SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
Filed by the Registrant XX
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))
XX Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
EAGLE BANCGROUP, INC.
(Name of Registrant as Specified in its Charter)
EAGLE BANCGROUP, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (check the appropriate box):
XX No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
</page>
<PAGE>
Eagle BancGroup, Inc.
301 Fairway Drive
Bloomington, Illinois 61701
(309) 663-6345
March 13, 1998
Dear Stockholder:
On behalf of the Board of Directors and the management of Eagle BancGroup,
Inc., you are cordially invited to attend the Annual Meeting of Stockholders
of Eagle BancGroup, Inc. to be held at the Conference Center at the Best
Western Eastland Suites Lodge, 1801 Eastland Drive, Bloomington, Illinois,
on Wednesday, April 15, 1998, at 10:00 a.m., Central Time.
The attached Notice of the Annual Meeting and Proxy Statement describes the
formal business to be transacted at the meeting. During the meeting, we will
also report on the operations of the Corporation. Directors and officers of
the Corporation, as well as a representative of McGladrey & Pullen, LLP, the
Corporation's independent auditors, will be present to respond to any
appropriate questions stockholders may have.
YOUR VOTE IS VERY IMPORTANT. TO ENSURE PROPER REPRESENTATION OF YOUR SHARES AT
THE MEETING, PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED POSTAGE-PREPAID ENVELOPE AS SOON AS POSSIBLE EVEN IF YOU CURRENTLY
PLAN TO ATTEND THE MEETING. THIS WILL NOT PREVENT YOU FROM VOTING IN PERSON
BUT WILL ASSURE THAT YOUR VOTE IS COUNTED IF YOU ARE UNABLE TO ATTEND THE
MEETING.
Thank you for your continued support.
Sincerely,
Donald L. Fernandes
President and Chief Executive Officer
</page>
<PAGE>
EAGLE BANCGROUP, INC.
301 FAIRWAY DRIVE
BLOOMINGTON, ILLINOIS 61701
(309) 663-6345
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 15, 1998
NOTICE IS HEREBY GIVEN, that the Annual Meeting of Stockholders (the
"Meeting") of Eagle BancGroup, Inc. (the "Corporation") will be held at the
Conference Center at the Best Western Eastland Suites Lodge, 1801 Eastland
Drive, Bloomington, Illinois, on Wednesday, April 15, 1998, at 10:00 a.m.,
Central Time.
The Meeting is for the purpose of considering and acting upon:
1. The election of three directors of the Corporation; and
2. Such other matters as may properly come before the Meeting or any
adjournments thereof.
The Board of Directors has fixed the close of business on March 5, 1998 as
the record date for the determination of the stockholders entitled to vote at
the Meeting and any adjournments thereof.
You are requested to complete and sign the enclosed proxy card which is
solicited by the Board of Directors and to mail it promptly in the enclosed
envelope.
BY ORDER OF THE BOARD OF DIRECTORS
Donald L. Fernandes
President and Chief Executive Officer
Bloomington, Illinois
March 13, 1998
</page>
<PAGE>
PROXY STATEMENT
OF
EAGLE BANCGROUP, INC.
301 FAIRWAY DRIVE
BLOOMINGTON, ILLINOIS 61701
(309) 663-6345
ANNUAL MEETING OF STOCKHOLDERS
APRIL 15, 1998
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Eagle BancGroup, Inc. (the 'Corporation')
to be used at the Annual Meeting of Stockholders of the Corporation (the
'Meeting'). The Meeting will be held at the Conference Center at the Best
Western Eastland Suites Lodge, 1801 Eastland Drive, Bloomington, Illinois, on
Wednesday, April 15, 1998, at 10:00 a.m., Central Time. The accompanying
Notice of Meeting, this Proxy Statement and the Proxy Card are being first
mailed to stockholders on or about March 13, 1998. The Corporation is the
holding company for First Federal Savings and Loan Association of Bloomington
(the 'Association').
Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted
at the Meeting and all adjournments thereof. A stockholder who has executed a
proxy has the power to revoke it at any time before it is voted by delivering
written notice of revocation to the Secretary of the Corporation at 301 Fairway
Drive, Bloomington, Illinois 61701, by executing and delivering a subsequently
dated proxy, or by attending the Meeting and voting in person. Proxies
solicited by the Board of Directors of the Corporation will be voted in
accordance with the directions given therein. Where no instructions are
indicated, proxies will be voted for the nominees for director set forth below.
A quorum of stockholders is necessary to take action at the Meeting. The
presence, in person or by proxy, of the holders of a majority of the shares of
common stock of the Corporation (the 'Common Stock') entitled to vote at the
Meeting will constitute a quorum. Votes cast by proxy or in person at the
Meeting will be tabulated by the inspectors of election appointed for the
Meeting and will be counted as present for purposes of determining whether a
quorum is present.
