SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
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(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
MB FINANCIAL, INC.
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(Name of Registrant as Specified In Its Charter)
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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 state how
it was determined):
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
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the offsetting fee was paid previously. Identify the previous
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[LOGO]
NOTICE OF 2000 ANNUAL MEETING
PROXY STATEMENT
April 20, 2000
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of MB Financial, Inc.
(the "Company"), I cordially invite you to attend the Company's Annual Meeting
of Stockholders. The meeting will be held at 9:00 a.m., local time, on Tuesday,
May 30, 2000 at the branch office of Manufacturers Bank located at 7557 West
Oakton Street, Niles, Illinois.
At the meeting, stockholders of the Company will be asked to vote upon the
election of three members nominated to the Board of Directors of the Company.
I encourage you to attend the meeting in person. Whether or not you plan to
attend, however, PLEASE READ THE ENCLOSED PROXY STATEMENT AND THEN COMPLETE,
SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT IN THE ACCOMPANYING
POSTAGE-PAID ENVELOPE AS PROMPTLY AS POSSIBLE. This will save the Company
additional expense in soliciting proxies and will ensure that your shares are
represented at the meeting.
Thank you for your attention to this important matter.
Very truly yours,
[SIGNATURE]
Mitchell Feiger
PRESIDENT AND CHIEF EXECUTIVE OFFICER
[LOGO]
1200 North Ashland Avenue
Chicago, Illinois 60622
(773) 278-4040
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 30, 2000
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of MB Financial, Inc. (the "Company") will be held at the branch
office of Manufacturers Bank located at 7557 West Oakton Street, Niles,
Illinois, at 9:00 a.m., local time, on Tuesday, May 30, 2000.
A proxy and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of the three members nominated to the Board of
Directors of the Company; and
2. Upon such other matters as may properly come before the Meeting, or
any adjournments or postponements thereof.
The Board of Directors is not aware of any other business to come before the
Meeting.
Any action may be taken on the foregoing proposals at the Meeting on the
date specified above, or on any date or dates to which the Meeting may be
adjourned or postponed. Stockholders of record at the close of business on
April 3, 2000 are the stockholders entitled to vote at the Meeting and any
adjournments or postponements thereof.
A complete list of stockholders entitled to vote at the Meeting will be
available for examination during normal business hours by any stockholder, for
any purpose germane to the Meeting, at the branch office of Manufacturers Bank
at which the Meeting will be held, during the ten days prior to the Meeting as
well as at the Meeting.
You are requested to complete, sign and date the enclosed proxy, which is
solicited on behalf of the Board of Directors, and to mail it promptly in the
enclosed postage-paid envelope. The proxy will not be used if you attend and
vote at the Meeting in person.
By Order of the Board of Directors
[SIGNATURE]
Mitchell Feiger
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Chicago, Illinois
April 20, 2000
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A PRE-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED
WITHIN THE UNITED STATES.
PROXY STATEMENT
MB FINANCIAL, INC.
1200 North Ashland Avenue
Chicago, Illinois 60622
(773) 278-4040
-----------------
ANNUAL MEETING OF STOCKHOLDERS
MAY 30, 2000
This Proxy Statement is furnished in connection with the solicitation, on
behalf of the Board of Directors of MB Financial, Inc. (the "Company"), of
proxies to be used at the Annual Meeting of Stockholders of the Company (the
"Meeting") to be held at the branch office of Manufacturers Bank (the "Bank")
located at 7557 West Oakton Street, Niles, Illinois. at 9:00 a.m., local time,
on Tuesday, May 30, 2000.
The accompanying Notice of Annual Meeting and this Proxy Statement are first
being mailed to stockholders on or about April 20, 2000. At the Meeting,
stockholders of the Company are being asked to elect three directors of the
Company.
VOTE REQUIRED AND PROXY INFORMATION
All shares of the Company's common stock, par value $.01 per share (the
"Common Stock"), represented at the Meeting by properly executed proxies
received prior to or at the Meeting, and not revoked, will be voted at the
Meeting in accordance with the instructions thereon. If no instructions are
indicated, properly executed proxies will be voted for the nominees set forth
herein. The Company does not know of any matters, other than as described in the
Notice of Annual Meeting, that are to be presented at the Meeting. If any other
matters are properly presented at the Meeting for action, the persons named in
the enclosed proxy and acting thereunder will have the discretion to vote on
such matters in accordance with their best judgment.
Directors shall be elected by a plurality of the votes present in person or
represented by proxy at the Meeting and entitled to vote on the election of
directors. Votes may be cast in favor of or withheld from each nominee; votes
that are withheld will be excluded entirely from the vote and will have no
effect. Broker non-votes will have no effect on the election of directors. A
majority of all of the shares of Common Stock entitled to vote at the Meeting,
present in person or represented by proxy, shall constitute a quorum for
purposes of the Meeting. Broker non-votes are counted for purposes of
determining a quorum. Brokers who do not receive instructions are entitled to
vote on the election of directors.
A proxy given pursuant to this solicitation or otherwise may be revoked at
any time before it is voted. Proxies may be revoked by: (i) filing with the
Secretary of the Company at or before the Meeting a written notice of revocation
bearing a later date than the proxy, (ii) duly executing a subsequent proxy
relating to the same shares and delivering it to the Secretary of the Company at
or before the Meeting, or (iii) attending the Meeting and voting in person
(although attendance at the Meeting will not in and of itself constitute
revocation of a proxy). Any written notice revoking a proxy should be delivered
to Doria Koros, Secretary, MB Financial Inc., 1200 North Ashland Avenue,
Chicago, Illinois 60622.
VOTING SECURITIES AND CERTAIN HOLDERS THEREOF
Stockholders of record as of the close of business on April 3, 2000 will be
entitled to one vote for each share of Common Stock then held. As of that date,
the Company had 7,064,515 shares of Common Stock issued and outstanding.
The following table sets forth, as of April 3, 2000, certain information as
to the beneficial ownership of Common Stock by: (i) those persons or entities
known by management to beneficially own more than 5% of the Company's
outstanding shares of Common Stock; (ii) the Company's Chief Executive Officer,
its Chairman of the Board and the other executive officers of the Company (the
"Named Officers"), and (iii) all directors and executive officers of the Company
as a group.
SHARES PERCENT
BENEFICIALLY OF
BENEFICIAL OWNER OWNED (1) CLASS
---------------- ------------ --------
PRINCIPAL OWNERS
There are no stockholders
owning 5% or more of the Company
NAMED OFFICERS
Mitchell Feiger 208,062 2.95%
President, Chief Executive Officer and
Director
of the Company;
Chairman of the Board and Director of the
Bank
Robert S. Engelman, Jr. 302,891 4.29
Chairman of the Board of the Company;
Director of the Bank
Burton J. Field 74,422 1.05
Director of the Company;
President, Chief Executive Officer
and Director of the Bank
Howard A. Jaffe 112,467 1.59
Vice President and Chief Financial Officer
of
the Company;
Executive Vice President, Chief Financial
Officer and Director of the Bank
Thomas D. Panos 59,452 .84
Executive Vice President, Senior Lending
Officer and Director of the Bank
Directors and executive officers as a group 1,552,101 21.97
(14 persons)
- ---------
(1) Includes shares held directly, in retirement accounts, in the deferred
compensation plan, in a fiduciary capacity or by certain affiliated entities
or members of the named individuals' families, with respect to which shares
the named individuals and group may be deemed to have sole or shared voting
and/or dispositive powers and subject to options granted under the Company's
1997 Omnibus Incentive Plan (the "Stock Option Plan") which options are
exercisable within 60 days of April 3, 2000. Excludes 27,000, 21,160, 6,305,
17,000, 13,000, and 97,522 shares subject to options granted under the Stock
Option Plan to Messrs. M. Feiger, Engelman, Field, Jaffe, Panos and all
directors and executive officers as a group, respectively, which options are
not exercisable within 60 days of April 3, 2000.
2
DIRECTORS AND EXECUTIVE MANAGEMENT
The Company's Board of Directors currently consists of fourteen members;
however, Mr. Robert A. Wislow ("Wislow") and Mr. Thomas F. Carey ("Carey") have
chosen not to stand for reelection at the Annual Meeting. The Board is divided
into three classes, each of which presently consists of approximately one-third
of the Board, and approximately one-third of the directors are elected annually.
Directors of the Company are generally elected to serve for a three-year term or
until their respective successors are elected and qualified. As a result of the
merger between Avondale Financial Corp. ("Avondale") and Coal City Corporation
("Coal City") in February of 1999 (the "Merger"), the Board terms were
re-staggered as indicated below. Therefore, some nominees had terms expiring in
one or two years.
The following table sets forth certain information, as of April 3, 2000,
regarding the Company's Board of Directors, including each director's term of
office. The Board of Directors acting as the nominating committee has
recommended and approved the nominees identified in the following table. It is
intended that the proxies solicited on behalf of the Board of Directors (other
than proxies in which the vote is withheld as to one or more nominee) will be
voted at the Meeting "FOR" the election of the nominees identified below. If a
nominee is unable to serve, the shares represented by all valid proxies will be
voted for the election of such substitute nominee as the Board of Directors may
recommend. At this time, the Board of Directors knows of no reason why the
nominees may be unable to serve, if elected. There are no arrangements or
understandings between any director or nominee and any other person pursuant to
which such director or nominee was selected.
