<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / 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 Section 240.14a-11(c) or Section
240.14a-12
EAGLE BANCGROUP, 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)(1)
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 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(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>
EAGLE BANCGROUP, INC.
301 FAIRWAY DRIVE
BLOOMINGTON, ILLINOIS 61701
(309) 663-6345
March 22, 1999
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 Eastland Suites
Lodge, 1801 Eastland Drive, Bloomington, Illinois, on Wednesday, April 21, 1999,
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,
[GRAPHIC OMITTED]
Donald L. Fernandes
President and Chief Executive Officer
<PAGE>
EAGLE BANCGROUP, INC.
301 FAIRWAY DRIVE
BLOOMINGTON, ILLINOIS 61701
(309) 663-6345
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 21, 1999
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 Eastland Suites Lodge, 1801 Eastland Drive, Bloomington, Illinois,
on Wednesday, April 21, 1999, at 10:00 a.m., Central Time.
The Meeting is for the purpose of considering and acting upon:
1. The election of two 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 11, 1999 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
[GRAPHIC OMITTED]
Donald L. Fernandes
President and Chief Executive Officer
Bloomington, Illinois
March 22, 1999
<PAGE>
PROXY STATEMENT
OF
EAGLE BANCGROUP, INC.
301 FAIRWAY DRIVE
BLOOMINGTON, ILLINOIS 61701
(309) 663-6345
ANNUAL MEETING OF STOCKHOLDERS
APRIL 21, 1999
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 Eastland Suites Lodge, 1801 Eastland Drive, Bloomington, Illinois, on
Wednesday, April 21, 1999, 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 22, 1999. 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 inspector 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. Proxies are being solicited
principally by mail and by telephone. Kissel-Blake Inc. has been retained by the
Corporation to act as a proxy solicitor for a fee estimated not to exceed $8,500
plus reimbursement of out of pocket expenses. In addition, directors, officers
and regular employees of the Corporation may solicit proxies personally, by
telephone, by fax or by special letter. The Corporation may also reimburse
brokers, nominees and other fiduciaries for their reasonable expenses in
forwarding proxy solicitation material to beneficial owners.
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Stockholders of record as of the close of business on March 11, 1999
(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 1,070,108 shares of Common Stock issued and
outstanding.
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.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF COMMON
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) STOCK OUTSTANDING
- ------------------------ ----------------------- -----------------
<S> <C> <C>
PRINCIPAL STOCKHOLDERS:
First Federal Savings and Loan 103,472(2) 9.67%
Association of Bloomington ESOP
301 Fairway Drive
Bloomington, Illinois 61701
Investors of America, L.P. 105,000(3) 9.81%
39 Glen Eagles Drive
St. Louis, Missouri 63124
Jeffrey L. Gendell 86,800(4) 8.11%
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
Lawrence B. Seidman, et al. 102,235(5) 9.55%
100 Misty Lane
Parsippany, New Jersey 07054
</TABLE>
2
<PAGE>
DIRECTORS:
<TABLE>
<S> <C> <C>
Gerald A. Bradley 13,708(6) 1.28%(14)
Robert P. Dole 23,648(7) 2.20%(14)
Donald L. Fernandes 32,169(8) 2.97%(14)
William J. Hanfland 13,648(9) 1.27%(14)
Louis F. Ulbrich 23,648(10) 2.20%(14)
David R. Wampler 7,689(11) .72%(14)
Steven J. Wannemacher 8,648(12) .81%(14)
All directors and executive officers as 143,259(13) 12.93%(15)
a group (10 persons)
</TABLE>
- ----------------------------
(1) Unless otherwise indicated, the nature of beneficial ownership for
shares shown in this column is sole voting and investment power.
(2) Robert P. Dole, William J. Hanfland and Steven J. Wannemacher, acting
as a committee, hold 103,472 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.
(3) Based on Amended Schedule 13D dated August 19, 1998 (as supplemented by
information known by the Corporation as to subsequent dispositions of
shares). 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.
(4) Based on Amended Schedule 13D dated October 13, 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. Of the
86,800 shares reported, Mr. Gendell reported shared ownership of 86,800
shares, Tontine Management, L.L.C. reported shared ownership of 71,100
shares, Tontine Financial Partners, L.P. reported shared ownership of
71,100 shares and Tontine Overseas Associates, L.L.C. reported shared
ownership of 15,700 shares.
(5) Based on Amended Schedule 13D dated January 22, 1999. The 102,235
shares reported includes shares reported as beneficially owned by the
following persons and entities: Lawrence B. Seidman; Seidman and
Associates II, L.L.C.; Seidman Investment Partnership, L.P.; Kerrimatt,
L.P.; Benchmark Partners, L.P.; Seidman and Associates, LLC; Federal
Holdings, L.L.C.; Richard Whitman; Lorraine DiPaolo; The Benchmark
Company, Inc.; Dennis Pollack.