The expenses of solicitation, including the cost of printing and mailing,
will be paid by the Corporation. Officers and employees of the Corporation may
solicit proxies personally, by telephone or by telegram. The Corporation may
also reimburse brokers, nominees and other fiduciaries for their reasonable
expenses in forwarding proxy solicitation material to beneficial owners.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Stockholders of record as of the close of business on March 5, 1998
(the 'Record Date') are entitled to one vote for each share of Common Stock
then held. The Certificate of Incorporation of the Corporation provides that
for a period of five years following the conversion of the Association from
mutual to stock form, no person (including any individual, company or group
acting in concert) shall acquire beneficial ownership of more than 10% of any
class of equity security of the Corporation. The Certificate of Incorporation
further provides that, where any person directly or indirectly acquires
beneficial ownership of more than 10% of any class of equity security of the
Corporation during such five-year period, the securities beneficially owned in
excess of 10% shall not be counted as shares entitled to vote, shall not be
voted by any person or counted as voting shares in connection with any matter
submitted to the stockholders for a vote and shall not be counted as shares
outstanding for purposes of determining a quorum or the affirmative vote
necessary to approve any matter submitted to the stockholders for a vote.
Stockholders are not permitted to cumulate their votes for the election of
directors. As of the Record Date, the Corporation had 1,177,705 shares of
Common Stock issued and outstanding.
<TABLE>
The following table sets forth, as of the Record Date, the number of
shares of Common Stock beneficially owned by each person known by the
Corporation to be the beneficial owner of more than five percent of the
outstanding shares of Common Stock, each director of the Corporation, the
executive officer (who is also a director) named in the Summary Compensation
Table below, and all directors and executive officers of the Corporation as a
group.
<CAPTION>
Name of Beneficial Owner Amount and Nature of Percent of Common
Beneficial Ownership<F1> Stock Outstanding
<S> <C> <C>
Principal Stockholders:
First Federal Savings and 104,216 <F2> 8.85%
Loan Association of Bloomington
Employee Stock Ownership Plan
301 Fairway Drive
Bloomington, Illinois 61701
Investors of America, Limited 130,000 <F3> 11.04%
Partnership
39 Glen Eagles Drive
St. Louis, Missouri 63124
Jeffrey L. Gendell 112,100 <F4> 9.52%
Tontine Management, L.L.C.
Tontine Financial Partners, L.P.
Tontine Overseas Associates, L.L.C.
200 Park Avenue, Suite 3900
New York, New York 10166
Directors:
Gerald A. Bradley 11,884 <F5> 1.01% <F12>
Robert P. Dole 21,824 <F6> 1.85% <F12>
Donald L. Fernandes 21,586 <F7> 1.82% <F12>
William J. Hanfland 11,824 <F8> 1.00% <F12>
Louis F. Ulbrich 21,824 <F9> 1.85% <F12>
David R. Wampler -- --
Steven J. Wannemacher 6,824 <F10> 0.59% <F12>
All directors and
executive officers as
a group (10 persons) 109,563 <F11> 9.17% <F13>
____________________________
<FN>
<F1>
Unless otherwise indicated, the nature of beneficial ownership for shares
shown in this column is sole voting and investment power.
<F2>
Robert P. Dole, William J. Hanfland and Steven J. Wannemacher, acting as
a committee, hold 104,216 shares of Common Stock in their capacity as
Trustee of the First Federal Savings and Loan Association of Bloomington
Employee Stock Ownership Plan ('ESOP'). Messrs. Dole, Hanfland and
Wannemacher have no voting and investment power with respect to ESOP
shares allocated to participant accounts and have shared voting and
investment power with respect to unallocated ESOP shares. Participants in
the ESOP are entitled to direct the Trustee as to the voting of shares
allocated to their accounts under the ESOP. Unallocated shares and
allocated shares for which no direction is received will be voted by the
Trustee in the same proportion that the allocated shares were voted,
unless inconsistent with the Trustee's fiduciary responsibility.
<F3>
Based on Schedule 13D dated July 12, 1996. The general partner of
Investors of America, Limited Partnership is First Securities America,
Inc., a Missouri corporation ('First Securities'). First Securities's
principal address is Suite 404, 135 North Meramec, Clayton, Missouri
63105. James F. Dierberg is the controlling shareholder and President of
First Securities. Mr. Dierberg's address is 39 Glen Eagles Drive, St.
Louis, Missouri 63124.
<F4>
Based on Amended Schedule 13D dated February 17, 1998. Tontine Management,
L.L.C. is the general partner of Tontine Financial Partners, L.P. Jeffrey
L. Gendell is the managing member of Tontine Management, L.L.C. and of
Tontine Overseas Associates, L.L.C.
<F5>
Of the 11,884 shares reported as beneficially owned by Mr. Bradley, 2,590
are held by PrimeVest Financial Services, Inc. as custodian for Mary C.
Bradley, Mr. Bradley's wife. Also includes options to purchase 1,303
shares of Common Stock under the Corporation's 1996 Stock Option and
Incentive Plan.
<F6>
Of the 21,824 shares reported as beneficially owned by Mr. Dole, 10,000 are
held jointly with Joyce L. Dole, Mr. Dole's wife, 5,000 are held by the
Robert P. Dole Trust for which Mr. Dole and Ms. Dole act as co-trustees
with shared voting and investment power and 5,000 are held by the Joyce L.