SHARES OF
COMMON STOCK PERCENT
POSITION(S) HELD DIRECTOR TERM TO BENEFICIALLY OF
NAME AGE IN THE COMPANY SINCE (1) EXPIRE OWNED (2) CLASS
---- -------- ------------------------ --------- -------- ------------ --------
NOMINEES
Robert S. Engelman, Jr. 58 Chairman of the Board 1993 2003 302,891 4.29%
Alfred Feiger 74 Director 1992 2003 166,304 2.35
Richard I. Gilford 75 Director 1992 2003 143,600 2.03
ELECTED DIRECTORATE
R. Thomas Eiff 59 Director 1993 2001 23,190 0.33
Burton J. Field 64 Director 1992 2001 74,422 1.05
David L. Husman 65 Director 1992 2001 107,861 1.53
Clarence Mann 74 Director 1992 2001 213,450 3.02
Hipolito (Paul) Roldan 56 Director 1993 2001 8,570 0.12
Mitchell Feiger 41 Director, President and 1992 2002 208,062 2.95
Chief Executive Officer
Lawrence E. Gilford 76 Director 1992 2002 96,550 1.37
Arthur L. Knight, Jr. 62 Director 1993 2002 22,132 0.31
Peter G. Krivkovich 53 Director 1993 2002 13,150 0.19
- ---------
(1) Director of either Avondale or Coal City since Coal City acquired the Bank.
(2) Includes shares held directly, in retirement accounts, in the deferred
compensation plan, in a fiduciary capacity or by certain affiliated entities
or members of the named individuals' families, with respect to which shares
the named individuals may be deemed to have sole or shared voting and/or
dispositive powers and subject to options granted under the Stock Option
Plan which options are exercisable within 60 days of April 3, 2000. Excludes
21,160, 8,232, 6,305, 1,439, 27,000, 1,947, and 1,439 shares subject to
options granted under the Stock Option Plan to Messrs. Engelman, Eiff,
Field, Roldan, M. Feiger, Knight and Krivkovich which options are not
exercisable within 60 days of April 3, 2000. Includes Board of Directors
retainer or meeting fees deferred in the form of Common Stock units pursuant
to the Deferred Compensation Plan.
3
Wislow and Carey, current directors of the Company whose terms expire with
this Annual Meeting, have chosen not to stand for reelection at the Annual
Meeting.
Ms. Jameson A. Baxter ("Baxter") and Ms. Sandra P. Guthman ("Guthman")
resigned from the Board of Directors after the January 2000 meeting. Each person
cited conflicts with other business commitments as the reason to leave the
Board.
The Board of Directors amended the By-laws of the Company to reduce the size
of the Board of Directors, effective immediately following the January 2000
meeting, by two members, thereby not creating a vacancy on the Board with the
resignations of Baxter and Guthman. The Board further amended the By-laws to
reduce the Board by an additional two members, effective at the 2000 Annual
Meeting, thereby not creating vacancies due to Wislow and Carey not standing for
reelection.
The business experience for at least the past five years of each nominee and
Director is set forth below.
NOMINEES
ROBERT S. ENGELMAN, JR. Mr. Engelman joined Avondale in January 1993 as
President, Chief Executive Officer and Director and served in that capacity
until the Merger. Prior to joining Avondale, Mr. Engelman was the Chairman of
the Board and Chief Executive Officer of University Financial Corporation and
its wholly-owned subsidiary, First Federal of Elgin, FSA, Elgin, Illinois.
Mr. Engelman retired as an executive officer of the Company on December 31,
1999, but will continue to serve the Company as its Chairman of the Board.
ALFRED FEIGER. Mr. Feiger served as Chairman of the Board and Chief
Executive Officer of Coal City until the Merger. Mr. Feiger has nearly 50 years
of banking and finance company experience, having served in various executive
capacities during such period. Mr. Feiger also served as a Director of the seven
banks that were owned by Affiliated Banc Group, Inc. ("Affiliated") and was
President of Affiliated's Western National Bank of Cicero.
RICHARD I. GILFORD. Mr. Gilford has nearly 50 years of banking experience,
having served in various executive capacities during such period. Mr. Gilford
also served as a Director of the seven banks that were owned by Affiliated and
was Chairman of the Board of Affiliated Asset-Based Lending Services.
Mr. Gilford is a trustee of Mt. Sinai Hospital in Chicago.
STANDING BOARD MEMBERS
R. THOMAS EIFF. Mr. Eiff is the TEC Chairman for Southern Arizona. TEC is
an organization that was founded on the premise that company presidents,
managing directors and other executives can benefit from the formal exchange of
ideas. From 1991 through 1998 he was the owner and President of Adams Air and
Radiator Service, an automotive service and distribution company. Mr. Eiff
served as the Chairman of the Board of Avondale until the Merger.
MITCHELL FEIGER. Mr. Feiger is President and Chief Executive Officer of the
Company, as well as Chairman of the Board of the Bank. Mr. Feiger began his
carreer with Touche Ross & Company in 1982, and then joined Affiliated in 1984
where he worked in various capacities until eventually becoming its Executive
Vice President. Mr. Feiger became President and a Director of Coal City in 1992.
BURTON J. FIELD. Mr. Field has served as President and Chief Executive
Officer of the Bank since 1983 and a Director of the Bank since 1977. Mr. Field
has over 40 years of banking and finance experience, mainly in the areas of
commercial lending and leasing. Mr. Field joined the Bank in 1970.
LAWRENCE E. GILFORD. Mr. Gilford has nearly 50 years of banking experience,
having served in various executive capacities during such period. He also served
as a Director of the seven banks that were owned
4
by Affiliated and was President of its North Shore National Bank. Mr. Gilford
served as President of the Chicago Chapter of the Illinois Bankers Association
and is a Board Member of the Chicago Chapter of the Jewish Community Center and
Rush North Shore Medical Center.
DAVID L. HUSMAN. Mr. Husman is an attorney and is in the real estate and
investment business. Mr. Husman also served as a Director of the seven banks
that were owned by Affiliated.
ARTHUR L. KNIGHT, JR. Mr. Knight is a private investor and business
consultant. He serves on the boards of a number of private Chicago-based
companies, including, CrossCom National, Inc., Frain Industries, Inc., LA-CO
Industries, Inc., STS Consultants, Ltd. and United Scrap Metal, Inc. From 1988
through 1994, Mr. Knight was President, Chief Executive Officer and Director of
Morgan Products Ltd., a manufacturer and distributor of specialty building
products.
PETER G. KRIVKOVICH. Mr. Krivkovich is President and Chief Executive
Officer of Cramer-Krasselt Company, a marketing communications company. He was
named President of that company in 1985 and was named CEO in 1999.
Mr. Krivkovich is a Board member of the Friends of Prentice Hospital, the
Off-the-Street Club in Chicago and the American Association of Advertising
Agencies.
CLARENCE MANN. Mr. Mann has over 45 years of banking experience, having
served in various executive capacities during such period. Mr. Mann also served
as a Director of the seven banks that were owned by Affiliated and was President
of both Franklin Park Bank and First State Bank of Franklin Park.
HIPOLITO (PAUL) ROLDAN. Mr. Roldan has been Chief Executive Officer of the
Hispanic Housing Development Corp., a residential and retail development and
property management company, since 1976 and President of Tropic Construction, a
general contractor, since 1994. Mr. Roldan serves as a director of the Local
Initiatives Support Corporation and the National Puerto Rican Coalition.
Alfred Feiger is Mitchell Feiger's father. Lawrence Gilford and Richard
Gilford are cousins.
EXECUTIVE OFFICERS
The following information is for the executive officers who are not
directors of the Company.
HOWARD A. JAFFE. Mr. Jaffe, 46, is Vice President and Chief Financial
Officer of the Company and Executive Vice President and Chief Financial Officer
and Director of the Bank. Mr. Jaffe joined Avondale in August 1995 as Vice
President and Chief Financial Officer. From 1990 through July 1995, Mr. Jaffe
was Executive Vice President and Chief Financial Officer of Northern States
Financial Corporation, a bank holding company. Mr. Jaffe has over 25 years of
banking experience.
THOMAS D. PANOS. Mr. Panos, 44, is Executive Vice President and Senior
Lending Officer and a Director of the Bank since March 1996. Mr. Panos was
Senior Vice president and Manager of Corporate Banking (in Illinois) for First
Bank System from 1994 to 1996, and he served Boulevard Bank in various lending
and management capacities since 1982. Mr. Panos has over 23 years of banking
experience.
5
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
THE COMPANY AND THE BANK. The Company's Board of Directors has standing
Executive, Audit and Compensation Policy Committees, which meet and act in
conjunction with the like committees of the Bank's Board of Directors. It is
expected that the Company and the Bank will hold at least eight Board meetings
during 2000.
During 1999, the Board of Directors of the Company met six times. No nominee
or standing Director of the Company attended fewer than 75% of the total number
of Board and Committee meetings held by the Board of Directors. Retiring Board
members Carey and Wislow did not attend 75% of the Board and Committee meetings
held.
The entire Board of Directors acts as a nominating committee for selecting
nominees for election as directors. While the Board of Directors will consider
nominees recommended by stockholders, the Board has not actively solicited such
nominations. Pursuant to the Company's By-laws, nominations by stockholders
generally must be delivered in writing to the Secretary of the Company at least
30 days prior to the date of the Meeting. The Board of Directors met once during
1999 in its capacity as a nominating committee.
The Company's Executive Committee exercises the powers of the full Board of
Directors between Board meetings. The Executive Committee is comprised of
Directors Engelman (Chairman), A. Feiger, M. Feiger, Field, Knight and
Krivkovich. The Executive Committee met twice during 1999.
