GREAT AMERICAN BANCORP, INC.
1311 South Neil Street
Champaign, Illinois 61820
(217) 356-2265
March 27, 1998
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders
of Great American Bancorp, Inc., the holding company for First Federal
Savings Bank of Champaign-Urbana, which will be held on Tuesday, April 28,
1998, at 9:30 a.m., Central Time, at the offices of First Federal Savings
Bank of Champaign-Urbana, 1311 South Neil Street, Champaign, Illinois 61820.
The attached notice of the annual meeting and the proxy statement
describe the formal business to be transacted at the annual meeting.
Directors and officers of Great American Bancorp, Inc., as well as
representatives of George S. Olive & Co., LLC, whom the Company has
appointed as independent auditor for the fiscal year ending December 31,
1998 will be present. In November 1995, the Company changed its fiscal year
end from September 30 to December 31 and, accordingly, the three months
ended December 31, 1995 are included in the audit of the fiscal year ending
December 31, 1996.
The Board of Directors of Great American Bancorp, Inc. has determined
that the matters to be considered at the annual meeting are in the best
interests of Great American and its stockholders. For the reasons set
forth in the proxy statement, the Board of Directors unanimously recommends
that you vote "FOR" each matter to be considered.
Your cooperation is appreciated since a majority of the common stock
must be represented, either in person or by proxy, to constitute a quorum
for the conduct of business. Whether or not you expect to attend, please
sign, date and return the enclosed proxy card promptly in the postage-paid
envelope provided so that your shares will be represented.
On behalf of the Board of Directors and all of the employees of Great
American Bancorp, Inc. and First Federal Savings Bank of Champaign-Urbana,
I thank you for your continued interest and support.
Sincerely yours,
/s/ George R. Rouse
George R. Rouse
President and Chief
Executive Officer
GREAT AMERICAN BANCORP, INC.
1311 South Neil Street
Champaign, Illinois 61820
(217) 356-2265
__________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on April 28, 1998
__________________________________
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders (the
"Annual Meeting") of Great American Bancorp, Inc. (the "Company") will be
held on Tuesday, April 28, 1998, at 9:30 a.m., Central Time, at the offices
of First Federal Savings Bank of Champaign-Urbana (the "Bank"), 1311 South
Neil Street, Champaign, Illinois 61820.
The purpose of the Annual Meeting is to consider and vote upon the
following matters:
1. The election of two directors to a three-year term of office;
2. The ratification of the appointment of George S. Olive & Co.,
LLC as independent auditors of the Company for the fiscal year
ending December 31, 1998; and
3. Such other matters as may properly come before the Annual
Meeting and at any adjournments thereof, including whether or
not to adjourn the meeting.
The Board of Directors has established March 3, 1998, as the record
date for the determination of stockholders entitled to receive notice of and
to vote at the Annual Meeting and at any adjournments thereof. Only record
holders of the common stock of the Company as of the close of business on
that date will be entitled to notice of and to vote at the Annual Meeting
or any adjournments thereof. In the event there are not sufficient votes
for a quorum or to approve or ratify any of the foregoing proposals at the
time of the Annual Meeting, the Annual Meeting may be adjourned in order
to permit further solicitation of proxies by the Company. A list of
stockholders entitled to vote at the Annual Meeting will be available at
Great American Bancorp, Inc., 1311 South Neil Street, Champaign, Illinois
61820, for a period of ten days prior to the Annual Meeting and will also
be available at the meeting itself.
By Order of the Board of Directors
/s/ Jane F. Adams
Jane F. Adams
Corporate Secretary
Champaign, Illinois
March 27, 1998
GREAT AMERICAN BANCORP, INC.