Dole Trust for which Mr. Dole and Ms. Dole act as co-trustees with shared
voting and investment power. Also includes options to purchase 1,303
shares of Common Stock under the Corporation's 1996 Stock Option and
Incentive Plan.
<F7>
Includes options to purchase 6,514 shares of Common Stock under the
Corporation's 1996 Stock Option and Incentive Plan.
<F8>
Includes options to purchase 1,303 shares of Common Stock under the
Corporation's 1996 Stock Option and Incentive Plan.
<F9>
Includes options to purchase 1,303 shares of Common Stock under the
Corporation's 1996 Stock Option and Incentive Plan.
<F10>
Includes options to purchase 1,303 shares of Common Stock under the
Corporation's 1996 Stock Option and Incentive Plan.
<F11>
Includes options to purchase 16,938 shares of Common Stock under the
Corporation's 1996 Stock Option and Incentive Plan.
<F12>
Percentage is calculated on a partially diluted basis, assuming only the
exercise of stock options by such individual which are exercisable within
60 days.
<F13>
Percentage is calculated on a fully diluted basis, assuming the exercise
of all stock options which are exercisable within 60 days.
</FN>
</TABLE>
PROPOSAL I - ELECTION OF DIRECTORS
The Corporation's Board of Directors consists of seven members. The
Corporation's Certificate of Incorporation provides that directors are elected
for terms of three years, approximately one-third of whom are elected annually.
Three directors will be elected at the Meeting to serve for a three-year
period, or until their respective successors have been elected and qualified.
The Board of Directors has nominated for election as directors Donald L.
Fernandes, David R. Wampler and Steven J. Wannemacher. Directors Fernandes
and Wannemacher have been members of the Board of Directors of the Corporation
since its formation in January 1996. Mr. Wampler became a director of the
Corporation on August 26, 1997. Each director of the Corporation, including
each director nominee, is also a director of the Association.
If any nominee is unable to serve, the shares represented by all valid
proxies will be voted for the election of such substitute nominees as the Board
of Directors may recommend, or the Board of Directors may amend the Bylaws and
reduce the size of the Board. At this time, the Board knows of no reason why
any nominee might be unavailable to serve. The three individuals receiving the
highest number of votes cast will be elected as directors of the Corporation.
<TABLE>
The following table sets forth as to each nominee and director continuing
in office, his name, age, principal occupation and the year he first became a
director of the Corporation. Unless otherwise indicated, the principal
occupation listed for each person below has been his occupation for the past
five years.
<CAPTION>
Year First Year
Became Term
Name Age<F1> Principal Occupation Director<F2> Expires
<S> <C> <C> <C> <C>
DIRECTOR NOMINEES
Donald L. 40 Mr. Fernandes has been the 1991 1998
Fernandes President and Chief Executive
Officer of the Corporation since
its formation and the Chairman of
the Board and Chief Executive
Officer of the Association since
August 26, 1997. From August 15,
1995 to August 26, 1997, Mr.
Fernandes served as President and
Chief Executive Officer of the
Association. Prior to such time,
Mr. Fernandes served as the
Senior Vice President and Chief
Financial Officer of the
Association.
David R. 37 Mr. Wampler has been the Vice 1997 1998
Wampler President of the Corporation and
the President of the Association
since August 26, 1997. Prior to
assuming his current positions,
he served as the President of
Central Illinois Bank of McLean
County, beginning in July, 1993.
Prior to 1993, he was a
commercial lending officer with
Bank One in Bloomington. He
began his banking career in
Bloomington in 1983.
Steven J. 46 Mr. Wannemacher has been the 1995 1998
Wannemacher Executive Vice President-
Corporate Services of Heritage
Enterprises, Inc., a health care
and commercial property
management firm, since July,
1992. Mr. Wannemacher served as
Senior Vice President of Champion
Federal Savings and Loan in
Bloomington, Illinois prior to
July, 1992.
DIRECTORS CONTINUING IN OFFICE
Robert P. Dole 74 Mr. Dole is the retired President 1982 1999
and Chairman of National Union
Electric Corporation, a
manufacturer of household
appliances, including 'Eureka'
brand vacuum cleaners.
Louis F. 69 Mr. Ulbrich is the Secretary of 1990 1999
Ulbrich the Corporation and the
Association. He has served as
Secretary of the Association
since July, 1995. Mr. Ulbrich
has also been an attorney with
the law firm of Dunn, Ulbrich,
Hundman, Stanczak and Ogar (now
Dunn, Stanczak & Willard) in
Bloomington, Illinois. Mr.
Ulbrich is currently of counsel
to the firm and served as a
partner of the firm until January
1, 1994.
Gerald A. 70 Mr. Bradley has been the Chairman 1975 2000
Bradley of the Board of the Association
since November 16, 1993. He is
the owner and operator of
Bloomington Tent and Awning
Company. Bloomington Tent and
Awning Company manufactures and
installs awnings and other canvas
products and provides rentals of
large tents.
William J. 56 Mr. Hanfland is the Assistant 1991 2000
Hanfland Treasurer and Director of
Financial Operations of the
Illinois Agricultural
Association, a membership
organization for farmers.
____________________
<FN>
<F1>
At December 31, 1997.
