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 ss.240.14a-11(c) or ss.240.14a-12
HOME BANCORP OF ELGIN, INC.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
1
<PAGE>
[LOGO & COMPANY NAME]
August 29, 1997
Dear Stockholder:
You are cordially invited to attend a Special Meeting of Stockholders
(the "Special Meeting") of Home Bancorp of Elgin, Inc. (the "Company"), the
holding company for Home Federal Savings and Loan Association of Elgin (the
"Association") which will be held on September 29, 1997, at 2:00 p.m. Central
Time, at the office of the Association, 16 North Spring Street, Elgin, Illinois
60120.
The attached Notice of the Special Meeting of Stockholders and 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 appropriate questions.
The Board of Directors of the Company has determined that an
affirmative vote on each matter to be considered at the Special Meeting is in
the best interests of the Company and its stockholders and unanimously
recommends a vote "FOR" each of these matters.
Please complete, sign and return the enclosed proxy card promptly
whether or not you plan to attend the Special Meeting. YOUR VOTE IS IMPORTANT
REGARDLESS OF THE NUMBER OF SHARES YOU OWN. VOTING BY PROXY WILL NOT PREVENT YOU
FROM VOTING IN PERSON AT THE SPECIAL MEETING BUT WILL ASSURE THAT YOUR VOTE IS
COUNTED IF YOU ARE UNABLE TO ATTEND. IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE
NOT REGISTERED IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM
YOUR RECORD HOLDER TO ATTEND AND TO VOTE PERSONALLY AT THE SPECIAL MEETING.
EXAMPLES OF SUCH DOCUMENTATION INCLUDE A BROKER'S STATEMENT, LETTER OR OTHER
DOCUMENT CONFIRMING YOUR OWNERSHIP OF SHARES OF THE COMPANY.
On behalf of the Board of Directors and the employees of Home Bancorp
of Elgin, Inc. and Home Federal Savings and Loan Association of Elgin, we thank
you for your continued support and appreciate your interest.
Sincerely yours,
/s/ George L. Perucco
George L. Perucco
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
HOME BANCORP OF ELGIN, INC.
16 NORTH SPRING STREET
ELGIN, ILLINOIS 60120
(847) 742-3800
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 29, 1997
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of Home
Bancorp of Elgin, Inc. (the "Company") will be held on September 29, 1997, at
2:00 p.m. Central Time, at the office of Home Federal Savings and Loan
Association of Elgin, 16 North Spring Street, Elgin, Illinois 60120 to consider
and vote upon:
1. The approval of amendments to the Home Bancorp of Elgin, Inc. 1997
Stock Option Plan;
2. The approval of amendments to the Home Bancorp of Elgin, Inc. 1997
Recognition and Retention Plan; and
3. The authorization of the Board of Directors, in its discretion, to
direct the vote of proxies upon such matters incident to the
conduct of the Special Meeting as may properly come before the
Special Meeting, and any adjournment or postponement thereof,
including, without limitation, a motion to adjourn the Special
Meeting. The Company is not aware of any other business that may
properly come before the Special Meeting.
The Board of Directors has fixed August 15, 1997 as the record date for
the determination of stockholders entitled to notice of, and to vote at, the
Special Meeting and any adjournment or postponement thereof. Only stockholders
of record at the close of business on that date will be entitled to notice of,
and to vote at, the Special Meeting and any adjournment or postponement thereof.
By Order of the Board of Directors,
/s/ Kathleen A. Schroeder
Kathleen A. Schroeder
VICE PRESIDENT AND SECRETARY
Elgin, Illinois
August 29, 1997
- --------------------------------------------------------------------------------
YOU ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING. IT IS IMPORTANT
THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER OF SHARES YOU
OWN. THE BOARD OF DIRECTORS URGES YOU TO MARK, SIGN AND DATE THE
ENCLOSED PROXY CARD PROMPTLY AND RETURN IT IN THE ENCLOSED ENVELOPE.
RETURNING THE PROXY CARD WILL NOT PREVENT YOU FROM VOTING IN PERSON IF
YOU ATTEND THE SPECIAL MEETING.
- --------------------------------------------------------------------------------
<PAGE>
HOME BANCORP OF ELGIN, INC.
PROXY STATEMENT FOR THE
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 29, 1997
GENERAL INFORMATION
GENERAL
This Proxy Statement and accompanying proxy card are being furnished to
the stockholders of Home Bancorp of Elgin, Inc. (the "Company") in connection
with the solicitation of proxies by the Board of Directors of the Company from
holders of the shares of the Company's issued and outstanding common stock, par
value $.01 per share (the "Common Stock"), as of the close of business on August
15, 1997 (the "Record Date"), for use at the Special Meeting of Stockholders of
the Company (the "Special Meeting") to be held on September 29, 1997 at 2:00
p.m. Central Time, at the office of Home Federal Savings and Loan Association of
Elgin (the "Association"), 16 North Spring Street, Elgin, Illinois 60120 and at
any adjournment or postponement thereof. This Proxy Statement, together with the
enclosed proxy card, is first being mailed to stockholders on or about August
29, 1997.
On September 26, 1996, the Company became the holding company for the
Association upon completion of the conversion of the Association from the mutual
form of organization into the stock form of organization (the "Conversion"). The
Company, a Delaware corporation, operates as a savings association holding
company for its wholly-owned subsidiary, the Association.
RECORD DATE AND VOTING RIGHTS
The Board of Directors of the Company has fixed the close of business
on August 15, 1997 as the Record Date for the determination of the Company's
stockholders entitled to notice of, and to vote at, the Special Meeting.
Accordingly, only holders of record of shares of Common Stock at the close of
business on such date will be entitled to vote at the Special Meeting. On the
Record Date, there were 6,855,799 shares of Common Stock issued and outstanding.
Each holder of shares of Common Stock outstanding on the Record Date
will be entitled to one vote at the Special Meeting and at any adjournment or
postponement thereof for each share of capital stock registered in his or her
name on the transfer books or records of the Company. As provided in the
Company's Certificate of Incorporation, record holders of Common Stock who
beneficially own in excess of ten percent (10%) of the issued and outstanding
shares of Common Stock ("Excess Shares") shall be entitled to cast one
one-hundredth (1/100) of one vote per share for each Excess Share. A person or
entity is deemed to beneficially own shares owned by an affiliate or associate
as well as by persons acting in concert with such person or entity. The
Company's Certificate of Incorporation authorizes and imposes a duty on the
Board of Directors, by action of a majority, to interpret all of the terms and
provisions of the Certificate of Incorporation governing Excess Shares and to
determine on the basis of information known to them after reasonable inquiry all
facts necessary to ascertain compliance with the Certificate of Incorporation,
including, without limitation, (i) the number of shares of Common Stock
beneficially owned by any person or purported owner; (ii) whether a person or
purported owner is an affiliate or associate of, or is acting in concert with,
any other person or purported owner; (iii) whether a person or purported owner
has an agreement, arrangement or understanding with any other person or
purported owner as to the voting or disposition of any shares of Common Stock;
(iv) the application of any other definition or operative provision of the
Certificate of Incorporation to the given facts; and (v) any other matter
relating to the applicability or effect of the Certificate of Incorporation.
<PAGE>
All properly executed proxies received by the Company will be voted in
accordance with the instructions indicated thereon. IF NO INSTRUCTIONS ARE
GIVEN, EXECUTED PROXIES WILL BE VOTED FOR EACH PROPOSAL IDENTIFIED IN THE NOTICE
OF SPECIAL MEETING OF STOCKHOLDERS. Management is not aware of any matters other
than those set forth in the Notice of Special Meeting of Stockholders that may
be brought before the Special Meeting. If any other matters properly come before
the Special Meeting, the persons named in the accompanying proxy card will vote
the shares represented by all properly executed proxies on such matters in such
manner as shall be determined by a majority of the Board of Directors of the
Company.
VOTE REQUIRED
All of the Proposals require the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock represented, in person or by
proxy, at the Special Meeting and entitled to vote thereon. Shares as to which
the "ABSTAIN" box has been selected on the proxy card with respect to all
matters will be counted as present and entitled to vote and will have the effect
of a vote against that proposal. In contrast, shares underlying broker non-votes
will not be counted as present and entitled to vote and will have no effect on
the vote for that proposal.
REVOCABILITY OF PROXIES
A proxy may be revoked at any time before it is voted by filing with
the Secretary of the Company a duly executed instrument revoking the proxy or by
submitting a duly executed proxy bearing a later date. A proxy may also be
revoked by attending and voting at the Special Meeting or any adjournment or
postponement thereof, if a written revocation is filed with the Secretary of the
Special Meeting prior to the voting of such proxy.
IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN
NAME, YOU WILL NEED APPROPRIATE DOCUMENTATION FROM YOUR STOCKHOLDER OF RECORD TO
VOTE PERSONALLY AT THE SPECIAL MEETING. Examples of such documentation would
include a broker's statement, letter or other document that will confirm your
ownership of shares of the Company.
