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United States
Securities and Exchange Commission
Proxy Statement Pursuant to Section 14(a)
Under the Securities Exchange Act of 1934
(Amendment No.___)*
Filed by the Registrant: [_] 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(a)(2))
[X] Definitive proxy statement
[_] Definitive additional materials [_] Soliciting material pursuant to Rule
14a-11(c) or Rule 14a-12
StateFed Financial Corporation
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(Name of Registrant as Specified in its Charter)
Krause Gentle Corporation
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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 how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, schedule, or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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Definitive Proxy Materials Dated October 10, 2000
The information included herein is as it is expected to be when definitive
proxy statement is mailed to stockholders of StateFed Financial Corporation.
This proxy statement will be revised to reflect actual facts at the time of the
filing of the definitive proxy statement.
October 25, 2000
ANNUAL MEETING OF STOCKHOLDERS
OF
STATEFED FINANCIAL CORPORATION
PROXY STATEMENT OF
KRAUSE GENTLE CORPORATION
IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING:
----------------------------------------------
WHY YOU WERE SENT THIS PROXY STATEMENT
This Proxy Statement and the enclosed BLUE proxy card are furnished to you
by Krause Gentle Corporation ("Krause Gentle") in connection with the
solicitation of proxies for the Annual Meeting of Stockholders of StateFed
Financial Corporation ("StateFed" or the "Company"), scheduled to be held on
October 25, 2000 at 2:00 p.m.(local time) at the Clive office of StateFed
located at 13523 University Ave., Clive, Iowa, and any adjournment(s) or
postponement(s) thereof (the "Annual Meeting").
This Proxy Statement and accompanying proxy card are first being sent to
stockholders on or about October 5, 2000.
KRAUSE GENTLE RECOMMENDS A VOTE FOR KYLE J. KRAUSE AND DENNIS N. FOLDEN AS
DIRECTORS.
Krause Gentle is a StateFed stockholder. Krause Gentle has beneficial ownership
of a total of 149,000 shares of Common Stock, par value $.01 per share, of the
Company ("StateFed Common Stock"), representing approximately 9.87% of issued
and outstanding StateFed Common Stock).
WHAT YOU ARE VOTING ON
At the annual meeting, among other things, the stockholders of the Company
will be asked to vote to elect three directors.
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WHO CAN VOTE AT THE ANNUAL MEETING
Stockholders who owned shares of StateFed Common Stock at the close of
business on September 1, 2000 (the "Record Date") are entitled to vote at the
annual meeting. On May 8, 2000, according to the Company's report on Form 10-Q
filed by the Company with the U.S. Securities and Exchange Commission (the
"SEC") on May 12, 2000 there were 1,508,600 issued and outstanding shares of the
Company's Common Stock. Each share of StateFed Common Stock held on the Record
Date is entitled to one (1) vote at the Annual Meeting.
HOW TO VOTE BY PROXY
To elect Krause Gentle's nominees to the Board, promptly complete, sign,
date, and mail the enclosed BLUE proxy card in the enclosed postage-paid
envelope. Whether you plan to attend the annual meeting or not, we urge you to
complete and return the enclosed BLUE proxy card.
Properly executed proxies will be voted in accordance with the directions
indicated thereon. If you sign the BLUE proxy card, but do not make any specific
choices, your proxy will vote your shares as follows:
-- `FOR' the election of Krause Gentle's two nominees to the
Board of Directors, Kyle J. Krause and Dennis N. Folden.
If any other matter is presented at the annual meeting, your proxy will
vote in accordance with his best judgment. At the time this Proxy Statement was
mailed, we knew of no matter which needed to be acted on at the annual meeting,
other than those discussed in this Proxy Statement.
If you hold your StateFed Common Stock in the name of a brokerage firm,
your broker cannot vote your StateFed Common stock until he or she receives
specific instructions for you. Please contact the party at the brokerage firm
responsible for your account to make sure that a proxy is executed for your
StateFed Common Stock on the BLUE proxy card.