<F2>
Includes prior service on the Board of Directors of the Association.
</FN>
</TABLE>
The Board of Directors recommends a vote "FOR" the election of Directors
Fernandes, Wampler and Wannemacher for a term of three years.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Boards of Directors of the Corporation and the Association conduct
their business through meetings of the full Boards and through meetings of
committees of the Board. During the fiscal year ended December 31, 1997, the
Board of Directors of the Corporation held 13 meetings, and the Board of
Directors of the Association held 14 meetings. No director of the Corporation
or the Association attended fewer than 75% of the total meetings of the Boards
and committee meetings on which such Board member served during this period.
The Corporation does not maintain any standing audit, nominating or
compensation committee of its Board of Directors. The full Board acts on all
matters relating to its audit function and the nomination of individuals for
election as directors. Because all employees of the Corporation and the
Association are compensated only at the Association level, all matters relating
to compensation are addressed by the Compensation Committee of the Board of
Directors of the Association, with the exception that matters relating to the
Corporation's 1996 Stock Option and Incentive Plan and its Management
Development and Recognition Plan are addressed by the Corporation's Option Plan
Committee and Management Recognition Plan Committee, respectively.
The Compensation Committee of the Association consists of Messrs. Bradley,
Dole, Hanfland, Ulbrich and Wannemacher. The Compensation Committee of the
Association met once in fiscal 1997. The Compensation Committee is responsible
for establishing the compensation for the executive officers of the Association
and is also responsible for establishing certain guidelines and limits for
compensation for other salaried officers and employees of the Association.
EXECUTIVE COMPENSATION
Summary Compensation Information. The following table sets forth
compensation information for the fiscal years ended December 31, 1997, 1996 and
1995, with respect to the Chief Executive Officer of the Corporation. The
amounts reflected in the table were paid by the Association for services
rendered to the Association. Officers of the Corporation do not receive any
additional compensation for serving in such capacities. No other officer or
employee of the Association received compensation in excess of $100,000 in the
fiscal year ended December 31, 1997. The person named in the table is sometimes
referred to herein as the "named executive officer."
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
Name and Other Restricted Securities
Principal Annual Stock Underlying All Other
Position Year Salary Bonus Compensation Award Options(#) Compensation
<S> <C> <C> <C> <C> <C> <C> <C>
Donald L. 1997 $107,292 -- $1,604<F3> $197,099<F4> 32,567 $20,031<F5>
Fernandes,
President 1996 $101,874 -- $1,604<F3> -- -- $19,750<F5>
and Chief
Executive 1995 $89,081<F1> $1,604<F3> -- -- $ 1,000<F5>
Officer $3,000<F2>
- ------------------------
<FN>
<F1>
Mr. Fernandes was appointed President and Chief Executive Officer of the
Association effective August 15, 1995. The 1995 compensation reflected
under salary includes compensation paid to Mr. Fernandes from January 1,
1995 through August 14, 1995 in his capacity as Senior Vice President -
Finance of the Association.
<F2>
A bonus was authorized by the Board of Directors in December, 1995, payable
on January 4, 1996. The bonus amount listed is that paid on January 4,
1996.
<F3>
Mr. Fernandes has a deferred compensation agreement with the Association
whereby the Association has agreed to purchase a life insurance policy on
his behalf. The amount listed is the annual premium paid by the
Association for this policy.
<F4>
Consists of an award on February 11, 1997 of 13,027 shares of restricted
stock at $15.13 per share (the market value per share at such date) under
the Corporation's Management Development and Recognition Plan. Such
shares vest over a five year period from the date of grant with 20%
vesting on each anniversary date of the initial grant date. At December
31, 1997, the aggregate value of such award of restricted stock was
$245,950.
<F5>
All other compensation for 1997 includes an ESOP allocation of 1,008 shares
at $18.88 per share or approximately $19,031 at the date of allocation and
a $1,000 employer matching contribution in the Association's 401(k) Profit
Sharing Plan. In 1996, it included an ESOP allocation of 1,261 shares at
$14.87 per share or approximately $18,750 at the date of allocation and a
$1,000 employer matching contribution in the Association's 401(k) Profit
Sharing Plan. In 1995, it included a $1,000 employer matching
contribution in the Association's 401(k) Profit Sharing Plan.
</FN>
</TABLE>
<TABLE>
The following table sets forth information with respect to option grants
during the fiscal year ended December 31, 1997 under the Corporation's 1996
Stock Option and Incentive Plan.
<CAPTION>
Potential Realizable
Number of Pct of Total Value at Assumed
Securities Options Rates of Stock
Underlying Granted to Exercise Appreciation for
Options Employees Price Expiration Option Term
Name Granted(#) in Fiscal Year Per Share Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Donald L. 32,567<F1> 42% $15.13 2/11/07 $310,039 $785,516
Fernandes
President
and Chief
Executive
_________________________
<FN>
<F1>
The options become exercisable with respect to 20% of the shares covered
thereby on each of the first five anniversaries of the date of grant.
</FN>
</TABLE>
<TABLE>
The following table sets forth information with respect to the fiscal year
end values of unexercised options under the Corporation's 1996 Stock Option and
Incentive Plan.
