NORTHWEST EQUITY CORP.
234 Keller Avenue South
Amery, Wisconsin 54001
(715) 268-7105
July 21, 1999
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders
(the "Annual Meeting") of Northwest Equity Corp. (the "Company"), the holding
company for Northwest Savings Bank (the "Bank"). The meeting will be held on
Tuesday, August 17, 1999, at 2:00 p.m., Amery, Wisconsin time, at Centennial
Hall, 608 Harriman Avenue South, Amery, Wisconsin 54001.
The attached Notice of Annual Meeting of Shareholders and Proxy
Statement describes the formal business to be conducted at the Annual Meeting. A
copy of the Company's Annual Report for the fiscal year ended March 31, 1999,
also is enclosed. Directors and officers of the Company, as well as a
representative of Wipfli Ullrich Bertelson LLP, the Company's independent
auditors, will be present at the Annual Meeting to respond to any questions that
shareholders may have.
The vote of every shareholder is important to ensure a quorum is
present and that the necessary business can be conducted at the meeting. Please
sign and return the enclosed appointment form of proxy promptly in the
postage-paid envelope provided, regardless of whether you are able to attend the
Annual Meeting in person. If you attend the Annual Meeting, you may vote in
person even if you have already mailed your Proxy.
On behalf of the Board of Directors and all of the employees of the Company
and the Bank, I thank you for your investment and trust in Northwest Equity
Corp.
Sincerely yours,
/s/Brian L. Beadle_______
Brian L. Beadle
President, Chief Executive Officer and
Chief Financial Officer
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NORTHWEST EQUITY CORP.
234 Keller Avenue South
Amery, Wisconsin 54001
(715) 268-7105
-------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on August 17, 1999
-------------
To Holders of Common Stock of Northwest Equity Corp.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Annual Meeting") of Northwest Equity Corp. (the "Company") will be held on
Tuesday, August 17, 1999, at 2:00 p.m., Amery Wisconsin time, at Centennial
Hall, 608 Harriman Avenue South, Amery, Wisconsin 54001. The Annual Meeting is
for the purpose of considering and voting upon the following matters, all of
which are set forth more completely in the accompanying Proxy Statement:
1. The election of two directors each for a three year term, and in each
case until their successors are elected and qualified;
2. The ratification of the appointment of Wipfli Ullrich Bertelson LLP as
independent auditors of the Company for the fiscal year ending March
31, 2000; and
3. Such other matters as may properly come before the Annual Meeting or
any adjournments or postponements thereof. The Board of Directors is
not aware of any other such business.
The Board of Directors has established June 25, 1999, as the record
date for the determination of shareholders entitled to notice of and to vote at
the Annual Meeting and any adjournments thereof. Only shareholders of record as
of the close of business on that date will be entitled to vote at the Annual
Meeting or any adjournments or postponements thereof. In the event there are not
sufficient votes for a quorum or to approve or ratify any of the foregoing
proposals at the time of the Annual Meeting. The Annual Meeting may be adjourned
or postponed in order to permit further solicitation of proxies by the Company.
By Order of the Board of Directors
/s/James L. Moore_______
Amery, Wisconsin James L. Moore
July 21, 1999 Secretary
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YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. WHETHER OR NOT YOU PLAN
TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN, DATE AND RETURN THE
ENCLOSED PROXY PROMPTLY IN THE ENVELOPE PROVIDED.
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NORTHWEST EQUITY CORP.
234 Keller Avenue South
Amery, Wisconsin 54001
(715) 268-7105
--------------------
PROXY STATEMENT
-------------------
ANNUAL MEETING OF SHAREHOLDERS
To Be Held On August 17, 1999
----------------------------
This Proxy Statement is being furnished to holders of common stock,
$1.00 par value per share (the "Common Stock"), of Northwest Equity Corp. (the
"Company") in connection with the solicitation on behalf of the Board of
Directors of the Company of proxies to be used at the Annual Meeting of
Shareholders (the "Annual Meeting") to be held on Tuesday, August 17, 1999, at
2:00 p.m., Amery, Wisconsin time, at Centennial Hall, 608 Harriman Avenue South,
Amery, Wisconsin 54001 and at any adjournments or postponements thereof.
The 1999 Annual Report to Shareholders, including the Company's
consolidated financial statements for the fiscal year ended March 31, 1999,
accompanies this Proxy Statement and appointment form of proxy (the "proxy"),
which are being mailed to shareholders on or about July 21, 1999.
Only shareholders of record at the close of business on June 25, 1999
(the "Voting Record Date") will be entitled to vote at the Annual Meeting or any
adjournments or postponements thereof. On the Voting Record Date, there were
825,301 shares of Common Stock outstanding and the Company had no other class of
securities outstanding.
The presence, in person or by proxy, of the holders of at least a
majority of the total number of shares Common Stock entitled to vote is
necessary to constitute a quorum at the Annual Meeting. As to the election of
directors, the proxy being provided by the Board of Directors enables a
shareholder to vote for the election of the nominees proposed by the Board, or
to withhold authority to vote for one or more of the nominees being proposed.