HOW YOU CAN REVOKE A PROXY
IF YOU HAVE EXECUTED THE BOARD OF DIRECTORS' PROXY CARD BEFORE RECEIVING
KRAUSE GENTLE'S PROXY STATEMENT, YOU HAVE EVERY RIGHT TO CHANGE YOUR VOTE BY
COMPLETING, SIGNING, DATING, AND RETURNING THE ENCLOSED BLUE PROXY CARD. ONLY
YOUR LATEST DATED PROXY WILL COUNT AT THE ANNUAL MEETING. ANY PROXY MAY BE
REVOKED AT ANY TIME BEFORE IT IS VOTED BY (i) SUBMITTING A DULY EXECUTED PROXY
CARD BEARING A LATER DATE TO THE SECRETARY OF THE COMPANY OR TO KRAUSE GENTLE,
(ii) FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION, OR (iii)
ATTENDING AND VOTING AT THE ANNUAL MEETING IN PERSON.
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WHO YOU CAN CALL IF YOU HAVE QUESTIONS
If you have any questions concerning this Proxy Statement or need
assistance in voting your shares, please call Krause Gentle at (515) 457-6000 or
Krause Gentle's proxy solicitor:
BEACON HILL PARTNERS, INC.
Attn: Rick Grubaugh
90 Broad Street
New York, NY 10004
(212) 843-8500
ANNUAL MEETING PROPOSALS
At the annual meeting, the Company's stockholders will be asked to vote on
the election of three directors. As discussed in more detail below, we believe
that the current Board of Directors as a group have not been acting in your best
interests as stockholders of the Company because StateFed stock has not
increased in value when compared to indices described in more detail below. The
election of the directors nominated by Krause Gentle is, in our opinion, in your
best interest as stockholders.
1. ELECTION OF THREE DIRECTORS.
StateFed's Board of Directors consists of eight directors, who serve three
year terms. Three of the eight directors are being elected at this year's Annual
Meeting. Krause Gentle is proposing two nominees for election as directors of
StateFed, Kyle J. Krause and Dennis N. Folden. In June or 2000, Krause Gentle
nominated Thomas Bernau, along with Messrs. Krause and Folden, for election as a
director of StateFed. In July of 2000, StateFed objected to the three nominees
of Krause Gentle claiming that the nominations did not comport with StateFed's
bylaws, without specifically informing Krause Gentle why the nominations did not
comport with the bylaws. In August of 2000, Krause Gentle withdrew Mr. Bernau's
nomination because it was thought the nomination was objected to by StateFed
because Mr. Bernau's business address was incorrect. In September of 2000,
StateFed withdrew its objections to all three nominations. proxies cannot be
voted for a greater number of persons than the number of nominees named.
We are asking you to elect the two directors nominated by Krause Gentle,
instead of the directors nominated by the Company. We believe it is in your best
interests as stockholders to do so because we believe that the performance of
the current Board of Directors has been inadequate in the areas of increasing
stockholder value, increasing the profitability of the Company and taking
advantage of opportunities available to the Company. This is shown by the stock
price not increasing in value in comparison with the indices described in more
detail below.
We believe that Krause Gentle's nominees have experience in the management
and supervision of business institutions, and will be dedicated to enhancing
stockholder value.
In addition, Krause Gentle has concluded that StateFed should seriously
explore whether it can be acquired or merged as an alternative for increasing
the value of StateFed to stockholders. In this respect, if elected, Krause
Gentle's nominees will constitute only two of eight directors and therefore
cannot compel the Board to act and can only advise that StateFed seriously
consider proposals of acquisition or merger.
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HOW KRAUSE GENTLE DISAGREES WITH CURRENT DIRECTORS ON OPERATION OF THE COMPANY -
KRAUSE GENTLE'S OBJECTIVES
Krause Gentle believes that the current management and Board of Directors
of the bank have failed to maximize stockholder value and the profitability of
the Company and that this is evident in the performance of the Company as
compared to other financial institutions in the area of stock price.
