UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 5)
HMN FINANCIAL, INC.
(Name of Issuer)
Common Stock, $.01 par value
(Title of Class of Securities)
40424G108
(CUSIP Number)
Charles R. Haywood
Foley & Lardner
One IBM Plaza
330 North Wabash Avenue
Suite 3300
Chicago, Illinois 60611
(312) 755-1900
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 3, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box [ ].
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
LaSalle Financial Partners, Limited Partnership
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: WC, OO
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [X]
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 403,600 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
403,600 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
403,600 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
9.7%
14 Type of Reporting Person
PN
<PAGE>
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Richard J. Nelson
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: Not Applicable
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [X]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 403,600 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
403,600 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
403,600 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
9.7%
14 Type of Reporting Person
IN
<PAGE>
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Peter T. Kross
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: Not Applicable
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [X]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 403,600 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
403,600 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
403,600 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [ ]
13 Percent of Class Represented By Amount in Row (11)
9.7%
14 Type of Reporting Person
IN
<PAGE>
1 Name of Reporting Person
S.S. or I.R.S. Identification Number of Above Person (optional)
Florence Nelson
2 Check The Appropriate Box If a Member of a Group (a)[X]
(b)[ ]
3 SEC Use Only
4 Source of Funds: Not Applicable
5 Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
0 shares
Number of
Shares 8 Shared Voting Power
Beneficially 0 shares
Owned By
Each Reporting 9 Sole Dispositive Power
Person With 0 shares
10 Shared Dispositive Power
0 shares
11 Aggregate Amount Beneficially Owned by Each Reporting Person
0 shares
12 Check Box If The Aggregate Amount in Row (11) Excludes
Certain Shares [X]
13 Percent of Class Represented By Amount in Row (11)
0%
14 Type of Reporting Person
IN
<PAGE>
This is Amendment No. 5 to the Schedule 13D filed jointly by
LaSalle Financial Partners, Limited Partnership (the "Partnership"),
Richard J. Nelson, Florence Nelson and Peter T. Kross (the "Group") on
July 11, 1997 (as amended, the "Original 13D"), and relates to the common
stock, $.01 par value (the "Common Stock"), of HMN Financial, Inc. (the
"Issuer"). The following items in the Original 13D are amended to read in
their entirety as follows:
Item 4. Purpose of Transaction
The Group's goal is to profit from appreciation in the market
price of the Common Stock. The Group expects to actively assert
shareholder rights, in the manner described below, with the purpose to
influence the policies of the Issuer.
The Partnership's stated purpose is to emphasize investments in
the stocks of selected thrifts, banks and savings banks which the General
Partners believe to be undervalued or that they believe to represent
"special situation" investment opportunities. The Partnership has further
described its purpose, in its private placement memorandum, as follows:
Considering the current opportunity to purchase shares
of selected thrifts and savings banks at substantial
discounts to intrinsic value as determined by the
General Partners, with significant appreciation
potential available due to merger and acquisition
activity in the banking industry, the Partnership
currently intends to concentrate its investments in
thrifts, banks and savings banks which, in the opinion
of the General Partners, possess certain buyout
characteristics. Concentrated investments may be made
in companies to allow the Partnership to influence or
to effect control over management's decisions in order
to achieve Partnership objectives.
The Partnership believes that its acquisition of the Common Stock is in
accordance with these stated purposes.
The Group intends to work with the Issuer to attempt to
influence the Board of Directors to consider all possible strategic
alternatives available to the Issuer in order to increase the market price
of the Common Stock. One way of achieving this goal is to seek out
another financial institution and attempt to implement a business
combination. The Group is interested in influencing the Issuer's Board of
Directors to explore seriously, in consultation with independent financial
advisors, this and other possible means of improving the market price of
the Common Stock, to the extent such options may not have already been
fully explored. To the extent such influence may be deemed to constitute
a "control purpose" with respect to the Securities Exchange Act of 1934,
as amended, and the regulations thereunder, the Group has such a purpose.
On October 21, 1997, Messrs. Nelson and Kross met with
management of the Issuer. Topics of discussion included the past
performance of the Issuer and methods to maximize shareholder value in the
future. At that meeting, Messrs. Nelson and Kross, on behalf of the
Group, requested that the Board of Directors of the Issuer nominate Mr.