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Options
Shares at Fiscal Year End (#) at Fiscal Year End<F1>
Acquired on Value
Name Exercise(#) Received Exercisable Unexercisable Exercisable Unexerisable
<S> <C> <C> <C> <C> <C> <C>
Donald L. -- -- -- 32,567 -- $122,126
Fernandes
President
and Chief
Executive
Officer
_________________________
<FN>
<F1>
This amount represents the difference between the market value of one share
of the Corporation's Common Stock on December 31, 1997 ($18.88) and the
option exercise price times the total number of shares subject to
exercisable or unexercisable options.
</FN>
</TABLE>
Pension Plan. The Association currently maintains a defined benefit
pension plan (the 'Pension Plan') to provide retirement benefits for its
employees. The Pension Plan is qualified under Section 401(a) and 501(a) of
the Internal Revenue Code of 1986, as amended (the "Code"). The Association
annually contributes an amount to the Pension Plan necessary to satisfy the
actuarially determined minimum funding requirements in accordance with the
Employee Retirement Income Security Act of 1974, as amended, ('ERISA').
<TABLE>
The following table sets forth the estimated annual benefits payable upon
retirement at age 65 in calendar year 1997, expressed in the form of a ten-year
certain and life annuity, for the average salary and years of service
classifications specified.
<CAPTION>
Years of Service
Average
Salary 15 20 25 30 35
<S> <C> <C> <C> <C> <C>
$ 25,000 $ 5,625 $ 7,500 $ 9,375 $ 11,250 $ 13,125
$ 50,000 $ 11,250 $ 15,000 $ 18,750 $ 22,500 $ 26,250
$ 75,000 $ 16,875 $ 22,500 $ 28,125 $ 33,750 $ 39,375
$100,000 $ 22,500 $ 30,000 $ 37,500 $ 45,000 $ 52,500
$125,000 $ 28,125 $ 37,500 $ 46,875 $ 56,250 $ 65,625
</TABLE>
All employees over the age of 20-1/2 who have worked at least 500 hours in
a 6-month period of employment with the Association are eligible to participate
in the Pension Plan. Once eligible to participate in the Pension Plan an
employee accrues benefits for each year of service during which the employee
works at least 1,000 hours for the Association.
The amount of an employee's Pension Plan benefit is based on that
employee's years of service to the Association, up to a maximum of forty years,
and his or her average salary during his or her most highly compensated five
consecutive years of service. An employee's Pension Plan benefit vests
according to the following schedule: 20% after two years of service, 40% after
3 years of service, 60% after 4 years of service, 80% after 5 years of service
and 100% after 6 years of service. Normal retirement occurs at the later of
age 65 or when an employee completes five years of service to the Association.
An employee may elect early retirement any time after reaching age 55 and
completing ten years of service to the Association. An employee may also elect
to delay retirement beyond his or her normal retirement date. An employee's
Pension Plan benefits are payable in full without deduction for Social Security
or any other offset amounts.
An employee retiring on his or her normal retirement date is entitled to
a monthly pension equal to 1.5% of his or her average monthly salary during his
or her five consecutive most highly-compensated years of service multiplied by
the number of that employee's years of service, up to a maximum of 40 years of
service. An employee electing early retirement or late retirement will have
his or her monthly benefit actuarially adjusted to account for such early or
late commencement of benefit payments. Under the Pension Plan, benefits are
also payable upon termination, disability and death.
The approximate years of service, as of December 31, 1997, for the named
executive officer is as follows:
Name Years of Service
Donald L. Fernandes 14 Years
Effective March 31, 1996, the Board of Directors of the Association froze
the Pension Plan. No further benefits will accrue under the Pension Plan after
that date. All participants became fully vested in their benefits accrued as
of that date. The Association will continue making contributions to the
Pension Plan until the plan is fully funded at which time the Pension Plan will
be terminated and liquidated by paying out all funds in the Pension Plan to
the respective beneficiaries of those funds. The date fixed for termination of
the Pension Plan is March 31, 1998.
Deferred Compensation Agreement. The Association entered into a deferred
compensation agreement with Donald L. Fernandes on September 22, 1992. Under
the terms of this agreement, Mr. Fernandes or his beneficiary is entitled to
receive annual payments from the Association after Mr. Fernandes' retirement at
age 60 or beyond or in the event that he is disabled or dies prior to age 60.
The deferred compensation agreement will be terminated if Mr. Fernandes ceases
to be employed by the Association at any time prior to his attaining age 60 if
no benefits have been paid under the agreement. To meet its obligations under
the deferred compensation agreement, the Association has purchased a life
insurance policy for the benefit of Mr. Fernandes, and the Association pays an
annual premium on this policy. In the event that the deferred compensation
agreement is terminated, the Association will no longer have any obligation to
make premium payments on the insurance policy, and Mr. Fernandes may receive
ownership of the policy.
Employment Agreement. The Association and the Corporation have entered
into an employment agreement with Donald L. Fernandes, effective as of June 29,
1996. The employment agreement provides that Mr. Fernandes will be employed
for a 36-month term. The term of the agreement may be extended for an
additional twelve-month period by action of the Board of Directors of the
Association and the Corporation taken 60 days prior to each anniversary of the
effective date of the employment agreement. Mr. Fernandes may terminate the
employment agreement at any time upon 60 days' prior written notice to the
Board of Directors of the Association and the Corporation.