The Audit Committee is responsible for recommending the selection of the
independent auditors of the Company and the Bank and meeting with the
independent auditors to outline the scope and review the results of the annual
audit. The Audit Committee also meets with the Bank's internal auditor on a
periodic basis. The Audit Committee is comprised of Directors R. Gilford
(Chairman), L. Gilford and Mann. This Committee held four meetings during 1999.
The Compensation Policy Committee is responsible for the design and
administration of the overall compensation program. In addition, the committee
reviews and approves all executive officers' compensation plans, evaluates
executive performance, grants awards under the Stock Option Plan and considers
other related matters. The Compensation Policy Committee includes Directors
Knight (Chairman), Eiff, R. Gilford and Mann. The Compensation Policy Committee
met three times during 1999.
DIRECTOR COMPENSATION
Non-employee directors are paid (i) an annual retainer of $15,000, plus
(ii) $2,500 for serving as Committee chairman; (iii) $1,000 per day for
attending Board of Directors meetings; and (iv) $250 per day for attending any
Board of Directors Committee meeting. All Board and Committee fees may be paid
in the form of cash, Common Stock or options to purchase Common Stock; however,
at least 50% of the annual retainer and meeting fees must be taken in the form
of Common Stock or options to purchase Common Stock. All fees may be deferred
pursuant to the Company's Deferred Compensation Plan.
6
EXECUTIVE COMPENSATION
Executive officers of the Company currently do not receive any remuneration
in their capacity as Company executive officers. The following table sets forth
information concerning the compensation of the Named Officers for services in
all capacities to the Bank or one of its predecessors for the years ended
December 31, 1999, 1998 and 1997.
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
ANNUAL AWARDS
COMPENSATION ---------------------------
NAME AND CALENDAR ------------------- RESTRICTED STOCK OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS AWARD(S)($) SARS(1) COMPENSATION
------------------ --------- -------- -------- ---------------- -------- -------------
Mitchell Feiger 1999 $325,000 $154,375 -$- 27,000 $ 47,135 (2)
President and Chief Executive 1998 251,000 50,000 -- 16,366 39,450 (3)
Officer 1997 238,665 50,000 -- 12,525 34,770 (4)
Robert S. Engelman, Jr. 1999 310,000 150,000 -- 44,585 736,382 (5)
Chairman of the Board 1998 300,000 210,000 -- 35,000 450,415 (6)
1997 300,000 -- -- 35,000 274,498 (7)
Burton J. Field 1999 345,000 102,125 -- 6,305 65,601 (8)
President and Chief Executive 1998 345,000 50,000 -- -- 77,825 (9)
Officer of the Bank 1997 330,000 -- -- -- 75,970(10)
Howard A. Jaffe 1999 175,000 62,344 -- 13,000 57,209(11)
Vice President and Chief Financial 1998 155,000 92,000 -- 30,000 34,890(12)
Officer 1997 151,196 -- -- 15,187 24,140(13)
Thomas D. Panos 1999 150,000 62,700 -- 13,000 21,651(14)
Executive Vice President and 1998 136,000 55,000 -- 11,022 21,121(15)
Senior Lending Officer of the Bank 1997 130,000 52,000 -- 8,350 16,543(16)
- ---------
(1) Represents incentive and non-qualified stock options granted pursuant to
the Company's Stock Option Plan. All options were granted at or above the
market price of the stock on the date of the grant and vest up to ten
years.
(2) Includes automobile allowance of $11,021, non-qualified retirement benefits
of $18,413, supplemental health plan of $4,153 and 401(k) matching and
profit sharing contribution of $13,548.
(3) Includes automobile allowance of $5,288, excess group life insurance of
$459, non-qualified retirement benefits of $13,004, supplemental health
plan of $4,153 and 401(k) matching and profit sharing contribution of
$16,546.
(4) Includes automobile allowance of $5,566, excess group life insurance of
$297, non-qualified retirement benefits of $11,505, supplemental health
plan of $3,970 and 401(k) matching and profit sharing contribution of
$13,432.
(5) Includes a contribution under the Company's Supplemental Executive
Retirement Plan ("SERP contribution") of $668,207, ESOP contribution of
$56,378, an automobile allowance of $1,210, non-qualified retirement
benefits of $3,895, and 401(k) matching and profit sharing contribution of
$6,692.
(6) Includes SERP contribution of $405,000, ESOP contribution of $34,890,
supplemental life insurance premium of $9,910 and an automobile allowance
of $615.
(7) Includes SERP contribution of $240,000, ESOP contribution of $24,140,
supplemental life insurance premium of $9,555 and an automobile allowance
of $803.
(8) Includes automobile allowance of $5,338, non-qualified retirement benefits
of $35,989, supplemental health plan of $10,186 and 401(k) matching and
profit sharing contribution of $13,548.
7
(9) Includes automobile allowance of $3,360, excess group life insurance of
$3,159, non-qualified retirement benefits of $41,853, supplemental health
plan of $12,907 and 401(k) matching and profit sharing contribution of
$16,546.
(10) Includes automobile allowance of $3,360, excess group life insurance of
$3,159, non-qualified retirement benefits of $45,834, supplemental health
plan of $10,185 and 401(k) matching and profit sharing contribution of
$13,432.
(11) Includes ESOP contribution of $44,324, an automobile allowance of $1,169,
non-qualified retirement benefits of $4,524 and 401(k) matching and profit
sharing contribution of $7,192.
(12) Includes ESOP contribution of $34,890.
(13) Includes ESOP contribution of $24,140.
(14) Includes automobile allowance of $4,378, non-qualified retirement benefits
of $3,725, and 401(k) matching and profit sharing contribution of $13,548.
(15) Includes automobile allowance of $4,116, excess group life insurance of
$459 and 401(k) matching and profit sharing contribution of $16,546.
(16) Includes automobile allowance of $2,652, excess group life insurance of
$459 and 401(k) matching and profit sharing contribution of $13,432.
STOCK OPTIONS
OPTION GRANTS IN 1999
The following table sets forth certain information with respect to stock
options granted to the Named Officers during 1999 under the Stock Option Plan.
In addition to providing the number of shares subject to options granted to
Named Officers listed in the Summary Compensation Table, the following table
discloses the range of potential realizable values at various assumed
appreciation rates. The table discloses for the Chief Executive Officer and
other Named Officers the gain or "spread" that would be realized at the end of
the option term for the options granted during 1999, if the price of the Common
Stock appreciates annually by the percentage levels indicated from the market
price on the date of grant.
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO POTENTIAL REALIZABLE VALUE
UNDERLYING EMPLOYEES EXERCISE AT ASSUMED ANNUAL RATES OF
OPTIONS IN FISCAL PRICE PER EXPIRATION STOCK PRICE APPRECIATION FOR
NAME GRANTED 1999 SHARE DATE OPTION TERM(1)
---- ---------- ---------- --------- ---------- -----------------------------
5.00% 10.00%
---------- ----------
Mitchell Feiger 27,000 12.98% $13.50 05/24/09 $211,191 $535,199
Robert S. Engelman, Jr. 44,585 21.44 14.04 01/21/04 87,407 183,548
Burton J. Field 6,305 3.03 13.50 05/24/09 49,317 124,979
Howard A. Jaffe 13,000 6.25 13.50 05/24/09 101,684 257,688
Thomas D. Panos 13,000 6.25 13.50 05/24/09 101,684 257,688
- ---------
(1) Percentage growth computed based on the closing price of the Common Stock on
December 31, 1999 ($12.4375 per share).
8
OPTION EXERCISES, HOLDINGS AND VALUES TABLE
The following table sets forth information with respect to the value of all
stock options held at December 31, 1999. No options were exercised in 1999.
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS "IN-THE-MONEY" OPTIONS
AT DECEMBER 31, 1999 AT DECEMBER 31, 1999(1)
------------------------------- -------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
Mitchell Feiger 42,418 27,000 $48,017 $-0-
Robert S. Engelman, Jr. 199,225 21,160 -0- -0-
Burton J. Field -0- 6,305 -0- -0-
Howard A. Jaffe 61,187 17,000 -0- -0-
Thomas D. Panos 27,722 13,000 30,046 -0-
- ---------
(1) Represents the difference between the closing price of the Common Stock on
December 31, 1999 ($12.4375 per share) and the exercise price of the stock
options.
EMPLOYMENT AGREEMENTS
Mitchell Feiger entered into an employment agreement with the Company,
effective February 26, 1999. This agreement is a so-called "evergreen" contract
with a continual three-year term. Although either party may terminate the
agreement at any time, it provides for Mr. Feiger to be paid his compensation
for the full remaining term of the agreement unless he is terminated "for cause"
(as defined in the agreement). Mr. Feiger's annual salary compensation under the
agreement is $325,000, and he may, in addition, receive an annual bonus at the
discretion of the Board. Mr. Feiger is eligible to participate in the Company's
standard package of employee benefits, including retirement plans and insurance
programs, as well as certain executive benefits, such as an automobile allowance
and club dues. In the event of a change of control of the Company (as defined in
the agreement), if Mr. Feiger or the Company (or its successor) terminates his
employment with the Company (or its successor), Mr. Feiger will receive 2.99
times his base compensation and he will be entitled to continued health benefits
during the remaining term of the agreement (and thereafter, at his cost) and to
vesting of any unvested stock options and unvested benefits under benefit plans
and arrangements of the Company at the time of the change in control (except for
qualified pension plans).