SOLICITATION OF PROXIES
The Company will bear the costs of soliciting proxies from its
stockholders. In addition to the use of mail, proxies may be solicited by
officers, directors or employees of the Company and the Association, by
telephone or through other forms of communication. 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 reasonable expenses incurred in connection therewith. In addition,
the Company has retained MacKenzie Partners, Inc. to assist in the solicitation
of proxies, which firm will be paid a fee of $3,000, plus out-of-pocket
expenses.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Certain terms of the stock options and restricted stock awards granted
to directors, officers and employees of the Company and the Association will be
modified if stockholders approve the proposed amendments to the Home Bancorp of
Elgin, Inc. 1997 Stock Option Plan (the "Option Plan") and the proposed
amendments to the Home Bancorp of Elgin, Inc. 1997 Recognition and Retention
Plan (the "RRP"). For complete descriptions of these Plans and the amendments to
each Plan, see "Proposal 1" and "Proposal 2."
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
PRINCIPAL STOCKHOLDERS OF THE COMPANY
The following table sets forth, as of August 1, 1997, certain
information as to Common Stock beneficially owned by persons owning in excess of
5% of the outstanding shares of Common Stock. Management knows of no person,
except as listed below, who beneficially owned more than 5% of the Company's
outstanding shares of Common Stock as of August 1, 1997. Except as otherwise
indicated, the information provided in the following table was obtained from
filings with the Securities and Exchange Commission (the "SEC") and with the
Company pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Addresses provided are those listed in the filings as the
address of the person authorized to receive notices and communications. For
purposes of the table below and the table set forth under "Security Ownership of
Management," in accordance with Rule 13d-3 under the Exchange Act, a person is
deemed to be the beneficial owner of any shares of Common Stock (1) over which
such person has or shares, directly or indirectly, voting or investment power,
or (2) of which such person has the right to acquire beneficial ownership at any
time within 60 days after August 1, 1997. As used herein, "voting power" is the
power to vote or direct the voting of shares, and "investment power" includes
the power to dispose or direct the disposition of such shares.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT
- -------------------- ---------------------------------- -------------------- -------
<S> <C> <C> <C>
Common Stock Employee Stock Ownership Plan of 560,740(1) 8.2%
Home Bancorp of Elgin, Inc.
16 North Spring Street
Elgin, Illinois 60120
Common Stock Janus Capital Corporation 486,825(2) 7.1%
100 Fillmore Street
Denver, Colorado 80206
Common Stock Brandes Investment Partners, L.P. 378,321(3) 5.5%
San Diego, California
</TABLE>
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(1) The Employee Stock Ownership Plan ("ESOP") is administered by a committee
of the Company's Board of Directors (the "ESOP Committee"). The ESOP's
assets are held in a trust (the "ESOP Trust"), for which Harris Bank
Barrington, N.A., serves as trustee (the "ESOP Trustee"). The ESOP Trustee
is the beneficial owner of the shares held in the ESOP Trust. The ESOP
Trust purchased these shares with funds borrowed from the Company in the
Conversion. Shares purchased by the ESOP Trust are held in a suspense
account for release and allocation to participants' accounts in annual
installments. The terms of the ESOP Trust Agreement provide that, subject
to the ESOP Trustee's fiduciary responsibilities under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), the ESOP
Trustee will vote, tender or exchange shares of Common Stock held in the
ESOP Trust as directed by the ESOP Committee. The ESOP Committee must
generally direct the vote, tender or exchange of shares of Common Stock
allocated to participants' accounts in accordance with instructions
received from the participants. As of August 1, 1997, 14,019 shares of
Common Stock held by the ESOP Trust have been allocated to the accounts of
eligible ESOP participants. The ESOP Committee must generally direct the
vote of allocated shares as to which no instructions are received and any
shares that have not been allocated to participants' accounts in the same
proportion as allocated shares with respect to which the ESOP Committee
receives instructions are voted. The ESOP Committee must generally direct
the vote, tender or exchange of any shares in the suspense account or that
otherwise have not been allocated to participants' accounts in the same
proportion as allocated shares with respect to which the ESOP Committee
receives instructions are tendered or exchanged. With respect to allocated
shares as to which no instructions are received, the ESOP Committee will be
deemed to have received instructions not to tender or exchange such shares.
Except as described above, the ESOP Committee of the Company's Board of
Directors has sole investment power, but no voting power, over the Common
Stock held in the ESOP Trust.
(2) Based on information in a Schedule 13G, dated February 10, 1997, the Janus
Capital Corporation ("Janus Capital") is a registered investment adviser
which furnishes investment advice to several investment companies
registered under Section 8 of the Investment Company Act of 1940 and
individual and institutional clients (collectively referred to herein as
"Managed Portfolios"). As a result of its role as investment adviser to the
Managed Portfolios, Janus Capital may be deemed to be the beneficial owner
of the shares of Common Stock held by the Managed Portfolios. Thomas H.
Bailey owns approximately 12.2% of Janus Capital and is the President and
Chairman of the Board of Directors of Janus Capital. Mr. Bailey, as the
controlling person of Janus Capital, may be deemed to have beneficial
ownership of the shares of Common Stock beneficially owned or deemed to be
beneficially owned by Janus Capital.
(3) Based on information in a Schedule 13G, dated February 13, 1997, Brandes
Investment Partners, L.P. is an investment adviser registered under Section
203 of the Investment Advisers Act of 1940 and is deemed to be the
beneficial owner of these shares of Common Stock.
3
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information with respect to the shares
of Common Stock beneficially owned by each director of the Company, by each
named executive officer of the Company identified in the Summary Compensation
Table included elsewhere herein and all directors and executive officers of the
Company as a group, as of August 1, 1997. Except as otherwise indicated, each
person and each group shown in the table has sole voting and investment power
with respect to the shares of Common Stock indicated.
<TABLE>
<CAPTION>
AMOUNT AND PERCENT OF
NATURE COMMON
POSITION WITH OF BENEFICIAL STOCK
NAME THE COMPANY(1) OWNERSHIP(2)(3) OUTSTANDING
- ------------------------------------ ----------------------------------- ------------------------- ---------------
<S> <C> <C> <C>
George L. Perucco................... Director, President and Chief
Executive Officer 91,352(4) 1.3%
Lyle N. Dolan....................... Director, Executive Vice President
and Treasurer 52,896(4) *
Orval M. Graening................... Director 24,018(5)(6) *
Thomas S. Rakow..................... Director 77,318(5)(7) 1.1%
Henry R. Hines...................... Director 24,018(5) *
Donald E. Laird..................... Director 17,058(5)(8) *
Leigh C. O'Connor................... Director 17,518(5) *
Richard S. Scheflow................. Director 17,018(5) *
Kenneth L. Moran.................... Senior Vice President and Chief
Lending Officer 36,313(4) *
All directors and executive
officers as a group (13 persons)....................................... 492,381(4)(5) 7.2%
</TABLE>
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* Less than one percent.
(1) Titles are for both the Company and the Association.
(2) See "Principal Stockholders of the Company" for the definition of
"beneficial ownership."
(3) The figures shown above include the restricted share awards made to
Messrs. Perucco, Dolan and Moran under the RRP in the amounts of
70,092, 42,055, and 28,037 shares of Common Stock, respectively, and
the restricted share awards made to four other executive officers under
the RRP in the aggregate amount of 56,072 shares of Common Stock, whose
beneficial ownership of Common Stock has been included in the total
shown above for all directors and officers of the Company as a group.
The figures shown above also include the restricted share awards of
14,018 shares of Common Stock made to each of Messrs. Graening, Rakow,
Hines, Laird, O'Connor and Scheflow under the RRP. Each recipient of an
RRP restricted share award has sole voting power, but no investment
power, over the shares of Common Stock covered by the award.
(4) The figures shown above include the shares of Common Stock held in the
ESOP Trust that have been allocated to individual accounts as follows:
Mr. Perucco, 1,260 shares; Mr. Dolan, 841 shares; Mr. Moran, 676
shares; and all directors and executive officers as a group, 4,465
shares of Common Stock. Such persons have voting power (subject to the
legal duties of the ESOP Trustee) but no investment power, except in
limited circumstances, over such shares.
(5) The figures shown above do not include the 546,721 shares held by the
ESOP Trust that have not been allocated to participants' accounts with
respect to which members of the Board of Directors who serve on the
ESOP Committee may be deemed to have sole investment power but no
voting power. Each such person disclaims beneficial ownership of such
shares.
(6) All of these shares are held by a trust for Mr. Graening.
