
Community Banking......................................... 69,551(3)(4) 0.76
D&N Bank
Kenneth R. Janson, Executive Vice President/
Chief Financial Officer and Treasurer..................... 62,306(3) 0.68
D&N Financial Corporation and D&N Bank
Richard E. West, Executive Vice President/
Wholesale Banking......................................... 42,266(3) 0.46
D&N Bank
Donald W. Schulze, Senior Vice President/
Human Resources........................................... 36,471(3) 0.40
D&N Bank
All directors and executive officers as a group (18
persons)(5)............................................... 1,184,392(6) 12.22
</TABLE>
- ---------------
(1) The above information regarding beneficial ownership by Heartland Advisors,
Inc. ("HAI") is as reported by them in a Schedule 13G dated January 27, 1998
under the Securities Exchange Act of 1934. HAI reported sole voting power as
to 686,600 shares, sole dispositive power as to 722,680 shares, shared
voting power as to no shares, and shared dispositive power as to no shares.
The shares are held in investment advisory accounts of HAI. The interests of
one such account, Heartland Value Fund, a series of Heartland Group, Inc., a
registered investment company, relate to more than 5% of the class.
(2) The above information regarding beneficial ownership by Mellon Bank
Corporation ("MBC"), Mellon Bank, N.A. ("MBN") and The Dreyfus Corporation
is as reported by them in a Schedule 13G dated January 15, 1998 under the
Securities Exchange Act of 1934. MBC and MBN reported sole voting power as
to 275,813 shares, sole dispositive power as to 275,813 shares, shared
voting power as to 251,040 shares, and shared dispositive power as to
251,040 shares. The Dreyfus Corporation reported sole voting power as to
253,550 shares, sole dispositive power as to 253,550 shares, shared voting
power as to 251,040 shares, and shared dispositive power as to 251,040
shares.
2
<PAGE> 5
(3) Includes for Messrs. Butvilas, Sliwinski, Janson, West and Schulze,
respectively, 224,045, 60,178, 53,774, 32,291 and 30,152 shares subject to
options granted under the Corporation's stock option plans that are
exercisable within 60 days of March 10, 1998.
(4) Mr. Sliwinski has disclaimed beneficial ownership over 202 shares of the
Common Stock.
(5) Includes directors and executive officers of the Corporation and the Bank as
of March 10, 1998.
(6) In addition to shares held directly, this amount includes restricted stock
and 571,556 shares subject to options exercisable within 60 days of March
10, 1998 granted under the Corporation's stock option plans. Also included
are shares allocated under the D&N Bank 401(k) Plan and shares held in
retirement accounts or by certain family members, over which shares the
respective directors and officers may be deemed to have shared voting and
investment powers. However, 2,046 of these shares have been disclaimed for
beneficial ownership purposes.
PROPOSAL I -- ELECTION OF DIRECTORS
Approximately one-third of the Corporation's Board of Directors is elected
annually.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF THE
THREE NOMINEES PROPOSED BY YOUR BOARD OF DIRECTORS.
INFORMATION REGARDING DIRECTORS
Since the March 25, 1997 Proxy Statement, Sharon A. Reese Dalenberg
resigned from the Board of Directors effective July 26, 1997 due to other
business commitments. Subsequently, the number of directors was increased from
nine to ten pursuant to action taken at the January 28, 1998 Board of Directors
meeting. On January 28, 1998, the Board of Directors appointed Mary P. Cauley
and Steven Coleman to fill the two vacancies until the Annual Meeting of
Stockholders to be held in the year 2000.
The table below sets forth certain information regarding the composition
of the Corporation's Board of Directors, including terms of office. It is
intended that the proxies solicited on behalf of the Board of Directors (other
than proxies in which the vote is withheld as to one or more nominees) will be
voted at the Meeting for the election of the nominees listed below. If any
nominee is unable to serve, the shares represented by all valid proxies will be
voted for the election of such substitute as the Board of Directors may
recommend. At this time, the Board of Directors knows of no reason why any of
the nominees might be unable to serve if elected. There are no arrangements or
understandings between any nominee and any other person pursuant to which such
nominee was selected. Except for Directors Butvilas, Jacobson and Smith who
beneficially own approximately 2.67%, 1.65% and 3.02%, respectively, of the
outstanding shares of the Common Stock including options exercisable within 60
days of March 10, 1998, no director of the Corporation owned in excess of one
percent of the total outstanding shares of the Common Stock at March 10, 1998.