Under the Wisconsin Business Corporation Law (the "WBCL"), directors are elected
by a plurality of the votes cast with a quorum present and shareholders do not
have a right to cumulate their votes for the election of directors unless the
articles of incorporation provide otherwise. The Company's Articles of
Incorporation do not provide cumulative voting rights for the election of
directors. The affirmative vote of a majority of the shares of Common Stock
represented in person or by proxy at the Annual Meeting is necessary to ratify
the appointment of Wipfli Ullrich Bertelson LLP as auditors of the Company for
the fiscal year ending March 31, 2000. Abstentions are included in the
determination of shares present and voting for purposes of whether a quorum
exists, while broker non-votes are not. Neither abstentions nor broker non-votes
are counted in determining whether a matter has been approved. In the event
there are not sufficient votes for a quorum or to approve or ratify any proposal
at the time of the Annual Meeting, the Annual Meeting may be adjourned or
postponed in order to permit the further solicitation of proxies. As provided in
the Company's Articles of Incorporation, record holders of Common Stock who
beneficially own in excess of 10% of the outstanding shares of Common Stock (the
"10% Limit") are not entitled to any vote in respect of the shares held in
excess of the 10% Limit. A person or entity is deemed to beneficially own shares
owned by an affiliate of, as well as such persons acting in concert with, such
person or entity. The Company's Articles of Incorporation authorize the Board
(i) to make all determinations necessary to implement and apply the 10% Limit,
including determining whatever persons or entities are acting in concert, and
(ii) to demand that any person who is reasonably believed to beneficially own
stock in excess of the 10% Limit supply information to the Company to enable the
Board to implement and apply the 10% Limit.
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Shareholders are requested to vote by completing the enclosed proxy and
returning it signed and dated in the enclosed postage-paid envelope.
Shareholders are urged to indicate their vote in the spaces provided on the
proxy. Proxies solicited by the Board of Directors of the Company will be voted
at the Annual Meeting or any adjournments or postponements thereof in accordance
with the directions given thereon. Where no instructions are indicated, signed
proxies will be voted FOR the election of each of the nominees for director
named in this Proxy Statement and FOR ratification of the appointment of Wipfli
Ullrich Bertelson LLP as independent auditors of the Company for the fiscal year
ending March 31, 2000. Returning your completed proxy will not prevent you from
voting in person at the Annual Meeting should you be present and wish to do so.
Any shareholder giving a proxy has the power to revoke it any time
before it is exercised by (i) filing with the Secretary of the Company written
notice thereof (James L. Moore, Secretary, Northwest Equity Corp., 234 Keller
Avenue South, Amery Wisconsin 54001); (ii) submitting a duly executed proxy
bearing a later date; or (iii) appearing at the Annual Meeting and giving the
Secretary notice of his or her intention to vote in person. If you are a
shareholder whose shares are not registered in your own name, you will need
additional documentation from your record holder to vote personally at the
Annual Meeting. Proxies solicited hereby may be exercised only at the Annual
Meeting and any adjournments or postponements thereof and will not be used for
any other meeting.
The cost of solicitation of proxies by mail on behalf of the Board of
Directors will be borne by the Company. Proxies may be solicited by personal
interview or by telephone, in addition to the use of the mails by directors,
officers and regular employees of the Company and Northwest Savings Bank (the
"Bank"), without additional compensation therefor. The Company also has made
arrangements with brokerage firms, banks, nominees and other fiduciaries to
forward proxy solicitation materials for shares of Common Stock held of record
by the beneficial owners of such shares. The Company will reimburse such holders
for their reasonable out-of-pocket expenses.
Proxies solicited hereby will be returned to the Board of Directors,
and will be tabulated by inspectors of election designated by the Board of
Directors, who will not be employed by, or a director of, the Company or any of
its affiliates.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the beneficial ownership of shares of
Common Stock as of May 31, 1999 (except as noted otherwise below) by: (i) each
shareholder known to the Company to beneficially own more than 5% of the shares
of Common Stock outstanding, as disclosed in certain reports regarding such
ownership filed with the Company and with the Securities and Exchange Commission
("SEC"), in accordance with Sections 13(d) or 13(g) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), (ii) each director and director
nominee of the Company, (iii) the executive officer of the Company appearing in
the Summary Compensation Table below, and (iv) all directors and executive
officers as a group. Members of the Board of Directors of the Company also serve
as directors of the Bank.
Number of Shares
Beneficially
Name Owned (1) Percent of Class
- ---- --------- ----------------
Northwest Savings Bank
Employee Stock Ownership Trust (2)......... 21,437 2.6%
Heartland Advisors, Inc. (3)............... 80,000 9.7%
John Hancock Advisers, Inc. (4)............ 61,000 7.4%
Donald J. Ripp (5)......................... 52,000 6.3%
Brian L. Beadle (6)(8)..................... 46,574 5.6%
Gerald J. Ahlin............................ 10,295 1.2%
Michael D. Jensen.......................... 34,025 4.1%
Vern E. Albrecht........................... 13,500 1.6%
Donald M. Michels.......................... 5,120 *
Norman M. Osero............................ 14,275 1.7%
James L. Moore (7)......................... 21,310 2.6%
All directors, director nominees and
executive officers as a group(7 persons)(6)(8) 145,099 16.8%
- ---------------------------
* Amount represents less than 1% of the total shares of Common Stock
outstanding on the Voting Record Date.
(1) Unless otherwise indicated, includes shares of Common Stock held
directly by the individuals as well as by members of such individuals'
immediate family who share the same household, shares held in trust and
other indirect forms of ownership over which shares the individuals
effectively exercise sole or shared voting and for investment power.
(2) Emjay Corporation (the "Trustee") is the trustee for the Northwest
Savings Bank Employee Stock Ownership Trust. The Trustee's address is
725 W. Glendale Ave., Milwaukee, Wisconsin 53217-0909.
(3) Based upon a Schedule 13G, dated January 28, 1999, filed with the
Company under the Exchange Act, by Heartland Advisors, Inc., 790 North
Milwaukee Street, Milwaukee, Wisconsin 53202.
(4) Based upon a Schedule 13G, dated January 29, 1997, filed with the
Company under the Exchange Act, by John Hancock Advisers, Inc., John
Hancock Place, P.O. Box 111, Boston, MA 02199.
(5) Based upon a Schedule 13D, dated December 14, 1994, filed with the
Company under the Exchange Act by Donald J. Ripp, 10575 W. Forest Home
Avenue, P.O. 301, Hales Corners, Wisconsin 53130-0301.