Nelson for election to the Board at the 1998 Meeting of Stockholders and
noted that if the Board of Directors does not nominate Mr. Nelson for
election as a Board nominee, the Group most likely would nominate Mr.
Nelson and directly solicit shareholder votes for Mr. Nelson's election to
the Board. In addition, Messrs. Nelson and Kross informed management of
the Issuer that the Group was generally reviewing its options with respect
to the Issuer, and that the Group may submit for shareholder vote at the
1998 Meeting of Stockholders a proposal regarding corporate governance,
maximizing shareholder value or other matters. Messrs. Nelson and Kross
also informed the Issuer that the Partnership would shortly submit a
request for a shareholder list and associated materials. On November 15,
1998 the Issuer filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q and attached a change in the Issuer's bylaws
adopted September 23, 1997, imposing a residency requirement upon
directors of the Issuer. On November 20, 1997, the Partnership sent to
the Issuer a request for a stockholder list and associated materials. A
copy of that letter is attached as Exhibit 3.
By a letter dated January 27, 1998, the Partnership submitted to
the Issuer a notice of intent to nominate Thomas A. Burton and Howard T.
Stewart for election to the Board of Directors of the Issuer at the 1998
Annual Meeting of Stockholders of the Issuer (the "Annual Meeting"), to be
held April 28, 1998. A copy of that letter is attached as Exhibit 4. On
that same day, Messrs. Nelson and Kross discussed their notice of intent
to nominate with management of the Issuer. Mr. Nelson and Mr. Kross
continued to have discussions with management of the Issuer regarding the
election of Mr. Burton and Mr. Stewart, including discussions regarding
the Issuer's accepting one of Mr. Burton or Mr. Stewart as a candidate and
expanding the Board of Directors by one seat. The Issuer rejected all of
Mr. Nelson's and Mr. Kross's suggestions and refused to nominate either
Mr. Burton or Mr. Stewart for election to the Board of Directors.
The Partnership and the Issuer also continued to discuss making
available to the Partnership stockholder list materials. Certain of those
materials were provided to the Partnership. On March 27, 1998, the
Partnership sent to the Issuer another request for a stockholder list and
associated materials. A copy of that letter is attached as Exhibit 5. On
March 2, 1998 the Partnership sent a letter to the Issuer regarding the
Issuer's response to the Partnership's demand that the Issuer provide the
Partnership with a list of Non-Objecting Beneficial Owners (a "NOBO"
list). A copy of that letter is attached as Exhibit 6. By letter dated
March 3, 1998, the Partnership withdrew its notice of intent to nominate
Mr. Stewart for election to the Board of Directors. A copy of that letter
is attached as Exhibit 7. By letter dated March 3, 1998, the Partnership
inquired regarding obtaining a current NOBO list. A copy of that letter
is attached as Exhibit 8.
The Partnership and the Issuer held discussions regarding
whether the record date for the Annual Meeting had been set as March 2 or
March 3, 1997. By letter dated March 4, 1998, the Partnership's counsel
communicated with Issuer's counsel regarding certain transactions. A copy
of that letter is attached as Exhibit 9. After further discussions
between the Partnership and the Issuer, the Issuer re-set the record date
for April 1, 1998. A copy of a letter, dated March 4, 1998 from the
Issuer's counsel to the Partnership's counsel regarding the record date
and stockholder list materials is attached as Exhibit 10. By letter dated
March 6, 1998, the Partnership's counsel responded to that letter. A copy
of that letter is attached as Exhibit 11. On March 5, 1998, the
Partnership filed with the Securities and Exchange Commission a letter it
may send to stockholders of the Issuer. By letter dated March 6, 1998,
the Issuer's counsel stated certain positions of the Issuer regarding the
Partnership's actions. A copy of that letter is attached as Exhibit 12.
The Partnership disputes statements and conclusions made by the Issuer in
that letter.
The Partnership intends to conduct a proxy solicitation in order
to elect Mr. Burton to the Board of Directors. The Partnership is
currently preparing proxy solicitation materials and expects to file those
materials with the Securities and Exchange Commission and mail those
materials to stockholders of the Issuer.