Robert S. Engelman, Jr. has an employment agreement which provides for
Mr. Engelman to be Chairman of the Board of the Company. Mr. Engelman retired as
an executive officer of the Company on December 31, 1999. Under the terms of the
agreement, Mr. Engelman will be paid $310,000 per year through January 31, 2004
for his agreement not to compete against the Company in Illinois during that
period. Mr. Engelman is also entitled to participate in the Company's health
benefits for his lifetime at his cost. Mr. Engelman will also continue to accrue
benefits under the Company's Supplemental Executive Retirement Plan through
January 31, 2004. If Mr. Engelman's position with the Company is terminated
without cause, he will continue to be entitled to his covenant not to compete
payments. The agreement does not provide for any change of control severance or
liquidated damages under any circumstances.
The Company entered into a new employment agreement with Burton J. Field in
September of 1999. Under the terms of the new agreement, Mr. Field is to be the
President and Chief Executive Officer of the Bank. This agreement is a so-called
"evergreen" contract with a continual three-year term. Although either party may
terminate the agreement at any time, it provides for Mr. Field to be paid his
compensation for the full remaining term of the agreement unless he is
terminated "for cause" (as defined in the agreement). Mr. Field's annual salary
compensation under the agreement is at least $400,000, and he may, in addition,
receive an annual bonus at the discretion of the Board. Mr. Field is also
eligible to participate in the Company's standard package of employee benefits,
including retirement plans and insurance
9
programs, as well as certain executive benefits, such as an automobile allowance
and club dues. The Bank also pays the premium on two separate life insurance and
disability policies for Mr. Field. In the event of a change of control of the
Company (as defined in the agreement), if Mr. Field or the Company (or its
successor) terminates his employment with the Company (or its successor),
Mr. Field will receive 2.99 times his base compensation and he will be entitled
to continued health benefits during the remaining term of the agreement (and
thereafter, at his cost) and to vesting of any unvested stock options and
unvested benefits under benefit plans and arrangements of the Company at the
time of the change in control (except for qualified pension plans). A copy of
Mr. Field's new employment agreement is included in this Proxy Statement as
Exhibit "B".
SEVERANCE PAY AGREEMENTS
The Company has a change in control severance agreement with Howard A.
Jaffe, Vice President of the Company and Executive Vice President of the Bank,
under which he is entitled to severance pay equal to 200% of his base amount as
defined in Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), and continued health benefits for 24 months following termination of
his employment if his employment is terminated by the Bank (including a material
diminution of his duties) within 12 months after a change in control (as defined
in the Agreement) of the Company or the Bank.
Thomas D. Panos, Executive Vice President and Senior Lending Officer and a
Director of the Bank, has a change in control severance agreement with the Bank
under which he is entitled to 100% of his base amount as defined in
Section 280G of the Code, and continued health benefits for 12 months following
termination of his employment if his employment is terminated by the Bank
(including a material diminution of his duties) within 12 months after a change
in control (as defined in the Agreement) of the Company or the Bank.
Each Severance Pay Agreement has an initial term of three years (the
effective date of each agreement was February 26, 1999) and shall be extended by
the Board of Directors for a period of one year beginning on the first
anniversary of the agreement, and on each anniversary date thereafter upon
approval by the Board of Directors.
COMPENSATION POLICY COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Under rules established by the Securities and Exchange Commission ("SEC"),
the Company is required to provide certain data and information in regard to the
compensation and benefits provided to the Company's Chief Executive Officer and
other executive officers of the Company. The disclosure requirements for the
Chief Executive Officer and other executive officers include the use of tables
and a report explaining the rationale for and considerations that led to
fundamental executive compensation decisions affecting those individuals. In
fulfillment of this requirement, the Compensation Policy Committee of the
Company, at the direction of the Company's Board of Directors, has prepared the
following report for inclusion in this Proxy Statement.
GENERAL. The Board of Directors of the Company and the Bank have delegated
to the Compensation Policy Committee the responsibility and authority to oversee
the general compensation policies of the Company and the Bank, to establish
compensation plans and specific compensation levels for executive officers, and
to review the recommendations of management for compensation and benefits for
other officers and employees of the Company and the Bank. The Compensation
Policy Committee is composed solely of independent outside directors.
Non-employee directors who are not members of the Compensation Policy Committee
also participate in executive compensation decisions by way of review,
discussion and ratification of Compensation Policy Committee recommendations.
The Compensation Policy Committee has adopted an executive compensation
program designed to: (i) offer competitive compensation packages in order to
attract, motivate, retain and reward those key
10
executive officers who are crucial to the long-term success of the Company;
(ii) establish a direct link between executive compensation and annual and
long-term performance of the Company; and (iii) encourage decision-making that
maximizes long-term shareholder value. The Compensation Policy Committee's
primary compensation objective is to ensure that such compensation be tied to
the achievement of both short term and longer term goals and objectives
established in conjunction with the Company's annual planning process, and to
ensure that a significant portion of total compensation is at risk for those
executive officers who have significant control over and responsibility for the
direction and performance of the Company.
The Compensation Policy Committee followed the guidelines listed below in
establishing the Compensation Program for 1999.
EXECUTIVE COMPENSATION POLICY. The compensation package provided to the
executive officers of the Bank is composed principally of base salary, an annual
incentive bonus and awards under the Company's equity-based plans. Executive
officers also participate in other benefit plans available to all eligible
employees.
BASE SALARY. It is the policy of the Compensation Policy Committee to
annually review executive compensation packages, including base salaries paid or
proposed to be paid, with compensation packages and base salaries offered by
other financial institutions with total assets, loan origination and performance
results comparable to those of the Company and the Bank, as well as to compare
the complexities of the positions under consideration with similar jobs in other
financial institutions regardless of size. This information is primarily derived
from third party sources and company proxy statements that provide compensation
data and analysis from other publicly held companies. Specific factors
considered include the level of responsibility delegated to a particular
officer, the complexity of the job being evaluated, the position's impact on
both short term and long term corporate goals and objectives, the expertise and
skill level of the individual under consideration, the degree to which the
officer has achieved his management objectives for the plan year, his ability to
attract highly skilled individuals to the Company and the officer's overall
performance in managing his area of responsibility. The Compensation Policy
Committee's decisions are discretionary and no quantifiable formula or weighting
of the above-mentioned factors are utilized in the decision-making process.
INCENTIVE BONUS AWARDS. The annual incentive bonus is designed to provide
that a substantial portion of each executive officer's total compensation
remains variable. The purpose of the incentive plan is to more closely align
executive performance to the annual and long-term financial and operating
performance of the Company and the Bank and to reward officers for the
achievement of certain specified goals and objectives. Officers are classified
into groups, based on their relative position in the Company and the Bank, with
annual target bonuses (as a percentage of base salary) as recommended by the
Chief Executive Officer (other than his own) and agreed upon by the Compensation
Policy Committee. An annual incentive bonus pool is established if specific
financial, operational and business goals, determined at the beginning of each
fiscal year, are achieved; and if certain safety and soundness standards are
maintained. Individual bonus awards can range from 0% to 150% of a person's
target goal depending on actual results compared to target results, as well as
the officer's individual accomplishments vs. individual goals and objectives.
Bonuses are subject to fluctuation from year to year, and the Committee's
decisions are subjective and no specific formula is utilized. The Compensation
Policy Committee determines the Chief Executive Officer's incentive bonus.
BENEFIT PLANS. The Compensation Policy Committee's policy with respect to
employee benefit plans is to provide competitive benefits to employees of the
Company, including its executive officers. Additionally, the Omnibus Incentive
Plan will provide employees, including executive officers, with an additional
equity-based incentive to maximize long-term shareholder value. The Compensation
Policy Committee believes that a competitive employee benefit package is
essential to achieving the goals of attracting and retaining highly-qualified
employees.
11
CHIEF EXECUTIVE OFFICER. The base salary paid to Mitchell Feiger, Chief
Executive Officer of the Company, for 1999 was $325,000, under the terms of
Mr. Feiger's Employment Agreement. In examining the base compensation of other
executives among peer institutions, the Compensation Policy Committee determined
that the compensation level was proper and consistent with other peer
institutions.
The Compensation Policy Committee determined that the Chief Executive
Officer's target incentive bonus be maintained at a range between 40%-70% of
base salary. This decision was based on the Committee's annual review of third
party data as discussed above, and on the review and completion of the Company's
1999 target goals and objectives, among which included the successful
integration of the merged banks, substantial growth in the Company's core
lending business while maintaining excellent asset quality, the completion of
the Company's long-term strategic plan, the formation of an effective executive
management team, and other factors relating to the performance of the Company,
including (i) goals relating to fee income, loan volume, asset quality,
Community Reinvestment Act compliance, expense containment and (ii) improvement
in the Bank's infrastructure. Based on the Company's performance in 1999, the
Compensation Policy Committee determined that the Chief Executive Officer,
basically met the short and longer term criteria established in the Business
Plan and as described above and, therefore, approved a bonus payment in the
amount of $154,375 (47.5%) for 1999.
Arthur L. Knight, Jr.,
CHAIRMAN OF THE COMPENSATION POLICY
COMMITTEE
R. Thomas Eiff
Richard I. Gilford
Clarence Mann
AUDIT COMMITTEE REPORT
Under rules of the SEC, the Company has expanded the responsibilities of its
Audit Committee. Pursuant to the rules, the Company has adopted a charter which
details the responsibilities of the Audit Committee. The Company's Audit
Committee Charter was adopted by the Board of Directors during 1999 and is
attached to this Proxy Statement as Exhibit "A".
