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SCHEDULE 14a
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
St. Francis Capital Corporation
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(Name of Registrant as Specified in Its Charter)
St. Francis Capital Corporation
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (1)
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
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St. Francis Capital Corporation [LOGO]
3545 SOUTH KINNICKINNIC AVENUE
MILWAUKEE, WISCONSIN 53235
(414) 744-8600
December 16, 1996
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders
(the "Annual Meeting") of St. Francis Capital Corporation (the "Company"), the
holding company for St. Francis Bank, F.S.B. and Bank Wisconsin, which will be
held on Wednesday, January 22, 1997, at 4:00 p.m., Milwaukee time, at the
Midway Hotel Airport, 5105 S. Howell Avenue, Milwaukee, Wisconsin.
The attached Notice of Annual Meeting of Shareholders and Proxy
Statement describe the formal business to be conducted at the Annual Meeting.
We also have enclosed a copy of the Company's Summary Annual Report and the
Company's Form 10-K Annual Report for the fiscal year ended September 30, 1996.
Directors and officers of the Company, as well as representatives of KPMG Peat
Marwick LLP, the Company's independent auditors, will be present at the Annual
Meeting to respond to any questions that our shareholders may have.
The vote of every shareholder is important to us. Please sign and
return the enclosed appointment of proxy form promptly in the postage-paid
envelope provided, regardless of whether you are able to attend the Annual
Meeting in person. If you attend the Annual Meeting, you may vote in person
even if you have already mailed your proxy.
On behalf of the Board of Directors and all of the employees of the
Company and its subsidiaries, I wish to thank you for your continued support.
Sincerely yours,
John C. Schlosser
President and Chief Executive Officer
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St. Francis Capital Corporation [LOGO]
3545 SOUTH KINNICKINNIC AVENUE
MILWAUKEE, WISCONSIN 53235
(414) 744-8600
_________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 22, 1997
_________________
TO THE HOLDERS OF COMMON STOCK OF ST. FRANCIS CAPITAL CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Annual Meeting") of St. Francis Capital Corporation (the "Company") will be
held on Wednesday, January 22, 1997, at 4:00 p.m., Milwaukee time, at the
Midway Hotel Airport, 5105 S. Howell Avenue, Milwaukee, Wisconsin.
The Annual Meeting is for the purpose of considering and voting upon
the following matters, all of which are set forth more completely in the
accompanying Proxy Statement:
1. The election of three directors each for three-year
terms, and in each case until their successors are
elected and qualified;
2. The approval of the St. Francis Capital Corporation
1997 Stock Option Plan;
3. The ratification of the appointment of KPMG Peat
Marwick LLP as independent auditors of the Company
for the fiscal year ending September 30, 1997; and
4. Such other matters as may properly come before the
Annual Meeting or any adjournments or postponements
thereof. The Board of Directors is not aware of any
other such business.
The Board of Directors has established December 1, 1996 as the record
date for the determination of shareholders entitled to notice of and to vote at
the Annual Meeting and any adjournments or postponements thereof. Only
shareholders of record as of the close of business on that date will be
entitled to vote at the Annual Meeting or any adjournments or postponements
thereof. In the event there are not sufficient votes for a quorum or to
approve or ratify any of the foregoing proposals at the time of the Annual
Meeting, the Annual Meeting may be adjourned or postponed in order to permit
further solicitation of proxies by the Company.
BY ORDER OF THE BOARD OF DIRECTORS
Milwaukee, Wisconsin Brian T. Kaye
December 16, 1996 Secretary
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. WHETHER OR NOT YOU
PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN, DATE AND RETURN THE
ENCLOSED PROXY PROMPTLY IN THE ENVELOPE PROVIDED.
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St. Francis Capital Corporation [LOGO]
3545 SOUTH KINNICKINNIC AVENUE
MILWAUKEE, WISCONSIN 53235
(414) 744-8600
_____________________________________
PROXY STATEMENT
_______________________________
ANNUAL MEETING OF SHAREHOLDERS
To Be Held On January 22, 1997
______________________________________________
This Proxy Statement is being furnished to holders of common stock,
$0.01 par value per share (the "Common Stock") of St. Francis Capital
Corporation (the "Company") in connection with the solicitation on behalf of
the Board of Directors of the Company of proxies to be used at the Annual
Meeting of Shareholders (the "Annual Meeting") to be held on Wednesday, January
22, 1997, at 4:00 p.m., Milwaukee time, at the Midway Hotel Airport, 5105 S.
Howell Avenue, Milwaukee, Wisconsin and at any adjournments or postponements
thereof.
The 1996 Summary Annual Report and the Company's Form 10-K Annual
Report, including the Company's consolidated financial statements for the
fiscal year ended September 30, 1996, accompany this Proxy Statement and
appointment form of proxy (the "proxy"), which are being mailed to shareholders
on or about December 16, 1996.
Only shareholders of record at the close of business on December 1,
1996 (the "Voting Record Date") will be entitled to vote at the Annual Meeting.
On the Voting Record Date, there were 5,371,064 shares of Common Stock
outstanding and the Company had no other class of securities outstanding.
The presence, in person or by proxy, of the holders of at least a
majority of the total number of shares of Common Stock entitled to vote is
necessary to constitute a quorum at the Annual Meeting. As to the election of
directors, the proxy being provided by the Board of Directors enables a
shareholder to vote for the election of the nominees proposed by the Board, or
to withhold authority to vote for one or more of the nominees being proposed.
Article VI of the Company's Articles of Incorporation provides that there will
be no cumulative voting by shareholders for the election of the Company's
directors. Under the Wisconsin Business Corporation Law, directors are elected
by a plurality of the votes cast with a quorum present. The affirmative vote
of at least a majority of the shares of Common Stock represented in person or
by proxy at the Annual Meeting is necessary to approve the St. Francis Capital
Corporation 1997 Stock Option Plan (the "1997 Stock Option Plan"). The
affirmative vote of a majority of the total votes cast in person or by proxy is
necessary to ratify the appointment of KPMG Peat Marwick LLP as auditors for
the fiscal year ending September 30, 1997. Abstentions are included in the
determination of shares present and voting for purposes of whether a quorum
exists, while broker non-votes are not. Neither abstentions nor broker
non-votes are counted in determining whether a matter has been approved. In
the event there are not sufficient votes for a quorum or to approve or ratify
any proposal at the time of the Annual Meeting, the Annual Meeting may be
adjourned or postponed in order to permit the further solicitation of proxies.
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As provided in the Company's Articles of Incorporation, record holders
of Common Stock who beneficially own in excess of 10% of the outstanding shares
of Common Stock (the "10% Limit") are not entitled to any vote in respect of
the shares held in excess of the 10% Limit. A person or entity is deemed to
beneficially own shares owned by an affiliate of, as well as such persons
acting in concert with, such person or entity. The Company's Articles of
Incorporation authorize the Board to make all determinations necessary to
implement and apply the 10% Limit, including determining whatever persons or
entities are acting in concert.
Shareholders are requested to vote by completing the enclosed proxy
and returning it signed and dated in the enclosed postage-paid envelope.
Shareholders are urged to indicate their vote in the spaces provided on the
proxy. Proxies solicited by the Board of Directors of the Company will be
voted in accordance with the directions given therein. Where no instructions
are indicated, signed proxies will be voted FOR the election of each of the
nominees for director named in this Proxy Statement, FOR approval of the 1997
Stock Option Plan and FOR the ratification of the appointment of KPMG Peat
Marwick LLP as independent auditors of the Company for the fiscal year ending
September 30, 1997. Returning your completed proxy form will not prevent you
from voting in person at the Annual Meeting should you be present and wish to
do so.
Any shareholder giving a proxy has the power to revoke it any time
before it is exercised by (i) filing with the Secretary of the Company written
notice thereof (Brian T. Kaye, Secretary, St. Francis Capital Corporation, 3545
South Kinnickinnic Avenue, Milwaukee, Wisconsin 53235); (ii) submitting a
duly-executed proxy bearing a later date; or (iii) appearing at the Annual
Meeting and giving the Secretary notice of his or her intention to vote in
person. If you are a shareholder whose shares are not registered in your own
name, you will need additional documentation from your record holder to vote
personally at the Annual Meeting. Proxies solicited hereby may be exercised
only at the Annual Meeting and any adjournment or postponement thereof and will
not be used for any other meeting.
The cost of solicitation of proxies by mail on behalf of the Board of
Directors will be borne by the Company. The Company has retained D.F. King &
Co., Inc., a professional proxy solicitation firm, to assist in the
solicitation of proxies. D.F. King & Co., Inc. will be paid a fee of $5,000,
plus reimbursement for out-of-pocket expenses. Proxies also may be solicited
by personal interview or by telephone, in addition to the use of the mails by
directors, officers and regular employees of the Company and St. Francis Bank,
F.S.B. ("St. Francis Bank"), without additional compensation therefor. The
Company also has made arrangements with brokerage firms, banks, nominees and
other fiduciaries to forward proxy solicitation materials for shares of Common
Stock held of record by the beneficial owners of such shares. The Company will
reimburse such holders for their reasonable out-of-pocket expenses.
Proxies solicited hereby will be returned to the Board of Directors,
and will be tabulated by inspectors of election designated by the Board of
Directors, who will not be employed by, or a director of, the Company or any of
its affiliates.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the beneficial ownership of shares of
Common Stock as of November 30, 1996 (except as noted otherwise below) by (i)
each shareholder known to the Company to beneficially own more than 5% of the
shares of Common Stock outstanding, as disclosed in certain reports regarding
such ownership filed with the Company and with the Securities and Exchange
Commission (the "SEC"), in accordance with Sections 13(d) or 13(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), (ii) each
director and director nominee of the Company, (iii) each of the executive
officers of the Company appearing in the Summary Compensation Table below, and
(iv) all directors and executive officers as a group.
NUMBER OF SHARES
BENEFICIALLY
NAME OWNED (1) PERCENT OF CLASS*
---- --------- -----------------
Brandes Investment Partners, Incorporated (6) . . . . . . 472,535 8.8%
Neumeier Investment Counsel (7) . . . . . . . . . . . . . 329,400 6.1
St. Francis Bank, F.S.B.
Employee Stock Ownership Trust (5) . . . . . . . . . . 379,473 7.1
John C. Schlosser (2)(3)(4) . . . . . . . . . . . . . . . 133,237 2.5
Thomas R. Perz (2)(3)(4) . . . . . . . . . . . . . . . . 135,441 2.5
David J. Drury . . . . . . . . . . . . . . . . . . . . . 225 **
William F. Double (2) . . . . . . . . . . . . . . . . . 48,841 **
James C. Hazzard (3)(4) . . . . . . . . . . . . . . . . . 3,040 **
Rudolph T. Hoppe (2) . . . . . . . . . . . . . . . . . . 42,625 **
Edward W. Mentzer (2) . . . . . . . . . . . . . . . . . . 55,396 1.0
Jeffrey A. Reigle . . . . . . . . . . . . . . . . . . . . -- --
Edmund O. Templeton (2) . . . . . . . . . . . . . . . . . 75,678 1.4
Brian T. Kaye (2)(3)(4) . . . . . . . . . . . . . . . . . 81,023 1.5
Bruce R. Sherman (2)(3)(4) . . . . . . . . . . . . . . . 80,425 1.5
All directors and executive officers
as a group (16 persons) (2)(3)(4) . . . . . . . . . . . 841,166 14.8%
_____________________________
* As of the Voting Record Date.
** Amount represents less than 1% of the total shares of Common Stock
outstanding.
(1) Unless otherwise indicated, includes shares of Common Stock held
directly by the individuals as well as by members of such individuals'
immediate family who share the same household, shares held in trust
and other indirect forms of ownership over which shares the
individuals effectively exercise sole or shared voting and/or
investment power. Fractional shares of Common Stock held by certain
executive officers under the St. Francis Bank, F.S.B. Employee Stock
Ownership Plan ("ESOP") have been rounded to the nearest whole share.
(2) Includes shares of Common Stock which the named individuals have the
right to acquire within 60 days of the Voting Record Date pursuant to
the exercise of stock options as follows: Mr. Schlosser - 40,000
shares; Mr. Perz - 40,000 shares; Mr. Double - 21,146 shares; Mr.
Hoppe - 13,592 shares; Mr. Mentzer - 27,336 shares; Mr. Templeton -
25,233 shares; Mr. Kaye - 40,000 shares; and Mr. Sherman - 33,644
shares.
(3) Does not include options for shares of Common Stock which do not vest
within 60 days of the Voting Record Date which have been awarded to
executive officers under the St. Francis Capital Corporation 1993
Incentive Stock Option Plan.
(4) Includes shares of Common Stock allocated to certain executive
officers under the ESOP, for which such individuals possess shared
voting power, of which approximately 14,854 have been allocated to the
accounts of the named executive officers in the Summary Compensation
Table as follows: Mr. Schlosser - 3,941; Mr. Perz - 3,581; Mr. Kaye -
3,356; Mr. Sherman - 3,186 and Mr. Hazzard-790.
(5) First Bank Milwaukee, N.A. ("Trustee") is the trustee for the St.
Francis Bank, F.S.B. Employee Stock Ownership Trust. The Trustee's
address is 201 West Wisconsin Avenue, Milwaukee, Wisconsin 53202.
(6) Based upon Amendment No. 2 to a Schedule 13G, dated February 12, 1996,
filed with the Company pursuant to the Exchange Act by Brandes
Investment Partners, Incorporated, an investment advisor, located at
12750 High Bluff Drive, Suite 420, San Diego, California 92130.
(7) Based upon Amendment No. 1 to a Schedule 13G, dated February 2, 1996,
filed with the Company pursuant to the Exchange Act by Neumeier
Investment Counsel, an investment advisor, located at 26435 Carmel
Rancho Blvd., Carmel, California 93923.