The above-stated purpose to control is unrelated to the Office
of Thrift Supervision ("OTS") regulations. Specifically, the Group is
aware that regulations promulgated by the OTS contain separate standards
with regard to acquisition of "control" of a federally chartered savings
institution, such as the Issuer's subsidiary bank. Those regulations
require OTS approval for acquisition of control under certain conditions.
Some of the provisions are based in part on numerical criteria. One of
the provisions creates a rebuttable presumption of control where a person
acquires more than 10 percent of the voting stock of a savings association
and other conditions are met. Another provision creates a rebuttable
presumption of control where a person acquires proxies to elect one-third
or more of the savings association's board of directors and other
conditions are met. The Group intends to comply with all OTS regulations.
The Group intends to continue to evaluate the Issuer and its
business prospects and intends to consult with management of the Issuer,
other shareholders of the Common Stock or other persons to further its
objectives. The Group may make further purchases of shares of the Common
Stock or may dispose of any or all of its shares of the Common Stock at
any time. At present, and except as disclosed herein, the Group has no
specific plans or proposals that relate to, or could result in, any of the
matters referred to in paragraphs (a) through (j), inclusive, of Item 4 of
Schedule 13D. The Group intends to continue to explore the options
available to it. The Group may, at any time or from time to time, review
or reconsider its position with respect to the Issuer and may formulate
plans with respect to matters referred to in Item 4 of Schedule 13D.
Item 7. Material to be Filed as Exhibits
No. Description
1 Joint Filing Agreement*
2 Professional Account Agreement, dated March 6, 1996,
between the Partnership and each of the subsidiaries of The
Bear Stearns Companies Inc.*
3 Letter from Richard J. Nelson to the Issuer, dated November
20, 1997.*
4 Letter from Peter T. Kross to the Issuer, dated January 27,
1998.*
5 Letter from Richard J. Nelson to the Issuer, dated February
26, 1998.
6 Letter from Richard J. Nelson to the Issuer, dated March 2,
1998.
7 Letter from Richard J. Nelson to the Issuer, dated March 3,
1998.
8 Letter from Richard J. Nelson to the Issuer, dated March 3,
1998.
9 Letter from Phillip M. Goldberg to David M. Vander Haar,
dated March 4, 1998.
10 Letter from David M. Vander Haar to Phillip M. Goldberg,
dated March 4, 1998.
11 Letter from Phillip M. Goldberg to David M. Vander Haar,
dated March 6, 1998.
12 Letter from David M. Vander Haar to Richard J. Nelson,
dated March 6, 1998.
*Filed previously with the Securities and Exchange Commission as part of
the Original 13D.
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true,
complete and correct.
Date: March 9, 1998
LaSALLE FINANCIAL PARTNERS, LIMITED PARTNERSHIP
By: LaSALLE CAPITAL MANAGEMENT, INC.
a General Partner
By: /s/ Richard J. Nelson
Richard J. Nelson, President
/s/ Richard J. Nelson
Richard J. Nelson
/s/ Peter T. Kross
Peter T. Kross
/s/ Florence Nelson
Florence Nelson
<PAGE>
EXHIBIT 5
LASALLE FINANCIAL PARTNERS, L.P.
Suite 500
350 E. Michigan Avenue
Kalamazoo, Michigan 49007
______________________
Telephone (616) 344-4993
Facsimile (616) 382-2382
February 26, 1998
Via Federal Express
HMN Financial, Inc.
101 North Broadway
P.O. Box 231
Spring Valley, MN 55975
Via Federal Express
HMN Financial, Inc.