(7) Mr. Rakow owns 12,500 shares in his own name, and his spouse owns
20,000 shares in her own name. Rakow Enterprises, Inc., a corporation
controlled by Mr. Rakow, owns 12,500 shares, and 18,300 shares are held
for the benefit of Mr. Rakow by the 401(k) Plan established by this
corporation. This total also includes 5,000 shares owned by the IHC
Group Foundation. Mr. Rakow is a Trustee of this Foundation and may be
deemed to have beneficial ownership of these shares since he may
exercise voting and investment power over these shares in his capacity
as a Trustee. Mr. Rakow disclaims beneficial ownership of these 5,000
shares.
(8) Ownership of 1,500 shares is held by a Trust established by Mr. Laird
under which his spouse is the designated beneficiary, and ownership of
1,500 shares is held by a Trust established by Mr. Laird's spouse under
which Mr. Laird is the designated beneficiary. Mr. Laird's spouse owns
40 shares in her own name.
4
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS' COMPENSATION
FEE ARRANGEMENTS. Currently, each director of the Association, other
than Messrs. Perucco and Dolan, receives an annual retainer of $26,460 for
attendance at board meetings. The aggregate amount of fees paid to such
directors by the Association for the year ended December 31, 1996 was $158,760.
No additional fees are paid for attendance at board committee meetings.
Directors of the Company are not separately compensated for their services as
such. Directors are also eligible to receive options and awards pursuant to the
Company's Option Plan and RRP, and such grants have been made. For complete
descriptions of the Option Plan and the RRP, see "Proposal 1" and "Proposal 2."
EXECUTIVE COMPENSATION
CASH COMPENSATION. The following table sets forth the cash compensation
paid by the Association for services rendered in all capacities during the
fiscal years ended December 31, 1996 and December 31, 1995, to the Chief
Executive Officer and all executive officers of the Association who received
aggregate salary and bonus in excess of $100,000 (the "Named Executive
Officers").
<TABLE>
SUMMARY COMPENSATION TABLE(1)
<CAPTION>
LONG TERM COMPENSATION
-------------------------------------------------
ANNUAL COMPENSATION (2) AWARDS PAYOUTS
-------------------------------------- ---------------------- -------------------------
OTHER RESTRICTED
ANNUAL STOCK LTIP ALL OTHER
NAME AND PRINCIPAL COMPENSATION AWARDS OPTIONS PAYOUTS COMPENSATION
POSITIONS YEAR SALARY($) BONUS($) ($)(3) ($)(4) (#)(4) ($)(4) ($)(5)
- --------------------------------- ---- --------- -------- --------------- ------------ -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
George L. Perucco, President and
Chief Executive Officer....... 1996 $214,655 -- $4,104 -- -- -- $17,613
1995 $204,433 -- $2,884 -- -- -- $ 734
Lyle N. Dolan, Executive Vice
President and Treasurer....... 1996 $134,753 -- $4,682 -- -- -- $12,872
1995 $128,336 -- $4,635 -- -- -- $ 1,430
Kenneth L. Moran, Senior Vice
President and Chief Lending
Officer....................... 1996 $109,242 -- $3,547 -- -- -- $10,340
1995 $104,040 -- $3,625 -- -- -- $ 1,145
</TABLE>
- --------------------------------------------
(1) No information is provided for 1994, because neither the Company nor
the Association was subject to the reporting requirements of the
Exchange Act for such year, and such information has not otherwise been
included in filings made under the federal securities laws.
(2) Under Annual Compensation, the column titled "Salary" includes base
salary, directors' fees and payroll deductions for health insurance
under the Association's health insurance plan.
(3) Represents amounts reimbursed for the payment of taxes. For 1995 and
1996, there were no: (a) perquisites with an aggregate value for any
named individual in excess of the lesser of $50,000 or 10% of the total
of the individual's 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; or (d) preferential discounts on stock.
(4) During the fiscal years ended December 31, 1995 and 1996, neither the
Association nor the Company maintained any restricted stock, stock
options or other long-term incentive plans.
(5) Includes the dollar value of premiums, if any, paid by the Association
with respect to term life insurance (other than group term insurance
coverage under a plan available to substantially all salaried
employees) for the benefit of the Named Executive Officer and the value
of shares of Common Stock allocated to these Executives as of December
31, 1996 under the ESOP on a value per share of $13.50, which was the
closing sales price for Common Stock on The Nasdaq Stock Market
National Market System on December 31, 1996.
5
<PAGE>
EMPLOYMENT AGREEMENTS
Effective upon the Conversion, the Company and the Association have
authorized the execution of Employment Agreements with each of Messrs. Perucco,
Dolan and Moran (the "Senior Executives"). These Employment Agreements establish
the respective duties and compensation of the Senior Executives and are intended
to ensure that the Association and the Company will be able to maintain a stable
and competent management base after the Conversion. The continued success of the
Association and the Company depends to a significant degree on the skills and
competence of the Senior Executives.
The Employment Agreements provide for a three-year term for Mr. Perucco
and two-year terms for Messrs. Dolan and Moran. The Association's Employment
Agreements provide that, commencing on the first anniversary date and continuing
each anniversary date thereafter, the Board of Directors may, with the Senior
Executive's concurrence, extend its Employment Agreements for an additional
year, so that the remaining terms shall be three years, after conducting a
performance evaluation of the Senior Executive. The Company's Employment
Agreements provide for automatic daily extensions such that the remaining terms
of the Employment Agreements shall be three years unless written notice of
non-renewal is given by the Board of Directors or the Senior Executive. The
Employment Agreements provide that the Senior Executive's base salary will be
reviewed annually. It is anticipated that this review will be performed by
non-employee members of the Board, and the Senior Executive's base salary may be
increased on the basis of his job performance and the overall performance of the
Association. The base salaries for Messrs. Perucco, Dolan and Moran as of
January 1, 1996 were $214,655, $134,753 and $109,242, respectively. In addition
to the base salary, the Employment Agreements provide for, among other things,
entitlement to participation in stock, retirement and welfare benefit plans and
eligibility for fringe benefits applicable to executive personnel such as a
company car and fees for club and organization memberships deemed appropriate by
the Association or Company and the Senior Executive. The Employment Agreements
provide for termination by the Association or the Company at any time for cause
as defined in the Employment Agreements.
In the event of the termination of the Senior Executives' due to death
or disability, or in the event the Association or the Company chooses to
terminate the Senior Executive's employment for reasons other than for cause, or
in the event of the Senior Executive's resignation from the Association and the
Company for certain reasons specified in the Employment Agreements, the Senior
Executive or, in the event of death, his beneficiary would be entitled to a lump
sum cash payment in an amount equal to the present value of the remaining base
salary and bonus payments due to the Senior Executive and the additional
contributions or benefits that would have been earned under any employee benefit
plans of the Association or the Company during the remaining terms of the
Employment Agreements and payments that would have been made under any incentive
compensation plan during the remaining terms of the Employment Agreements. The
Association and the Company would also continue the Senior Executive's life,
health and disability insurance coverage for the remaining terms of the
Employment Agreements. Reasons specified as grounds for resignation for purposes
of the Employment Agreements are: failure to elect or re-elect the Senior
Executive to his offices; failure to vest in him the functions, duties or
authority associated with such offices; any material breach of contract by the
Association or the Company which is not cured within 30 days after written
notice thereof; and, following a Change of Control (as defined in the Employment
Agreements), include demotion, loss of title, office or significant authority or
responsibility, any reduction in any element of compensation or benefits, any
adverse change on location of the principal place of employment or working
conditions or resignation for any other reason. In general, for purposes of the
Employment Agreements and the plans maintained by the Company or the
Association, a "change of control" will generally be deemed to occur when a
person or group of persons acting in concert acquires beneficial ownership of
25% or more of any class of equity security of the Company or the Association,
upon stockholder approval of a merger or consolidation or a change of the
majority of the Board of Directors of the Company or the Association, or
liquidation or sale of substantially all the assets of the Company or the
Association.
6
<PAGE>
Payments to the Senior Executives under the Association's Employment
Agreements will be guaranteed by the Company in the event that payments or
benefits are not paid by the Association. Payment under the Company's Employment
Agreements would be made by the Company. To the extent that payments under the
Company's Employment Agreements and the Association's Employment Agreements are
duplicative, payments due under the Company's Employment Agreements would be
offset by amounts actually paid by the Association. Senior Executives would be
entitled to reimbursement of certain costs incurred in interpreting or enforcing
the Employment Agreements.
Cash and benefits paid to a Senior Executive under the Employment
Agreements together with payments under other benefit plans following a "change
of control" of the Association or the Company may constitute an "excess
parachute" payment under Section 280G of the Code, resulting in the imposition
of a 20% excise tax on the recipient and the denial of the deduction for such
excess amounts to the Company and the Association. The Company's Employment
Agreements include a provision indemnifying each Senior Executive on an
after-tax basis for any "golden parachute" excise taxes.
EMPLOYEE RETENTION AGREEMENTS
The Association and the Company have authorized execution of Employee
Retention Agreements with the following four executive officers: Mr. Towe, Mr.