3
<PAGE> 6
<TABLE>
<CAPTION>
DIRECTOR OF SHARES OF COMMON
POSITIONS HELD CORPORATION TERM STOCK BENEFICIALLY
IN THE CORPORATION OR BANK TO OWNED AS OF
NAME AGE AND THE BANK SINCE EXPIRE MARCH 10, 1998(1)
---- --- ------------------ ----------- ------ ------------------
<S> <C> <C> <C> <C> <C>
NOMINEES
Stanley A. Jacobson............... 48 Director of the Corporation 1996 2001 150,921(2)
and the Bank
Randolph P. Piper................. 49 Director of the Corporation 1982 2001 43,706(2)(3)
and the Bank
Kenneth D. Seaton................. 68 Director and Chairman of 1964 2001 59,407(2)
the Board of the
Corporation and the Bank
DIRECTORS CONTINUING IN OFFICE
George J. Butvilas................ 52 Director, President and 1990 1999 249,767(2)
Chief Executive Officer of
the Corporation and the
Bank
B. Thomas M. Smith, Jr............ 63 Director of the Corporation 1995 1999 275,726(2)
and the Bank
Steven E. Zack.................... 47 Director of the Corporation 1996 1999 48,800(2)
and the Bank
Joseph C. Bromley................. 69 Director of the Corporation 1980 2000(4) 24,573(2)
and the Bank
Mary P. Cauley.................... 50 Director of the Corporation 1998 2000 570
and the Bank
Steven Coleman.................... 45 Director of the Corporation 1998 2000 529
and the Bank
Peter Van Pelt.................... 65 Director of the Corporation 1988 2000 33,008(2)
and the Bank
</TABLE>
- ---------------
(1) Includes shares held directly, as well as restricted stock and shares
subject to options exercisable within 60 days of March 10, 1998 granted
under the Corporation's stock option plans, shares allocated under the D&N
Bank 401(k) Plan and shares held in retirement accounts or by certain
members of the named individuals' families. To the extent that restricted
stock is held pursuant to the Tandem Restricted Stock/Stock Option Program
under the Amended and Restated Stock Option and Incentive Plan, these shares
are included in this total and the related tandem options are not so
included.
(2) Includes shares subject to options which are exercisable within 60 days of
March 10, 1998: S. Jacobson, 5,500; R. Piper, 26,950; K. Seaton, 13,750; G.
Butvilas, 224,045; B. T. Smith, Jr., 13,750; S. Zack, 5,500; J. Bromley,
13,750; and P. Van Pelt, 26,950.
(3) 1,844 of these shares have been disclaimed for beneficial ownership
purposes.
(4) In accordance with the age limitation for directors in the Bylaws of the
Corporation, Mr. Bromley is required to retire at the 1999 Annual Meeting of
Stockholders following his 70th birthday. The Board of Directors has not
made a determination at this time whether to fill the vacancy or to reduce
the number of directors.
4
<PAGE> 7
The business experience of each of the directors during the last five
years is as follows:
Joseph C. Bromley. Mr. Bromley has been associated with Churchill
Transportation, Inc. of Detroit, Michigan, a 48-state truck load carrier, since
October 1990 and presently serves as its Executive Vice President and Treasurer.
Mr. Bromley was a director of First Farmington Savings and Loan Association from
1959 until its merger with the Bank in 1980.
George J. Butvilas. Mr. Butvilas joined D&N as President in May 1990. He
was named Chief Executive Officer of the Bank in 1991 and Chief Executive
Officer of the Corporation in 1992. Prior to joining D&N, he served most
recently as Executive Vice President and Director of Boulevard Bancorp, Inc. of
Chicago, Illinois.
Mary P. Cauley. Ms. Cauley has been an attorney with Plunkett & Cooney of
Detroit, Michigan since 1987, and a partner of the firm since 1995. Her legal
specialties are labor law and employment defense.
Steven Coleman. Mr. Coleman is the Executive Vice President and Managing
Director of Near North Insurance Brokerage, Inc., the largest subsidiary of the
Near North National Group ("Near North"). Near North, based in Chicago,
Illinois, provides specialized insurance brokerage, risk management and
financial services worldwide. Mr. Coleman, who has been with Near North since
1985, also serves in various capacities with other subsidiaries of Near North.
Stanley A. Jacobson. Mr. Jacobson is an attorney and has been active in
southeastern Michigan real estate developments for his own account and in
association with Mark Jacobson & Associates, Inc. since 1986. Mr. Jacobson was
President since 1989, and a director since 1975, of Macomb Federal Savings Bank
until its merger with the Bank in 1996.
Randolph P. Piper. Mr. Piper has been an attorney-at-law in Flint,
Michigan for over 24 years. He was a director of First Federal Savings and Loan
Association of Flint from 1979 until its merger with the Bank in 1982.
Kenneth D. Seaton. Mr. Seaton has been Chairman of the Board of the
Corporation since its formation in 1988 and served as its Chief Executive
Officer from 1988 to 1992. He was Chief Executive Officer of the Bank from 1968
to 1991.
B. Thomas M. Smith, Jr. Mr. Smith was a consultant for ITT Corporation, a
multi-national conglomerate headquartered in New York, from January 1996 to
December 1996 and is now retired. Prior to that, he served as Vice President and
Director of Corporate Purchasing for ITT.
Peter Van Pelt. Mr. Van Pelt has served as the manager of North Wind Books
(and its predecessor business, The Museum Shop) of Eagle Harbor, Michigan since
January 1994. He also is an independent management consultant. Prior to 1990, he
served as President of Runzheimer International of Rochester, Wisconsin, a
specialized management consulting firm.
Steven E. Zack. Mr. Zack has served as President of Global Commercial
Credit, a specialty insurance firm in Franklin, Michigan, since March 1996 and
as Executive Vice President of J. A. Versical & Associates, Inc., a Michigan
retail insurance broker, since May 1994. From May 1992 to May 1994, he served as
an independent insurance consultant. Mr. Zack was a director of Macomb Federal
Savings Bank from 1989 until its merger with the Bank in 1996.
