SCHEDULE 14A
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
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
MAF Bancorp, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] 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:
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(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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Notes:
[MAF Bancorp, Inc. Logo Appears Here]
55th Street & Holmes Avenue
Clarendon Hills, Illinois 60514-1500
(630) 325-7300
March 23, 2001
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of MAF
Bancorp, Inc., which will be held on Wednesday, April 25, 2001 at Marie's Ashton
Place, 341 W. 75th Street, Willowbrook, Illinois 60514, at 10:00 a.m.
The attached Notice of the Annual Meeting and Proxy Statement describe the
formal business to be transacted at the Meeting. Directors and officers of MAF
Bancorp as well as a representative of KPMG LLP will be present at the Meeting
to respond to any questions from our shareholders regarding the business to be
transacted.
The Board of Directors of MAF Bancorp has determined that the specific
proposals to be considered at the Meeting are in the best interests of the
Company and its shareholders. For the reasons set forth in the Proxy Statement,
the Board unanimously recommends a vote "FOR" each of these matters.
YOUR VOTE IS IMPORTANT. Please sign and return the enclosed proxy card
promptly in the postage-paid envelope. Your cooperation is appreciated since a
majority of the common stock must be represented, either in person or by proxy,
to constitute a quorum for the conduct of business.
On behalf of the Board of Directors and all the employees of the Company and
Mid America Bank, I wish to thank you for your continued support.
Sincerely yours,
/s/ Allen Koranda
Allen Koranda
Chairman of the Board and
Chief Executive Officer
[MAF Bancorp, Inc. Logo Appears Here]
55th Street & Holmes Avenue
Clarendon Hills, Illinois 60514-1500
(630) 325-7300
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On April 25, 2001
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of MAF
Bancorp, Inc. will be held at Marie's Ashton Place, 341 W. 75th Street,
Willowbrook, Illinois 60514 on Wednesday, April 25, 2001 at 10:00 a.m.
The Meeting is for the purpose of considering and voting upon the following
matters:
1. Election of four directors for terms of office of three years each, or
until their successors are elected and qualified;
2. Approval of a proposed amendment to the MAF Bancorp, Inc. 2000 Stock
Option Plan;
3. Ratification of the appointment of KPMG LLP as independent auditors of
MAF Bancorp, Inc. for the year ending December 31, 2001; and
4. Such other matters as may properly come before the Meeting or any
adjournments thereof, including whether or not to adjourn the Meeting.
The Board of Directors has fixed March 7, 2001 as the record date for the
determination of shareholders entitled to notice of and to vote at the Meeting
and at any adjournments thereof. Only record holders of the common stock of the
Company as of the close of business on such record date will be entitled to vote
at the Meeting or any adjournments thereof. In the event there are not
sufficient shares represented for a quorum or to approve any one or more of the
foregoing proposals at the time of the Meeting, the Meeting may be adjourned in
order to permit further solicitation of proxies by the Company. A list of
shareholders entitled to vote at the Meeting will be available at the Company's
offices located at Mid America Bank, 55th Street & Holmes Avenue, Clarendon
Hills, Illinois 60514-1500, for a period of ten days prior to the Meeting and
will also be available at the Meeting.
EACH SHAREHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE MEETING, IS
REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WITHOUT DELAY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN BY THE SHAREHOLDER MAY BE
REVOKED AT ANY TIME BEFORE IT IS EXERCISED. A PROXY MAY BE REVOKED BY FILING
WITH THE CORPORATE SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A DULY
EXECUTED PROXY BEARING A LATER DATE. ANY SHAREHOLDER PRESENT AT THE MEETING MAY
REVOKE HIS OR HER PROXY AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE
MEETING. HOWEVER, 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 MEETING.
By Order of the Board of Directors
/s/ Carolyn Pihera
Carolyn Pihera
Corporate Secretary
Clarendon Hills, Illinois
March 23, 2001
TABLE OF CONTENTS
-----------------
Page
----
Section 1. Establishment, Purpose, and Effective Date of Plan B-1
1.1 Establishment........................................... B-1
1.2 Purpose................................................. B-1
1.3 Effective Date.......................................... B-1
Section 2. Definitions B-1
2.1 Definitions............................................. B-1
2.2 Gender and Number....................................... B-3
Section 3. Eligibility and Participation..................................... B-3
3.1 Eligibility and Participation............................ B-3
Section 4. Administration.................................................... B-3
4.1 Administration.......................................... B-3
Section 5. Stock Subject to Plan............................................. B-3
5.1 Number of Shares Available for Awards................... B-3
5.2 Individual Participant Limitations...................... B-3
5.3 Reuse................................................... B-4
5.4 Adjustment in Capitalization............................ B-4
Section 6. Duration of Plan B-4
6.1 Duration of Plan........................................ B-4
Section 7. Stock Options..................................................... B-4
7.1 Grant of Options........................................ B-4
7.2 Option Agreement........................................ B-4
7.3 Option Price............................................ B-4
7.4 Exercise of Options..................................... B-5
7.5 Payment................................................. B-5
7.6 Limitations on ISOs..................................... B-6
7.7 Restrictions on Stock Transferability................... B-6
7.8 Termination of Employment or as a Director Due to Death,
Disability, Retirement or after a Change in Control..... B-6
7.9 Other Termination of Employment or as a Director........ B-7
7.10 Nontransferability of Options........................... B-7
Section 8. Limited Rights B-8
8.1 Grant of Limited Rights................................ B-8
8.2 Terms of Rights......................................... B-8
8.3 Effect on Related Option................................ B-8
8.4 Payment................................................. B-8
8.5 Term of Limited Right................................... B-8
8.6 Termination of Employment............................... B-8
i
Section 9. Beneficiary Designation........................................... B-8
9.1 Beneficiary Designation................................. B-8
Section 10. Rights of Employees.............................................. B-9
10.1 Employment.............................................. B-9
10.2 Participation........................................... B-9
Section 11. Change in Control................................................ B-9
11.1 In General.............................................. B-9
11.2 Definition.............................................. B-9
Section 12. Amendment, Modification, and Termination of Plan.................. B-10
12.1 Amendment, Modification, and Termination of Plan........ B-10
Section 13. Tax Withholding.................................................. B-10
13.1 Tax Withholding......................................... B-10
13.2 Share Withholding....................................... B-10
Section 14. Indemnification.................................................. B-11
14.1 Indemnification......................................... B-11
Section 15. Requirements of Law.............................................. B-11
15.1 Requirements of Law..................................... B-11
15.2 Governing Law........................................... B-11
ii
[MAF Bancorp, Inc. Logo Appears Here]
55th Street & Holmes Avenue
Clarendon Hills, Illinois 60514-1500
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
April 25, 2001
Solicitation and Voting of Proxies
This Proxy Statement is being furnished to shareholders of MAF Bancorp,
Inc. in connection with the solicitation by the Board of Directors of proxies to
be used at the Annual Meeting of Shareholders to be held at Marie's Ashton
Place, 341 W. 75th Street, Willowbrook, Illinois 60514 on Wednesday, April 25,
2001 at 10:00 a.m., and at any adjournments thereof. The 2000 Annual Report to
Shareholders and Form 10-K, including the audited consolidated financial
statements as of and for the year ended December 31, 2000, accompanies this
Proxy Statement, which is first being mailed to shareholders on or about
March 23, 2001.
Regardless of the number of shares of common stock owned, it is important
that shareholders be represented by proxy or present in person at the Meeting.
Shareholders are requested to vote by completing the enclosed proxy card 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 card. Proxies solicited by the Board of Directors of MAF Bancorp will be
voted in accordance with the directions given therein. Where no instructions are
indicated, proxies will be voted FOR the election of the Board of Directors'
nominees and FOR the approval or ratification of the other specific proposals
presented in this Proxy Statement.
The Board of Directors knows of no additional matters that will be
presented for consideration at the Meeting. Execution of a proxy, however,
confers on the designated proxyholders discretionary authority to vote the
shares in accordance with their best judgment on such other business, if any,
that may properly come before the Meeting or any adjournments thereof, including
whether or not to adjourn the Meeting.
A proxy may be revoked at any time prior to its exercise by the filing of a
written notice of revocation with the Corporate Secretary of the Company, by
delivering to the Company a duly executed proxy bearing a later date, or by
attending the Meeting and voting in person. However, 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 Meeting.
The cost of solicitation of proxies in the form enclosed herewith will be
borne by the Company. In addition to the solicitation of proxies by mail, the
Company has retained Georgeson Shareholder Communications, Inc. to assist with
the solicitation of proxies for a fee of $4,500, plus reimbursement for out-of-
pocket expenses. Proxies may also be solicited personally or by telephone or
facsimile by
1
directors, officers and regular employees of the Company and Mid America Bank,
fsb (the "Bank"), without additional compensation therefor. The Company will
also request persons, firms and corporations holding shares in their names, or
in the name of their nominees, which are beneficially owned by others, to send
proxy material to, and obtain proxies from, such beneficial owners, and will
reimburse such holders for their reasonable expenses in doing so.
Voting Securities
The securities that may be voted at the Meeting consist of shares of common
stock of MAF Bancorp (the "Common Stock"), with each share entitling its owner
to one vote on all matters to be voted on at the Meeting, except as described
below. There is no cumulative voting for the election of directors. The close of
business on March 7, 2001, has been fixed by the Board of Directors as the
record date for the determination of shareholders entitled to notice of and to
vote at the Meeting and any adjournments thereof. The total number of shares of
Common Stock outstanding on the record date was 22,855,601.
As provided in Article Fourth of the Company's Certificate of
Incorporation, record holders of Common Stock who beneficially own in excess of
10% of the outstanding shares of Common Stock are not entitled to any vote in
respect of the shares held in excess of this limit. A person or entity is deemed
to beneficially own shares owned by an affiliate of, as well as by persons
acting in concert with, such person or entity. The Company's Certificate of
Incorporation authorizes the Board of Directors (i) to make all determinations
necessary to implement and apply the limit, including determining whether
persons or entities are acting in concert, and (ii) to demand that any person
who is reasonably believed to beneficially own stock in excess of the limit
supply information to the Company to enable the Board of Directors to implement
and apply the limit.
The presence, in person or by proxy, of at least a majority of the total
number of shares of Common Stock entitled to vote (after subtracting from shares
outstanding any shares held in excess of the 10% limit described in the
preceding paragraph) is necessary to constitute a quorum at the Meeting. Shares
covered by broker non-votes, if any, will be considered votes cast for purposes
of determining the presence of a quorum. In the event there are not sufficient
shares represented for a quorum or to approve any proposal at the time of the
Meeting, the Meeting may be adjourned in order to permit the further
solicitation of proxies.
As to the election of directors, the proxy card being provided by the Board
of Directors enables a shareholder of record to vote "FOR" election of the
nominees proposed by the Board, or to "WITHHOLD" authority to vote "FOR" one or
more of the nominees being proposed. Directors are elected by a plurality of
votes cast, without regard to either (i) broker non-votes, or (ii) proxies as to
which authority to vote for one or more of the nominees being proposed is
withheld.
As to the approval of an amendment to the MAF Bancorp, Inc. 2000 Stock
Option Plan being proposed for stockholder action in Proposal 2, the proxy card
being provided by the Board of Directors enables a stockholder to check the
appropriate box on the proxy card to (i) vote "FOR" approval of the Plan
amendment; (ii) vote "AGAINST" approval of the Plan amendment; or (iii)
"ABSTAIN" from voting on approval of the Plan amendment. An affirmative vote of
the holders of a majority of the shares of Common Stock present at the Meeting,
in person or by proxy, and entitled to vote, is required to constitute
stockholder approval of this proposal. Shares as to which the "ABSTAIN" box has
been selected on the proxy card with respect to Proposal 2 will be counted as
present and entitled to vote and will have the effect of a vote against the
matter. In contrast, shares underlying broker non-votes or in excess of the 10%
limit described above will not be counted as present and entitled to vote and
these proxies will have no effect on the vote on Proposal 2.
2
As to ratification of KPMG LLP as independent auditors of the Company set
forth in Proposal 3, and all other matters that may properly come before the
Meeting, under the Company's bylaws, unless otherwise required by law, such
matters must be approved by a majority of the votes cast, including proxies
marked "ABSTAIN" as to that matter. Shares underlying broker non-votes or in
excess of the 10% limit described above will not be counted as shares voting on
these matters.
Proxies solicited hereby will be returned to the proxy solicitor or the
Company's transfer agent, and will be tabulated by inspectors of election
designated by the Board, who will not be employed by, or act as directors of,
the Company or any of its affiliates.
Security Ownership of Certain Beneficial Owners
As of the record date, management was not aware of any persons who were
beneficial owners of more than 5% of the outstanding shares of Common Stock.
Interest of Certain Persons in Matters to be Acted Upon
With the exception of Kenneth Koranda, President of the Company and the
Bank, no person being nominated as a director under Proposal 1, "Election of
Directors," is being proposed for election pursuant to any agreement or
understanding between any person and MAF Bancorp. Pursuant to his employment
agreement with MAF Bancorp, failure to nominate Kenneth Koranda to the Board of
Directors, if followed by his voluntary or involuntary termination, would
obligate the Company to make certain payments to him under the terms of his
agreement. Payments and other benefits due Kenneth Koranda under the agreement
are described in "Employment and Special Termination Agreements." In addition,
directors and executive officers are eligible to receive awards pursuant to the
MAF Bancorp, Inc. 2000 Stock Option Plan, an amendment to which is being voted
on under Proposal 2. The amendment would increase the number of shares available
for option grants.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the SEC
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Officers, directors and greater than
ten-percent shareholders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file. To the Company's knowledge
during the year ended December 31, 2000, all required Section 16(a) reports were
timely filed except for: (1) the purchase of 24 shares in various transactions
in 1998-1999 by Alan Schatz, First Vice President, which were reported in 2000;
(2) the purchase of 33 shares in various transactions in 1997-1999 by Andrew
Zych, director, which were reported in 2000; (3) the surrender of shares in
payment of a 1999 stock option exercise price by Kenneth Rusdal, Senior Vice
President, which was reported in 2001; and (4) the 1999 receipt by Robert Bowles
of shares by gift, which was reported in 2000.
3
PROPOSALS TO BE VOTED ON AT THE MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
Pursuant to the Company's bylaws, the number of directors is set at twelve
(12), unless otherwise designated by the Board. The current number of directors
designated by the Board is eleven (11). Directors are elected for staggered
terms of three years each, with the term of office of only one of the three
classes of directors expiring each year. Directors serve until their successors
are elected and qualified.