_______________________
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
April 28, 1998
_______________________
Solicitation and Voting of Proxies
This proxy statement is being furnished to stockholders of Great
American Bancorp, Inc. (the "Company") in connection with the solicitation
by the Board of Directors ("Board of Directors" or "Board") of proxies to
be used at the annual meeting of stockholders (the "Annual Meeting"), to
be held on Tuesday, April 28, 1998, at 9:30 a.m., Central Time, at the
offices of First Federal Savings Bank of Champaign-Urbana, 1311 South Neil
Street, Champaign, Illinois 61820 and at any adjournments thereof. The 1997
Annual Report to Stockholders, including consolidated financial statements
for the fiscal year ended December 31, 1997, and a proxy card, accompanies
this proxy statement, which is first being mailed to record holders on or
about March 27, 1998.
Regardless of the number of shares of common stock owned, it is
important that record holders of a majority of the outstanding shares of
common stock be represented by proxy or in person at the Annual Meeting.
Stockholders are requested to vote by completing the enclosed proxy card and
returning it signed and dated in the enclosed postage-paid envelope.
Stockholders are urged to indicate their vote in the spaces provided on the
proxy card. Proxies solicited by the Board of Directors of the Company
will be voted in accordance with the directions given therein. Where no
instructions are indicated, signed proxy cards will be voted "FOR" the
election of the nominees for director named in this proxy statement, and
"FOR" the ratification of George S. Olive & Co., LLC as independent
auditors for the fiscal year ending December 31, 1998.
Other than the matters set forth on the attached Notice of Annual
Meeting of Stockholders, the Board of Directors knows of no additional
matters that will be presented for consideration at the Annual Meeting.
Execution of a proxy, however, confers on the designated proxy holders
discretionary authority to vote the shares in accordance with their best
judgment on such other business, if any, that may properly come before the
Annual Meeting and at any adjournments thereof, including a motion as to
whether or not to adjourn the Annual Meeting.
A proxy may be revoked at any time prior to its exercise by filing
a written notice of revocation with the Corporate Secretary of the Company,
by delivering to the Company a duly executed proxy bearing a later date,
or by attending the Annual Meeting and voting in person. However, if you
are a stockholder whose shares are not registered in your own name, you
will need appropriate documentation from your record holder to vote
personally at the Annual Meeting.
The cost of solicitation of proxies on behalf of the Board of
Directors will be borne by the Company. Proxies may also be solicited
personally or by mail or telephone by directors, officers and other
employees of the Company and its subsidiary, the Bank, without additional
compensation therefor. The Company will also request persons, firms and
corporations holding shares in their names, or in the name of their
nominees, which are beneficially owned by others, to send proxy material to
and obtain proxies from such beneficial owners, and will reimburse such
holders for their reasonable expenses in doing so.
Voting Securities
The securities which may be voted at the Annual Meeting consist of
shares of common stock of the Company ("Common Stock"), with each share
entitling its owner to one vote on all matters to be voted on at the
Annual Meeting, except as described below. There is no cumulative voting
for the election of directors.
The close of business on March 3, 1998, has been fixed by the Board
of Directors as the record date (the "Record Date") for the determination
of stockholders of record entitled to notice of and to vote at the Annual
Meeting and at any adjournments thereof. The total number of shares of
Common Stock outstanding on the Record Date was 1,588,378 shares.
In accordance with the provisions of the Company's certificate of
incorporation, record holders of Common Stock who beneficially own in excess
of 10% of the outstanding shares of Common Stock (the "Limit") are not
entitled to any vote with respect to the shares held in excess of the
Limit. A person or entity is deemed to beneficially own shares owned by
an affiliate of, as well as by persons acting in concert with, such person
or entity. The Company's certificate of incorporation authorizes the Board
of Directors (i) to make all determinations necessary to implement and apply
the Limit, including determining whether persons or entities are acting in
concert, and (ii) to demand that any person who is reasonably believed to
beneficially own stock in excess of the Limit supply information to the
Company to enable the Board of Directors to implement and apply the Limit.
The presence, in person or by proxy, of the holders of at least a
majority of the total number of shares of Common Stock entitled to vote
(after giving effect to the Limit described above, if applicable) is
necessary to constitute a quorum at the Annual Meeting. In the event that
there are not sufficient votes for a quorum, or to approve or ratify any
matter being presented at the time of the Annual Meeting, the Annual
Meeting may be adjourned in order to permit the further solicitation of
proxies.