BOARD OF DIRECTORS MEETINGS, COMPENSATION AND COMMITTEES
The Board conducts its business through meetings of the Board and through
the activities of its committees. The Board of Directors of the Corporation held
thirteen meetings during fiscal year 1997. No incumbent director of the
Corporation attended fewer than 92% of the total meetings of the Board of
Directors and committees on which such director served during this period. The
average attendance of all incumbent directors was 99% during 1997. The
Corporation has standing Audit, Compensation, Stock Option and Executive
Committees.
5
<PAGE> 8
The Corporation has no standing nominating committee. The full Board of
Directors acts as a nominating committee for the annual selection of its
nominees for election as directors. During fiscal year 1997, the Board of
Directors acting as a nominating committee met once. While the Board of
Directors will consider nominees recommended by stockholders, it has neither
actively solicited nominations nor established any procedures for this purpose
outside of the requirements of the Bylaws of the Corporation.
The Bank, as the principal subsidiary of the Corporation, has certain
standing committees of its Board of Directors. These committees consist of the
Asset/Liability, Audit, Community Responsibility, Compensation, Executive and
Loan Committees. The Bank's Board of Directors is comprised of the same
individuals who currently serve on the Board of Directors of the Corporation.
During fiscal year 1997, the Board of Directors of the Bank held twelve
meetings. No incumbent director of the Bank attended fewer than 83% of the total
meetings of the Board of Directors and committees on which such director served
during this period. The average attendance of all incumbent directors was 98%
during 1997.
During fiscal year 1997, directors received $8,500 per annum, payable
monthly; the chairpersons of the Board's Asset/Liability, Audit, Community
Responsibility, Compensation and Loan Committees received additional
compensation of $50 per month; and the Chairman of the Board received additional
compensation of $750 per month. In addition, directors received a fee of $400
per day for attendance at meetings of the Board of Directors and a fee of $400
for attendance at Board committee meetings. These were the total fees paid for
representation on both the Corporation and the Bank Boards of Directors and were
allocated pursuant to a cost allocation agreement between the Corporation and
the Bank. A separate attendance fee was not paid for a Corporation Board or
committee meeting if a fee was paid for a meeting of the Bank Board or parallel
Bank committee held on the same day. Directors who were full-time employees of
the Corporation or the Bank did not receive the Board meeting or committee
meeting attendance fees. Effective January 1, 1998, the annual fee was increased
from $8,500 to $9,250. In March 1997, each non-employee director was granted a
nonqualified stock option for 7,500 shares of Common Stock pursuant to the
formula award program under the Amended and Restated 1994 Management Stock
Incentive Plan, with an exercise price equal to the fair market value of the
Common Stock on the date of grant.
Set forth below is a list of the principal committees formed by the Board
of Directors of the Corporation and the Bank and members of those committees.
Asset/Liability Committee. The Asset/Liability Committee is responsible
for monitoring the Bank's exposure to interest rate risk in conjunction with
credit, operational and liquidity risks as they affect net interest income,
capital and return on equity and other aspects of asset/liability management.
The Asset/Liability Committee currently is composed of Directors Piper
(Chairperson), Coleman, Smith, Van Pelt and Zack. This committee met four times
during fiscal year 1997.
Audit Committee. The Audit Committee meets with the Corporation's
independent auditors and oversees the internal audit functions of the
Corporation and the Bank. The Audit Committee currently is composed of Directors
Van Pelt (Chairperson), Cauley, Smith and Zack. The Corporation's Audit
Committee and the Bank's Audit Committee each met four times during fiscal year
1997.
Community Responsibility Committee. The Community Responsibility Committee
is responsible for ensuring that an affirmative effort is made by the Bank to
meet the banking and financial needs within its communities, with an
understanding of the cultural diversity within these communities. The Community
Responsibility Committee currently is composed of Directors Van Pelt
(Chairperson), Cauley, Smith and Zack. This committee met twice during fiscal
year 1997.
Compensation Committee. The Compensation Committee is responsible for
reviewing and recommending to the Board of Directors senior officers' salaries,
compensation and benefit programs and other aspects of personnel matters. The
Compensation Committee currently is composed of Directors Bromley (Chairperson),
Smith and Van Pelt. The Corporation's Compensation Committee and the Bank's
Compensation Committee each met six times during fiscal year 1997.
6
<PAGE> 9
Executive Committee. The Executive Committee is authorized to exercise all
of the authority of the Board of Directors in the management of the Corporation
and the Bank between Board meetings, unless otherwise provided for in the Bylaws
of such entities. The Executive Committee currently is composed of Directors
Butvilas (Chairperson), Bromley, Jacobson, Seaton and Smith. The Executive
Committee did not meet during fiscal year 1997.
Loan Committee. The Loan Committee is responsible for monitoring the
credit risk and other aspects of the Bank's lending operations. The Loan
Committee currently is composed of Directors Jacobson (Chairperson), Piper and
Seaton. This committee met seventeen times during fiscal year 1997.
