<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] 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 Rule 14a-11(c) or Rule 14a-12
PARK BANCORP, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
[ ] 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:
- --------------------------------------------------------------------------------
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE> 2
PARK BANCORP, INC.
2740 W. 55TH STREET
CHICAGO, ILLINOIS 60632
(773) 434-6040
January 21, 1997
Fellow Shareholders:
You are cordially invited to attend the special meeting of shareholders
(the "Special Meeting") of Park Bancorp, Inc. (the "Company"), the holding
company for Park Federal Savings Bank (the "Bank"), Chicago, Illinois, which
will be held on February 27, 1997, at 10:00 a.m., Chicago time, at The Inland
Meeting Exposition Center, 400 East Ogden Avenue, Westmont, Illinois 60559.
The attached Notice of the Special Meeting and the Proxy Statement describe
the formal business to be transacted at the Special Meeting. Directors and
officers of the Company will be present at the Special Meeting to respond to any
questions that our shareholders may have regarding the business to be
transacted.
The Board of Directors of Park Bancorp, Inc. has determined that the matter
to be considered at the Special Meeting is in the best interests of the Company
and its shareholders. FOR THE REASONS SET FORTH IN THE PROXY STATEMENT, THE
BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE MATTER TO BE CONSIDERED.
PLEASE SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. YOUR COOPERATION
IS APPRECIATED SINCE A MAJORITY OF THE COMMON STOCK MUST BE REPRESENTED, EITHER
IN PERSON OR BY PROXY, TO CONSTITUTE A QUORUM FOR THE CONDUCT OF BUSINESS.
On behalf of the Board of Directors and all of the employees of the Company
and the Bank, I thank you for your continued interest and support.
Sincerely yours,
David A. Remijas
President and Chief Executive Officer
<PAGE> 3
PARK BANCORP, INC.
2740 W. 55TH STREET
CHICAGO, ILLINOIS 60632
------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 27, 1997
------------------------
NOTICE IS HEREBY GIVEN that the special meeting of shareholders (the
"Special Meeting") of Park Bancorp, Inc. (the "Company") will be held on
February 27, 1997, at 10:00 a.m., Chicago time, at The Inland Meeting Exposition
Center, 400 East Ogden Avenue, Westmont, Illinois 60559.
The purpose of the Special Meeting is to consider and vote upon the
following matters:
1. The approval of the Park Bancorp, Inc. 1997 Stock-Based Incentive Plan;
and
2. Such other matters as may properly come before the meeting and at any
adjournments thereof, including whether or not to adjourn the meeting.
The Board of Directors has established January 15, 1997 as the record date
for the determination of shareholders entitled to receive notice of and to vote
at the Special Meeting and at any adjournments thereof. Only record holders of
the common stock of the Company as of the close of business on such record date
will be entitled to vote at the Special Meeting or any adjournments thereof. In
the event there are not sufficient votes for a quorum or to approve the
foregoing proposal at the time of the Special Meeting, the Special Meeting may
be adjourned in order to permit further solicitation of proxies by the Company.
A list of shareholders entitled to vote at the Special Meeting will be available
at Park Bancorp, Inc., 2740 W. 55th Street, Chicago, Illinois 60632, for a
period of ten days prior to the Special Meeting and will also be available at
the Special Meeting itself.
By Order of the Board of Directors
Richard J. Remijas, Jr.
Corporate Secretary
Chicago, Illinois
January 21, 1997
<PAGE> 4
PARK BANCORP, INC.
------------------------
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
FEBRUARY 27, 1997
------------------------
SOLICITATION AND VOTING OF PROXIES
This Proxy Statement is being furnished to shareholders of Park Bancorp,
Inc. (the "Company") in connection with the solicitation by the Board of
Directors ("Board of Directors" or "Board") of proxies to be used at the special
meeting of shareholders to be held on February 27, 1997 (the "Special Meeting"),
and at any adjournments thereof. This Proxy Statement is first being mailed to
record holders of Common Stock of the Company ("Common Stock") on or about
January 21, 1997.
The Company was formed and became a savings and loan holding company as
part of the mutual to stock conversion (the "Conversion") of Park Federal
Savings Bank (the "Bank"), which was completed on August 9, 1996.
Regardless of the number of shares of Common Stock owned, it is important
that record holders of a majority of the shares be represented by proxy or in
person at the Special Meeting. Shareholders are requested to vote by completing
the enclosed proxy card and returning it signed and dated in the enclosed
postage-paid envelope. Shareholders are urged to indicate their vote in the
spaces provided on the proxy card. PROXIES SOLICITED BY THE BOARD OF DIRECTORS
OF THE COMPANY WILL BE VOTED IN ACCORDANCE WITH THE DIRECTIONS GIVEN THEREIN.
WHERE NO INSTRUCTIONS ARE INDICATED, SIGNED PROXY CARDS WILL BE VOTED FOR THE
APPROVAL AND RATIFICATION OF THE SPECIFIC PROPOSAL PRESENTED IN THIS PROXY
STATEMENT.
Other than the matter listed on the attached Notice of Special Meeting of
Shareholders, the Board of Directors knows of no additional matter that will be
presented for consideration at the Special Meeting. EXECUTION OF A PROXY,
HOWEVER, CONFERS ON THE DESIGNATED PROXY HOLDERS DISCRETIONARY AUTHORITY TO VOTE
THE SHARES IN ACCORDANCE WITH THEIR BEST JUDGMENT ON SUCH OTHER BUSINESS, IF
ANY, THAT MAY PROPERLY COME BEFORE THE SPECIAL MEETING AND AT ANY ADJOURNMENTS
THEREOF, INCLUDING WHETHER OR NOT TO ADJOURN THE SPECIAL MEETING.
A proxy may be revoked at any time prior to its exercise by filing a
written notice of revocation with the Corporate Secretary of the Company, by
delivering to the Company a duly executed proxy bearing a later date, or by
attending the Special Meeting and voting in person. However, if you are a
shareholder whose shares are not registered in your own name, you will need
appropriate documentation from your record holder to vote personally at the
Special Meeting.
The cost of solicitation of proxies on behalf of management will be borne
by the Company. In addition to the solicitation of proxies by mail, Morrow &
Co., a proxy solicitation firm, will assist the Company in soliciting proxies
for the Special Meeting and will be paid a fee of $5,500, plus out-of-pocket
expenses. Proxies may also be solicited personally or by telephone by directors,
officers and other employees of the Company and its subsidiary, the Bank,
without additional compensation therefor. The Company will also request persons,
firms and corporations holding shares in their names, or in the name of their
nominees, which are beneficially owned by others, to send proxy materials to and
obtain proxies from such beneficial owners, and will reimburse such holders for
their reasonable expenses in doing so.
SOLICITATION AND VOTING OF COMMON STOCK HELD IN THE ESOP AND 401(K) PLAN
A separate notice of shareholders meeting, proxy statement, voting
direction form ("Voting Direction Form") and return envelope will be provided to
each participant ("Plan Participant") in the Park Federal Savings Bank Employee
Stock Ownership Plan (the "ESOP") and/or Park Federal Savings Bank 401(k) Plan
(the "401(k) Plan"). California Central Trust Bank has been appointed as the
corporate trustee for the ESOP and 401(k) Plan ("Trustee"). Pursuant to the
ESOP, each ESOP Participant is entitled to direct the
1
<PAGE> 5
Trustee with respect to voting of the shares of Common Stock allocated to the
Participant's account. Subject to its duties under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), the Trustee will vote all
allocated shares held in the ESOP in accordance with the instructions received.
As of the Record Date, 16,757 of the 216,099 shares of Common Stock in the ESOP
had been allocated to participating employees. Under the ESOP, unallocated
shares held in the suspense account will be voted by the Trustee in a manner
calculated to most accurately reflect the instructions received from
participants regarding the allocated stock, subject to the provisions of ERISA.
Pursuant to the 401(k) Plan, each Participant is entitled to direct the Trustee
with respect to voting of the portion of the shares of Common Stock held in the
401(k) Plan allocated to the Participant's account.
Plan Participants should return the Voting Direction Forms directly to the
Trustee in the envelope provided. The Trustee will maintain as confidential the
directions set forth on the sheet from disclosure to the Company and its
directors or officers.
VOTING SECURITIES
The securities which may be voted at the Special Meeting consist of shares
of Common Stock, with each share entitling its owner to one vote on all matters
to be voted on at the Special Meeting, except as described below.
The close of business on January 15, 1997, has been fixed by the Board of
Directors as the record date (the "Record Date") for the determination of
shareholders of record entitled to notice of and to vote at the Special Meeting
and at any adjournments thereof. The total number of shares of Common Stock
outstanding on the Record Date was 2,701,441 shares.
As provided in the Company's Certificate of Incorporation, record holders
of Common Stock who beneficially own in excess of 10% of the outstanding shares
of Common Stock (the "Limit") are not entitled to any vote in respect of the
shares held in excess of the Limit. A person or entity is deemed to beneficially
own shares owned by an affiliate of, as well as by persons acting in concert
with, such person or entity. The Company's Certificate of Incorporation
authorizes the Board of Directors (i) to make all determinations necessary to
implement and apply the Limit, including determining whether persons or entities
are acting in concert, and (ii) to demand that any person who is reasonably
believed to beneficially own stock in excess of the Limit to supply information
to the Company to enable the Board of Directors to implement and apply the
Limit.
The presence, in person or by proxy, of the holders of at least a majority
of the total number of shares of Common Stock entitled to vote (after
subtracting any shares in excess of the Limit pursuant to the Company's
Certificate of Incorporation) is necessary to constitute a quorum at the Special
Meeting. In the event that there are not sufficient votes for a quorum or to
approve or ratify any proposal at the time of the Special Meeting, the Special
Meeting may be adjourned in order to permit the further solicitation of proxies.
As to the matter being proposed for shareholder action set forth in
Proposal 1, the proxy card being provided by the Board of Directors enables a
shareholder to check the appropriate box on the proxy card to (i) vote "FOR" the
item, (ii) vote "AGAINST" the item, or (iii) "ABSTAIN" from voting on such item.
Under Delaware law, an affirmative vote of the holders of a majority of the
shares of Common Stock present at the Special Meeting, in person or by proxy,
and entitled to vote, is required to constitute shareholder approval of Proposal
1. Shares as to which the "ABSTAIN" box has been selected on the proxy card with
respect to Proposal 1 will be counted as present and entitled to vote and have
the effect of a vote against the matter for which the "ABSTAIN" box has been
selected. In contrast, shares underlying broker non-votes or in excess of the
Limit are not counted as present and entitled to vote and have no effect on the
vote on the matter presented. UNDER APPLICABLE REGULATIONS OF THE OFFICE OF
THRIFT SUPERVISION ("OTS"), HOWEVER, THE AFFIRMATIVE VOTE OF A MAJORITY OF
SHARES OF COMMON STOCK ELIGIBLE TO VOTE AT THE SPECIAL MEETING IS REQUIRED TO
IMPLEMENT THE PROPOSAL 1 PRIOR TO AUGUST 9, 1997, THE FIRST ANNIVERSARY OF THE
COMPLETION OF THE CONVERSION (THE "CONVERSION ANNIVERSARY DATE"). ACCORDINGLY,
ABSTENTIONS AND NON-VOTES WILL HAVE THE EFFECT OF A "NO VOTE" WITH REGARD TO
SUCH APPROVAL. For further information on the vote required to implement
Proposal 1 during the first year following Conversion, see the discussion under
Proposal 1 herein.