The four nominees being proposed for election at the Meeting to serve a
three-year term of office are Terry A. Ekl, Kenneth Koranda, Lois B. Vasto and
Jerry A. Weberling. Each of the nominees currently serves as a director of the
Company and the Bank.
In the event that any nominee is unable to serve or declines to serve for
any reason, it is intended that proxies will be voted for the election of the
balance of those nominees named and for such other persons as may be designated
by the present Board of Directors. The Board of Directors has no reason to
believe that any of the persons named will be unable or unwilling to serve.
Unless authority to vote for any director is withheld, the shares represented by
the enclosed proxy card, if executed, will be voted FOR election of each of the
nominees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES
NAMED IN THIS PROXY STATEMENT.
Information with respect to Nominees, Continuing Directors and Others
The table on the following page sets forth the names of nominees,
continuing directors, and "Named Executive Officers," as listed in "Executive
Compensation-Summary Compensation Table," their ages, a brief description of
their recent business experience, including present occupations and employment,
certain directorships held by each, the year in which each became a director of
the Company, the year in which their terms (or in the case of nominees, their
proposed term) as directors of the Company expire, and the amount of Common
Stock and the percent thereof beneficially owned by each and all directors and
executive officers as a group, as of the record date. Each of the members of the
Board of Directors of MAF Bancorp also presently serves as a director of the
Bank.
4
Name and Principal Occupation Director of Shares of Common
at Present and the Company Expiration of Stock Beneficially Ownership
for the Past Five Years Age Since Term as Director Owned (1) Percentage
- ------------------------------------- --- ----------- ---------------- ---------------------- -----------
NOMINEES
- --------
Terry A. Ekl......................... 53 1995 2004 31,346 (2)(3) *
Partner in the law firm
of Connolly, Ekl &
Williams, P.C.
Kenneth Koranda...................... 51 1989 2004 1,112,875 (2) 4.82%
President of the Company and the
Bank. Mr. Koranda is the brother
of Allen H. Koranda.
Lois B. Vasto........................ 67 1989 2004 56,079 (2)(3)(4) *
Senior Vice President/Loan
Operations of the Company and
the Bank until her retirement in
January, 1997. Ms. Vasto served
as a consultant to the Bank until
December 31, 1997.
Jerry A. Weberling................... 49 1998 2004 201,167 (2)(4) *
Executive Vice President and
Chief Financial Officer of the
Company and the Bank.
CONTINUING DIRECTORS
- -------------------------------------
Allen H. Koranda..................... 55 1989 2002 920,014 (2) 3.98%
Chairman of the Board and Chief
Executive Officer of the Company
and the Bank. Mr. Koranda is the
brother of Kenneth Koranda.
Robert Bowles, MD.................... 54 1989 2002 61,710 (2)(3) *
Chairman of the Board of Physician
Associates of Florida, Orlando,
Florida, and practicing physician.
David Burba.......................... 53 1999 2002 308,324 (2) 1.34
Executive Vice President of the
Company and the Bank since January,
1999. Former Chairman and
President, Westco Bancorp, Inc.
Henry Smogolski...................... 69 1996 2002 220,458 (2)(3) *
Former Chairman of the Board
and Chief Executive Officer,
N.S. Bancorp, Inc.
Joe F. Hanauer....................... 63 1990 2003 423,040 (2)(3) 1.85
Principal of Combined Investments,
L.P., Director and former Chairman
of the Board of Grubb and Ellis Co.,
and Director of Homestore.com, Inc.
5
Name and Principal Occupation Director of Shares of Common
at Present and the Company Expiration of Stock Beneficially Ownership
for the Past Five Years Age Since Term as Director Owned (1) Percentage
- --------------------------------------- --- ----------- ---------------- ---------------------- ----------
CONTINUING DIRECTORS
F. William Trescott.................... 71 1989 2003 36,297 (2)(3) *
Assistant Superintendent of
Hinsdale Township High School
District 86, Hinsdale, Illinois until
his retirement in 1994.
Andrew J. Zych......................... 59 1996 2003 310,602 (2)(3) 1.36
Former Director and Executive
Vice President, N.S. Bancorp, Inc.
NAMED EXECUTIVE
OFFICERS (who are not
directors)
Kenneth B. Rusdal...................... 59 N/A N/A 105,009 (2) *
Senior Vice President-Operations
and Information Systems of the
Company and the Bank.
Stock Ownership of all Directors 4,383,934 (2) 18.24%
and Executive Officers
as a Group (18 persons)
* Less than 1%
________________________
(1) "Shares of Common Stock Beneficially Owned" includes: stock held in joint
tenancy; stock owned as tenants in common; stock owned or held by a spouse
or other member of the individual's household; stock allocated, purchased
or owned through an employee benefit plan of the Company or Bank; except
when indicated by footnote, stock in which the individual either has or
shares voting and/or investment power; and stock subject to options
currently exercisable or exercisable within 60 days of March 7, 2001. Each
person or relative of such person whose shares are included herein,
exercises sole or shared voting and dispositive power as to the shares
reported.
(2) Includes 240,757, 238,336, 95,230, 102,080 and 76,415 shares for Messrs. A.
Koranda, K. Koranda, Weberling, Burba and Rusdal, respectively, which may
be acquired pursuant to options granted under the MAF Bancorp, Inc. 1990
Incentive Stock Option Plan (the "1990 Plan") and the MAF Bancorp, Inc.
Amended and Restated 1993 Premium Price Stock Option Plan (the "Premium
Plan"). In the case of Mr. Burba, such total also includes exercisable
options granted under the Westco Bancorp, Inc. 1992 Incentive Stock Option
Plan. Also includes 16,875, 9,000, 13,500, 14,625, 13,500, 13,500 and
14,625 shares for Mr. Ekl, Ms. Vasto and Messrs. Bowles, Smogolski,
Hanauer, Trescott and Zych respectively, which may be acquired pursuant to
options granted under the 1990 Plan and Premium Plan. Total shares for all
directors and executive officers include 1,177,254 shares subject to
options granted under these option plans.
(3) Excludes 329 unallocated shares held by the Mid America Bank Management
Recognition and Retention Plans and Trusts (the "MRPs") which shares are
reflected in the total stock ownership of directors and executive officers
as a group. The voting of such shares is directed by the non-employee
directors of the Bank. As a result of this shared voting authority, each
non-employee director may be deemed to be the beneficial owner of all such
shares.
(4) Excludes 58,609 shares held by the Mid America Bank Employees' Profit
Sharing Plan which shares are reflected in the total stock ownership of
directors and executive officers as a group. The voting and dispositive
authority over such shares is directed by the trustees of the plan (Lois
Vasto, Jerry Weberling and two other executive officers). As a result of
this shared voting and dispositive authority, each trustee may be deemed to
be the beneficial owner of all such shares.
6
Meetings of the Board and Committees of the Board
During the year ended December 31, 2000, the Board of Directors of the
Company held eleven regular meetings and one special meeting. During the year,
all directors attended at least 75% of all regular and special Board meetings,
and no director of the Company attended fewer than 75% of the aggregate number
of total Board meetings held and total meetings of committees on which such
director served. The Boards of Directors of the Company and the Bank maintain a
number of committees, certain of which are described below.
The Executive Committee consists of Allen Koranda (Chairman), Kenneth
Koranda, Lois Vasto and Robert Bowles. The Committee generally meets as needed
and is charged with the responsibility of overseeing the business of the Company
and the Bank. The Committee has the power to exercise most of the powers of the
Board of Directors in the intervals between meetings of the Board. The Executive
Committee held one meeting during 2000.
The Audit Committee consists of F. William Trescott (Chairman), Joe F.
Hanauer and Henry Smogolski. The Committee is responsible for assisting the
Board in the oversight of the Company's accounting, reporting and financial
controls practices and reports to the Board of Directors concerning audit
activities and the results of examinations and any other related matters
affecting the Company and the Bank. The Committee met six times during 2000. The
Board of Directors has adopted a written charter for the Audit Committee, which
is attached hereto as Exhibit A. All members of the Audit Committee meet the
independence standards of Rule 4200(a)(15) of the National Association of
Securities Dealers listing standards. The formal report of the Audit Committee
with respect to the year 2000 is shown later in this proxy statement.
The Administrative/Compensation Committee consists of Robert Bowles
(Chairman), F. William Trescott, Terry Ekl and Andrew Zych. Andrew Zych was
appointed to the Committee, and Robert Bowles was appointed Chairman, effective
May 23, 2000. The Committee is responsible for administering various benefit
plans and for reviewing and making recommendations to the Board concerning
compensation and other related benefit plans applicable to the Company's
executive officers. The Committee met five times during 2000.
The Nominating Committee consists of Allen Koranda, Robert Bowles and Lois
Vasto. The Committee recommends to the Board of Directors the nominees to stand
for election at the Company's annual meeting of shareholders. Any nominations
other than the Board of Directors' slate must comply with the Company's bylaws
with regard to a shareholder slate. The Company's bylaws provide procedures for
shareholder nominations for director, as well as for any other proposals by
shareholders of business to be brought before the meeting. See "Notice of
Business to be Conducted at an Annual Meeting." The Nominating Committee met one
time during 2000.
The Asset/Liability Management Committee consists of Jerry Weberling
(Chairman), Robert Bowles, Joe Hanauer, Allen Koranda, Kenneth Koranda, Gerard
Buccino and Michael Janssen. The Committee's function is to assist the Board of
Directors in monitoring and overseeing the Company's interest rate risk and
credit risk exposure. The Committee is also responsible for implementation of
the Company's overall asset/liability management and credit policies and for
overseeing and making recommendations to the Board concerning other financial
areas of the business, including financing transactions, capital utilization and
dividend policy. The Committee met eleven times in 2000.
7
Directors' Compensation
Directors' Fees. All directors receive annual directors fees of $18,000
($20,000 beginning in January 2001), and directors who are not also officers
receive an additional fee of $450 for each Board meeting and annual meeting
attended. Individuals who are not directors but who serve as director emeriti
are paid an annual retainer fee of $8,200 ($8,600 beginning in January 2001)
plus $100 for each Board meeting they attend. Hugo Koranda, former Chairman of
the Board of Directors of the Bank, who presently serves as Chairman Emeritus,
is paid an annual retainer fee of $11,500 ($20,000 beginning in January 2001)
plus $100 for each Board meeting he attends ($450 beginning in January 2001).
Directors' Deferred Compensation Plan. The Bank maintains the Mid America
Bank Directors' Deferred Compensation Plan. Under the plan, directors may
annually elect to defer up to 100% of their annual directors' fees. Directors
may choose whether to have their deferred amounts earn interest at 130% of the
Moody's Corporate Bond Rate, or invested in the Common Stock of MAF Bancorp.
Generally, upon attaining the age of 65 (or, pursuant to an election made by a
director, at the later of termination of service or attaining the age of 65),
directors are entitled to receive the deferred fees plus accrued interest, or in
the case of amounts invested in Common Stock, the associated number of MAF
Bancorp shares plus accrued dividends. Such amounts are payable in a lump sum or
in installments over a period of time not to exceed fifteen years. Death
benefits are provided to the beneficiaries of the plan participants. The amount
of deferred directors' fees in 2000 is included in "Executive Compensation-
Summary Compensation Table" for the individuals named therein. The shares
purchased on behalf of directors through the plan and allocated to directors'
accounts are included in beneficial ownership shown in "Information with respect
to Nominees, Continuing Directors and Others," for each director and for all
directors and executive officers as a group.
Health Insurance Plan. The Bank maintains a health insurance plan for its
non-employee directors, under which directors electing to be covered under the
plan must contribute certain amounts to receive coverage under the plan.
Option Plans. Certain directors of the Company participate in the MAF
Bancorp, Inc. 1990 Incentive Stock Option Plan (the "1990 Plan") and the MAF
Bancorp, Inc. Amended and Restated 1993 Premium Price Stock Option Plan (the
"Premium Plan"). Non-employee directors of the Company who have not previously
participated in another option plan of the Company are entitled to receive an
initial grant of 5,625 options under the Premium Plan when they become plan
participants. In addition, all non-employee directors of the Company who become
participants in the Premium Plan receive an annual grant of 2,250 options under
the Premium Plan. All options granted to non-employee directors under the
Premium Plan are granted at an exercise price of 110% of the fair market value
of the Common Stock on the date of grant. During 2000, non-employee directors
did not receive a grant of options under the Premium Plan because there were no
options available to be granted under the Premium Plan. Each non-employee
director did receive a grant of 2,250 options under the 1990 Plan during 2000,
at an exercise price equal to 100% of the fair market value of the Common Stock
on the date of grant. Directors are also eligible to receive option grants under
the MAF Bancorp, Inc. 2000 Stock Option Plan but did not receive a grant of
options under this plan in 2000.
8
Report of the Audit Committee
The report of the Audit Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates this information, by reference, and shall not
otherwise be deemed filed under such Acts.
In accordance with its written charter adopted by the Board, the Audit
Committee of the Board ("Committee") assists the Board in fulfilling its
responsibility for oversight of the quality and integrity of the accounting,
auditing and financial reporting practices of the Company.
In discharging its oversight responsibility as to the audit process, the
Committee obtained from the independent auditors a formal written statement
describing all relationships between the auditors and the Company that might
bear on the auditors' independence consistent with Independence Standards Board
Standard No. 1, "Independence Discussions with Audit Committees." The Committee
has considered and discussed with the auditors whether the provision of non-
audit services or any other relationships impacted their objectivity and
independence and satisfied itself as to the auditors' independence. The
Committee also discussed with management, the internal auditors and the
independent auditors, the quality and adequacy of the Company's internal
controls and the internal audit function's organization, responsibilities,
budget and staffing. The Committee reviewed with both the independent and the
internal auditors, their audit plans, audit scope and identification of audit
risks.
Management of the Company is responsible for the preparation, presentation
and integrity of the Company's consolidated financial statements and for
maintaining appropriate accounting principles, financial reporting policies,
internal financial controls and procedures to assure compliance with accounting
standards and applicable laws and regulations. The independent auditors are
responsible for auditing the Company's consolidated financial statements and
expressing an opinion as to their conformity with accounting principles
generally accepted in the United States of America.
The Committee reviewed and discussed the audited consolidated financial
statements of the Company as of and for the year ended December 31, 2000, with
management and the independent auditors. The Committee also discussed and
reviewed with the independent auditors all communications required by generally
accepted auditing standards, including those described in Statement on Auditing
Standards No. 61, as amended, "Communication with Audit Committees," and with
management present, discussed and reviewed the results of the independent
auditors' examination of the financial statements. The Committee also discussed
the results of the internal audit examinations.
