<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant X
---
Filed by a Party other than the Registrant
---
Check the appropriate box:
Preliminary Proxy Statement
- - ---
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
- - ---
X Definitive Proxy Statement
- - ---
Definitive Additional Materials
- - ---
Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
- - ---
MIDWEST BANCSHARES, INC.
- - ------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- - ------------------------------------------------------------------------
(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>
NOTICE OF 1997 ANNUAL MEETING AND PROXY STATEMENT
March 21, 1997
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of Midwest
Bancshares, Inc., I cordially invite you to attend the 1997 Annual Meeting of
Stockholders of the Company, to be held at 1:00 p.m. on April 28, 1997, at the
main office of the Company, 3225 Division Street, Burlington, Iowa.
In addition to the election of two directors of the Company, your Board
of Directors is submitting for approval the ratification of the appointment of
KPMG Peat Marwick LLP as auditors of the Company. The Board of Directors
unanimously recommends that you vote for the election of the Board nominees for
director and for the appointment of KPMG Peat Marwick LLP.
I encourage you to attend the Meeting in person. Whether or not you
plan to attend, however, please read the enclosed Proxy Statement and then
complete, sign and date the enclosed proxy and return it in the accompanying
postpaid return envelope as promptly as possible. This will save the Company
additional expense in soliciting proxies and will ensure that your shares are
represented at the Meeting.
Thank you for your attention to this important matter.
Very truly yours,
WILLIAM D. HASSEL
President and Chief Executive Officer
<PAGE>
MIDWEST BANCSHARES, INC.
3225 Division Street
Burlington, Iowa 52601
(319) 754-6526
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on April 28, 1997
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of Midwest Bancshares, Inc. (the "Company") will be held at 1:00 p.m.
Burlington, Iowa time, on April 28, 1997 at the main office of the Company, 3225
Division Street, Burlington, Iowa.
A proxy card and a Proxy Statement for the Meeting are enclosed. The
purpose of the Meeting is to consider and vote upon:
(1) The election of two directors of the Company;
(2) The ratification of the appointment of KPMG Peat Marwick LLP
as auditors of the Company for the fiscal year ending December
31, 1997; and
such other matters 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 February 28, 1997 are the stockholders entitled to vote at the
Meeting and any adjournments or postponements thereof.
You are requested to complete, sign and date the enclosed proxy, which
is solicited on behalf of the Board of Directors, and to mail it promptly in the
enclosed postpaid return envelope. The proxy will not be used if you attend and
vote at the Meeting in person.
By Order of the Board of Directors
THOMAS A. JACOBS
Secretary
Burlington, Iowa
March 21, 1997
- - -----------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A PRE-
ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED WITHIN THE UNITED STATES.
- - -----------------------------------------------------------------------------
<PAGE>
MIDWEST BANCSHARES, INC.
3225 Division Street
Burlington, Iowa 52601
(319) 754-6526
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
To be Held on April 28, 1997
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of Midwest Bancshares, Inc. (the
"Company") to be used at the Annual Meeting of Stockholders of the Company (the
"Meeting"), to be held at the main office of the Company, 3225 Division Street,
Burlington, Iowa, on April 28, 1997 at 1:00 p.m. Burlington, Iowa time, and at
all adjournments or postponements of the Meeting. The accompanying Notice of
Meeting and this Proxy Statement are first being mailed to stockholders on or
about March 21, 1997. Certain of the information provided herein relates to
Midwest Federal Savings and Loan Association of Eastern Iowa (the
"Association"), a wholly owned subsidiary and the predecessor of the Company.
At the Meeting, the stockholders of the Company are being asked to
consider and vote upon proposals to elect two directors of the Company and to
ratify the appointment of KPMG Peat Marwick LLP as auditors of the Company for
the fiscal year ending December 31, 1997.