12
STOCK PERFORMANCE PRESENTATION
The following line graph shows a comparison of the cumulative returns for
the Company, the Nasdaq Bank Index and an index of peer companies selected by
the Company, since April 4, 1995, the date the Company's Common Stock began
trading on the Nasdaq National Market System. The information assumes that $100
was invested in the Company's Common Stock and each index on April 4, 1995, and
that all dividends have been reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG MB FINANCIAL INC.,
NASDAQ BANK INDEX AND PEER GROUP INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
4/7/95 12/29/95 12/31/96 12/31/97 12/31/98 12/31/99
MB FINANCIAL CORPORATION $100.00 $126.09 $148.91 $141.30 $134.78 $108.15
NASDAQ BANK INDEX $100.00 $133.98 $176.90 $296.18 $294.03 $282.65
PEER GROUP $100.00 $117.65 $158.80 $215.25 $199.80 $194.52
ASSUMES $100 INVESTED ON APRIL 3, 1995
ASSUMES DIVIDENDS REINVESTED
FISCAL YEAR ENDING DECEMBER 31, 1999
The peer group includes the following Illinois banking and thrift
institution holding companies: Alliance Bancorp, AMCORE Financial, Inc., Corus
Bankshares, Inc., First Midwest Bancorp, Inc., First Oak Brook
Bancshares, Inc., MAF Bancorp, Inc., Midwest Banc Holdings, Inc., Northern
States Financial Corporation, Old Second Bancorp, Inc., Success
Bancshares, Inc., and Wintrust Financial Corporation.
13
CERTAIN TRANSACTIONS
Directors and officers of the Company and their affiliates were customers of
and have had transactions with the Bank. Additional transactions may be expected
to take place in the future. All outstanding loans, commitments to loans,
transactions in repurchase agreements and certificates of deposit and depository
relationships were 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 did not involve more
than the normal risk of collectibility or present other unfavorable features.
The Bank has entered into an agreement with US Equities, (of which Robert
Wislow, a Director of the Company who is not standing for reelection, is
Chairman of the Board) to provide facilities management services for the Bank's
office locations. The agreement is on the same terms and conditions and in the
same amount as other businesses which offer this service.
INDEPENDENT PUBLIC ACCOUNTANTS
McGladrey & Pullen, LLP ("McGladrey"), independent certified public
accountants, have been selected by the Board of Directors and the Audit
Committee of the Board of Directors to continue to serve the Company in that
capacity for 2000. Representatives of McGladrey are expected to be present at
the Meeting and can make a statement should they desire to do so and will be
available to respond to appropriate questions from stockholders.
McGladrey continues to perform audit professional services for and on behalf
of the Company. During 1999 the audit services included examination of the
consolidated financial statements of the Company, examination of the financial
statements of subsidiaries and a review of certain filings with the SEC.
McGladrey's unqualified opinion of the consolidated financial statements, along
with the consolidated financial statements of the Company, are enclosed in the
mailing of this Proxy Statement.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials for
the next Annual Meeting of Stockholders, any stockholder proposal to take action
at such meeting must be received by the Company prior to December 22, 2000. Any
such proposal shall be subject to the requirements of the proxy rules adopted
under the Securities Exchange Act of 1934, as amended. In addition, if any
business should properly come before such Annual Meeting other than that which
is stated in such proxy materials, then, if the Company does not receive notice
of such matter by March 6, 2001, the persons designated in the form of proxy
will have discretionary authority to vote or refrain from voting on such matter.
14
OTHER MATTERS
The Board of Directors is not aware of any business to be properly presented
at the Meeting other than those matters described above in this Proxy Statement.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitation by mail,
directors, officers and employees of the Company and the Bank may solicit
proxies personally or by telegraph or telephone without additional compensation.
By Order of the Board of Directors
[SIGNATURE]
Mitchell Feiger
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Chicago, Illinois
April 20, 2000
15
EXHIBIT "A"
AUDIT COMMITTEE CHARTER
The Audit Committee will be composed of non-employee Directors who, in the
opinion of the entire Board, are financially knowledgeable, independent of
Management, and free of any relationship that would interfere with their
exercise of independent judgment as a Committee member.
In discharging its responsibilities, the Committee will seek to maintain
free and open communications between the Board of Directors, the independent
accountants, the internal auditors and Management of the Company. The Committee
will meet at least four times each year.
EXTERNAL AUDIT
The Committee will review and recommend to the entire Board the selection,
retention and, if required, dismissal of independent accountants to audit the
Company's financial statements. In making its selection, the Committee will also
review any non-audit business relationships with the Company, to insure there
will be appropriate independence in the annual audit process. In addition, prior
to the annual audit the Committee will meet with the independent accountants and
Management of the Company to review the scope of the audit and the procedures to
be used. At the conclusion of the annual audit, the Committee will review with
the independent accountants and Management:
- The Company's annual financial statements and related footnotes.
- The independent accountant's comments and recommendations.
- Any significant changes in accounting policies from prior years.
- Any significant changes from the original audit plan.
- Any areas of disagreement with Management.
- The independent accountant's specific responses to the following
questions:
- IF THE ACCOUNTING FIRM WERE SOLELY RESPONSIBLE FOR THE PREPARATION OF
THE FINANCIAL STATEMENTS, WOULD THEY HAVE BEEN PREPARED DIFFERENTLY IN
EITHER A MATERIAL OR IMMATERIAL WAY AND WHY?
- IF THE ACCOUNTING FIRM WERE AN INVESTOR, WOULD IT HAVE RECEIVED THE
INFORMATION NEEDED TO UNDERSTANDING THE COMPANY'S FINANCIAL PERFORMANCE
FOR THE PERIOD?
- IF THE ACCOUNTING FIRM WERE THE CEO, WOULD THE COMPANY HAVE THE SAME
INTERNAL AUDIT PROCEDURES, AND IF NOT, WHAT WOULD BE THE DIFFERENCES
AND WHY?
- Any matters related to the conduct of the audit, which need to be
communicated to the Board of Directors under GAAP.
- All annual SEC filings of the Company containing the Company's financial
statements. In so doing, the Committee will consider whether the
information in such documents is consistent with the information contained
in the financial statements, and if not, discuss the reasons for the
inconsistencies and act accordingly.
The results of this review and the answers to the specific questions will be
documented and distributed to the entire Board along with the Committee minutes
at the next meeting of the entire Board.
A-1
INTERNAL AUDIT
The Committee will, at least annually, meet with the independent auditor,
Management and the internal auditor to plan the internal audit program for the
Company. The Committee will periodically review with these same parties the
results of the internal audit process with a specific focus on the adequacy and
effectiveness of the accounting, financial and other internal control systems.
The Committee will proactively elicit any recommendations for improvement of
such internal control procedures and monitor as appropriate.
As part of its responsibilities, the Committee will also proactively inquire
of Management, the internal auditors and the external accountants about
significant risks or exposures, and assess the steps Management has taken to
control and/or monitor such risks. Finally with respect to the internal audit
program, the Committee will review and concur in the appointment, replacement,
reassignment, or dismissal of the internal auditor.
INTERIM FINANCIAL REPORTING
The Committee, or a representative thereof, will review with Management, the
independent accountants, and if the Audit Committee so requires, the internal
auditor, all interim financial reports filed with the SEC prior to the next
quarter's filings. To the extent such a review leads to issues or concerns, the
Committee reserves the right to require such reports be reviewed by the
Committee prior to any filing with the SEC.
OTHER RESPONSIBILITIES
In addition to its responsibilities relative to both the internal and
external audit programs, the Committee will be responsible for:
- Monitoring the Company's Compliance Program and receiving reports thereon.
- Monitoring the Company's Loan Review process and receiving reports
thereon.
- Monitoring the Company's Disaster Recovery/Contingency Plan, and providing
that an appropriate program of continuous testing is ongoing.
- Monitoring the Company's Senior Officers' expense reimbursement policies
(including the use of corporate assets by senior officers), and
considering the results of any review of such expense reimbursements by
the internal auditor or external accountant.
- Monitoring Senior Officers' compliance with the Company's Conflict of
Interest Policy.
- Advising Management and the independent auditor that they are expected to
provide the Committee with a timely analysis of significant current
financial reporting issues and practices relating to the Company.
- Conducting or authorizing investigations into any matters within the
Committee's scope of responsibilities. The Committee shall be empowered to
retain independent counsel and other professionals to assist in the
conduct of any investigation.
COMMUNICATION AND REPORTING
In discharging its responsibilities, the Committee will meet with the
Director of Internal Audit, the independent accountants and Management in
separate executive sessions to discuss any matter that any party believes should
be discussed privately with the Committee.
All Committee actions, with any recommendations, will be reported to the
Board of Directors no later than the Board's next regularly scheduled meeting.
A-2
EXHIBIT "B"
FIELD EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of this 22nd
day of September, 1999, by and between Manufacturers Bank (the "Bank") and
Burton J. Field (the "Employee").
WHEREAS, the Bank is the wholly-owned subsidiary of MB Financial, Inc. (the
"Holding Company");
WHEREAS, the Employee serves as the President and Chief Executive Officer of
the Bank;
WHEREAS, the Employee and the Bank have entered into an employment agreement
dated November 12, 1992 (the "Prior Employment Agreement"), which the Employee
is willing to terminate with no obligation to him thereunder on the part of the
Bank or any of its affiliates, in consideration of the Bank's entering into this
Agreement;
WHEREAS, the board of directors of the Bank (the "Board of Directors")
believes it is in the best interests of the Bank and its subsidiaries and its
shareholder for the Bank to enter into this Agreement with the Employee in order
to assure continuity of management of the Bank and its subsidiaries;
WHEREAS, the Board of Directors has approved and authorized the execution of
this Agreement with the Employee;
NOW THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein, it is AGREED as follows:
1. DEFINITIONS.
(a) The term "Change in Control" means (1) an event of a nature that
(i) results in a change in control of the Holding Company or the Bank within the
meaning of the Bank Holding Company Act of 1956, as amended and 12 C.F.R.