The members of the Committee are not professionally engaged in the practice
of auditing or accounting and are not experts in the fields of accounting or
auditing, including with respect to auditor independence. Members of the
Committee rely without independent verification on the information provided to
them and on the representations made by management and the independent auditors.
Accordingly, the Committee's oversight does not provide an independent basis to
determine that management has maintained appropriate accounting and financial
reporting principles or appropriate internal control and procedures designed to
assure compliance with accounting standards and applicable laws and regulations.
Furthermore, the Committee's considerations and discussions referred to above do
not assure that the audit of the Company's consolidated financial statements has
been carried out in accordance with auditing standards generally accepted in the
United States of America, that the
9
consolidated financial statements are presented in accordance with accounting
principles generally accepted in the United States of America or that the
Company's auditors are in fact "independent."
Based upon the reports and discussions described in this report, and
subject to the limitations on the role and responsibilities of the Committee
referred to above, the Committee has recommended to the Board that the audited
consolidated financial statements be included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2000 to be filed with the Securities
and Exchange Commission. The Committee also recommended the reappointment,
subject to shareholder approval, of the independent auditors and the Board
concurred with such recommendation.
Submitted by the Audit Committee of the Company's Board of Directors
F. William Trescott, Chairman
Joe F. Hanauer
Henry Smogolski
Executive Compensation
The report of the Compensation Committee and the stock performance graph
shall not be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933 or the Securities Exchange Act of 1934, except to the
extent that the Company specifically incorporates this information by reference,
and shall not otherwise be deemed filed under such Acts.
Compensation Committee Report. Under rules established by the Securities
and Exchange Commission, the Company is required to provide certain data and
information in regard to the compensation and benefits provided to the Company's
Chief Executive Officer and other executive officers of the Company. The
disclosure requirements for the Chief Executive Officer and other executive
officers include the use of tables and a report explaining the rationale and
considerations that led to fundamental executive compensation decisions
affecting those individuals. In fulfillment of this requirement, the Company's
Administrative/Compensation Committee (the "Compensation Committee") has
prepared the following report for inclusion in this proxy statement.
The Compensation Committee is composed solely of independent outside
directors. The entire Board has delegated to the committee the responsibility of
assuring that the compensation of the Chief Executive Officer and other
executive officers is consistent with the compensation strategy, competitive
practices, the performance of the Company, and the requirements of appropriate
regulatory agencies. Directors who do not sit on the Compensation Committee also
participate in executive compensation matters through the review, discussion and
ratification of Compensation Committee actions.
Executive Compensation Philosophy. The Compensation Committee has the
following goals for the compensation programs relating to the executives of the
Company and the Bank:
* to provide motivation for the executives to enhance earnings per share
results by linking a portion of their compensation to the Company's financial
performance;
* to provide motivation for the executives to enhance shareholder value by
linking a portion of their compensation to the future appreciation in the
value of the Company's Common Stock;
10
* to retain the executive officers who have led the Company to high performance
levels and allow the Company to attract high quality executives in the future
by providing total compensation opportunities which are consistent with
competitive norms of the industry and the Company's level of performance; and
* to maintain reasonable "fixed" compensation costs by targeting base salaries
at competitive average to moderately above average levels.
For purposes of determining the competitive compensation market for the
Company's executives, the Compensation Committee has reviewed the compensation
paid to top executives of thrifts with total assets and performance results
(return on equity) comparable to those of the Company. This information was
generally derived from peer group data taken from the SNL Securities Executive
Compensation Review, which covers publicly-held thrifts (the "SNL Public Thrift
Survey"). In reviewing peer group data, the Compensation Committee chose to use
information contained in the SNL Public Thrift Survey because these
institutions, similar to the Company, are all publicly-held thrifts or thrift
holding companies and many, although not all, of these institutions are included
in the peer group index used in the stock performance graph. In addition, the
Compensation Committee reviewed the compensation paid to top executives of
certain Illinois banks of comparable asset size and reviewed the salary history
and performance levels of each of the executive officers in determining
appropriate compensation levels.
In addition to the information cited above, the Compensation Committee, in
making compensation decisions for 2000, considered the excellent earnings
results over the past few years. The positive trend continued during 2000 as
diluted earnings per share increased to $2.40 per share in 2000 compared to
$2.07 per share for 1999 and $1.65 per share for 1998.
During 2000, executive officers' compensation consisted principally of
salary, annual incentive bonuses, long-term performance awards and stock option
grants. The Committee believes the salaries are generally in the average range
compared to other thrift institutions of comparable asset size. The Committee
pursues the goal of linking executive compensation to the Company's financial
performance through awards under the Company's annual incentive plan, and
linking executive compensation to the Company's stock price performance through
awards under the long-term incentive plan and stock option plans. All awards
under these plans are intended to motivate executives to take actions that will
favorably impact the Company's long-term, as well as annual, profitability.
Under the MAF Bancorp Executive Annual Incentive Plan (the "Annual
Incentive Plan"), executives are classified into three groups, based on their
relative position within the Company, with target annual bonuses (as a
percentage of base salary) equal to 60%, 50% and 45%, respectively. Target
bonuses are paid if targeted company net income or diluted earnings per share
goals established at the beginning of each fiscal year are met and if certain
safety and soundness standards are maintained. Annual bonus awards can range
from 0% to 150% of the target awards depending on how actual net income or
diluted earnings per share ("EPS") compares to the targeted company goal. Awards
will be (1) 50% of the targeted awards if net income/EPS equals a threshold
performance level (80% of targeted net income/EPS), (2) 150% of the targeted
awards if net income/EPS equals a superior performance level (120% of targeted
net income/EPS) or (3) 0% of the targeted awards if net income/EPS is below the
threshold performance level or if certain safety and soundness standards are not
maintained. Beginning in 2001, the threshold and superior performance levels
have been changed to 90% of targeted net income/EPS and 110% of targeted net
income/EPS, respectively. A subjective analysis of an executive's individual
performance can also increase or decrease his award opportunity, although for
2000, this was not used as a criteria in determining annual bonuses.
11
In 2000, EPS, adjusted for certain non-recurring items, equaled
approximately 107% of the targeted goal. As a result of this performance, and
having met certain safety and soundness standards, annual bonuses equal to 70.4%
of base salaries were paid to Messrs. A. Koranda and K. Koranda and annual
bonuses equal to 58.7% of base salaries were paid to Messrs. Weberling, Burba
and Rusdal.
The MAF Bancorp Shareholder Value Long-Term Incentive Plan (the "Long-Term
Incentive Plan") grants performance units annually to executives in target
amounts equal to 30%, 25% and 22.5% of their base salaries, based on executives'
respective classification in one of three groups. The value of performance units
is determined at the end of a three-year period based on the stock price
performance of MAF Bancorp versus the S&P 500 Index. In order for the
performance units to be worth their targeted value, the stock price performance
of MAF Bancorp (including reinvested dividends) must be in the 60th percentile
of the S&P 500 Index (target performance) at the end of the three-year
measurement period. If the stock price performance ranks in the 50th percentile
of the S&P 500 Index, the performance units will be worth 50% of their targeted
value, while performance in the 90th percentile of the S&P 500 Index will result
in the performance units being worth 200% of their targeted value. If the
Company's stock price performance does not rank at least in the 50th percentile
of the S&P 500 Index for the three-year measurement period, the performance
units will have no value. Further, the plan will not be activated and the
performance units will have no value (regardless of stock price performance
relative to the S&P 500 Index) if MAF Bancorp's stock price appreciation,
including reinvested dividends, does not exceed a certain minimum total return
threshold for the three-year period. The value of long-term performance units
granted to executives on January 1, 2000 will be determined at the end of the
three-year performance period ending on December 31, 2002, and cash payments
equal to the value of the units will be made at that time.
Long-term performance units granted on January 1, 1998 were valued at the
end of their three-year performance period on December 31, 2000. The total
return on MAF Bancorp Common Stock (including reinvested dividends) was 26.2%
during this performance period and ranked in the 51st percentile when compared
to the S&P 500 Index. As a result, following the end of the performance period
ended on December 31, 2000, executives participating in the plan received a
payout for the long-term incentive plan units awarded in 1998, as reflected in
the summary compensation table below.
The MAF Bancorp, Inc. 1990 Incentive Stock Option Plan, as amended (the
"1990 Plan"), and the MAF Bancorp, Inc. 2000 Stock Option Plan (the "2000
Plan"), provide the Compensation Committee with the authority to grant
discretionary option awards to executives, directors and employees at an
exercise price of not less than 100% of the fair market value of the Common
Stock on the date of grant. Discretionary awards of options to executive
officers, including the Chief Executive Officer, for 2000 were based on a number
of factors, including the Company's continued strong financial performance as
described above and each executive officer's individual performance, level of
responsibility and position within the Company.
Chief Executive Officer. The Chief Executive Officer's compensation for
2000 consisted principally of the following components:
* Salary
* Incentive Bonus
* Long-Term Performance Units
* Stock Option Grants
The Chief Executive Officer's total base compensation consists of a base
salary and an annual retainer as a director of the Company and the Bank. The
annual base salary effective January 1, 2000 was $315,000 and the annual
director retainer was $18,000. The Committee believes the Chief Executive
12
Officer's base salary is comparatively average to lower than average in his peer
group. The base salary increased 5.0% over the prior year, and the annual
director retainer increased $1,200. The annual incentive bonus for 2000 was
based on the Annual Incentive Plan described above.
The target amount of long-term performance units granted to the Chief
Executive Officer at the beginning of 2000 was equal to 30% of his prior year
base salary. As discussed above, the value of these long-term performance units
will be determined at the end of the three-year performance period ending on
December 31, 2002. Cash payments under the Long-Term Incentive Plan were made to
the Chief Executive Officer for 2000 based on performance units granted on
January 1, 1998.
Based on action taken by the Compensation Committee in January 2001, the
Chief Executive Officer was awarded a discretionary grant of 50,000 stock
options for 2000, on the basis of the factors described above.
Section 162(m). The Compensation Committee does not believe that the
provisions of Section 162(m) of the Internal Revenue Code of 1986, as amended,
relating to the deductibility of compensation paid to the Named Executive
Officers, will limit the deductibility of the executive compensation currently
expected to be paid by the Company. The Compensation Committee will continue to
evaluate the impact, if any, of such provisions and take such actions as it
deems appropriate.
Submitted by the Administrative/Compensation Committee of the Company's
Board of Directors
Robert Bowles, MD (Chairman)
Terry Ekl
F. William Trescott
Andrew J. Zych
Compensation Committee Interlocks and Insider Participation
Terry Ekl, a director of the Company and a member of the Compensation
Committee, is a partner in the law firm of Connolly, Ekl & Williams, P.C. During
2000, the Bank paid that firm $259,757 for legal services rendered. The same law
firm leases office space in the Bank's main office building and paid rents to
the Bank in the amount of $115,992 during 2000.
Four individuals, Messrs. A. Koranda, K. Koranda, D. Burba and J.
Weberling, who are executive officers of the Company serve on the board of
directors of the Bank. These same individuals are also executive officers of the
Bank and serve as directors of the Company.
13
Stock Performance Graph. The following graph shows a comparison of
cumulative total shareholder return (including reinvested dividends) on the
Company's Common Stock, with the cumulative total returns of both a broad-
market index and a peer group index for the period June 30, 1995 through
December 31, 2000. The broad-market index chosen was the Nasdaq Market Index
and the peer group index chosen was the Media General Industry Group, which is
comprised of savings and loan securities. The data was provided by Media
General Financial Services. The shareholder returns are measured based on an
assumed investment of $100 on July 1, 1995.
Comparison of Cumulative Total Return Among MAF Bancorp, Inc.,
Nasdaq Market Index and Peer Group Index
[GRAPH]
6/30/95 6/28/96 12/31/96 12/31/97 12/31/98 12/31/99 12/29/00
------- ------- -------- -------- -------- -------- --------
MAF Bancorp............. 100.00 116.19 165.80 255.34 289.86 232.55 321.98
Peer Group Index........ 100.00 127.08 158.00 265.66 232.88 187.21 303.48
Nasdaq Market Index..... 100.00 125.88 135.44 165.67 233.66 412.11 259.03
A. The lines represent yearly index levels derived from compounded returns
that include all dividends.
B. If the fiscal year end is not a trading day, the preceding day is used.
C. The Index level for all series was set to $100.00 on 6/30/95.
14
Summary Compensation Table. The following table shows, for the years ended
December 31, 2000, 1999 and 1998, the cash compensation paid, as well as certain
other compensation paid or accrued for those periods, to the Chief Executive
Officer and the other four highest paid executive officers ("Named Executive
Officers") of the Company.
Annual Compensation Long Term Compensation
----------------------------------- ---------------------------------
Awards Payouts
----------------------- -------
Other Securities
Annual Restricted Underlying LTIP All Other
Name and Principal Salary Bonus Compen- Stock Options/ Payouts Compensation
Position Year ($)(1) ($)(2) sation($)(3) Awards($) SARs#(4) ($) ($)(5)
- ---------------------------- ---- -------- -------- ------------ ---------- ---------- -------- ------------
Allen H. Koranda; 2000 $333,840 $222,114 - - 50,000 $ 39,648 $ 51,747
Chairman of the Board 1999 316,429 173,359 - - 114,971 19,320 35,712
& Chief Executive Officer 1998 305,320 164,428 - - 30,621 120,120 30,482
Kenneth Koranda; 2000 333,840 222,114 - - 50,000 39,200 69,874
President 1999 316,429 173,359 - - 114,971 18,984 47,970
1998 305,208 164,428 - - 30,519 117,390 39,732
Jerry A. Weberling; 2000 229,016 123,534 - - 25,000 18,984 26,984
Executive Vice President and 1999 215,935 92,589 - - 52,612 9,128 19,289
Chief Financial Officer 1998 187,607 80,668 - - 16,610 55,510 18,539
David Burba; 2000 234,016 126,464 - - 15,000 - 234,933
Executive Vice President 1999 221,800 94,899 - - 33,344 - 662,966
1998 - - - - - - -
Kenneth B. Rusdal; 2000 179,616 105,934 - - 20,000 15,400 24,465
Senior Vice President - 1999 169,000 78,739 - - 41,309 5,544 16,409
Operations and Information 1998 143,750 65,498 - - 14,240 33,670 15,745
Systems
_______________________
(1) Includes amounts deferred under the Bank's deferred compensation plan and
profit sharing/401(k) plan and includes directors' fees earned by Messrs.
A. Koranda, K. Koranda, Weberling and Burba.
(2) Includes bonuses earned pursuant to the Bank's annual incentive plan, which
bases bonuses upon percentages of officers' salaries if the Bank meets
certain financial performance goals.