STOCK PRICE
Over the six years since StateFed's Common Stock commenced trading on the
NASDAQ National Market System, the return on StateFed's Common Stock has
underperformed each of the NASDAQ Bank Index (an Index of the U.S. banks stock
traded on NASDAQ published by NASDAQ) and the SNL Thrift Index (an index of
savings and loans institutions published by SNL Securities). A table comparing
the returns of StateFed's Common Stock to these indices as well as to the Dow
Jones Industrial Average and S & P 500 is set forth below.
<TABLE>
<CAPTION>
NAME 12/31/93 01/05/94 09/05/00 09/06/00 % Change
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
STATEFED FINANCIAL/(1)/
CORP. 6.0 9.00 50.00%
NASDAQ BANK INDEX 686.54 1672.00 143.54%
SNL THRIFT INDEX 252.50 661.40 161.94%
DOW JONES INDUSTRIAL
AVERAGE 3,754.10 11,311.00 201.30%
S & P 500 466.50 1,492.30 219.89%
</TABLE>
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(1) StateFed converted from a mutual to stock form of ownership in 1993.
StateFed issued its initial stock on January 5, 1994. The price shown for
StateFed is its closing price on the first day of trading.
To maximize share values, Krause Gentle has concluded that StateFed should
seriously explore the feasibility of being acquired by or merging with another
institution. If elected, Krause Gentle's nominees will recommend that the Board
aggressively pursue the acquisition of StateFed as an alternative for increasing
share values, although these nominees will be open minded and will consider all
recommendations from other stockholders or directors. If you share this view,
then you should vote
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for Krause Gentle's nominees. If elected, Krause Gentle would constitute only
two of eight directors and could not compel action by the Board. However, by
electing Krause Gentle's candidates, we believe you will be sending a message to
the remaining Board members that you wish them to focus on enhancing share
values.
None of the members of the Committee know of any agreements or
understandings concerning the possible acquisition of StateFed and there can be
no assurance that an acquisition can be effected at prices materially above the
current market value for StateFed Common Stock.
WHY THE DIRECTORS NOMINATED BY KRAUSE GENTLE WILL BETTER SERVE INVESTORS THAN
STATEFED'S ANTICIPATED NOMINEES
Krause Gentle has invested a significant amount of money in shares of
StateFed Common Stock. All of the shares purchased by Krause Gentle have been
purchased at market price. In our opinion, Krause Gentle's significant
stockholdings in the Company closely align its interests with your interests as
stockholders.
Information with respect to these nominees is set forth under the caption
"Krause Gentle's Nominees".
The director nominees proposed by the StateFed Board include Andrea K.
Black who since 1986 has been Executive Vice President of State Federal Savings
and Loan Association, Sidney M. Ramey who since 1982 has been the President of
People's Abstract Company, a title search company located in Des Moines, Iowa,
and Eugene McCormick who practiced dentistry in Des Moines, Iowa until his
retirement in 1993.
KRAUSE GENTLE'S NOMINEES
The table set forth below identifies Krause Gentle's two nominees for
election as new directors of StateFed and provides information concerning each
of these nominees.
NAME AGE BUSINESS EXPERIENCE DURING PAST FIVE YEARS
--------------------------------------------------------------------------------
KYLE J. KRAUSE 37 currently the Chief Operating Officer of Krause Gentle
in West Des Moines, Iowa. He has been an owner and/or
employee of Krause Gentle since 1972. Mr. Krause is a
Director
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and the Chairman of the Krause Gentle Investment
Committee. Mr. Krause is also the President and a
Director of the following companies, all located in
West Des Moines, Iowa: Solar, Inc.; Solar Transport;
Sole, Inc.; and Krause Holdings, Inc.