Part 225 (or any successor statute or regulation) or (ii) requires the filing of
a notice with the Federal Deposit Insurance Corporation under 12 U.S.C.
Section1817(j) and 12 C.F.R. Part 303 (or any successor statute or regulation);
(2) an event that would be required to be reported in response to Item 1 of the
current report on Form 8-K, as in effect on the Effective Date, pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"),
other than an event at the completion of which the stockholders of the Holding
Company hold more than 40% of the outstanding stock of the resulting entity;
(3) any person (as the term is used in Sections 13(d) and 14(d) of the Exchange
Act) is or becomes the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act) directly or indirectly of securities of the Holding Company (the
"Incumbent Board") cease for any reason to constitute at least a majority
thereof, PROVIDED THAT any person becoming a director subsequently whose
election was approved by a vote of at least three-quarters of the directors
comprising the Incumbent Board, or whose nomination for election by the Holding
Company's stockholders was approved by the nominating committee serving under an
Incumbent Board, shall be considered a member of the Incumbent Board; or
(5) consummation of a plan of reorganization, merger, consolidation, sale of all
or substantially all of the assets of the Holding Company or a similar
transaction in which the Holding Company is not the resulting entity, other than
an event at the completion of which the stockholders of the Holding Company hold
more than 40% of the outstanding stock of the resulting entity; PROVIDED THAT
the term "change in control" shall not include an acquisition of securities by
an employee benefit plan of the Bank or the Holding Company or the merger of
Coal City Corporation into Avondale Financial Corp. (the former name of the
Holding Company).
(b) The term "Date of Termination" means the date upon which the
Employee's employment with the Bank ceases, as specified in a notice of
termination pursuant to Section 8 of this Agreement,
(c) The term "Effective Date" means September 1, 1999.
B-1
(d) The term "Involuntary Termination" means the termination of the
employment of Employee (i) by the Bank without his express written consent; or
(ii) by the Employee by reason of a material diminution of or interference with
his duties, responsibilities or benefits, including (without limitation) any of
the following actions unless consented to in writing by the Employee: (1) a
requirement that the Employee be based at any place other than Chicago,
Illinois, or within a radius of 35 miles from the location of the Bank's
principal office located at 1200 N. Ashland Avenue, Chicago, Illinois, except
for reasonable travel on Bank business; (2) a material demotion of the Employee;
(3) a material reduction in the number or seniority of personnel reporting to
the Employee or a material reduction in the frequency with which, or in the
nature of the matters with respect to which, such personnel are to report to the
Employee, other than as part of a Bank and Holding Company-wide reduction in
staff; (4) a reduction in the Employee's salary or a material adverse change in
the Employee's perquisites, benefits, contingent benefits or vacation, other
than as part of an overall program applied uniformly and with equitable effect
to all members of the senior management of the Bank and the Holding Company;
(5) a material permanent increase in the required hours of work or the workload
of the Employee; or (6) the failure of the Board of Directors to elect Employee
as President and Chief Executive Officer of the Bank (or successor of the Bank)
or any action by the Board of Directors (or a board of directors of a successor
of the Bank) removing him from such office, or the failure of the Holding
Company (or any successor of the Holding Company) to elect him as a director of
the Bank (or any successor of the Bank) or any action by the Holding Company
removing him from such office. The term "Involuntary Termination" does not
include Termination for Cause, termination of employment due to death,
disability pursuant to Section 7(h) of this Agreement, retirement or suspension
or temporary or permanent prohibition from participation in the conduct of the
Bank's affairs under Section 8 of the Federal Deposit Insurance Act.
(e) The terms "Termination for Cause" and "Terminated For Cause" mean
termination of the employment of the Employee with the Bank because of the
Employee's willful misconduct, breach of a fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule, or regulation (other than traffic violations or similar offenses) or
final cease-and-desist order, or (except as provided below) material breach of
any provision of this Agreement. No act or failure to act by the Employee shall
be considered willful unless the Employee acted or failed to act in bad faith
and without a reasonable belief that his action or failure to act was in the
best interest of the Bank. The Employee shall not be deemed to have been
Terminated for Cause unless and until there shall have been delivered to the
Employee a copy of a resolution, duly adopted by the affirmative vote of not
less than a majority of the entire membership of the Board of Directors at a
meeting of the Board duly called and held for such purpose (after reasonable
notice to the Employee and an opportunity for the Employee, together with the
Employee's counsel, to be heard before the Board), stating that in the good
faith opinion of the Board of Directors the Employee has engaged in conduct
described in the preceding sentence and specifying the particulars thereof in
detail.
(f) The term "Voluntary Termination" shall mean termination of
employment by the Employee voluntarily as set forth in Section 7(e) of this
Agreement.
2. TERM; TERMINATION OF PRIOR EMPLOYMENT AGREEMENT. The term of this
Agreement shall be a period of three years commencing on the Effective Date,
subject to earlier termination as provided herein. Beginning on the first
anniversary of the Effective Date, and on each anniversary thereafter, the term
of this Agreement shall be extended for a period of one year in addition to the
then-remaining term, PROVIDED THAT the Bank has not given 90 days prior written
notice that the extensions will cease. The Prior Employment Agreement shall
terminate as of immediately prior to the Effective Date, with no obligation to
the Employee thereunder on the part of the Bank and its affiliates, except for
Salary (as defined in Section 4 below) and benefits accrued prior to the
Effective Date, which shall be paid at the times such payments are due. Such
termination of the Prior Employment Agreement shall not affect the Employee's
vested rights to deferred compensation.
B-2
3. EMPLOYMENT. The Employee is employed as the President and Chief
Executive Officer of the Bank. As such, the Employee shall render such
management services as are specified by the Board of Directors and are
customarily performed by persons situated in similar executive capacities
consistent with the Employee's duties as of the date of this Agreement. The
Employee shall also render services to any subsidiary or subsidiaries of the
Bank as requested by the Bank from time to time. The Employee shall devote his
best efforts and reasonable time and attention to the business and affairs of
the Bank to the extent necessary to discharge his responsibilities hereunder.
The Employee may (i) serve on charitable boards or committees at the Employee's
discretion without consent of the Board of Directors and, in addition, on such
corporate boards as are approved in a resolution adopted by a majority of the
Board of Directors, and (ii) manage personal investments, so long as such
activities do not interfere materially with performance of his responsibilities
hereunder.
4. CASH COMPENSATION.
(a) SALARY. The Bank agrees to pay the Employee during the term of
this Agreement a base salary (the "Salary") the annualized amount of which shall
be not less than Four Hundred Thousand Dollars ($400,000). The Salary shall be
paid no less frequently than monthly and shall be subject to customary tax
withholding. The amount of the Salary shall be increased (but under no
circumstances may the Salary be decreased) from time to time in accordance with
the amounts approved by the Board of Directors after the Effective Date. In
order to effectuate the purpose of the preceding sentence, the amount of the
Salary shall be reviewed by the Board of Directors at least every three years
during the term of this Agreement. At his option, the Employee may defer payment
of a portion of the Salary consistent with deferred compensation programs of the
Bank and the Holding Company and applicable IRS regulations.
(b) BONUSES. The Employee shall be entitled to participate in an
equitable manner with all other executive officers of the Bank in such
performance-based and discretionary bonuses, if any, as are authorized and
declared by the Board of Directors for executive officers of the Bank.
(c) EXPENSES. The Employee shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Employee in performing
services under this Agreement in accordance with the policies and procedures
applicable to the executive officers of the Holding Company and the Bank,
PROVIDED THAT the Employee accounts for such expenses as required under such
policies and procedures.
5. BENEFITS.
(a) PARTICIPATION IN BENEFIT PLANS. The Employee shall be entitled to
participate, to the same extent as executive officers of the Holding Company and
the Bank generally, in all plans of the Holding Company and the Bank relating to
pension, retirement, thrift, profit-sharing, savings, group or other life
insurance, hospitalization, medical and dental coverage, travel and accident
insurance, education, cash bonuses, retirement or employee benefits or
combination thereof. In addition, the Employee shall be entitled to be
considered for benefits under all of the stock and stock option related plans in
which the Holding Company's or the Bank's executive officers are eligible or
become eligible to participate.
(b) FRINGE BENEFITS. The Employee shall be eligible to participate in,
and receive benefits under, any other fringe benefit plans or perquisites which
are or may become generally available to the Holding Company's or the Bank's
executive officers, including but not limited to supplemental retirement,
incentive compensation, supplemental medical or life insurance plans, company
cars, club dues, physical examinations, financial planning and tax preparation
services. Without limiting the generality of the foregoing, the Bank agrees to
pay for Employee's membership dues and related expenses in Mission Hills Country
Club (Northbrook, Illinois) and expenses for an automobile provided to Employee
by the Bank commensurate with similarly situated officers of the Holding Company
and the Bank.