Bandemer, Ms. Schroeder and Ms. Lenart ("Contract Employee" or "Contract
Employees"). The purpose of the Retention Agreements is to secure the Contract
Employees' continued availability and attention to the Association's affairs,
relieved of distractions arising from the possibility of a corporate change of
control. The Retention Agreements do not impose an immediate obligation on the
Association to continue the Contract Employees' employment but provide for a
period of assured employment ("Assurance Period") following a change of control
of the Association or Company. The Retention Agreements provide for an initial
Assurance Period of one year commencing on the date of a change of control,
subject to extension.
If, upon a change of control, or within 12 months of, and in connection
with, a change of control, a Contract Employee is discharged without "cause" (as
defined in the Retention Agreements) or he voluntarily resigns within one year
following a material adverse change in his position, duties, salary or due to a
material breach of the Agreement by the Association or Company, the Contract
Employee (or, in the event of his death, his estate) would be entitled to a lump
sum cash payment equal to the present value of the remaining base salary and
bonus payments due during the Assurance Period plus any additional contributions
and benefits that the Contract Employee would have earned under the Association
or Company's employee benefit plans during the Assurance Period. Each Contract
Employee's life, health, and disability coverage would also be continued during
the Assurance Period. The total amount of termination benefits payable to each
Contract Employee under the Retention Agreements is limited to three times the
Contract Employee's average total compensation for the prior five calendar
years, and is subject to further reduction if necessary to avoid the
characterization of such payments as excess parachute payments for purposes 280G
of the Code. Payments to the Contract Employees under their respective Retention
Agreements will be guaranteed by the Company to the extent that the required
payments are not made by the Association.
7
<PAGE>
BENEFITS
PENSION PLAN. During 1996, the Association maintained a
non-contributory, tax-qualified defined benefit pension plan (the "Pension
Plan") for eligible employees. All employees, except leased employees, who had
attained age 21 and completed one year of service were eligible to participate
in the Pension Plan. The Pension Plan provided for a benefit for each
participant, including executive officers named in the Summary Compensation
Table above. The benefit is equal to the sum of (a) a participant's accrued
benefit as of March 31, 1989 adjusted for final average compensation determined
after March 31, 1989, plus (2) 1.9% times final average compensation multiplied
by benefit service earned after March 31, 1989, plus (3) 0.5936% times final
average compensation in excess of covered compensation multiplied by benefit
service after March 31, 1989. Benefit service after March 31, 1989 was limited
to a maximum of 25 years and all benefit service is limited to a maximum of 35
years. Final average compensation was one-twelfth of the highest average of a
participant's compensation during five (5) consecutive calendar years of
employment out the last ten (10) calendar years of employment. The Pension Plan
is funded by the Association on an actuarial basis and all assets are held in
trust by the Pension Plan trustee.
The Association terminated this Pension Plan during 1996, with the
effect that all accrued benefits of all affected employees became 100% vested
and no additional benefit may be accrued. Provision has been made for the
settlement of all of the Pension Plan's benefit liabilities through the purchase
of insurance company annuities or the payment of lump sum settlements.
The following table illustrates the annual benefit payable upon normal
retirement at age 65 in the normal form of benefit under the Pension Plan (a
10-year certain and life annuity) at various levels of compensation and years of
service under the Pension Plan.
<TABLE>
<CAPTION>
YEARS OF SERVICE AT RETIREMENT
-----------------------------------------------------------------------------------------
REMUNERATION
15 20 25 30 35
---------------- ---------------- ----------------- ----------------- -----------------
<C> <C> <C> <C> <C> <C>
$ 125,000 $ 54,940 $ 62,155 $ 66,514 $ 69,329 $ 71,285
150,000(1) 66,788 75,726 81,119 84,623 87,072
175,000(1) 66,788 75,726 81,119 84,623 87,072
200,000(1) 66,788 75,726 81,119 84,623 87,072
225,000(1) 66,788 75,726 81,119 84,623 87,072
250,000(1) 66,788 75,726 81,119 84,623 87,072
</TABLE>
- --------------------------------------------
(1) For the Pension Plan year ending March 31, 1996, the compensation for
calculating benefits could not exceed $150,000 (as adjusted for
subsequent years pursuant to Code provisions). No supplemental plan was
in effect.
The following table sets forth the years of credited service and the
Average Annual Earnings (as defined above) determined as of the Pension Plan
year ended as of March 31, 1996, for each of the individuals named in the
Summary Compensation Table. The Average Annual Earnings includes the salary and
bonus columns of the Summary Compensation Table.
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE
-------------------------
YEARS MONTHS AVERAGE ANNUAL EARNINGS
----- ------ -----------------------
<S> <C> <C> <C>
Mr. Perucco 33 6 $150,000
Mr. Dolan 25 0 128,000
Mr. Moran 25 0 105,000
</TABLE>
8
<PAGE>
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST. The Company has established,
and the Association and the Company have adopted for the benefit of eligible
employees, an ESOP and related trust. Substantially all employees of the
Association or the Company who have attained age 21 and have completed one year
of service may be eligible to become participants in the ESOP. The ESOP
purchased eight percent (8%) of the Common Stock issued in the Conversion with
funds borrowed from the Company. Although contributions to the ESOP will be
discretionary, the Company or the Association intends to make annual
contributions to the ESOP in an aggregate amount at least equal to the principal
and interest requirement on the debt. This loan is for a term of 10 years, bears
interest at the rate of 8% per annum and calls for level annual payments of
principal and interest designed to amortize the loan over its term. The loan
also permits optional pre-payment. The Company and the Association may make
additional annual contributions to the ESOP to the maximum extent deductible for
federal income purposes.
Shares purchased by the ESOP have been pledged as collateral for the
loan, and will be held in a suspense account until released for allocation among
participants in the ESOP as the loan is repaid. The pledged shares will be
released annually from the suspense account in an amount proportional to the
repayment of the ESOP loan for each plan year. The released shares will be
allocated among the accounts of participants on the basis of the participant's
compensation for the year of allocation. Effective, as of August 1, 1997, 14,019
shares of Common Stock held by the ESOP Trust have been released from the
suspense account and allocated to eligible ESOP participants. Benefits generally
become vested at the rate of 10% per year for the first two years of service and
20% per year for the next three years, with 100% vesting after five years of
service. Participants also become immediately vested upon termination of
employment due to death, retirement at age 65 or older, permanent disability or
upon the occurrence of a change of control. Forfeitures will be reallocated
among remaining participating employees, in the same proportion as
contributions. Vested benefits may be paid in a single sum or installment
payments and are payable upon death, retirement at age 65 or older, disability
or separation from service.
In connection with the establishment of the ESOP, the ESOP Committee, a
committee of the Company's Board of Directors, was appointed to administer the
ESOP. Harris Bank Barrington, N.A. has been appointed as the ESOP Trustee. The
ESOP Committee may instruct the trustee regarding investment of funds
contributed to the ESOP and the voting of shares held in the ESOP Trust. The
ESOP Trustee, subject to its fiduciary duty, must vote all allocated shares held
in the ESOP in accordance with the instructions of the participating employees.
Under the ESOP, unallocated shares will be voted in a manner calculated to most
accurately reflect the instructions it has received from participants regarding
the allocated stock as long as such vote is in accordance with the provisions of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
OPTION PLAN AND RRP. The Option Plan and the RRP were adopted by the
Board of Directors of the Company and approved by the stockholders of the
Company at the 1997 Annual Meeting. The purpose of these Plans is to promote the
growth of the Company, the Association and other affiliates of the Company by
linking the incentive compensation of officers, key executives and directors
with the profitability of the Company. Options are granted to eligible officers
and executives in such amounts and on such terms as may be determined by the
Committee appointed to administer the Option Plan, in its discretion. Options
are awarded to eligible directors of the Company and the Association in
accordance with the terms of the Option Plan. Restricted stock awards are
awarded under the RRP on a discretionary basis to eligible officers and
executives and are awarded to directors pursuant to the terms of the RRP. Option
grants and restricted stock awards generally vest at the rate of 20% per year
over a five-year period, with accelerated vesting to occur upon the grantee's
death or disability. Under proposed amendments to the Option Plan and RRP,
vesting will also be accelerated upon the "retirement" of an option holder or
award recipient or upon the "change in control" of the Company, as such terms
are defined in the Plans.
For complete descriptions of the Option Plan and the RRP and the
proposed amendments to these Plans, see "Proposal 1" and "Proposal 2."
9
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Hines, Graening, Laird,
O'Connor, Rakow and Scheflow. Mr. Rakow, a director of the Company, is also the
President of IHC Group, Inc., a general construction firm which performed site
utility work on the construction of the Association's South Elgin branch during
the 1996 fiscal year. Upon completion of this work, the Association paid a total
of $74,430 in fees to IHC Group, Inc. Mr. Scheflow, a director of the Company,
is also a partner in the law firm of Scheflow, Rydell, Travis & Scheflow. During
the 1996 fiscal year, this law firm provided legal representation to the
Association on corporate matters and in foreclosure proceedings. The Association
paid Scheflow, Rydell, Travis & Scheflow a total of $35,190 for legal work
performed during the 1996 fiscal year. There are no other interlocks, as defined
under the rules and regulations of the SEC, between members of the Compensation
Committee or executive officers of the Company and corporations with respect to
which such persons are affiliated, or otherwise.