(6) Of the 13,708 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
2,606 shares of Common Stock under the Corporation's 1996 Stock Option
and Incentive Plan.
(7) Of the 23,648 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 2,606 shares of Common Stock under the
Corporation's 1996 Stock Option and Incentive Plan.
3
<PAGE>
(8) Includes options to purchase 13,028 shares of Common Stock under the
Corporation's 1996 Stock Option and Incentive Plan and 3,049 shares
allocated to Mr. Fernandes under the ESOP (which shares are also
included above under the ESOP's beneficial ownership total).
(9) Includes options to purchase 2,606 shares of Common Stock under the
Corporation's 1996 Stock Option and Incentive Plan.
(10) Includes options to purchase 2,606 shares of Common Stock under the
Corporation's 1996 Stock Option and Incentive Plan.
(11) Includes options to purchase 5,210 shares of Common Stock under the
Corporation's 1996 Stock Option and Incentive Plan and 395 shares
allocated to Mr. Wampler under the ESOP (which shares are also included
above under the ESOP's beneficial ownership total).
(12) Includes options to purchase 2,606 shares of Common Stock under the
Corporation's 1996 Stock Option and Incentive Plan.
(13) Includes options to purchase 37,783 shares of Common Stock under the
Corporation's 1996 Stock Option and Incentive Plan and 8,675 shares
allocated to the executive officers under the ESOP (which shares are
also included above under the ESOP's beneficial ownership total).
(14) Percentage is calculated on a partially diluted basis, assuming only
the exercise of stock options by such individual which are exercisable
within 60 days.
(15) Percentage is calculated on a fully diluted basis, assuming the
exercise of all stock options which are exercisable within 60 days.
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.
Two 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 Robert P. Dole and Louis F.
Ulbrich. 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 two individuals receiving the highest
number of votes cast will be elected as directors of the Corporation.
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.
4
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST YEAR
BECAME TERM
NAME AGE(1) PRINCIPAL OCCUPATION DIRECTOR(2) EXPIRES
- ---- ------ -------------------- ----------- -------
<S> <C> <C> <C>
DIRECTOR NOMINEES
Robert P. Dole 75 Mr. Dole is the retired President and Chairman of National 1982 1999
Union Electric Corporation, a manufacturer of household
appliances, including "Eureka" brand vacuum cleaners.
Louis F. Ulbrich 70 Mr. Ulbrich is the Secretary of the Corporation and the 1990 1999
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.
DIRECTORS CONTINUING IN OFFICE
Gerald A. Bradley 71 Mr. Bradley has been the Chairman of the Board of the 1975 2000
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. Hanfland 57 Mr. Hanfland is the Assistant Treasurer and Director of 1991 2000
Financial Operations of the Illinois Agricultural
Association, a membership organization for farmers.
Donald L. Fernandes 41 Mr. Fernandes has been the President and Chief Executive 1991 2001
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. Wampler 38 Mr. Wampler has been the Vice President of the 1997 2001
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.
Steven J. Wannemacher 47 Mr. Wannemacher has been the Executive Vice President- 1995 2001
Corporate Services of Heritage Enterprises, Inc., a health
care and commercial property management firm, since
July, 1992.
</TABLE>
- --------------------
(1) At December 31, 1998.
(2) Includes prior service on the Board of Directors of the Association.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF
DIRECTORS DOLE AND ULBRICH FOR A TERM OF THREE YEARS.
5
<PAGE>
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, 1998, the
Board of Directors of the Corporation held 22 meetings, and the Board of
Directors of the Association held 15 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 one time in fiscal 1998. 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, 1998, 1997 and
1996, with respect to the Chief Executive Officer of the Corporation. No other
executive officer's salary and bonus exceeded $100,000 for the year ended
December 31, 1998. 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.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------------------- ----------------------------
OTHER RESTRICTED SECURITIES
NAME AN ANNUAL STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARD OPTIONS(#) COMPENSATION
- --------------------- --------- -------------- ------------ ---------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Donald L. Fernandes, 1998 $ 110,000 $ -- $ 1,604(1) $ - - $ 18,577(3)
President and Chief
Executive Officer
1997 $ 107,292 $ -- $ 1,604(1) $ 197,099(2) 32,567 $ 20,031(3)
1996 $ 101,874 $ -- $ 1,604(1) $ -- -- $ 19,750(3)
</TABLE>
- ----------------------------
(1) 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.
(2) 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
6
<PAGE>
year period from the date of grant with 20% vesting on each anniversary
date of the initial grant date. At December 31, 1998, the aggregate
value of such award of restricted stock was $245,885.
(3) All other compensation for 1998 for Mr. Fernandes includes an ESOP
allocation of 868 shares at $20.25 per share or approximately $17,577
at the date of allocation and a $1,000 employer matching contribution
in the Association's 401(k) Profit Sharing Plan. In 1997, it included
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.