c/o The Corporation Trust Company
1209 Orange Street
Wilmington, DE 19899
Re: Stockholder Demand For Inspection of Stocklist Materials
Ladies and Gentlemen:
The undersigned, LaSalle Financial Partners, L.P., is the record
owner of common stock of HMN Financial, Inc., a Delaware corporation ("HMN
Financial" or "the Company"). Pursuant to Section 220 of the Delaware
General Corporation Law, the undersigned hereby demands the right (in
person or by its attorney or other agent), during the usual business
hours, to inspect the following records and documents of the Company (the
"Stocklist Materials") and to make copies or extracts therefrom:
a. A complete record or list of the Company's stockholders,
certified by its transfer agent(s) and/or registrar(s), showing the
name and address of each stockholder and the number of shares
registered in the name of each such stockholder as of March 2, 1998;
b. A magnetic computer tape or disk containing a list of the
Company's stockholders showing the names and addresses of each
stockholder and number of shares registered in the name of each such
stockholder as of March 2, 1998, together with such computer
processing data and directions as are necessary to make use of such
magnetic computer tape or disk, and a printout of such magnetic
computer tape or disk for verification purposes;
c. A list of all stockholders arranged in descending order by
number of shares, showing the name and address of each stockholder; a
complete record or list of any participants in any employee stock
purchase, ESOP plan, or other plan for the purchase of shares,
showing the name and address of each participant and the number of
shares credited to the participant's account; a magnetic tape(s) or
disk containing this information with same computer processing data
and directions as requested in (b) above; a correct and complete copy
of the plan(s) documents, including any amendments of such plan(s);
d. All daily transfer sheets showing changes in the list of
the Company's stockholders referred to in paragraph (a) above which
are in or come into the possession of the Company or its transfer
agent from the date of such list to the date of the Company's annual
meeting or any meeting held as a result of any postponement or
adjournment thereof;
e. All information in or which comes into the Company's
possession or control or which can reasonably be obtained from
brokers, dealers, banks, clearing agencies or voting trustees or
nominees of any central certificate depository system concerning the
number and identity of the actual beneficial owners of the Company's
stock, including a breakdown of any holders in the name of Cede &
Co., Kray & Co., Philadep, and other similar nominees;
f. All information in or which comes into the Company's
possession or control or which can reasonably be obtained from
brokers, dealers, banks, clearing agencies or voting trustees
relating to the names of the non-objecting beneficial owners of the
Company's stock ("NOBO's") in the format of a printout in descending
order balance and on a magnetic computer tape or disk with the
computer processing data or directions that are necessary to make use
of such magnetic computer tape or disk (such information with respect
to brokers and dealers is readily available to the Company under
Rule 14b-1 of the Securities Exchange Act of 1934, as amended, from
Independent Election Corporation of America and ADP Proxy Services),
including without limitation, the NOBO list produced to CIC in or
about September, 1997, which was previously requested by the
undersigned but not produced by the Company;
g. A stop list or stop lists relating to any Common Stock as
of the date of the list referred to in paragraph (a) above;
h. A true and correct copy of the Company's bylaws and
articles of incorporation, including any amendments thereto, in
effect on the date hereof; and
i. The information and records specified in paragraphs (a),
(b), (c), (d), (f), and (g) above as of March 2, 1998, the record
date for stockholder action set by the Board of Directors; the
information and records specified in paragraph (e) on a weekly basis
up until any shareholders' meeting.
The purpose of this demand to inspect the Stocklist Materials is
to enable the undersigned to communicate with stockholders regarding their
investment as stockholders including, without limitation, to communicate
with stockholders regarding a possible proxy solicitation.
Please advise Jon E. Abramczyk of Morris, Nichols, Arsht &
Tunnell, 1201 North Market Street, Wilmington, Delaware 19801 (302) 658-
9200, where and when the Stocklist Materials will be available. The
undersigned hereby authorizes Jon E. Abramczyk of Morris, Nichols, Arsht &
Tunnell, and his respective partners, associates, employees, and any other
persons to be designated by them, acting together, singly or in
combination, to conduct the inspection and copying herein demanded.
Very truly yours,
LaSalle Financial Partners, L.P.
By: /s/ Richard J. Nelson
General Partner
LaSalle Capital Management, Inc.
STATE OF MICHIGAN :
: SS.
COUNTY OF KALAMZOO :
BE IT REMEMBERED that, the undersigned, Richard J. Nelson,
personally appeared before me, who being duly sworn, deposes and says:
1. That the foregoing is his letter of demand for the
inspection of designated books and records of HMN Financial, Inc. and that
the statements made in such letter are true and correct.
2. That the letter contains a designation or Jon E. Abramczyk
and his respective partners and employees and any other person to be
designated by them, acting together, singly or in combination as the
undersigned's attorney or agent to conduct such inspection, and that the
foregoing and this verification are the undersigned's power of attorney
authorizing the foregoing persons to act on behalf of the undersigned.