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MATTERS TO BE VOTED ON AT THE ANNUAL MEETING
MATTER 1.
ELECTION OF DIRECTORS
Pursuant to the Articles of Incorporation of the Company, at the first
annual meeting of shareholders of the Company held on January 26, 1994,
directors of the Company were divided into three classes as equal in number as
possible. Directors of the first class were elected to hold office for a term
expiring at the first succeeding annual meeting, directors of the second class
were elected to hold office for a term expiring at the second succeeding annual
meeting and directors of the third class were elected to hold office for a term
expiring at the third succeeding annual meeting, and in each case until their
successors are elected and qualified. At each subsequent annual meeting of
shareholders, one class of directors, or approximately one-third of the total
number of directors, are to be elected for a term of three years. There are no
family relationships among any of the directors and/or executive officers of
the Company. No person being nominated as a director is being proposed for
election pursuant to any agreement or understanding between any person and the
Company.
Unless otherwise directed, each proxy executed and returned by a
shareholder will be voted FOR the election of the nominees for director listed
below. If any person named as nominee should be unable or unwilling to stand
for election at the time of the Annual Meeting, the proxies will nominate and
vote for any replacement nominee or nominees recommended by the Board of
Directors. At this time, the Board of Directors knows of no reason why any of
the nominees listed below may not be able to serve as a director if elected.
The following tables present information concerning the nominees for
director and continuing directors. All of the following nominees have served as
a director the Company since the Company's formation in December 1992, except
director David J. Drury who was elected by shareholders at the Company's annual
meeting of shareholders held in January 1996 and director nominee Jeffrey A.
Reigle.
Position with the Company Director of Director of
and Principal Occupation St. Francis Bank Wisconsin
Name Age During the Past Five Years Bank Since Since
---- --- -------------------------- ---------- -----
NOMINEES FOR DIRECTOR FOR THREE-YEAR TERMS EXPIRING IN 2000
Jeffrey A. Reigle 45 Director of Bank Wisconsin, the -- 1994
Company's wholly-owned state-
chartered bank subsidiary;
Since 1992, President and Chief
Executive Officer of Regal
Ware, Inc., a privately held
manufacturer of utensils and
electrical appliances, located
in Kewaskum, Wisconsin; From
1989-1991, Executive Vice
President-Housewares of Regal
Ware, Inc.
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Position with the Company Director of Director of
and Principal Occupation St. Francis Bank Wisconsin
Name Age During the Past Five Years Bank Since Since
---- --- -------------------------- ---------- -----
John C. Schlosser 68 Director, President, Chief 1978 1994
Executive Officer and Chairman
of the Board of the Company;
Chairman of the Board of St.
Francis Bank; Director of Bank
Wisconsin.
Edmund O. Templeton 53 Director of the Company and St. 1990 --
Francis Bank; Since 1969,
President, Pilot Systems, Inc.,
a privately held company that
sells, develops and services a
variety of computer software
programs for medium-sized
manufacturing companies,
located in Brookfield,
Wisconsin.
INFORMATION WITH RESPECT TO CONTINUING DIRECTORS
DIRECTORS WHOSE TERMS EXPIRE IN 1998
William F. Double 86 Director of the Company and St. 1987 --
Francis Bank; Prior to
retirement, from 1976 to 1987,
partner in the law firm of
Double & Double, General
Counsel to St. Francis Bank.
Edward W. Mentzer 60 Director of the Company, St. 1982 1996
Francis Bank and Bank
Wisconsin; Since 1995, Chairman
of the Board of Plastic
Engineered Components Inc., a
privately held plastic
injection molded products
manufacturer, located in
Waukesha, Wisconsin; From 1992
to 1995, President, and from
1989 to 1992, Chief Executive
Officer of Plastic Engineered
Components Inc.
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Position with the Company Director of Director of
and Principal Occupation St. Francis Bank Wisconsin
Name Age During the Past Five Years Bank Since Since
---- --- -------------------------- ---------- -----
Rudolph T. Hoppe 70 Director of the Company and St. 1980 --
Francis Bank; Prior to
retirement, from 1965 to 1990,
President of Glenora Company,
an accounting, tax and
investment services firm,
located in Milwaukee,
Wisconsin; Director, Plexus
Corporation, a publicly traded
electronic products
manufacturing and design
company, located in Neenah,
Wisconsin.
Thomas R. Perz 52 Director and Vice President of 1983
the Company; Director, 1994
President and Chief Executive
Officer of St. Francis Bank;
Director of Bank Wisconsin.
David J. Drury 48 Director of the Company; Since -- --
1994, President, Stolper-
Fabralloy Company LLC, a
privately held manufacturer of
turbomachinery components,
located in Brookfield,
Wisconsin; From 1989-1993,
Executive Vice President,
Oldenburg Group, Inc., an
industrial holding company,
located in Milwaukee,
Wisconsin; Since 1989, director
of Jason, Inc., a publicly held
manufacturer of automotive
trim, finishing, power
generation and industrial
products, located in Milwaukee,
Wisconsin.
The affirmative vote of a plurality of the votes cast is required for
the election of directors. Unless otherwise specified, the shares of Common
Stock represented by the proxies solicited hereby will be voted in favor of the
election of the above-described nominees. The Board of Directors recommends
that you vote FOR election of the nominees for director.
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MATTER 2.
APPROVAL OF THE
ST. FRANCIS CAPITAL CORPORATION
1997 STOCK OPTION PLAN
The Board of Directors of the Company proposes for consideration and
approval by the Company's shareholders the St. Francis Capital Corporation 1997
Stock Option Plan (the "1997 Stock Option Plan"). Absent shareholder approval,
the 1997 Stock Option Plan will not be effective and no grants of options to
purchase shares of Common Stock will be made thereunder. Shareholder approval
of the 1997 Stock Option Plan will qualify the 1997 Stock Option Plan for
granting Incentive Stock Options under Section 422 of the Internal Revenue Code
of 1986, as amended (the "Internal Revenue Code"), and is a non-quantitative
listing requirement under the By-laws of the National Association of Securities
Dealers, Inc. ("NASD") which is applicable to all issuers, including the
Company, whose shares are traded on the NASDAQ National Market System.
PURPOSE OF THE 1997 STOCK OPTION PLAN
In connection with the conversion of St. Francis Bank from mutual to
stock form and the issuance of the Common Stock in connection therewith in 1993
(the "Conversion"), the Board of Directors adopted two stock option plans, the
St. Francis Capital Corporation 1993 Stock Option Plan for Outside Directors
of the Company and its Affiliates (the "Directors' Plan") and the St. Francis
Capital Corporation 1993 Incentive Stock Option Plan (the "Incentive Stock
Option Plan"), which authorized in the aggregate options to purchase 140,185
and 560,740 shares of Common Stock, respectively. The Directors' Plan and
Incentive Stock Option Plan were approved by the Company's shareholders at a
Special Meeting of Shareholders held on September 15, 1993. In connection with
the Conversion, options to purchase 140,185 shares of Common Stock were granted
to directors of the Company under the Directors' Plan and options to purchase
391,198 shares of Common Stock were granted to officers of the Company under
the Incentive Stock Option Plan. With the exception of options to purchase
8,500 shares of Common Stock granted to Mr. James C. Hazzard in connection with
his retention as President and Chief Executive Officer of Bank Wisconsin in
fiscal 1995, no additional option grants have been made to directors, executive
officers or employees of the Company or its subsidiaries. No options remain
available for future grant under the Directors' Plan and options to purchase
167,441 shares of Common Stock remain available for future grant under the
Incentive Stock Option Plan.
In November 1996, at the direction of the Board of Directors of the
Company, the Compensation Committee of the Board of Directors of the Company
reviewed the scope and adequacy of Company's current stock-based compensation
plans with the long-term objective of increasing the stock-based components of
total compensation paid to directors, officers and employees of the Company and
its subsidiaries. The Board of Directors believes that increasing the
stock-based components of total compensation serves to further align the
interests of the Company's directors, officers and employees and its
shareholders. Based upon such review, the Compensation Committee recommended,
and the Board of Directors approved, the proposed 1997 Stock Option Plan as a
method of increasing the stock-based components of total compensation and
providing an adequate reserve of options for additional corporate purposes such
as retaining existing directors, officers and employees, recruiting future
directors and officers, and for issuances in connection with potential
strategic acquisitions.
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ELIGIBILITY, TYPE OF OPTION GRANTS AND SHARES SUBJECT TO PLAN
Under the proposed 1997 Stock Option Plan, all directors, officers and
employees of the Company and its subsidiaries are eligible to participate. As
of December 1, 1996, the Company had 368 directors, officers and employees
eligible to participate in the 1997 Stock Option Plan. The 1997 Stock Option
Plan authorizes the grant of (i) options to purchase shares of Common Stock
intended to qualify as incentive stock options under Section 422 of the
Internal Revenue Code ("Incentive Stock Options"); and (ii) options that do not
so qualify ("Non-Statutory Options"). If approved by shareholders, under the
1997 Stock Option Plan, options for a total of 220,000 shares of Common Stock,
or approximately 4.0% of the number of shares of Common Stock outstanding on
the Voting Record Date, will be made available for granting to eligible
participants. The Company currently has no plans to grant options under the
1997 Stock Option Plan and would not have granted options under the 1997 Stock
Option Plan if such plan had been in effect in fiscal 1996.
The shares of Common Stock to be issued by the Company upon the
exercise of options by optionees may be acquired either through open market
purchases by the Company, or issued from authorized but unissued shares of
Common Stock. If additional authorized but unissued shares of Common Stock are
issued upon the exercise of options, the interests of existing shareholders
will be diluted.
ADMINISTRATION
The proposed 1997 Stock Option Plan will be administered jointly by
the Board of Directors of the Company and the Compensation Committee of the
Board of Directors of the Company. The Compensation Committee will consist
solely of "non-employee directors" as that term is defined under Rule 16b-3
promulgated by the SEC under the Exchange Act and "outside directors" as that
term is defined under applicable regulations issued by the Internal Revenue
Service under the Internal Revenue Code. The Board of Directors shall make
the following determinations with respect to grants to outside directors and
the Compensation Committee shall make the following determinations with respect
to grants to eligible participants other than outside directors: (i) the
persons to whom options are granted; (ii) the terms at which options are to be
granted; (iii) the number of shares of Common Stock subject to an individual
grant; (iv) the vesting schedule applicable to individual grants; and (v) the
expiration date of the option (which shall not be later than ten years from the
date the option is granted). The exercise price may be paid in cash or shares
of Common Stock and shall be the fair market value (as defined in the 1997
Stock Option Plan) of the Common Stock on the date of grant or such greater
amount as determined by the Compensation Committee with respect to grants to
eligible participants other than outside directors, and by the Board of
Directors with respect to grants to outside directors.
TERMS AND CONDITIONS OF OPTION GRANTS
Options granted under the 1997 Stock Option Plan are subject to
certain terms and conditions as described herein. Of the total number of
shares of Common Stock available for grant under the 1997 Stock Option Plan, a
participant may not be granted options to purchase more than 50,000 shares of
Common Stock in any period of three calendar years.
The aggregate fair market value of shares of Common Stock with respect
to which Incentive Stock Options may be granted to an eligible participant
which are exercisable for the first time in any calendar year may not exceed
$100,000. Any option granted in excess of such amount shall be treated as a
Non-Statutory Option. Incentive Stock Options granted to any person who is the
beneficial owner of more than 10% of the outstanding shares of Common Stock may
be exercised only for a period of five years following the date of grant and
the exercise price at the time of grant must be equal to at least 110% of the
fair market value of the Common Stock on the date of the grant.
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No option granted under the 1997 Stock Option Plan will be exercisable
after three months after the date on which the optionee ceases to perform
services for the Company, except that in the event of death, retirement or
disability, all options, whether or not exercisable at such time, may be
exercisable for up to one year thereafter or such longer period as determined by
the Compensation Committee of the Company. Options held by employees terminated
for cause will terminate on the date of termination. Termination "for cause"
includes termination due to personal dishonesty, incompetence, willful
misconduct, the intentional failure to perform stated duties, breach of
fiduciary duty involving personal dishonesty, willful violations of law, the
entry of a final cease and desist order or the material breach of any provisions
of an employee's employment contract.
In the event of a Change of Control of the Company, all Incentive Stock
Options and Non-Statutory Options, whether or not exercisable at such time,
shall become immediately exercisable. If a participant is terminated due to
such Change of Control, all options shall be exercisable for a period of one
year following such Change of Control, or such longer period as determined by
the Compensation Committee; provided that in no event shall the period extend
beyond the option term and in the case of Incentive Stock Options, such options
shall not be eligible for treatment as Incentive Stock Options if exercised more
than three months following the date of a participant's cessation of employment.
"Change of Control" is defined to mean a change of control of a nature that: (i)
would be required to be reported to the SEC by the Company in a current report
on Form 8-K; or (ii) results in a change in control of St. Francis Bank or the
Company within the meaning of the Home Owners Loan Act of 1933 and the rules and
regulations promulgated by the Office of Thrift Supervision (or its predecessor
agency) (the "OTS"). In addition, under the 1997 Stock Option Plan, a Change of
Control shall be deemed to have occurred at such time as (i) 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 Company or its subsidiaries
representing 25% or more of such entities' outstanding voting securities; (ii)
individuals who constitute the current Board of Directors of the Company (the
"Incumbent Board"), cease for any reason to constitute at least a majority
thereof, provided that any person becoming a director subsequent to the
effective date of the 1997 Stock Option Plan 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 Company's shareholders was approved by
the same Nominating Committee serving under an Incumbent Board, shall be
considered as a member of the Incumbent Board; or (iii) a plan of
reorganization, merger, consolidation, sale of all or substantially all the
assets of the Company or similar transaction in which the Company is not the
surviving institution; or (iv) any change of control of the Company instituted
by an entity or individual other than current management of the Company.