VOTING RIGHTS AND PROXY INFORMATION
All shares of common stock, par value $.01 per share, of the Company
(the "Common Stock") represented at the Meeting by properly executed proxies
received prior to or at the Meeting, and not revoked, will be voted at the
Meeting in accordance with the instructions thereon. If no instructions are
indicated, properly executed proxies will be voted for election of the nominees
for director named below and for the proposals to ratify the appointment of KPMG
Peat Marwick LLP. The Company does not know of any matters, other than as
described in the Notice of Meeting, that are to come before the Meeting. If any
other matters are properly presented at the Meeting for action, the persons
named in the enclosed form of proxy 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 by: (i) filing with the Secretary of the Company at or before
the Meeting a written notice of revocation bearing a later date than the proxy,
(ii) duly executing a subsequent proxy relating to the same shares and
delivering it to the Secretary of the Company at or before the Meeting, 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 Thomas A. Jacobs, Secretary, Midwest
Bancshares, Inc., 3225 Division Street, Burlington, Iowa 52601.
VOTE REQUIRED FOR APPROVAL OF PROPOSALS
The presence, in person or by proxy, of at least one-third of the total
number of shares of Common Stock entitled to vote is required to constitute a
quorum at the Meeting. The two nominees for election as directors at the Meeting
who receive the greatest number of votes cast for the election of directors at
the Meeting shall become directors at the conclusion of the tabulation of votes.
Approval of the proposal to ratify the appointment of KPMG Peat Marwick LLP
requires the affirmative vote of the holders of a majority of the shares present
or represented by proxy and entitled to vote at the Meeting.
Proxies marked as abstaining from, and proxies returned by brokers as
"non-votes" will be treated as present for purposes of determining a quorum at
the Meeting; however, abstaining shares will have the same effect as a vote
against the approval of the proposal to ratify the appointment of auditors while
non-voted shares will have no effect on such proposal. Abstentions and non-voted
shares will have no effect on the election of directors.
<PAGE>
VOTING SECURITIES AND CERTAIN HOLDERS THEREOF
Stockholders of record as of the close of business on February 28, 1997
(the "Record Date") will be entitled to one vote for each share then held. As of
that date, the Company had 349,379 shares of Common Stock issued and
outstanding.
The following table sets forth, as of the Record Date, certain
information as to those persons who were known by management to be beneficial
owners of more than 5% of the Company's outstanding shares of Common Stock and
as to the shares of Common Stock beneficially owned by all directors and
executive officers of the Company and the Association as a group.
Shares
Name and Address of Beneficially Percent
Beneficial Owner Owned of Class
---------------- ----- --------
Midwest Bancshares, Inc.
Employee Stock Ownership Plan 31,015(1) 8.88%
3225 Division Street
Burlington, Iowa 52601
Jeffrey L. Gendell et al. 25,500(2) 7.30
Tontine Partners, L.P.
31 West 52nd Street, 17th Floor
New York, New York 10019
Forrest L. Stewart et al. 26,623(3) 7.62
2714 Bittersweet Place
Burlington, Iowa 52601
All directors and executive
officers as a group (10 persons) 129,151(4) 33.68
- - -----------------------
(1) Burlington Bank and Trust, as trustee of the Employee Stock Ownership Plan
(the "ESOP"), has sole voting and investment power as to the 12,000 shares
under the ESOP which have not been allocated to participants, and may be
deemed under applicable regulations to "beneficially own" the 12,000
shares. In addition, the trustee of the ESOP has shared voting power with
respect to the 19,015 shares allocated to the accounts of ESOP
participants.
(2) The above information regarding beneficial ownership by Jeffrey L. Gendell
and Tontine Partners, L.P. ("Tontine") is as reported by Mr. Gendell and
Tontine in a Schedule 13D dated August 22, 1995. Mr. Gendell reported sole
voting and dispositive power with respect to 18,000 shares and shared
voting and dispositive power with Tontine with respect to 7,500 shares. Mr.
Gendell is the Managing Member of Tontine Management, L.L.C. which is the
general partner of Tontine.
(3) The above information regarding beneficial ownership by Forrest L. Stewart
and Service Realty Co. is as reported in a Schedule 13D dated May 19, 1993.
Mr. Stewart reported sole voting and investment power as to 16,623 shares
and Service Realty Co., for which Mr. Stewart serves as President, reported
sole voting and investment power as to 10,000 shares. The Company has been
informed of the death of Mr. Stewart subsequent to the filing of the
Schedule 13D.