(3) For 2000, 1999 and 1998, there were no (a) perquisites in excess of the
lesser of $50,000, or 10% of the individual's total salary and bonus for
the years; (b) payments of above-market preferential earnings on deferred
compensation, except as disclosed in footnote (5); (c) payments of earnings
with respect to long-term incentive plans prior to settlement or
maturation; (d) tax payment reimbursements; or (e) preferential discounts
on stock.
(4) Option grants listed in the table were made pursuant to the 1990 Plan, 2000
Plan and the Premium Plan. Option grants shown for 2000 were made in
January 2001 but relate to 2000 service. Options granted to the Named
Executive Officers under these plans become exercisable at various dates as
determined at the time of grant by the Administrative/Compensation
Committee of the Board of Directors. Options awarded under the Premium Plan
were granted at an exercise price equal to 133% of the fair market value of
the Common Stock on the date of grant. Options awarded under the 1990 Plan
and 2000 Plan are granted at an exercise price equal to 100% of the fair
market value of the Common Stock on the date of grant. Options granted to
Named Executive Officers for 2000 have exercise prices of $25.94 per share.
Options granted during 1999 have exercise prices of $27.06 and $21.84 per
share (under the 1990 Plan) and $35.99 and $29.05 per share (under the
Premium Plan). Options granted during 1998 have exercise prices of $23.46
per share (under the 1990 Plan) and $31.20 per share (under the Premium
Plan). Options granted include limited rights, which are generally
exercisable upon a change in control. Options granted for 2000 include a
feature that provides for an automatic additional grant of options in
instances in which shares are surrendered for the payment of exercise price
amounts and/or withheld for the payment of taxes.
(footnotes continued on next page)
15
(5) Includes for 2000: (1) contributions to the Company's Employee Stock
Ownership Plan of 409 shares each for Messrs. A. Koranda, K. Koranda,
Weberling, Burba and Rusdal, valued at the year-end stock price of $28.44
per share; (2) contributions to the Bank's profit sharing plan, representing
discretionary employer contributions, 401(k) employer-matching contributions
and forfeiture allocations, of $6,230 each for Messrs. A. Koranda, K.
Koranda, Weberling, Burba and Rusdal; and (3) amounts accrued in the
deferred compensation plan, relating to the excess of the plan's interest
rates over 120% of the applicable federal long-term interest rates, of
$33,885, $52,012, $9,122, $3,523 and $6,603 for Messrs. A. Koranda, K.
Koranda, Weberling, Burba and Rusdal, respectively; and (4) for Mr. Burba, a
payment of $213,548, representing the final portion of the retention bonus
payable to him, plus interest, in connection with the merger of Westco
Bancorp, Inc. with the Company on December 31, 1998. See "Employment and
Special Termination Agreements."
Employment and Special Termination Agreements
The Company and the Bank have entered into employment agreements with Allen
Koranda, Kenneth Koranda and Jerry Weberling, and the Company has entered into
an employment agreement with David Burba. The Company and the Bank have also
entered into special termination agreements with certain executive officers of
the Company and the Bank, including Kenneth Rusdal. Such employment and special
termination agreements are designed to ensure that the Company and the Bank will
be able to maintain a stable and experienced management base.
Employment Agreements. The employment agreements with Messrs. A. Koranda,
K. Koranda and Weberling provide for three-year terms. Prior to each anniversary
date, the Board of Directors of the Company or the Bank may extend the
agreements for an additional year so that the remaining terms shall be
approximately three years. The agreements provide for an annual base salary,
which is reviewed annually, to be paid by the Bank, or the Company in lieu of
the Bank, in an amount that is not less than that which was paid to each
executive in 1990. In addition to base salary, each agreement provides, among
other things, for participation in benefit plans and other fringe benefits
applicable to executive officers.
The agreements with Messrs. A. Koranda, K. Koranda and Weberling provide
for termination by the Company and the Bank for "cause," as defined in the
agreements, at any time. In the event the Company and the Bank choose to
terminate an executive's employment for reasons other than as a result of a
change in control (as defined in the agreements) and other than for cause, or in
the event of an executive's resignation from the Company or the Bank upon (i)
failure to re-elect executive to the executive's current offices and, in the
case of Messrs. A. Koranda or K. Koranda, to re-nominate him as a director of
the Company and the Bank; (ii) a material lessening of the executive's
functions, duties or responsibilities; (iii) a liquidation, dissolution,
consolidation or merger in which the Company or the Bank is not the resulting
entity; or (iv) a breach of the agreement by the Company or the Bank, the
executive or, in the event of death, the executive's beneficiary, as the case
may be, would be entitled to a payment equal to the greater of the amount
payable to the executive for the remaining term of the agreement or three times
the executive's average annual salary and Annual Incentive Plan bonus paid over
the prior three years. The Company and the Bank would also continue the
executive's life, health and disability coverage for thirty-six months or, if
earlier, until the executive is employed by another employer. The continued
life, health and disability benefits provided under the agreements would apply
to the executive and to any other dependents covered under the Bank's life,
health and disability plans prior to the change in control. If termination
results from a change in control of the Company or the Bank, as defined in the
agreements, followed by the executive's subsequent termination of employment,
the executive would be entitled to a termination payment equal to three times
the executive's average annual salary and Annual Incentive Plan bonus paid over
the prior three years (which would result in current payments of approximately
$1,471,000, $1,471,000 and $891,000 for Messrs. A. Koranda, K. Koranda and
Weberling, respectively, exclusive of any additional payment which may be due to
each
16
individual relating to the reimbursement of excise taxes, as discussed
below) and continued benefits as described above and certain benefits provided
under the Bank's benefit plans.
The employment agreement with Mr. Burba, effective in January 1999, was
entered into in connection with the merger of Westco Bancorp, Inc. with MAF
Bancorp, Inc. on December 31, 1998. The agreement, pursuant to which Mr. Burba
serves as an Executive Vice President of the Company and the Bank, provides for
a three-year term with an annual base salary of $205,000 and entitles Mr. Burba
to participate in employee benefit plans of the Company and the Bank, including
annual and long-term incentive programs, on the same basis as similarly-situated
executives. The employment agreement provides for the payment of a $920,000
retention bonus to Mr. Burba in consideration of the termination of his
employment agreements with Westco Bancorp, Inc. and First Federal Savings and
Loan Association of Westchester and the waiver of the lump-sum severance payment
of equal amount otherwise payable under these agreements. The retention bonus
was payable in three installments and all payments have been made as of December
31, 2000. The agreement with Mr. Burba permits termination by the Company for
"cause," as defined in the agreement, at any time. In the event Mr. Burba's
employment is involuntarily terminated other than for cause, or Mr. Burba
resigns due to a breach of the agreement by the Company or the Bank prior to the
expiration of the three-year term, certain annual compensation payments and
insurance benefits will be paid for the balance of the term.
In connection with the employment agreement, the Company and Mr. Burba also
entered into a non-competition agreement pursuant to which Mr. Burba has agreed
that for a period of 24 months following his termination of employment, he will
not, without the Company's prior consent, engage or participate in depository,
lending or other financial services businesses in any community in which the
Company or the Bank or any of their affiliates has a financial institution or
branch or has sought regulatory approval to acquire or establish a financial
institution or branch at the time of termination of employment, or in any
community within a prescribed radius of any such institution or branch. The
agreement also imposes confidentiality restrictions on Mr. Burba and restricts
him from soliciting or encouraging employees of the Company or the Bank to
terminate employment. As separate consideration for these restrictive covenants,
the Company or the Bank will be obligated to make monthly payments of $15,000 to
Mr. Burba during the 24-month period following his termination of employment.
Such payments will be made to his beneficiary in the event of his death.
Special Termination Agreements. Special termination agreements among the
Company, the Bank and certain executive officers, including Kenneth Rusdal,
provide for three-year terms. Prior to each anniversary date, the Board of
Directors of the Company or the Bank may extend the agreements so that the
remaining term shall be approximately three years. Each agreement provides that
at any time following a change in control of the Company or the Bank, as defined
in the agreements, if the Company or the Bank were to terminate the executive's
employment for any reason other than "cause," as defined in the agreements, or
if the executive were to elect to terminate his or her own employment following
his or her demotion, loss of title, office or significant authority, a reduction
in his or her compensation, or relocation of his or her principal place of
employment, the executive would be entitled to receive a termination payment in
an amount equal to three times his or her average annual salary and Annual
Incentive Plan bonus paid over the three previous years of his or her employment
(which would result in a current payment of approximately $751,000 for Mr.
Rusdal, exclusive of any additional payment which may be due to him relating to
the reimbursement of excise taxes, as discussed below). The Company and the Bank
would also continue the executive's life, health and disability coverage for
thirty-six months or, if earlier, until the executive is employed by another
employer. The continued life, health and disability benefits provided under the
agreements would apply to the executive and to any other dependents covered
under the Bank's life, health and disability plans prior to the change in
control.
17
Payments upon a change in control under the employment agreements and
special termination agreements could constitute excess parachute payments under
Section 280G of the Internal Revenue Code (the "Code"), which may result in the
imposition of an excise tax on the recipient and denial of the deduction for
such excess amounts to the Company and the Bank. The agreements provide that
benefits payable following a change in control will, in most cases, be increased
by the amount necessary to reimburse the executive officer for the amount of the
excise tax and any related income tax due on such reimbursement payment.
Supplemental Executive Retirement Plan
The Bank has a supplemental executive retirement plan ("SERP") for the
purpose of providing certain retirement benefits to executive officers and other
corporate officers approved by the Board of Directors. The annual retirement
plan benefit under the SERP is calculated equal to 2% of final average salary
times the years of service after 1994 ("Years of Service"). Except in the case
of Mr. Burba, ten additional Years of Service will be credited to participants
in the event of a change in control transaction, although in no event may total
Years of Service exceed the lesser of 20 years or the Years of Service at age
65. The maximum annual retirement payment is equal to 40% of final average
salary. Benefits are payable in various forms in the event of retirement, death,
disability and separation from service, subject to certain conditions defined in
the plan. The SERP also provides for certain death benefits to the extent such
amounts exceed a participant's accrued benefit under the SERP at the time of
death.
The following table shows the annual benefits payable upon retirement under
the SERP, based on the specified final average salary amounts and service
periods.
Final Average Years of Credited Service (1)(2)
-------------------------------------
Salary 5 10 15 20
- ---------------------------- ------- ------- -------- --------
$ 80,000 $ 8,000 $16,000 $ 24,000 $ 32,000
120,000 12,000 24,000 36,000 48,000
160,000 16,000 32,000 48,000 64,000
200,000 20,000 40,000 60,000 80,000
240,000 24,000 48,000 72,000 96,000
280,000 28,000 56,000 84,000 112,000
320,000 32,000 64,000 96,000 128,000
360,000 36,000 72,000 108,000 144,000
400,000 40,000 80,000 120,000 160,000
440,000 44,000 88,000 132,000 176,000
(1) Benefits shown are computed on the basis of a single life annuity. Other
forms of benefit payments are available under the SERP and would be
determined based on the actuarial equivalent amount of the single life
annuity payment.
(2) Messrs. A. Koranda, K. Koranda, Weberling and Rusdal have six credited years
of service as of December 31, 2000 and Mr. Burba has two credited years of
service.
Option Plans
The Company maintains the 1990 Plan and 2000 Plan, which provide for
discretionary stock option awards to officers, directors and employees as
determined by the Compensation Committee. As of the record date, a total of
2,842,010 options have been granted under the 1990 Plan and 2000 Plan of which
1,601,535 remain outstanding. A total of 61,526 options remain to be issued
under the 1990 Plan and the 2000 Plan. The table on the following page lists all
grants of options (and limited rights) under
18
the 1990 Plan and 2000 Plan to the Named Executive Officers for the year ended
December 31, 2000, and contains certain information about grant-date valuation
of the options.
The Company also maintains the Premium Plan, which provides for stock
option awards to officers, directors and employees as determined by the
Compensation Committee. Under the Premium Plan, options are granted to executive
officers at 133% of the fair market value of the Common Stock on the date of
grant and are granted to non-employee directors at 110% of the fair market value
of the Common Stock on the date of grant. Thus, no executive officer or director
will derive any financial benefit from the grant of options under the Premium
Plan until such time as shareholders have benefited from considerable stock
price appreciation. As of the record date, a total of 556,875 options have been
granted under the Premium Plan of which 508,748 remain outstanding. No options
remain to be issued under the Premium Plan. There were no grants of options
under the Premium Plan for the year ended December 31, 2000.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR (1)
------------------------------------------
Individual Grants
-----------------
Number of
Securities Percent of Total
Underlying Options/SARs
Options/SARs Granted to Exercise or Base
Granted Employees in Price Expiration Grant Date
Name (#)(2) Fiscal Year ($/Share)(3)(4) Date (5) Present Value ($)(6)
- ---------------------- ------------ ---------------- ---------------- ---------- --------------------
Allen H. Koranda 50,000 12.3% $25.94 01/11/11 $551,500
Kenneth Koranda 50,000 12.3 25.94 01/11/11 551,500
Jerry A. Weberling 25,000 6.1 25.94 01/11/11 275,750
David Burba 15,000 3.7 25.94 01/11/11 165,450
Kenneth B. Rusdal 20,000 4.9 25.94 01/11/11 220,600
- --------------------------------------
(1) The options shown in the table were granted on January 11, 2001 and relate
to service performed in 2000.
(2) Options granted for 2000 service become exercisable in various installments
between 2001-2003 with respect to Messrs. A. Koranda and K. Koranda, and in
various installments between 2001-2004 with respect to Messrs. Weberling,
Burba and Rusdal. To the extent not already exercisable, the options become
exercisable upon a change in control, as defined in the plan. In addition,
vesting of options may be accelerated by the Compensation Committee.
(3) The purchase price may be made in cash or in whole or in part through the
surrender of previously-held shares of Common Stock at the fair market
value of such shares on the date of exercise. The exercise price of stock
options granted to the Named Executive Officers was equal to 100% of the
fair market value of the Common Stock on the date the options were granted.
(4) Options are subject to limited rights (SARs) which may be exercised in the
event of a change in control of the Company. Upon the exercise of a limited
right, the optionee would receive a cash payment (or at the discretion of
the Compensation Committee, a like payment of shares of Common Stock) equal
to the difference between the exercise price of the related option and the
fair market value of the underlying shares of Common Stock on the date the
limited right is exercised, multiplied by the number of shares to which
such limited rights are exercised.
(5) The option term is ten years.