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Proxies solicited hereby will be returned to the Company's transfer agent,
Harris Trust and Savings Bank. The Board of Directors have designated Crowe,
Chizek and Company LLP to act as inspectors of election and tabulate the votes
at the Special Meeting. After the final adjournment of the Special Meeting, the
proxies will be returned to the Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as to those persons believed by
management to be beneficial owners of more than 5% of the Company's outstanding
shares of Common Stock on the Record Date or as disclosed in certain reports
received to date regarding such ownership filed by such persons with the Company
and with the Securities and Exchange Commission ("SEC"), in accordance with
Sections 13(d) and 13(g) of the Securities Exchange Act of 1934, as amended
("Exchange Act"). Other than those persons listed below, the Company is not
aware of any person, as such term is defined in the Exchange Act, that owns more
than 5% of the Company's Common Stock as of the Record Date.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
BENEFICIAL OWNER OWNERSHIP CLASS
------------------------------------------------ ---------- ----------
<S> <C> <C>
Park Federal Savings Bank Employee Stock 216,099(1) 8.0%
Ownership Plan ("ESOP")
2740 W. 55th Street
Chicago, Illinois 60632
</TABLE>
- ---------------
(1) Shares of Common Stock were acquired by the ESOP in the Bank's Conversion.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of the Record Date as to
shares of Common Stock and the percent thereof beneficially owned by directors
and Named Executive Officers (as defined herein) individually and by all
executive officers and directors as a group. Ownership information is based upon
information furnished by the respective individuals.
<TABLE>
<CAPTION>
SHARES OF
COMMON
STOCK
BENEFICIALLY PERCENT OF
NAME TITLE OWNED(1)(2) CLASS(3)
- ----------------------------------------- --------------------------- ------------ ----------
<S> <C> <C> <C>
DIRECTORS AND NAMED EXECUTIVE OFFICERS
David A. Remijas President, Chief Executive 19,195 *
Officer and Chairman of the
Board
Richard J. Remijas, Jr. Executive Vice President, 16,271 *
Chief Operating Officer,
Corporate Secretary and
Director
Joseph M. Judickas, Jr. Director 13,800 *
Charles Paprocki Director 8,672 *
Paul Shukis Director 14,190 *
Glenn Zajicek Director 15,088 *
Steven J. Pokrak Chief Financial Officer and 15,437 *
Treasurer
All directors and executive officers as a 103,504 3.8%
group (8 persons)
</TABLE>
- ---------------
* Does not exceed 1.0% of the Company's voting securities.
(1) Each person effectively exercises sole (or shares with spouse or other
immediate family member) voting and dispositive power as to shares reported.
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<PAGE> 7
(2) Does not include options and awards intended to be granted under the Park
Bancorp, Inc. 1997 Stock-Based Incentive Plan (the "Incentive Plan"), which
is subject to shareholder approval. For a discussion of the options and
awards that are intended to be granted under the Incentive Plan, see
Proposal 1.
(3) As of the Record Date, there were 2,701,441 shares of Common Stock
outstanding.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Upon obtaining shareholder approval, the Company intends to grant to
outside directors and selected officers and employees of the Bank and the
Company stock options and awards in the form of shares of Common Stock under the
Incentive Plan, being presented for approval in Proposal 1.
DIRECTORS' COMPENSATION
DIRECTORS' FEES. Non-employee members of the Board of Directors of the Bank
currently receive a fee of $1,000 for each regular monthly meeting attended.
Each outside director also receives a fee of $475 for each special Board meeting
attended. Directors do not receive any fees for serving on the Board of the
Company.
INCENTIVE PLAN. The Company is presenting to shareholders for approval the
Incentive Plan, under which all directors of the Company and the Bank are
eligible to receive awards. See Proposal 1 for a summary of the material terms
of the Incentive Plan.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table shows, for the years ended
December 31, 1996 and 1995, the cash compensation paid by the Bank, as well as
certain other compensation paid or accrued for those years, to the Chief
Executive Officer and other executive officers of the Company and the Bank who
earned and/or received salary and bonus in excess of $100,000 in fiscal years
1996 and 1995 ("Named Executive Officers"). No other executive officer of the
Company or the Bank earned and/or received salary and bonus in excess of
$100,000 in fiscal year 1996 and 1995.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------------------
ANNUAL COMPENSATION(1) AWARDS
--------------------------------- --------------------------- PAYOUTS
OTHER SECURITIES -------
ANNUAL RESTRICTED UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION STOCK AWARDS OPTIONS/SARS PAYOUTS COMPENSATION
POSITIONS YEAR ($)(1) ($) ($)(2) ($)(3) (#)(4) ($)(5) ($)(6)
- -------------------------------- ---- -------- ------- ------------ ------------ ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David A. Remijas 1996 $140,300 $37,800 -- -- -- -- $ 30,465
Chairman of the Board, 1995 138,100 33,250 -- -- -- -- 18,915
President and Chief Executive
Officer
Richard J. Remijas, Jr. 1996 107,780 29,500 -- -- -- -- 23,221
Director, Executive Vice 1995 101,190 25,700 -- -- -- -- 13,337
President, Chief Operating
Officer and Corporate
Secretary
Steven J. Pokrak 1996 76,800 24,500 -- -- -- -- 17,161
Chief Financial Officer 1995 72,800 20,000 -- -- -- -- 10,920
</TABLE>
- ---------------
(1) Under Annual Compensation, the column titled "Salary" includes fees received
as a Director of the Bank.
(2) For 1996 and 1995, there were no (a) perquisites over the lesser of $50,000
or 10% of the individual's total salary and bonus for the year; (b) payments
of above-market preferential earnings on deferred compensation; (c) payments
of earnings with respect to long-term incentive plans prior to settlement or
maturation; (d) tax payment reimbursements; or (e) preferential discounts on
stock.
(3) Does not include awards pursuant to the Incentive Plan intended to be
granted, subject to shareholder approval, as such awards were not earned,
vested or granted in fiscal 1996 or 1995. For a discussion of the terms of
the Incentive Plan, see "Proposal 1."
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<PAGE> 8
(4) Does not include options intended to be granted pursuant to the Incentive
Plan because such options were not earned or granted in 1996 or 1995. For a
discussion of the terms of the grants and vesting of options, see "Proposal
1."
(5) For 1996 and 1995, there were no long-term incentive plans in existence.
(6) Includes (a) in 1995, amounts paid pursuant to the Bank's Employee Profit
Sharing Plan and (b) in 1996, Company matching contributions to the 401(k)
Plan and stock allocations under the ESOP based upon a $13 per share closing
price of the Common Stock on December 31, 1996.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION FOR THE 1996 FISCAL
PERIOD
A Compensation Committee of the Board of Directors of the Company (the
"Compensation Committee") was created in conjunction with the Bank's conversion
from a mutual to a stock company. The Compensation Committee is composed of
independent outside directors. The Compensation Committee is responsible for
developing and making recommendations to the Board of Directors regarding
executive officers' compensation, including bonuses and other benefits. The
Compensation Committee also recommends directors' fees for the coming year. The
Compensation Committee determined the stock awards described herein and will
also administer the Incentive Plan once the plan is approved by shareholders and
implemented.
After shareholder approval of the Incentive Plan, the executive officers,
outside directors and other employees of the Company will be granted the stock
options and restricted stock awards as described under Proposal 1. The
Compensation Committee has developed a compensation program which is comprised
of salary, annual cash incentive bonuses, long-term incentives in the form of
stock options, restricted stock and other benefits typically offered to
executives by corporations similar to the Company.
The Board of Directors as a whole, and the Compensation Committee in
particular, recognizes that attracting and retaining key executives is critical
to the Company's and the Bank's long term success. This report reflects the
compensation policies ratified by all outside directors. The Compensation
Committee, with recommendations from the Board of Directors, has set certain
guidelines regarding executive officers' compensation. Each executive officer
will be reviewed annually, and that officer's compensation will be based on that
individual's contribution to the Company and the Bank.
The Compensation Committee has reviewed compensation structures and other
information from various sources, including, among others, the SNL Thrift
Institutions Executive Compensation Report and the ACB Compensation Survey for
Savings Institutions. Although no company is an exact match, consideration was
given to salaries and bonuses that are paid to executives at similar public
thrifts. Additional considerations were the greatly increased responsibilities
of running a public company, the individual's contributions to the Company and
the Bank and individual experience and tenure.
The Internal Revenue Code limits the deductions a publicly held company may
take for compensation paid to its most highly paid executive officers.
Typically, salaries and bonuses in excess of $1 million (excluding
performance-based compensation) which are paid in one tax year cannot be
deducted. The Compensation Committee did not consider this section of the
Internal Revenue Code when establishing compensation because current executive
salaries and bonuses are well below the $1 million threshold.
COMPENSATION COMMITTEE
Paul Shukis
Glenn Zajicek
5
<PAGE> 9
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
The following graph compares the cumulative total stockholder return on the
Common Stock to the Nasdaq Stock Market Index (which includes all Nasdaq traded
stocks of U.S. companies) and the Nasdaq Financial Stock Index for the period
from August 12, 1996, the date the Common Stock commenced trading on the Nasdaq
National Market, through December 31, 1996. The graph assumes that $100 was
invested on August 12, 1996 and that all dividends were reinvested. On January
15, 1997, the closing sale price for the Common Stock on the Nasdaq National
Market was $13.75 per share.
PARK BANCORP, INC.
COMPARATIVE RETURNS
<TABLE>
<CAPTION>
THE NASDAQ NASDAQ FI-
MEASUREMENT PERIOD PARK BANCORP, STOCK MARKET NANCIAL STO
(FISCAL YEAR COVERED) INC. (U.S.) INDEX CKS INDEX
<S> <C> <C> <C>
8/12/96 100 100 100
9/30/96 110.4 107.8 107.4
10/31/96 117.1 106.7 110.8
11/29/96 117.1 113.3 117.9
12/31/96 126.8 113.1 119.2
</TABLE>
EMPLOYMENT AGREEMENTS
The Bank and the Company have each entered into employment agreements with
Messrs. David A. Remijas, Richard J. Remijas, Jr., and Steven J. Pokrak and Mrs.
Sandra L. Remijas (each, an "Executive"). These employment agreements are
intended to ensure that the Bank and the Company will be able to maintain a
stable and competent management base. The continued success of the Bank and the
Company depends to a significant degree on the skills and competence of Messrs.
David A. Remijas, Richard J. Remijas, Jr., and Steven J. Pokrak and Mrs. Sandra
L. Remijas.
The employment agreements provide for a three-year term. The Bank
employment agreements provide that commencing on the first anniversary date and
continuing each anniversary date thereafter, the Board of Directors reviews the
agreements and the Executive's performance for purposes of determining whether
to extend the agreements for an additional year so that the remaining term shall
be three years, unless written notice of non-renewal is given by the Board of
Directors after conducting a performance evaluation of the Executive. The terms
of the Company employment agreements are extended on a daily basis unless
written notice of non-renewal is given by the Board of Directors of the Company.
The agreements provide that the
6
<PAGE> 10
Executives' base salary will be reviewed annually. The current base salaries for
Messrs. David A. Remijas, Richard J. Remijas, Jr., and Steven J. Pokrak and Mrs.
Sandra L. Remijas are $147,722, $118,976, $84,240, and $58,406, respectively. In
addition to the base salary, the agreements provide for, among other things,
participation in stock benefit plans and other fringe benefits applicable to
executive personnel.