/s/ Richard J. Nelson
Richard J. Nelson
SWORN TO AND SUBSCRIBED BEFORE ME
this 27th day of February, 1998
/s/ Janine K. Scott
Notary Public
<PAGE>
EXHIBIT 6
LASALLE FINANCIAL PARTNERS, L.P.
Suite 500
350 E. Michigan Avenue
Kalamazoo, Michigan 49007
______________________
Telephone (616) 344-4993
Facsimile (616) 382-2382
March 2, 1998
VIA FACSIMILE
Mr. Roger P. Weise
HMN Financial, Inc.
101 North Broadway
Spring Valley, Minnesota 55975
Dear Mr. Weise:
We are extremely disturbed by recent events which have occurred and which
were the subject of a telephone conversation between us this afternoon.
The concern we are addressing in this letter relates to your failure to
provide us with a list of Non-Objecting Beneficial Owners ("NOBOs"),
despite repeated demands for that document and despite affirmative
representations on the part of your company that the document was not in
your possession. We believe these actions reflect management's current
position of entrenchment with a view toward obstructing our right to
communicate with shareholders. If management does not take immediate
corrective measures, we will commence appropriate legal action.
On November 20, 1997, in accordance with Delaware Corporate Law, we sent
the company a request for various information, including the NOBO List. On
December 1, 1997, when your counsel responded by indicating that our
request was "insufficient" under Delaware law without providing any basis
for that conclusion, we reviewed our demand to ensure that it complied
with each and every section provision of Delaware law. We then forwarded
to you a revised stockholder demand list that same day, December 1, 1997,
requesting a copy of the NOBO list, indicating that it was for the purpose
of communicating with stockholders regarding a possible proxy
solicitation. Once again, waiting until the very last day to respond, you
contacted me on December 11, 1997, to inform me, among other things, that
HMN "does not presently have available a current list of the names of non-
objecting beneficial owners of the company's stock ("NOBO's")." No
qualification was set forth in our demand to you to suggest that we were
seeking a "current" list, as you first indicated in your December 11th
response. To compound the situation, we again communicated with you
through our counsel on January 5, 1998, and reiterated our request for a
copy of the NOBO list without any qualification. On January 9, 1998, you
responded again by referring to our request for the NOBO list. What we
did not anticipate was the extent to which you were willing to interfere
with our serious demand by not producing a copy of the NOBO list that was
already in your possession. As you described it to me in our conversation
today, you had reached the dubious conclusion that the list was not
"current" at the time of our request because it was at least several weeks
old.
Our original demand was for a NOBO list in your possession at the time the
demand was received. That the document was not produced is in blatant
violation of our rights under Delaware Corporate Law. When we learned last
Thursday, February 26th, of the existence of the NOBO list in your
possession, we promptly contacted your counsel and instructed immediate
production of the NOBO list. At that time, we were told that it would be
sent to us immediately. Despite your counsel's representation that we
would receive it Friday, the NOBO list was not received Friday, it was not
received Saturday, nor was it received today. We can only conclude that
your failure to provide the NOBO list was for the sole purpose of
interfering with our legitimate rights as shareholders to review such
stockholder information.
We demand that you deliver the NOBO list to us immediately. Any further
attempt on your part to violate the letter and spirit of applicable law
will be met with swift legal action to guarantee our rights as
shareholders.
Sincerely,
LA SALLE FINANCIAL PARTNERS, L. P.
/s/ Richard J. Nelson
Richard J. Nelson
La Salle Capital Management, Inc.
General Partner
<PAGE>
EXHIBIT 7
LASALLE FINANCIAL PARTNERS, L.P.
Suite 500
350 E. Michigan Avenue
Kalamazoo, Michigan 49007
______________________
Telephone (616) 344-4993
Facsimile (616) 382-2382
March 3, 1998
Mr. Roger P. Weise
HMN Financial, Inc.
101 North Broadway
Spring Valley, Minnesota 55975
Dear Mr. Weise:
On behalf of La Salle Financial Partners, Limited Partnership, please be
advised that the Partnership hereby withdraws its notice of intent to
nominate Howard T. Stewart for election to the Board of Directors of HMN
Financial, Inc., at the 1998 annual meeting of shareholders. The
Partnership intends to solicit proxies for the election of Thomas A.