(4) This amount includes shares held directly, shares held in retirement
accounts, including the ESOP, and held by certain members of the named
individuals' families, or held by trusts of which the named individual is a
trustee or substantial beneficiary, with respect to which shares the
respective directors and officers may be deemed to have sole or shared
voting and/or investment power. This amount also includes an aggregate of
9,040 shares granted to executive officers under the Company's Recognition
and Retention Plan (the "RRP"), 6,310 of which have vested as of the Record
Date (as adjusted for shares sold and shares withheld to satisfy applicable
withholding and employment taxes) and the remaining 2,730 shares of which
are scheduled to vest during the next year. This amount also includes an
aggregate of 34,125 shares subject to options granted to directors and
executive officers under the Company's 1992 Stock Option and Incentive Plan
(the "Stock Option Plan") which are exercisable within 60 days of the
Record Date.
2
<PAGE>
I. ELECTION OF DIRECTORS
GENERAL
The Company's Board of Directors currently consists of seven members.
The Board is divided into three classes, each of which contains approximately
one-third of the Board. Approximately one-third of the directors are elected
annually. Directors of the Company are generally elected to serve for a
three-year period or until their respective successors are elected and
qualified.
The table below sets forth certain information, as of the Record Date,
regarding the composition of the Company's Board of Directors, including their
terms of office. On January 27, 1997, the Board of Directors of the Company
approved the nominees identified below. 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 any nominee) will be voted at the Meeting FOR the
election of the nominees identified 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 nominee might be unable to serve, if
elected. There are no arrangements or understandings between the nominees and
any other person pursuant to which the nominees were selected.
<TABLE>
<CAPTION>
Shares of
Common Stock
Position(s) Director Term Beneficially Percent of
Name Held with the Company Age Since(1) Expires Owned(2) Class
- - ------------------------- --------------------- --- --------- ------- -------------- -------
NOMINEES
<S> <C> <C> <C> <C> <C>
Yuh-Fen (Boni) Lin Director 49 1992 2000 15,075(3) 4.3%
James E. Witte Director 62 1979 2000 12,275(3) 3.5
DIRECTORS CONTINUING IN OFFICE
William D. Hassel President, Chief 48 1985 1998 23,890(4) 6.7
Executive Officer
and Director
Henry L. Hirsch Chairman of the Board 81 1958 1999 9,775(3) 2.8
Robert D. Maschmann Executive Vice President, 41 1992 1999 21,007 5.9
Treasurer and Director
James R. Walker Director 49 1979 1998 16,025(3) 4.6
Edward C.
Whitham, Jr. Director 57 1974 1998 4,404(3) 1.3
- - ---------------------------
</TABLE>
(1) Includes service as a director of the Association.
(2) Amounts include shares held directly, as well as shares which are held in
retirement accounts, including the ESOP, or held by certain members of the
named individuals' families, or held by trusts of which the named
individual is a trustee or substantial beneficiary, with respect to which
shares the respective directors may be deemed to have sole or shared voting
and/or investment power.
(3) Includes an award of 2,275 shares subject to currently exercisable options
granted to each non-employee director (i.e., directors other than Messrs.
Hassel and Maschmann) under the Stock Option Plan.
(4) Amount includes an award of restricted shares of Common Stock granted to
Mr. Hassel under the RRP, 80% of which have vested (as adjusted for shares
withheld to satisfy applicable withholding and employment taxes) and an
additional 20% of which vest within 60 days of the Record Date. Amount also
includes 9,100 shares subject to options which are exercisable within 60
days of the Record Date granted to Mr. Hassel under the Stock Option Plan.
(5) Amount includes an award of restricted shares of Common Stock granted to
Mr. Maschmann under the RRP, 80% of which have vested (as adjusted for
shares withheld to satisfy applicable withholding and employment taxes) and
an additional 20% of which vest within 60 days of the Record Date. Amount
also includes 5,460 shares subject to options which are exercisable within
60 days of the Record Date granted to Mr. Maschmann under the Stock Option
Plan.
3
<PAGE>
The business experience of each director is set forth below. All
directors have held their present positions for at least five years unless
otherwise indicated. Each individual has served as a director of the Company
since its organization in July 1992, with the exception of Directors Maschmann
and Lin, who joined the Company's Board later that same year.