-----------------------------------------------------------------
PROPOSAL 1
APPROVAL OF AMENDMENTS TO THE
HOME BANCORP OF ELGIN, INC.
1997 STOCK OPTION PLAN
-----------------------------------------------------------------
GENERAL PLAN INFORMATION
The Company adopted the Home Bancorp of Elgin, Inc. 1997 Stock Option
Plan (the "Option Plan") on January 16, 1997, subject to approval by its
stockholders, and the stockholders approved the Option Plan on April 17, 1997
(the "Effective Date"). The Option Plan provides for the grant of options to
purchase Common Stock of the Company ("Options") to certain officers, employees
and directors of the Company, the Association or any affiliate approved by the
Board of Directors. The Option Plan is not subject to ERISA and is not a
tax-qualified plan under the Code. Pursuant to regulations of the Office of the
Thrift Supervision (the "OTS") applicable to stock option plans established or
implemented within one year following the completion of a mutual-to-stock
conversion, the Option Plan contains certain restrictions and limitations,
including among others: provisions requiring the vesting of options granted to
occur no more rapidly than ratably over a five year period; and the resultant
prohibition against accelerated vesting of option grants upon retirement of the
optionee or the occurrence of a "change in control" (as defined in the Option
Plan) of the Company. In addition, OTS ruling positions may restrict the
Company's ability to provide for, and implement, anti-dilutive provisions in the
Option Plan that would apply in the event that an extraordinary dividend,
including a non-taxable return of capital, is to be paid to stockholders.
OTS ruling positions permit the elimination of the provisions of the
Option Plan which reflect the restrictions and limitations described above,
provided that stockholder approval therefor is obtained more than one year
following the completion of the mutual-to-stock conversion. The Board of
Directors has adopted amendments to the Option Plan, subject to approval by
stockholders of the Company, for the purpose of eliminating such restrictions
and limitations (these changes to the Option Plan are collectively referred to
herein as the "Amendments"). The Amendments do not increase the number of shares
reserved for issuance under the Option Plan, decrease the price per share at
which Options may be granted under the Option Plan or alter the classes of
individuals eligible to participate in the Option Plan. In the event that the
Amendments are not approved by stockholders at the Special Meeting, the
Amendments will not take effect, but the Option Plan will remain in effect. The
principal provisions of the Option Plan, as it would be amended by the
Amendments, are
10
<PAGE>
summarized below. The full text of the Amendments is set forth as Appendix A to
this Proxy Statement, to which reference is made, and the summary of the
Amendments provided below is qualified in its entirety by such reference.
PURPOSE OF THE OPTION PLAN
The purpose of the Option Plan is to promote the growth and
profitability of the Company and the Association, to provide certain key
officers, employees and directors of the Company and its affiliates with an
incentive to achieve corporate objectives, to attract and retain individuals of
outstanding competence and to provide such individuals with an equity interest
in the Company.
DESCRIPTION OF THE OPTION PLAN
ADMINISTRATION. The members of the Compensation Committee who are
"disinterested directors" (the "Option Committee") administer the Option Plan
and determine, within the limitations of the Option Plan, the officers and
employees to whom Options will be granted, the number of shares subject to each
Option, the terms of such Options (including provisions regarding exercisability
and acceleration of exercisability) and the procedures by which the Options may
be exercised. Options granted to non-employee or "outside" directors under the
Option Plan are by automatic formula grant, and the Option Committee has no
discretion over the material terms of such grants. Subject to certain specific
limitations and restrictions set forth in the Option Plan, the Option Committee
has full and final authority to interpret the Option Plan, to prescribe, amend
and rescind rules and regulations, if any, relating to the Option Plan and to
make all determinations necessary or advisable for the administration of the
Option Plan. The costs and expenses of administering the Option Plan are borne
by the Company.
STOCK SUBJECT TO THE OPTION PLAN. The Company has reserved 700,925
shares of Common Stock ("Option Shares") for issuance upon the exercise of
Options. These Option Shares may be authorized and unissued shares or shares
previously issued and reacquired by the Company. Any Option Shares subject to
grants under the Option Plan which expire or are terminated, forfeited or
cancelled without having been exercised or vested in full, shall again be
available for purposes of the Option Plan. As of August 15, 1997, the aggregate
fair market value of the Option Shares reserved for issuance was $12,266,188,
based on the closing sales price per share of Common Stock of $17.50 on The
Nasdaq Stock Market on such Record Date.
ELIGIBILITY. Any employee of the Company, the Association or any
affiliate approved by the Board who is selected by the Option Committee is
eligible to participate in the Option Plan as an "Eligible Individual." As of
the Record Date, there were 7 Eligible Individuals. Members of the Board or of
the Board of Directors of the Association or any affiliate approved by the Board
who are not employees or officers of the Company or the Association or any
affiliate are eligible to participate as an "Eligible Director." As of the
Record Date, there were 6 Eligible Directors.
TERMS AND CONDITIONS OF OPTIONS GRANTED TO OFFICERS AND EMPLOYEES. The
Option Plan provides for the grant of options which qualify for favorable
federal income tax treatment as "incentive stock options" ("ISOs") and
non-qualified stock options which do not so qualify ("NQSOs"). ISOs are subject
to certain restrictions under the Code. A maximum of 490,647 shares may be
issued to all officers and employees in the aggregate, and a maximum of 175,236
shares may be issued to any officer or employee individually, upon exercise of
Options. See, "New Plan Benefits - Home Bancorp of Elgin, Inc. Stock Benefit
Plans" for information on Options granted under this Plan. Unless otherwise
designated by the Option Committee, Options granted under the Option Plan will
be NQSOs, will be exercisable at a price per share equal to the fair market
value of a share of Common Stock on the date of the Option grant and will be
exercisable for a period of ten years after the date of grant (or for a shorter
period ending three months after the option holder's termination of employment
for reasons other than death, disability or retirement or discharge for cause,
one year after termination of employment due to death, disability or retirement,
or immediately upon termination for cause).
11
<PAGE>
In no event may an Option be granted with an exercise price per share that is
less than fair market value of a share of Common Stock when the Option is
granted. An option holder's right to exercise Options is suspended during any
period when the option holder is the subject of a pending proceeding to
terminate his or her employment for cause. If the Option expires during such
suspension, the Company will, upon the employee's reinstatement, pay damages
equal to the value of the expired Options less the exercise price.
Upon the exercise of an Option, the Exercise Price must be paid in
full. Payment may be made in cash or in such other consideration as the Option
Committee deems appropriate, including, but not limited to, Common Stock already
owned by the option holder or Option Shares to be acquired by the option holder
upon exercise of the Option. Options may be transferred prior to exercise only
to certain family members, certain non-profit organizations, and upon the death
of the option holder.
Currently, the Option Plan requires that Options granted to Eligible
Individuals become exercisable no more rapidly than ratably over a five year
period (with acceleration only upon death or disability) and would prohibit the
accelerated vesting of Options upon retirement or a "change in control" (as such
terms are defined in the Option Plan). As permitted by OTS ruling positions, the
Amendments would eliminate these requirements, both with respect to outstanding
Options and any Options that may be granted in the future. Pursuant to the
Option Plan, as amended by the Amendments, upon a "change in control" or
retirement of an Eligible Individual, all Options granted to such Individual
that are outstanding as of the date of such Individual's retirement or a "change
in control" will automatically become fully vested and exercisable. The amended
Option Plan also permits the Committee to establish a vesting schedule that is
either more or less favorable than the five year vesting schedule to be
applicable to an Option granted to an Eligible Individual under the Option Plan.
TERMS AND CONDITIONS OF OPTIONS GRANTED TO OUTSIDE DIRECTORS. On the
Option Plan's Effective Date, each person who was an Eligible Director on such
date was granted a NQSO to purchase 35,046 Option Shares. See, "New Plan
Benefits - Home Bancorp of Elgin, Inc. Stock Benefit Plans" for more information
on these grants. These Options were granted to Eligible Directors with an
Exercise Price of $14.8125, which was equal to the fair market value of a share
of Common Stock on the date of grant. These Options also have an Exercise Period
commencing on the date of the grant and expiring on the earliest of (i) the date
the Eligible Director ceases to be an Eligible Director due to a removal for
cause (in accordance with the bylaws of the Association or the Company or other
affiliate, as applicable) and (ii) the last day of the ten-year period
commencing on the date the Option was granted. Each Option granted to an
Eligible Director will become exercisable with respect to 20% of the Option
Shares as to which his outstanding Option has been granted commencing effective
April 17, 1998 and continuing at a rate of 20% on each anniversary date
occurring thereafter. All Option Shares not previously purchased or available
for purchase will become available for purchase on the date of the option
holder's death or disability as defined in the Option Plan. A maximum of 210,276
shares may be issued to all Eligible Directors in the aggregate upon exercise of
Options.