As to the election of directors, the proxy card being provided by the
Board of Directors enables a stockholder to vote "FOR" the election of the
nominees proposed by the Board of Directors, or to "WITHHOLD AUTHORITY" to
vote for any of the nominees being proposed. Under Delaware law and the
Company's bylaws, directors are elected by a plurality of votes cast,
without regard to either broker non-votes, or proxies as to which authority
to vote for one or more of the nominees being proposed is withheld.
As to the approval of George S. Olive & Co., LLC as independent
auditors of the Company and all other matters that may properly come before
the Annual Meeting, by checking the appropriate box, a stockholder may:
(i) vote "FOR" the item; (ii) vote "AGAINST" the item; or (iii) "ABSTAIN"
from voting on the item. Under the Company's bylaws, unless otherwise
required by law, all such matters shall be determined by a majority of the
votes cast, without regard to either broker non-votes, or proxies marked
"ABSTAIN" as to that matter.
Proxies solicited hereby will be returned to the Company's transfer
agent, and will be tabulated by inspectors of election designated by the
Board of Directors, who will not be employed by, or be a director of, the
Company or any of its affiliates. After the final adjournment of the
Annual Meeting, the proxies will be returned to the Company for safekeeping.
Security Ownership of Certain Beneficial Owners
The following table sets forth information as to those persons
believed by the Company to be beneficial owners of more than 5% of the
Company's outstanding shares of Common Stock on the Record Date as disclosed
in certain reports regarding such ownership filed by such persons with the
Company and with the Securities and Exchange Commission ("SEC"), in
accordance with Sections 13(d) and 13(g) of the Securities Exchange Act of
1934, as amended ("Exchange Act"). Other than those persons listed below,
the Company is not aware of any person, as such term is defined in the
Exchange Act, that owns more than 5% of the Company's Common Stock as of
the Record Date.
Amount and
Nature of
Name and Address Beneficial Percent of
Title of Class of Beneficial Owner Ownership Class
- ----------------- --------------------------- -------------- -----------
Common Stock First Federal Savings Bank 157,137 (1) 9.89%
of Champaign-Urbana Employee
Ownership Plan ("ESOP")
1311 South Neil Street
Champaign, Illinois 61820
Common Stock Clinton C. Atkins 155,575 (2) 9.79%
2001 Kankakee Drive
Champaign, IL 61821
(footnotes on following page)
- ---------------------------
(1) Shares of Common Stock were acquired by the ESOP in the Conversion.
The Personnel and Salary Committee of the board of directors
administers the ESOP. The ESOP Trustee, U.S. Bancorp, (formerly First
Bank, N.A.), must vote all allocated shares held in the ESOP in
accordance with the instructions of the participants. As of March 3,
1998, 76,329 shares had been allocated under the ESOP. Under the ESOP,
unallocated shares will be voted by the ESOP Trustee in a manner
calculated to most accurately reflect the instructions received from
participants regarding the allocated stock so long as such vote is in
accordance with the provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
(2) Includes 150,975 shares owned directly by Mr. Atkins, 1,800 shares of
unvested stock awards held by a trust established for the 1995 Great
American Bancorp, Inc. Incentive Plan (the "Incentive Plan" and
"Incentive Plan Trust") and 2,800 shares subject to immediately
exercisable options granted under the Incentive Plan.
PROPOSALS TO BE VOTED ON AT THE MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of five (5)
directors and is divided into three classes. Currently, each of the
members of the Board of Directors of the Company also serves as a director
of the Bank, with the exception of Mr. Atkins. There are a total of nine
directors of the Bank. Directors of the Company are elected for staggered
terms of three years each, with the term of office of only one of the
three classes of directors expiring each year. Directors serve until their
successors are elected and qualified.
The nominees proposed for election at this Annual Meeting are Dr.
Morgan C. Powell and George R. Rouse, each of whom currently serves as a
director of the Company.