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(c) LIFE INSURANCE AND DISABILITY INSURANCE POLICIES. Until the
soonest of the expiration of the term of this Agreement (including extensions of
the term as provided for in Section 2), the date of Voluntary Termination, the
date of Termination for Cause or the date on which the Employee attains age 70,
the Bank shall pay premiums on the following life insurance policies. The
Guardian Life Insurance Company of America Policy Numbers 2932634 ($180,000 face
amount) and 2880468 ($180,000 face amount). Until the soonest of the expiration
of the term of this Agreement (including extensions as provided for in
Section 2), the date of Voluntary Termination, the date of Termination for Cause
or the date on which the employee attains the age at which disability coverage
expires under the following disability policies, the Bank shall pay the premiums
on the following disability policies: The Guardian Life Insurance Company of
America Disability Policy Nos. G-441671 and G-418069.
6. VACATIONS; LEAVE. The Employee shall be entitled (i) to annual paid
vacation of four weeks in accordance with the policies established by the Board
of Directors for executive officers, and (ii) to voluntary leaves of absence,
with or without pay, from time to time at such times and upon such conditions as
the Board of Directors may determine in its discretion.
7. TERMINATION OF EMPLOYMENT.
(a) INVOLUNTARY TERMINATION. If the Employee experiences an
Involuntary Termination, such termination of employment shall be subject to the
Bank's obligations under this Section 7. In the event of the Involuntary
Termination, if the Employee has offered to continue to provide services as
contemplated by this Agreement and such offer has been declined, then, subject
to Section 7(b) of this Agreement, the Bank shall, as liquidated damages
(i) during the remaining term of this Agreement, pay to the Employee monthly
one-twelfth of the Salary at the annual rate in effect immediately prior to the
Date of Termination and one-twelfth of the average annual amount of cash bonus
of the Employee, based on the average amounts of cash bonus earned by the
Employee for the two full fiscal years preceding the Date of Termination;
(ii) provide the benefits set forth in Section 7(f) of this Agreement on the
terms set forth therein PROVIDED THAT during the remaining term of this
Agreement, the Bank shall pay the same portion of the cost of benefits under
Section 7(f) as it would have paid if no termination of employment had occurred;
and (iii) if the Employee is the record or beneficial owner of any options for
stock of the Holding Company as of the Date of Termination, then notwithstanding
the provisions of any other agreements or documents relating to such options,
such options shall be deemed to be fully vested on the Date of Termination and
shall be exercisable for a period of not less one year from the Date of
Termination and the Bank shall guarantee that the Employee shall receive the
benefits of such vesting; and (iv) if the Employee is not fully vested under any
other benefit plan or arrangement in which he is a participant as of the Date of
Termination (except for any "employee pension plan" as defined in Section 3(2)
of the Employee Retirement Income Security Act of 1974, as amended, including
any "multiemployer plan" as defined in Section 3(37) of such Act), deem the
Employee to be fully vested therein and the Bank shall guarantee that he shall
receive benefits thereunder accordingly.
(b) MITIGATION OF THE BANK'S OBLIGATIONS UNDER SECTION 7(a).
(1) In the event that the Employee becomes entitled to liquidated
damages pursuant to Section 7(a), (i) the Bank's obligation under clause (i) of
Section 7(a) with respect to cash damages shall be reduced by the amount of the
Employee's cash income, if any, earned from providing services other than to the
Bank (or any successor) or its affiliates during the remaining term of this
Agreement; and (ii) if the Employee receives benefits under a supplemental
retirement plan pursuant to clause (iv) of Section 7(a), the Bank's obligation
under clause (iv) of Section 7(a) shall be reduced to the extent, if any, that
the Employee receives benefits under a supplemental retirement plan of an
employer other than the Holding Company (or any successor) or any of its
affiliates. For purposes of this Section 7(b), the term "cash income" shall
include amounts of salary, wages, bonuses, incentive compensation and fees paid
to the
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Employee in cash but shall not include shares of stock, stock options, stock
appreciation rights or other earned income not paid to the Employee in cash.
(2) The Employee agrees that in the event he becomes entitled to
liquidated damages pursuant to Section 7(a), throughout the period during which
he is so entitled, he shall promptly inform the Bank of the nature and amounts
of cash income and other non-cash income and benefits which he earns from
providing services other than to the Bank (or any successor) or its affiliates,
and shall provide such documentation of such cash and non-cash income and
benefits as the Bank may request. In the event of changes to such cash and
non-cash income and benefits from time to time, the Employee shall inform the
Bank of such changes, in each case within 15 days after the change occurs, and
shall provide such documentation concerning the change as the Bank may request.
(c) CHANGE IN CONTROL. In the event that within the 18 months
following a Change in Control the Employee experiences an Involuntary
Termination, in addition to the Bank's obligations under Section 7(a) of this
Agreement, the Bank shall pay to the Employee in cash, within 25 days after the
Date of Termination, an amount equal to 299% of the Employee's "base amount" as
determined under Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), reduced (not less than zero) by the present value of payments to
be made under clause (i) of Section 7(a) of this Agreement. For this purpose,
present value shall be determined as present value of a payment is determined
under Section 280G of the Code using the applicable Federal rate in effect on
the date such determination is made or the date of this Agreement, whichever is
lower. Notwithstanding any other provision of this Agreement, if the payment
under this Section 7(c), together with any other amounts and the value of
benefits received or to be received by the Employee in connection with the
Change in Control would cause any amount to be nondeductible by the Bank (or any
successor), or the consolidate group of which the Bank (or any successor) is a
member for federal income tax purposes, pursuant to or by reason of
Section 280G of the Code, then the payment under this Section 7(c) shall be
further reduced (not less than zero) to the extent necessary so as to maximize
amounts and the value of benefits to be received by the Employee without causing
any amount to become nondeductible pursuant to or by reason of Section 280G of
the Code. The Employee shall determine the allocation of such reduction among
payments and benefits to the Employee.
(d) TERMINATION FOR CAUSE. In the event of Termination for Cause, the
Bank shall have no further obligation to the Employee under this Agreement after
the Date of Termination except as set forth in Section 7(f) hereof.
(e) VOLUNTARY TERMINATION. The Employee may terminate his employment
voluntarily at any time by a notice pursuant to Section 8 of this Agreement.
Except as may be provided in Sections 7(c) and 7(f) of this Agreement, in the
event that the Employee voluntarily terminates his employment other than by
reason of any of the actions that constitute Involuntary Termination under
Section 7(b) of this Agreement ("Voluntary Termination"), the Bank shall be
obligated to the Employee for the amount of his Salary and benefits only through
the Date of Termination, at the time such payments are due (accrued vacation
shall be payable within seven days after the Date of Termination), and the Bank
shall have no further obligation to the Employee under this Agreement except a
final annual bonus in an amount consistent with the Bank's year-end bonus
practices, PROVIDED THAT the Board of Directors shall determine the amount of
such bonus in good faith at the time of the Employee's termination, taking into
consideration the portion of the year elapsed prior to termination, and the Bank
shall pay such bonus in cash on the Date of Termination.
(f) HEALTH BENEFITS. Notwithstanding any other provision of this
Agreement, upon cessation of the Employee's service as an employee of the Bank
(or any successor) or any of its affiliates for any reason other than death, the
Bank (or any successor, directly or through its affiliates) shall provide or
make available to the Employee thereafter during the lifetime of the Employee
the same health insurance, hospitalization, medical, dental, prescription drug
and other health benefits, and long-term disability
B-5
insurance, as he would have been eligible for if he had continued to serve as an
executive officer of the Bank (or any successor), for the benefit of himself and
his dependents and beneficiaries who would have been eligible for such benefits
if the Employee had continued to serve as an executive officer of the Bank (or
any successor), on terms as favorable to the Employee as to other executive
officers of the Bank (or any successor) from time to time, including amounts of
coverage and deductibles, PROVIDED THAT the Employee shall pay during the term
of this Agreement the same portion of the cost of such benefits and insurance as
he would pay if employed by the Bank (or a successor) during the term of this
Agreement (even if his employment is terminated during the term) and the
Employee shall pay the full cost of such benefits and insurance after the term
of this Agreement ends; PROVIDED FURTHER THAT the Bank's obligations under this
Section 7(f) shall be reduced to the extent that, and so long as, the Employee
receives such benefits on no less favorable terms from another employer. The
Bank's obligations under this Section 7(f) shall survive the term of this
Agreement.
(g) DEATH. In the event of the death of Employee during the term of
this Agreement and prior to any termination of employment, the Bank shall pay to
the Employee's estate, or such person as the Employee may have previously
designated in writing, the Salary which was not previously paid to the Employee
and which he would have earned if he had continued to be employed under this
Agreement through the last day of the calendar month in which the Employee died,
and a bonus (prorated in accordance with the portion of the fiscal year expired
as of the date of his death) in an amount consistent with the Bank's year-end
bonus practices as determined by the Board of Directors in good faith, which
bonus shall be paid within 90 days after the death of the Employee.
(h) DISABILITY. If the Employee becomes entitled to benefits under the
terms of the then-current disability plan, if any, of the Holding Company or the
Bank (a "Disability Plan"), he shall be entitled to receive such group and other
disability benefits, if any, as are then provided by the Holding Company or the
Bank for executive employees. In the event of such disability, this Agreement
shall not be suspended, except that (i) the Holding Company's obligation to pay
the Salary to the Employee shall be reduced in accordance with the amount of
disability income benefits received by the Employee, if any, pursuant to this
Section 7(h) or the policies described in Section 5(c) such that on an after-tax
basis, the Employee shall realize from the sum of disability income benefits and
a portion of the Salary (if any) the same amount as he would realize on an
after-tax basis from the Salary if the Bank's obligation to pay salary were not
reduced pursuant to this Section 7(h); and (ii) upon a resolution adopted by a
majority of the disinterested members of the Board of Directors, the Bank may
discontinue payment of the Salary beginning six months following a determination
that the Employee has become entitled to benefits under a Disability Plan or
otherwise unable to fulfill his duties under this Agreement.