(6) The method used is a variation of the Black-Scholes option pricing model
and reflects the following assumptions as of the January 11, 2001 grant
date for the options shown in the table: (a) fair market value of the
Common Stock on the date of grant equal to $25.94 per share; (b) expected
dividend yield on the Common Stock of 1.54%; (c) calculated volatility of
the price of the Common Stock equal to 32.13%, determined based
19
on the closing end-of-week stock prices for the most recent 104 weeks ending
prior to the date of grant; and (d) a risk-free interest rate equal to
5.08%. The actual value, if any, an executive officer may realize will
depend on the excess of the stock price over the exercise price on the date
the option is exercised. There is no assurance that the value realized will
be at or near the value estimated by the Black-Scholes model.
The following table shows options exercised by the Named Executive Officers
during 2000, including the aggregate value of such options realized on the date
of exercise. In addition, the table provides certain information with respect to
the number of shares of Common Stock represented by outstanding stock options
held by the Named Executive Officers as of December 31, 2000. Also reported are
the values for "in-the-money" options, which represent the positive spread
between the exercise price of any such existing stock options and the year-end
price of the Common Stock.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
---------------------------------
Number of Securities Value of Unexercised in-the-
Underlying Unexercised Money Options/SARs at
Options/SARs at Fiscal Fiscal Year-End
Year-End(#)(1) ($)(1)(2)
Shares Acquired ------------------------- ----------------------------
On Value
Name Exercise(#) Realized($) Exercisable/Unexercisable Exercisable/Unexercisable
- ------------------- --------------- ----------- ------------------------- ----------------------------
Allen H. Koranda 209,125 $3,684,090 236,495/118,995 $3,055,129/$462,597
Kenneth Koranda 134,125 2,362,838 234,074/118,995 3,019,164/ 462,597
Jerry Weberling - - 91,253/ 52,309 863,022/ 194,840
David Burba 41,682 715,102 101,631/ 28,782 1,980,877/ 111,063
Kenneth Rusdal - - 72,720/ 42,028 773,943/ 149,997
___________________________________
(1) Includes options granted on January 11, 2001 for 2000 service.
(2) Market value of underlying securities at December 31, 2000 ($28.44 per
share), minus the exercise or base price per share.
20
Long-Term Incentive Plan
The table below provides certain information relating to performance units
granted to the Named Executive Officers under the MAF Bancorp Shareholder Value
Long-Term Incentive Plan during the year ended December 31, 2000. The value of
the performance units, if any, is to be paid in cash to the recipient at the end
of a three-year performance period. The value of the units is to be determined
based on the stock price performance (including reinvested dividends) of MAF
Bancorp, Inc. Common Stock relative to the S&P 500 Composite Index.
LONG-TERM INCENTIVE PLAN - AWARDS IN LAST FISCAL YEAR
------------------------------------------------------
Performance Estimated Future Payouts
Number of or Other Under Non-Stock Price Based Plans (1)
Shares, Period Until ---------------------------------------
Units or Other Maturation Threshold Target Maximum
Name Rights (#) or Payout ($ or #) ($ or #) ($ or #)
- -------------------- -------------- ------------ --------- --------- --------
Allen H. Koranda 900 3 years $45,000 $90,000 $180,000
Kenneth Koranda 900 3 years 45,000 90,000 180,000
Jerry A. Weberling 500 3 years 25,000 50,000 100,000
David Burba 513 3 years 25,650 51,300 102,600
Kenneth B. Rusdal 425 3 years 21,250 42,500 85,000
___________________________
(1) The threshold, target and maximum payments are based on MAF Bancorp stock
price appreciation (including reinvested dividends) ranking in the 50th,
60th and 90th percentile of the S&P 500 Index at the end of the three-year
performance period. No payout is to be made if MAF Bancorp's stock price
performance ranks below the 50th percentile at the end of the performance
period or if MAF Bancorp's stock price performance for the three-year period
is below a minimum total return threshold, regardless of stock price
performance relative to the S&P 500 Index.
Transactions with Certain Related Persons
Directors, officers and employees of the Company and its subsidiaries are
eligible to apply for mortgage, home equity, home improvement, savings account,
automobile and education loans. All loans to directors and executive officers
are made in the ordinary course of business, do not involve more than the normal
risk of collectibility and do not present any unfavorable features. These loans
are made on substantially the same terms, including interest rates and
collateral, as those prevailing at the same time for comparable transactions
with unaffiliated persons. The Bank's policy is to have all loans to directors
and executive officers approved by the Board of Directors of the Bank.
On May 3, 2000, the Company purchased 15,000 shares of MAF Bancorp Common
Stock from Allen Koranda, Chief Executive Officer of the Company, for $18.00 per
share, or $270,000, in a private transaction. On July 31, 2000, the Company
purchased 70,000 shares of MAF Bancorp Common Stock from Allen Koranda for
$19.1625 per share, or approximately $1.3 million, in a private transaction. In
each case, the purchase price per share did not exceed the then-prevailing
market price for the Common
21
Stock and the transaction was consummated in accordance with terms approved by
the disinterested members of the Board. The sales were related to Mr. Koranda's
marital dissolution agreement.
The Bank has certain business relationships with the law firm in which
Terry Ekl, a director of the Company, is a partner. See "Compensation Committee
Interlocks and Insider Participation."
PROPOSAL 2. APPROVAL OF A PROPOSED AMENDMENT TO THE MAF BANCORP, INC. 2000
STOCK OPTION PLAN
The Board of Directors has adopted an amendment to the 2000 Plan, which is
being presented to shareholders for approval. The amendment increases the number
of shares of Common Stock authorized to be issued under the 2000 Plan by
1,500,000 shares. A copy of the 2000 Plan, as proposed to be amended and
restated, is attached hereto as Exhibit B. The 2000 Plan was originally approved
by shareholders at the 2000 Annual Meeting of Shareholders and authorized
300,000 shares to be issued under the Plan. The amendment will increase the
total shares authorized to be issued under the 2000 Plan to 1,800,000.
The purpose of the 2000 Plan is to advance the interests of the Company and
its shareholders by tying Company performance with long-term compensation. The
Board of Directors believes that stock options are an important element of
executives' compensation package, serving to attract and retain qualified
executives and providing an important motivational link between the Company's
stock price and executives' compensation. Since 1998, stock options have also
been granted to employees other than executive officers. It is the intention of
the Company to continue this practice. The Board of Directors also believes it
is in the best interests of the Company and its shareholders to grant stock
options as part of the compensation paid to directors, in order to attract and
retain qualified directors and link part of their compensation to the return
shareholders receive on their investment in the Company.
The Company currently has three active stock option plans, the 2000 Plan,
the 1990 Plan and the Premium Plan. The 1990 Plan was originally adopted in
connection with the Company's 1990 initial public offering and was approved by
shareholders at the 1990 Annual Meeting of Shareholders. Shareholders later
approved various amendments to the 1990 Plan in 1996 and 1998. Under the 1990
Plan and 2000 Plan, an aggregate total of 61,526 options remain to be granted
and 1,601,535 previously-granted options remain to be exercised as of March 7,
2001, representing in total, approximately 7.3% of the outstanding shares of
Common Stock as of the record date. The weighted average exercise price of the
1,601,535 outstanding options under the 1990 Plan and 2000 Plan is $21.55 per
share.
The Premium Plan was originally adopted in 1993 with various amendments
approved by shareholders in 1995. Option awards to executive officers and
directors under the Premium Plan are granted at a premium exercise price equal
to 133% and 110% of the fair market value of the Common Stock on the date of
grant, respectively. Thus, executive officers will derive no financial benefit
from the grant of premium options until such time as shareholders benefit from a
33% stock price increase, while directors' options will be "out of the money"
until such time as the stock price increases by 10% from the date of grant of
the options. Under the Premium Plan, all authorized options have been granted
and 508,748 previously-granted options remain to be exercised as of March 7,
2001, representing approximately 2.2% of the outstanding shares of Common Stock
as of the record date. The weighted average exercise price of the 508,748
outstanding options under the Premium Plan is $19.65 per share.
In addition to the plans described above, the Company is administering one
other stock option plan from an entity that merged with the Company. Under this
plan, there are 82,069 options remaining to be exercised as of March 7, 2001,
which have an exercise price of $4.78 per share.
22
In that there are only 61,526 options remaining to be granted under the
Company's option plans, the Board believes that it is an appropriate time to
increase this reserve by 1,500,000 options. If this proposed increase is
approved by shareholders, the Company expects to utilize the available options
over the next three years. Under the terms of the Option Plan, options are to be
granted at not less than 100% of the fair market value of the Common Stock on
the date of grant.
The foregoing and the following is a summary of the material terms of the
2000 Plan, as proposed to be amended and restated, which is qualified in its
entirety by the complete provisions of the plan document attached as Exhibit B.
The 2000 Plan is administered by the Compensation Committee. The
Compensation Committee is authorized to make all determinations and
interpretations under the Plan, including the amount, timing, terms and
conditions of awards granted, subject to the limitations set forth in the Plan.
To the extent necessary to comply with Rule 16b-3 under the Exchange Act, the
Plan provides that the full Board may act for the Committee. Under the 2000
Plan, the number of options that may be granted to any single plan participant
during a calendar year may not exceed 100,000.
Under the 2000 Plan, option awards may be granted for ten years. Options
may be granted in the form of incentive stock options or non-statutory stock
options. As discussed below, income tax consequences generally make incentive
stock options more beneficial to participants than non-statutory stock options,
while the tax consequences of non-statutory stock options are generally more
favorable for the issuing company than incentive stock options.
The 2000 Plan authorizes the granting of incentive and non-statutory stock
options to such employees and directors of the Company or its affiliates as the
Compensation Committee may determine. Options granted under the 2000 Plan may be
either "incentive stock options" (options which afford tax benefits to
recipients upon compliance with certain conditions, and which do not generally
result in tax deductions to the Company), or "non-statutory stock options"
(options which do not afford income tax benefits to recipients, but which may
provide tax deductions for the Company). Directors are only eligible to receive
non-statutory stock options under the 2000 Plan.
Incentive stock options granted under the 2000 Plan may be exercised at
such times as the Compensation Committee determines (but not after ten years
from the date of grant or, in the case of an employee owning directly or
indirectly more than 10% of the Common Stock of the Company on the date of grant
of an option, not after five years from the date of grant) and at exercise
prices not less than 100% of the fair market value of the Common Stock on the
date the option is granted or, in the case of an employee owning directly or
indirectly more than 10% of the Common Stock on the date of grant of an option,
not less than 110% of the fair market value of the Common Stock on the date the
option is granted. Non-statutory stock options granted under the 2000 Plan may
be exercised at such times as the Committee determines (but not after ten years
from the date of grant) and at exercise prices of not less than 100% of the fair
market value of the Common Stock on the date the option is granted. The purchase
price may be paid in cash or by surrendering shares of Common Stock (which meet
certain requirements) equal in value to the exercise price. No options may be
granted under the 2000 Plan after February 28, 2010 or if earlier, upon the
exercise of options or related rights equaling the maximum number of shares
reserved under the 2000 Plan.
Option grants will become exercisable in whole or in part at such times as
determined by the Compensation Committee at the time of grant. The Compensation
Committee, in its sole discretion, may accelerate the time at which any option
may be exercised in whole or in part. All options become immediately exercisable
upon a participant's termination of employment due to death, disability, or
retirement as defined in the 2000 Plan. In addition, all options become
immediately exercisable upon a change in control, as defined in the 2000 Plan.
23
Stock options granted in connection with the 2000 Plan which are
exercisable, may not be exercised more than three months after the date on which
the optionee ceases to perform services for the Bank or the Company, except as
described below. In the event of cessation of service due to death, disability,
retirement or following a change in control (as defined in the 2000 Plan), stock
options may be exercisable for up to three years following the date of
termination.
If an optionee is terminated for cause, all options expire upon such
termination. In no event, however, may an incentive or non-statutory stock
option be exercised after the tenth anniversary of the grant of the option. If
an optionee ceases to perform services for the Company or any affiliate due to
retirement or following a change in control, any incentive stock options
exercised more than three months following the date of the optionee's
termination of employment shall be treated for tax purposes as non-statutory
stock options. If an optionee ceases to perform services for the Company or any
affiliate due to disability, any incentive stock options exercised more than
twelve months following the date of the optionee's termination of employment
shall be treated for tax purposes as non-statutory stock options.
The Company is obligated to withhold from any distributions made pursuant
to an option exercise, or require a Participant to remit, the amount of tax
required to be withheld by law or regulation. At the participant's election,
such withholding obligation may be settled by having shares of Common Stock
otherwise issuable upon exercise of an award, withheld by the Company to satisfy
applicable withholding taxes.
An optionee will not be deemed to have received taxable income upon the
grant or exercise of any incentive stock option, provided that such shares are
not disposed of by the optionee for at least one year after the date the shares
are transferred in connection with the exercise of the option and two years
after the date of grant of the option. No compensation deduction may be taken by
the Company as a result of the grant or exercise of incentive stock options,
assuming these holding periods are met. In the case of a non-statutory stock
option, or in the event shares received upon the exercise of an incentive stock
option are disposed of prior to the satisfaction of the holding periods (a
"disqualifying disposition"), an optionee will be deemed to have received
ordinary income upon the exercise of the stock option, or the date of the
disqualifying disposition, whichever is later, in an amount equal to the amount
by which the exercise price is exceeded by the lesser of the fair market value
of the Common Stock on the date of exercise or the fair market value of the
Common Stock on the date of the disqualifying disposition, multiplied by the
number of shares received pursuant to the exercise of such options. The amount
of any ordinary income deemed to have been received by an optionee upon the
exercise of a non-statutory stock option or due to a disqualifying disposition
of an incentive stock option will generally be a deductible expense of the
Company for tax purposes.
Section 162(m) of the Code disallows federal income tax deductions for
certain compensation in excess of $1 million per year paid to any of the
Company's Named Executive Officers. One exception to the limitation is
"performance-based" compensation. The determination of whether compensation is
performance-based is dependent upon a number of factors, including shareholder
approval of the benefit plan pursuant to which the compensation was paid.
Although the Company has structured the 2000 Plan to satisfy the "performance-
based" criteria, there is no assurance that options granted under the 2000 Plan
will satisfy such requirements.
The Compensation Committee may grant limited rights simultaneously with the
grant of options, other than options granted to non-employee directors. A
limited right may only be exercised by the optionee following a change in
control of the Company or the Bank and only when the underlying option is
exercisable. In no event may a limited right be exercisable when the fair market
value of the underlying shares of Common Stock on the day of exercise is less
than the exercise price of the related option. Upon exercise of a limited right,
the optionee is entitled to receive a lump-sum cash payment equal to the
difference between the exercise price of the related option and the fair market
value of the
24
shares of Common Stock subject to the option on the date of exercise, multiplied
by the number of shares with respect to which such limited rights are exercised,
and the related option thereafter ceases to be exercisable. The Compensation
Committee may substitute Common Stock for cash in satisfaction of any payment
due to a participant for a limited right exercise, if it considers such
substitution to be in the best interests of the Company and its shareholders.