(6) Includes shares of Common Stock awarded to certain executive officers
under the Company's stock incentive plan that are subject to vesting
requirements. Recipients of restricted stock awards may direct voting
prior to vesting.
(7 Current executive officer and new director nominee.
(8) Includes shares of Common Stock allocated to certain executive officers
under the Northwest Savings Bank Employee Stock Ownership Plan, for
which such individuals possess shared voting power. Mr. Beadle was
allocated 11,924 shares and Mr. Moore was allocated 7,742 shares.
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MATTERS TO BE VOTED ON AT THE ANNUAL MEETING
MATTER 1
ELECTION OF DIRECTORS
Pursuant to the Articles of Incorporation of the Company directors of
the Company are divided into three classes as equal in number as possible. At
each annual meeting of shareholders, one class of directors, or approximately
one-third of the total number of directors, are to be elected for a term of
three years. There are no family relationships among any of the directors and/or
executive officers of the Company. No person being nominated as a director is
being proposed for election pursuant to any agreement or understanding between
any person and the Company.
Unless otherwise directed, each proxy executed and returned by a
shareholder will be voted FOR the election of the nominees for director listed
below. If any person named as nominee should be unable or unwilling to stand for
election at the time of the Annual Meeting, the proxies will nominate and vote
for any replacement nominee or nominees recommended by the Board of Directors.
All of the proposed nominees currently serve as directors of the Bank. At this
time, the Board of Directors knows of no reason why any of the nominees listed
below may not be able to serve as director if elected.
The following table presents information concerning the nominees for
director and continuing directors. Mr. Jensen has served as a director of the
Company since the Company's formation in November 1993 and has been a director
of the Bank since 1986. Mr. Moore is Senior Vice President and Secretary of the
Company and the Bank and has been an officer of the Company since the Company's
formation in November 1993 and an employee of the Bank since 1975. Mr. Moore has
been nominated to replace Donald M. Michels, who is retiring from the Board
under the Board's retirement policy.
Nominees for Director for Three-Year Term Expiring in 2002
Director
Position with the Company of the Bank
Name Age and Principal Occupation Since
Michael D. Jensen 49 Director of the Company and the 1986
Bank; President and director of
Amery Telcom, Inc., a
communications company, since
1983; Director of Amery Regional
Medical Center, Amery, Wisconsin
since 1984.
James L. Moore 61 Senior Vice President and Secretary, n/a
of the Company and the Bank;
joined the Bank in 1975.
The affirmative vote of a plurality of the votes cast is required for
the election of directors. Unless otherwise specified, the shares of Common
Stock represented by the proxies solicited hereby will be voted in favor of the
election of the above-described nominees. The Board of Directors recommends that
you vote FOR the election of each of the nominees for director.
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INFORMATION WITH RESPECT TO CONTINUING DIRECTORS
Director
Position with the Company of the Bank
Name Age and Principal Occupation Since
Directors Whose Terms Expire in 2000
Gerald J. Ahlin 66 Director of the Company and the 1985
Bank; Prior to his retirement,
from 1959 to 1992, he was a
business and economics teacher
for the Amery Public Schools,
Amery, Wisconsin.
Brian L. Beadle 56 President, Chief Executive Officer, 1976
Chief Financial Officer, and
Director of the Company and
the Bank; from 1974 to 1984, he
served as Vice President of the
Bank. Mr. Beadle joined the Bank
in 1970.
Directors Whose Terms Expire in 2001
Vern E. Albrecht 70 Director of the Company and the 1989
Bank; Prior to his retirement,
from 1971 to 1989, he was a
President, Chief Executive Officer
and principal owner of Nova Tran
Corporation, an electronics and
and medical manufacturing
company, Clear Lake, Wisconsin.
Norman M. Osero 60 Director of the Company and the 1992
Bank; President of Dynatronix,
Inc., Amery, Wisconsin, an
electronic manufacturing company
since 1979; President of Amery
Technical Products, Inc., Amery,
Wisconsin, a subcontractor
manufacturing company, since
1984.
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MEETINGS OF THE BOARD AND ITS COMMITTEES
Regular meetings of the Board of Directors are held on a monthly basis.
During the fiscal year ended March 31, 1999, the Board of Directors of the
Company held twelve regular meetings and one special meeting. No incumbent
director attended fewer than 75% of the aggregate total number of meetings of
the Board of Directors held and the total number of committee meetings on which
such director served during the fiscal year ended March 31, 1999.
The Board of Directors of the Company has a standing joint Audit
Committee with the Bank. For the fiscal year ended March 31, 1999, the Audit
Committee of the Company and the Bank consisted of Directors Vern E. Albrecht,
Donald M. Michels, and Gerald J. Ahlin, who were neither officers nor employees
of the Company nor the Bank ("Outside Directors"). The Audit Committee reviews
the scope and timing of the audit of the Company's financial statements by the
Company's independent auditors and reviews with the independent auditors the
Company's management policies and procedures with respect to auditing and
accounting controls. The Audit Committee also reviews and evaluates the
independence of the Company's auditors, approves services rendered by such
auditors and recommends to the Board the engagement, continuation or discharge
of the Company auditors. The Company's Audit Committee met once during the
fiscal year ended March 31, 1999.
For the fiscal year ended March 31, 1999, the Compensation Committee of
the Board of Directors of the Company consisted of Directors Michael D. Jensen,
Norman M. Osero and Gerald J. Ahlin. The Company did not pay separate
compensation to its officers during the fiscal year ended March 31, 1999. The
Bank paid all compensation and the Compensation Committee of the Bank determined
the compensation policies. The Compensation Committee of the Company met twice
during the fiscal year ended March 31, 1999. In April 1998, the Compensation
Committee of the Company met to ratify compensation decisions made by the Bank
during the fiscal year ended March 31, 1999. In August 1996, the Compensation
Committee of the Company met to grant stock options and shares of common stock
under the Company's stock related benefit plans.