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.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR END (#) AT FISCAL YEAR END (1)
------------------------------ ---------------------------
SHARES ACQUIRED VALUE
NAME ON EXERCISE (#) RECEIVED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
--------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Donald L. Fernandes, -- -- 6, 514 26,053 $33,384 $133,522
President and Chief
Executive Officer
</TABLE>
- -------------------------
(1) This amount represents the difference between the market value of one
share of the Corporation's Common Stock on December 31, 1998 ($20.25)
and the option exercise price times the total number of shares subject
to exercisable or unexercisable options.
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").
The following table sets forth the estimated annual benefits payable
upon retirement at age 65 in calendar year 1998, expressed in the form of a
ten-year certain and life annuity, for the average salary and years of service
classifications specified.
<TABLE>
<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.
7
<PAGE>
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, 1998, for the
named executive officers is as follows:
<TABLE>
<CAPTION>
NAME YEARS OF SERVICE
<S> <C> <C>
Donald L. Fernandes 14 Years
</TABLE>
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 is currently in the process of terminating and
liquidating the Pension Plan at which time all funds in the Pension Plan will be
paid out to the respective beneficiaries of those funds.
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 October
23, 1998. The employment agreement provides that Mr. Fernandes will be employed
for a 36-month term. The term of the agreement may be extended annually for
additional twelve-month periods by action of the Board of Directors of the
Association and the Corporation. 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 annual base salary for Mr.
Fernandes is $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
8
<PAGE>
in any incentive, retirement, medical and other employee benefit plans offered
by the Association or the Corporation 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." 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. 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.
A copy of Mr. Fernandes's employment agreement is filed as an exhibit
to the Corporation's Form 10-K for this fiscal year.
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, 1998 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, 1998, approximately $1,062,635 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, 1998.
9
<PAGE>
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.
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
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.
10
<PAGE>
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
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 BancGroup, Inc - 100 128.75 148.75 157.50 155.00 176.25 188.75
Nasdaq Bank Stocks - 100 110.65 124.95 134.32 156.31 184.34 209.21
The Nasdaq Stock Market - 100 103.54 108.63 102.74 121.57 142.13 133.27
</TABLE>
<TABLE>
<CAPTION>
1998
-------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
------- ------- ------- -------
<S> <C> <C> <C> <C>
Eagle BancGroup, Inc 206.25 191.25 145.00 202.50
Nasdaq Bank Stocks 221.17 216.94 182.97 207.22
The Nasdaq Stock Market 155.94 160.45 145.26 187.35
</TABLE>
11
<PAGE>
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 an additional 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.
AUDITORS
The Board of Directors has selected McGladrey & Pullen, LLP,
independent public accountants, to be the Corporation's auditors for the 1999
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 years ended December 31, 1997
and 1998.
The Corporation dismissed its former principal accountants, Ernst &
Young LLP, effective October 17, 1997. During the fiscal year ended December 31,
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 report of the former
principal accountants on the financial statements of the Corporation or the
Association for the fiscal year ended December 31, 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 11, 1999. 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.
12
<PAGE>
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 before 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
before 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, 1998.
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
23, 1999. Any such proposal shall be subject to the requirements of the proxy
rules adopted under the Exchange Act.
13
<PAGE>
FORM 10-K
A COPY OF THE FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998 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.
14
<PAGE>
REVOCABLE PROXY
EAGLE BANCGROUP, INC.
|X| PLEASE MARK VOTES
AS IN THIS EXAMPLE
THIS PROXY IS SOLICITED BY THE BOARD OF
DIRECTORS OF EAGLE BANCGROUP, INC.
The undersigned hereby appoint(s) William J. Hanfland and Steven J.
Wannemacher, or either of them, as proxies for the undersigned, with full
power of substitution, to act and to vote all the shares of common stock of
Eagle BancGroup, Inc. that the undersigned would be entitled to vote if
personally present at the annual meeting of stockholders to be held at the
Conference Center at the Eastland Suites Lodge, 1801 Eastland Drive,
Bloomington, Illinois, on April 21, 1999, or at any adjournments or
postponements thereof. Said proxies are directed to vote as instructed on the
matters set forth on this card and otherwise at their discretion. Receipt of
a copy of the notice of said meeting and proxy statement are hereby
acknowledged.
Please be sure to sign and date Date
this Proxy in the box below.
Stockholder sign above. Co-holder (if any) sign above.
Vote For All
For Withheld Except
1. The election as directors of all / / / / / /
the nominees listed below
(except as marked to the
contrary below):
Nominees:
Robert P. Dole; Louis F. Ulbrich
INSTRUCTION: To withhold authority to vote for any individual nominee, mark
"For All Except" and write that nominee's name in the space provided below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
ALL THE NOMINEES.
PLEASE CHECK BOX IF YOU PLAN 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.
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