In the event that either Dr. Powell or Mr. Rouse is unable to serve
or declines to serve for any reason, it is intended that the proxies will
be voted for the election of such other person as may be designated by the
present Board of Directors. The Board of Directors has no reason to
believe that Dr. Powell or Mr. Rouse will be unable or unwilling to serve.
Unless authority to vote for the nominee is withheld, it is intended that
the shares represented by the enclosed proxy card, if executed and returned,
will be voted "FOR" the election of the nominee proposed by the Board of
Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF
THE NOMINEES NAMED IN THIS PROXY STATEMENT.
Information with Respect to the Nominee, Continuing Directors and Certain
Executive Officers
The following table sets forth, as of the Record Date, the names of
the nominee, continuing directors and "named executive officers" of the
Company, as defined below, their ages, a brief description of their recent
business experience, including present occupations and employment, certain
directorships held by each, the year in which each became a director of the
Bank, and the year in which their terms (or in the case of the nominee,
proposed term) as director of the Company expire. The table also sets
forth the amount of Common Stock and the percent thereof beneficially owned
by each director and named executive officer and all directors and executive
officers as a group as of the Record Date.
Shares of
Name and Principal Expiration Common Stock
Occupation at Present Director of Term as Beneficially Percent of
and for Past Five Years Age Since (1) Director Owned (2)(3)(4) Class
- ------------------------- ----- ------------ ------------ ---------------- -----------
NOMINEE
Dr. Morgan C. Powell 62 1977 2001 6,800 .43%
Chairman of the Board
of the Company; self-
employed orthodontist.
Dr. Powell also serves
as a director of the
Bank's wholly-owned
subsidiary, Park Avenue
Service Corporation,
("PASC").
George R. Rouse (5) 47 1982 2001 75,519 4.69%
President and Chief
Executive Officer of the
Company; President of
the Bank and PASC.
CONTINUING DIRECTORS
James S. Acheson 64 1977 1999 26,350 1.66%
Consultant, Prairie
Central Co., ready
-mixed concrete and hard
material dealer. From 1972
until 1997, owner and
Chief Executive Officer of
Central Material Co., a
concrete and building
materials supply business;
Director of PASC.
Clinton C. Atkins 52 1984 2000 155,575 9.78%
Chairman of Hobbico Inc.,
a hobby retailer and
supplier, Chairman of
Herr's Inc., a craft
wholesale retailer, and
owner of The Atkins
Group, North Point
Development and Stone
Creek Development, all
real estate development
concerns.
Ronald Kiddoo 55 1987 2000 16,200 1.02%
Chairman of the Board
and Chief Investment
Officer, Cozad Asset
Management, Inc., an
investment advisory
concern; Director
of PASC.
Stock Ownership of all -- -- -- 352,327 21.52%
Directors and Executive
Officers as a Group
(13 persons)(6)(7)
- -----------------------------
(1) Includes years of service as a director of the Bank.
(2) Each person effectively exercises sole (or shares with spouse or other
immediate family member) voting or dispositive power as to shares
reported herein (except as noted).
(3) Includes 1,800 shares of common stock granted to each outside director
and 12,316 shares of common stock granted to Mr. Rouse under the Great
American Bancorp, Inc. 1995 Incentive Plan (the "Incentive Plan").
Stock Awards granted under the Incentive Plan vest in five equal annual
installments and began vesting on February 14, 1997, the first
anniversary of the effective date of the grant of the stock award.
(4) Includes 2,800 shares subject to options held by each outside director
that are currently exercisable and does not include 4,200 shares
subject to options which are not currently exercisable held by each
outside director under the Incentive Plan which will continue to vest
in equal installments through February 14, 2001. Includes 20,528
shares subject to options that are immediately exercisable and does not
include 30,791 shares subject to options which are not currently
exercisable granted to Mr. Rouse under the Incentive Plan. All options
granted under the Incentive Plan to Mr. Rouse are exercisable in five
equal annual installments and began vesting on February 14, 1997, the
first anniversary of the effective date of the grant of the options.