The Options granted to directors under the Option Plan are NQSOs. Upon
the exercise of an Option, the Exercise Price is required to be paid in full.
Payment may be made in cash or in such other consideration as the Option
Committee deems appropriate, including, but not limited to, Common Stock already
owned by the option holder or Option Shares to be acquired by the option holder
upon exercise of the Option.
Currently, the Option Plan requires that Options granted to Eligible
Directors become exercisable no more rapidly than ratably over a five year
period (with accelerated vesting triggered only upon a Director's death or
disability) and would prohibit the accelerated vesting of Options upon
retirement or a "change in control" (as such terms are defined in the Option
Plan). As permitted by OTS ruling positions, the Amendments would eliminate
these requirements, both with respect to outstanding Options and any Options
that may be granted in future. Pursuant to the Option Plan, as amended by the
Amendments, upon a "change in control" or retirement of an Eligible Director,
all Options granted to such Director that are outstanding as of the date of such
Director's retirement or a "change in control" will automatically become fully
vested and exercisable.
12
<PAGE>
MERGERS AND REORGANIZATIONS; ADJUSTMENTS FOR EXTRAORDINARY DIVIDENDS.
The number of shares available under the Option Plan and the outstanding options
will be adjusted to reflect any merger, consolidation or business reorganization
in which the Company is the surviving entity, and to reflect any stock split,
stock dividend or other event generally affecting the number of shares. If a
merger, consolidation or other business reorganization occurs and the Company is
not the surviving entity, outstanding Options may be canceled upon 30 days'
written notice to the option holder so long as the option holder receives
payment determined by the Board to be the equivalent value of the canceled
Options. Pursuant to the Option Plan, as amended by the Amendments, the Company
will make a cash payment to option holders or will adjust the exercise price of
outstanding Options to equitably reflect any extraordinary non-stock dividend
that may be paid which results in a non-taxable return of capital. No
representation is made that any such dividend will be declared or paid.
TERMINATION OR AMENDMENT OF THE OPTION PLAN
Unless sooner terminated, the Option Plan will terminate automatically
on the day preceding the tenth anniversary of the Option Plan's Effective Date.
The Board may suspend or terminate the Option Plan in whole or in part at any
time prior to the tenth anniversary of the Option Plan's Effective Date by
giving written notice of such suspension or termination to the Option Committee.
In the event of any suspension or termination of the Option Plan, all Options
theretofore granted under the Option Plan that are outstanding on the date of
such suspension or termination of the Option Plan will remain outstanding under
the terms of the agreements granting such Options.
The Board may amend or revise the Option Plan in whole or in part at
any time, but if the amendment or revision amends a material term of the Option
Plan, such amendment or revision will be subject to approval by the stockholders
of the Company to the extent required to comply with Section 162(m) of the Code.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion is intended only as a summary and does not
purport to be a comprehensive description of the federal tax laws, regulations
and policies affecting the Company and recipients of ISOs and NQSOs that may be
granted under the Option Plan. Any change in applicable law or regulation or in
the policies of various taxing authorities may have a material effect on the
discussion contained herein.
There are no federal income tax consequences for the Company or the
option holder at the time an ISO is granted or upon the exercise of an ISO. If
there is no sale or other disposition of the shares acquired upon the exercise
of an ISO within two years after the date the ISO was granted, or within one
year after the exercise of the ISO, then at no time will any amount be
deductible by the Company with respect to the ISO. If the option holder
exercises an ISO and sells or otherwise disposes of the shares so acquired after
satisfying the foregoing holding period requirements, then he will realize a
capital gain or loss on the sale or disposition. If the option holder exercises
his ISO and sells or disposes of his shares prior to satisfying the foregoing
holding period requirements, then an amount equal to the difference between the
amount realized upon the sale or other disposition of such shares and the price
paid for such shares upon the exercise of the ISO will be includible in the
ordinary income of such person, and such amount will ordinarily be deductible by
the Company at the time it is includible in such person's income.
With respect to the grant of NQSOs, there are no federal income tax
consequences for the Company or the option holder at the date of the grant. Upon
the exercise of a NQSO, an amount equal to the difference between the fair
market value of the shares to be purchased on the date of exercise and the
aggregate purchase price of such shares is generally includible in the ordinary
income of the person exercising such NQSO, although such inclusion may be at a
later date in the case of an option holder whose disposition of such shares
could result in liability under Section 16(b) of the Exchange Act. The Company
will ordinarily be entitled to a deduction for federal income tax purposes at
the time the option holder is taxed on the exercise of the NQSO equal to the
amount which the option holder is required to include as ordinary income.
Section 162(m) of the
13
<PAGE>
Code limits the Company's deductions of compensation in excess of $1,000,000 per
year for the chief executive officer and the four other most highly paid
executives named in its proxy statement, but provides for certain exceptions for
performance based compensation. The Company intends the Option Plan to comply
with the requirements for an exception to Section 162(m) applicable to stock
option plans so that the Company's deduction for compensation related to the
exercise of stock options would not be subject to the $1,000,000 limitation. No
executive of the Company currently receives compensation that would be rendered
nondeductible by this limitation.
The foregoing statements are intended to summarize the general
principles of current federal income tax law applicable to Options that may be
granted under the Option Plan. State and local tax consequences may also be
significant.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" APPROVAL OF THE AMENDMENTS TO THE HOME BANCORP OF ELGIN, INC.
1997 STOCK OPTION PLAN.
-----------------------------------------------------------------
PROPOSAL 2
APPROVAL OF AMENDMENTS TO THE
HOME BANCORP OF ELGIN, INC.
1997 RECOGNITION AND RETENTION PLAN
-----------------------------------------------------------------
GENERAL PLAN INFORMATION
The Company adopted the Home Bancorp of Elgin, Inc. 1997 Recognition
and Retention Plan (the "RRP") on January 16, 1997, subject to the approval by
stockholders of the Company, and the stockholders approved the RRP on April 17,
1997 (the "Effective Date"). The RRP provides for restricted stock awards
("Awards") to be made to certain officers, employees and directors of the
Company, the Association or any affiliate approved by the Board. The RRP is not
subject to ERISA and is not a tax-qualified plan under the Code. Pursuant to
regulations of the OTS applicable to stock benefit plans established or
implemented within one year following the completion of a mutual-to-stock
conversion, the RRP contains certain restrictions and limitations, including
among others: provisions requiring the vesting of restricted stock awards to
occur no more rapidly than ratably over a five year period; the resultant
prohibition against accelerated vesting of restricted stock awards upon
retirement or the occurrence of a "change in control" (as defined in the RRP) of
the Company; and a prohibition against the distribution of cash dividends to a
participant prior to the vesting of the underlying stock award.
OTS ruling positions permit the elimination of the provisions of the
RRP which reflect the restrictions and limitations described above, provided
that stockholder approval therefor is obtained more than one year following the
completion of the mutual-to-stock conversion. The Board of Directors has adopted
amendments to the RRP, subject to approval by stockholders of the Company, for
the purpose of eliminating such restrictions and limitations (these changes to
the RRP are collectively referred herein as the "Amendments"). The Amendments do
not increase the number of shares available for distribution under the RRP,
change the RRP's eligibility requirements, or alter the types of restricted
stock awards that may be made to participants in the RRP. In the event that the
Amendments are not approved by stockholders at the Special Meeting, they will
not take effect, but the RRP will remain in effect. The principal provisions of
the RRP, as it would be amended by the Amendments, are summarized below. The
full text of the Amendments is set forth as Appendix B to this
14
<PAGE>
Proxy Statement, to which reference is made, and the summary of the Amendments
provided below is qualified in its entirety by such reference.
PURPOSE OF THE RRP
The purpose of the RRP is to promote the growth and profitability of
the Company and the Association, to provide certain key officers, employees and
directors of the Company and its affiliates with an incentive to achieve
corporate objectives, to attract and retain individuals of outstanding
competence and to provide such individuals with an equity interest in the
Company.
DESCRIPTION OF THE RRP
ADMINISTRATION. The members of the Compensation Committee who are
"disinterested directors" (the "RRP Committee") administer the RRP and
determine, within the limitations of the RRP, the officers and employees to whom
Awards will be granted, the number of shares subject to each Award and the terms
of such Awards (including provisions regarding vesting and acceleration of
vesting). Awards to outside directors will be determined by automatic formula
grant and the RRP Committee has no discretion over the material terms of such
grants. Subject to certain specific limitations and restrictions set forth in
the RRP, the RRP Committee has full and final authority to interpret the RRP, to
prescribe, amend and rescind rules and regulations, if any, relating to the RRP
and to make all determinations necessary or advisable for the administration of
the RRP. The costs and expenses of administering the RRP are borne by the
Company and are not charged to any grant of an Award nor to any participating
director, officer or employee.