In the event of a participant's termination of employment, the Company, if
requested by the participant, may elect to pay the participant, or beneficiary
in the event of death, in exchange for cancellation of the option, the amount by
which the fair market value of the Common Stock exceeds the exercise price of
the option on the date of the participant's termination of employment.
Incentive Stock Options may be transferred only by will or the laws of
descent and distribution. Non-Statutory Options may be transferred by
participants pursuant to the laws of descent and distribution and during a
participant's lifetime by participants to members of their "immediate family"
(as defined in the 1997 Stock Option Plan), trusts for the benefit of members of
their immediate family and charitable institutions to the extent permitted under
Section 16 of the Exchange Act and subject to federal and state securities laws.
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13
FEDERAL INCOME TAX TREATMENT
An optionee will not be deemed to have received taxable income upon
the grant or exercise of an Incentive Stock Option, provided that such shares
of Common Stock are held for at least one year after the date of exercise and
two years after the date of grant. No gain or loss will be recognized by the
Company as a result of the grant or exercise of Incentive Stock Options. An
optionee will be deemed to receive ordinary income upon exercise of
Non-Statutory Options in an amount equal to the amount by which the fair market
value of the Common Stock on the exercise date exceeds the exercise price. The
amount of any ordinary income deemed to be received by an optionee due to a
premature disposition of the shares of Common Stock acquired upon the exercise
of an Incentive Stock Option or upon the exercise of a Non-Statutory Option
will be deductible expense for tax purposes for the Company. At this time,
generally accepted accounting principles ("GAAP") do not require compensation
expense to be recorded for any options granted for which the exercise price
equals the market value on the date of grant. When options are exercised, the
net proceeds received by the Company will be recorded as an increase in Common
Stock and paid-in capital.
ADJUSTMENTS IN THE EVENT OF CAPITAL CHANGES
In the event the number of shares of Common Stock are increased or
decreased or changed into or exchanged for a different number or kind of shares
of stock or other securities of the Company by reason of any stock dividend or
split, recapitalization, merger, consolidation, spin-off, reorganization,
combination or exchange of shares, or other similar corporate change, or other
increase or decrease in such shares without receipt or payment of consideration
by the Company, the following appropriate adjustments may be made to prevent
dilution or enlargement of the rights of participants, including any or all of
the following: (i) adjustments in the aggregate number or kind of shares of
Common Stock which may be awarded; (ii) adjustments in the aggregate number or
kind of shares of Common Stock covered by outstanding option grants; and (iii)
adjustments in the purchase price of outstanding option grants. No such
adjustments may, however, materially change the value of benefits available to
participants under a previously granted award.
DURATION AND AMENDMENT OF 1997 STOCK OPTION PLAN
No options will be awarded under the 1997 Stock Option Plan following
the tenth anniversary of approval of the 1997 Stock Option Plan by shareholders
of the Company.
The Board of Directors of the Company may amend the 1997 Stock Option
Plan in any respect; provided, however, that certain provisions governing the
terms of Incentive Stock Option and Non-Statutory Option grants shall not be
amended more than once every six months to comport with the Internal Revenue
Code or the Employee Retirement Income Security Act of 1974, as amended, if
applicable. In addition, the Board of Directors may determine that shareholder
approval of any amendment to the 1997 Stock Option Plan may be advisable for
any reason, including but not limited to, for the purpose of obtaining or
retaining any statutory or regulatory benefits under tax, securities or other
laws or satisfying applicable stock exchange listing requirements.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES OF COMMON STOCK
REPRESENTED IN PERSON OR BY PROXY AND VOTED AT THE ANNUAL MEETING IS REQUIRED
FOR APPROVAL OF THE 1997 STOCK OPTION PLAN. UNLESS MARKED TO THE CONTRARY, THE
SHARES OF COMMON STOCK REPRESENTED BY THE ENCLOSED PROXY WILL BE VOTED FOR
APPROVAL OF THE 1997 STOCK OPTION PLAN. THE BOARD OF DIRECTORS RECOMMENDS THAT
YOU VOTE FOR APPROVAL OF THE 1997 STOCK OPTION PLAN.
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14
MATTER 3.
RATIFICATION OF APPOINTMENT OF AUDITORS
The Company's independent auditors for the fiscal year ended September
30, 1996 were KPMG Peat Marwick LLP. The Board of Directors of the Company has
reappointed KPMG Peat Marwick LLP to perform the audit of the Company's
financial statements for the year ending September 30, 1997. Representatives
of KPMG Peat Marwick LLP will be present at the Annual Meeting and will be
given the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions from the Company's shareholders.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES OF COMMON STOCK
REPRESENTED IN PERSON OR BY PROXY AND VOTED AT THE ANNUAL MEETING IS REQUIRED
FOR RATIFICATION OF KPMG PEAT MARWICK LLP AS INDEPENDENT AUDITORS OF THE
COMPANY. UNLESS MARKED TO THE CONTRARY, THE SHARES OF COMMON STOCK REPRESENTED
BY THE ENCLOSED PROXY WILL BE VOTED FOR RATIFICATION OF THE APPOINTMENT OF KPMG
PEAT MARWICK LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF KPMG PEAT
MARWICK LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY.
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
Regular meetings of the Board of Directors of the Company are held
eight times per year. During the fiscal year ended September 30, 1996, the
Board of Directors of the Company held eight regular meetings and one special
meeting. No incumbent director attended fewer than 75% of the aggregate total
number of meetings of the Board of Directors held and the total number of
committee meetings on which such director served during the fiscal year ended
September 30, 1996.
In fiscal 1996, the Audit Committee of the Company consisted of the
same three directors, Messrs. Rudolph T. Hoppe, Edward W. Mentzer and Edmund
O. Templeton, who are neither officers nor employees of the Company or its
subsidiaries ("Outside Directors"). In March 1996, the composition of the
Audit Committee was changed to include all Outside Directors of the Company,
including Messrs. Double, Drury, Hoppe, Mentzer and Templeton. The Audit
Committee reviews the scope and timing of the audit of the Company's financial
statements by the Company's independent public accountants and reviews with the
independent public accountants the Company's management policies and procedures
with respect to auditing and accounting controls. The Audit Committee also
reviews and evaluates the independence of the Company's accountants, approves
services rendered by such accountants and recommends to the Board the
engagement, continuation or discharge of the Company's accountants. The
Company's Audit Committee met four times during the fiscal year ended September
30, 1996.
Through February 1996, the Compensation Committee of the Board of
Directors of the Company consisted of Outside Directors, Messrs. Mentzer and
Templeton. In March 1996, the composition of the Compensation Committee was
changed to include all Outside Directors of the Company, including Messrs.
Double, Drury, Hoppe, Mentzer and Templeton. During the fiscal year ended
September 30, 1996, the Company did not pay separate compensation to its
executive officers and did not have any salaried employees. However, pursuant
to an agreement between the Company and St. Francis Bank, the Company
reimburses St. Francis Bank for the services of St. Francis Bank's officers and
employees for time devoted to Company affairs. In fiscal 1996, the
Compensation Committee of the Company reviewed and ratified the compensation
policies set by, and decisions made by, the Board of Directors of St. Francis
Bank and the Board of Directors of Bank Wisconsin.
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15
The Compensation Committee of the Company met four times during the fiscal
year ended September 30, 1996. In November 1996, the Compensation Committee of
the Company met to issue the Compensation Committee Report which appears in this
Proxy Statement. In fiscal 1997, executive compensation policies and programs
will be made and/or ratified by the Compensation Committee of the Company, which
will consider the recommendations of the Board of Directors of each of the
subsidiary banks. For a further discussion of the compensation policies of the
Company, see "Compensation Committee Report."
The entire Board of Directors of the Company acted as a Nominating
Committee for the selection of nominees for directors to stand for election at
the Annual Meeting. In October and December 1996, the Board, acting as the
Nominating Committee, considered nominations for directors. The Company's
By-laws allow for shareholder nominations of the directors and require such
nominations be made pursuant to timely notice in writing to the Secretary of the
Company. See "Shareholder Proposals for the 1998 Annual Meeting."
COMPENSATION COMMITTEE REPORT
COMPENSATION COMMITTEE
Through February 1996, the Compensation Committee of the Board of Directors
of the Company consisted of Outside Directors, Messrs. Mentzer and Templeton. In
March 1996, the composition of the Compensation Committee was changed to include
all Outside Directors of the Company, including Messrs. Double, Drury, Hoppe,
Mentzer and Templeton. During the fiscal year ended September 30, 1996, the
Company did not pay separate compensation to its executive officers and did not
have any salaried employees. However, pursuant to an agreement between the
Company and St. Francis Bank, the Company reimburses St. Francis Bank for the
services of St. Francis Bank's officers and employees for time devoted to
Company affairs. In fiscal 1996, the Compensation Committee of the Company
reviewed and ratified the compensation policies set by, and decisions made by,
the Board of Directors of St. Francis Bank and the Board of Directors of Bank
Wisconsin. In November 1996, the Compensation Committee of the Company met to
issue this Compensation Committee Report.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Through February 1996, the Compensation Committee was composed of two
Outside Directors, Messrs. Mentzer and Templeton, who are not former officers
or employees of the Company or any of its subsidiaries. In March 1996, the
Compensation Committee was composed of all Outside Directors. There are no
interlocks, as defined under the rules and regulations of the SEC, between the
Compensation Committee and corporate affiliates of members of the Compensation
Committee.
COMPENSATION COMMITTEE REPORT
Under rules established by the SEC, the Company is required to provide
certain data and information regarding the compensation and benefits provided to
the Company's Chief Executive Officer and certain other executive officers of
the Company. The rules require compensation disclosure in the form of tables
and a report of the Compensation Committee which explains the rationale and
considerations that led to fundamental compensation decisions affecting such
individuals. The Compensation Committee has prepared the following report, at
the direction of the Board of Directors of the Company, for inclusion in this
Proxy Statement.
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16
I. EXECUTIVE COMPENSATION POLICY
It is the policy of the Company and its subsidiary banks to maintain
an executive compensation program which will attract, motivate, retain and
reward senior executives and provide appropriate incentives intended to
generate long-term financial results which will benefit the Company, St.
Francis Bank and Bank Wisconsin, and shareholders of the Company. The
Company's executive compensation program incorporates a pay-for-performance
policy that compensates executives for both corporate and individual
performance. The executive compensation program is designed to achieve the
following objectives:
- Provide competitive compensation packages comparable to those
offered by other peer group financial institutions;
- Provide the Company and the subsidiary banks with the ability
to compete for and retain talented executives that are
critical to the Company's long-term success; and
- Provide incentives to achieve the Company's financial
performance objectives and exceptional individual performance
with the goal of enhancing shareholder value.
The executive compensation package consists of three major components:
(i) cash compensation, including base salary and an annual incentive bonus;
(ii) long-term incentive compensation in the form of stock options awarded
under the St. Francis Capital Corporation 1993 Incentive Stock Option Plan; and
(iii) executive benefits.
II. COMPENSATION DECISIONS FOR FISCAL 1996
In fiscal 1995, St. Francis Bank retained an independent compensation
consultant to review the salary levels, incentive program and individual
performance goals for executive officers of St. Francis Bank. The compensation
consultant's analysis included a review of senior officer salary studies and
surveys prepared by national and state trade associations, together with
available competitive compensation data. The consultant made specific
recommendations regarding adjustments to the salary levels of St. Francis Bank
executive officers as well as adjustments to the incentive compensation targets
for fiscal 1995 and 1996. These recommendations included proposed revisions to
the incentive compensation programs maintained by the Company's subsidiary
banks designed to ensure that incentives are based upon factors over which the
participants have direct influence and control, and are tied to longer-term
corporate performance. In reviewing and approving compensation decisions for
fiscal 1995, 1996 and 1997, the Compensation Committee has, and intends to,
consider the guidelines and recommendations of the independent compensation
consultant.
During fiscal 1996, the Board of Directors of St. Francis Bank
modified the existing Incentive Compensation Program ("SFB-ICP") pursuant to
which executive officers of St. Francis Bank receive cash incentive
remuneration. Under the modified SFB-ICP, executive officers earn their
targeted incentive compensation based on St. Francis Bank achieving a target
level of net income (excluding gains on the sale of securities) for the fiscal
year and based upon participants achieving certain individual performance goals
established at the beginning of each fiscal year. Previously, the SFB- ICP
provided for payment of incentive compensation based upon target levels of net
income, coupled with achievement of individual performance objectives. The
Board of Directors of St. Francis Bank decided to modify the SFB-ICP parameter
in fiscal 1996 based upon the recommendations of the independent compensation
consultant that incentives should be based upon factors over which SFB-ICP
participants have direct influence and control. The Company intends to further
modify its incentive programs for fiscal 1997 in pursuit of this objective as
discussed further herein. Incentive compensation earned under the SFB-ICP is
established as a percentage of each officer's base salary. Incentive
compensation may exceed established percentages of base salaries
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17
if St. Francis Bank surpasses the target level of net income (excluding gains
on the sale of securities) and individual performance objectives are met, or
may be less than the established percentages if St. Francis Bank does not
achieve the target net income level and individual performance objectives are
not met. The SFB-ICP provides for a target of 35% of base salary for St.