Stock Option Committee. The Stock Option Committee is responsible for
administering the Corporation's stock option plans. The Stock Option Committee
currently is composed of Directors Bromley (Chairperson) and Smith. This
committee met four times during fiscal year 1997.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information concerning the compensation
paid or granted to the Corporation's Chief Executive Officer and to each of the
four other most highly compensated executive officers of the Corporation and the
Bank whose aggregate cash compensation exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
---------------------------------
AWARDS PAYOUTS
----------------------- -------
ANNUAL COMPENSATION SECURITIES
------------------------------------ RESTRICTED UNDERLYING
OTHER ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARD(S) SARS PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($) ($) (#)(2) ($) ($)(3)
------------------ ---- ------ ----- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
George J. Butvilas............. 1997 $308,039(1) $87,074 $0 $0 33,000 $0 $24,722
President and Chief 1996 248,500(1) 72,007 0 0 46,588 0 23,338
Executive Officer 1995 248,500(1) 0 0 0 0 0 5,270
Alfred J. Sliwinski............ 1997 $120,000 $31,486 $0 $0 13,750 $0 $ 9,550
Executive VP/ 1996 109,700 19,818 0 0 16,176 0 8,215
Community Banking 1995 95,559 5,000 0 0 0 0 3,190
Kenneth R. Janson.............. 1997 $120,070 $28,470 $0 $0 12,564 $0 $ 9,373
Executive VP/Chief 1996 109,651 21,433 0 0 17,304 0 8,284
Financial Officer and Treasurer
1995 106,968 6,800 0 0 0 0 3,568
Richard E. West................ 1997 $108,662 $24,624 $0 $0 10,674 $0 $ 8,374
Executive VP/ 1996 93,163 19,508 0 0 13,938 0 7,120
Wholesale Banking 1995 86,161 5,750 0 0 0 0 2,908
Donald W. Schulze.............. 1997 $ 97,000 $19,948 $0 $0 8,891 $0 $ 7,389
Senior VP/ 1996 85,819 8,001 0 0 9,318 0 5,983
Human Resources 1995 72,000 3,700 0 0 0 0 4,559
</TABLE>
- ---------------
(1) Includes annual fees received as a director; no meeting or committee fees
were received.
(2) The 1996 and 1997 stock option awards have been adjusted for a 10% stock
dividend which was paid on January 13, 1998 to stockholders of record on
December 23, 1997.
7
<PAGE> 10
(3) Represents employer matching contributions under the D&N Bank 401(k) Plan,
contributions under a nonqualified supplemental executive retirement plan
("SERP"), and life insurance premiums paid by the Corporation as follows:
<TABLE>
<CAPTION>
YEAR 401(k) SERP LIFE INS.
---- ------- ---- ---------
<S> <C> <C> <C> <C>
Butvilas....................................... 1997 $9,500 $14,454 $768
1996 9,500 13,070 768
1995 4,620 0 650
Sliwinski...................................... 1997 $9,089 $ 0 $461
1996 7,771 0 444
1995 2,866 0 324
Janson......................................... 1997 $8,912 $ 0 $461
1996 7,865 0 419
1995 3,208 0 360
West........................................... 1997 $7,997 $ 0 $377
1996 6,760 0 360
1995 2,585 0 323
Schulze........................................ 1997 $7,017 $ 0 $372
1996 5,629 0 354
1995 4,320 0 239
</TABLE>
The following table sets forth certain information concerning stock
options and stock appreciation rights ("SARs") granted to named executive
officers in 1997.
OPTION/SAR GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
GRANT DATE
INDIVIDUAL GRANTS VALUE
------------------------------------------------------ -------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS/SARs EXERCISE
OPTIONS/SARs GRANTED TO OR BASE GRANT DATE
GRANTED EMPLOYEES IN PRICE EXPIRATION PRESENT VALUE
NAME (#)(2) FISCAL YEAR ($/Sh) DATE ($)(3)
---- ------------ ------------ -------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Butvilas.............................. 33,000 16.92% $16.3636 3/31/07 $322,463
Sliwinski............................. 13,750 7.05% $16.3636 3/31/07 $134,360
Janson................................ 12,564 6.44% $16.3636 3/31/07 $122,770
West.................................. 10,674 5.47% $16.3636 3/31/07 $104,302
Schulze............................... 8,891 4.56% $16.3636 3/31/07 $ 86,879
</TABLE>
- ---------------
(1) The number of securities underlying the options and the exercise price per
share have been adjusted for a 10% stock dividend which was paid on January
13, 1998 to stockholders of record on December 23, 1997.
(2) The options vest in three equal annual installments beginning on April 1,
1997.
(3) The fair value of grants made in fiscal year 1997 was estimated to be
$9.7716 per share on the date of grant using the Black-Scholes option
pricing model with the following assumptions used: risk-free interest rate
of 6.96%, expected volatility of 46.91%, expected lives of seven years and
0.81% dividend yield.