(5) Mr. Rouse is the sole Named Executive Officer of the Company.
(6) Includes a total of 36,109 shares of common stock granted under the
Incentive Plan, and a total of 48,928 shares subject to options which
are currently exercisable granted under the Incentive Plan. Excludes
a total of 75,773 shares subject to options which are not currently
exercisable granted under the Incentive Plan.
(7) Includes directors and executive officers of the Bank.
Meetings of the Board of Directors and Committees of the Board of Directors
The Board of Directors conducts its business through meetings of the
Board of Directors and through activities of its committees. The Board of
Directors meets monthly and may have additional meetings as needed. During
fiscal 1997, the Board of Directors of the Company held 12 meetings. All
of the directors of the Company attended at least 75% of the total number
of the Company's Board meetings held and committee meetings on which such
directors served during fiscal 1997.
The Boards of Directors of the Company and the Bank maintain
committees, the nature and composition of which are described below:
Audit Committee. The Audit Committee of the Company consists of
Messrs. Kiddoo (Chairman) and Atkins and Dr. Powell, all of whom are
Outside Directors. This committee meets quarterly or as called by the
committee chairman. The purpose of this committee is to provide assurance
that financial disclosures made by management portray the financial condition
and results of operations. The committee also maintains a liaison with the
outside auditors and reviews the adequacy of internal controls. The Audit
Committee met 2 times in fiscal 1997.
Nominating Committee. The Company's Nominating Committee for the 1998
Annual Meeting consists of Messrs. Acheson, Atkins and Kiddoo. The
committee considers and recommends the nominees for director to stand for
election at the Company's annual meeting of stockholders. The Company's
bylaws also provide for stockholder nominations of directors. These
provisions require such nominations to be made pursuant to timely notice in
writing to the Secretary of the Company. The stockholder's notice of
nomination must contain all information relating to the nominee which is
required to be disclosed by the Company's bylaws and by the Exchange Act.
The Nominating Committee met on January 12, 1998.
Compensation/Benefits Committee. The Compensation/Benefits Committee
of the Company consists of Messrs. Powell (Chairman), Acheson, Kiddoo and
Atkins. This committee meets to establish compensation for the Chief
Executive Officer, approves the compensation of senior officers and various
compensation and benefits to be paid to employees and to review the
incentive compensation programs when necessary. The Compensation/Benefits
Committee met 1 time in fiscal 1997.
Directors' Compensation
Directors' Fees. For fiscal 1997, directors of the Company and
directors of the Bank received a monthly fee of $500 per month for serving
on each board, and no additional fees were paid for serving on board
committees. The Chairman of the Board received a monthly fee of $500 in
addition to any board fees.
Incentive Plan. The Company maintains the Great American Bancorp,
Inc. 1995 Incentive Plan. Under the Incentive Plan, each Outside Director
was granted non-statutory stock options to purchase 7,000 shares of Common
Stock and Stock Awards for 3,000 shares of Common Stock on February 14,
1996. The Incentive Plan previously provided that to the extent options
for shares are available for grant under the Incentive Plan, each
subsequently elected Outside Director would be granted non-statutory stock
options to purchase 2,791 shares of Common Stock and Stock Awards for 316
shares of Common Stock. In January 1997, the Incentive Plan was amended
to, among other things, remove the limitations on the amount of common
stock and stock options which may be awarded to subsequently elected outside
directors. On March 10, 1997, three newly elected Outside Directors of the
Bank were each granted non-statutory options to purchase 5,594 shares of
Common Stock and Stock Awards for 1,811 shares. All options granted to
Directors under the Incentive Plan were granted with an exercise price equal
to the fair market value of the Company's common stock as of the date of
grant. Unless otherwise accelerated, the options and Stock Awards granted
to Outside Directors vest 20% per year over a five-year period and will
continue to vest each year in which the Outside Director remains on the
Board or serves as a consultant or advisory director. Upon a change in
control, death, or disability, all unvested Stock Awards or unexercisable
options will vest immediately.