For the fiscal year ended March 31, 1999, the Nominating Committee of
the Board of Directors of the Company consisted of Directors Brian L. Beadle,
Vern E. Albrecht and Norman M. Osero. In April 1999, the Nominating Committee
recommended nominees for directors to stand for election at the Annual Meeting
to the Board of Directors. The Company's By-Laws allow for shareholder
nominations of directors and require such nominations be made pursuant to timely
notice in writing to the Secretary of the Company. See "SHAREHOLDER PROPOSALS
FOR THE 1999 ANNUAL MEETING."
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COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Executive Compensation
During the fiscal year ended March 31, 1999, the Company did not pay
separate compensation to its executive officers. Separate compensation will not
be paid to officers of the Company until such time as the officers of the
Company devote significant time to separate management of Company affairs. This
is not expected to occur until the Company becomes actively involved in
additional significant business beyond that of the Bank.
The following table summarizes the total compensation earned by the
Bank's Chief Executive Officer. The Bank's next highest paid executive officer's
compensation (salary and bonus) did not exceed $100,000 for the Bank's fiscal
years ended March 31, 1999, 1998 or 1997.
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Awards
Value of Number All
Restricted of Shares Other
Annual Compensation(1) Stock Subject to Compen-
Name and Principal Position Year Salary Bonus(2) Awards Options sation(3)
Brian L. Beadle............ 1999 $87,742 $6,700 --- --- $87,695
President, Chief Executive 1998 $83,086 $6,500 --- --- $74,197
Officer and Chief Financial 1997 $80,375 $5,000 --- --- $35,538
Officer of the Company
and the Bank
- ------------------------
(1) Perquisites and other personal benefits provided to the named executive
officer by the Bank did not exceed the lesser of $50,000 or 10% of named
executive officer's total annual salary and bonus during the fiscal years
indicated, and accordingly, are not included.
(2) Bonuses paid during the fiscal years ended March 31, 1997, 1998, and 1999
were discretionary.
(3) The amount shown for the fiscal year ended March 31, 1997, is derived from
the following figures: (i) $31,174 - ESOP contribution (based upon the
value of the shares of Common Stock at March 31, 1997); (ii) $4,364 -
Pension Plan contribution. The amount shown for the fiscal year ended March
31, 1998, is derived from the following figures: (i) $66,013 - ESOP
contribution (based upon the value of the shares of Common Stock at March
31, 1999); (ii) $8,184 - Pension Plan contribution. The amount shown in the
column for the fiscal year ended March 31, 1999, is derived from the
following figures: (i) $83,094 - ESOP contribution (based upon the value of
the shares of Common Stock at March 31, 1996); (ii) $4,601 - Pension Plan
contribution.
Employment Agreements
The Bank entered into a three-year employment agreement with Mr. Brian
L. Beadle and a two-year employment agreement with Mr. James L. Moore (the
"Employment Agreements"). The term of the agreements can be restored to the full
three and two year terms, as applicable, by action of the Board of Directors in
connection with the Board's annual performance evaluation. On April 21, 1998,
the Board of Directors approved a three-year employment agreement with Mr. Brian
L. Beadle and a two-year employment agreement with Mr. James L. Moore. The
Employment Agreements are intended to ensure that the Bank maintains stable and
competent management. Under the agreements, the base salary for Brian L. Beadle
is $88,000 and $58,000 for James L. Moore. Base salaries may be increased by the
Board of Directors of the Bank, but may not be reduced except as part of a
general pro rata reduction in compensation for all executive officers. In
addition to base salary, the Employment Agreements provide for payments from
other Bank incentive compensation plans, and provide for other benefits,
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<PAGE>
including participation in any group health, life, disability or similar
insurance program and in any pension, profit-sharing, employee stock ownership
plan, deferred compensation, 401(k) or other retirement plans maintained by the
Bank. The Employment Agreements also provide for participation in any
stock-based incentive programs made available to executive officers of the Bank.
The Employment Agreements may be terminated by the Bank upon death, disability,
or retirement; for cause at any time; or in certain events specified by
regulations issued by the Wisconsin Department of Financial Institutions
("DFI"). If the Bank terminates the Employment Agreements other than for death,
disability, retirement or cause (or a change of control as defined below), the
executive is entitled to continuation of his compensation and benefits (based on
the highest compensation within three years preceding termination) for the
remainder of the employment term together with other compensation and benefits
in which he was vested at the termination date.
The Employment Agreements also provide for severance payments if the
executive's employment terminates following a change in control. Under the
Employment Agreements, a "Change of Control" is generally defined to include any
change in control required to be reported under the federal securities laws as
well as (i) the acquisition by any person of 25% or more of the Company's
outstanding voting securities, or (ii) a change in a majority of the directors
of the Company during any two-year period without the approval of at least
two-thirds of the persons who were directors at the beginning of such period. In
the event of a Change of Control, the executive shall receive severance pay in
the form of payments continuing for the then remaining unexpired portion of the
employment term. ( If the executive elects to receive such payments in one lump
sum, it would be calculated on the basis of the executive's average annual
compensation for the past three years ). Assuming a Change in Control occurred
as of March 31, 2000, Messrs. Beadle and Moore would be entitled to severance
pay in the amounts of $237,000 and $129,000 respectively, or $366,000 in the
aggregate. In addition, the executive is entitled to all qualified retirement
and other benefits in which the executive was vested and additional retirement
benefits under all qualified plans that the executive would have been entitled
had such executive continued employment through the then-remaining employment
term. If the severance payments following a Change in Control would constitute
"parachute payments" within the meaning of Section 280G(b)(2) of the Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code"), and the present
value of such "parachute payments" equals or exceeds three times the executive's
average annualized includable income for the five calendar years preceding the
year in which a Change in Control occurred, the severance payments shall be
reduced to an amount equal to the present value of 2.99 times the average annual
compensation paid to the executive during the five calendar years immediately
preceding such Change in Control. If total payments following a Change in
Control constitute excess parachute payments under Section 280G of the Internal
Revenue Code, it could result in the imposition of an excise tax on the
recipient and denial of an income tax deduction for such excess amounts to the
Bank and the Company. The employment agreements provide that benefits payable to
the executive under a Change in Control may, at the election of the executive,
be reduced to an amount necessary to prevent imposition of an excise tax.