YUH-FEN (BONI) LIN has been clinical dietician at Burlington Medical
Center since 1985. She has also been an owner/partner in several motels in the
state of Washington since 1979.
JAMES E. WITTE has been employed by Komick Construction, a real estate
construction, management and maintenance company, since 1988. For the two years
prior thereto, Mr. Witte was engaged part-time in farming, and from 1965 to 1985
was the owner/manager of a grain and livestock farming operation.
WILLIAM D. HASSEL joined the Association in 1972 as Comptroller before
being promoted to Treasurer in 1974 and to Chief Financial Officer in 1983. Mr.
Hassel has served as President and Chief Executive Officer of the Association
since 1989 and as President and Chief Executive Officer of the Company since its
organization in 1992.
HENRY L. HIRSCH has been a partner in the law firm of Hirsch, Adams,
Krekel, Putnam, Cahill & Miller since 1948 and has served as the Association's
General Counsel since 1958. Mr. Hirsch served as President of Midwest Federal
from 1971 to 1977 and has served as Chairman of the Board since 1977.
ROBERT D. MASCHMANN was appointed Executive Vice President of the
Company and the Association in April 1994. Prior thereto, Mr. Maschmann served
as Vice President and Treasurer of the Association since 1989 and of the Company
since 1992. Mr. Maschmann is the Company's and the Association's chief financial
and accounting officer, responsible for developing and implementing financial
plans and policies, supervising the accounting functions and overseeing
asset/liability activities. Mr. Maschmann served as Vice President and
Controller of the Association from 1985 to 1989.
JAMES R. WALKER has been a shareholder in the accounting firm of Walker
& Egerton, P.C. since 1973.
EDWARD C. WHITHAM, JR. has been the owner of Financial Management
Accounting, an accounting and tax consulting firm, since 1989. From 1987 to
1989, Mr. Whitham was the President of Financial Management Consultants, an
accounting and tax consulting firm. Since 1989, Mr. Whitham has also served as
the business manager/treasurer of Employee Benefit Systems, Inc., a firm that
administers employee benefit plans for governmental bodies, corporations and
businesses.
MEETINGS AND COMPENSATION OF THE BOARD OF DIRECTORS AND COMMITTEES
Midwest Bancshares, Inc. Meetings of the Company's Board of Directors
are generally held on a monthly basis. The Board of Directors met 12 times
during the fiscal year ended December 31, 1996. During fiscal 1996, no incumbent
director of the Company attended fewer than 75% of the aggregate of the total
number of Board meetings and the total number of meetings held by the committees
of the Board of Directors on which he or she served. Directors of the Company
are not paid a fee for serving on the Company Board.
The Board of Directors of the Company has established the Company's
Executive, Audit and Compensation Committees.
The Company's Executive Committee exercises the powers of the full
Board of Directors between board meetings, except that this Committee does not
have the authority to amend the charter or bylaws, adopt a plan of merger,
consolidation, dissolution, or provide for the disposition of all or
substantially all of the property and assets of the Company. The Executive
Committee is composed of Directors Hirsch and Walker. The Executive Committee
met 2 times during the year ended December 31, 1996.
The Audit Committee is responsible for selecting the Company's
independent accountants and meeting with the independent accountants to outline
the scope and review the results of the annual audit. The current members
4
<PAGE>
of this Committee are Directors Whitham, Lin and Walker. This Committee met 1
time during the year ended December 31, 1996.
The Compensation Committee recommends employee compensation benefits
and personnel policies to the Board of Directors, as well as salaries and cash
bonus plan distributions concerning executive officers of the Company and the
Association. The current members of this Committee are Directors Whitham, Lin
and Walker. This Committee met 2 times during the year ended December 31, 1996.
The full Board of Directors of the Company acts as a Nominating
Committee for the annual selection of its nominees for election as directors.
Pursuant to the Company's Bylaws, nominations for directors by stockholders must
be made in writing and delivered to the Secretary of the Company at least 30
days prior to the meeting and such written nomination must contain certain
information as provided in the Company's Bylaws. While the Board of Directors
will consider nominees recommended by stockholders, it has not actively
solicited nominations.