8
<PAGE> 11
The following table sets forth certain information concerning the number
and value of stock options and SARs exercised during 1997, and held at December
31, 1997, by the named executive officers.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
SHARES FY-END(#)(1) FY-END($)(1)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE (#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Butvilas............. 41,248 $479,116 189,673 37,529 $3,292,263 $454,524
Sliwinski............ 0 N/A 55,943 14,559 993,476 173,310
Janson............... 0 N/A 41,305 14,144 708,938 170,898
West................. 0 N/A 30,545 11,762 518,844 141,398
Schulze.............. 0 N/A 25,271 9,033 435,867 106,386
</TABLE>
- ---------------
(1) The number of securities underlying the options and the exercise price per
share have been adjusted for a 10% stock dividend which was paid on January
13, 1998 to stockholders of record on December 23, 1997.
EMPLOYMENT CONTRACTS
On July 31, 1997, the Corporation and the Bank entered into an employment
contract with Mr. Butvilas, President and Chief Executive Officer of the
Corporation and the Bank, for a term of three years with an automatic renewal
provision of one year in addition to the then-remaining term of employment on
the anniversary of the commencement date unless the Corporation, the Bank or Mr.
Butvilas provides written notice otherwise not less than 90 days in advance of
the anniversary date.
The employment contract provides for a minimum annual salary to be paid by
the Corporation in the amount of $300,000. The salary is reviewed annually and
may be increased from time to time at the discretion of the Board of Directors
but may not be decreased from the prior rate. The contract also provides for,
among other things, participation in an equitable manner in employee benefits
applicable to executive personnel.
If Mr. Butvilas is terminated for any reason other than for cause or in
connection with or within 12 months after a change in control which occurs
during the term of the employment contract, Mr. Butvilas will be entitled to
receive his salary for the remaining term of the employment contract at the rate
in effect immediately prior to the date of termination and to medical coverage
maintained for the benefit of executives of the Corporation and the Bank. In the
event of death, Mr. Butvilas' estate will be entitled to receive his salary
through the last day of the calendar month in which he died. In the event of
disability, Mr. Butvilas will be entitled to receive disability income benefits
provided for executive personnel.
Mr. Butvilas' employment contract also provides for a severance payment
equal to 299% of the base amount as defined in Section 280G of the Internal
Revenue Code of 1986, as amended, and for medical coverage maintained for the
benefit of executives of the Corporation and the Bank until he reaches the age
of 65, in the event of termination in connection with or within 12 months after
a change in control which occurs during the term of his employment contract.
On September 24, 1997, the Corporation and the Bank entered into an
employment contract with Mr. Janson, Executive Vice President and Chief
Financial Officer of the Corporation and the Bank, for a term of two years.
The employment contract provides for a minimum annual salary to be paid by
the Corporation in the amount of $120,152. The salary is reviewed annually by
the Chief Executive Officer and may be increased from time to time at the
discretion of the Board of Directors but may not be decreased from the prior
rate. The
9
<PAGE> 12
contract also provides for, among other things, participation in an equitable
manner in employee benefits applicable to executive personnel.
If Mr. Janson is terminated for any reason other than for cause or in
connection with or within 12 months after a change in control which occurs
during the term of the employment contract, Mr. Janson will be entitled to
receive his salary for the remaining term of the employment contract at the rate
in effect immediately prior to the date of termination and to medical coverage
maintained for the benefit of executives of the Corporation and the Bank. In the
event of death, Mr. Janson's estate will be entitled to receive his salary
through the last day of the calendar month in which he died. In the event of
disability, Mr. Janson will be entitled to receive disability income benefits
provided for executive personnel.
Mr. Janson's employment contract also provides for a severance payment
equal to 200% of the base amount as defined in Section 280G of the Internal
Revenue Code of 1986, as amended, in the event of termination in connection with
or within 12 months after a change in control which occurs during the term of
his employment contract.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") is composed of three
non-employee directors. The Committee is responsible for overseeing all
compensation policies of the Corporation and the Bank (the "Company"), and
recommending to the full Board of Directors actions governing executive officer
salaries and annual and long-term incentive plans. Described below is an
accounting of actions taken by the Committee regarding executive officer and CEO
compensation in 1997.
COMPENSATION POLICIES FOR EXECUTIVE OFFICERS
As in prior years, the Committee's principal philosophy is to integrate
compensation consideration with the execution of the Company's strategic plan,
to ensure Company performance results and stockholder return. This is
accomplished by providing both short-term and long-term incentives that reward
achievement of the Company's performance goals and business plans. Assessments
of both individual and corporate performance are made within a discretionary
framework where the executive shares compensation risk and reward relative to
results achieved.
It is also the objective of the Committee, through its compensation
policies, to attract and recruit quality professional talent, encourage stock
ownership in the Company by senior management, and ensure that executive
compensation is competitive to industry peer institutions. The Committee
continues to use compensation surveys from national and regional research
organizations that report on compensation practices and salary levels for
various executive positions at comparable size financial institutions. It is the
Committee's philosophy to provide executive base compensation that is
competitive to other regional financial institutions' median base salary levels.
The Committee's decisions regarding base salaries for executive officers are
discretionary and no quantifiable formula is utilized in the decision-making
process.
The Corporation has also designed its compensation practices to comply
with the Internal Revenue Code's Section 162(m) compensation deduction limit of
$1.0 million.