Francis Bank's President (Mr. Perz), a target of 30% of base salary for members
of St. Francis Bank's Investment Committee (Messrs. Kaye, Sherman and Sorenson)
and targets of 25% and 20% for other Senior Vice Presidents of St. Francis
Bank. The target net income level for St. Francis Bank is reviewed and
established annually by the Board of Directors of St. Francis Bank and may vary
from year to year, as may the specifics of the SFB-ICP. St. Francis Bank did
not achieve the net income target established for fiscal 1996, and therefore,
executive officers of St. Francis Bank will earn incentive compensation at
levels less than the target SFB-ICP levels. The aggregate pay-out under the
SFB-ICP for fiscal 1996 was $197,704. The average bonus earned under the
SFB-ICP in fiscal 1996 by participants (other than Mr. Perz) was 17% of their
base salaries compared to 31% in fiscal 1995.
During fiscal 1996, the Bank Wisconsin Incentive Compensation Program
(the "BW-ICP") was modified and redefined to include several executive officers
of Bank Wisconsin in addition to James C. Hazzard, President of Bank Wisconsin.
The BW-ICP provides for payment of cash incentive compensation as a percentage
of base salary based upon Bank Wisconsin achieving various levels of net income
and based upon participants achieving certain individual performance goals
established at the beginning of each fiscal year, and operates in a similar
manner as the SFB-ICP. The BW-ICP provides for a target of 25% of base salary
for Mr. Hazzard and lesser percentages of base salary for other participants.
Bank Wisconsin exceeded its net income target established for fiscal 1996, and
therefore, executive officers of Bank Wisconsin will earn incentive
compensation in excess of the target BW-ICP levels. The aggregate pay-out
under the BW- ICP was $63,500 for fiscal 1996. The average bonus earned under
the BW-ICP in fiscal 1996 by Bank Wisconsin's executive officers (other than
Mr. Hazzard) was 8% of their base salaries. Mr. Hazzard earned ICP
remuneration equal to $35,000 for fiscal 1996, or 35% of his $105,000 base
salary.
Remuneration earned under the SFB-ICP and BW-ICP for the fiscal year
ended September 30, 1996 will be paid by St. Francis Bank and Bank Wisconsin in
January 1997.
Senior officers of St. Francis Bank were awarded stock options during
the fiscal year ended September 30, 1993 in connection with the conversion of
St. Francis Bank from a federally-chartered mutual savings bank to a
federally-chartered state savings bank which was consummated in June 1993 (the
"Conversion") under the Incentive Stock Option Plan. Mr. Hazzard was granted
stock options in fiscal 1995 in connection with his retention as President of
Bank Wisconsin. No stock options were awarded to executive officers under the
Incentive Stock Option Plan during the fiscal year ended September 30, 1996.
Executive benefits paid by St. Francis Bank and Bank Wisconsin to its
executive officers were based upon each officer's contribution to the success
of the subsidiary bank and reflected each officer's position, salary and
specific responsibilities. Executive compensation and benefit plans applicable
to officers and directors of the subsidiary banks vary. For a further
discussion of the executive benefits made available to officers of the
subsidiary banks during the fiscal year ended September 30, 1996, see
"Compensation of Executive Officers and Directors - Benefits."
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Stock options awarded to executive officers of St. Francis Bank during
the fiscal year ended September 30, 1993 in connection with the Conversion and
to Mr. Hazzard in connection with his retention as President of Bank Wisconsin
in fiscal 1995, and executive benefits paid during the fiscal year ended
September 30, 1996 were intended to promote the interests of St. Francis Bank,
Bank Wisconsin and the Company and its shareholders by enabling the subsidiary
banks to retain qualified management by providing competitive financial
incentives.
III. PRESIDENT AND CHIEF EXECUTIVE OFFICER COMPENSATION IN FISCAL 1996
Effective October 1, 1995, John C. Schlosser relinquished his
responsibilities as Chief Executive Officer of St. Francis Bank, and Thomas R.
Perz was named Chief Executive Officer. Mr. Schlosser continued as Chairman of
the Board of Directors of St. Francis Bank in fiscal 1996, and his base salary
(excluding amounts deferred under certain deferred compensation agreements with
St. Francis Bank) for fiscal 1996 remained the same as for fiscal 1995
($287,955), except that effective October 1, 1995, Mr. Schlosser was no longer
eligible to participate in the SFB-ICP. In addition, during fiscal 1996, Mr.
Schlosser continued to serve as President, Chief Executive Officer and Chairman
of the Board of Directors of the Company.
Following the 1997 Annual Meeting of Shareholders, Mr. Schlosser's
responsibilities and remuneration will be reduced as Mr. Schlosser will
relinquish his position as President and Chief Executive Officer of the Company
and all regular administrative activities for the Company. Mr. Perz will
succeed Mr. Schlosser as President and Chief Executive Officer of the Company.
Mr. Schlosser will continue as Chairman of the Board of Directors of the
Company and will further serve the Company and its President in a consultive
role and on special projects. Effective February 1, 1997, he will receive a
base salary of $150,000 per year under a contract extending until January 1999.
In establishing the compensation of Messrs. Schlosser and Perz, the
Compensation Committee specifically considered St. Francis Bank's overall
operating performance and compared St. Francis Bank's operating results to
other thrifts headquartered in Wisconsin. The Compensation Committee also
considered the individual performance of Messrs. Schlosser and Perz and the
revised responsibilities of such individuals during fiscal 1996, including
their individual performance and ability to develop, train and motivate a
competent management team and to execute the directives of the Board, as well
as to manage St. Francis Bank and the Company in a profitable, safe and sound
manner.
Mr. Perz's base salary (excluding ICP remuneration) for the fiscal
year ended September 30, 1996 remained at $224,448 (excluding amounts deferred
under his deferred compensation agreement with St. Francis Bank). Mr. Perz's
targeted ICP remuneration was set at 35% of base salary. St. Francis Bank did
not meet the net income target established by the Board of Directors for fiscal
1996 under the SFB-ICP, and therefore, Mr. Perz will receive incentive
compensation equal to $53,127 for fiscal 1996 under the SFB-ICP, or 23.7% of
his $224,448 base salary established at the beginning of fiscal 1996.
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IV. MODIFICATIONS TO COMPENSATION PROGRAMS IN FISCAL 1997
In fiscal 1997, executive compensation policies and programs will be made
and/or ratified by the Compensation Committee of the Company which will consider
the recommendations of the Board of Directors of each of the subsidiary banks.
Based upon the recommendations of the independent compensation consultant
retained by St. Francis Bank in 1995 and the Compensation Committee's objective
to tie incentive compensation more directly to corporate performance, the
Compensation Committee has approved several additional modifications to its
incentive compensation programs for fiscal 1997. The Company has established an
incentive compensation program for St. Francis Capital Corporation (the
"STFR-ICP") for fiscal 1997 in which certain executive officers of the Company
will participate. Under the STFR-ICP, incentive compensation targets will
include various objective measures of Company-level performance. Individual
incentive compensation will be based upon the Company achieving specific
corporate performance targets applicable to various executive officer groups as
well as achievement of individual performance objectives. The SFB-ICP will
operate as it did in fiscal 1996, except that the corporate performance
indicator will be redefined as net income excluding gains on the sale of
securities and excluding leverage income of St. Francis Bank, and eligible
participants will include only those executive officers of St. Francis Bank who
do not participate in the STFR-ICP. The BW-ICP will remain the same for fiscal
1997.
V. SHAREHOLDER PROPOSAL TO APPROVE 1997 STOCK OPTION PLAN
In order to further promote the best interests of the Company and its
shareholders by providing key officers, employees and directors of the Company
and its subsidiaries with additional incentive to perform in a superior manner,
the Compensation Committee has reviewed and recommends that shareholders approve
the 1997 Stock Option Plan. The Compensation Committee recommends the
establishment of the 1997 Stock Option Plan to recognize the contributions of
both existing and prospective directors, officers and employees of the Company
and its affiliates. The Compensation Committee recognizes that stock options
are a performance-motivating incentive because they have no value unless the
price of the Common Stock increases above the exercise price applicable to
outstanding option grants. In determining whether to grant options under the
proposed 1997 Stock Option Plan, the Board of Directors and the Compensation
Committee, on a subjective basis and within their sole discretion, will review
management recommendations and evaluate the overall financial performance of the
Company and its subsidiaries, or any specific measure of financial performance
thereof. Options may be granted for achievement of both long-term and short-term
corporate performance objectives and also may be based upon an evaluation of
individual contributions to Company and subsidiary performance. The
Compensation Committee intends to grant options based upon review of various
corporate performance criteria, which may include the Company's ability to
improve return on assets, return on equity and efficiency ratio goals, as well
as earnings growth, new product development and growth in net income, deposits,
loans and any other targeted rate of improvement in the operations of the
Company and its subsidiaries.
COMPENSATION COMMITTEE
WILLIAM F. DOUBLE
DAVID J. DRURY
RUDOLPH T. HOPPE
EDWARD W. MENTZER
EDMUND O. TEMPLETON
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COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
EXECUTIVE COMPENSATION
During the fiscal year ended September 30, 1996, the Company did not
pay separate compensation to its executive officers. Separate compensation
will not be paid to the officers of the Company until such time as the officers
of the Company devote significant time to separate management of Company
affairs, which is not expected to occur until the Company becomes actively
involved in additional significant business beyond St. Francis Bank and Bank
Wisconsin. The following table summarizes the total compensation earned by St.
Francis Bank's Chief Executive Officer and the next four highest paid executive
officers of the Company's subsidiaries whose compensation (salary and bonus)
exceeded $100,000 during the Company's fiscal years ended September 30, 1994,
1995 and 1996.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
------------
ANNUAL NUMBER OF
COMPENSATION(1) SHARES
-------------------- SUBJECT TO ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(2) BONUS(3) OPTIONS(4) COMPENSATION(5)
- --------------------------- ---- --------- -------- ---------- ---------------
John C. Schlosser . . . . . 1996 $287,955 $ -- -- $61,855
Chairman of the Board of 1995 292,955 129,580 -- 59,016
St. Francis Bank and 1994 302,421 16,842 -- 63,493
President and CEO of
the Company
Thomas R. Perz . . . . . . 1996 229,448 53,127 -- 52,058
President and CEO 1995 229,448 88,044 -- 43,379
of St. Francis Bank and 1994 205,326 10,612 -- 45,215
and Vice President of
the Company
Brian T. Kaye . . . . . . . 1996 161,114 36,251 -- 53,276
Executive Vice President 1995 161,114 72,501 -- 48,876
and Secretary of 1994 161,958 7,793 -- 42,149
St. Francis Bank and
Secretary of the Company
Bruce R. Sherman . . . . . 1996 145,000 26,100 -- 49,176
Senior Vice President and 1995 139,038 75,695 -- 45,663
Treasurer of St. Francis 1994 140,177 6,955 -- 35,733
Bank and Vice President
of the Company
James C. Hazzard (6) . . . 1996 105,000 35,000 -- 28,188
President and CEO of 1995 100,000 25,000 8,500 --
Bank Wisconsin 1994 100,000 -- -- --
- ------------------------------
(FOOTNOTES ON FOLLOWING PAGE)
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______________________________
(1) Perquisites and other personal benefits provided to the named
executive officers by the Company did not exceed the lesser of $50,000
or 10% of each named executive officer's total annual salary and bonus
during the fiscal years indicated, and accordingly, are not included.
(2) Amounts shown include compensation earned and deferred at the election
of the named executive officers during the fiscal years ended
September 30, 1994, 1995 and 1996, including compensation deferred in
fiscal 1994 and 1995 by Mr. Schlosser and in fiscal 1994, 1995 and
1996 by Mr. Perz, respectively, under deferred compensation agreements
entered into with St. Francis Bank. See "-Deferred Compensation
Agreements."
(3) Senior officers of St. Francis Bank and Bank Wisconsin receive
remuneration under separate Incentive Compensation Programs ("ICPs").
The amounts indicated for the fiscal year ended September 30, 1996
represent incentive compensation earned by the named executive
officers under the ICPs for St. Francis Bank and Bank Wisconsin's
fiscal year ended September 30, 1996 which will be paid in January
1997. Mr. Schlosser did not participate in the St. Francis Bank ICP
in fiscal 1996.
(4) The amount shown in this column represents the total number of shares
of Common Stock subject to options granted to Mr. Hazzard during the
fiscal year ended September 30, 1995 under the Incentive Stock Option
Plan.
(5) Amounts shown in this column represent contributions by the Bank
pursuant to the St. Francis Bank, F.S.B. Money Purchase Pension Plan
(the "Pension Plan"), the St. Francis Bank, F.S.B. 401(k) Savings Plan
(the "401(k) Plan"), the ESOP, the Executive Split Dollar Life
Insurance Plan (the "Split Dollar Plan"), and Long-Term Disability
Policies during the fiscal years ended September 30, 1994, 1995 and
1996. The amounts shown for each individual for the fiscal year ended
September 30, 1996 are derived from the following figures: (i) Mr.