The agreements provide for termination by the Bank or the Company for cause
as defined in the agreements, at any time. In the event the Bank or the Company
chooses to terminate the Executives' employment for reasons other than for
cause, or in the event of the Executive's resignation from the Bank and the
Company upon: (i) failure to re-elect the Executive to his/her current offices;
(ii) a material change in the Executive's functions, duties or responsibilities;
(iii) a relocation of the Executive's principal place of employment by more than
25 miles; (iv) liquidation or dissolution of the Bank or the Company; or (v) a
breach of the agreement by the Bank or the Company, the Executive or, in the
event of death his/her beneficiary, is entitled to receive an amount equal to
the remaining base salary payments due to the Executive and the contributions
that would have been made on the Executive's behalf to any employee benefit
plans of the Bank or the Company during the remaining term of the agreement. The
Bank and the Company also continue to pay for the Executive's life, health and
disability coverage for the remaining term of the Agreement.
Under the agreements, if voluntary or involuntary termination follows a
change in control of the Bank or the Company as defined in the employment
agreements, the Executive or, in the event of the Executive's death, his
beneficiary, is entitled to a severance payment equal to the greater of: (i) the
payments due for the remaining terms of the agreement; or (ii) three times the
average of the five preceding taxable years' compensation (except that the
Company agreement uses a three year average in this formula.) The Bank and the
Company will also continue the Executive's life, health, and disability coverage
for thirty-six months. Notwithstanding that both agreements would provide for a
severance payment in the event of a change in control, the Executive is only
entitled to receive a severance payment under one agreement.
Payments to the Executive under the Bank's agreements are guaranteed by the
Company in the event that payments or benefits are not paid by the Bank. Payment
under the Company's agreement would be made by the Company. All reasonable costs
and legal fees paid or incurred by the Executive pursuant to any dispute or
question of interpretation relating to the agreements are paid by the Bank or
Company, respectively, if the Executive is successful on the merits pursuant to
a legal judgment, arbitration or settlement. The employment agreements also
provide that the Bank and Company shall indemnify the Executive to the fullest
extent allowable under federal and Delaware law, respectively. In the event of a
change in control of the Bank or the Company, the total amount of payments due
under the employment agreements, based solely on cash compensation paid to
Messrs. David A. Remijas, Richard J. Remijas, Jr., and Steven J. Pokrak and Mrs.
Sandra L. Remijas over the past three taxable years and excluding any benefits
under any employee benefit plan which may be payable, would be approximately
$1.3 million.
INCENTIVE PLAN. The Company is presenting to shareholders for approval the
Incentive Plan under which all employees of the Company and the Bank are
eligible to receive awards. See Proposal 1 for a summary of the material terms
of the Incentive Plan.
PENSION PLAN. The Park Federal Savings Bank Employee Pension Plan ("Pension
Plan") was frozen effective May 31, 1996, and no additional benefits will accrue
thereunder after that date. Accrued benefits under the Pension Plan will be
distributed in lump sum payments in 1997 to Messrs. David A. Remijas, Richard J.
Remijas, Jr., and Steven J. Pokrak and Mrs. Sandra L. Remijas in the amount of
$61,689, $5,856, $9,093 and $5,429, respectively.
TRANSACTIONS WITH CERTAIN RELATED PERSONS
The Bank's current policy provides that all loans made by the Bank to its
directors and executive officers are made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons and do not involve more than the
normal risk of collectibility or present other unfavorable features.
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<PAGE> 11
PROPOSAL 1. APPROVAL OF THE
PARK BANCORP, INC.
1997 STOCK-BASED INCENTIVE PLAN
The Board of Directors of the Company is presenting for stockholder
approval the Park Bancorp, Inc. 1997 Stock-Based Incentive Plan, in the form
attached hereto as Appendix A. The purpose of the Incentive Plan is to attract
and retain qualified personnel in key positions, provide officers, employees and
non-employee directors ("Outside Directors") with a proprietary interest in the
Company as an incentive to contribute to the success of the Company and reward
employees for outstanding performance. The following is a summary of the
material terms of the Incentive Plan which is qualified in its entirety by the
complete provisions of the Incentive Plan document attached as Appendix A.
GENERAL
The Incentive Plan authorizes the granting of options to purchase Common
Stock ("Options"), option-related awards and awards of Common Stock ("Stock
Awards") (collectively, "Awards"). Subject to certain adjustments to prevent
dilution of Awards to participants, the maximum number of shares reserved for
Awards under the Incentive Plan is 14% of the outstanding shares of the Common
Stock as of the effective date of the Incentive Plan of which the maximum number
of shares reserved for purchase pursuant to the exercise of Options and
Option-related Awards granted under the Incentive Plan is 10% of the outstanding
shares of Common Stock as of the effective date of the Incentive Plan and the
maximum number of the shares reserved for Stock Awards is 4% of the outstanding
shares of Common Stock as of the effective date of the Incentive Plan. Based on
the shares outstanding as of the Record Date, a total of 378,201 shares will be
reserved for Awards under the Plan, of which 270,144 shares will be reserved for
Option and Option-related Awards and 108,057 shares will be reserved for Stock
Awards. All officers, other employees and Outside Directors of the Company and
its affiliates are eligible to receive Awards under the Incentive Plan;
provided, however, that the maximum number of shares of Common Stock that may be
granted or that may vest with respect to Awards granted under the Incentive Plan
to any single officer or employee is 94,550. The Incentive Plan will be
administered by the Compensation Committee. Subject to the regulations of the
OTS, authorized but unissued shares or shares previously issued and reacquired
by the Company or any trust established to administer Awards under the Incentive
Plan may be used to satisfy Awards under the Incentive Plan, resulting in an
increase in the number of shares outstanding, and may have a dilutive effect on
the holdings of existing shareholders.
AWARDS
TYPES OF AWARDS. The Incentive Plan authorizes the grant of Awards in the
form of: (i) Options granted to employees intended to qualify as incentive stock
options under Section 422 of the Code (Options which afford tax benefits to the
recipients upon compliance with certain conditions and which do not result in
tax deductions to the Company), referred to as "Incentive Stock Options"; (ii)
Options that do not so qualify (Options which do not afford income tax benefits
to recipients, but which may provide tax deductions to the Company), referred to
as "Non-statutory Stock Options"; (iii) limited rights which are exercisable
only upon a change in control of the Company (as defined in the Incentive Plan)
("Limited Rights"); (iv) Stock Awards, that provide a grant of Common Stock
which vests over time (such vesting may be contingent upon the attainment of
stated performance goals); (v) to the extent not limited by OTS regulations,
dividend equivalent rights which provide option holders with a cash benefit in
the event of the payment by the Company of an extraordinary dividend (as defined
below) to shareholders ("Dividend Equivalent Rights"); and (vi) to the extent
not limited by OTS regulations, equitable adjustment rights which provide option
holders upon the payment of an extraordinary dividend an equitable adjustment of
the number of shares and/or exercise price at the discretion of the Compensation
Committee ("Equitable Adjustment Rights").
OPTIONS. Under the Incentive Plan on the date of the Special Meeting,
assuming the requisite shareholder approval is obtained, the Board of Directors
intends to grant Options for 232,323 shares of Common Stock to employees
(including executive officers) and Outside Directors with Limited Rights and to
the extent not limited by OTS regulations, Dividend Equivalent Rights or
Equitable Adjustment Rights.
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<PAGE> 12
Options for 37,821 shares remain eligible for future awards. The term of all
Options will be ten years unless otherwise determined by the Compensation
Committee.
All Options granted to employees will be qualified as Incentive Stock
Options to the extent permitted under Section 422 of the Code. Pursuant to the
Incentive Plan, the Compensation Committee has the authority to determine the
date or dates on which each Option shall become exercisable; provided, however,
under the terms of the Incentive Plan any Option granted prior to the Conversion
Anniversary Date may not vest in annual installments of greater than 20% of the
number of shares underlying the Options awarded commencing at least one year
from the date of grant, and the vesting of such options may not be accelerated
except in the case of death or disability. However, to the extent not prohibited
by the OTS, the Compensation Committee may amend such Options subsequent to the
Conversion Anniversary Date to provide for acceleration of vesting, see "New
Plan Benefits" below. The Compensation Committee may also decide to make the
vesting of future option awards contingent upon the Company's, Bank's or
grantee's attainment of performance goals set by the Compensation Committee. The
exercise price of all Incentive Stock Options must be 100% of the fair market
value of the underlying Common Stock at the time of grant, except as provided
below. The exercise price of any Option, whether an Incentive Stock Option or
Non-statutory Stock Option, may be paid in cash or in Common Stock at the
discretion of the Compensation Committee. See "Payout Alternatives" and
"Alternate Option Payment Mechanism."
Incentive Stock Options may only be granted to employees. In order to
qualify as Incentive Stock Options under Section 422 of the Code, the exercise
price must not be less than 100% of the fair market value on the date of grant.
Incentive Stock Options granted to any person who is the beneficial owner of
more than 10% of the outstanding voting stock must be exercised only for a
period of five years from the date of grant and the exercise price must be at
least equal to 110% of the fair market value of the underlying Common Stock on
the date of grant.
Unless otherwise determined by the Committee, upon termination of an
employee's services for any reason other than death, disability or termination
for cause, the Incentive Stock Options shall be exercisable for a period of
three months following termination. The Committee in its discretion may
redesignate Incentive Stock Options as Non-statutory Stock Options, and extend
this period. Notwithstanding the foregoing, in the event of death or disability,
Options will become fully vested and shall be exercisable for up to one year
thereafter.
LIMITED RIGHTS. Limited Rights are related to specific Options granted and
become exercisable in the event of a change in control of the Bank or the
Company. Upon exercise, the optionee will be entitled to receive in lieu of
purchasing the stock underlying the Option a lump sum amount, paid in cash or in
shares of Common Stock, as determined by the Compensation Committee, equal to
the difference between the exercise price of the related Option and the fair
market value of the shares of Common Stock subject to the Option on the date of
exercise of the right less any applicable tax withholding.
DIVIDEND EQUIVALENT RIGHTS. Simultaneously with the grant of any Option,
the Compensation Committee may, to the extent not limited by OTS regulations,
grant a Dividend Equivalent Right with respect to all or some of the shares
covered by such Option. The Dividend Equivalent Right provides the grantee with
a separate cash benefit equal to 100% of the amount of any extraordinary
dividend declared by the Company on shares of Common Stock subject to an Option.
Under the terms of the Incentive Plan, an extraordinary dividend is any dividend
paid on shares of Common Stock where the rate of the dividend exceeds the Bank's
weighted average cost of funds on interest bearing liabilities for the current
and preceding three quarters. Upon the payment of an extraordinary dividend, the
holder of a Dividend Equivalent Right will receive, at the time of vesting of
the related Option, an amount of cash or some other payment, as determined under
the Incentive Plan, equal to 100% of the extraordinary dividend paid on shares
of Common Stock, multiplied by the number of shares subject to the underlying
Option plus any earnings thereon minus any tax withholding amounts. The Dividend
Equivalent Right is transferable only when the underlying Option is transferable
and under the same conditions.
EQUITABLE ADJUSTMENT RIGHTS. Simultaneously with the grant of any Option,
in the alternative to a Dividend Equivalent Right, the Compensation Committee
may, to the extent not limited by OTS regulations,
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<PAGE> 13
grant an Equitable Adjustment Right. Under the payment of an extraordinary
dividend as described above, the Compensation Committee may adjust the number of
shares and/or the exercise price of the Options underlying the Equitable
Adjustment Right, as the Compensation Committee deems appropriate.