Midwest Federal Savings and Loan Association of Eastern Iowa. The
Association's Board of Directors meets monthly and may have additional special
meetings. The Board of Directors met 14 times during the year ended December 31,
1996. During 1996, no incumbent director of the Association attended fewer than
75% of the aggregate of the total number of Board meetings and the total number
of meetings held by the committees of the Board of Directors on which he or she
served. During fiscal 1996, each director received $550 per month with no
additional compensation paid for special committee meetings. Effective January
1, 1994, employee directors no longer receive Board fees. No special committee
meetings were held during fiscal 1996.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Thomas A. Jacobs, age 47, is Senior Vice President in charge of loan
operations for the Association. His primary responsibilities include overall
administration of the Association's lending operations, including real estate,
consumer and commercial lending. Mr. Jacobs joined the Association in 1984 and
served in several capacities in the Association's lending department prior to
being promoted to his present position in 1989.
Dennis L. Dietzman, age 47, joined the Association in 1988 as Vice
President and marketing and business development manager. Mr. Dietzman is
primarily responsible for planning and directing the Association's marketing
function as well as establishing marketing objectives and programs designed to
promote the growth of the Association. In addition, Mr. Dietzman serves as
managing officer of Midwest Financial Products, Inc., the Association's sole
active subsidiary, which is engaged in the sale of tax-deferred annuities and
other financial products. Prior to joining Midwest Federal, Mr. Dietzman served
as a Vice President, Consumer Loan Manager and Marketing Director of Hawkeye
Bank & Trust for 15 years.
Michele L. Schnicker, age 35, has been Vice President in charge of data
processing with the Association since 1989. In this capacity, she is responsible
for the overall administration of operations and data processing of the
Association. Ms. Schnicker has been employed by the Association since 1980.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the cash compensation paid or accrued by
the Association for services rendered during the fiscal year ended December 31,
1996 to the Association's Chief Executive Officer. No other officer made in
excess of $100,000 during fiscal 1996. The Company's officers do not receive any
compensation from the Company for services performed in their capacities as
officers of the Company.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Compensation
------------
Annual Compensation
-------------------
Awards
------
Securities
Restricted Underlying
Name and Stock Options/ All Other
Principal Salary Bonus Award(s) SARs Compensation
Position Year ($) ($)(1) ($)(2) (#) ($)(3)
--------- ---- ------ ------ ----------- ---------- ------------
<S> <C> <C> <C> <C>
William D. Hassel 1996 $111,930 $2,652 --- --- $3,570
President, Chief Executive 1995 108,700 2,601 --- --- 3,700
Officer and Director 1994 106,708 101 --- --- 3,292
</TABLE>
(1) Represents a Christmas bonus of $152 paid to all full-time employees in
1996 and $101 paid to all full time employees in 1995 and 1994; as well
as a bonus of $2,500 paid to Messrs. Hassel and Maschmann in 1996 and
1995.
(2) At December 31, 1996, Mr. Hassel held 1,092 unvested shares of
restricted stock under the RRP with an aggregate fair market value of
$29,757 at such date. Such shares are scheduled to vest, subject to
certain conditions, on March 31, 1997. During the restricted period,
holders of restricted stock under the RRP are entitled to receive any
dividends paid on such shares.
(3) Represents a pre-tax medical insurance premiums paid on behalf of Mr.
Hassel during 1996, 1995, and 1994.
The following table sets forth information concerning the number and
value of unexercised stock options held by the Company and the Association's
Chief Executive Officer at December 31, 1996. No stock options were exercised
during fiscal 1996 and no stock option awards were made under the Company's
Stock Option Plan during fiscal 1996. All options granted to date expire ten
years from the date of grant and have exercise prices per share equal to the
market price per share of the Common Stock on the date of grant. The Stock
Option Plan pursuant to which all options were granted was ratified by
stockholders on April 26, 1993.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
Value of
Number of Securities Unexercised
Underlying Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#) FY-End ($)
---------------------- ---------------
Shares
Acquired
on Value
Exercise Realized
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
William D. Hassel --- --- 7,280 1,820 $125,58081) $31,395(1)
</TABLE>
(1) Represents the aggregate market value of incentive stock options to
purchase 7,280 and 1,820 shares of Common Stock (market price less the
exercise price of $10.00 per share), respectively, awarded to Mr.