Schlosser: $11,388 - Pension Plan contribution; $3,000 - 401(k) Plan
matching contribution; $26,294 - ESOP allocation; $20,000 - Split
Dollar Plan premium; $1,173 - Long-Term Disability Policy premium;
(ii) Mr. Perz: $11,388 - Pension Plan contribution; $3,000 - 401(k)
Plan matching contribution; $26,294 - ESOP allocation; $7,000 - Split
Dollar Plan premium; $4,376 - Long-Term Disability Policy premium;
(iii) Mr. Kaye: $11,388 - Pension Plan contribution; $2,590 - 401(k)
Plan matching contribution; $26,294 - ESOP allocation; $11,525 - Split
Dollar Plan premium; $1,479- Long-Term Disability Policy premium; (iv)
Mr. Sherman: $11,388 - Pension Plan contribution; $3,000 - 401(k) Plan
matching contribution; $26,294- ESOP allocation; $7,979 - Split
Dollar Plan premium; $506 - Long-Term Disability Policy premium; and
(v) Mr. Hazzard: $7,748 - Pension Plan contribution; $2,117 - 401(k)
Plan matching contribution; and $18,232- ESOP allocation.
(6) Mr. Hazzard was hired on August 1, 1994; the salary amount indicated
for fiscal 1994 has been annualized. The ICP applicable to Mr.
Hazzard for fiscal 1995 provided for a bonus payment equal to 25% of
his base salary for fiscal 1995.
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EMPLOYMENT AGREEMENTS
In June 1993, St. Francis Bank entered into three-year employment
agreements with Messrs. Schlosser, Perz, Kaye and Sherman. In fiscal 1994 and
1995, the terms of these agreements were extended for one year by Board action.
In lieu of renewal of the employment agreements in fiscal 1996, the Company and
St. Francis Bank entered into new three-year employment agreements with
Messrs. Perz, Kaye and Sherman to be effective as of October 1, 1996. In
August 1994, the Company entered into a one-year employment agreement with Mr.
Hazzard which was subsequently assigned to Bank Wisconsin, and in October 1996,
Bank Wisconsin entered into a new three-year employment agreement with Mr.
Hazzard. The term of these new employment agreements with Messrs. Perz, Kaye,
Sherman and Hazzard, which are described herein, may be restored to three years
by action of the Boards of Directors annually, subject to the Boards'
performance evaluation. Effective October 1, 1996, the Company entered into a
separate employment agreement with Mr. Schlosser as discussed further herein.
These employment agreements are intended to ensure that the Company, St.
Francis Bank and Bank Wisconsin maintain a stable and competent management
base.
Under the employment agreements in effect for fiscal 1996, the base
salaries for Messrs. Perz, Kaye, Sherman and Hazzard were $224,448, $161,114,
$145,000 and $105,000, respectively. Base salaries may be increased by the
Board of Directors of the Company, St. Francis Bank or Bank Wisconsin, as
applicable, but may not be reduced except as part of a general pro rata
reduction in compensation for all executive officers. In addition to base
salary, the agreements provide for payments from other incentive compensation
plans, and provide for other benefits, including participation in any group
health, life, disability, or similar insurance program and in any pension,
profit-sharing, employee stock ownership plan, deferred compensation, 401(k) or
other retirement plan maintained by St. Francis Bank and Bank Wisconsin, as
applicable. The agreements also provide for participation in any stock-based
incentive programs made available to executive officers of the Company and its
subsidiaries. The agreements with Messrs. Perz, Kaye, Sherman and Hazzard may
be terminated by the Company, St. Francis Bank or Bank Wisconsin, as
applicable, upon death, disability, retirement, for cause at any time, or in
certain events specified by the regulations of the OTS. If the Company, St.
Francis Bank or Bank Wisconsin terminate the agreements due to death or
retirement, for cause or pursuant to OTS regulations, the executives shall be
entitled to receive all compensation and benefits in which they were vested as
of the termination date. If the agreements are terminated due to disability,
the executives shall be entitled to receive 100% of their base salary at the
rate in effect at the time of termination for a period of one year and
thereafter an amount equal to 75% of such base salary for any remaining portion
of the employment term (offset by any payments received by executives under any
employer disability plans or government social security or workers'
compensation programs), together with other compensation and benefits in which
they were vested as of the termination date. If the Company, St. Francis Bank
or Bank Wisconsin terminate the agreements other than for the foregoing
reasons, or the executives terminate the agreements in accordance with the
terms stated therein, the executives are entitled to severance payments equal
to one year's base salary (in the case of Messrs. Kaye, Sherman and Hazzard)
and two year's base salary (in the case of Mr. Perz) (based upon the highest
base salary within the three years preceding the date of termination) and the
amount of bonus and incentive compensation paid to the executives in the most
recently completed calendar year of employment, payable over a twelve or
24-month period, as applicable. In addition, the executives shall be entitled
to participate in all group insurance, life insurance, health and accident,
disability and certain other employee benefit plans maintained by the employer,
at no cost to the executives, for a period of one year (in the case of Messrs.
Kaye, Sherman and Hazzard) or two years (in the case of Mr. Perz), or such
earlier time as the executives are employed on a full-time basis by another
employer which provides substantially similar benefits. The employment
agreements also contain covenant-not-to-compete provisions which prohibit the
executives from competing with a Significant Competitor (as defined therein) of
the Company, St. Francis Bank or Bank Wisconsin, as applicable, for a period of
twelve months following termination.
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The employment agreements provide for severance payments if the
executives' employment terminates following a change in control. Under the
agreements, a "Change in Control" is generally defined to include any change in
control required to be reported under the federal securities laws, as well as
(i) the acquisition by any person of 25% or more of the Company's outstanding
voting securities, or (ii) a change in a majority of the directors of the
Company during any two-year period without approval of at least two-thirds of
the persons who were directors at the beginning of such period. Within 24
months of the effective date of any Change in Control, the executives may
terminate the agreements in the event certain conditions contained therein are
satisfied, and shall be entitled to receive as severance three year's base
salary (based upon the highest base salary within in the three years preceding
the date of termination) and the amount of bonus and incentive compensation
paid to the executives in the most recently completed calendar year of
employment, payable over a three-year period. In addition, the executives
shall be entitled to all other benefits and compensation which would have been
payable to them in the event of termination other than for death, disability,
cause or pursuant to OTS regulations, as described herein. In addition, the
executives are entitled to all qualified retirement and other benefits in which
they were vested. If the severance benefits payable following a Change in
Control would constitute "parachute payments" within the meaning of Section
280G(b)(2) of the Internal Revenue Code, and the present value of such
"parachute payments" equals or exceeds three times the executive's average
annual compensation for the five calendar years preceding the year in which a
Change in Control occurred, the severance benefits shall be reduced to an
amount equal to the present value of 2.99 times the average annual compensation
paid to the executive during the five years immediately preceding such Change
in Control.
The Company and Mr. Schlosser have entered into an employment
agreement to be effective as of October 1, 1996 through January 2, 1999. The
employment agreement provides that Mr. Schlosser shall continue to serve as
President, Chief Executive Officer and Chairman of the Board of the Company
through January 22, 1997 and thereafter, for the balance of the employment
term, shall serve as Chairman of the Board of Directors of the Company and will
further serve the Company in a consultive role and on special projects.
Through January 31, 1997, Mr. Schlosser shall be compensated at a base rate of
$287,955 per annum and effective February 1, 1997, he shall receive a base
salary of $150,000 per year. In addition to base salary, the agreement
provides for other benefits generally made available to other executive
officers of the Company and its subsidiaries, excluding benefits under the
Company's or its subsidiaries' bonus or stock-based plans. The agreement also
provides for termination upon death, retirement, disability, for cause, and in
the case of certain events specified by OTS regulations. If Mr. Schlosser
retires or dies, or Mr. Schlosser voluntarily terminates his employment
agreement, he or his estate shall be entitled to any compensation and benefits
in which he was vested as of his termination date. If the agreement is
terminated due to Mr. Schlosser's disability, Mr. Schlosser shall be entitled
to receive 100% of his base salary at the rate in effect at the time of
termination for the remainder of the employment term up to one year and
thereafter at an annual rate equal to 75% of such base salary for any remaining
portion of the employment term (offset by any payments received by Mr.
Schlosser under any employer disability plans or governmental social security
or workers' compensation programs). If Mr. Schlosser is terminated for cause,
Mr. Schlosser shall not be entitled to any severance payment; however, he
shall be entitled to any benefits in which he was vested as of the termination
date. If Mr. Schlosser is terminated by the Company other than for cause,
death, disability or retirement, or Mr. Schlosser terminates the employment
agreement pursuant to the terms contained therein, he shall be entitled to
receive as severance, salary payments under the employment agreement for the
remainder of the employment term, together with certain other benefits subject
to certain terms and conditions. The agreement also contains a
covenant-not-to-compete which prohibits Mr. Schlosser from competing with a
Significant Competitor (as defined therein) of the Company for a period of
twelve months following termination.
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CONSULTING, NON-COMPETITION AND SUPPLEMENTAL COMPENSATION AGREEMENT
In August 1992, St. Francis Bank and Mr. Schlosser entered into a
consulting, non-competition and supplemental compensation agreement (the
"Consulting Agreement") pursuant to which St. Francis Bank agreed to pay Mr.
Schlosser (or his beneficiary) monthly payments of $4,166.67 for 120 months
upon his attainment of age 70, death, disability or termination of his
employment following a change of control. A "change of control" is defined to
include a change in the majority of St. Francis Bank's Board of Directors by
reason of the election of new directors not nominated by the Board, the merger
of St. Francis Bank, or the acquisition by any person or group of persons
acting in concert of 25% or more of the stock of St. Francis Bank. Death
benefit payments may be paid in a lump sum to Mr. Schlosser's beneficiary. No
benefits are payable if Mr. Schlosser's employment is terminated for cause.
"Cause" is defined as a willful and continued failure to perform his duties,
willful misconduct which is materially injurious to St. Francis Bank, a
criminal conviction involving the affairs of St. Francis Bank or removal by a
regulatory agency. If requested by St. Francis Bank, Mr. Schlosser will
provide consulting services to St. Francis Bank during the period benefits are
paid under the Consulting Agreement.
DEFERRED COMPENSATION AGREEMENTS
In December 1980, St. Francis Bank and Mr. Schlosser entered into a
deferred compensation agreement (the "1980 Agreement") in lieu of a $10,000 per
annum increase in Mr. Schlosser's base salary, pursuant to which St. Francis
Bank agreed to pay Mr. Schlosser (or his beneficiary) $156,000 over 13 years
following his normal retirement date, death or disability. If Mr. Schlosser's
employment with St. Francis Bank terminates other than for death or disability,
he will receive a lump sum in an amount equal to $833 multiplied by the number
of months he was employed by St. Francis Bank from January 1, 1981 until the
date of termination. In September 1986, St. Francis Bank and Mr. Schlosser
entered into a further deferred compensation agreement (the "1986 Agreement")
in lieu of a $5,000 per annum increase in Mr. Schlosser's base salary,
pursuant to which Mr. Schlosser (or his beneficiary) will receive $1,000 per
month following his normal retirement date, death or disability, with such
payments increasing 5% per annum until terminating after 15 years. The 1986
Agreement further provides that if Mr. Schlosser's employment terminates prior
to retirement for any reason other than disability, no payments will be made.
Both the 1980 and 1986 Agreements are non-tax qualified, unfunded deferred
compensation plans. Mr. Schlosser attained normal retirement age of 65 in
October 1993 and since January 1, 1994, St. Francis Bank has paid Mr. Schlosser
$1,000 per month under the 1980 Agreement and $1,000 per month plus the 5% per
annum increase which commenced January 1, 1995 under the 1986 Agreement.
In September 1986, St. Francis Bank and Mr. Perz entered into a
deferred compensation agreement in lieu of a $5,000 per annum increase in Mr.
Perz' base salary, pursuant to which St. Francis Bank agreed to pay Mr. Perz
$3,333 per month for the first year upon his retirement, death or disability,
with such monthly payments to be increased 5% each year thereafter for the
following 14 years. The deferred compensation agreement further provides that
if Mr. Perz' employment terminates before retirement for any reason other than
disability, no payments will be made. The deferred compensation agreement is a
non-tax qualified, unfunded plan.
In November 1987 and February 1988, Messrs. Mentzer and Perz each
entered into deferred compensation agreements whereby they agreed to defer
certain monthly directors' fees paid to them by St. Francis Bank. The deferred
compensation agreements are non-tax qualified, unfunded plans which establish
deferred benefit accounts for both Messrs. Perz and Mentzer. The deferred
benefit accounts are credited annually on April 30 of each year with interest
at a rate equal to one percentage point over the composite yield on Moody's
Long Term Bond Index Rate in effect on the preceding April 30. Upon
retirement, deferred compensation with accrued interest is to be paid to each
director or his designated beneficiary over ten years in annual installment
portions as designated in the
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deferred compensation agreements. In the event of Mr. Perz' death before
retirement, his deferred compensation agreement provides that St. Francis Bank
shall pay his designated beneficiary an annual sum of $48,000 for a period of
ten years. In the event of Mr. Mentzer's death before retirement, his deferred
compensation agreement provides his designated beneficiary shall receive the
balance in his director's deferred benefit account over a period of ten years.
BENEFITS
EXECUTIVE SPLIT DOLLAR INSURANCE PROGRAM
St. Francis Bank established a Split Dollar Life Insurance Plan,
effective September 13, 1992 (the "Split Dollar Plan"), in which Messrs.
Schlosser, Perz, Kaye, Sherman, Koepp and Messrs. James S. Eckel and George M.