DENNIS N. FOLDEN 46 currently an Executive Vice President with Krause
Gentle and his responsibilities include the operations
and marketing of Kum & Go convenience stores. He has
been employed by Krause Gentle since 1976 and has
served in various positions including the following:
Executive Vice President of Marketing; Senior Vice
President of Marketing; Real Estate and Acquisitions;
and Operations/Personnel. Mr. Folden has also been
President of the Spencer School of Business and the
Bradford School of Business. Mr. Folden serves or has
served as a director on the Boards of Directors of the
following entities: Krause Gentle Corporation, Blimpie
Midwest, Chieftain Corp., Liberty Savings Bank,
Convenience Store Decisions Publications, and Investors
R Us.
Further biographical information about StateFed's nominees is set forth
below:
KYLE KRAUSE Mr. Krause is an alumnus of the University of Iowa (B.B.A. in
Finance). Mr. Krause beneficially owns 2,000 shares of the common stock of
StateFed. Mr. Krause has four sons, Ryan Kyle Krause, Tanner Joseph Krause,
Elliott Stephen Krause, and Oliver Anthony Krause. Mr. Krause's father is W.A.
Krause and his mother is Nancy S. Krause. Mr. Krause's siblings include his
brother Kevin William Krause and Kathryn M. Prange. His grandfather is Anthony
S. Gentle and his grandmother is Angie Gentle. He has an uncle, Leon Doughty,
two aunts, Mary Ellen Doughty and Marjorie Johns. He has a sister-in-law, Mary
M. Krause and a brother-in-law, David C. Prange. His nieces and nephews include,
Amanda Krause, Morgan Krause, William A. Krause, Ellen Prange and Connor Prange.
DENNIS N. FOLDEN is a graduate of Mankato State University (B.A. in
Philosophy). Mr. Folden is married to Linda Shook-yin Folden. He has two
children, Derek L. Folden and Melissa R. Folden. His parents are Lief Folden and
Carene Folden. His living brother is Darwin Folden, he has a deceased brother,
David Folden. His sister-in-law is Janet Folden. He
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has two nieces and a nephew, Anna Folden, Elizabet Folden and Eric Folden. He
has two aunts, Zene Berg and Jane Schulte. His uncle is Rader Folden. He has
thirteen first counsins: Larry Berg, Anna Moore, Norman Larson, Lester Larson,
Joanne Watson, Joyce Strand, William Lien, Arlo Lien, Shirley Berric, Nancy
Weber, George A. Lien, Doug Schulte, Debra Anhory, Diane Beckman, Trudy Lanford,
Cheryl Ott, Jeanee Isdahl, Linda Montgomery, Fred Folden, Phillip Folden, Nelmer
Folden, Nolan Folden and Barbara Morgan.
There are no arrangements or understandings between Krause Gentle's
nominees and any other person pursuant to which they were selected as nominees,
except that the nominees named above have consented to serve as directors if
elected. Krause Gentle does not expect that the nominees will be unable to stand
for election; but, in the event that any nominee should be unable to stand for
election, the Common Stock represented by the enclosed BLUE proxy card will be
voted for a substitute candidate selected by Krause Gentle.
COMPENSATION OF DIRECTOR NOMINEES
None of the persons nominated by Krause Gentle to serve as directors of the
Company is or has been a director or officer of the Company nor have any of them
received any compensation from the Company. No discussions have been held and,
except as indicated in the Proxy Statement, there are no understandings with
respect to any proposed remuneration from any source for these nominees in
connection with serving as a director of StateFed if elected. However, if Krause
Gentle's nominees are elected as directors of StateFed, it is anticipated they
will receive the same compensation as other directors. According to the Proxy
Statement filed by the Company with the SEC dated September 28, 1999, each
member of the Board of Directors is paid a fee of $600 per month.