Benefits
Insurance Plans
All full-time employees of the Bank are eligible for comprehensive
health insurance commencing upon the completion of three full months of
employment with the Bank. After three full months of employment, full-time
employees are covered as a group for life insurance and long-term disability
insurance. The Bank pays 85% of the cost of health insurance for single coverage
and 70% of the cost of health insurance for family coverage. The Bank pays the
entire cost of life insurance and long-term disability coverage for all
employees.
Money Purchase Pension Plan
The Bank maintains the Northwest Savings Bank Money Purchase Pension
Plan (the "Pension Plan"), a tax qualified defined contribution plan covering
all eligible employees. Employees are eligible to participate after completing a
twelve-month period of 1,000 or more hours of employment and attaining age 21.
Each plan year, the Bank contributes 5% of each participant's salary to the
Pension Plan on behalf of those participants who have completed 1,000 hours of
service during the plan year and are employed at the end of the plan year.
Benefits generally become 5% vested after one year of service, 10% vested after
two years of service, 15% vested after three years of service, 20% vested after
four years of service and 100% vested after five years of service. Distributions
from the Pension Plan are made upon termination of service in an annuity, a lump
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sum or in installments over a period not to exceed the greater of the life
expectancy of the participant or the life expectancy of the joint survivor of
the participant and his designated beneficiary. Under the Pension Plan, a
separate account is established for each participating employee. The Pension
Plan's trustee is the Emjay Corporation.
Employee Stock Ownership Plan and Trust
The Bank has established an Employee Stock Ownership Plan (the "ESOP")
for eligible employees. The ESOP borrowed funds from the Company to purchase
103,250 shares of Common Stock. Collateral for the loan is the Common Stock
purchased by the ESOP. The Bank makes scheduled discretionary cash contributions
to the ESOP sufficient to amortize the principal and pay the interest on the
loan. Under normal amortization, the ESOP loan would be repaid by May 1, 2000.
The interest rate payable on the ESOP loan is 8% simple interest compounded
annually. Shares purchased by the ESOP are held in a suspense account for
allocation among participants as the loan is repaid.
Contributions to the ESOP and shares released from the suspense account
in an amount proportional to the repayment of the ESOP loan will be allocated
among participants on the basis of compensation. Benefits generally become 5%
vested after one year of service, 10% vested after two years of service, 15%
vested after three years of service, 20% vested after four years of service and
100% vested after five years of service. Participants also become 100% vested
upon death, retirement, early retirement, or disability retirement. Benefits may
be paid either in shares of Common Stock or in cash. As the Bank's contributions
to the ESOP are not fixed, benefits payable under the ESOP cannot be estimated.
In November 1993, the American Institute of Certified Public
Accountants issued Statement of Position 93-6 - "Employers' Accounting for
Employee Stock Ownership Plans" ("SOP"). The SOP is effective for the Company's
fiscal year that began April 1995. The SOP requires that shares committed to be
released in an accounting period should be reflected in the consolidated
financial statements as compensation expense equal to the fair value of the
shares committed to be released. The shares generally will be deemed to be
committed to be released ratably during an accounting period as the employee
performs service. Accordingly, average fair values will be used to determine the
amount of compensation expense to be recognized in that period. Thus, as shares
increase or decrease in value, earnings will be affected relative to the shares
committed to be released in that period. Additionally, the SOP requires that
outstanding shares for purposes of computing both primary and fully diluted
earnings per share include only those shares scheduled to be released in that or
prior periods. Thus, as the ESOP releases additional shares in future periods,
earnings per share may be diluted. Shares of the Company acquired by the ESOP
are scheduled to be released over a seven-year period commencing in 1996. On
March 31, 1999, 28,023 shares of Common Stock held by the ESOP were released.
Emjay Corporation (the "Trustee") is the ESOP trustee. The Compensation
Committee may instruct the Trustee regarding investment of funds contributed to
the ESOP. The Trustee will vote all allocated shares held in the ESOP in
accordance with instructions from participating employees. The Trustee will vote
unallocated shares held in the suspense account.
Northwest Equity Corp. Incentive Plan
In October 1995, the Company's shareholders approved the Northwest
Equity Corp. Incentive Plan (the "Incentive Plan"). The Incentive Plan provides
officers and employees of the Company and the Bank with a proprietary interest
in the Company and is intended to encourage them to remain with the Company and
the Bank. As of March 31, 1999, the Bank had 15 officers and employees
participating in the Plan. The Plan acquired 41,300 shares of Common Stock.
The Compensation Committee of the Company, consisting of Directors
Gerald J. Ahlin, Michael D. Jensen and Norman M. Osero administers the Incentive
Plan. In October 1995, officers and employees of the Bank were granted in the
aggregate 41,300 nontransferable and nonassignable shares of Common Stock.
Officers and employees became vested in shares of Common Stock awarded under the
Incentive Plan at the rate of approximately 33 1/3% per year on the first,
second and third anniversaries of the date of the grant. Awards will be 100%
vested upon termination of employment due to death, disability or following a
change in control of the Bank or the Company. If an employee terminates
9
<PAGE>
employment with the Bank or Company for reasons other than due to death,
disability or a change in control of the Bank or the Company, unvested Plan
awards will be forfeited. The Incentive Plan was terminated by the Board in
October 1998 and no further rights, obligations or liabilities exist with
respect to the Incentive Plan.