OPTION GRANTS. It is currently intended that the Options proposed to be
granted will include Limited Rights and, to the extent not limited by OTS
regulations, Dividend Equivalent Rights or Equitable Adjustment Rights and will
vest and become exercisable on a cumulative basis in equal installments over
five (5) years commencing one year from the date of grants; provided, however,
that all Options will be immediately exercisable in the event the optionee's
service is terminated due to death or disability. The exercise price of all such
Options will be 100% of the fair market value of the underlying Common Stock at
the time of grant, which is intended to be the date of the Special Meeting. See
"New Plan Benefits Table" below for information concerning Options intended to
be granted under the Incentive Plan.
As of January 15, 1997, the closing price per share of Common Stock, as
reported on the Nasdaq National Market, was $13.75.
STOCK AWARDS. The Incentive Plan authorizes the granting of Stock Awards.
Under the Incentive Plan on the date of the Special Meeting, assuming the
requisite shareholder approval is obtained, the Board of Directors intends to
grant 92,925 Stock Awards to eligible employees (including executive officers)
and Outside Directors. There will be 15,132 shares of Stock Awards remaining for
future awards. The Compensation Committee has the authority to determine the
dates on which Stock Awards granted will vest, provided, however, that any Stock
Award granted prior to the Conversion Anniversary Date may not vest at a rate
greater than 20% per year commencing at least one year from the date of grant
and the vesting of any Stock Award may not be accelerated except in the case of
death or disability. However, to the extent not prohibited by the OTS, the
Compensation Committee may amend such Stock Awards subsequent to the Conversion
Anniversary Date to provide for acceleration of vesting, see "New Plan Benefits"
below. All Stock Award grants will immediately vest upon termination of service
due to death or disability. Under the Incentive Plan, the vesting of Stock
Awards may also be contingent upon the attainment of certain performance goals
by the Company, Bank or grantee. Such performance goals would, if any, be
established by the Compensation Committee. An agreement setting forth the terms
of the Stock Award ("Stock Award Agreement") shall set forth the vesting period
and performance goals, if any, which must be attained. The performance goals may
be set by the Compensation Committee on an individual basis, for all Stock
Awards made during a given period of time, or for all Stock Awards for
indefinite periods. A Stock Award may only be granted from the shares reserved
and available for grant under the Incentive Plan. No Stock Award that is subject
to a performance goal is to be distributed to the employee until the
Compensation Committee confirms that the underlying performance goal has been
achieved.
Stock Awards are nontransferable and nonassignable. When Common Stock is
distributed in accordance with the Incentive Plan, the recipients will also
receive amounts equal to accumulated cash and stock dividends (if any) with
respect thereto plus earnings thereon minus any required tax withholding
amounts. Prior to vesting, recipients of Stock Awards may direct the voting of
shares of Common Stock granted to them and held in a trust established in
connection with the Incentive Plan. Shares of Common Stock held by the Incentive
Plan trust which have not been allocated or for which voting has not been
directed are voted by the trustee in the same proportion as the awarded shares
are voted in accordance with the directions given by all recipients of Stock
Awards.
TAX TREATMENT
STOCK OPTIONS. An optionee will generally not be deemed to have recognized
taxable income upon grant or exercise of any Incentive Stock Option, provided
that shares transferred in connection with the exercise are not disposed of by
the optionee until the later of one year after the date the shares are
transferred in connection with the exercise of the Incentive Stock Option or two
years after the date of grant of such Option. If the holding periods are
satisfied, upon disposal of the shares, the aggregate difference between the per
share option exercise price and the fair market value of the Common Stock is
recognized as income taxable at long
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<PAGE> 14
term capital gains rates. No compensation deduction may be taken by the Company
as a result of the grant or exercise of Incentive Stock Options, assuming these
holding periods are met.
In the case of the exercise of a Non-statutory Stock Option, an optionee
will be deemed to have received ordinary income upon exercise of the Stock
Option in an amount equal to the aggregate amount by which the per share
exercise price is exceeded by the fair market value of the Common Stock. In the
event shares received through the exercise of an Incentive Stock Option are
disposed of prior to the satisfaction of the holding periods (a "disqualifying
disposition"), the exercise of the option will be treated as the exercise of a
Non-statutory Stock Option, except that the optionee will recognize the ordinary
income for the year in which the disqualifying disposition occurs. The amount of
any ordinary income deemed to have been received by an optionee upon the
exercise of a Non-statutory Stock Option or due to a disqualifying disposition
will be a deductible expense of the Company for tax purposes.
In the case of Limited Rights, the Option holder would have to include the
amount paid to him upon exercise in his gross income for federal income tax
purposes in the year in which the payment is made and the Company would be
entitled to a deduction for federal income tax purposes of the amount paid.
Equitable Adjustment Rights have the same tax treatment as other Non-statutory
Stock Options. The employee will recognize taxable income for the amount of cash
received under the Dividend Equivalent Right for the year such amounts are paid.
The Company is permitted a compensation deduction for such amount.
STOCK AWARDS. When shares of Common Stock, as Stock Awards, are
distributed, the recipient is deemed to receive ordinary income equal to the
fair market value of such shares at the date of distribution plus any dividends
and earnings on such shares and the Company is permitted a commensurate
compensation expense deduction for income tax purposes.
CODE SECTION 162(M). Code Section 162(m) limits the deductibility of the
annual compensation of executive officers of the Company to $1 million.
Compensation which is "performance-based" is not subject to such limitation.
Although the Stock Option Awards to the executive officers are intended to
qualify as performance-based compensation, there is no assurance that the
compensation deductions attributable to such Stock Option Awards or other Awards
under the Plan will not be limited by Code Section 162(m).
PAYOUT ALTERNATIVES
The Compensation Committee has the sole discretion to determine what form
of payment it shall use in distributing payments for all Awards. If the
Compensation Committee requests any or all participants to make an election as
to form of payment, it shall not be considered bound by the election. Any shares
of Common Stock tendered in payment of an obligation arising under the Incentive
Plan or applied to tax withholding amounts shall be valued at the fair market
value of the Common Stock. The Compensation Committee may use treasury stock,
authorized but unissued stock or may direct the market purchase of such Common
Stock to satisfy its obligations under the Incentive Plan.
ALTERNATE OPTION PAYMENT MECHANISMS
The Compensation Committee also has the sole discretion to determine the
form of payment for the exercise of an Option. The Compensation Committee may
indicate acceptable forms in the Award Agreement covering such options or may
reserve its decision to the time of exercise. No Option is to be considered
exercised until payment in full is accepted by the Compensation Committee. It is
anticipated that the Compensation Committee will permit the following forms of
payment for Options: (a) in cash or by certified check; (b) through borrowed
funds, to the extent permitted by law; or (c) by tendering previously acquired
shares of Common Stock. Any shares of Common Stock tendered in payment of the
exercise price of an Option shall be valued at the fair market value of the
Common Stock on the date prior to the date of exercise.
AMENDMENT OF THE INCENTIVE PLAN
The Board of Directors may amend the Incentive Plan in any respect, at any
time. Any such amendments will not be submitted to the shareholders for approval
unless the Board determines such approval is necessary
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or advisable under applicable laws or regulations. In addition, no amendment may
adversely affect the rights of an Award recipient without his or her permission.
ADJUSTMENTS
In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend or split, recapitalization, merger, consolidation,
spin-off, reorganization, combination or exchange of shares, or other similar
corporate change, or other increase or decrease in such shares without receipt
or payment of consideration by the Company, the Compensation Committee will make
such adjustments to previously granted Awards, to prevent dilution or
enlargement of the rights of the Award recipient.
No such adjustments may, however, materially change the value of benefits
available to an Award recipient under a previously granted Award. All Awards
under this Incentive Plan shall be binding upon any successors or assigns of the
Company.
NONTRANSFERABILITY
Unless determined otherwise by the Compensation Committee, no award under
the Incentive Plan shall be transferable by the Award recipient other than by
will or the laws of intestate succession or pursuant to a qualified domestic
relations order. With the consent of the Compensation Committee, an Award
recipient may designate a person or his or her estate as beneficiary of any
award to which the recipient would then be entitled, in the event of the death
of the employee.
SHAREHOLDER APPROVAL
An affirmative vote of holders of a majority of shares represented in
person or by proxy at the Special Meeting will constitute shareholder approval
of the Plan. Pursuant to OTS regulations, however, the Incentive Plan may not be
implemented until the Conversion Anniversary Date unless the affirmative vote of
the holders of a majority of the total votes eligible to be cast at the Special
Meeting is received. If such approval is not obtained, but the Incentive Plan
receives the affirmative vote of a majority of the shares present at the meeting
and eligible to be cast, the Incentive Plan will not become effective at this
time, but will become effective on the Conversion Anniversary Date.
Unless marked to the contrary, the shares represented by the enclosed proxy
card, if executed and returned, will be voted "FOR" the approval of the Park
Bancorp, Inc. 1997 Stock-Based Incentive Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF THE
PARK BANCORP, INC. 1997 STOCK-BASED INCENTIVE PLAN.
NEW PLAN BENEFITS
The following table provides certain information with respect to all Awards
which will be granted under the Incentive Plan immediately following the Special
Meeting assuming stockholder approval is obtained, specifying the amounts to be
granted to Outside Directors and the Named Executive Officers individually, all
current directors who are not executive officers as a group and all current
executive officers as a group. No other Awards are anticipated at this time.
All Awards granted to the officers and directors of the Company and the
Bank reflected in the table below become exercisable (in the case of Option
Awards) or vested (in the case of Stock Awards) in equal annual installments of
20% each year commencing one year from the date of grant. All Option Awards will
have a term of 10 years. All Awards reflected in the following table will
immediately vest upon termination of employment due to death or disability.
Additionally, on or after the Conversion Anniversary Date, to the extent not
prohibited by the OTS, the Board of Directors may amend the Awards reflected
below to provide for acceleration of the vesting of such Awards upon a change in
control of the Company (as defined in the Incentive Plan). The Incentive Plan
generally defines that a change in control will be deemed to occur when a person
or group of persons acting in concert acquires beneficial ownership of 20% or
more of the outstanding voting securities of the Company, or the Bank, or in the
event of a tender offer or exchange offer, merger or
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other form of business combination, sale of assets or contested election of
directors which results in a change in control of the Company.
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
OPTION AWARDS STOCK AWARDS
-------------------- --------------------
NUMBER NUMBER
DOLLAR OF DOLLAR OF
NAME AND POSITION VALUE(1) UNITS(2) VALUE(3) UNITS(2)
- -------------------------------------------------------- -------- -------- -------- --------
DIRECTORS AND NAMED EXECUTIVE OFFICERS
<S> <C> <C> <C> <C> <C>
David A. Remijas President, Chief -- 67,536 $371,442 27,014
Executive Officer and
Chairman of the Board
Richard J. Remijas, Jr. Executive Vice -- 48,626 267,437 19,450
President, Chief
Operating Officer,
Corporate Secretary
and Director
Joseph M. Judickas, Jr. Director -- 13,507 74,277 5,402
Charles Paprocki Director -- 13,507 74,277 5,402
Paul Shukis Director -- 13,507 74,277 5,402
Glenn Zajicek Director -- 13,507 74,277 5,402
Steven J. Pokrak Chief Financial -- 27,014 148,582 10,806
Officer and Treasurer
All current directors who are
not executive officers as a
group (4 persons) -- 54,028 297,110 21,608
All current executive officers
as a group (4 persons) -- 164,788 906,331 65,915
</TABLE>
- ---------------
(1) The "dollar value" for options to be granted pursuant to the Incentive Plan
on the date of grant will be zero, as the exercise price for such options
will be fair market value on the date of grant, which is intended to be the
date shareholder approval is obtained.
(2) 37,821 Stock Option Awards and 15,132 Stock Awards remain unallocated under
the Incentive Plan.