REQUIRED VOTES AND OTHER MATTERS
By signing and returning the enclosed BLUE proxy card, you can vote to
elect StateFed, KYLE J. KRAUSE AND DENNIS N. FOLDEN.
Directors shall be elected by a plurality of the votes cast. Proxies marked
to abstain with respect to a proposal have the same effect as votes against the
proposal. Votes withheld (for election of directors) and broker non-votes will
have no effect on the vote. One-third of the shares of the Common Stock, present
in person or represented by proxy, shall constitute a quorom for purposes of the
annual meeting. Abstentions and broker non-votes are counted for purposes of
determining a quorum.
OTHER INFORMATION
HOW PROXIES WILL BE SOLICITED
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Krause Gentle may solicit proxies for the Annual Meeting by mail,
advertisement, telephone, telecopier or in person. The persons identified on
Schedule 1 to this Proxy Statement also may make solicitations. None of these
persons will receive additional compensation for participating in the
solicitation. We have requested banks, brokerage houses and other custodians,
nominees and fiduciaries to forward all of our solicitation materials to the
beneficial owners of the StateFed Common Stock they hold.
IMPORTANT INSTRUCTIONS FOR "STREET NAME" STOCKHOLDERS
If any of your shares are held in the name of a brokerage firm, bank, bank
nominee or other institution on the record date, only that entity can vote your
shares and only upon its receipt of your specific instructions. Accordingly,
please contact the person responsible for your account at such entity and
instruct that person to execute and return the BLUE proxy card on your behalf.
You should also sign, date and mail the voting instruction form your broker or
banker sends you when you receive it. Please do this for each account you
maintain to ensure that all of your shares are voted.
INFORMATION ABOUT THE PROXY SOLICITOR
Krause Gentle retained Beacon Hill Partners, Inc. (`Beacon')to assist in
the solicitation of proxies. Krause Gentle has agreed to pay Beacon a fee of
$30,000.00 and to reimburse it for its reasonable out-of-pocket expenses.
Approximately four persons will be used by Beacon Hill in its solicitation
efforts.
COSTS OF SOLICITING PROXIES
The entire expense of preparing, assembling, printing and mailing this
Proxy Statement and related materials and the cost of soliciting proxies
pursuant to this Proxy Statement will be borne by Krause Gentle. Krause Gentle
estimates that the total expenditures relating to the solicitation of proxies
will be approximately $50,000.00. To date, approximately $23,000.00
of expenses have been incurred. Krause Gentle will pay the costs of soliciting
proxies. Krause Gentle intends to seek approval from the Board of Directors for
the reimbursement of its cost of soliciting proxies.
PARTICIPANTS IN THE SOLICITATION
The following table identifies and provides certain information as of
September 5, 2000 about individuals and entities that might be deemed
participants in this proxy solicitation within the meaning of Instruction 3 to
Item 4 of Schedule 14A promulgated under the Securities Exchange Act of 1934, as
amended:
1. Krause Gentle Corporation
6400 Westown Parkway
West Des Moines, IA 50266
Krause Gentle has filed a Schedule 13D and will make amendments as required by
law with respect to beneficial ownership of Common Stock.
2. Kyle J. Krause
6400 Westown Parkway
West Des Moines, IA 50266
3. Dennis N. Folden
6400 Westown Parkway
West Des Moines, IA 50266
Except as described in this Proxy Statement, none of the above-listed
participants in the solicitation is now, or was within the last two years, a
party to any contract, arrangement or understanding with any person with respect
to any securities of StateFed, future employment by StateFed or future
transactions involving StateFed.
None of the Participants has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) during the past ten
years. No Participant owns any shares of common stock of record but not
beneficially. No Participant owns any securities of any subsidiary of the
Company.
During the past two years, none of the Participants has borrowed or
otherwise obtained funds for the purpose of acquiring or holding any securities
of the Company.
None of the Participants has any substantial direct or indirect interest in
any matters to be acted upon at the Meeting, other than the directors who have
been nominated for election to the Board.