Under the employment agreement, the base salary for Mr. Fernandes for 1997 was
$110,000. The Board of Directors of the Association and the Corporation will
review Mr. Fernandes's base salary at least once a year and may increase that
base salary. In addition to base salary, the agreement provides for
participation in any group health, medical, hospitalization, dental care, sick
leave pay, life insurance or death benefit, disability plans and other employee
benefit plans offered by the Association to its employees.
The employment agreement provides for continuing benefits in the event Mr.
Fernandes is terminated, or his employment agreement is not renewed, other than
for "just cause" (e.g., personal dishonesty, incompetence, willful misconduct,
breach of a fiduciary duty involving personal profit or willful violation of
any law, rule or regulation). In such instances, Mr. Fernandes will continue
to receive all benefits due to him under the employment agreement through the
remaining term of the agreement. If Mr. Fernandes is terminated within one
year after a "change of control" of the Association or the Corporation, then
the Association will pay to Mr. Fernandes a lump sum equal to 2.99 times Mr.
Fernandes's "Base Amount," as that term is defined in Section 280G(b)(3) of
the Code, and will continue to provide coverage for Mr. Fernandes and his
dependents, beneficiaries and estate under all employee benefit plans of the
Association and the Corporation for twenty-four months. If payments and
benefits under the employment agreement would constitute an "Excess Parachute
Payment" under Section 280G of the Code, then such payments and benefits will
be reduced to one dollar less than the maximum amount that the Association may
pay under Section 280G of the Code without losing its ability to deduct such
payments for tax purposes. A "change of control" is defined in the employment
agreement to include, among other events, the acquisition of more than 25% of
the Association's or the Corporation's outstanding common stock, or the
equivalent in voting power of any class or classes of outstanding capital stock
of the Association or the Corporation, by any corporation, person or group. The
employment agreement further provides that, within one year of a change of
control, Mr. Fernandes may elect to terminate his employment with the
Association or the Corporation and receive the severance benefits described
above if there is (i) any substantial change in his duties and responsibilities,
(ii) any material reduction in his aggregate compensation or (iii) a change in
his main place of work to a location outside of a forty-mile radius of the
Association's offices at which he is then based, provided that any such event
occurs without his express written consent.
In the event Mr. Fernandes's employment is terminated for "just cause,"
all Mr. Fernandes's rights and benefits under the employment agreement cease as
of the date of such termination.
The agreement with Mr. Fernandes includes a covenant which will limit his
ability under certain circumstances to compete with the business of the
Association for a period of one year following the termination of his
employment with the Association.
Compensation Committee Interlocks and Insider Participation. The members
of the Compensation Committee of the Board of Directors of the Association for
the fiscal year ended December 31, 1997 were Messrs. Bradley, Dole, Hanfland,
Ulbrich and Wannemacher. No such member of the Compensation Committee is a
former or current officer or employee of the Corporation or the Association.
The Association makes loans to executive officers and directors of the
Association and their affiliates in the ordinary course of its business. Such
loans to executive officers, directors and their affiliates are made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time the transaction is originated for comparable
transactions with nonaffiliated persons and do not, in the opinion of the
Association's management, involve more than the normal risk of collectibility
or present any other unfavorable features. As of December 31, 1997,
approximately $1,004,000 of loans were outstanding from the Association to
executive officers and directors of the Association and their affiliates.
Louis F. Ulbrich, the Secretary and a director of the Corporation and the
Association, is of counsel to the law firm of Dunn, Stanczak & Willard in
Bloomington, Illinois. The Association has retained the services of Mr.
Ulbrich's firm.
Compensation Committee Report. At the direction of the Board of Directors
of this Corporation, the Compensation Committee of the Association has prepared
and is submitting the following report explaining the rationale and
considerations that led to fundamental compensation decisions affecting the
Corporation's Chief Executive Officer and other executive officers of the
Corporation and the Association for the fiscal year ending December 31, 1997.
The Compensation Committee has conducted its annual review of the
compensation structure for executive officers of the Association. The purpose
of the review is to provide the Compensation Committee with the information
needed to determine whether the compensation programs and benefits structure
are adequate and competitive and whether they are achieving the goals of
attracting and retaining competent executive officers.
In its review, the Compensation Committee utilized several different
compensation surveys to evaluate levels of compensation and benefits. Actual
compensation was compared to survey data from at least two different sources
with a focus on data for entities similar in size to the Corporation. The
survey data also included separate breakdowns for companies within the same
region of the state of Illinois, for the entire state of Illinois and for the
entire country. Some adjustments were made to more closely fit actual
positions within the Corporation and the Association to position descriptions
used in the surveys. In addition, the Compensation Committee also reviewed
the performance of the Corporation and the progress being made toward achieving
the goals of the Corporation as a factor in the assessment of compensation
levels and benefit programs.
The Compensation Committee determined the compensation of the
Corporation's Chief Executive Officer using the same criteria as for the other
executive officers.