(3) Based upon $13.75, the closing price of the Common Stock as reported on the
Nasdaq National Market on January 15, 1997.
ADDITIONAL INFORMATION
SHAREHOLDER PROPOSALS
To be considered for inclusion in the Company's proxy statement and form of
proxy relating to the 1997 Annual Meeting of Shareholders, which has been
scheduled to be held on April 22, 1997, a shareholder proposal should be
received by the Secretary of the Company at the address set forth on the Notice
of Special Meeting of Shareholders not later than January 31, 1997, except that
if such annual meeting is held on a date more than 30 calendar days from April
22, 1997, a stockholder proposal must be received by a reasonable time before
the proxy solicitation for such annual meeting is made. Any such proposal will
be subject to 17 C.F.R. sec. 240.14a-8 of the Rules and Regulations under the
Exchange Act.
NOTICE OF BUSINESS TO BE CONDUCTED AT AN ANNUAL MEETING
The Bylaws of the Company set forth the procedures by which a shareholder
may properly bring business before a meeting of shareholders. Pursuant to the
Bylaws, only business brought by or at the direction of the Board of Directors
may be conducted at a special meeting. The Bylaws of the Company provide an
advance notice procedure for a shareholder to properly bring business before an
annual meeting. The shareholder must give written advance notice to the
Secretary of the Company not less than ninety (90) days before the date
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<PAGE> 17
originally fixed for such meeting; provided, however, that in the event that
less than one hundred (100) days notice or prior public disclosure of the date
of the meeting is given or made to shareholders, notice by the shareholder to be
timely must be received not later than the close of business on the tenth day
following the date on which the Company's notice to shareholders of the annual
meeting date was mailed or such public disclosure was made. The advance notice
by a shareholder must include the shareholder's name and address, as they appear
on the Company's record of shareholders, a brief description of the proposed
business, the reason for conducting such business at the annual meeting, the
class and number of shares of the Company's capital stock that are beneficially
owned by such shareholder and any material interest of such shareholder in the
proposed business. In the case of nominations to the Board of Directors, certain
information regarding the nominee must be provided. Nothing in this paragraph
shall be deemed to require the Company to include in its proxy statement or the
proxy relating to any special meeting any shareholder proposal which does not
meet all of the requirements for inclusion established by the SEC in effect at
the time such proposal is received.
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING
The Board of Directors knows of no business which will be presented for
consideration at the Special Meeting other than as stated in the Notice of
Special Meeting of Shareholders. If, however, other matters are properly brought
before the Special Meeting, it is the intention of the persons named in the
accompanying proxy to vote the shares represented thereby on such matters in
accordance with their best judgment.
Whether or not you intend to be present at the Special Meeting, you are
urged to return your proxy card promptly. If you are then present at the Special
Meeting and wish to vote your shares in person, your original proxy may be
revoked by voting at the Special Meeting.
By Order of the Board of Directors
Richard J. Remijas, Jr.
Corporate Secretary
Chicago, Illinois
January 21, 1997
- --------------------------------------------------------------------------------
YOU ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING IN PERSON.
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, YOU ARE
REQUESTED TO SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
- --------------------------------------------------------------------------------
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APPENDIX A
PARK BANCORP, INC.
1997 STOCK-BASED INCENTIVE PLAN
1. DEFINITIONS.
Whenever used in the Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized:
"AFFILIATE" means (i) a member of a controlled group of corporations of
which the Holding Company is a member or (ii) an unincorporated trade or
business which is under common control with the Holding Company as determined in
accordance with Section 414(c) of the Code and the regulations issued
thereunder. For purposes hereof, a "controlled group of corporations" shall mean
a controlled group of corporations as defined in Section 1563(a) of the Code
determined without regard to Section 1563(a)(4) and (e)(3)(C).
"ALTERNATE OPTION PAYMENT MECHANISM" refers to one of several methods
available to a Participant to fund the exercise of a stock option set out in
Section 14. These mechanisms include: broker assisted cashless exercise and
stock for stock exchange.
"AWARD" means a grant of one or some combination of one or more
Non-statutory Stock Options, Incentive Stock Options and Stock Awards under the
provisions of this Plan.
"BANK" means Park Federal Savings Bank.
"BOARD OF DIRECTORS" or "BOARD" means the board of directors of the Holding
Company.
"CHANGE IN CONTROL" means: (i) a change in control of the Holding Company
of a nature that (A) would be required to be reported in response to Item 1 of
the current report on Form 8-K, as in effect on the Effective Date hereof,
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"); or (B) results in a change in control within the
meaning of the Home Owners' Loan Act of 1933, as amended ("HOLA") and the Rules
and Regulations promulgated by the Office of Thrift Supervision ("OTS") (or its
predecessor agency), as in effect on the date hereof (provided, that in applying
the definition of change in control as set forth under such rules and
regulations the Board shall substitute its judgment for that of the OTS); or
(ii) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act and the rules and regulations promulgated thereunder) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act
and the rules and regulations promulgated thereunder), directly or indirectly,
of securities of the Holding Company representing 20% or more of the Holding
Company's then outstanding voting securities, other than a trustee or fiduciary
holding securities under any employee benefit plan of the Company or Bank; or
(iii) individuals who constitute the Board on the date hereof (the "Incumbent
Board") cease for any reason to constitute at least a majority thereof, provided
that any person becoming a director subsequent to the date hereof whose election
was approved by a vote of at least three-quarters of the directors comprising
the Incumbent Board, or whose nomination for election by the Holding Company's
stockholders was approved by the same Nominating Committee serving under an
Incumbent Board, shall be, for purposes of this clause (iii), considered as
through he were a member of the Incumbent Board; or (iv) the Holding Company is
merged or consolidated or reorganized into or with another corporation or other
legal person (an "Acquiror") and as a result of such merger, consolidation or
reorganization less than 50% of the outstanding voting securities or other
capital interests of the surviving, resulting or acquiring corporation or other
legal person are owned in the aggregate by the stockholders of the Holding
Company, directly or indirectly, immediately prior to such merger, consolidation
or reorganization, other than by the Acquiror or any corporation or other legal
person controlling, controlled by or under common control with the Acquiror; or
(v) the Holding Company sells or otherwise transfers all or substantially all of
the shares of the Bank, or all or substantially all of the business and/or
assets of the Holding Company, to an Acquiror, of which less than 50% of the
outstanding voting securities are owned in the aggregate by stockholders of the
Holding Company, directly or indirectly,
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<PAGE> 19
immediately prior to such sale or transfer, other than by the Acquiror or any
corporation or legal person controlling, controlled by or under common control
with the Acquiror; or (vi) a solicitation of stockholders of the Holding
Company, by someone other than the current management of the Holding Company,
seeking stockholder approval of a plan of reorganization, merger or
consolidation of the Holding Company, seeking stockholder approval of a plan of
reorganization, merger or consolidation of the Holding Company or Bank or
similar transaction with one or more corporations, as a result of which the
outstanding shares of the class of securities then subject to the plan are
exchanged for or converted into cash or property or securities not issued by the
Holding Company; or (vii) a tender offer is made for 20% or more of the voting
securities of the Holding Company.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation thereto.
"COMMITTEE" means a committee consisting of at least two members of the
Board of Directors who are defined as Outside Directors, all of whom are
"non-employee directors" as such term is defined under Rule 16b-3 under the
Exchange Act as promulgated by the Securities and Exchange Commission.
"COMMON STOCK" means the common stock of the Holding Company, par value
$.01 per share, or any stock exchanged for shares of Common Stock pursuant to
Section 18 hereof.
"DATE OF GRANT" means the effective date of an Award.
"DIRECTORS' AWARDS" means awards of Non-statutory Stock Options and/or
Stock Awards pursuant to the terms of Section 12.
"DISABILITY" means the permanent and total inability by reason of mental or
physical infirmity, or both, of a Participant to perform the work customarily
assigned. Additionally, a medical doctor selected or approved by the Board of
Directors must advise the Committee that it is either not possible to determine
when such Disability will terminate or that it appears probable that such
Disability will be permanent during the remainder of said Participant's
lifetime.
"DIVIDEND EQUIVALENT RIGHTS" means the right to receive an amount of cash
based upon the terms set forth in Section 10.
"EFFECTIVE DATE" means , 1997 or if later, the date on which
this Plan is approved by the stockholders of the Holding Company.
"EMPLOYEE" means any person who is employed by the Holding Company or an
Affiliate, including officers.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation thereto.
"EXERCISE PRICE" means the purchase price per share of Common Stock
deliverable upon the exercise of each Option in order for the option to be
exchanged for shares of Common Stock.
"FAIR MARKET VALUE" means, when used in connection with the Common Stock on
a certain date, the average of the high and low bid prices of the Common Stock
as reported by the Nasdaq Stock Market ("Nasdaq") (as published by The Wall
Street Journal, if published) on such date or if the Common Stock was not traded
on such date, on the next preceding day on which the Common Stock was traded
thereon or the last previous date on which a sale is reported. If the Common
Stock is not reported on the Nasdaq, the Fair Market Value of the Common Stock
is the value so determined by the Board in good faith.
"HOLDING COMPANY" means Park Bancorp, Inc., a Delaware corporation.
"INCENTIVE STOCK OPTION" means an Option granted by the Committee to a
Participant, which Option is designated by the Committee as an Incentive Stock
Option pursuant to Section 7.
"LIMITED RIGHT" means the right to receive an amount of cash based upon the
terms set forth in Section 8.
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"NON-STATUTORY STOCK OPTION" means an Option granted by the Committee to a
Participant pursuant to Section 6, which is not designated by the Committee as
an Incentive Stock Option or which is redesignated by the Committee under
Section 7 as a Non-Statutory Stock Option.
"OPTION" means the right to buy a fixed amount of Common Stock at the
Exercise Price within a limited period of time designated as the term of the
option as granted under Sections 6, 7 or 12 of the Plan.
"OTS" means the Office of Thrift Supervision, or any successor agency.
"OUTSIDE DIRECTOR" means a member of the Board of Directors of the Holding
Company or its Affiliates, who is not also an Employee. The term "Outside
Director" also includes any Director Emeritus who has executed a consulting
agreement with the Holding Company or the Bank.
"PARTICIPANT" means any Employee or Outside Director who holds an
outstanding Award under the terms of the Plan.
"RETIREMENT" means the Participant's termination of employment with the
Company and all Affiliates on or after the date the Participant is eligible to
receive an immediately annuity under the Bank's Retirement Plan. With respect to
an Outside Director, "Retirement" means the termination of service from the
Board of Directors of the Holding Company or its Affiliates following written
notice to the Board as a whole of such Outside Director's intention to retire or
retirement as determined by the Holding Company or applicable Affiliate's
bylaws.
"STOCK AWARDS" are Awards of Common Stock which may vest immediately or
over a period of time. Vesting of Stock Awards under Section 9 of this Plan may
be contingent upon the occurrence of specified events or the attainment of
specified performance goals as determined by the Committee.
"TERMINATION FOR CAUSE" shall mean termination because of a material loss
to the Holding Company or one of its subsidiaries caused by the Participant's
intentional failure to perform stated duties, personal dishonesty, willful
violation of any law, rule, regulation, (other than traffic violations or
similar offenses) or final cease and desist order. No act, or the failure to
act, on Participant's part shall be "willful" unless done, or omitted to be
done, not in good faith and without reasonable belief that the action or
omission was in the best interest of the Holding Company or its affiliates.
"TRUST" means a trust established by the Board in connection with this Plan
to hold Common Stock and other assets relating to Plan Awards.
"TRUSTEE" means that person or persons and entity or entities approved by
the Board to hold legal title to any of the Trust assets for the purposes set
forth herein.
2. ADMINISTRATION.
(a) COMMITTEE. The Plan as regards Awards to Employees shall be
administered by the Committee. The Committee is authorized, subject to the
provisions of the Plan, to establish such rules and regulations as it deems
necessary for the proper administration of the Plan and to make whatever
determinations and interpretations in connection with the Plan it deems
necessary or advisable. All determinations and interpretations made by the
Committee shall be binding and conclusive on all Participants and on their legal
representatives and beneficiaries.
(b) DIRECTORS' AWARDS. The Plan in regards to Awards to Outside Directors
is self-administering. The grant of Awards to Outside Directors are made herein
by the terms of this Plan. Actual transference of any Award to Outside Directors
requires no, nor allows any, discretion by the Trustee or Committee.
3. TYPES OF AWARDS.
The following Awards may be granted under the Plan:
(a) Non-statutory Stock Options;
(b) Incentive Stock Options;
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(c) Limited Rights;
(d) Employee Stock Awards;
(e) Dividend Equivalent Rights;
(f) Equitable Adjustment Rights; and
(g) Directors' Stock Awards;
as described below in paragraphs 6 through 13 of the Plan.
4. STOCK SUBJECT TO THE PLAN.
Subject to adjustment as provided in Section 18, the maximum number of
shares reserved for Awards under the Plan is 378,201 which number may not be
excess of 14% of the outstanding shares of the Common Stock as of the Effective
Date. Subject to adjustment as provided in Section 18, the maximum number of
shares reserved hereby for purchase pursuant to the exercise of Options and
Option-related Awards granted under the Plan is 270,144, which number is not in
excess of the 10% of the outstanding shares of Common Stock as of the Effective
Date. The maximum number of the shares reserved for award as Stock Awards is
108,057 which number is not in excess of 4% of the outstanding shares of Common
Stock as of the Effective Date. These shares of Common Stock may be either
authorized but unissued shares or authorized shares previously issued and
reacquired by the Holding Company or by the Trust. To the extent that Options
and Stock Awards are granted under the Plan, the shares underlying such Awards
will be unavailable for any other use including future grants under the Plan
except that upon:
(a) a cancellation, termination, expiration, forfeiture, or lapse for any
reason of any Award; or
(b) payment of an Option Price and/or payment of any taxes arising upon the
exercise of an Option or payout of an Award with previously acquired
Common Stock or by withholding of shares of Common Stock which
otherwise would be acquired on exercise or issued upon such payout; or
(c) a payout of a Limited Right in the form of cash,
then the number of shares of Common Stock underlying any such Award which were
not issued as a result of any of the foregoing actions shall again be available
for purposes of Awards under the Plan. Subject to adjustment as provided in
Section 18, the maximum aggregate number of shares of Common Stock (including
Options, Limited Rights and Stock Awards) that may be granted or that may vest
with respect to Awards granted hereunder to an Employee shall be 94,550.
5. ELIGIBILITY.
All Employees shall be eligible to receive Awards under the Plan. Outside
Directors shall not be eligible to receive Awards under the Plan except for
Directors' Awards under Section 12 of this Plan. An Outside Director who is a
former Employee may, however, continue to hold unexercised or unvested Awards
granted while such person was an Employee.
6. NON-STATUTORY STOCK OPTIONS.
The Committee may, subject to the limitations of the Plan, from time to
time, grant Non-statutory Stock Options to Employees and, upon such terms and
conditions as the Committee may determine, grant Non-statutory Stock Options in
exchange for and upon surrender of previously granted Awards under this Plan.
Non-statutory Stock Options granted under this Plan are subject to the following
terms and conditions:
(a) EXERCISE PRICE. The Exercise Price of each Non-statutory Stock Option
shall be determined by the Committee on the date the option is granted. Such
Exercise Price shall not be less than 100% of the Fair Market Value of the
Common Stock on the Date of Grant. Common Stock underlying such Non-statutory
Stock Options may be purchased only upon full payment of the Exercise Price or
upon operation of an Alternate Option Payment Mechanism
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(b) TERMS OF OPTIONS. The term during which each Non-statutory Stock Option
may be exercised shall be determined by the Committee, but in no event shall a
Non-statutory Stock Option be exercisable in whole or in part more than 10 years
from the Date of Grant. The Committee shall determine the date on which each
Non-statutory Stock Option shall become exercisable; provided, however, that to
the extent so limited by applicable OTS regulations, the Committee shall not
make any determination to grant a Non-statutory Stock Option which provides for:
(1) exercisability at a rate in excess of 20% per year; or (2) acceleration of
exercisability except in the case of death or Disability. The Common Stock
comprising each installment may be purchased in whole or in part at any time
during the term of such Non-statutory Stock Option after such installment
becomes exercisable. The Committee may, in its sole discretion, accelerate the
time at which any Non-statutory Stock Option may be exercised in whole or in
part; provided, however, that to the extent so limited by OTS regulations, the
Committee shall not make any determination which will result in: (1) a Non-
statutory Stock Option becoming exercisable at a rate in excess of 20% per year;
or (2) the acceleration of the exercisability of a Non-statutory Stock Option
except in the case of death or Disability. The acceleration of any Non-statutory
Stock Option under the authority of this paragraph will create no right,
expectation or reliance on the part of any other Participant or that certain
Participant regarding any other unaccelerated Non-statutory Stock Options.
(c) NSO AGREEMENT. The terms and conditions of any Non-statutory Stock
Options shall be evidenced by an agreement (the "NSO Agreement") which such NSO
Agreement will be subject to the terms and conditions of the Plan.
(d) TERMINATION OF EMPLOYMENT. Unless otherwise determined by the
Committee, upon termination of the Participant's employment for any reason other
than death, Disability, Retirement or Termination for Cause, the Participant's
Nonstatutory Stock Options shall be exercisable only as to those shares that
were immediately exercisable at the date of termination and only for a period
three months following termination. Notwithstanding any provisions set forth
herein or contained in any NSO Agreement relating to an award of an Option, in
the event of termination for Disability or death, all Options shall immediately
vest and be exercisable for one year after such termination, in the event of
termination for Retirement, all exercisable Non-statutory Stock Options shall be
exercisable for one year after Retirement, and in the event of Termination for
Cause all rights under the Participant's Non-Statutory Stock Options shall
expire immediately upon termination. Notwithstanding the foregoing, a
Participant whose termination of employment would be a Retirement shall not be
deemed to have incurred a termination of employment for purposes determining
vesting and exercisability of Non-Statutory Stock Options under the Plan in the
event he continues to serve as a consultant or advisory director to the Holding
Company or any of its Affiliates. In such event, the Participant's Retirement
shall not be deemed to occur until service as a consultant or advisory director
terminates.
7. INCENTIVE STOCK OPTIONS.
The Committee may, subject to the limitations of the Plan, from time to
time, grant Incentive Stock Options to Employees. Incentive Stock Options
granted pursuant to the Plan shall be subject to the following terms and
conditions:
(a) EXERCISE PRICE. The Exercise Price of each Incentive Stock Option shall
be not less than 100% of the Fair Market Value of the Common Stock on the Date
of Grant. However, if at the time an Incentive Stock Option is granted to a
Participant, the Participant owns Common Stock representing more than 10% of the
total combined voting securities of the Holding Company (or, under Section
424(d) of the Code, is deemed to own Common Stock representing more than 10% of
the total combined voting power of all classes of stock of the Holding Company,
by reason of the ownership of such classes of stock, directly or indirectly, by
or for any brother, sister, spouse, ancestor or lineal descendent of such
Participant, or by or for any corporation, partnership, estate or trust of which
such Participant is a shareholder, partner or beneficiary) ("10% Owner"), the
Exercise Price per share of Common Stock deliverable upon the exercise of each
Incentive Stock Option shall not be less than 110% of the Fair Market Value of
the Common Stock on the Date of Grant. Shares may be purchased only upon payment
of the full Exercise Price or upon operation of an Alternate Option Exercise
Mechanism set out in Section 14 of the Plan.
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(b) AMOUNTS OF INCENTIVE STOCK OPTIONS. Incentive Stock Options may be
granted to any Employee in such amounts as determined by the Committee; provided
that the amount granted is consistent with the terms of Section 422 of the Code.
In the case of a stock option intended to qualify as an Incentive Stock Option,
the aggregate Fair Market Value (determined as of the time the Option is
granted) of the Common Stock with respect to which Incentive Stock Options
granted are exercisable for the first time by the Participant during any
calendar year (under all plans of the Participant's employer corporation and its
parent and subsidiary corporations) shall not exceed $100,000. The provisions of
this Section 7(b) shall be construed and applied in accordance with Section
422(d) of the Code and the regulations, if any, promulgated thereunder. To the
extent an Award of an Incentive Stock Option under this Section 7 exceeds this
$100,000 limit, the portion of the Award of an Incentive Stock Option in excess
of such limit shall be deemed a Non-statutory Stock Option. The Committee shall
have discretion to redesignate Stock Options granted as Incentive Stock Options
as Non-statutory Stock Options. Such Non-statutory Stock Options shall be
subject to Section 6 of the Plan.
(c) TERMS OF INCENTIVE STOCK OPTIONS. The term during which each Incentive
Stock Option may be exercised shall be determined by the Committee, but in no
event shall an Incentive Stock Option be exercisable in whole or in part more
than 10 years from the Date of Grant. If at the time an Incentive Stock Option
is granted to a Participant who is a 10% Owner, the Incentive Stock Option
granted to such Participant shall not be exercisable after the expiration of
five years from the Date of Grant. No Incentive Stock Option granted under this
Plan is transferable except by will or the laws of descent and distribution and
is exercisable in his lifetime only by the Participant to whom it is granted.
The Committee shall determine the date on which each Incentive Stock Option
shall become exercisable; provided, however, that to the extent so limited by
OTS regulations, the Committee shall not make any determination to grant an
Incentive Stock Option which provides for: (1) exercisability at a rate in
excess of 20% per year; or (2) acceleration of exercisability except in the case
of death or Disability. The Committee may also determine as of the Date of Grant
any other specific conditions or specific performance goals which must be
satisfied prior to the Incentive Stock Option becoming exercisable. The shares
comprising each installment may be purchased in whole or in part at any time
during the term of such Incentive Stock Option after such installment becomes
exercisable. The Committee may, in its sole discretion, accelerate the time at
which any Incentive Stock Option may be exercised in whole or in part; provided,
however, that to the extent so limited by OTS regulations, the Committee shall
not make any determination which will result in: (1) an Incentive Stock Option
becoming exercisable at a rate in excess of 20% per year; or (2) the
acceleration of the exercisability of an Incentive Stock Option except in the
case of death or Disability. To the extent that such acceleration, through the
operation of law, destroys incentive treatment under the Code, then such
accelerated Stock Option shall be deemed to be a Non-statutory Stock Option. The
acceleration of any Incentive Stock Option under the authority of this paragraph
will create no right, expectation or reliance on the part of any other
Participant or that certain Participant regarding any other unaccelerated
Incentive Stock Options.
(d) ISO AGREEMENT. The terms and conditions of any Incentive Stock Option
shall be evidenced by an agreement (the "ISO Agreement") which such Incentive
Stock Option Agreement will be subject to the terms and conditions of the Plan.
(e) TERMINATION OF EMPLOYMENT. Unless otherwise determined by the
Committee, upon the termination of a Participant's service for any reason other
than Disability, death or Termination for Cause, the Participant's Incentive
Stock Options shall be exercisable only as to those shares that were immediately
exercisable by the Participant at the date of termination and only for a period
of three months following termination. Notwithstanding any provisions set forth
herein or contained in any Agreement relating to an award of an Incentive Stock
Option, in the event of termination for Disability or death, all Incentive Stock
Options shall immediately vest and be exercisable for one year after such
termination, and in the event of Termination for Cause all rights under the
Participant's Incentive Stock Options shall expire immediately upon termination.
(f) COMPLIANCE WITH CODE. The Incentive Stock Options granted under this
Section 7 of the Plan are intended to qualify as "incentive stock options"
within the meaning of Section 422 of the Code, but the
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Holding Company makes no warranty as to the qualification of any option as an
incentive stock option within the meaning of Section 422 of the Code. All
Incentive Stock Options that do not so quality shall be treated as Non-statutory
Stock Options.
8. LIMITED RIGHTS.
Simultaneously with the grant of any Option to an Employee, the Committee
may grant a Limited Right with respect to all or some of the shares covered by
such Option. Limited Rights granted under this Plan are subject to the following
terms and conditions:
(a) TERMS OF RIGHTS. A Limited Right may be exercised only in the event of
a Change in Control.
The Limited Right may be exercised only when the underlying Option is
eligible to be exercised, and only when the Fair Market Value of the underlying
shares on the day of exercise is greater than the Exercise Price of the
underlying Option.
Upon exercise of a Limited Right, the underlying Option shall cease to be
exercisable. Upon exercise or termination of an Option, any related Limited
Rights shall terminate. The Limited Right is transferable only when the
underlying option is transferable and under the same conditions.
(b) PAYMENT. Upon exercise of a Limited Right, the holder shall promptly
receive from the Holding Company an amount of cash or, in the sole discretion of
the Committee, shares of Common Stock or other payment alternative found in
Section 13, equal to the difference between the Exercise Price of the underlying
option and the Fair Market Value of the Common Stock subject to the underlying
Option on the date the Limited Right is exercised, multiplied by the number of
shares with respect to which such Limited Right is being exercised. Payments
shall be less any applicable tax withholding as set forth in Section 19.
9. STOCK AWARDS.
The Committee may, subject to the limitations of the Plan from time to
time, make Awards of some number of shares of Common Stock. The Awards shall be
made subject to the following terms and conditions:
(a) PAYMENT OF THE STOCK AWARD. A Stock Award may only be made in whole
shares of Common Stock. Shares used in payment may only be granted from shares
reserved under the Plan but not yet awarded at the time the new Stock Award is
made.
(b) STOCK AWARD AGREEMENT. The terms and conditions of any Stock Award
shall evidenced by an agreement (the "Stock Award Agreement") which such Stock
Award Agreement will be subject to the terms and conditions of the Plan. Each
Stock Award Agreement shall set forth:
(i) the period over which the Stock Award may vest; and
(ii) the performance goals, if any, which must be satisfied prior to
the vesting of any portion of the Stock Award. The performance goals may be
set by the Committee on an individual level, for all Participants, for all
Awards made during a given period of time, or for all Awards for indefinite
periods.
(c) CERTIFICATION OF ATTAINMENT OF THE PERFORMANCE GOAL. No Stock Award
that is subject to a performance goal is to be distributed to the Participant
until the Committee certifies that the underlying performance goal has been
achieved.
(d) TERMS OF STOCK AWARDS. The Committee shall determine the dates on which
Stock Awards granted to a Participant shall vest, provided that all Stock Awards
shall immediately vest in full upon the termination of employment due to
Disability or the death of the Participant; further provided, however, that to
the extent so limited by OTS regulations, the Committee shall not make any
determination to grant a Stock Award which provides for: (1) exercisability at a
rate in excess of 20% per year; or (2) acceleration of exercisability except in
the case of Death or Disability. The Committee, notwithstanding other paragraphs
in this Section, in its sole discretion may accelerate the vesting of any Stock
Award; provided, however, that to the extent so limited by OTS regulations, the
Committee shall not make any determination which will result in: (1) a Stock
Award becoming exercisable at a rate in excess of 20% per year; or (2) the
acceleration of the exercisability of
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a Stock Award except in the case of Death or Disability. The acceleration of any
Stock Award under the authority of this paragraph will create no right,
expectation or reliance on the part of any other Participant or that certain
Participant regarding any other unaccelerated Stock Awards.
(e) ACCRUAL OF DIVIDENDS. Whenever Stock Awards are distributed to a
Participant or a beneficiary under the Plan, such recipient or beneficiary shall
also be entitled to receive, with respect to each such Stock Award, a payment
equal to any cash dividends and a number of shares of Common Stock equal to any
stock dividends, declared and paid with respect to a share of the Common Stock
between the date the relevant Stock Award was granted and the date the Stock
Awards are being distributed. To the extent applicable, there shall also be
distributed an appropriate amount of net earnings, if any, of the Trust with
respect to any cash dividends paid out.
(f) VOTING OF STOCK AWARDS. After a Stock Award has been granted, the
Participant shall be entitled to direct the Trustee as to the voting of the
Common Stock which the Stock Award covers but which has not yet been earned and
distributed to the Participant pursuant to the Plan, subject to the rules and
procedures adopted by the Committee for this purpose. All shares of Common Stock
held by the Trust as to which Participants are not entitled to direct, or have
not directed, the voting, shall be voted by the Trustee in the same proportion
as Common Stock covered by Stock Awards which have been awarded and voted.
(g) FORFEITURE. If the Participant's employment terminates for any other
reason than death or Disability, to the extent that the Participant has not
become vested in a Stock Award as provided in this Section 9, such Participant's
Award shall be forfeited immediately upon such termination and the Participant
shall have no further rights with respect to such Award. Notwithstanding the
foregoing, a Participant whose termination of employment would be a Retirement
shall not be deemed to have incurred a termination of employment for purposes
determining vesting or forfeiture of a Stock Award under the Plan in the event
he continues to serve as a consultant or advisory director to the Holding
Company or any of its Affiliates. In such event, the Participant's termination
of employment shall not be deemed to occur until service as a consultant or
advisory director terminates.
10. DIVIDEND EQUIVALENT RIGHTS.
Simultaneously with the grant of any Incentive Stock Option or a
Non-statutory Stock Option to Participants, the Committee may to the extent not
limited by OTS regulations, grant a Dividend Equivalent Right with respect to
all or some of the shares covered by such Option. Dividend Equivalent Rights
granted under this Plan are subject to the following terms and conditions:
(a) EXTRAORDINARY DIVIDEND. For purposes of this Section 10, an
extraordinary dividend is any dividend paid on shares of Common Stock where the
rate of the dividend exceeds the Bank's weighted average cost of funds on
interest-bearing liabilities for the current and preceding three quarters.
(b) TERMS OF RIGHTS. The Dividend Equivalent Right provides the Participant
with a cash benefit equal to the amount of any extraordinary dividend declared
by the Holding Company on shares of Common Stock subject to an Option. The
Dividend Equivalent Right is transferable only when the underlying option is
transferable and under the same conditions.
(c) DIVIDEND EQUIVALENT RIGHTS AGREEMENT. The terms and conditions of any
Dividend Equivalent Rights shall be evidenced by an agreement (the "Dividend
Equivalent Rights Agreement") which such Dividend Equivalent Rights Agreement
shall be subject to the terms and conditions of the Plan.
(d) PAYMENT. Upon the payment of an extraordinary dividend, the holder of a
Dividend Equivalent Right shall promptly receive from the Holding Company an
amount of cash or some other payment option found in Section 13, equal to the
amount of the extraordinary dividend paid on one share of Common Stock,
multiplied by the number of shares of Common Stock subject to the underlying
Option. Payments shall be decreased by the amount of any applicable tax
withholding prior to distribution to the Participant as set forth in Section 19.
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11. EQUITABLE ADJUSTMENT RIGHT.
Simultaneously with the grant of any Option under this Plan, in the
alternative to a Dividend Equivalent Right, the Committee may to the extent not
limited by OTS regulations, grant an Equitable Adjustment Right.
Upon the payment of an extraordinary dividend (as such term is defined in
Section 10(a)), the Committee may adjust the number of shares and/or the
Exercise Price of the Options underlying the Equitable Adjustment Right, as the
Committee deems appropriate.
12. DIRECTORS' AWARDS.
Awards to Outside Directors under this Plan ("Directors' Awards") are made
in the form of Non-statutory Stock Options and Stock Awards. Directors' Awards
shall be made subject to the following terms and conditions:
(a) INITIAL GRANT OF THE DIRECTORS' AWARD. Each Outside Director who is
serving on the Board of Directors on the Effective Date of this Plan shall
receive (1) Non-statutory Stock Options for 13,507 shares of Common Stock, each
together, to the extent not limited by OTS regulations, with a Dividend
Equivalent Right pursuant to Section 10, and (2) Stock Awards of 5,402 shares of
Common Stock.
(b) GRANTS TO SUBSEQUENT OUTSIDE DIRECTORS. To the extent shares are
available for grant under the Plan, each Outside Director who is first appointed
as a director subsequent to the Effective Date ("Subsequent Outside Director")
is hereby granted, as of the date on which such Subsequent Outside Director is
qualified and first begins to serve as an Outside Director, Nonstatutory Stock
Options for 13,507 shares of Common Stock, each together, to the extent not
limited by OTS regulations, with a Dividend Equivalent Right pursuant to Section
10, and Stock Awards of 5,402 shares of Common Stock, subject to adjustment
pursuant to Section 18, or pro rata amounts of Non-statutory Stock Options and
Stock Awards of such lesser number of shares of Common Stock as remain under
reserve but not granted the Plan.
If shares for sufficient Non-statutory Stock Options and Stock Awards are
not available under the Plan to fulfill the grant of Options and Stock Awards
under this paragraph (b) to any Subsequent Outside Director, and thereafter
shares become available, such Subsequent Outside Director shall then receive pro
rata amounts of Non-statutory Stock Options and Stock Awards, determined by
dividing pro rata among each Subsequent Outside Director, the number of shares
of Common Stock then available, not to exceed the amount granted with respect to
Subsequent Outside Directors, subject to adjustment under Section 18 as
appropriate. The date of grant shall be the date shares for such Directors'
Awards become available.
(c) VESTING. The Non-statutory Stock Options and the Stock Awards made
under this Section will vest over a five-year period, with 20% of the initial
number of Non-statutory Stock Options and Stock Awards vesting each year in
which the Outside Director remains an Outside Director or serves as an advisory
director or consultant to the Holding Company or an Affiliate of the Holding
Company, commencing with the first anniversary of the date of the grant of the
Directors' Award.
(d) EXERCISE PRICE. The Exercise Price of each Non-statutory Stock Option
awarded to an Outside Director shall equal the Fair Market Value of the Common
Stock on the date of the grant of the Option. Shares may be purchased only upon
full payment of the Exercise Price or upon operation of an Alternate Option
Payment Mechanism set out in Section 14 of the Plan.
(e) TERMS OF NON-STATUTORY STOCK OPTIONS AWARDS TO DIRECTORS. The term
during which each Non-statutory Stock Option awarded to a director may be
exercised shall be 10 years from the Date of Grant. The shares comprising each
installment may be purchased in whole or in part at any time during the term of
such Non-statutory Stock Option.
(f) ACCRUAL OF DIVIDENDS ON STOCK AWARDS. Whenever Stock Awards are
distributed to an Outside Director or a beneficiary under this Section, such
Outside Director or beneficiary shall also be entitled to receive, with respect
to each such Stock Award, a payment equal to any cash dividends and a number of
shares of Common Stock equal to any stock dividends, declared and paid with
respect to a share of the
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Common Stock between the date the relevant Stock Award was granted and the date
the Stock Awards are being distributed. To the extent applicable, there shall
also be distributed an appropriate amount of net earnings, if any, of the Trust
with respect to any cash dividends paid out.