The amount payable upon exercise of a limited right will be taxable to the
optionee as ordinary income and will generally be deductible by the Company.
Options and limited rights granted under the 2000 Plan may only be
exercised during his or her lifetime by the optionee, or a guardian or legal
representative of the optionee. With the consent of the Compensation Committee,
a participant may designate a beneficiary of any stock option or limited right
award in the event of the death of the participant. The 2000 Plan enables the
Compensation Committee to permit limited transferability of non-statutory stock
options by participants to immediate family members. Transferred non-statutory
stock options remain subject to the vesting and exercise periods applicable to
the non-statutory stock options prior to such transfer.
The 2000 Plan provides for adjustment in the number and class of shares
subject to, and available for, option awards under the 2000 Plan, and in the
annual limit on the number of options which may be granted to an individual
participant under the 2000 Plan, and to the number, class and the exercise price
of shares subject to outstanding options granted thereunder, in the event of any
change in the outstanding shares of Common Stock that occurs by reason of a
stock dividend or split, recapitalization, merger, consolidation, combination,
separation (including a spin-off), exchange of shares or other similar corporate
change or distribution of stock or property by the Company. Such adjustments do
not constitute amendments to the 2000 Plan. The Board of Directors may at any
time terminate the 2000 Plan or amend it, provided, that no amendment which
would have the effect of (a) increasing the number of shares available for
option awards under the 2000 Plan, (b) increasing the annual limit on the number
of options which may be granted to an individual participant under the 2000
Plan, or (c) extending the period during which options may be granted under the
2000 Plan, will be effective unless approved by the shareholders of the Company.
No termination or amendment of the 2000 Plan may adversely affect any
outstanding option granted under the 2000 Plan without the consent of the
optionee.
The above discussion describes the general terms of the 2000 Plan. The
purpose of requesting stockholder approval of the proposed amendment to the 2000
Plan is to permit certain options to be granted as incentive stock options under
Section 422 of the Code, to qualify the options granted under the Option Plan as
"performance based" compensation under Section 162(m) of the Code and to comply
with the rules of the Nasdaq Stock Market on which the Company's shares are
traded. In addition, the 2000 Plan requires shareholder approval of the proposed
amendment. In the event shareholders fail to approve Proposal 2, the amendment
will not be effective and the plan will continue to operate in accordance with
its existing terms.
No determination has yet been made as to the amount or terms of any future
grants of stock options to executive officers, directors or non-executive
employees if shareholders approve the amendment to the 2000 Plan. The disclosure
provided in the following table sets forth the estimated dollar value and
associated number of options that were granted to the Named Executive Officers
and certain other persons and groups during 2000, or for service in 2000. These
grants were made under the 1990 Plan and the 2000 Plan. If shareholders approve
the proposed amendment to the 2000 Plan to increase the authorized shares
available for option grants, future grants of options to the Named Executive
Officers and the groups shown on the following table will be determined by the
Compensation Committee.
25
NEW PLAN BENEFITS TABLE
MAF Bancorp, Inc. 2000 Stock Option Plan
Dollar Number
Name and Position Value ($)(1) of Units (2)
----------------- ------------ ------------
Allen Koranda, Chief Executive Officer $ 551,500 50,000
Kenneth Koranda, President 551,500 50,000
Jerry Weberling, Executive Vice President and CFO 275,750 25,000
David Burba, Executive Vice President 165,450 15,000
Kenneth Rusdal, Senior Vice President 220,600 20,000
Terry A. Ekl, Director Nominee 24,818 2,250
Lois B. Vasto, Director Nominee 24,818 2,250
Executive Officers as a Group(2) 2,757,500 250,000
Non-Executive Directors as a Group 173,723 15,750
Non-Executive Officer Employee Group 1,734,468 157,250
- ----------------
(1) For purposes of determining the dollar value of the options in the above
table, a variation of the Black-Scholes pricing model was used with an
assumed date of grant of January 11, 2001, the most recent date of grant
for options granted to executive officers. The specific assumptions are set
forth above under the table titled "Options/SAR Grants in Last Fiscal
Year." There is no assurance that the value realized will be at or near the
value estimated by the Black-Scholes model.
(2) See "Executive Compensation-Summary Compensation Table" and "Options/SAR
Grants in Last Fiscal Year" for additional information on options granted
to Named Executive Officers.
Unless marked to the contrary, the shares represented by the enclosed proxy
card, if executed and returned, will be voted FOR the approval of a proposed
amendment to the MAF Bancorp, Inc. 2000 Stock Option Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF A PROPOSED
AMENDMENT TO THE MAF BANCORP, INC. 2000 STOCK OPTION PLAN.
PROPOSAL 3. RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Company's independent auditors for the year ended December 31, 2000
were KPMG LLP. The Board of Directors has reappointed KPMG LLP to continue as
independent auditors for the Company and its affiliates, including the Bank, for
the year ending December 31, 2001 subject to ratification of such appointment by
the shareholders. Representatives of KPMG LLP are expected to attend the
Meeting. They will be given an opportunity to make a statement if they desire to
do so and will be available to respond to appropriate questions from
shareholders present at the Meeting.
Audit Fees. KPMG LLP has billed the Company $188,000, in the aggregate,
for professional services rendered by them for the audit of the Company's annual
consolidated financial statements for the fiscal year ended December 31, 2000,
and the reviews of the interim consolidated financial statements included in the
Company's Quarterly Reports on Form 10-Q filed with the Securities and Exchange
Commission during the fiscal year ended December 31, 2000.
26
Financial Information Systems Design and Implementation Fees. KPMG LLP has
not billed the Company for professional services to the Company of the nature
described in Regulation S-X Rule 2-01(c)(4)(ii) during the fiscal year ended
December 31, 2000.
All Other Fees. KPMG LLP has billed the Company $168,079, in the aggregate,
for all other services rendered by them during the fiscal year ended December
31, 2000, exclusive of those described above under "Audit Fees." This amount
includes audit-related services and non-audit services. The audit-related
services performed were in connection with the filing of registration statements
and other reports as required by the SEC. Non-audit services generally include
tax review and tax consultation services.
The Audit Committee has considered whether the services described under the
caption "All Other Fees" performed by the independent auditors to the Company
are compatible with maintaining the auditor's independence.
Unless marked to the contrary, the shares represented by the enclosed proxy
card, if executed and returned, will be voted FOR the ratification of the
appointment of KPMG LLP as the independent auditors of the Company for the year
ending December 31, 2001.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
OF KPMG LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY FOR THE YEAR ENDING
DECEMBER 31, 2001.
Shareholder Proposals
To be considered for inclusion in the proxy statement and proxy relating to
the annual meeting of shareholders to be held in 2002, a shareholder proposal
must be received by the Corporate Secretary of the Company at the address set
forth on the first page of this Proxy Statement, no later than November 23,
2001. If such annual meeting is held on a date more than 30 calendar days from
April 25, 2002, a shareholder proposal must be received by a reasonable time
before the proxy solicitation for such annual meeting is made. Any such
proposal will be subject to 17 C.F.R. (S)240.14a-8 of the Rules and Regulations
of the SEC.
Notice of Business to be Conducted at an Annual Meeting
The bylaws of the Company provide an advance notice procedure for certain
business to be brought before an annual meeting. Under the bylaw provisions
currently in effect, in order for a shareholder to properly bring business
before the 2002 Annual Meeting, the shareholder must give written notice to the
Corporate Secretary of the Company at the address on the front page of this
Proxy Statement. To be timely, a shareholder's notice must be delivered or
mailed to and received at the principal executive offices of the Company on or
before January 22, 2002, or in the event that the date of the meeting is changed
more than 30 days from April 25, 2002, such notice must be delivered or mailed
to and received by the Company not later than 90 days in advance of such
meeting. The notice of proposed shareholder action must include the
shareholder's name and address, as it appears on the Company's record of
shareholders, a brief description of the proposed business, the reason for
conducting such business at the annual meeting, the class and number of shares
of the Company's capital stock that are beneficially owned by such shareholder
and any material interest of such shareholder in the proposed business. In the
case of nominations to the Board, certain information regarding the nominee must
be provided. The shareholder's notice of nomination must contain all
information relating to the nominee that is required to be disclosed by the
Company's bylaws and by the Exchange Act. These procedures apply to any matter
that a shareholder wishes to raise at the 2002 Annual Meeting, including those
matters raised other than pursuant to 17 C.F.R. (S)240.14a-8 of the Rules and
Regulations of the SEC.
27
Nothing in this paragraph shall be deemed to require the Company to include in
its proxy statement and proxy relating to the 2002 Annual Meeting any
shareholder proposal that does not meet all of the requirements for inclusion
established by the SEC in effect at the time such proposal is received.
Other Matters Which May Properly Come Before the Meeting
The Board of Directors knows of no business that will be presented for
consideration at the Meeting other than as stated in the Notice of Annual
Meeting of Shareholders. If, however, other matters are properly brought before
the Meeting, it is the intention of the persons named in the accompanying proxy
to vote the shares represented thereby on such matters in accordance with their
best judgment.
Whether or not you intend to be present at the Meeting, you are urged to
return your proxy card promptly. If you are a record holder and are present at
the Meeting and wish to vote your shares in person, your proxy may be revoked by
voting at the Meeting. However, 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 Meeting.
By Order of the Board of Directors
/s/ Carolyn Pihera
Carolyn Pihera
Corporate Secretary
Clarendon Hills, Illinois
March 23, 2001
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN AND PROMPTLY RETURN THE
ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
28
EXHIBIT A
MAF BANCORP, INC.
Audit Committee of the
Board of Directors
COMMITTEE CHARTER
(approved by the Board on May 23, 2000)
I. Audit Committee Purpose
The Audit Committee is appointed by the Board of Directors to assist the
board in fulfilling its oversight responsibilities. The Audit Committee's
primary duties and responsibilities are to:
. Monitor the integrity of the company's financial reporting process and
systems of internal controls regarding finance, accounting, and legal
compliance.
. Encourage adherence to, and continuous improvement of, the company's
policies, procedures and practices.
. Monitor the independence and performance of the company's independent
auditors and internal auditing department and annually make
recommendations regarding the appointment of independent auditors to the
Board.
. Provide an avenue of communication among the independent auditors,
management, the internal auditing department, and the Board of
Directors.
The Internal Audit Department will report to the Audit Committee. The
Audit Committee has the authority to conduct any investigation appropriate
to fulfilling its responsibilities, utilizing the Internal Audit Department
or Security Department and it has direct access to the independent
auditors. In addition, the Audit Committee has the ability to retain, at
the company's expense, special legal, accounting, or other consultants or
experts it deems necessary in the performance of its duties. The Audit
Committee may request any officer or employee of the company or the
company's outside counsel or independent auditor to attend a meeting of the
committee or to meet with any members of, or consultants to, the committee.
The Audit Committee will report its findings to the Board of Directors.
II. Audit Committee Composition, Meetings and Manner of Acting:
Audit committee members shall meet the requirements of the NASDAQ National
Market. The audit committee shall be comprised of three or more directors
as determined by the Board of Directors, each of whom shall be independent
non-executive directors, free from any relationship that would interfere
with the exercise of his or her independent judgment. All members of the
committee shall have a basic understanding of finance and accounting and be
able to read and understand fundamental financial statements, and at least
one member of the committee shall have accounting or related financial
management expertise.
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Audit committee members shall be appointed by the Board of Directors on
recommendation of the nominating committee. If an Audit Committee chair is
not designated or present, the members of the committee may designate a
chair by majority vote of the committee membership.
A majority of the members of the Audit Committee present (in person or by
telephone) at any meeting of the Audit Committee shall constitute a quorum,
and approval by a majority of the quorum is necessary for Audit Committee
action. The Audit Committee shall meet at least four times annually, or
more frequently as circumstances dictate. The Audit Committee chair shall
prepare and/or approve an agenda in advance of each meeting. The committee
should meet privately in separate executive session at least annually with
each of management, the director of the internal auditing department, the
independent auditors, and as a committee with all of these groups to
discuss any matters that the committee or each of these groups believes
should be discussed. In addition, the committee will communicate with
management and the independent auditors quarterly to review the company's
interim financial statements and significant findings based upon the
auditors limited review procedures regarding the interim financial
statements to be included in the company's Quarterly Report on Form 10-Q.
III. Audit Committee Responsibilities and Duties
Review Procedures
-----------------
1. Review and reassess the adequacy of this charter at least annually.
Submit the charter to the Board of Directors for approval and have the
document published at least every three years in accordance with SEC
regulations.
2. Review the company's annual audited financial statements prior to filing
or distribution. Review should include discussion with management and
independent auditors of significant issues regarding accounting
principles, practices, and judgments.
3. In consultation with management, the independent auditors, and the
internal auditors, consider the integrity of the company's financial
reporting processes and controls. Discuss significant financial risk
exposures and the steps management has taken to monitor, control, and
report such exposures. Review significant findings prepared by the
independent auditors and the internal auditing department together with
management's responses.
4. Review with financial management and the independent auditors the
company's quarterly financial results prior to the release of earnings
and/or the company's quarterly financial statements prior to filing or
distribution. Discuss any significant changes to the company's
accounting principles and any items required to be communicated in
accordance with SAS 61 (see item 9).
A-2
Independent Auditors
--------------------
5. The independent auditors are ultimately accountable to the Audit
Committee and the Board of Directors. The Audit Committee shall review
the independence and performance of the auditors and annually recommend
to the Board of Directors the appointment of the independent auditors
or approve any discharge of auditors when circumstances warrant.
6. Approve the fees and other significant compensation to be paid to the
independent auditors.
7. On an annual basis, the committee shall request and ensure receipt of a
formal written statement from the independent auditors regarding their
independence and should review and discuss with the independent
auditors all significant relationships they have with the company that
could impair the auditors' independence.
8. Review the independent auditor's audit plan - discuss scope, staffing,
locations, reliance upon management, and internal audit and general
audit approach.
9. Prior to releasing the year-end earnings, discuss the results of the
audit with the independent auditors. Discuss certain matters required
to be communicated to Audit Committee in accordance with AICPA SAS 61.
10. Consider the independent auditors' judgments about the quality and
appropriateness of the company's accounting principles as applied in
its financial reporting and the adequacy of internal controls that
could significantly affect the company's financial statements.