Executive Compensation
Summary Compensation Table. The following table shows, for the fiscal
years ended December 31, 1997 and 1996, and September 30, 1995, the cash
compensation paid by the Bank, as well as certain other compensation paid
or accrued for those years, to the chief executive officer and executive
officers of the Company and the Bank who received salary and bonuses in
excess of $100,000 in fiscal year 1997 ("Named Executive Officer").
Long-Term Compensation
--------------------------------------
Annual Compensation(1) Awards Payouts
---------------------------------- -------------------------- ---------
Other Restricted Securities
Name and Annual Stock Underlying LTIP All Other
Principal Compensation Awards Options/ Payouts Compensation
Positions Year Salary($)(1) Bonus ($)(2) ($)(3) SARs (#)(4) ($)(5) ($)(6)
- --------------- ----- ------------ ------ ------------ ----------- ------------- -------- -------------
George R. Rouse 1997 $167,500 $6,200 - - - - $61,028
President 1996 198,250 14,750 - $287,392 51,319 - 96,548
1995 161,900 11,750 - - - - 781
(1) Under Annual Compensation, the column titled "Salary" includes directors
fees of $12,500, $12,000, and $19,400 in fiscal 1997, 1996 and 1995,
respectively.
(2) There were no (a) perquisites over the lesser of $50,000 or 10% of the
individual's total salary and bonus for the year; (b) payments of
above-market preferential earnings on deferred compensation; (c) payments
of earnings with respect to long-term incentive plans prior to
settlement or maturation; (d) tax payment reimbursements; or
(e) preferential discounts on stock. For 1995, the Bank had no
restricted stock or stock-related plans in existence.
(3) Pursuant to the Incentive Plan, Mr. Rouse held an aggregate of 20,528
shares of common stock which had a market value of $14 per share on
the effective date of grant, February 14, 1996. Awards to Mr. Rouse
vest in five equal annual installments, the first of which commenced
on February 14, 1997, the first anniversary date of the effective date
of the award. All awards vest immediately upon termination of
employment due to death, disability or change of control. As of
December 31, 1997, 4,106 shares of stock awarded to Mr. Rouse under the
Incentive Plan had vested. As of December 31, 1997, the market value
of the 16,422 unvested shares held by Mr. Rouse was $312,018.
(4) Includes options awarded under the Incentive Plan. Options granted to
Mr. Rouse become exercisable in five equal annual installments, the
first of which commenced on February 14, 1997, the first anniversary
date of the grant. To the extent not already exercisable, the options
become exercisable upon death, disability or a change of control. As
of December 31, 1997, 10,263 options granted to Mr. Rouse were
exercisable. See "Incentive Plan."
(5) For 1997, 1996 and 1995, the Bank had no long-term incentive plans,
accordingly, there were no payouts or awards under any long-term
incentive plan.
(6) Reflects 3,212 shares allocated to Mr. Rouse under the Bank's Employee
Stock Ownership Plan for 1997 and 6,518 shares allocated in 1996.
Employment Agreements. The Bank and the Company have entered into
employment agreements with Mr. Rouse (the "Executive"). These employment
agreements are intended to ensure that the Bank and the Company will be
able to maintain a stable and competent management base. The continued
success of the Bank and the Company depends, to a significant degree, on
the skills and competence of Mr. Rouse.