Northwest Equity Corp. 1995 Stock Option Plan
In October 1995, the Company's shareholders approved the Northwest
Equity Corp. 1995 Stock Option Plan (the "Stock Option Plan"). The purpose of
the Stock Option Plan is to provide officers, employees and directors of the
Company and the Bank with a proprietary interest in the Company; to recognize
management, employees and the Board of Directors for their contributions to the
success of the Bank; and to incite their future performance and encourage them
to remain with the Company and the Bank. Under the Stock Option Plan, all
directors, officers and employees of the Company and its subsidiaries are
eligible to participate. As of March 31, 1999, the Company had 16 directors,
officers and employees participating in the Stock Option Plan. The Stock Option
Plan authorizes the grant of (i) options to purchase shares of Common Stock
intended to qualify as incentive stock options under Section 422 of the Internal
Revenue Code ("Incentive Stock Options"); (ii) options that do not so qualify
("Non-Statutory Options"); and (iii) options that are exercisable only upon a
change in control of the Bank or the Company ("Limited Rights"). Under the Stock
Option Plan, options for a total of 103,251 shares of Common Stock, or 10.0% of
the number of shares of Common Stock issued in connection with the Conversion,
were made available for granting to eligible participants. As of March 31, 1996,
options to purchase 103,251 shares had been granted under the Stock Option Plan
and no options to purchase Common Stock were available for future grants. The
Stock Option Plan may be amended to increase the number of options available for
granting in the future; however, if the increase in the number of shares
available for grant is deemed material under regulations issued by the SEC, such
amendment would require shareholder approval.
Mr. Beadle did not receive individual option grants under the stock option
plan during the fiscal year ended March 31, 1999.
The following table sets forth certain information concerning the
exercise of stock options granted under the Stock Option Plan by Mr. Beadle
during the year ended March 31, 1999, and the number and value of his
unexercised stock options at March 31, 1999.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
Value of
Number of Unexercised
Number of Unexercised In-the-Money
Shares Options Options
Acquired on Valu At Fiscal Year-End At Fiscal Year-End(1)
Name Exercise Realized(1) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
Brian L. Beadle 0 0 41,300 $487,753
- ---------------
<FN>
(1) The value of the unexercised "in-the-money" options is based upon the
difference between the fair market value of the securities underlying
the options ($22.25) and the exercise price of the options ($10.44) at
March 31, 1999.
</FN>
</TABLE>
Of the options to purchase 51,624 shares of Common Stock granted to the
directors of the Company, options grants to individual directors were determined
based upon years of service with the Bank. Each non-executive director who had
served as a director for a period of one or more years as of the date of
shareholder approval in October 1995 were granted options to purchase 10,000
shares of Common Stock. Each non-executive director who served as a director for
a period of less than one year as of the date of shareholder approval was
granted options to purchase 1,624 shares of Common Stock.
10
<PAGE>
Under the Stock Option Plan, the Compensation Committee will determine
the expiration date (but not later than ten years from the date the option is
granted) and the exercise price of the options with respect to employees. With
respect to all options granted to directors and the initial grant of options to
officers and employees, the expiration date is ten years from the date of grant
(October 10, 1995) and the exercise price of the options is the fair market
value of the Common Stock on the date of the grant ($10.44). All options granted
to employees are intended to be Incentive Stock Options to the extent permitted
under Section 422 of the Internal Revenue Code. The exercise price may be paid
in cash or shares of Common Stock. No options will be awarded under the Stock
Option Plan following the tenth anniversary of approval of the Stock Option Plan
by shareholders of the Company. Options will be transferable only by will or the
laws of descent and distribution, except that Non-Statutory Options may be
transferred to the spouse, children or grandchildren of a participating employee
(or a trust for the benefit of such family members).
Options granted under the Stock Option Plan in October 1995 to
employees are intended to vest at the rate necessary to qualify such options as
Incentive Stock Options under the Internal Revenue Code. Options granted to
non-executive directors vest at the rate of 33 1/3% per year commencing on the
first, second and third anniversaries of the date the Stock Option Plan was
approved by shareholders. The vesting schedule of options to be granted to
non-executive employees in the future, if any, will be determined by the
Compensation Committee of the Company.
In the event of a stock split, reverse stock split or stock dividend,
the number of shares of Common Stock subject to options awarded under the Stock
Option Plan and the exercise price per share under the option will be adjusted
to reflect such increase or decrease in the total number of shares of Common
Stock outstanding.
No option granted in connection the Stock Option Plan will be
exercisable after three months after the date on which the optionee ceases to
perform services for the Bank or the Company, except that in the event of death
or disability, options may be exercisable for up to one year thereafter or such
longer period as determined by the Compensation Committee of the Company.
Options held by employees terminated for cause will terminate on the date of
termination. Termination "for cause" includes termination due to personal
dishonesty, incompetence, willful misconduct, the intentional failure to perform
stated duties, breach of fiduciary duty involving personal dishonesty, willful
violations of law, the entry of a final cease and desist order or the material
breach of any provisions of an employee's employment contract. Options will be
immediately exercisable in the event of a change of control. "Change of control"
is defined to include the acquisition of beneficial ownership of 25% or more of
any class of equity security by a person or group of persons acting in concert,
an exchange offer, merger or other form of business combination, a sale of
assets or a contested election of directors that results in a change in control
of a majority of the Board of Directors of the Company.
In the event of death, disability or retirement, the Company, if
requested by the employee, may elect to pay the employee in exchange for
cancellation of the option, or beneficiary in the event of death, the amount by
which the fair market value of the Common Stock exceeds the exercise price of
the option on the date of the employee's termination of employment.
Directors' Compensation
For the fiscal year ended March 31, 1999, each non-employee member of
the Board of Directors of the Bank received a $400 monthly directors' fee. The
directors of the Company, including Mr. Beadle, also received a $200 monthly
directors' fee for Company board meetings attended during the fiscal year ended
March 31, 1999.