Internal Audit Department and Legal Compliance
----------------------------------------------
11. Review the budget, plan, changes in plan, activities, organizational
structure, and qualifications of the internal audit department, as
needed.
12. Review the appointment, performance, and replacement of the senior
internal audit executive. Approve the compensation plan for the senior
internal audit executive.
13. Review reports prepared by the internal audit department together with
management's response and follow-up to these reports.
14. On at least an annual basis, review with the company's counsel, any
legal matters that could have a significant impact on the
organization's financial statements, the company's compliance with
applicable laws and regulations, and inquiries received from regulators
or governmental agencies.
Other Audit Committee Responsibilities
--------------------------------------
15. Annually prepare a report to shareholders as required by the Securities
and Exchange Commission. The report should be included in the company's
annual proxy statement.
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16. Perform any other activities consistent with this charter, the
company's by-laws, and governing law, as the committee or the Board of
Directors deems necessary or appropriate.
17. Maintain minutes of meetings and periodically report to the Board of
Directors on significant results of the foregoing activities.
18. Establish, review, and update periodically a code of ethical conduct
and ensure that management has established a system to enforce this
code.
19. Periodically perform self-assessment of Audit Committee performance.
While the Audit Committee has the responsibilities and powers set forth in
this charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the company's financial statements are complete
and accurate and are in accordance with generally accepted accounting
principles. This is the responsibility of management and the independent
auditor. Nor is it the duty of the Audit Committee to conduct
investigations, to resolve disagreements, if any, between management and
the independent auditor or to assure compliance with laws and regulations
and the company's code of conduct.
A-4
EXHIBIT B
FORM OF
AMENDED AND RESTATED
MAF BANCORP, INC.
2000 STOCK OPTION PLAN
MAF BANCORP, INC.
2000 STOCK OPTION PLAN
Section 1. Establishment, Purpose, and Effective Date of Plan
1.1 Establishment. MAF Bancorp, Inc., a Delaware corporation, hereby
establishes the "MAF BANCORP, INC. 2000 STOCK OPTION PLAN" for key employees and
non-employee directors. The Plan permits the grant of stock options and limited
rights.
1.2 Purpose. The purpose of the Plan is to advance the interests of the
Company and its stockholders, by encouraging and providing for the acquisition
of an equity interest in the success of the Company and its affiliates,
including Mid America Bank, by employees and non-employee directors, by
providing additional incentives and motivation toward superior performance of
the Company, and by enabling the Company to attract and retain the services of
employees and non-employee directors upon whose judgment, interest, and special
effort the successful conduct of its operations is largely dependent.
1.3 Effective Date. The Plan shall become effective immediately upon its
adoption by the Board of Directors of the Company, subject to ratification by
the stockholders of the Company. Awards may be granted hereunder on or after the
effective date but shall in no event be exercisable or payable to a Participant
prior to such stockholder approval; and, if such approval is not obtained within
twelve (12) months after the effective date, such Awards shall be of no force
and effect.
Section 2. Definitions
2.1 Definitions. Whenever used herein, the following terms shall have
their respective meanings set forth below:
"Award" means any Stock Option and related Limited Right (if
applicable) granted under this Plan.
"Bank" means Mid America Bank, fsb.
"Board" means the Board of Directors of the Company.
"Cause" shall mean any one of the following:
(i) gross misconduct in, or the continued and willful refusal
by the Participant after written notice by the Company to make
himself available for, the performance of the Participant's duties
for the Company or a subsidiary; or
(ii) conviction for a felony for a matter related to the
Company or a subsidiary; or
(iii) suspension due to the direction of any authorized bank
regulatory agency that the Participant be relieved of his duties and
responsibilities to the Company or a subsidiary.
B-1
"Change in Control" is defined in Section 11.2.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the Administrative/Compensation Committee of the
Board of Directors or such other committee appointed from time to time by the
Board of Directors to administer this Plan. The Committee shall consist of two
or more members, each of whom shall qualify as a "non-employee director," as the
term (or similar or successor term) is defined by Rule 16b-3, and as an "outside
director" within the meaning of Code Section 162(m) and regulations thereunder.
"Company" means MAF Bancorp, Inc., a Delaware corporation.
"Disability" means the permanent and total inability by reason of
mental or physical infirmity, or both, of a Participant to perform the work
customarily assigned to the Participant, as determined by a medical doctor
selected or approved by the Committee. Such determination shall also conclude
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.
"Employee" means an employee (including officers and directors who are
also employees) of the Company or its subsidiaries, or any branch or division
thereof.
"Fair Market Value" means the average of the highest and lowest trade
prices of the Stock as reported by the Nasdaq Stock Market on a particular date.
In the event that there are no Stock transactions on such date, the Fair Market
Value shall be determined as of the immediately preceding date on which there
were Stock transactions.
"Limited Right" means the right to receive an amount of cash or Stock
based upon the terms set forth in Section 8.
"Non-Employee Director" means any member of the Board of Directors who
is not an Employee.
"Option" means the right to purchase Stock at a stated price for a
specified period of time. For purposes of the Plan an Option may be either (i)
an "Incentive Stock Option," or "ISO" within the meaning of Section 422 of the
Code, (ii) a "Nonstatutory (Nonqualified) Stock Option," or "NSO," or (iii) any
other type of option encompassed by the Code.
"Participant" means any Non-Employee Director or Employee designated
by the Committee to participate in the Plan.
"Plan" means the MAF Bancorp, Inc. 2000 Stock Option Plan as set forth
herein and any amendments hereto.
"Retirement" means, with respect to a Participant, termination of
employment other than for Cause, after the Participant's normal retirement date
or early retirement date as from time to time set forth under any tax-qualified
plan of the Company or any subsidiary which covers the Participant. In the case
of a Non-Employee Director, "Retirement" means retirement as a director of the
Company.
B-2
"Rule 16b-3" means Rule 16b-3 or any successor or comparable rule or
rules promulgated by the Securities and Exchange Commission under Section 16(b)
of the Securities Exchange Act of 1934, as amended, applicable to Awards granted
under the Plan.
"Stock" means the Common Stock, $.01 par value per share, of the
Company.
2.2 Gender and Number. Except when otherwise indicated by the context,
words in the masculine gender when used in the Plan shall include the feminine
gender, the singular shall include the plural, and the plural shall include the
singular.
Section 3. Eligibility and Participation
3.1 Eligibility and Participation. Participants in the Plan shall be
selected by the Committee from among those employees who, in the opinion of the
Committee, are employees in a position to contribute materially to the Company's
continued growth and development and to its long-term financial success. Non-
Employee Directors shall also be eligible to participate in the Plan.
Section 4. Administration
4.1 Administration. The Committee shall be responsible for the
administration of the Plan. The Committee, by majority action thereof (whether
taken during a meeting or by written consent), is authorized to interpret the
Plan, to prescribe, amend, and rescind rules and regulations relating to the
Plan, to provide for conditions and assurances deemed necessary or advisable to
protect the interests of the Company, and to make all other determinations
necessary or advisable for the administration of the Plan, but only to the
extent not contrary to the express provisions of the Plan. Determinations,
interpretations, or other actions made or taken by the Committee pursuant to the
provisions of the Plan shall be final and binding and conclusive for all
purposes and upon all persons whomsoever. To the extent deemed necessary or
advisable for purposes of Rule 16b-3 or otherwise, the Board may act as the
Committee hereunder.
Section 5. Stock Subject to Plan
5.1 Number of Shares Available for Awards. The total number of shares
of Stock subject to Awards under the Plan may not exceed 1,800,000, of which all
such shares may be issued with respect to Incentive Stock Options. Such number
of shares shall be subject to adjustment upon occurrence of any of the events
described in Section 5.4. The shares to be delivered under the Plan may
consist, in whole or in part, of authorized but unissued Stock or treasury
Stock, not reserved for any other purpose.
5.2 Individual Participant Limitations. The maximum aggregate number of
shares of Stock with respect to Options granted in any calendar year under this
Plan to any Participant shall be 100,000. Such number of shares shall be
subject to adjustment upon occurrence of any of the events described in Section
5.4.
B-3
5.3 Reuse. If, and to the extent:
(a) An option shall expire or terminate for any reason without having
been exercised in full (including, without limitation, cancellation and re-
grant), the shares of Stock subject thereto which have not become outstanding
shall (unless the Plan shall have terminated) become available for issuance
under the Plan.
(b) Options granted under the Plan are exercised, and shares of Stock
are tendered or withheld for the payment of the exercise price or to satisfy tax
withholding amounts, then such number of shares of Stock tendered or withheld
for the payment of the exercise price or to satisfy tax withholding amounts
shall (unless the Plan shall have terminated) become available for issuance
under the Plan.
5.4 Adjustment in Capitalization. In the event of any change in the
outstanding shares of Stock that occurs after ratification of the Plan by the
stockholders of the Company by reason of a Stock dividend or split,
recapitalization, merger, consolidation, combination, separation (including a
spin-off), exchange of shares, or other similar corporate change or distribution
of stock or property by the Company, the number and class of and/or price of
shares of Stock subject to each outstanding Award, the number and class of
shares of Stock available for Awards and the number and class of shares of Stock
set forth in Sections 5.1 and 5.2, shall be adjusted appropriately by the
Committee, whose determination shall be conclusive; provided, however, that
fractional shares shall be rounded to the nearest whole share.
Section 6. Duration of Plan
6.1 Duration of Plan. The Plan shall remain in effect, subject to the
Board's right to earlier terminate the Plan pursuant to Section 12 hereof, until
all Stock subject to it shall have been purchased or acquired pursuant to the
provisions hereof. Notwithstanding the foregoing, no Award may be granted under
the Plan on or after February 28, 2010.
Section 7. Stock Options
7.1 Grant of Options. Subject to the provisions of Section 5 and 6,
Options may be granted to Participants at any time and from time to time as
shall be determined by the Committee. The Committee shall have complete
discretion in determining the number of Options granted to each Participant.
The Committee may grant any type of Option to purchase Stock that is permitted
by law at the time of grant.
7.2 Option Agreement. Each Option shall be evidenced by an Option
agreement that shall specify the type of Option granted, the Option price, the
duration of the Option, the number of shares of Stock to which the Option
pertains, and such other provisions as the Committee shall determine; provided,
however that the term of an Option shall not exceed ten years.
7.3 Option Price. No Option granted pursuant to the Plan shall have an
Option price that is less than the Fair Market Value of the Stock on the date
the Option is granted. However, if an Employee owns stock representing more
than 10% of the total combined voting power of all classes of stock of the
Company (or, under Section 424(d) of the Code, is deemed to own stock
representing more than 10% of the total combined voting power of all such
classes of stock), the purchase price per share of Stock
B-4
deliverable upon the exercise of each Incentive Stock Option shall not be less
than 110% of the Fair Market Value of the Stock on the date the Incentive Stock
Option is granted.
7.4 Exercise of Options. Options awarded under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall approve, either at the time of grant of such Options or
pursuant to a general determination, and which need not be the same for all
Participants, provided that, to the extent required to comply with Rule 16b-3,
no Option granted to a Participant who is subject to Section 16(a) of the
Securities Exchange Act of 1934, shall be exercisable within the first six
months of its term, unless death or Disability of the Participant occurs during
such period. Each Option which is intended to qualify as an Incentive Stock
Option pursuant to Section 422 of the Code, and each Option which is intended to
qualify as another type of ISO which may subsequently be authorized by law,
shall comply with the applicable provisions of the Code pertaining to such
Options.
7.5 Payment. Options shall be exercised by the delivery of a written
notice of exercise to the Company, setting forth the number of shares of Stock
with respect to which the Option is to be exercised, accompanied by full payment
for the Stock. The Option price upon exercise of any Option shall be payable to
the Company in full either:
(a) in cash or its equivalent (including, for this purpose, the
proceeds from a cashless exercise through a broker, or other borrowed funds as
permitted by the Option Agreement),
(b) by tendering previously-acquired Stock (including, for this
purpose, Stock deemed tendered by affirmation of ownership), that (i) has an
aggregate Fair Market Value at the time of exercise equal to the total Option
price and (ii) has been owned by the Participant for at least six (6) months
prior to the date of exercise (unless otherwise permitted by the Committee).
(c) by any other means which the Committee determines to be consistent
with the Plan's purpose and applicable law, or
(d) by a combination of (a), (b), and (c).
The exercise of an Option shall cancel any Limited Right granted with respect to
the Option to the extent of the number of shares as to which the Option is
exercised. As soon as practicable after receipt of each notice and full
payment, the Company shall deliver to the Participant a certificate or
certificates representing acquired shares of Stock.
Notwithstanding the foregoing, the Option price payable with respect to the
exercise of any Options by a Participant who has a deferral election in effect
under the MAF Bancorp, Inc. Stock Option Gain Deferral Plan (the "Gain Deferral
Plan") shall be made solely be tendering previously-acquired Stock in accordance
with paragraph (b) above. In such an instance, as soon as practicable after
receipt of notice of exercise and payment, the Company shall deliver to the
trustee of the trust established under the Gain Deferral Plan, a certificate or
certificates representing such number of shares of Stock determined by dividing
(i) the excess of (A) the Fair Market Value of the shares of Stock purchased
pursuant to such Option exercise, over (B) the aggregate exercise price of the
shares of Stock purchased, by (ii) the Fair Market Value of one share of Stock.
In addition, as soon as practicable after receipt of such notice and payment of
the Option price (other than payment by affirmation of ownership), the Company
shall deliver to the Participant a certificate or certificates representing
shares with a Fair Market Value equal to the
B-5
aggregate option exercise price paid, net of tax withholding, if any, pursuant
to Section 13. For purposes of the foregoing, Fair Market Value shall be
determined on the date of Option exercise.
7.6 Limitations on ISOs. Notwithstanding anything in the Plan to the
contrary, to the extent required from time to time by the Code, the following
additional provisions shall apply to the grant of Options which are intended to
qualify as Incentive Stock Options (as such term is defined in Section 422 of
the Code):
(a) The aggregate Fair Market Value (determined as of the date the
Option is granted) of the shares of Common Stock with respect to which Incentive
Stock Options are exercisable for the first time by any Participant during any
calendar year (under all plans of the Company) shall not exceed $100,000 or such
other amount as may subsequently be specified by the Code; provided that, to the
extent that such limitation is exceeded, any excess Options (as determined under
the Code) shall be deemed to be Nonstatutory (Nonqualified) Stock Options.
(b) Any Incentive Stock Option authorized under the Plan shall contain
such other provisions as the Committee shall deem advisable, but shall in all
events be consistent with and contain or be deemed to contain all provisions
required in order to qualify the Options as Incentive Stock Options.