Vranes, and Ms. Judith M. Gauvin and Ms. Marynell M. Costa, Senior Vice
Presidents of St. Francis Bank, and Mr. Jon D. Sorenson, Chief Financial
Officer and Treasurer of the Company and Senior Vice President of St. Francis
Bank, participate. The life insurance benefit is equal to the executives'
salary up to $150,000. The executive pays the PS-58 cost of the insurance and
St. Francis Bank pays the premium. Upon the executive's death or the policy
maturity date, St. Francis Bank will receive all premiums paid on behalf of the
executive together with interest accrued thereon at a rate of 5% per annum and
the executive will receive the remainder of the death benefit or the cash
surrender value.
401(K) PLAN
St. Francis Bank and Bank Wisconsin participate in the St. Francis
Bank, F.S.B. 401(k) Savings Plan (the "401(k) Plan"), covering all of their
eligible employees. Employees are eligible to participate after completing a
six- month period of employment and attaining age 21. The 401(k) Plan permits
participants, subject to the limitations imposed by Section 401(k) of the
Internal Revenue Code, to make voluntary tax deferred contributions in amounts
between 2% and 7% of their annual compensation. Each subsidiary bank makes a
semi-monthly contribution to the 401(k) Plan in an amount equal to 50% of the
first 4% of compensation deferred by the participant for those participants
currently employed. Participants are 100% vested in their contributions and
the earnings thereon. Participants become 20% vested in the employer
contributions credited to their accounts and the earnings thereon after one
year of credited service, with vesting increasing 20% per year thereafter to
100% vesting after five years. Participants also become 100% vested on death,
disability and attainment of age 65. Bank Wisconsin participation in the
401(k) Plan became effective as of January 1, 1995, and Bank Wisconsin
employees vesting schedules included prior service with the predecessor
institutions to Bank Wisconsin. The 401(k) Plan permits participants to
receive distributions during service on account of hardship or upon attaining
age 59. Distributions from the 401(k) Plan are made upon termination of
service either in a lump sum or in installments over a period not to exceed the
greater of the life expectancy of the participant or the joint survivor life
expectancy of the participant and his designated beneficiary. Under the 401(k)
Plan, a separate account is established for each participating employee.
Participating employees may direct the trustee with respect to the investment
of assets held in their 401(k) Plan accounts among six investment options made
available by the trustee. The 401(k) Plan's trustee is the Marshall & Ilsley
Trust Company.
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
In connection with the Conversion, St. Francis Bank established the
St. Francis Bank, F.S.B. Employee Stock Ownership Plan (the "ESOP") for its
eligible employees. The ESOP borrowed funds from the Company to purchase
490,643 shares of Common Stock. Collateral for the loan is the Common Stock
purchased by the ESOP.
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Bank Wisconsin employees became eligible for participation in the ESOP
effective November 1995. St. Francis Bank and Bank Wisconsin make scheduled
discretionary cash contributions to the ESOP sufficient to amortize the
principal and interest on the loan. The loan will be repaid principally from
contributions of St. Francis Bank and Bank Wisconsin to the ESOP over a period
of twelve years. Shares purchased by the ESOP will be held in a suspense
account for allocation among participants as the loan is repaid. Benefits
generally become 20% vested after the three years of credited service, with
vesting increasing 20% per year thereafter to 100% vesting after seven years.
Participants also become 100% vested on death, disability and attainment of age
65. Benefits may be payable, in either shares of Common Stock or cash, upon
death, retirement, early retirement, disability or separation from service.
MONEY PURCHASE PENSION PLAN
St. Francis Bank maintains the St. Francis Bank, F.S.B. Money Purchase
Pension Plan (the "Pension Plan"), a tax-qualified, defined contribution plan
covering all eligible employees. Bank Wisconsin employees became eligible to
participate in the Pension Plan as of January 1, 1995. Employees are eligible
to participate after completing a twelve-month period of 1,000 or more hours of
employment and attaining age 21. As of December 31 of each plan year, St.
Francis Bank and Bank Wisconsin contribute to the Pension Plan on behalf of
those participants currently employed. For plan years ending prior to January
1, 1993, St. Francis Bank contributed 14% of each participant's compensation up
to $15,300 and 18.3% of each participant's compensation in excess of $15,300.
For plan years ending after December 31, 1992, St. Francis Bank, and for plan
years commencing January 1, 1995, Bank Wisconsin, will contribute 4% of each
participant's compensation up to $15,300 and 8% of each participant's
compensation in excess of $15,300. Benefits generally become 20% vested after
three years of credited service, with vesting increasing 20% per year
thereafter to 100% vesting after seven years. Participants also become 100%
vested on death, disability or attainment of age 65. Distributions from the
Pension Plan are made upon termination of service either in a lump sum or in
installments over a period not to exceed the greater of the life expectancy of
the participant or the life expectancy of the joint survivor of the participant
and his designated beneficiary. Under the Pension Plan, a separate account is
established for each participating employee. Participating employees may
direct the trustee with respect to the investment of assets held in their
Pension Plan accounts among six investment options made available by the
trustee. The Pension Plan's trustee is the Marshall & Ilsley Trust Company.
INCENTIVE STOCK OPTION PLAN
In 1993, the Board of Directors of the Company adopted the St. Francis
Capital Corporation 1993 Incentive Stock Option Plan (the "Incentive Stock
Option Plan"). All employees of the Company and its subsidiaries are eligible
to participate in the Incentive Stock Option Plan. As of September 30, 1996,
the Company and its subsidiaries had 344 eligible employees. The Incentive
Stock Option Plan authorizes the grant of (i) options to purchase shares of
Common Stock intended to qualify as incentive stock options under Section 422A
of the Internal Revenue Code ("Incentive Stock Options"), (ii) options that do
not so qualify ("Non-Statutory Options"), and (iii) options which are
exercisable only upon a change in control of St. Francis Bank or the Holding
Company ("Limited Rights"). As of September 30, 1996, options to purchase
399,698 shares of Common Stock had been granted under the Incentive Stock
Option Plan and a total of 167,441 shares of Common Stock were available for
granting under the Incentive Stock Option Plan.
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The executive officers listed in the Summary Compensation Table did
not receive individual grants under the Incentive Stock Option Plan during the
fiscal year ended September 30, 1996. The following table sets forth certain
information concerning the exercise of stock options granted under the
Incentive Stock Option Plan by each of the executive officers named in the
Summary Compensation Table during the fiscal year ended September 30, 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
NUMBER OF OPTIONS OPTIONS AT
SHARES AT FISCAL YEAR END FISCAL YEAR END (1)
ACQUIRED VALUE --------------------------- -------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
John C. Schlosser 0 $ 0 40,000 30,093 $635,200 $477,877
Thomas R. Perz 0 0 40,000 30,093 635,200 477,877
Brian T. Kaye 0 0 40,000 18,176 635,200 288,635
Bruce R. Sherman 0 0 33,644 8,411 534,267 133,567
James C. Hazzard 0 0 0 8,500 0 75,480
- --------------------
(1) The value of Unexercised In-the-Money Options is based upon the
difference between the fair market value of the securities underlying
the options ($25.88) and the exercise price of the options [($10.00)
for Messrs. Schlosser, Perz, Kaye and Sherman; ($17.00) for Mr.
Hazzard] at September 30, 1996.
Incentive Stock Options granted to any person who is the beneficial
owner of more than 10% of the outstanding shares of Common Stock may be
exercised only for a period of five years following the date of grant and the
exercise price at the time of grant must be equal to at least 110% of the fair
market value of the Common Stock on the date of the grant. No option granted
in connection with the Incentive Stock Option Plan will be exercisable three
months after the date on which the optionee ceases to perform services for St.
Francis Bank or the Company, except that in the event of death, disability or
retirement, options may be exercisable for up to one year thereafter or such
longer period as determined by the Company with respect to the exercise of
Non-Statutory Options. If an optionee ceases to perform services for St.
Francis Bank or the Company due to retirement, Incentive Stock Options
exercised more than three months following the date the optionee ceases to
perform services shall be treated as Non-Statutory Stock Options. Options of
employees terminated for cause will terminate on the date of termination.
Termination for cause includes termination due to the intentional failure to
perform stated duties, breach of fiduciary duty involving personal dishonesty
resulting in a material loss to the Company, willful violations of law or the
entry of a final cease and desist order which results in a material loss to the
Company. Options will be immediately exercisable in the event of a change in
control. "Change of control" is defined to include the acquisition of
beneficial ownership of 20% or more of any class of equity security by a person
or group of persons acting in concert, a tender offer or exchange offer, merger
or other form of business combination, a sale of assets or a contested election
of directors which results in a change in control of a majority of the Board of
Directors.
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DIRECTORS' COMPENSATION
BOARD FEES
Effective October 1, 1995, the schedule of Board meetings and
directors' fees were revised significantly. Because of the increased
responsibilities of the members of the Board of Directors of the Company,
including those resulting from the acquisition of Bank Wisconsin, and the
addition of directors to the Company Board that are not also directors of St.
Francis Bank, regularly scheduled Company Board meetings were no longer held on
the same date as St. Francis Bank Board meetings. Effective October 1, 1995,
regular Company Board meetings were held eight times per year. Compensation
paid to Company directors in fiscal 1996 included an annual retainer of $12,000
per year plus a fee of $1,000 per regular meeting attended, $500 per special
meeting attended and $500 per Company Board committee meeting attended.
Effective January 1, 1996, Company directors who also were directors of St.
Francis Bank did not receive an annual retainer of $11,400 paid to St. Francis
Bank directors, but did receive $500 per regular and special meeting of the
Board of Directors of St. Francis Bank attended, and $500 per St. Francis Bank
loan committee meeting attended. In fiscal 1996, Messrs. Schlosser, Perz and
Hazzard, directors of the Company who also currently serve as directors of Bank
Wisconsin, received an annual retainer of $1,800 plus $200 per meeting of the
Board of Directors of Bank Wisconsin attended, and $100 per Bank Wisconsin loan
committee meeting attended.
STOCK OPTION PLAN FOR OUTSIDE DIRECTORS
The Board of Directors of the Company has adopted the St. Francis
Capital Corporation 1993 Stock Option Plan for Outside Directors of the Company
and its Affiliates (the "Directors' Plan"). The Directors' Plan is
self-administered. Upon completion of the Conversion in June 1993, each person
serving as an Outside Director was granted options to purchase shares of Common
Stock under a percentage formula which included credit for each year of service
on the Board or year of service as legal counsel to St. Francis Bank. Under
the Directors' Plan and pursuant to the percentage formula, the Outside
Directors, Messrs. Double, Hoppe, Mentzer, Rice and Templeton, were granted
options to purchase, at $10.00 per share, 28,738, 28,038, 27,336, 30,840 and
25,233 shares of Common Stock, respectively, during the fiscal year ended
September 30, 1993. Options granted under the Directors' Plan vested
approximately 33.33% on the date of completion of the Conversion and
approximately 33.33% on each anniversary date of the Conversion for the
following two years. All options granted under the Directors' Plan will expire
upon the earlier of ten years following the date the option was granted or one
year following the date the optionee ceases to be a director. No options were
granted under the Directors' Plan during the fiscal year ended September 30,
1996.
PERFORMANCE GRAPH
The following graph shows a semi-annual comparison from September 1993
to September 1996 of the Company's cumulative shareholder return on the Common
Stock with (i) the cumulative total return on stocks included in the National
Association of Securities Dealers, Inc. Automated Quotation ("NASDAQ") Stock
Market Index (for United States companies) and (ii) the cumulative total return
on stocks of NASDAQ listed companies included in the Standard Industrial
Classification (SIC) codes 602 - 679 (the "Nasdaq Financial Index"), commencing
on September 30, 1993 through September 30, 1996. The cumulative returns set
forth in each graph assume the reinvestment of dividends into additional shares
of the same class of equity securities at the frequency with which dividends
were paid on such securities during the applicable comparison period.
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COMPARISON OF SEMI-ANNUAL
CUMULATIVE TOTAL RETURN AMONG THE COMPANY,
NASDAQ STOCK MARKET (U.S.) INDEX AND
NASDAQ FINANCIAL INDEX(1)
[PERFORMANCE GRAPH]
09/30/93 03/31/94 09/30/94 03/31/95 09/30/95 03/31/96 09/30/96
-------- -------- -------- -------- -------- -------- --------
Company Common Stock.......... $100.00 $98.31 $122.03 $123.73 $154.24 $186.10 $177.29
NASDAQ (U.S.) Stock Market.... $100.00 $97.67 $100.82 $108.65 $139.25 $147.54 $165.24
NASDAQ Financial.............. $100.00 $96.45 $105.39 $108.04 $133.37 $148.86 $165.29
(1) Assumes $100.00 invested on September 30, 1993, and all dividends
reinvested through the end of the Company's fiscal year on September
30, 1996. The Company's Common Stock commenced trading on June 18,
1993. From September 30, 1993 to September 30, 1995, the Company did
not pay dividends on its Common Stock. On November 22, 1995, the
Company paid its first quarterly dividend and has paid quarterly
dividends of $0.10 per share since that time through September 30,
1996. The performance graph is based upon closing prices on the
trading day specified.
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INDEBTEDNESS OF MANAGEMENT AND CERTAIN TRANSACTIONS
Current federal law requires that all loans or extensions of credit to
officers and directors must be made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with the general public and must not involve more than the normal
risk of repayment or present other unfavorable features. In addition, loans
made to a director or executive officer in excess of the greater of $25,000 or
5% of St. Francis Bank's capital and surplus (up to a maximum of $500,000) must
be approved in advance by a majority of the disinterested members of the Board
of Directors.