In October 1995, Outside Directors Ahlin, Albrecht, Jensen, Michels and
Osero each were granted options to purchase 10,000 shares of Common Stock under
the Stock Option Plan which are subject to the following vesting schedule: (i)
3,333 - October 10, 1996; (ii) 3,333 - October 10, 1997; and (iii) 3,334 -
October 10, 1998. In addition, Outside Director Counter was granted options to
purchase 1,624 shares of Common Stock that were subject to the following vesting
schedule: (i) 541 - October 10, 1996; (ii) 541 - October 10, 1997; and (iii) 542
- - October 10, 1998.
11
<PAGE>
INDEBTEDNESS OF MANAGEMENT AND CERTAIN TRANSACTIONS
With the passage of the Financial Institutions Reform, Recovery and
Enforcement Act ("FIRREA") on August 9, 1989, all loans or extensions of credit
to officers and directors had to be made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with the general public and not involve more than the
normal risk of repayment or present other unfavorable features. In addition,
loans made to a director or executive officer in excess of the greater of
$25,000 or 5% of the Bank's capital and surplus (up to a maximum of $500,000)
must be approved in advance by a majority of the disinterested members of the
Board of Directors of the Bank.
Effective November 8, 1996, regulations affecting loans to directors
and executive officers were changed to provide an exception that allows
extensions of credit made pursuant to a benefit or compensation program that are
widely available to employees of the member bank. Loans to employees of the bank
are made on substantially the same terms as those prevailing at the time for
comparable loans to members of the general public, except the rate shall be the
greater of, 1% less than the rate available to members of the general public,
110% of the applicable federal rate as determined by the Internal Revenue
Service for the month immediately prior to the month of disbursement, or the
cost of funds as determined by the Federal Home Loan Bank of Chicago's Cost of
Funds Survey for the previous quarter.
The Bank's policy has not been changed since the regulations changed
November 8, 1996, and all loans or extensions of credit to executive officers
and directors are to be made in the ordinary course of business, on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons, and may
not involve more than the normal risk of collectibility or present other
unfavorable features. All loans since the enactment of FIRREA were made by the
Bank in the ordinary course of business and were not made with favorable terms
nor involved more than the normal risk of collectibility or presented
unfavorable features.
The Company and the Bank intend to reexamine the current policy, and in
the future may permit loans between the Company and the Bank and executive
officers, directors, holders of 10% or more of the shares of any class of common
stock of the Company and affiliates thereof, on substantially the same terms as
those prevailing at the time for employees of the member bank pursuant to a
benefit or compensation program.
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Securities Exchange Act requires the Company's
executive officers and directors, and persons who own more than ten percent of
the shares of Common Stock outstanding, to file reports of ownership and changes
in ownership with the SEC and the National Association of Securities Dealers,
Inc. Executive officers, directors and greater than ten percent shareholders are
required by regulation to furnish the Company with copies of all Section 16(a)
forms they file.
Based solely upon the review of the information provided to the
Company, the Company believes that during the fiscal year ended March 31, 1999,
all of its executive officers, directors and greater than ten percent
shareholders complied with all applicable Section 16(a) filing requirements.
12
<PAGE>
MATTER 2
RATIFICATION OF APPOINTMENT OF AUDITORS
The Company's independent auditors for the fiscal year ended March 31,
1999, were Wipfli Ullrich Bertelson LLP. The Board of Directors of the Company
has reappointed Wipfli Ullrich Bertelson LLP to perform the audit of the
Company's financial statements for the fiscal year ending March 31, 2000. A
representative of Wipfli Ullrich Bertelson LLP will be present at the Annual
Meeting and will be given the opportunity to make a statement if they desire to
do so and will be available to respond to appropriate questions from the
Company's shareholders.
The affirmative vote of a majority of the shares of Common Stock
represented in person or by proxy and voted at the Annual Meeting is required
for ratification of the selection of auditors. The Board of Directors recommends
a vote FOR ratification of the appointment of Wipfli Ullrich Bertelson LLP as
the independent auditors of the Company.
SHAREHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING
DEADLINE FOR SUBMISSION OF SHAREHOLDER PROPOSALS FOR INCLUSION IN 2000 PROXY
MATERIALS
Any proposal which a shareholder wishes to have included in the proxy
materials of Northwest relating to the 2000 annual meeting of the shareholders
of Northwest, which is scheduled to be held in July 2000, must have been
received at the principal executive offices of the Northwest, 234 Keller Avenue
South, Amery, Wisconsin 54001 Attention: James Moore, Secretary, no later than
March 1, 2000. If such proposal is in compliance with all of the requirements of
Rule 14a-9 under the Exchange Act, it will be included in the proxy statement
and set forth on the appointment form of proxy issued for such annual meeting of
shareholders. It is urged that any such proposals be sent certified mail, return
receipt requested.
Nothing in this section shall be deemed to require Northwest to include
in its proxy statement and proxy relating to the 2000 Annual Meeting any
shareholder proposal which does not meet all of the requirements for inclusion
established by the SEC in effect at the time such proposal is received.
ADVANCE NOTICE REQUIREMENT FOR ANY PROPOSAL OR NOMINATION TO BE RAISED BY A
SHAREHOLDER
Shareholder proposals which are not submitted for inclusion in the
Company's proxy materials pursuant to Rule 14a-8 under the Exchange Act may be
brought before an annual meeting pursuant to Article VII of the Northwest
Articles, which provides that: (i) with respect to proposals to be brought
before an annual meeting, such proposal must be received by Northwest not less
than 60 days nor more than 90 days prior to the date of the previous year's
annual meeting of shareholders, or in the event no annual meeting was held in
the previous year, no later than ten days following the date notice of the
annual meeting is mailed to shareholders; and (ii) with respect to proposals to
be brought before a Annual Meeting, not later than the close of business on the
tenth day following the date notice of such Annual Meeting is mailed to
shareholders.