STOCK SUBJECT TO THE RRP. The Company has established a trust ("Trust")
and will contribute, or cause to be contributed, to the Trust, from time to
time, such amounts of money or property as shall be determined by the Board, in
its discretion. No contributions by participants will be permitted. The trustee
will invest the assets of the Trust in Common Stock and in such investments
including savings accounts, time or other interest bearing deposits in or other
interest bearing obligations of the Company, in such proportions as shall be
determined by the RRP Committee. In no event shall the assets of the Trust be
used to purchase more than 280,370 shares of Common Stock the maximum number of
shares of Commons Stock that may be subject to Awards under the RRP. As of
August 15, 1997, the aggregate fair market value of the Common Stock purchased
by the Trust for the RRP was $4,906,475, based on the closing sales price per
share of $17.50 on The Nasdaq Stock Market on such Record Date. The Trust
purchased these shares of Common Stock on the open market.
ELIGIBILITY. Any employee of the Company, the Association or any
affiliate approved by the Board who is selected by the RRP Committee is eligible
to participate in the RRP as an "Eligible Individual." As of the Record Date,
there were 7 Eligible Individuals. Members of the Board or of the Board of
Directors of the Association or any affiliate approved by the Board who are not
employees or officers of the Company, the Association or such affiliate are
eligible to participate as an "Eligible Director." As of the Record Date, there
were 6 Eligible Directors.
AWARDS TO OFFICERS, EMPLOYEES AND OUTSIDE DIRECTORS. On the RRP's
Effective Date, the RRP Committee granted Awards of restricted stock to Eligible
Individuals, subject to the Plan's maximum of 70,092 shares for any one
individual. The amount of the Awards granted to Eligible Individuals under the
RRP are shown in the table entitled "New Plan Benefits" at the end of this
Section. In addition, on the RRP Effective Date, each Eligible Director received
an Award of 14,018 shares of Common Stock. These awards are also indicated in
the table entitled "New Plan Benefits."
TERMS AND CONDITIONS OF AWARDS. Stock subject to Awards is held in
trust pursuant to the RRP until vested. An individual to whom an Award is
granted is entitled to exercise voting rights and receive cash dividends with
respect to stock subject to Awards granted to him whether or not vested. The RRP
Committee
15
<PAGE>
will exercise voting rights with respect to shares in the Trust that have not
been allocated to reflect the voting directions of shares granted under the RRP.
Each individual to whom an Award is granted is entitled to direct the manner of
response to any tender offer, exchange offer or other offer made to stockholders
with respect to stock subject to Awards granted to such person whether or not
vested. If no direction is given, the shares will not be tendered or exchanged.
For shares that are not allocated in connection with an Award, the RRP Committee
will direct the Trustee to respond to reflect the responses given with respect
to shares allocated in connection with Awards.
The shares covered by an Award will become vested in accordance with
the terms of the Award and as soon as practicable following such vesting, the
Trustee will transfer the shares to the recipient. Currently, the shares covered
by an Award will vest according to a vesting schedule established by the RRP
Committee, but in no event at a rate more rapid than 20% commencing on May 1st
following each of the first five anniversary dates of April 17, 1997 unless
consistent with prevailing OTS regulations; however, any shares covered by the
Award will become 100% vested as of the date of the recipient's death or
disability. The RRP Committee may prescribe a different vesting schedule for
Eligible Individuals, subject to regulatory restrictions described below. If an
individual covered by an Award terminates employment or ceases to be a director
for reasons other than death or disability, the individual forfeits all rights
to his unvested shares remaining in the RRP trust. Individuals may designate a
beneficiary to receive distributions on account of death. In addition, the RRP
currently provides for dividends declared and paid with respect to shares
subject to an outstanding Award to be retained in the RRP Trust until the shares
underlying the Award have vested.
As permitted by OTS ruling positions, these restrictions on vesting and
distribution of dividends may be removed through stockholder approval of the
Amendments. Accordingly, pursuant to the RRP, as amended by the Amendments, all
shares covered by an outstanding Award will become 100% vested upon the death,
disability or retirement of an Award recipient or a "change in control" of the
Company. The amended RRP also permits the Committee to establish a vesting
schedule that is either more or less favorable than the five year vesting
schedule to be applicable to an Award made to an Eligible Individual (but not an
Eligible Director) under the Option Plan. In addition, pursuant to the RRP, as
amended, the Committee may distribute cash payments representing dividends
declared and paid on shares, whether or not vested, covered by an Award held by
a recipient under the RRP. The changes apply both to Awards currently
outstanding and those that may be made in the future.
MERGERS AND REORGANIZATIONS. The number of shares available under the
RRP and the Awards will be adjusted to reflect any merger, consolidation or
business reorganization in which the Company is the surviving entity and to
reflect any stock split, stock dividend or other event generally affecting the
number of shares. If a merger, consolidation or other business reorganization
occurs and the Company is not the surviving entity, the Trustee will hold any
money, stock, securities or other property received in the trust fund, and
adjusting any award by allocating such money, stock, securities or other
property to the Eligible Director or Eligible Individual.
TERMINATION OR AMENDMENT OF THE RRP
The Board may suspend or terminate the RRP in whole or in part at any
time by giving written notice of such suspension or termination to the RRP
Committee, but the RRP may not be terminated while there are outstanding Awards
that may thereafter become vested. Upon the termination of the RRP, the Trustee
shall make distributions from the Trust in such amounts and to such persons as
the RRP Committee may direct and shall return the remaining assets of the Trust,
if any, to the Company.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion is intended only as a summary and does not
purport to be a comprehensive description of the federal tax laws, regulations
and policies affecting the Company and recipients of Awards that
16
<PAGE>
may be granted under the RRP. Any descriptions of the provisions of any law,
regulation or policy contained herein are qualified in their entirety by
reference to the particular law, regulation or policy. Any change in applicable
law or regulation or in the policies of various taxing authorities may have a
material effect on the discussion contained herein. The RRP does not constitute
a qualified plan under section 401(a) of the Code.
The award of Common Stock under the RRP does not result in federal
income tax consequences to either the Company or the award recipient. Upon the
vesting of an award and the distribution of the vested shares, the award
recipient will generally be required to include in ordinary income, for the
taxable year in which the vesting date occur, an amount equal to the fair market
value of the shares on the vesting date, and the Company will generally be
allowed to claim a deduction, for compensation expense, in a like amount. To the
extent that dividends are paid with respect to unvested shares held under the
RRP and distributed to the award recipient, such dividend amounts will likewise
be includible in the ordinary income of the recipient and allowable as a
deduction, for compensation expense, to the Company. Section 162(m) of the Code
limits the Company's deductions of compensation in excess of $1,000,000 per year
for the chief executive officer and the four other most highly paid executives
named in its proxy statement. No executive of the Company currently receives
compensation that would be rendered nondeductible by this limitation.
Compensation amounts resulting from the award and vesting of shares will be
subject to this deduction limitation, if such amount when added to other
includible compensation exceeds $1,000,000. Dividends declared and paid with
respect to vested shares, as well as any gain or loss realized upon an award
recipient's disposition of the shares, will be treated as dividend income and
capital gain or loss, respectively, in the same manner as for other
stockholders.
The foregoing statements are intended to summarize the general
principles of current federal income tax law applicable to Awards that may be
granted under the RRP. State and local tax consequences may also be significant.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" APPROVAL OF THE AMENDMENTS TO THE HOME BANCORP OF ELGIN, INC.
1997 RECOGNITION AND RETENTION PLAN.
17
<PAGE>
NEW PLAN BENEFITS
HOME BANCORP OF ELGIN, INC. STOCK BENEFIT PLANS
-----------------------------------------------
The following table sets forth the Options and Awards granted under the
Home Bancorp of Elgin, Inc. Option Plan and RRP to the individuals and groups
indicated below on each Plan's Effective Date. Stockholder approval of the
Amendments to these Plans, described in more detail above, primarily affects the
vesting of the Options and Awards granted under these Plans. The number of
Options and Awards which have been, and may be, granted under these Plans will
be unaffected by the Amendments to these Plans.