During 1997, under the Company's performance-formula compensation plans
discussed below, the executive officers received incentive awards for achieving
the Company's 1996 adjusted earnings goals and specific individual performance
targets that are integral to the Company's strategic business plan. In
recognition of the key role of the Chief Financial Officer position, and to
encourage Mr. Janson's continued affiliation with the Company, the Committee
approved a two year employment agreement for Mr. Janson.
10
<PAGE> 13
ANNUAL INCENTIVE AWARDS
Short-term cash awards are made to the executive officers based upon the
achievement of both corporate and individual performance measures. All executive
officers share the same corporate goal, which is based on earnings. Each
executive officer has different individual performance targets and weighting
factors between corporate and individual goals. Corporate performance awards are
determined by actual percent of goal achievement in excess of 100%. Failure to
reach 100% corporate performance could result in no incentive being paid,
despite the achievement of the individual performance goals. To encourage
progressive results in excess of performance goals, no performance ceilings are
established but payment amounts are subject to a maximum percent of salary
target.
LONG-TERM INCENTIVE AWARDS
Long-term stock option awards under the stockholder-approved Amended and
Restated 1994 Management Stock Incentive Plan are designed to increase long-term
stockholder value. The plan has a formula with respective target stock option
award levels, based upon equity-based compensation trends and practices at
financial institutions of similar size as the Company. Award payouts are subject
to the achievement of Return on Average Assets and Return on Average Equity
targets each year as delineated in the Company's business plan. Options are
granted at the fair market value of D&N Common Stock on the date of grant, which
is ninety days following the end of the fiscal year. One-third of the options
are exercisable immediately, with one-third each vesting on the first and second
anniversaries of the grant date.
CEO COMPENSATION DISCUSSION
During 1997, the Committee continued to base its evaluation of Mr.
Butvilas' performance primarily on his success in achieving the Company's
profitability goals and an improved stockholder return, as evidenced by the
following analysis of stockholder return. Mr. Butvilas' base salary was
increased to $300,000 in 1997 from $240,000 in 1996, partly as a result of the
Committee's analysis of CEO compensation at other Committee-selected financial
institutions of similar size as the Company. Mr. Butvilas' overall compensation
included an annual incentive payment for achieving the Company's 1996 adjusted
earnings goal discussed above. To encourage Mr. Butvilas' continued affiliation
with the Company and attention to his assigned duties, the Committee approved a
renewal of Mr. Butvilas' employment agreement for a term of three years.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In accordance with Item 404 of SEC Regulation S-K, no interlock
relationships existed by the Committee members. No member of the Committee is a
former or current officer or employee of the Corporation or any of its
subsidiaries.
The foregoing report has been furnished by the Compensation Committee of
the Board of Directors.
Joseph C. Bromley, Chairman
B. Thomas M. Smith, Jr.
Peter Van Pelt
11
<PAGE> 14
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total stockholder return on the Corporation's Common Stock
against the cumulative total return of Media General's Composite S&L Index ("MG
Group Index") and the NASDAQ Market Index for the period of five years
commencing January 1, 1993 and ending December 31, 1997.
COMPARISON OF FIVE-YEAR CUMULATIVE
TOTAL RETURN AMONG D&N FINANCIAL CORPORATION,
NASDAQ MARKET INDEX AND MG GROUP INDEX
[LINE GRAPH]
<TABLE>
<CAPTION>
D&N
MEASUREMENT PERIOD FINANCIAL MG GROUP NASDAQ
(FISCAL YEAR COVERED) CORPORATION INDEX MARKET INDEX
<S> <C> <C> <C>
1992 100.00 100.00 100.00
1993 93.94 124.00 119.95
1994 90.91 118.78 125.94
1995 146.97 188.13 163.35
1996 203.03 245.52 202.99
1997 354.86 412.81 248.30
</TABLE>
CERTAIN TRANSACTIONS
The Corporation, through the Bank, has followed a policy of granting to
its executive officers, directors and principal stockholders consumer loans as
well as mortgage loans for purposes of purchasing or improving their residences.
These loans were initially made on the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
nonaffiliated persons. Federal Reserve Board Regulation O, 12 CFR Part 215 was
amended to permit making certain kinds of loans to directors and executive
officers at favorable interest rates. The Bank adopted a policy, effective
September 30, 1996, of granting certain loans to executive officers at the same
rates as are available to other Bank employees through the Employee Loan
Program. Generally, employees may receive a loan benefit that provides up to a
1% interest rate reduction on
12
<PAGE> 15
eligible loans and a waiver of the loan processing/origination fee. There are
limitations with regard to loan type and the frequency of receiving certain
benefits. All participants in the Employee Loan Program must meet the same
credit and approval standards that are applicable to the general public. It is
the belief of management that these loans neither involve more than the normal
risk of collectability nor present other unfavorable features. Loans to
non-employee directors are made on the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
nonaffiliated persons. All loans by the Bank to its directors and executive
officers are subject to Office of Thrift Supervision regulations restricting
loans and other transactions with affiliated persons of the Bank.
Set forth below is certain information as of December 31, 1997 regarding
the indebtedness under the Bank's Employee Loan Program of each executive
officer of the Corporation and his or her immediate family members, and of the
immediate family members of the directors of the Corporation, whose aggregate
indebtedness to the Bank under such program exceeded $60,000 at any time during
the fiscal year ended December 31, 1997.