The Bank's and the Company's employment agreements (collectively, the
"Employment Agreements") provide for a three-year term. The Company's
employment agreement provides for automatic daily extensions such that the
remaining term of the agreement shall be three years unless written notice
of non-renewal is provided by either the Board of Directors or the
Executive. The Bank's employment agreement provides that, commencing on the
first anniversary date and continuing each anniversary date thereafter, the
Board of Directors may extend the agreement for an additional year so that
the remaining term shall be three years, unless written notice of
non-renewal is given by the Board of Directors after conducting a
performance evaluation of the Executive. The Employment Agreements provide
that the Executive's base salary will be reviewed annually. In this
regard, the current base salary of Mr. Rouse is $155,000. In addition to
base salary, the Employment Agreements provide for, among other things,
participation in stock benefit plans and other fringe benefits applicable
to executive personnel. The Employment Agreements provide for termination
of the Executive by the Bank or the Company for cause as defined in the
Employment Agreements at any time. In the event the Bank or the Company
chooses to terminate the Executive's employment for reasons other than for
cause, or in the event of the Executive's resignation from the Bank and the
Company upon (i) failure to re-elect the Executive to his current offices,
(ii) a material change in the Executive's functions, duties or
responsibilities, (iii) a relocation of the Executive's principal place of
employment by more than fifty miles, (iv) liquidation or dissolution of the
Bank or the Company, or (v) a breach of the Employment Agreement by the
Bank or the Company, the Executive or, in the event of death, his
beneficiary would be entitled to an amount equal to the remaining salary
payments under the Employment Agreement and the contributions that would
have been made on the Executive's behalf to any employee benefit plans of
the Bank or the Company during the remaining term of the Agreements. The
Bank and the Company would also continue the Executive's life, health and
disability coverage for the remaining term of the Employment Agreements.
Under the agreements, if termination, voluntary or involuntary, follows
a change in control of the Bank or the Company, as defined in the
Employment Agreements, the Executive or, in the event of death, his
beneficiary, would be entitled to a severance payment equal to the greater
of (i) the payments due for the remaining terms of the agreement or
(ii) three times the average of the five preceding years' annual
compensation. In addition, the Bank and the Company would continue the
Executive's life, health, and disability coverage for thirty-six months.
Payments to the Executive under the Bank's employment agreement are
guaranteed by the Company in the event that payments or benefits are not
paid by the Bank.
Payments and benefits under the Employment Agreements together with
payments from other benefit plans may constitute an excess parachute payment
under Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), resulting in the imposition of an excise tax on the recipient and
denial of the deduction for such excess amount to the Company and the Bank.
In the event of Mr. Rouse's termination following a change in control,
based solely upon the salary, bonus and other items of cash compensation
received by or payable to Mr. Rouse during 1997, Mr. Rouse would receive
approximately $521,100 in severance payments under the Employment Agreement.
Such amount does not include the effect of any non-cash benefits provided
for under the Employment Agreements, such as common stock or options which
vested or were awarded to Mr. Rouse in 1997.
Incentive Plan.
The Company maintains the Incentive Plan which provides discretionary
awards of common stock and options to purchase common stock to officers and
key employees as determined by a committee of non-employee directors. There
were no grants of options or stock appreciation rights ("SAR's) under the
Incentive Plan to the Named Executive Officers for fiscal 1997.
The following table provides certain information with respect to the
number of shares of Common Stock represented by outstanding options held by
the Named Executive Officers as of March 13, 1998. Also reported are the
values for "in-the-money" options which represent the positive spread between
the exercise price of any such existing stock options and the year end
price of the Common Stock. There were no exercises of stock options or
SARs during fiscal 1997.
FISCAL YEAR END OPTION/SAR VALUES
Securities Underlying Number of Value of Unexercised In-the-Money
Unexercised Options/SARs at Fiscal Year Options/SARs at Fiscal Year End ($)(1)
End (#)
------------------------------------------ ----------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---------------- ------------------ --------------------- ----------------- --------------------
George R. Rouse 20,526 30,793 102,630 153,965
- -------------------------
(1) Market value of underlying securities at fiscal year end ($19) minus
the exercise or base price ($14) per share. Options vest at an
annual rate of 20% of the original amount granted beginning on
February 14, 1997, unless otherwise accelerated.