In accordance with Article VII of the Northwest Articles, the advance
notice of a proposal described above must set forth certain information,
including the shareholder's name and address, as the appear on Northwest's
record of shareholders, the class and number of shares of Northwest Common Stock
beneficially owned by such shareholder, a brief description of the proposed
business, the reason for considering the business at the shareholder meeting and
any material interest of the shareholder in the proposed business. In addition,
with respect to nominations for election to the Board of Directors made by a
shareholder, in accordance with Article VII of the Northwest Articles and
Article III of the Northwest bylaws, the following information must be provided:
(i) the name and address of the shareholder who intends to make the nomination
13
<PAGE>
and of the person(s) to be nominated; (ii) a representation that the shareholder
is a holder of record of the stock of Northwest entitled to vote at such meeting
and intends to appear in person or by proxy at the meeting and to nominated the
person(s) specified in the notice; (iii) a description of all arrangements or
understanding between the shareholder and each nominee and any other person(s)
(naming such person(s)) pursuant to which the nominations(s) are to be made by
the shareholder; (iv) such other information regarding each nominee proposed by
such shareholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the SEC; and (v) written consent of each nominee
to serve as a director of Northwest if so elected.
DISCRETIONARY VOTING OF 2000 PROXIES
Effective June 29, 1998, the SEC amended Rule 14a-4(c) under the Exchange Act
which governs a company's use of discretionary proxy voting authority with
respect to shareholder proposals that are not being included in a company's
proxy solicitation materials pursuant to Rule 14a-8 of the Exchange Act. New
Rule 14a-4(c)(1) provided that if a shareholder fails to notify Northwest of
such proposal at least 45 days prior to the month and day of mailing of the
prior year's proxy statement, then the management proxies named in the form of
proxy distributed in connection with Northwest's proxy statement would be
allowed to use their discretionary voting authority to address the proposal
submitted by the shareholder, without discussion of the proposal in the proxy
statement. Accordingly, if a shareholder who intends to present a proposal at
the 2000 Annual Meeting does not notify Northwest of such proposal on or prior
to June 6, 2000, then management proxies would be allowed to use their
discretionary voting authority to vote on the proposal when the proposal is
raised at the annual meeting, even though there is no discussion of the proposal
in the 2000 proxy statement.
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING
The Board of Directors knows of no business that will be presented for
consideration at the Annual Meeting other than as stated in the Notice of Annual
Meeting of Shareholders. If, however, other matters are properly brought before
the Annual Meeting or any adjournments or postponements thereof, it is the
intention of the persons named in the accompanying proxy to vote the shares
represented thereby on such matters in accordance with their best judgment.
A copy of the Company's Form 10-KSB (without exhibits) for the fiscal
year ended March 31, 1999, as filed with the SEC will be furnished without
charge to shareholders of record upon written request to Northwest Equity Corp.,
Brian L. Beadle, 234 Keller Avenue South, Amery, Wisconsin 54001.
By Order of the Board of Directors
/s/James L. Moore
James L. Moore
Secretary
Amery, Wisconsin
July 21, 1999
================================================================================
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN AND
PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE PAID ENVELOPE.
================================================================================
14
<PAGE>
NORTHWEST EQUITY CORP REVOCABLE PROXY
234 Keller Avenue South
Amery, Wisconsin 54001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF NORTHWEST EQUITY
CORP. FOR USE ONLY AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON
AUGUST 17, 1999, OR AT ANY ADJOURNMENTS THEREOF
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders (the "Annual Meeting") and the Proxy Statement and,
revoking any proxy heretofore given, hereby constitutes and appoints Messrs.
Brian L. Beadle and Gerald J. Ahlin, and any of the directors of Northwest
Equity Corp. (the "Company") or any successors in their respective positions, to
represent and to vote, as designated herein, all the shares of common stock,
$1.00 par value per share (the "Common Stock') of the Northwest Equity Corp.
held of record by the undersigned on June 25, 1999, at the Annual Meeting which
will be held on August 17, 1999, at 2:00 p.m., Amery, Wisconsin time, at the
Centennial Hall, 608 Harriman Avenue South, Amery, Wisconsin 54001, or at any
adjournments thereof.
THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED BELOW, BUT IF NO
INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE MATTERS
LISTED BELOW If other business is presented at the Annual meeting or any
adjournments or postponements thereof, this proxy will be voted by the named
proxies in their best judgement and discretion. At the present time, the Board
of Directors of the Company knows of no other business to be presented at the
Annual Meeting.
<TABLE>
<CAPTION>
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED
NORTHWEST EQUITY CORP. 1999 ANNUAL MEETING
<S> <C> <C> <C> <C> <C>
I. ELECTION OF DIRECTORS: 1. James L. Moore 2. Michael D. Jensen ___FOR all nominees ___WITHHOLD AUTHORITY
listed to the left(except to vote for all nominees
as specified below) listed to the left.
(Instructions: To withhold authority to vote for any indicated nominee, write
the number(s)of the nominee(s)in the box provided to the right).
II. RATIFICATION OF THE APPOINTMENT OF WIPFLI ULLRICH BERTELSON LLP AS
INDEPENDENT AUDITORS OF THE COMPANY FOR THE FISCAL YEAR ENDING MARCH 31, 2000.
___FOR ___AGAINST ___ABSTAIN
III. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING
OR ANY ADJOURNMENTS THEREOF.
Check appropriate box Date: _________ NO. OF SHARES
Indicate changes below
Address Change?___ Name Change?____
Signature(s) in Box
IMPORTANT: Please sign your name exactly as it appears hereon.
When signing as an attorney, administrator, agent, corporation,
officer, executor, trustee, guardian or similar position,
please add your full title to your signature. If shares of
common stock are held jointly, each holder may sign but only
one signature is required.
</TABLE>