Burton for election to the Board of Directors, and the Partnership's
notice of intent to nominate Thomas A. Burton remains in effect, as
submitted.
Sincerely,
LA SALLE FINANCIAL PARTNERS, L. P.
/s/ Richard J. Nelson
Richard J. Nelson
La Salle Capital Management, Inc.
General Partner
<PAGE>
EXHIBIT 8
LASALLE FINANCIAL PARTNERS, L.P.
Suite 500
350 E. Michigan Avenue
Kalamazoo, Michigan 49007
______________________
Telephone (616) 344-4993
Facsimile (616) 382-2382
March 3, 1998
Mr. Roger P. Weise
HMN Financial, Inc.
101 North Broadway
Spring Valley, Minnesota 55975
Dear Mr. Weise:
I am sure you agree that it is in the best interest of the shareholders
that both the company and LaSalle Financial Partners be able to
communicate with as many shareholders as possible regarding the April 28th
annual meeting. Therefore, based on your letter to me of December 11,
1997, we trust you will promptly order a current listing of Non-Objecting
Beneficial Owners. We are enclosing a check in the amount of 4136.59, the
amount we understand was charged for the last NOBO list, to cover ADP's
charges for preparing the new list. Please forward a copy of ADP's
invoice to us, and we will make any needed adjustment.
Frankly, we were surprised to learn that you did not order a NOBO listing
as of the record date for HMN's annual meeting. We believe the
opportunity for both sides to communicate directly with beneficial owner's
of HMN's shares will be essential in determining the outcome of this
year's election, and we want to express in the strongest possible way our
desire to have access to the names of these holders that can only be
requested by you, the corporate issuer.
If you do not request a new NOBO list, we will be forced to conclude that
you fear that if we are able to speak directly with these shareholders we
will be successful in persuading them to support our position. We believe
that for a truly fair election to be held, all information that
facilitates communication with shareholders should be made available to
both parties.
Prompt action on this request is in order, as today is the record date for
the annual meeting.
Sincerely,
LA SALLE FINANCIAL PARTNERS, L. P.
/s/ Richard J. Nelson
Richard J. Nelson
La Salle Capital Management, Inc.
General Partner
<PAGE>
EXHIBIT 9
[ON LETTERHEAD OF FOLEY & LARDNER]
March 4, 1998
VIA FACSIMILE
David M. Vander Haar, Esq.
Faegre & Benson
2200 Norwest Center
Minneapolis, MN 55402-3901
Dear Mr. Vander Haar:
Your offer to somehow nullify the ESOP's ability to vote the 28,500
shares settling on March 3rd is an unacceptable remedy to this problem.
Sincerely,
/s/ Phillip M. Goldberg
Phillip M. Goldberg
PMG/acb
<PAGE>
EXHIBIT 10
[ON LETTERHEAD OF FAEGRE & BENSON LLP]
March 4, 1998
BY TELECOPY
Phillip M. Goldberg
Foley & Lardner
One IBM Plaza
Suite 3300
330 North Wabash Avenue
Chicago, Illinois 60611-3608
Re: HMN Financial Corporation
Dear Mr. Goldberg:
This letter is to advise you that the record date has now been set
for April 1, 1998 and brokers notices have been sent out. As I advised
you in my voice mail message this morning, we made this determination
prior to receiving your response to our discussions yesterday.
In view of the changed record date, please advise us as to whether
LaSalle still desires the information requested as of March 2.
Very truly yours,
/s/ David M. Vander Haar
David M. Vander Haar
DV:vanma
<PAGE>
EXHIBIT 11
[ON LETTERHEAD OF FOLEY & LARDNER]
March 6, 1998
VIA FACSIMILE
David M. Vander Haar, Esq.
Faegre & Benson
2200 Norwest Center
Minneapolis, MN 55402-3901
Re: HMN Financial, Inc.