<TABLE>
<CAPTION>
LARGEST
AMOUNT
OUTSTANDING
DATE OF ORIGINAL SINCE BALANCE AT INTEREST RATE
NAME AND POSITION LOAN TYPE OF LOAN AMOUNT 12/31/96 12/31/97 PAID
----------------- ------- ------------ -------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
David J. Boyd................ 10/10/96 Auto $ 11,000 $ 10,475 $ 7,074 8.9%
Assistant VP/Commercial 09/15/97 Real Estate Mortgage 117,725 117,725 117,386 5%
Services of Bank 09/15/97 1st Mortgage 51,920 51,920 0 8.5%
(Son-in-law of
Kenneth D. Seaton)
George J. Butvilas........... 12/14/92 Real Estate Mortgage 226,600 215,670 212,128 7.0%
Director, President and 05/29/97 Advantage Line of 25,000 24,716 0 1.5% over
CEO of Corporation Credit
and Bank prime
01/09/95 Home Equity Credit Line 30,000 28,857 0 prime
11/12/97 Boat 90,000 90,000 88,567 7.35%
Peter L. Lemmer.............. 05/31/95 Real Estate Mortgage 95,200 89,289 85,180 7.5%
Senior VP/General Counsel 05/22/97 Boat 16,500 16,500 16,165 7.75%
of Corporation and Bank
Peter J. Schmidt............. 12/23/94 Real Estate Mortgage 46,800 45,962 45,475 7.75%
Assistant VP/Community 02/05/95 Advantage Line of 3,300 1,900 0 4.5% over
Bank Manager of Bank Credit
(Son-in-law of George J. prime
Butvilas) 12/26/95 Auto 18,820 17,003 14,669 7.75%
12/15/97 Auto 21,939 21,939 21,939 8.25%
Donald W. Schulze............ 08/16/96 1st Mortgage 112,881 112,881 0 8.25%
Senior VP/Human 08/19/97 2nd Mortgage 11,019 11,019 10,223 8.25%
Resources of Bank 02/27/97 Auto 24,344 24,344 3,481 7.75%
08/26/97 Real Estate Mortgage 222,000 222,000 221,370 7.25%
Alfred J. Sliwinski.......... 10/04/96 1st Mortgage 224,050 235,849(1) 235,849 8.5%
Executive VP/Community 10/08/96 Auto 10,339 10,150 8,280 8.4%
Banking of Bank 05/22/97 Home Equity Credit Line 15,000 12,259 12,259 2.25%
over
prime
</TABLE>
- ---------------
(1) Interest totaling $11,799 was capitalized to this loan in 1997.
13
<PAGE> 16
PROPOSAL II -- RATIFICATION OF APPOINTMENT OF AUDITORS
The Corporation's independent auditors are Coopers & Lybrand L.L.P.,
certified public accountants. At the Meeting, the stockholders will consider and
vote on the ratification of the appointment of independent auditors for the
Corporation's fiscal year ending December 31, 1998. The Board of Directors has
engaged Coopers & Lybrand L.L.P. to be its auditors subject to ratification by
the Corporation's stockholders. A representative of Coopers & Lybrand L.L.P. is
expected to attend the Meeting and will have an opportunity to make a statement
and be available to answer questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS THE CORPORATION'S
AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1998.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Corporation's proxy materials
for next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at D&N's main office, 400 Quincy Street,
Hancock, Michigan 49930, no later than November 24, 1998. Any such proposal
shall be subject to the requirements of the proxy rules adopted under the
Securities Exchange Act of 1934, as amended.
SOLICITATION OF PROXIES
The cost of solicitation of the proxies will be borne by the Corporation.
The Corporation has retained the services of Regan & Associates, Inc., a
professional proxy solicitation firm, to assist in the solicitation of proxies.
Such firm will receive a fee of approximately $3,000 for such services plus
reimbursement for reasonable out-of-pocket expenses. Under certain
circumstances, additional fees may be paid to Regan & Associates, Inc. In
addition to solicitations by mail, the directors and certain officers and
regular employees of the Corporation and the Bank may solicit proxies personally
or by use of telecommunications equipment, or both, without additional
compensation. The Corporation will reimburse brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses incurred by them in
sending proxy materials to and obtaining proxy materials from the beneficial
owners of Common Stock.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers, and persons who beneficially own
more than 10% of a registered class of the Corporation's equity securities, to
file with the Securities and Exchange Commission initial reports of ownership
and reports of changes in ownership of Common Stock and other equity securities
of the Corporation. Officers, directors and greater than 10% beneficial owners
are also required to furnish the Corporation with copies of all Section 16(a)
forms they file.
To the Corporation's knowledge, based solely on a review of the copies of
such reports furnished to the Corporation and written representations that no
other reports were required, all Section 16(a) filing requirements applicable to
its officers, directors and greater than 10% beneficial owners were satisfied
during the fiscal year ended December 31, 1997.
14
<PAGE> 17
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than the matters described above in this Proxy Statement. However,
if any other matters should properly come before the Meeting, it is intended
that holders of the proxies will act in accordance with their best judgment and
vote the proxies to the extent permitted by law.