The policies of St. Francis Bank and Bank Wisconsin provide that all
loans or extensions of credit to executive officers and directors are to be
made in the ordinary course of business, on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons, and may not involve more than the
normal risk of collectibility or present other unfavorable features. All loans
were made by St. Francis Bank and Bank Wisconsin in the ordinary course of
business and were not made with favorable terms nor involved more than the
normal risk of collectibility or presented unfavorable features. All loans or
extensions of credit to executive officers and directors were current as of
September 30, 1996.
In fiscal 1996, St. Francis Bank retained Richard W. Double, Esq., a
partner in the law firm of Double & Double, as general counsel. Mr. Richard
Double is the son of William F. Double, a director of the Company and St.
Francis Bank. During the fiscal year ended September 30, 1996, St. Francis
Bank paid Mr. Richard Double and the law firm of Double & Double, in the
aggregate, $67,292 for legal services rendered to St. Francis Bank.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own more than
ten percent of the shares of Common Stock outstanding, to file reports of
ownership and changes in ownership with the SEC and the National Association of
Securities Dealers, Inc. Officers, directors and greater than ten percent
shareholders are required by regulation to furnish the Company with copies of
all Section 16(a) forms they file. Based upon review of the information
provided to the Company, the Company believes that during the fiscal year ended
September 30, 1996, officers, directors and greater than ten percent
shareholders complied with all Section 16(a) filing requirements.
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SHAREHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING
To be considered for inclusion in the proxy statement relating to the
Annual Meeting to be held in January 1998, shareholder proposals must be
received at the principal executive offices of the Company at 3545 South
Kinnickinnic Avenue, Milwaukee, Wisconsin 53235, Attention: Brian T. Kaye,
Secretary, no later than August 19, 1997. If such proposal is in compliance
with all of the requirements of 17 C.F.R. Section 20.14a-8 ("Rule 14a-8") of
the Rules and Regulations under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), it will be included in the proxy statement and set forth
on the appointment form of proxy issued for such annual meeting of
shareholders. It is urged that any such proposals be sent certified mail,
return receipt requested.
Shareholder proposals which are not submitted for inclusion in the
Company's proxy materials pursuant to Rule 14a-8 under the Exchange Act may be
brought before an annual meeting pursuant to Article VII of the Company's
Articles of Incorporation. For business to be properly brought before an
annual meeting, a shareholder must have given timely notice thereof in writing
to the Secretary of the Company. To be timely, a shareholder's notice must be
delivered to or mailed by first class United States mail, postage prepaid, to
the principal executive offices of the Company not later than the close of
business on the tenth day following the day on which notice of the annual
meeting was mailed to the shareholders. A shareholder's notice must set forth
certain information in accordance with Article VII of the Company's Articles of
Incorporation. The notice must include the shareholder's name and address, as
they appear on the Company's record of shareholders, the class and number of
shares of the Company's common stock beneficially owned by such shareholder, a
brief description of the proposed business, the reason for considering such
business at the annual meeting and any material interest of the shareholder in
the proposed business.
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 Annual Meeting other than as stated in the Notice of
Annual Meeting of Shareholders. If, however, other matters are properly
brought before the Annual Meeting or any adjournments or postponements thereof,
it is the intention of the persons named in the accompanying proxy to vote the
shares represented thereby on such matters in accordance with their best
judgment.
BY ORDER OF THE BOARD OF DIRECTORS,
Brian T. Kaye
Secretary
Milwaukee, Wisconsin
December 16, 1996
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WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN AND
PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
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ST. FRANCIS CAPITAL CORPORATION
1997 STOCK OPTION PLAN
1. PURPOSE.
The purpose of the St. Francis Capital Corporation (the "Holding Company")
1997 Stock Option Plan (the "Plan") is to advance the interests of the Holding
Company and its shareholders by providing those key employees and directors of
the Holding Company and its Affiliates, including St. Francis Bank, F.S.B. (the
"Bank"), upon whose judgment, initiative and efforts the successful conduct of
the business of the Holding Company and its affiliates largely depends, with
additional incentive to perform in a superior manner. A purpose of the Plan is
also to attract people of experience and ability to the service of the Holding
Company and its Affiliates.
2. DEFINITIONS.
(a) "Affiliate" means (i) a member of a controlled group of corporations of
which the Holding Company is a member or (ii) an unincorporated trade or
business which is under common control with the Holding Company as determined
in accordance with Section 414(c) of the Internal Revenue Code of 1986, as
amended, (the "Code") and the regulations issued thereunder. For purposes
hereof, a "controlled group of corporations" shall mean a controlled group of
corporations as defined in Section 1563(a) of the Code determined without
regard to Section 1563(a)(4) and (e)(3)(C).
(b) "Award" means a grant of Non-statutory Stock Options or Incentive Stock
Options under the provisions of this Plan.
(c) "Board of Directors" or "Board" means the board of directors of the
Holding Company.
(d) "Change in Control" of the Holding Company means a Change in Control of
a nature that: (i) would be required to be reported in response to Item 1 of
the current report on Form 8-K, as in effect on the date hereof, pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange
Act"); or (ii) results in a Change in Control of the Bank or the Holding
Company within the meaning of the Home Owners Loan Act of 1933 and the Rules
and Regulations promulgated by the Office of Thrift Supervision (or its
predecessor agency), as in effect on the effective date of this Plan; or (iii)
without limitation shall be deemed to have occurred at such time as (a) 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 Bank or the Holding
Company representing 25% or more of the Bank's or the
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Holding Company's outstanding securities ordinarily having the right to vote at
the election of directors except for any securities of the Bank purchased by
the Holding Company in connection with the conversion of the Bank to the stock
form and any securities purchased by the Bank's employee stock benefit plans;
or (b) individuals who constitute the Board on the date hereof (the "Incumbent
Board"), cease for any reason to constitute at least a majority thereof,
provided that any person becoming a director subsequent to the date hereof
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 shareholders was approved by the same Nominating
Committee serving under an Incumbent Board, shall be, for purposes of this
clause (b), considered as though he were a member of the Incumbent Board; or
(c) a plan of reorganization, a merger, consolidation, sale of all or
substantially all the assets of the Bank or the Holding Company or similar
transaction in which the Bank or Holding Company is not the surviving
institution is approved by shareholders and becomes effective; or (d) a proxy
statement soliciting proxies from stockholders of the Holding Company, by
someone other than the current management of the Holding Company, seeking
stockholder approval of a plan of reorganization, merger or consolidation of
the Holding Company or the Bank or similar transaction with one or more
corporations as a result of which the outstanding shares of the class of
securities then subject to such plan or transaction are exchanged for or
converted into cash or Property or securities not issued by the Bank or the
Holding Company shall be distributed and shareholders approve the action
disclosed in the proxy materials.
(e) "Committee" means a committee consisting of two or more Non-Employee
Directors appointed by the Board pursuant to Section 3 hereof. "Non-Employee
Director," as defined in Rule 16b-3 promulgated by the Securities and Exchange
Commission ("SEC") under the Exchange Act, means a director who (i) is not
currently an officer or otherwise employed by the Holding Company or the Bank,
or a parent or other subsidiary of the Holding Company, (ii) does not receive
compensation for consulting services or in any other capacity from the Holding
Company or the Bank in excess of $60,000 in any one year, (iii) does not
possess an interest in and is not engaged in business relationships required to
be reported under Items 404(a) or 404(b) of Regulation S-K promulgated under
the Exchange Act and (iv) is an Outside Director as defined in Treas. Reg.
1.162-27.
(f) "Common Stock" means the Common Stock of the Holding Company, par value,
$.01 per share.
(g) "Date of Grant" means the date an Award is effective pursuant to the
terms hereof.
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(h) "Disability" means the permanent and total inability by reason of mental
or physical infirmity, or both, of an Employee to perform the work customarily
assigned to him and the inability of an Outside Director to perform the
services customarily performed by an Outside Director. Additionally, a medical
doctor selected or approved by the Committee must advise the Committee that it
is either not possible to determine when such Disability will terminate or that
it appears probable that such Disability will be permanent during the remainder
of said participant's lifetime.
(i) "Employee" means any person who is currently employed by the Holding
Company or any Affiliate.
(j) "Fair Market Value" means, when used in connection with the Common Stock
on a certain date, the closing price as reported by the National Association of
Securities Dealers Automated Quotation System (as published by the Wall Street
Journal, if published) on such date or if the Common Stock was not traded on
such date, on the next preceding day on which the Common Stock was traded
thereon or the last previous date on which a sale is reported.
(k) "Incentive Stock Option" means an Option granted by the Committee to a
Participant, which Option is designed as an Incentive Stock Option pursuant to
Section 8 of this Plan.
(l) "Non-statutory Stock Option" means an Option granted to a participant
and which is not an Incentive Stock Option.
(m) "Option" means an Award granted under Section 7 or Section 8 of this
Plan.
(n) "Outside Director" means a member of the Board of Directors of the
Holding Company or the Bank, not also serving as an Employee of the Holding
Company or any of its Affiliates.
(o) "Participant" means an employee of the Holding Company or its affiliates
chosen by the Committee to participate in the Plan, or an Outside Director.
(p) "Plan Year(s)" means a calendar year or years commencing on or after
January 1, 1997.
(q) "Termination for Cause" means the termination upon personal dishonesty,
incompetence, willful misconduct, any breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties, or the willful
violation of any law, rule or regulation (other than traffic violations or
similar offenses) or final cease-and-desist order or the material breach of any
provisions of an Employee's employment contract.
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3. ADMINISTRATION.
The Plan shall be administered by the Committee. The Committee is
authorized, subject to the provisions of the Plan, to establish such rules and
regulations as it sees necessary for the proper administration of the Plan and
to make whatever determinations and interpretations in connection with the Plan
it sees as necessary or advisable with respect to Participants. All
determinations and interpretations made by the Committee shall be binding and
conclusive on such Participants and on their legal representatives and
beneficiaries.
4. TYPES OF AWARDS.
Awards under the Plan may be granted in any one or a combination of:
(a) Non-statutory Stock Options; and
(b) Incentive Stock Options;
as defined in paragraphs 7 and 8 of the Plan.
5. STOCK SUBJECT TO THE PLAN.
Subject to adjustment as provided in Section 14, the maximum number of shares
reserved for purchase pursuant to the exercise of options granted under the
Plan is 220,000 shares of Common Stock of the Holding Company, par value $.01
per share. Of the total shares of Common Stock available under the Plan, no
more than 50,000 options shall be issued to any Participant in any period of
three (3) calendar years. These shares of Common Stock may be either
authorized but unissued shares or shares previously issued and reacquired by
the Holding Company. To the extent that options are granted under the Plan,
the shares underlying such options will be unavailable for future grants under
the Plan except that, to the extent that options granted under the Plan
terminate, expire or are canceled without having been exercised new Awards may
be made with respect to these shares.
6. ELIGIBILITY.
Officers and other Employees (including Employees who are also directors of
the Holding Company or its Affiliates) shall be eligible to receive Incentive
Stock Options and Non-statutory Stock Options under the Plan. Outside
Directors shall be eligible to receive Non-statutory Stock Options under the
Plan.
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7. NON-STATUTORY STOCK OPTIONS.
7.1 Grant of Non-statutory Stock Options.
(a) Grants to Employees. The Committee may, from time to time, grant
Non-statutory Stock Options to Employees and, upon such terms and conditions as
the Committee may determine, grant Non-statutory Stock Options in exchange for
and upon surrender of previously granted Awards under this Plan.
(b) Grants to Outside Directors. The Board may, from time to time, grant
Non-statutory Stock Options to Outside Directors and, upon such terms and
conditions as the Board may determine, grant Non-statutory Stock Options in
exchange for and upon surrender of previously granted Awards under this Plan.
(c) Terms of Non-Statutory Options. Non-statutory Stock Options granted
under this Plan are subject to the following terms and conditions:
(i) Price. The purchase price per share of Common Stock deliverable
upon the exercise of each Non-statutory Stock Option shall be determined on the
date the option is granted. Such purchase price shall be the Fair Market Value
of the Holding Company's Common Stock on the Date of Grant or such greater
amount as determined by the Committee with respect to Employees or by the Board
with respect to Outside Directors. Shares may be purchased only upon full
payment of the purchase price. Payment of the purchase price may be made, in
whole or in part, through the surrender of shares of the Common Stock of the
Holding Company at the Fair Market Value of such shares on the date of
surrender determined in the manner described in Section 2(j) of the Plan.
(ii) Terms of Options. The term during which each Non-statutory Stock
Option may be exercised shall be 10 years from the Date of Grant, or such
shorter period determined by the Committee with respect to Employees or by the
Board with respect to Outside Directors. The Committee shall determine with
respect to Employees, and the Board shall determine with respect to Outside
Directors the date on which each Non-statutory Stock Option shall become
exercisable and may provide that a Non-statutory Stock Option shall become
exercisable in installments. The shares comprising each installment may be
purchased in whole or in part at any time after such installment becomes
purchasable. The Committee may, in its sole discretion, accelerate the time at
which any Non-statutory Stock Option granted to an Employee may be exercised in
whole or in part. The Board may, in its sole discretion accelerate the time at
which any Non-statutory Stock Option granted to an Outside Director may be
exercised in whole or in part. Notwithstanding the above, in the event of a
Change in Control of the Holding Company, all Non-statutory Stock Options shall
become immediately exercisable.