Hassel, based upon the average of the bid and asked price of $27.25 per
share of the Common Stock on December 31, 1996.
6
<PAGE>
EMPLOYMENT AGREEMENT
The Association has entered into an employment agreement with Mr.
Hassel. The employment agreement is designed to assist the Association and the
Company in maintaining a stable and competent management base. The continued
success of the Association and the Company depends to a significant degree on
the skills and competence of their officers. This agreement has been approved by
the Office of Thrift Supervision (the "OTS") as part of the Company's
application for approval to become a savings and loan holding company for the
Association. The employment agreement became effective on November 10, 1992 and
provides for an annual base salary in an amount not less than the employee's
current salary and for an initial term of three years. The agreement provides
for termination upon the employee's death, for cause, or in certain events
specified by OTS regulations. The employment agreement is terminable by the
employee upon 90 days notice to the Association. The employment agreement
provides for payment to the employee of up to 299% of the employee's
then-current annual compensation in the event there is a change in control of
the Association where employment terminates involuntarily in connection with
such change in control or within twelve months thereafter. This termination
payment is subject to reduction by the amount of all other compensation to the
employee deemed for purposes of the Internal Revenue Code of 1986, as amended,
to be contingent on a change in control. Such termination payment is provided on
a similar basis in connection with a voluntary termination of employment, where
the change in control was at any time opposed by the Company's Board of
Directors. For the purposes of the employment agreement, a change in control is
defined to mean: (i) the acquisition by a person or group of persons of
beneficial ownership of 25% or more of the Common Stock of the Company, (ii) as
a result of any cash tender offer, merger or other business combination, sale of
assets or contested election, the persons who were directors of the Company
cease to constitute a majority of the Board, or (iii) the shareholders approve
the sale or other disposition of all or substantially all the assets of the
Company; provided, however, that any such event shall not constitute a "change
in control" if approved by the Company's Board of Directors. The agreement
provides, among other things, for participation in an equitable manner in
employee benefits applicable to executive personnel.
Based on his current salary, if Mr. Hassel had been terminated as of
December 31, 1996, under circumstances entitling him to severance pay as
described above, he would have been entitled to receive a lump sum cash payment
of approximately $345,000.
PENSION PLAN
The Association participates in a multiple-employer non-contributory,
defined benefit pension plan (the "Pension Plan") which covers substantially all
employees and provides for monthly retirement benefits determined on the basis
of the employee's (i) base salary (generally, the amounts shown in the Summary
Compensation Table, above, exclusive of directors' fees and bonuses), averaged
over the five years of highest compensation, and (ii) years of service. Separate
actuarial valuations are not made for individual members of the Pension Plan.
Pension costs and funding include normal costs and amortization of prior service
costs over ten years. The book value of the assets of the Pension Plan fund
exceeds its liability for vesting benefits. The Association had no pension
funding expense for the last six fiscal years, due to the fully funded status of
the Pension Plan.
The following table illustrates annual pension benefits payable upon
normal retirement (age 65), based on various levels of compensation and years of
service and assuming payment in the standard form of benefit (single life
annuity) under the terms of the Pension Plan.
7
<PAGE>
<TABLE>
<CAPTION>
Pension Plan Table
----------------------------------------------------------------------------------------------------------
Years of Credited Service
Highest Five-Year ------------------------------------------------------------------------------------
Average Annual
Compensation 10 15 20 25 30 35
------------ -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C> <C>
$ 40,000 8,000 12,000 16,000 20,000 24,000 28,000
60,000 12,000 18,000 24,000 30,000 36,000 42,000
80,000 16,000 24,000 32,000 40,000 48,000 56,000
100,000 20,000 30,000 40,000 50,000 60,000 70,000
120,000 24,000 36,000 48,000 60,000 72,000 84,000
</TABLE>
The annual retirement benefits shown in the table reflect a deduction
for Social Security benefits and are not subject to further deductions or
offsets. Mr. Hassel had 23 years of credited service under the Pension Plan as
of December 31, 1996.