No Participant is, or was within the past year, a party to any contract,
arrangement, or understanding with any person with respect to any securities of
the Company.
None of the Participants has any arrangement or understanding with respect
to any future employment by the Company or its subsidiaries or any future
transactions to which the Company or any of its subsidiaries will or may be a
party, nor any material interest, direct or indirect, in any transaction which
has occurred since June 30, 2000 or any currently proposed transaction, or
series of similar transactions, to which the Company or any of its subsidiaries
was or is to be a party and in which the amount involved exceeds $60,000.
Except for the individuals identified above, no other persons listed in
Item 2 of the Schedule 13D filed by Krause Gentle Corporation on June 15, 2000,
are participants in the solicitation within the meaning of Instruction 3 to Item
4 of Schedule 14A.
No shares of StateFed Common Stock were purchased or sold during the two
years ended September 5, 2000 by participants in the solicitations of proxies
pursuant to this Proxy Statement.
BENEFICIAL OWNERSHIP OF SHARES BY PARTICIPANTS IN THE SOLICITATION
The following table shows, as of September 5, 2000 (except as otherwise
noted), the shares of StateFed Common Stock beneficially owned by the
participants in the solicitation of proxies pursuant to this Proxy Statement.
Unless otherwise indicated, each participant has sole voting and investment
power over the shares beneficially owned.
SHARES BENEFICIALLY
BENEFICIAL OWNER OWNED AT SEPT. 5, 2000 PERCENT OF CLASS
---------------- ---------------------- ----------------
Krause Gentle Corporation 149,000 9.87%
Kyle J. Krause 2,000 .13%
Dennis N. Folden 0 0%
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KRAUSE GENTLE STRONGLY RECOMMENDS A VOTE FOR KYLE J. KRAUSE AND DENNIS N. FOLDEN
AS DIRECTORS.
IT IS IMPORTANT THAT YOU RETURN YOUR PROXY PROMPTLY. PLEASE SIGN AND DATE YOUR
BLUE PROXY CARD PROMPTLY AND RETURN IT IN THE ENCLOSED ENVELOPE TO AVOID
UNNECESSARY EXPENSE AND DELAY. NO POSTAGE IS NECESSARY.
Sincerely,
W.A. Krause
Krause Gentle Corporation
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[Face of Proxy Card]
PROXY
STATEFED FINANCIAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 25, 2000
The undersigned appoints Krause Gentle Corporation with full power to act
without the other, and each with full power of substitution, proxies for the
undersigned, to represent and vote, as designated below, all shares of Common
Stock of StateFed Financial Corporation(the "Company") which the undersigned is
entitled to vote at the Annual Meeting of Stockholders of the Company to be held
as originally scheduled on October 25, 2000 at 2:00 p.m., at StateFed's Clive
office located at 13523 University Ave., Clive Iowa.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE ELECTION OF KYLE J. KRAUSE AND DENNIS N. FOLDEN AS DIRECTORS OF THE
COMPANY.
THIS PROXY IS SOLICITED ON BEHALF OF KRAUSE GENTLE CORPORATION
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
[Reverse of Proxy Card]
KRAUSE GENTLE CORPORATION RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF KYLE
J. KRAUSE AND DENNIS N. FOLDEN AS DIRECTORS OF THE COMPANY.
1. To elect two nominees as directors of the Company.
[_] FOR all nominees listed below [_] WITHHOLD authority to vote(except as
marked to the contrary for all nominees listed below)
KYLE J. KRAUSE
DENNIS N. FOLDEN
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full Title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
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_____________________________________________
Shareholder sign here Date
_____________________________________________
Co-owner sign here Date
If you need assistance in voting your shares, please call David Stork at (515)
457-6269 or Beacon Hill Partners, Inc., which is assisting Krause Gentle in its
solicitation of your proxy for the Annual Meeting, at (212) 843-8500.
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