Transactions with Certain Related Persons
It is the policy of the Bank to make loans to directors and executive
officers on their principal residence. The Bank also makes available to
each director of the Bank and each director of the Company an approved line
of credit in an amount up to $100,000. The directors may then apply for
a loan from the Bank which may be approved by the Bank's loan officers
without further Board approval, provided that terms of such loan applied for
thereunder, including the collateral securing such loan, are consistent with
the Bank's loan underwriting policies for loans generally available to its
customers. The Bank's policy provides that all loans made by the Bank to
its directors and officers, including the lines of credit to directors, are
made in the ordinary course of business, are made on substantially the same
terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons and do not involve more
than the normal risk of collectibility or present other unfavorable
features. As of December 31, 1997, all outstanding loans to directors and
executive officers were made by the Bank in the ordinary course of
business, were not made with favorable terms, and did not involve more than
the normal risk of collectibility or present other unfavorable features.
PROPOSAL 2. RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Company's Board of Directors has appointed George S. Olive & Co.,
LLC as independent auditors for the Bank and the Company for the year
ending December 31, 1998, subject to ratification of such appointment by the
stockholders. In November 1995, the Company determined to change its fiscal
year end from September 30 to December 31 and, accordingly, the three
months ended December 31, 1995 are included in the audit of the fiscal year
ending December 31, 1996.
Representatives of George S. Olive & Co., LLC will be present at the
Annual Meeting. They will be given an opportunity to make a statement if
they desire to do so and will be available to respond to appropriate
questions from stockholders present at the Annual Meeting.
Unless marked to the contrary, the shares represented by the enclosed
proxy card will be voted "FOR" ratification of the appointment of George
S. Olive & Co., LLC as the independent auditors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" RATIFICATION OF
THE APPOINTMENT OF GEORGE S. OLIVE & CO. LLC AS THE INDEPENDENT AUDITORS
OF THE COMPANY.
ADDITIONAL INFORMATION
Stockholder Proposals
To be considered for inclusion in the Company's proxy statement and
form of proxy relating to the 1999 Annual Meeting of Stockholders, a
stockholder proposal must be received by the Secretary of the Company at
the address set forth on the first page of this Proxy Statement not later
than November 27, 1998. Any such proposal will be subject to 17 C.F.R.
subsection 240.14a-8 of the Rules and Regulations under the Securities Exchange
Act of 1934, as amended.
Notice of Business to be Conducted at an Annual Meeting
The bylaws of the Company provide an advance notice procedure for a
stockholder to properly bring business before an Annual Meeting. The
stockholder must give written advance notice to the Secretary of the Company
not less than ninety (90) days before the date originally fixed for such
meeting, provided, however, that in the event that less than one hundred
(100) days notice or prior public disclosure of the date of the meeting is
given or made to stockholders, notice by the stockholder to be timely must
be received not later than the close of business on the tenth day following
the date on which the Company's notice to stockholders of the annual
meeting date was mailed or such public disclosure was made. The advance
notice by stockholders must include the stockholder's name and address, as
they appear on the Company's record of stockholders, a brief description of
the proposed business, the reason for conducting such business at the Annual
Meeting, the class and number of shares of the Company's capital stock that
are beneficially owned by such stockholder and any material interest of such
stockholder in the proposed business. In the case of nominations to the
Board of Directors, certain information regarding the nominee must be
provided. Nothing in this paragraph shall be deemed to require the Company
to include in its proxy statement or the proxy relating to an annual
meeting any stockholder proposal which does not meet all of the requirements
for inclusion established by the SEC in effect at the time such proposal
is received.
Other Matters Which May Properly Come Before the Meeting
The Board of Directors knows of no business which will be presented
for consideration at the Meeting other than as stated in the Notice of
Annual Meeting of Stockholders. If, however, other matters are properly
brought before the Annual Meeting, it is the intention of the persons named
in the accompanying proxy to vote the shares represented thereby on such
matters in accordance with their best judgment.
Whether or not you intend to be present at the Annual Meeting, you
are urged to return your proxy card promptly. If you are then present at
the Annual Meeting and wish to vote your shares in person, your original
proxy may be revoked by voting at the Annual Meeting.
By Order of the Board of Directors
/s/ Jane F. Adams
Jane F. Adams
Corporate Secretary
Champaign, Illinois
March 27, 1998
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE
REQUESTED TO SIGN, DATE AND PROMPTLY RETURN THE
ACCOMPANYING PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.