Dear Mr. Vander Haar:
LaSalle expects HMN Financial Corporation ("HMN") to fully and timely
comply with HMN's obligations to respond to LaSalle's February 26th letter
demanding HMN's stocklist as of March 2, 1998, and the other stocklist
materials requested therein, including HMN's NOBO lists and transfer
sheets. I note that the transfer sheets presumably will show trades up to
and beyond April 1, 1998. In addition, in view of the newly announced
April 1 record date, a complete list of the Company's stockholders as of
April 1 should be furnished at that date.
Sincerely,
/s/ Phillip M. Goldberg
Phillip M. Goldberg
PMG/acb
<PAGE>
EXHIBIT 12
[ON LETTERHEAD OF FAEGRE & BENSON LLP]
March 6, 1998
BY TELECOPY
LaSalle Financial Partners, L.P.
259 E. Michigan Avenue
Kalamazoo, Michigan 49007
Attn: Richard J. Nelson
Re: HMN Financial, Inc.
Dear Mr. Nelson:
This letter is in response to your letters of February 26, March
2 and March 3, 1998. In view of the changed record date, we requested on
March 4, 1998 that your counsel, Phillip Goldberg, confirm that you still
desire the records requested as of March 2, 1998. We have received no
response to that request.
The Company has provided the only NOBO list in its possession.
We provided it consistent with our representations to your counsel that it
would be sent by overnight delivery to you on Friday, February 26, 1998.
Consistent with our prior communications, the Company will make available
to you a new NOBO list when and if it requests one for its own use. We
provided the NOBO list to you notwithstanding your failure to provide the
Company with the assurances we requested in our earlier correspondence
with respect to limiting its use to a proper purpose. We remind you that
the NOBO list can only be used as permitted under Delaware and federal
law.
We are also extremely disturbed by continuing solicitations in
violation of the federal proxy rules. Specifically, we refer to the press
releases dated January 30, 1998, and March 3, 1998, the article entitled
"Proxy Fight on Main Street" appearing on page one of the February 27,
1998 issue of CityBusiness in which you were extensively quoted, and the
letter to shareholders which was filed with the Securities and Exchange
Commission on March 5, 1998 (the "Communications").
These Communications are impermissible solicitations for proxies
in violation of the federal proxy rules (the "Rules") adopted under the
Securities Exchange Act of 1934, amended (the "Act") and we demand that
you immediately cease and refrain from any further communication that
would constitute a violation of the Rules and the Act.
At the time of the Communications, the Company had not filed a
preliminary proxy statement, nor had it begun in any way to solicit
proxies from its shareholders for the upcoming meeting. At the time of
the Communications, LaSalle had similarly not filed a preliminary proxy
statement. Rule 14a-3 generally prohibits proxy solicitations unless each
person solicited is concurrently furnished or has previously been
furnished with a publicly-filed preliminary or definitive proxy statement
containing the information specified by the Rules and the Act. Your
Communications are obviously direct steps in a chain of communications
calculated and designed ultimately to result in the procurement or
withholding of a proxy. They are squarely solicitations as defined by
statutory and common law.
The Rules allow for certain exceptions to the flat prohibition
of Rule 14a-3, none of which, however, apply to the Communications. Rules
14a-11 clearly and exclusively applies in situations where persons are
opposing prior solicitations. HMN had not begun soliciting at the time of
the Communications and therefore there was no preceding solicitation for
LaSalle to oppose. Similarly, none of the exemptions contained in Rule
14a-2 are available to LaSalle.
Moreover, even if the Rule 14a-11 exemption was available,
LaSalle clearly did not comply with the requirements of Rule 14a-11 in any
of the Communications. Among other things, LaSalle has consistently
failed to provide any of the information regarding participants required
by Rule 14a-11. We demand that LaSalle promptly advise the Company of
this information.
We further demand that these blatant violations of the Act and
the Rules immediately stop. Should LaSalle continue to act in
contravention of the Act and the Rules, the Company intends to vigorously
defend its rights and protect its shareholders by taking whatever action
it deems appropriate.
Finally, in view of the general solicitation that LaSalle has
engaged in, we want to remind you that LaSalle, obviously, can no longer
rely on the exemption available under Rule 14a-2(b)(2) for solicitations
to not more than 10 persons.
Very truly yours,
/s/ David M. Vander Haar
David M. Vander Haar
DVH:ajr
cc: Phillip M. Goldberg
Roger P. Weise
Mark J. Gentile