Certain Transactions
The Association has followed a policy of granting consumer loans and
loans secured by the borrower's personal residence to officers, directors and
employees. Loans to officers, directors and their affiliates have been made in
the ordinary course of business and on the same terms and conditions as those of
comparable transactions prevailing at the time, in accordance with the
Association's underwriting guidelines, and do not involve more than the normal
risk of collectibility or present other unfavorable features. Loans to officers
and directors must be approved by a majority of the disinterested directors and
loans to other employees must be approved by the Association's loan committee.
All loans by the Association to its directors and executive officers are subject
to OTS regulations restricting loans and other transactions with affiliated
persons of the Association. Current law requires that all such loans be made on
terms and conditions comparable to those for similar transactions with
non-affiliates.
II. RATIFICATION OF THE APPOINTMENT OF AUDITORS
The Board of Directors has renewed the Company's arrangement for KPMG
Peat Marwick LLP to be its auditors for the 1997 fiscal year, subject to the
ratification of the appointment by the Company's stockholders. A representative
of KPMG Peat Marwick LLP is expected to attend the Annual Meeting to respond to
appropriate questions and will have an opportunity to make a statement if he or
she so desires.
The Board of Directors recommends that stockholders vote "FOR" the
ratification of the appointment of KPMG Peat Marwick LLP as the Company's
auditors for the fiscal year ending December 31, 1997.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials
for next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's executive offices, 3225
Division Street, Burlington, Iowa 52601, no later than November 21, 1997. Any
such proposals shall be subject to the requirements of the proxy rules adopted
under the Securities Exchange Act of 1934.
8
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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.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Company Common Stock. In addition to solicitation by
mail, directors and officers of the Company and regular employees of the
Association may solicit proxies personally or by telegraph or telephone, without
additional compensation.
By Order of the Board of Directors
THOMAS A. JACOBS
Secretary
Burlington, Iowa
March 21, 1997
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MIDWEST BANCSHARES, INC.
ANNUAL MEETING OF STOCKHOLDERS
to be held on April 28, 1997
The undersigned hereby appoints the Board of Directors of Midwest
Bancshares, Inc. (the "Company"), with full powers of substitution, to act as
attorneys and proxies for the undersigned to vote all shares of capital stock of
the Company which the undersigned is entitled to vote at the Annual Meeting of
Stockholders (the "Meeting") to be held at the main office of the Company, 3225
Division Street, Burlington, Iowa, on April 28, 1997 at 1:00 p.m. Burlington,
Iowa time, and at any and all adjournments and postponements thereof.
1. The election as directors of all nominees listed below (except
as marked to the contrary)
[ ] FOR [ ] VOTE WITHHELD
INSTRUCTION: To withhold your vote for any individual nominee,
strike a line in that nominee's name in the list below.
YUH-FEN (BONI) LIN JAMES E. WITTE
2. The ratification of the appointment of KPMG Peat Marwick LLP
as auditors of the Company for the fiscal year ending December
31, 1997
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the proxies are authorized to vote on any other
business that may properly come before the Meeting or any adjournment or
postponement thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF THE NOMINEES AND THE PROPOSAL STATED. IF ANY
OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY THOSE
NAMED IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF
DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
The Board of Directors recommends a vote "FOR" each of the listed
proposals.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting or
at any adjournments or postponements thereof, and after notification to the
Secretary of the Company at the Meeting of the stockholder's decision to
terminate this proxy, then the power of such attorneys or proxies shall be
deemed terminated and of no further force and effect. This proxy may also be
revoked by filing a written notice of revocation with the Secretary of the
Company or by duly executing a proxy bearing a later date.
The undersigned acknowledges receipt from the Company, prior to the
execution of this proxy, of notice of the Meeting, a Proxy Statement dated March
21, 1997 and an Annual Report to stockholders.
Dated: , 1997 ------------------------
Signature of Stockholder
------------------------
Signature of Stockholder
Please sign exactly as your name(s) appear(s) above. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title. If
shares are held jointly, each holder should sign.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE