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(iii) Termination of Service. Upon the termination of a Participant's
service for any reason other than Disability, death, retirement or Termination
for Cause, the Participant's Non-statutory Stock Options shall be exercisable
only as to those shares which were immediately purchasable by the Participant
at the date of termination and only for a period of three months following
termination. In the event of Termination for Cause, all rights under the
Participant's Non-statutory Stock Options shall expire upon termination. In
the event of the death, retirement or Disability of any Participant or a Change
in Control, all Non-statutory Stock Options held by the Participant, whether or
not exercisable at such time, shall be exercisable by the Participant or his
legal representatives or beneficiaries of the Participant for one year or such
longer period as determined by the Committee following the date of the
Participant's death, or cessation of service due to Disability or retirement,
or following a Change in Control, provided that in no event shall the period
extend beyond the expiration of the Non-statutory Stock Option term. For
purposes of this Section a Participant who has served as both an Employee and
as a member of the Board of Directors shall have terminated service only when
he has terminated service as both an Employee and a director.
8. INCENTIVE STOCK OPTIONS.
8.1 Grant of Incentive Stock Options.
The Committee may, from time to time, grant Incentive Stock Options to
Employees. Incentive Stock Options granted pursuant to the Plan shall be
subject to the following terms and conditions:
(a) Price. The purchase price per share of Common Stock deliverable upon
the exercise of each Incentive Stock Option shall be not less than 100% of the
Fair Market Value of the Holding Company's Common Stock on the Date of Grant.
However, if a Participant owns Common Stock possessing more than 10% of the
total combined voting power of all classes of Common Stock of the Holding
Company (or under Section 425(d) of the Code is deemed to own Common Stock
representing more than 10% of the total combined voting power of all such
classes of Common Stock), the purchase price per share of Common Stock
deliverable upon the exercise of each Incentive Stock Option shall not be less
than 110% of the Fair Market Value of the Holding Company's Common Stock on the
Date of Grant. Payment of the purchase price may be made, in whole or in part,
through the surrender of shares of the Common Stock of the Holding Company at
the Fair Market Value of such shares on the date of surrender determined in the
manner described in Section 2(j).
(b) Amounts of Options. Incentive Stock Options may be granted to any
Employee in such amounts as determined by the Committee. In the case of an
option intended to qualify as an
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Incentive Stock Option, the aggregate Fair Market Value (determined as of the
time the option is granted) of the Common Stock with respect to which Incentive
Stock Options granted are exercisable for the first time by the Participant
during any calendar year (under all plans of the Participant's employer
corporation and its parent and subsidiary corporations) shall not exceed
$100,000. The provisions of this Section 8.1(b) shall be construed and applied
in accordance with Section 422(d) of the Code and the regulations, if any,
promulgated thereunder. To the extent an award under this Section 8.1 exceeds
this $100,000 limit, the portion of the award in excess of such limit shall be
deemed a Non-statutory Stock Option.
(c) Terms of Options. The term during which each Incentive Stock Option may
be exercised shall be determined by the Committee, but in no event shall an
Incentive Stock Option be exercisable in whole or in part more than 10 years
from the Date of Grant. If at the time an Incentive Stock Option is granted to
an Employee, the Employee owns Common Stock representing more than 10% of the
total combined voting power of the Holding Company (or, under Section 425(d) of
the Code, is deemed to own Common Stock representing more than 10% of the total
combined voting power of all such classes of Common Stock) the Incentive Stock
Option granted to such Employee shall not be exercisable after the expiration
of five years from the Date of Grant. No Incentive Stock Option granted under
this Plan is transferable except by will or the laws of descent and
distribution and is exercisable in his lifetime only by the Employee to whom it
is granted.
The Committee shall determine the date on which each Incentive Stock Option
shall become exercisable and may provide that an Incentive Stock Option shall
become exercisable in installments. The shares comprising each installment may
be purchased in whole or in part at any time after such installment becomes
purchasable, provided that the amount able to be first exercised in a given
year is consistent with the terms of Section 422 of the Code. The Committee
may, in its sole discretion, accelerate the time at which any Incentive Stock
Option may be exercised in whole or in part, provided that it is consistent
with the terms of Section 422 of the Code. Notwithstanding the above, in the
event of a Change in Control of the Holding Company, all Incentive Stock
Options shall become immediately exercisable.
(d) Termination of Employment. Upon the termination of a Participant's
service for any reason other than Disability, Change in Control, death,
retirement or Termination for Cause, the Incentive Stock Options shall be
exercisable only as to those shares which were immediately purchasable by the
Participant at the date of termination and only for a period of three months
following termination. In the event of Termination for Cause all rights under
the Participant's Incentive Stock Options shall expire upon termination.
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39
In the event of death, retirement or Disability of any Employee, all
Incentive Stock Options held by such Participant, whether or not exercisable at
such time, shall be exercisable by the Participant or the Participant's legal
representatives or beneficiaries for one year following the date of the
Participant's death, retirement or cessation of employment due to Disability;
provided, however, that such option shall not be eligible for treatment as an
Incentive Stock Option in the event such option is exercised more than three
months following the date of the Participant's cessation of employment. Upon
termination of the Participant's service due to a Change in Control, all
Incentive Stock Options held by such Participant, whether or not exercisable at
such time, shall be exercisable for a period of one year following the date of
Participant's cessation of employment; provided however, that such option shall
not be eligible for treatment as an Incentive Stock Option in the event such
option is exercised more than three months following the date of the
Participant's cessation of employment. In no event shall the exercise period
extend beyond the expiration of the Incentive Stock Option term. For purposes
of this Section a Participant who has served as both an Employee and as a
member of the Board of Directors shall have terminated service only when he has
terminated service as both an Employee and a director.
(e) Compliance with Code. The options granted under this Section 8 of the
Plan are intended to qualify as incentive stock options within the meaning of
Section 422 of the Code, but the Holding Company makes no warranty as to the
qualification of any option as an incentive stock option within the meaning of
Section 422 of the Code.
9. SURRENDER OPTION.
In the event of a Participant's termination of employment (or service as a
Director), the Participant (or the Participant's Personal representative(s),
heir(s), or devisee(s)) may, in a form acceptable to the Committee make
application to surrender all or part of options held by such Participant in
exchange for a cash payment from the Holding Company of an amount equal to the
difference between the Fair Market Value of the Common Stock on the date of
termination and the exercise price per share of the option on the Date of
Grant. Whether the Committee accepts such application or determines to make
payment, in whole or part, is within its absolute and sole discretion, it being
expressly understood that the Committee is under no obligation to any
Participant whatsoever to make such payments. In the event that the Committee
accepts such application and the Holding Company determines to make payment,
such payment shall be in lieu of the exercise of the underlying option and such
option shall cease to be exercisable.
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10. RIGHTS OF A SHAREHOLDER; LIMITED TRANSFERABILITY.
No Participant shall have any rights as a shareholder with respect to any
shares covered by a Non-statutory and/or Incentive Stock Option until the date
of issuance of a stock certificate for such shares. Nothing in this Plan or in
any Award granted confers on any person any right to continue in the employ of
the Holding Company or its Affiliates or to continue to perform services for
the Holding Company or its Affiliates or interferes in any way with the right
of the Holding Company or its Affiliates to terminate a Participant's services
as an officer or other Employee at any time.
No Incentive Stock Option granted under this Plan is transferable except by
will or the laws of descent and distribution and is exercisable in his or her
lifetime only by the Participant to whom it is granted.
Non-statutory Stock Options granted hereunder may be exercised only
during a Participant's lifetime by the Participant, the Participant's guardian
or legal representative or by a permissible transferee. Non-statutory Stock
Options shall be transferable by Participants pursuant to the laws of descent
and distribution upon a Participant's death, and during a Participant's
lifetime, Non-statutory Stock Options shall be transferable by Participants to
members of their immediate family, trusts for the benefit of members of their
immediate family, and charitable institutions ("permissible transferee") to the
extent permitted under Section 16 of the Exchange Act and subject to federal
and state securities laws. The term "immediate family" shall mean any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, sister-in-law, or brother-in-law and
shall include adoptive relationships.
The Committee shall have the authority to establish rules and regulations
specifically governing the transfer of stock options granted under this Plan as
it deems necessary and advisable.
11. AGREEMENT WITH GRANTEES.
Each Award of Options will be evidenced by a written agreement, executed by
the Participant and the Holding Company or its Affiliates which describes the
conditions for receiving the Awards including the date of Award, the purchase
price if any, applicable periods, and any other terms and conditions as may be
required by applicable securities law.
12. DESIGNATION OF BENEFICIARY.
A Participant may, with the consent of the Committee, designate a person or
persons to receive, in the event of death,
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41
any stock option Award to which the Participant would then be entitled. Such
designation will be made upon forms supplied by and delivered to the Holding
Company and may be revoked in writing. If a Participant fails effectively to
designate a beneficiary, then the Participant's estate will be deemed to be the
beneficiary.
13. DILUTION AND OTHER ADJUSTMENTS.
In the event of any change in the outstanding shares of Common Stock of the
Holding Company by reason of any stock dividend or split, recapitalization,
merger, consolidation, spin-off, reorganization, combination or exchange of
shares, or other similar corporate change, or other increase or decrease in
such shares without receipt or payment of consideration by the Holding Company,
the Committee will make such adjustments to previously granted Awards, to
prevent dilution or enlargement of the rights of the Participant, including any
or all of the following:
(a) adjustments in the aggregate number or kind of shares of Common Stock
which may be awarded under the Plan;
(b) adjustments in the aggregate number or kind of shares of Common Stock
covered by Awards already made under the Plan;
(c) adjustments in the purchase price of outstanding Incentive and/or
Non-statutory Stock Options.
No such adjustments may, however, materially change the value of benefits
available to a Participant under a previously granted Award.
14. WITHHOLDING.
There may be deducted from each distribution of cash and/or Common Stock
under the Plan the amount of tax required by any governmental authority to be
withheld.
15. AMENDMENT OF THE PLAN.
The Board of Directors may at any time, and from time to time, modify or
amend the Plan in any respect; provided however, that Sections 7.1 and 8.1
governing grants shall not be amended more than once every six months other
than to comport with the Code or the Employee Retirement Income Security Act of
1974, as amended, if applicable.
The Board may determine that shareholder approval of any amendment to this
Plan may be advisable for any reason, including but not limited to, for the
purpose of obtaining or retaining any
10
42
statutory or regulatory benefits under tax, securities or other laws or
satisfying applicable stock exchange listing requirements.
No such termination, modification or amendment may affect the rights of a
Participant under an outstanding Award.
16. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as of the date the Plan is approved by
shareholders at an annual or special meeting of shareholders (the "Effective
Date"). The Plan also shall be presented to shareholders of the Holding
Company for ratification for purposes of: (i) satisfying one of the
requirements of Section 422 of the Code governing the tax treatment for
Incentive Stock Options; and (ii) maintaining listing on the NASDAQ National
Market System.
17. TERMINATION OF THE PLAN.
No Awards under the Plan shall be granted more than ten (10) years after
the Effective Date of the Plan. The Board of Directors has the right to
suspend or terminate the Plan at any time. No termination shall, without the
consent of a Participant, adversely affect such individual's rights under a
previously granted award.
18. APPLICABLE LAW.
The Plan will be administered in accordance with the laws of the State of
Wisconsin to the extent not Preempted by Federal law as now or hereafter in
effect.
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19. COMPLIANCE WITH SECTION 16.
With respect to persons subject to Section 16 of the Exchange Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the
extent any provision of the Plan or action by the Committee fails to so comply,
it shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.
___________________________ ______________________________
Date Adopted (Signature)
Title
__________________________ ______________________________
Date Approved by Secretary
Stockholders
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PROXY ST. FRANCIS CAPITAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JANUARY 22, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Shareholders (the "Annual Meeting") and the Proxy Statement and, revoking any
proxy heretofore given, hereby constitutes and appoints Messrs., John C.
Schlosser or Thomas R. Perz, directors of St. Francis Capital Corporation (the
"Company"), to represent and to vote, as designated below, all the shares of
common stock of the Company held of record by the undersigned on December 1,
1996 at the Annual Meeting which will be held on January 22, 1997, at 4:00
p.m., local time, at the Midway Hotel Airport, 5105 S. Howell Avenue, Milwaukee,
Wisconsin, and at any adjournments or postponements thereof.
This proxy is revocable and will be voted as directed below, but if no
directions are specified, this proxy will be voted FOR each of the matters
listed below. If any other business is presented at the Annual Meeting or any
adjournments or postponements thereof, this proxy will be voted by the Board of
Directors of the Company in their best judgment. At the present time, the Board
of Directors of the Company knows of no other business to be presented at the
Annual Meeting.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE
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ST. FRANCIS CAPITAL CORPORATION ANNUAL MEETING OF SHAREHOLDERS
1. ELECTION OF DIRECTORS: 1. - Jeffrey A. Reigle, 2. - John C. Schlossar, 3. - Edmund O.
Templeton / / FOR / / WITHHOLD
(Instructions: To withhold authority to vote for any indicated nominee, write the
number(s) of nominee(s) in the box provided to the right ____________________________
2. The approval of the St. Francis Capital Corporation 1997 Stock Option Plan. / / FOR / / AGAINST / / ABSTAIN
3. Ratification of the appointment of KPMG Peat Marwick LLP as independent auditors of
the Company for the fiscal year ending September 30, 1997. / / FOR / / AGAINST / / ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other business as
may properly come before the Annual Meeting or any adjournments or postponements
thereof.
NO. OF SHARES
Address Change? Date __________________________ ________________
Mark Box / /
Indicate changes below:
Signature(s) in Box
IMPORTANT: Please sign exactly as your
name appears on the proxy. When
signing as an attorney, administrator,
agent, corporation, officer, executor,
trustee, guardian or similar position,
please add your full title to your
signature. If shares of common stock are
held jointly, each holder may sign but
only one signature is required.