(c) All Incentive Stock Options must be granted within ten years from
the earlier of the date on which this Plan was adopted by the Board of Directors
or the date this Plan was approved by the stockholders.
(d) Unless exercised, terminated, or canceled sooner, all Incentive
Stock Options shall expire no later than ten years after the date of grant. If
any Employee, at the time an Incentive Stock Option is granted, owns stock
representing more than 10% of the total combined voting power of all classes of
stock of the Company (or, under Section 424(d) of the Code, is deemed to own
stock representing more than 10% of the total combined voting power of all such
classes of stock), the Incentive Stock Option granted shall not be exercisable
after the expiration of five years from the date of grant.
7.7 Restrictions on Stock Transferability. The Committee shall impose
such restrictions on any shares of Stock acquired pursuant to the exercise of an
Option under the Plan as it may deem advisable, including, without limitation,
restrictions under the applicable Federal securities law, under the requirements
of any stock exchange upon which such shares of Stock are then listed and under
any blue sky or state securities laws applicable to such shares.
7.8 Termination of Employment or as a Director Due to Death, Disability,
Retirement or after a Change in Control. Except as may otherwise be provided
in the Option agreement, in the event the employment or service as a director of
a Participant, as applicable, is terminated by reason of death, Disability,
Retirement, or after a Change in Control, any outstanding Options whether or not
then exercisable, may be exercised at any time prior to the expiration date of
the Options or within three (3) years after such date of termination of
employment, whichever period is the shorter. However, in the case of Incentive
Stock Options, the favorable tax treatment prescribed under Section 422 of the
Code shall not be available (in which case such Option shall thereafter be
treated as a Non-statutory (Nonqualified) Stock Option for its remaining term)
if: (a) in the case of a termination of employment due to Retirement or
following a Change in Control, such Options are not exercised within three (3)
B-6
months after the date of termination; or (b) in the case of termination of
employment due to Disability, such Options are not exercised within twelve (12)
months after the date of termination, provided such Disability constitutes total
and permanent disability as defined in Section 22(e)(3) of the Code.
7.9 Other Termination of Employment or as a Director. If prior to a
Change in Control the employment or service as a director of the Participant, as
applicable, shall terminate for any reason other than death, Disability,
Retirement, or involuntarily for Cause, any outstanding Options which were
immediately exercisable at the date of termination, may be exercised at any time
prior to the expiration date of the Option or three months after such date of
termination of employment or service as a director, whichever first occurs.
Where termination of employment or service as a director is involuntarily for
Cause, rights under all Options shall terminate immediately upon termination of
employment.
7.10 Nontransferability of Options. Except as provided below, no Option
granted under the Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, otherwise than by will or by the laws of descent and
distribution. Further, all Options granted to a Participant under the Plan
shall be exercisable during his lifetime only by such Participant.
Notwithstanding the foregoing, the Committee may, in its discretion, authorize
all or a portion of the Options (other than Incentive Stock Options) granted to
a Participant to be on terms which permit transfer by such Participant to:
(a) the spouse, children or grandchildren of the Participant
("Immediate Family Members");
(b) a trust or trusts for the exclusive benefit of such Immediate
Family Members, or;
(c) a partnership in which such Immediate Family Members are the only
partners,
provided that:
(i) there may be no consideration for any such transfer;
(ii) the Award Agreement pursuant to which such Options are
granted expressly provides for transferability in a manner consistent
with this Section 7.10; and
(iii) subsequent transfers of transferred Options shall be
prohibited except transfers back to the Participant or those in
accordance with Section 9.
Following a transfer, any such Options shall continue to be subject to the same
terms and conditions as were applicable immediately prior to the transfer,
provided that for purposes of Section 9 hereof the term "Participant" shall be
deemed to refer to the transferee. The provisions of Sections 7 and 11 relating
to the period of exercisability and expiration of the Option shall continue to
be applied with respect to the original Participant, and the Option shall be
exercisable by the transferee only to the extent, and for the periods, set forth
in said Section 7 and 11.
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Section 8. Limited Rights
8.1 Grant of Limited Rights. Subject to the provisions of Sections 5
and 6, Limited Rights may be granted to Employees (but not Non-Employee
Directors) simultaneously with the grant of any Option, with respect to all or
some of the shares of Stock covered by such Option, as shall be determined by
the Committee.
8.2 Terms of Rights. A Limited Right may be exercised only following a
Change in Control. The Limited Right may be exercised only when the underlying
Option is eligible to be exercised, provided that the Fair Market Value of the
underlying shares of Stock on the day of exercise is greater than the Option
price of the related Option.
8.3 Effect on Related Option. Upon exercise of a Limited Right, the
related Option shall cease to be exercisable. Upon exercise or termination of an
Option, any related Limited Rights shall terminate. The Limited Right is
transferable only when the underlying option is transferable and under the same
conditions.
8.4 Payment. Upon exercise of a Limited Right, the Participant shall
promptly receive from the Company an amount of cash equal to the excess of the
Fair Market Value of the underlying shares of Stock on the date the Limited
Right is exercised over the Option price of the related Option, multiplied by
the number of shares of Stock with respect to which such Limited Right is being
exercised. Notwithstanding the foregoing, the Committee may substitute Stock for
cash in satisfaction of any payment due to a Participant under this Section 8.4
if it considers such substitution to be in the best interests of the Company and
its shareholders. In the event of such substitution, the Company shall deliver
to the Participant shares of Stock having a Fair Market Value equal to the cash
payment that would otherwise have been made pursuant to this Section 8.4.
8.5 Term of Limited Right. The term of the Limited Rights granted under
the Plan shall be the same as the term of the related Option.
8.6 Termination of Employment. In the event the employment of a
Participant is terminated by reason of death, Disability, Retirement, or after a
Change of Control, or any other reason, any Limited Rights outstanding shall
terminate in the same manner as specified for the related Options under Sections
7.8 and 7.9 herein.
Section 9. Beneficiary Designation
9.1 Beneficiary Designation. Each Participant under the Plan may name,
from time to time, any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any benefit under the Plan is to be paid
in case of his death before he receives any or all of such benefit. Each
designation will revoke all prior designations by the same Participant, shall be
in a form prescribed by the Committee, and will be effective only when filed by
the Participant in writing with the Committee during his lifetime. In the
absence of any such designation, benefits remaining unpaid at the Participant's
death shall be paid to his estate.
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Section 10. Rights of Employees
10.1 Employment. Nothing in the Plan shall interfere with or limit in
any way the right of the Company to terminate any Participant's employment or
service as a director at any time, nor confer upon any Participant any right to
continue in the employ or service as a director of the Company.
10.2 Participation. No Employee or Non-Employee Director shall have a
right to be selected as a Participant, or, having been so selected, to be
selected again as a Participant.
Section 11. Change in Control
11.1 In General. In the event of a Change in Control of the Company as
defined in Section 11.2 below, all Awards under the Plan shall vest 100%,
whereupon all Options and Limited Rights shall become exercisable in full.
11.2 Definition. For purposes of the Plan, a "Change in Control" shall
mean any of the following events:
(a) a change in control which 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
(b) a change in control of the Company or the Bank within the meaning
of the Home Owners Loan Act of 1933, as amended, and the Rules and Regulations
promulgated by the Office of Thrift Supervision (or its predecessor agency), as
in effect on the date hereof, including Section 574 of such regulations; or
(c) without limitation, at such time as 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, or makes an offer to purchase and completes the
purchase of securities, of the Bank or Company representing 20% or more of the
Bank's or Company's outstanding securities ordinarily having the right to vote
at the election of directors except for (i) any securities purchased by the
employee stock ownership plan and trust of the Company or a subsidiary or (ii)
any securities of the Bank owned by the Company; or
(d) individuals who constitute either the Company's Board of Directors
on the date hereof (the "Incumbent Board"), or the Bank's Board of Directors on
the date hereof (the "Bank 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 the
Bank Incumbent Board, as the case may be, or whose nomination for election by
the stockholders was approved by the Nominating Committee serving under the
Incumbent Board or the Bank Incumbent Board, shall be, for purposes of this
clause (d), considered as though such individual was a member of the Incumbent
Board or the Bank Incumbent Board, as the case may be; or
(e) a plan of reorganization, merger, consolidation, sale of all or
substantially all the assets of the Bank or Company or similar transaction
occurs; or
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(f) a proxy statement shall be distributed soliciting proxies from
stockholders of the Company, by someone other than the current management of the
Company, seeking stockholder approval of a plan of reorganization, merger or
consolidation of the Company or 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 Company and such
proxy statement proposal is approved by the shareholders of the Company; or
(g) a tender offer is made and completed for 20% or more of the
outstanding securities of the Company.
However, notwithstanding anything contained in this section to the contrary, a
Change in Control shall not be deemed to have occurred as a result of an event
described in (a), (b), (c), (e) or (g) above which resulted from an acquisition
or proposed acquisition of stock of the Company by a person, as defined in the
OTS' Acquisition of Control Regulations (12 C.F.R. (S) 574) (the "Control
Regulations"), who was an executive officer of the Company on the date of the
adoption of the Plan and who has continued to serve as an executive officer of
the Company as of the date of the event described in (a), (b), (c), (e) or (g)
above (an "incumbent officer"). In the event a group of individuals acting in
concert satisfies the definition of "person" under the Control Regulations, the
requirements of the preceding sentence shall be satisfied and thus a change in
control shall not be deemed to have occurred if at least one individual in the
group is an incumbent officer.
Section 12. Amendment, Modification, and Termination of Plan
12.1 Amendment, Modification, and Termination of Plan. The Board at any
time may terminate, and from time to time may amend or modify the Plan, in whole
or in part, but no such action shall in any manner adversely affect any Award
theretofore granted under the Plan, without the consent of the Participant.
Notwithstanding the foregoing, unless approved by the shareholders of the
Company, no amendment or modification of the Plan shall be effective which would
increase the total amount of Stock which may be issued under the Plan, increase
the maximum number of shares which may be subject to Awards granted under the
Plan to a Participant during a calendar year or extend the maximum period during
which Awards may be made under this Plan. For purposes of this Section 12.1, any
adjustment under Section 5.1 or 5.2 upon the occurrence of any of the events
described in Section 5.4 shall not constitute an amendment or modification of
this Plan.
Section 13. Tax Withholding
13.1 Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy the minimum Federal, state, and local taxes, domestic or
foreign, required by law or regulation to be withheld with respect to any
taxable event arising as a result of the Plan. In no event shall such
withholding amount exceed the minimum amount required by law to be withheld.
13.2 Share Withholding. With respect to withholding required upon the
exercise of Options or Limited Rights, or upon any other taxable event arising
as a result of awards granted hereunder, Participants may elect to satisfy the
minimum withholding requirement, in whole or in part, in cash or by having the
Company withhold shares of Stock having a Fair Market Value on the date the tax
is to be determined equal to the minimum amount of tax required to be withheld
to cover any applicable income
B-10
tax withholding and employment taxes; provided, however, that in the event a
deferral election is in effect with respect to the shares of Stock deliverable
upon exercise of an Option, then the Participant may only elect to have such
minimum withholding made in cash or from the Stock tendered to exercise such
Option. In no event shall such withholding amount exceed the minimum amount
required by law to be withheld. All such elections shall be irrevocable, made in
writing, signed by the Participant, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate.
Section 14. Indemnification
14.1 Indemnification. Each person who is or shall have been a member of
the Committee or of the Board, or who is or shall have acted on behalf or under
authority of the Board or Committee, shall be indemnified and held harmless by
the Company against and from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him in connection with or resulting from
any claim, action, suit, or proceeding to which he may be a party or in which he
may be involved by reason of any action taken or failure to act under the Plan
and against and from any and all amounts paid by him in settlement thereof, with
the Company's approval, or paid by him in satisfaction of any judgment in any
such action, suit, or proceeding against him, provided he shall give the Company
an opportunity, at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company's Certificate of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the
Company may have to indemnify them or hold them harmless.
Section 15. Requirements of Law
15.1 Requirements of Law. The granting of Awards and the issuance of
shares of Stock upon the exercise of an Option shall be subject to all
applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
15.2 Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of Delaware.
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REVOCABLE PROXY
MAF BANCORP, INC.
55th Street & Holmes Avenue, Clarendon Hills, Illinois 60514
(630) 325-7300
ANNUAL MEETING OF SHAREHOLDERS
April 25, 2001, 10:00 a.m.
The undersigned hereby appoints the Board of Directors of MAF Bancorp, Inc.
("MAF Bancorp"), each with full power of substitution, to act as proxies for
the undersigned, and to vote all shares of common stock of MAF Bancorp which
the undersigned is entitled to vote only at the Annual Meeting of Shareholders
(the "Annual Meeting"), to be held on Wednesday, April 25, 2001, at 10:00
a.m., local time, at Marie's Ashton Place, 341 W. 75th Street, Willowbrook,
Illinois 60514, and at any and all adjournments thereof, as marked on the
reverse side.
This proxy is revocable and will be voted as directed, but if no instructions
are specified, this proxy will be voted FOR each of the proposals listed. If
any other business is presented at the Annual Meeting, including whether or
not to adjourn the meeting, this proxy will be voted by those named in this
proxy in their best judgment. At the present time, the Board of Directors
knows of no other business to be presented at the Annual Meeting.
The undersigned hereby acknowledges receipt from MAF Bancorp prior to the
execution of this proxy of a Notice of Annual Meeting of Shareholders and
proxy statement dated March 23, 2001, and the 2000 Annual Report to
Shareholders.
(Please mark this proxy and sign and date it on the reverse side hereof and
return it in the enclosed envelope.)
(Continued and to be signed on reverse side.)
MAF BANCORP, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
1. Election of Directors for terms of three years each: 01-Terry A. Ekl,
02-Kenneth Koranda, 03-Lois B. Vasto and 04-Jerry A. Weberling
For All [_] Withhold All [_] For All Except [_]
(To withhold authority to vote for an individual nominee, write that nominee's
name on the line provided below).
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2. Approval of a proposed amendment to the MAF Bancorp, Inc. 2000 Stock Option
Plan.
For [_] Against [_] Abstain [_]
3. Ratification of the appointment of KPMG LLP as independent auditors of MAF
Bancorp, Inc. for the year ending December 31, 2001.
For [_] Against [_] Abstain [_]
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
Dated: ___________________________ , 2001
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Signature of Shareholder
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Signature of Shareholder
Please sign exactly as your name appears
on this card (do not print).
Please indicate any change in address.
When shares are held by joint tenants,
both should sign, but only one signature
is required. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as such.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY.
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