(i) REGULATORY ACTION. Notwithstanding any other provisions of this
Agreement, if the Employee is removed and/or permanently prohibited from
participating in the conduct of the Bank's affairs by an order issued under
Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act,
12 U.S.C. Section 1818(e)(4) and (g)(1), all obligations of the Bank under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the parties shall not be affected.
8. NOTICE OF TERMINATION. Subject to the provisions of Section 1(e) of
this Agreement, in the event that the Bank desires to terminate the employment
of the Employee during the term of this Agreement, the Bank shall deliver to the
Employee a written notice of termination, stating whether such termination
constitutes Termination for Cause or Involuntary Termination, setting forth in
reasonable detail the facts and circumstances that are the basis for the
termination, and specifying the date upon which employment shall terminate,
which date shall be at least 30 days after the date upon which the notice is
delivered, except in the case of Termination for Cause. In the event that the
Employee determines in good faith that he has experienced an Involuntary
Termination of his employment, he shall send a written notice to the Bank
stating the circumstances that constitute such Involuntary Termination and the
date upon which his employment shall have ceased due to such Involuntary
Termination. In the event that the Employee desires to effect a Voluntary
Termination, he shall deliver a written notice to the Bank, stating the date
upon which
B-6
employment shall terminate, which date shall be at least 90 days after the date
upon which the notice is delivered, unless the parties agree to a date sooner.
9. COVENANT NOT TO COMPETE. The Employee agrees that his services are
special and unique, and of an unusual and extraordinary character which gives
them peculiar value for which monetary damages cannot provide adequate
compensation. In consideration of the Bank's entering into this Agreement, the
Employee hereby agrees that during the Non-Compete Period (as defined below), he
shall not without the prior written consent of the Bank:
(1) serve as a director, officer, or employee of, or directly or
indirectly, as a consultant, independent contractor or otherwise, provide any
personal services to any institution insured by the Federal Deposit Insurance
Corporation or any affiliate of such an institution which institution or
affiliate has an office in Cook County, Illinois or adjacent counties in
Illinois; or
(2) solicit, or directly or indirectly cause to be solicited, any
employee of the Bank to leave his or her employment; or
(3) solicit, or directly or indirectly cause to be solicited, customers
of the Bank for the purpose of offering loans or other financing services to
such customers.
The term "Non-Compete Period" shall mean (i) in the event of Termination for
Cause, the period of three years following the Date of Termination, (ii) in the
event of Involuntary Termination not following a Change in Control, the period
of the remaining term of this Agreement, (iii) in the event of Involuntary
Termination following a Change in Control which occurs during the term of this
Agreement, the period of the lesser of one year or the remaining term of this
Agreement, (iv) in the event of Voluntary Termination not following a Change in
Control, the period of 18 months, and (v) in the event of Voluntary Termination
following a Change in Control which occurs during the term of this Agreement,
the period of one year following the Date of Termination. The provisions of this
Section 9 shall survive expiration of the term of this Agreement.
If any provision of this Section 9, as applied to any party or to any
circumstances, is adjudged by a court to be invalid or unenforceable, the same
shall in no way affect any other provision of this Section 9 or any other part
of this Agreement, the application of such provision in any other circumstances
or the validity or enforceability of this Agreement. If any such provision, or
any part thereof, is held to be unenforceable because of the duration of such
provision or the area covered thereby, the parties agree that the court making
such determination shall have the power to reduce the duration and/or area of
such provision, and/or to delete specific words or phrases, and in its reduced
form such provision shall then be enforceable and shall be enforced. Upon breach
of any provision of this Section 9, the Bank shall be entitled to injunctive
relief, since the remedy at law would be inadequate and insufficient. In
addition, the Bank shall be entitled to such damages as it can show it has
sustained by reason of such breach.
10. ATTORNEYS' FEES. The Bank shall pay all legal fees and related
expenses (including the costs of experts, evidence and counsel) incurred by the
Employee as a result of (i) the Employee's contesting or disputing any
termination of employment, or (ii) the Employee's seeking to obtain or enforce
any right or benefit provided by this Agreement or by any other plan or
arrangement maintained by the Bank (or any successor) or an affiliate under
which the Employee is or may be entitled to receive benefits; PROVIDED THAT the
Bank's obligation to pay such fees and expenses is subject to the Employee's
prevailing with respect to the matters in dispute in any proceeding initiated by
the Employee or the Employee's having been determined to have acted reasonably
and in good faith with respect to any proceeding initiated by the Bank.
11. NO ASSIGNMENTS EXCEPT BY OPERATION OF LAW IN CERTAIN MERGERS.
(a) This Agreement is personal to each of the parties hereto, and
neither may assign or delegate any of its rights or obligations hereunder
without first obtaining the written consent of the other party
B-7
except that, by operation of law in a merger in which the Bank is a party but
not the resulting entity, the Bank's obligations may be assigned to and assumed
by the resulting entity of such a merger; provided, however, that the Bank shall
require any successor or assign (other than by operation of law in a merger in
which the Bank is a party but not the resulting entity) by an assumption
agreement in form and substance satisfactory to the Employee, to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Bank would be required to perform it if no such succession or
assignment had taken place. Failure of the Bank to obtain such an assumption
agreement prior to the effectiveness of any such succession or assignment shall
be a breach of this Agreement and shall entitle the Employee to compensation and
benefits from the Bank in the same amount and on the same terms as the
compensation pursuant to Section 7(a), Section 7(c) and Section 7(f) hereof. For
purposes of implementing the provisions of this Section 11, the date on which
any such succession becomes effective shall be deemed the Date of Termination.
(b) This Agreement and all rights of the Employee hereunder shall inure
to the benefit of and be enforceable by the Employee's personal and legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
12. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, to the Bank at its home office,
to the attention of the Board of Directors with a copy to the Secretary of the
Bank, or, if to the Employee, to such home or other address as the Employee has
most recently provided in writing to the Bank.
13. AMENDMENTS. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties.
14. HEADINGS. The headings used in this Agreement are included solely for
convenience and shall not affect, or be used in connection with, the
interpretation of this Agreement.
15. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provisions shall not
affect the validity or enforceability of the other provisions hereof.
16. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Illinois.
17. ATTORNEY'S FEES. Avondale shall be solely responsible for payment of
any and all legal fees incurred by Employee in the preparation, negotiation and
execution of this Agreement.
18. SUCCESSORS TO CODE SECTIONS. All provisions of this Agreement
referring to sections of the U.S.C. (United States Code) or to the Internal
Revenue Code shall be deemed to refer to successor code sections in the event of
renumbering of code sections.
B-8
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
Attest: MANUFACTURERS BANK
/s/ DORIA L. KOROS /s/ MITCHELL FEIGER
- -------------------------------------------- --------------------------------------------
SECRETARY MITCHELL FEIGER
CHAIRMAN
EMPLOYEE:
/s/ BURTON J. FIELD
--------------------------------------------
BURTON J. FIELD
B-9
PROXY PROXY
MB FINANCIAL, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS -- MAY 30, 2000
The undersigned hereby appoints Robert S. Engelman, Jr., Mitchell
Feiger, and Burton Field, and each of them, with full powers of substitution,
acting by a majority of those present and voting, or if only one is present
and voting then that one, to act as attorneys and proxies for the undersigned
to vote all shares of common stock of MB Financial, Inc. (the "Company")
which the undersigned is entitled to vote at the Annual Meeting of
Stockholders (the "Meeting"), to be held on Tuesday, May 30, 2000 at the
branch office of Manufacturers Bank located at 7557 West Oakton Street,
Niles, Illinois, at 9:00 a.m., local time, and at any and all adjournments or
postponements thereof, as follows;
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE NOMINEES LISTED ON THE
REVERSE SIDE. IF ANY OTHER BUSINESS IS PRESENTED AT SUCH MEETING, THIS PROXY
WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE
PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE
PRESENTED AT THE MEETING.
PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS PROXY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
MB FINANCIAL, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
[ ]
THE BOARD RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES LISTED BELOW.
1. THE ELECTION OF THE FOLLOWING DIRECTORS FOR THE TERMS
SET OPPOSITE THEIR NAMES:
For Withhold For All
All All Except
/ / / / / /
DIRECTOR TERM
-------- ----
NOMINEES: Robert S. Engelman, Jr. 2003
Alfred Feiger 2003
Richard I. Gilford 2003
(Instruction: To withhold authority to vote for any nominee,
please indicate the nominee's name in the space provided
below and mark the oval "For All Except".)
______________________________________________
(NOMINEE EXCEPTION)
Should the undersigned be present and elect to vote at the Meeting or at any
adjournment or postponement thereof, and after notification to the Secretary
of the Company at the Meeting of the stockholder's decision to terminate this
proxy, then the power of such attorneys and proxies shall be deemed
terminated and of no further force and effect. This proxy may also be
revoked by filing a written notice of revocation with the Secretary of the
Company or by duly executing a proxy bearing a later date.
The undersigned acknowledges receipt from the Company, prior to the execution
of this proxy, of notice of the Meeting, a Proxy Statement and the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1999.
In their discretion, the proxies are authorized to vote on any other business
that may come before the Meeting or any adjournment or postponement thereof.
Dated: __________________________, 2000
_______________________________________________________________________________
Signature of Stockholder
_______________________________________________________________________________
Signature if held jointly
Please sign exactly as your name(s) appear(s) on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.
TRIANGLE FOLD AND DETACH HERE TRIANGLE
PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS PROXY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.