By Order of the Board of Directors
LINDA K. KORPELA
LINDA K. KORPELA
Corporate Secretary
Hancock, Michigan
March 26, 1998
15
<PAGE> 18
The Directors and Officers of
[D&N LOGO]
cordially invite you to attend our
1998 Annual Meeting of Stockholders
Thursday, April 30, 1998, 2:00 p.m. (EDT)
Franklin Square Inn
820 Shelden Avenue
Houghton, Michigan
IMPORTANT
Please complete both sides of the PROXY CARD, sign, date,
detach and return in the enclosed envelope.
<TABLE>
<S><C>
DETACH ATTENDANCE CARD HERE
DETACH PROXY CARD HERE AND MAIL WITH PROXY CARD
- ------------------------------------------------------------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF | D&N FINANCIAL
DIRECTORS. IF NOT OTHERWISE SPECIFIED ON THE REVERSE | CORPORATION
SIDE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES LISTED | If you plan to personally attend the
AND FOR PROPOSAL II. THE UNDERSIGNED REVOKES ALL PROXIES | Annual Meeting of Stockholders in
HERETOFORE GIVEN TO VOTE AT SUCH MEETING AND ALL | Houghton, Michigan, please check the
ADJOURNMENTS OR POSTPONEMENTS. | box below and list the names of attendees
| on the reverse side.
|
| Return this stub in the enclosed envelope
| with your completed proxy card.
|
|
|
|
|
|
|
|
Dated: _______________________________ |
____________________________________ |
____________________________________ |
(Please sign here) |
| I/We do plan to attend
Please sign your name as it appears above. If executed by | the 1998 Meeting. [ ]
a corporation, a duly authorized officer should sign. |
Executors, administrators, attorneys, guardians and |
trustees should so indicate when signing. If shares are |
held jointly, at least one holder must sign. |
</TABLE>
<PAGE> 19
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE CORPORATION THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED, POSTAGE-PREPAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
<TABLE>
<S><C>
- ------------------------------------------------------------------------------------------------------------------------------------
NAMES OF PERSONS PLANNING | REVOCABLE PROXY D&N FINANCIAL CORPORATION
TO |
ATTEND THE 1998 MEETING | The Stockholder whose signature appears hereon appoints the Board of Directors of D&N
| Financial Corporation (the "Corporation") with full powers of substitution, to act as attorneys
--------------------------- | and proxies for the undersigned to vote all shares of Common Stock of the Corporation which the
| undersigned is entitled to vote at the Annual Meeting of Stockholders to be held at the Franklin
--------------------------- | Square Inn located at 820 Shelden Avenue, Houghton, Michigan, on Thursday, April 30, 1998, at
| 2:00 p.m. (Eastern Daylight Time) and at any and all adjournments or postponements thereof, with
--------------------------- | all the powers the Stockholder would possess if personally present, upon the proposals set forth
| below and, in their discretion, upon any other business that may properly come before said
--------------------------- | Meeting.
|
| THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES LISTED BELOW AND FOR PROPOSAL II.
|
|
| FOR WITHHELD
| I. Election of Directors: Stanley A. Jacobson
| ----------- -----------
| Randolph P. Piper
| ----------- -----------
| Kenneth D. Seaton
| ----------- -----------
|
| II. Ratification of the appointment of Coopers & Lybrand L.L.P. as independent auditors for
| the Corporation for the fiscal year ending December 31, 1998.
|
| FOR AGAINST ABSTAIN
| ---------------- ------------------ -----------------
|
| (Continued and to be signed on other side)
|
</TABLE>
<PAGE> 20
The Directors and Officers of 401K
[D&N LOGO]
cordially invite you to attend our
1998 Annual Meeting of Stockholders
Thursday, April 30, 1998, 2:00 p.m. (EDT)
Franklin Square Inn
820 Shelden Avenue
Houghton, Michigan
IMPORTANT
Please complete both sides of the PROXY CARD, sign, date,
detach and return in the enclosed envelope.
<TABLE>
<S><C>
DETACH ATTENDANCE CARD HERE
DETACH PROXY CARD HERE AND MAIL WITH PROXY CARD
- ------------------------------------------------------------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF | D&N FINANCIAL CORPORATION
DIRECTORS. IF NOT OTHERWISE SPECIFIED ON THE REVERSE |
SIDE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES LISTED | If you plan to personally attend the
AND FOR PROPOSAL II. THE UNDERSIGNED REVOKES ALL PROXIES | Annual Meeting of Stockholders in
HERETOFORE GIVEN TO VOTE AT SUCH MEETING AND ALL | Houghton, Michigan, please check the
ADJOURNMENTS OR POSTPONEMENTS. | box below and list the names of attendees
| on the reverse side.
|
| Return this stub in the enclosed envelope
| with your completed proxy card.
|
|
|
Dated: _______________________________ |
____________________________________ |
____________________________________ |
(Please sign here) |
|
Please sign your name as it appears above. If executed by |
a corporation, a duly authorized officer should sign. |
Executors, administrators, attorneys, guardians and | I/We do plan to attend
trustees should so indicate when signing. If shares are | the 1998 Meeting. [ ]
held jointly, at least one holder must sign. |
</TABLE>