(g) VOTING OF STOCK AWARDS. After a Stock Award has been granted under this
Section, the Outside Director shall be entitled to instruct the Trustee as to
the voting of the Common Stock that the Stock Award covers but which has not yet
been earned and distributed to him pursuant to the Plan, subject to the rules
and procedures adopted by the Committee for this purpose. Shares underlying a
Stock Award regarding which an Outside Director has not issued instructions,
shall be voted by the Trustee in accordance with the terms of paragraph 9(g) of
the Plan.
(h) DEATH OR DISABILITY OF A DIRECTOR. If the service of an Outside
Director as a member of the Board is terminated due to death or Disability, and
the Directors' Award made has not yet vested as provided in this Section 12,
such Directors' Award shall be deemed to be fully vested upon the date of
termination from service on the Board.
(i) FORFEITURE. If the service of an Outside Director as a member of the
Board is terminated for any other reason than death or Disability, to the extent
that the Outside Director has not become vested in a Directors' Award as
provided in this Section 12, such Directors' Award shall be forfeited
immediately upon such termination and the Outside Director shall have no further
rights with respect to such Directors' Award.
(j) DIRECTORS' AWARD AGREEMENT. The terms and conditions of any Directors'
Award will be evidenced by an agreement (the "Directors' Award Agreement") which
such Directors' Award Agreement shall be subject to the terms and conditions of
the Plan.
13. PAYOUT ALTERNATIVES.
Payments due to a Participant upon the exercise or redemption of an Award,
may be made under the following terms and conditions:
(a) DISCRETION OF THE COMMITTEE. The Committee has the sole discretion to
determine what form of payment (whether monetary, Common Stock, a combination of
payout alternatives or otherwise) it shall use in making distributions or
payments for all Awards. If the Committee requests any or all Participants to
make an election as to form of payment or distribution, it shall not be
considered bound by the election.
(b) PAYMENT IN THE FORM OF COMMON STOCK. Any shares of Common Stock
tendered in satisfaction of an obligation arising under this Plan shall be
valued at the Fair Market Value of the Common Stock at the time of the
distribution. The Committee may use authorized but unissued Shares, Common Stock
in treasury or may direct the market purchase of Common Stock to satisfy its
obligations under this Plan.
14. ALTERNATE OPTION PAYMENT MECHANISM.
The Committee has sole discretion to determine what form of payment it will
accept for the exercise of an Option. The Committee may indicate acceptable
forms in the Incentive Stock Option or Non-statutory Stock Option Agreement
covering such Options or may reserve its decision to the time of exercise. No
Option is to be considered exercised until payment in full is accepted by the
Committee or its agent.
(a) CASH PAYMENT. The exercise price may be paid in cash or by certified
check.
(b) BORROWED FUNDS. To the extent permitted by law, the Committee may
permit all or a portion of the exercise price of an Option to be paid through
borrowed funds.
(c) EXCHANGE OF COMMON STOCK. The Committee may, in its sole discretion,
permit payment by the tendering of previously acquired shares of Common Stock.
Any shares of Common Stock tendered in payment of the exercise price of an
Option shall be valued at the Fair Market Value of the Common Stock on the date
prior to the date of exercise.
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15. RIGHTS OF A STOCKHOLDER: DEFERRAL; LIMITED TRANSFERABILITY.
No Participant or Outside Director shall have any rights as a stockholder
with respect to any shares of Common Stock covered by an Option until the date
of issuance of a stock certificate for such Common Stock. Nothing in this Plan
or in any Award granted confers on any person any right to continue in the
employ or service of the Holding Company or its Affiliates or interferes in any
way with the right of the Holding Company or its Affiliates to terminate a
Participant's services as an officer or other employee at any time.
Except as expressly provided in the Award Agreement in accordance with this
Section 15, no Award under the Plan shall be transferable by the Participant or
Outside Director other than by will or the laws of intestate succession or
pursuant to a qualified domestic relations order.
The Committee may, in its discretion, authorize all or a portion of the
Options (other than Incentive Stock Options) granted to a Participant to be on
terms which permit transfer by such Participant to (a) the spouse, children or
grandchildren of the Participant ("Immediate Family Members"), (b) a trust or
trusts for the exclusive benefit of such Immediate Family Members, or (c) a
partnership in which such Immediate Family Members are the only partners,
provided that (i) there may be no consideration for any such transfer, (ii) the
Award Agreement pursuant to which such Options are granted expressly provides
for transferability in a manner consistent with this Section 15, and (iii)
subsequent transfers of transferred Options shall be prohibited except those in
accordance with Section 17. Following transfer, any such Options shall continue
to be subject to the same terms and conditions as were applicable immediately
prior to transfer, provided that for purposes of Section 17 hereof the term
"Participant" shall be deemed to refer to the transferee. The provisions of
Sections 6 and 12 relating to the period of exercisability and expiration of the
Option shall continue to be applied with respect to the original Participant,
and the Options shall be exercisable by the transferee only to the extent, and
for the periods, set forth in said Sections 6 and 12.
16. AGREEMENT WITH PARTICIPANTS.
Each Award will be evidenced by a written agreement ("Agreement"), executed
by the Participant and the Holding Company or its Affiliates that describes the
terms and conditions for receiving the Award including the date of Award, the
Exercise Price if any, the term or other applicable periods, and other terms and
conditions as may be required or imposed by the Plan, the Board of Directors,
tax law consideration or applicable securities law.
17. DESIGNATION OF BENEFICIARY.
A Participant may, with the consent of the Committee, designate a person or
persons to receive, in the event of death, any Award to which the Participant
would then be entitled. Such designation will be made upon forms supplied by and
delivered to the Holding Company and may be revoked in writing. If a Participant
fails effectively to designate a beneficiary, then the Participant's estate will
be deemed to be the beneficiary.
18. ADJUSTMENTS.
In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend, split, recapitalization, merger, consolidation,
spinoff, reorganization, combination or exchange of shares, or other similar
corporate change, or other increase or decrease in such shares without receipt
or payment of consideration by the Holding Company, the Committee will make such
adjustments to previously granted Awards, to prevent dilution or enlargement of
the rights of the Participant, including any or all of the following:
(a) adjustments in the aggregate number or kind of shares of Common Stock
or other securities that may underlie future Awards under the Plan;
(b) adjustments in the aggregate number or kind of shares of Common Stock
or other securities underlying Awards already made under the Plan; and
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<PAGE> 29
(c) adjustments in the purchase price of outstanding Incentive and/or
Non-statutory Stock Options, or any Limited Rights attached to such Options.
No such adjustments may, however, materially change the value of benefits
available to a Participant under a previously granted Award. All awards under
this Plan shall be binding upon any successors or assigns of the Holding
Company.
19. TAX WITHHOLDING.
(a) TAX WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of the Plan.
(b) SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options, or upon any other taxable event arising as a result of
Awards granted hereunder, Participants may elect to satisfy the withholding
requirement, in whole or in part, by having the Company withhold Shares having a
Fair Market Value on the date the tax is to be determined equal to the minimum
statutory total tax which would be imposed on the transaction. All such
elections shall be irrevocable, made in writing, signed by the Participant, and
shall be subject to any restrictions or limitations that the Committee, in its
sole discretion, deems appropriate.
20. AMENDMENT OF THE PLAN.
The Board of Directors may at any time, and from time to time, modify or
amend the Plan in any respect, prospectively or retroactively; provided however,
no such modification or amendment may adversely affect the rights of a
Participant under an outstanding Award without the written permission of such
Participant.
Notwithstanding any other provision of the Plan, to the extent so limited
by OTS regulations, no amendment shall be made which implements the Plan having
provisions contrary to those set forth in Section 6(b), 7(c) or 9(d) of the Plan
prior to August 9, 1997.
21. EFFECTIVE DATE OF PLAN.
The Plan shall become effective upon approval by the stockholders.
22. TERMINATION OF THE PLAN.
The right to grant Awards under the Plan will terminate upon the earlier of
(i) ten (10) years after the Effective Date or (ii) the issuance of Common Stock
and/or the exercise of Options, or related Limited Rights equivalent to the
maximum number of shares reserved under the Plan as set forth in Section 4. The
Board of Directors has the right to suspend or terminate the Plan at any time,
provided that no such action will, without the consent of a Participant,
adversely affect his vested rights under a previously granted Award.
23. APPLICABLE LAW.
The Plan will be administered in accordance with the laws of the state of
Delaware and applicable federal law.
24. DELEGATION OF AUTHORITY.
The Committee may delegate all authority for: the determination of forms of
payment to be made by or received by the Plan; the execution of Agreements; the
determination of Fair Market Value; the determination of all other aspects of
administration of the Plan to the executive officer(s) of the Holding Company.
The Committee may rely on the descriptions, representations, reports and
estimates provided to it by the management of the Holding Company for
determinations to be made pursuant to the Plan, including the
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<PAGE> 30
attainment of performance goals. However, only the Committee or a portion of the
Committee may certify the attainment of a performance goal.
IN WITNESS WHEREOF, Park Bancorp, Inc. has established this Plan, to be
executed by a designee of the Board of Directors and its duly corporate seal to
be affixed and duly attested, effective as of the day of
, 1997.
<TABLE>
<S> <C>
[CORPORATE SEAL] PARK BANCORP, INC.
ADOPTED BY THE BOARD OF DIRECTORS:
By:
Date Chairman of the Board of Directors
For the Board of Directors
APPROVED BY STOCKHOLDERS:
By:
Date Secretary
</TABLE>
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<PAGE> 31
PARK BANCORP, INC. PROXY
2740 West 55th Street
Chicago, Illinois 60632
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder(s) of Park Bancorp, Inc., a Delaware
corporation ("Park Bancorp") does (do) hereby constitute and appoint David A.
Remijas the true and lawful attorney of the undersigned with full power
of substitution, to appear and act as the proxy or proxies of the undersigned at
the Special Meeting of Shareholders of said corporation to be held at The Inland
Meeting Exposition Center, 400 East Ogden Avenue, Westmont, Illinois 60559, on
February 27, 1997, at 10:00 a.m. and at any adjournment thereof, and to vote all
the shares of Park Bancorp standing in the name of the undersigned, or which the
undersigned may be entitled to vote, as fully as the undersigned might or could
do if personally present, as set forth below.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder(s). If no direction is made, this proxy
will be voted FOR the approval and adoption of the Park Bancorp, Inc. 1997
Stock-Based Incentive Plan.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE
(Continued and to be signed on reverse)
PARK BANCORP, INC.
PLEASE MARK VOTE IN (OVAL) IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
[ ]
1. The approval and adoption of the Park Bancorp, FOR AGAINST ABSTAIN
Inc. 1997 Stock-Based Incentive Plan. / / / / / /
2. In their discretion the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
PLEASE SIGN EXACTLY AS NAME APPEARS
HEREON. WHEN SHARES ARE HELD BY JOINT
TENANTS, BOTH SHOULD SIGN. WHEN SIGNING
AS ATTORNEY, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE FULL
TITLE AS SUCH. IF A CORPORATION, PLEASE
SIGN THE FULL CORPORATION NAME BY
PRESIDENT OR OTHER AUTHORIZED OFFICER.
IF A PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AUTHORIZED PERSON.
______________________________________
Signature
______________________________________
Signature if held jointly
DATED ________________________________