The Compensation Committee is continually considering the implementation
of compensation programs and policies that will tie executive officer
compensation more closely to the financial performance of the Corporation. In
this regard, on February 11, 1997, the Corporation obtained stockholder
approval of its 1996 Stock Option and Incentive Plan and its Management
Development and Recognition Plan.
Submitted by the Compensation
Committee of the Association:
Gerald A. Bradley
Robert P. Dole
William J. Hanfland
Louis F. Ulbrich
Steven J. Wannemacher
COMMON STOCK PRICE PERFORMANCE GRAPH
<TABLE>
The following Common Stock price performance graph compares the change in
the Corporation's cumulative total stockholder returns on its Common Stock
commencing June 29, 1996, the effective date of the Corporation's initial
public offering and the conversion of the Association from mutual to stock
form, with the cumulative total return of all bank stocks traded on The Nasdaq
Stock Market and all stocks traded on The Nasdaq Stock Market. The amounts
shown assume the reinvestment of dividends.
(Graph depicting the following table has been omitted.)
1996 1997
First Second Third Fourth First Second Third Fourth
Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Eagle -- 100 128.75 148.75 157.50 155.00 176.25 188.75
BancGroup,Inc.
Nasdaq Bank -- 100 110.81 125.05 134.24 156.22 184.23 211.00
Stocks Index
The Nasdaq -- 100 103.56 108.65 102.81 121.65 142.23 133.39
Stock Market
Index
</TABLE>
DIRECTORS' COMPENSATION
Directors of the Corporation do not receive any fees in consideration of
their service. Directors of the Association who are not also employees of the
Association receive a fee of $1,000 per month for their services as Directors
of the Association. The Chairman of the Board of Directors of the Corporation
receives a fee of $200 per month. Directors who are employees of the
Association receive no compensation for their services as Directors of the
Association. No additional committee fees or meeting fees are paid. Mr.
Bradley defers a portion of his fees which is then used by the Association to
pay the premiums on two life insurance policies for his benefit. The
Association pays an aggregate of $4,800 per year as premiums on these policies,
and Mr. Bradley's annual compensation as a director is reduced accordingly.
The policies provide life insurance coverage for Mr. Bradley and will pay
benefits to his beneficiaries in the event of his death during the term of
the policies.
On February 11, 1997, each of the non-employee directors was granted an
award of 2,605 shares of restricted stock at $15.13 per share (the market value
per share at such date) under the Corporation's Management Development and
Recognition Plan. Such shares vest over a five year period from the date of
grant with 20% vesting on each anniversary date of the initial grant date. At
December 31, 1997, the aggregate value of such award of restricted stock for
each such director was $49,182. Also on February 11, 1997, each of the
non-employee directors was granted an option to purchase 6,514 shares of Common
Stock under the Corporation's 1996 Stock Option and Incentive Plan. The
exercise price for these options is $15.13 per share (the market value per share
at such date). The options become exercisable with respect to 20% of the shares
covered thereby on each of the first five anniversaries of the date of the grant
and will terminate 10 years from the date of the grant, or earlier in certain
circumstances.
AUDITORS
The Board of Directors has selected McGladrey & Pullen, LLP, independent
public accountants, to be the Corporation's auditors for the 1998 fiscal year.
A representative of McGladrey & Pullen, LLP is expected to be present at the
Meeting to respond to appropriate questions of stockholders and to make a
statement if he desires. McGladrey & Pullen, LLP was retained as the principal
accountants of the Corporation on October 17, 1997 and has audited the
Corporation's financial statements for the fiscal year ended December 31, 1997.
The Corporation dismissed its former principal accountants, Ernst & Young
LLP, effective October 17, 1997. During the fiscal years ended December 31,
1995 and 1996 and the subsequent interim period through October 17, 1997,
there were no disagreements with the former accountants on any matter of
accounting principle or practices, financial statement disclosure or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction of
the former accountants would have caused them to make reference in connection
with their report to the subject matter of the disagreements. The reports of
the former principal accountants on the financial statements of the Corporation
or the Association for either of the fiscal years ended December 31, 1995 or
1996 contained no adverse opinion or disclaimer of opinion, nor was either
qualified or modified as to uncertainty, audit scope or accounting principles.
The decision to change accountants was approved by the Board of Directors of
the Corporation.
OTHER MATTERS
The Board of Directors of the Corporation is not aware of any business to
come before the Meeting other than those matters described above in this Proxy
Statement. However, if any other matters should properly come before the
Meeting, it is intended that proxies in the accompanying form will be voted in
respect thereof in accordance with the judgment of the person or persons voting
the proxies.
The Corporation's Annual Report to Stockholders, including financial
statements, has been mailed with this Proxy Statement to all stockholders of
record as of the close of business on March 13, 1998. The Annual Report to
Stockholders is not to be treated as part of the proxy solicitation material or
as having been incorporated herein by reference.
NOTICE PROVISIONS FOR STOCKHOLDER NOMINATIONS OF DIRECTORS
Any stockholder wishing to nominate an individual for election as a
director must comply with certain provisions in the Corporation's Certificate
of Incorporation. The Corporation's Certificate of Incorporation establishes
an advance notice procedure with regard to the nomination, other than by or at
the direction of the Board of Directors of the Corporation, of candidates for
election as directors. Generally, such notice must be delivered to or mailed
to and received by the Secretary of the Corporation at the principal executive
offices of the Corporation not later than the close of business on the 40th day
or earlier than the close of business on the 70th day prior to the first
anniversary of the preceding year's annual meeting. The stockholder must also
comply with certain other provisions set forth in the Corporation's Certificate
of Incorporation relating to the nomination of an individual for election as a
director. For a copy of the Corporation's Certificate of Incorporation, which
includes the provisions relating to the nomination of an individual for
election as a director, an interested stockholder should contact the Secretary
of the Corporation at 301 Fairway Drive, Bloomington, Illinois 61701.
NOTICE PROVISIONS FOR STOCKHOLDER PROPOSALS
Any stockholder wishing to bring business before an annual meeting must
comply with certain provisions in the Corporation's Bylaws. The Corporation's
Bylaws establish an advance notice procedure with regard to certain matters to
be brought before an annual meeting of stockholders of the Corporation other
than by or at the direction of the Board of Directors of the Corporation. Such
notice must be delivered to or mailed to and received by the Secretary at the
principal executive offices of the Corporation not later than the close of
business on the 60th day or earlier than the close of business on the 90th day
prior to the first anniversary of the preceding year's annual meeting. The
stockholder must also comply with certain other provisions set forth in the
Corporation's Bylaws relating to the bringing of business before an annual
meeting. For a copy of the Corporation's Bylaws, which includes the provisions
relating to the bringing of business before an annual meeting, an interested
stockholder should contact the Secretary of the Corporation at 301 Fairway
Drive, Bloomington, Illinois 61701.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on a review of copies of Form 3, 4 and 5 beneficial ownership
reports and amendments thereto furnished to the Corporation, and written
representations that no other reports were required, the Corporation believes
that its directors, officers and greater than 10% stockholders complied with
all applicable requirements of Section 16(a) of the Exchange Act during the
fiscal year ended December 31, 1997.
INCLUSION OF STOCKHOLDER PROPOSALS IN PROXY MATERIALS
In order to be eligible for inclusion in the Corporation's proxy materials
for next year's Annual Meeting of Stockholders, any stockholder proposal to
take action at such meeting must be received at the Corporation's main office
at 301 Fairway Drive, Bloomington, Illinois, no later than November 13, 1998.
Any such proposal shall be subject to the requirements of the proxy rules
adopted under the Exchange Act.
FORM 10-K
A COPY OF THE FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997 AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE FURNISHED WITHOUT CHARGE TO
STOCKHOLDERS AS OF THE RECORD DATE UPON WRITTEN REQUEST TO DONALD L. FERNANDES,
PRESIDENT, EAGLE BANCGROUP, INC., 301 FAIRWAY DRIVE, BLOOMINGTON, ILLINOIS
61701.
</Page>
<PAGE>
REVOCABLE PROXY
EAGLE BANCGROUP, INC.
WITHHOLD FOR ALL
FOR AUTHORITY EXCEPT
XX PLEASE MARK VOTES 1. The election as ___ ___ ___
AS IN THIS EXAMPLE directors of all the
nominees listed below
(except as marked to
the contrary below):
THIS PROXY IS SOLICITED BY Nominees:
THE BOARD OF DIRECTORS OF
EAGLE BANCGROUP, INC. Donald L. Fernandes; David R. Wampler;
Steven J. Wannemacher
The undersigned hereby appoint(s) Robert INSTRUCTION: To withhold
P. Dole and William J. Hanfland, or either of authority to vote for any
them, as proxies for the undersigned, with individual nominee, mark 'For
full power of substitution, to act and to All Except' and write that
vote all the shares of common stock of Eagle nominee's name in the space
BancGroup, Inc. that the undersigned would be provided below.
entitled to vote if personally present at the
annual meeting of stockholders to be held at
the Conference Center at the Best Western ---------------------------
Eastland Suites Lodge, 1801 Eastland Drive,
Bloomington, Illinois, on April 15, 1998, or
at any adjournments or postponements there of. THE BOARD OF DIRECTORS
Said proxies are directed to vote as RECOMMENDS A VOTE 'FOR' ALL
instructed on the matters set forth on this THE NOMINEES.
card and otherwise at their discretion.
Receipt of a copy of the notice of said
meeting and proxy statement are hereby PLEASE CHECK BOX IF YOU PLAN
acknowledged. TO ATTEND __
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE
VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTIONS ARE
GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION
OF ALL NOMINEES LISTED ABOVE.
Please be sure to sign
and date this Proxy in
the box below.
Date__________________
___________________________________________________________________________
Stockholder sign above. Co-holder (if any) sign above.
IMPORTANT: Please sign exactly as your name or
names appear on this proxy card. If stock is
held jointly, all joint owners must sign.
Executors, administrators, trustees, guardians,
custodians, corporate officers and others signing
in a representative capacity should put their
full title.
* Detach above card, sign, date and mail in postage paid envelope provided. *
EAGLE BANCGROUP, INC.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