<TABLE>
<CAPTION>
==================================================== ============================= ===================================
Option Plan RRP
----------------------------- -----------------------------------
Name/Position # $ Value # $ Value
==================================================== ============================= ===================================
<S> <C> <C> <C> <C>
George L. Perucco, President & 175,231 -(1) 70,092 $1,038,238(3)
Chief Executive Officer
- ---------------------------------------------------- ----------------------------- -----------------------------------
Lyle N. Dolan, Executive Vice President & 105,138 -(1) 42,055 $ 622,940(3)
Treasurer
- ---------------------------------------------------- ----------------------------- -----------------------------------
Kenneth L. Moran, Senior Vice President 70,092 -(1) 28,037 $ 415,299(3)
- ---------------------------------------------------- ----------------------------- -----------------------------------
Executive Group 140,184 -(1) 56,072 $ 830,567(3)
- ---------------------------------------------------- ----------------------------- -----------------------------------
Non-Executive Director Group 210,276 -(2) 84,108 $1,245,850(4)
- ---------------------------------------------------- ----------------------------- -----------------------------------
Non-Executive Employee Group(5) N/A N/A N/A N/A
==================================================== ============================= =============== ===================
</TABLE>
- --------------------------------------------
(1) The Exercise Price of the Options granted to Messrs. Perucco, Dolan and
Moran and the other executive officers indicated in the above Table was
$14.8125 per share, which was the fair market value of a share of
Common Stock on April 17, 1997, the date these grants were made. The
dollar value of an Option on the grant date was $0, and the future
value, if any, will be dependent on the price of a share in the future.
The Options granted to Messrs. Perucco, Dolan and Moran (and the other
executive officers) will become exercisable in 20% increments on each
anniversary of the grant date, with full vesting to occur on the fifth
consecutive anniversary of the grant date or upon the earlier death or
disability of the Option recipient. If approved by the Company's
stockholders, the Amendments to the Option Plan would provide for
accelerated vesting to occur upon the "retirement" of the option holder
or a "change in control" of the Company, as such terms are defined in
the Option Plan.
(2) Each Eligible Director received a NQSO to purchase 35,046 shares of
Common Stock at an Exercise Price of $14.8125 per share, the fair
market value of a share of Common Stock on April 17, 1997, the date
these Options were granted. The dollar value of an Option on the grant
date is not determinable, and the future value, if any, will be
dependent on the price of a share of Common Stock prevailing from time
to time. The NQSO Options granted to each Eligible Director will become
exercisable in 20% increments on each anniversary of the grant date,
with full vesting to occur on the fifth consecutive anniversary of the
grant date or upon the earlier death or disability of the Option
recipient. If approved by the Company's stockholders, the Amendments to
the Option Plan would provide for accelerated vesting to occur upon the
"retirement" of the option holder or a "change in control" of the
Company, as such terms are defined in the Option Plan, and the
Committee would have the discretion to make other changes in the
vesting schedules applicable to Eligible Individuals.
(3) Messrs. Perucco, Dolan and Moran (and the other executive officers
indicated in the above Table) each received the Awards shown above
under the RRP on April 17, 1997. The dollar value of these Awards has
been calculated on the basis of the fair market value of a share of
Common Stock on such date, which was $14.8125. Currently, the RRP
provides for these Awards to vest in 20% increments, beginning May 1,
1998, with full vesting to occur on the fifth consecutive anniversary
of the date of grant or upon the earlier death or disability of the
Award recipient. If approved by the Company's stockholders, the
Amendments to the RRP would provide for accelerated vesting of these
Awards to occur upon the "retirement" of the Award recipient or the
date of a "change in control" of the Company, as such terms are defined
in the RRP, and the Committee would have the discretion to make other
changes in the vesting schedules applicable to Eligible Individuals.
(4) On April 17, 1997, each Eligible Director received an Award of 14,018
shares of Common Stock under the RRP. The dollar value of such Awards,
shown in the table above, was calculated on the basis of $14.8125 per
share of Common Stock, the fair market value of a share of Common Stock
on the date these Awards were granted. Currently, the RRP provides for
these Awards to vest in 20% increments, beginning May 1, 1998, with
full vesting to occur on the fifth consecutive anniversary of the date
of grant or upon the earlier death or disability of the Award
recipient. If approved by the Company's stockholders, the Amendments to
the RRP would provide for accelerated vesting of these Awards to occur
upon the "retirement" of the Award recipient or the date of a "change
in control" of the Company, as such terms are defined in the RRP.
(5) As of the date of this Proxy Statement, no other employees have
received grants under either the Option Plan or the RRP.
18
<PAGE>
-----------------------------------------------------------------
PROPOSAL 3
AUTHORIZATION OF THE BOARD OF DIRECTORS, IN ITS DISCRETION, TO DIRECT THE
VOTE OF THE PROXIES UPON SUCH OTHER MATTERS INCIDENT TO THE CONDUCT OF
THE SPECIAL MEETING AS MAY PROPERLY COME BEFORE THE SPECIAL MEETING, AND
ANY ADJOURNMENT OR POSTPONEMENT THEREOF, INCLUDING, WITHOUT
LIMITATION, A MOTION TO ADJOURN THE SPECIAL MEETING
-------------------------------------------------------------
The Board of Directors is not aware of any other business that may
properly come before the Special Meeting. The Board seeks the authorization of
the stockholders of the Company, in the event matters incident to the conduct of
the Special Meeting properly come before the meeting, including, but not limited
to, the consideration of whether to adjourn the Special Meeting once called to
order, to direct the manner in which those shares represented at the Special
Meeting by proxies solicited pursuant to this Proxy Statement shall be voted. As
to all such matters, the Board intends that it would direct the voting of such
shares in the manner determined by the Board, in its discretion, and in the
exercise of its duties and responsibilities, to be in the best interests of the
Company and its stockholders, taken as a whole.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" AUTHORIZATION OF THE BOARD OF DIRECTORS, IN ITS DISCRETION, TO DIRECT THE
VOTE OF THE PROXIES UPON SUCH OTHER MATTERS INCIDENT TO THE CONDUCT OF THE
SPECIAL MEETING AS MAY PROPERLY COME BEFORE THE SPECIAL MEETING, AND ANY
ADJOURNMENT OR POSTPONEMENT THEREOF, INCLUDING, WITHOUT LIMITATION, A MOTION TO
ADJOURN THE SPECIAL MEETING.
19
<PAGE>
ADDITIONAL INFORMATION
NOTICE OF BUSINESS TO BE CONDUCTED AT ANNUAL MEETING
The Bylaws of the Company provide an advance notice procedure for a
stockholder to properly bring business before an annual meeting or to nominate
any person for election to the Board of Directors. The stockholder must be a
stockholder of record and have given timely notice thereof in writing to the
Secretary of the Company. To be timely, a stockholder's notice must be delivered
to or received by the Secretary not later than the following dates: (i) with
respect to an annual meeting of stockholders, sixty (60) days in advance of such
meeting if such meeting is to be held on a day which is within thirty (30) days
preceding the anniversary of the previous year's annual meeting, or ninety (90)
days in advance of such meeting if such meeting is to be held on or after the
anniversary of the previous year's annual meeting; and (ii) with respect to an
annual meeting of stockholders held at a time other than within the time periods
set forth in the immediately preceding clause (I), the close of business on the
tenth (10th) day following the date on which notice of such meeting is first
given to stockholders. Notice shall be deemed to first be given to stockholders
when disclosure of such date of the meeting of stockholders is first made in a
press release reported to Dow Jones News Services, Associated Press or
comparable national news service, or in a document publicly filed by the Company
with the SEC pursuant to Section 13, 14 or 15(d) of the Exchange Act. A
stockholder's notice to the Secretary shall set forth such information as
required by the Bylaws of the Company. Nothing in this paragraph shall be deemed
to require the Company to include in its proxy statement and proxy card relating
to an annual meeting any stockholder proposal or nomination which does not meet
all of the requirements for inclusion established by the SEC in effect at the
time such proposal or nomination is received. See "--Date For Submission of
Stockholder Proposals."
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Any stockholder proposal intended for inclusion in the Company's proxy
statement and proxy card relating to the Company's 1998 Annual Meeting of
Stockholders must be received by the Company by November 13, 1997, pursuant to
the proxy soliciting regulations of the SEC. Nothing in this paragraph shall be
deemed to require the Company to include in its proxy statement and proxy card
for such meeting any stockholder proposal which does not meet the requirements
of the SEC in effect at the time. Any such proposal will be subject to 17 C.F.R.
ss.240.14a-8 of the Rules and Regulations promulgated by the SEC under the
Exchange Act.
20
<PAGE>
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of the
Company does not know of any other matters to be brought before the stockholders
at the Special Meeting. See "Proposal 3 -- Authorization of the Board of
Directors, in its Discretion, to Direct the Vote of the Proxies upon such Other
Matters Incident to the Conduct of the Special Meeting as may Properly Come
Before the Special Meeting, and any Adjournment or Postponement Thereof,
Including, Without Limitation, a Motion to Adjourn the Special Meeting."
By Order of the Board of Directors,
/s/ Kathleen A. Schroeder
Kathleen A. Schroeder
VICE PRESIDENT AND SECRETARY
Elgin, Illinois
August 29, 1997
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE SPECIAL MEETING,
PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY
CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
21
<PAGE>
APPENDIX A
HOME BANCORP OF ELGIN, INC.
1997 STOCK OPTION PLAN
(ADOPTED ON JANUARY 16, 1997
EFFECTIVE AS OF APRIL 17, 1997)
AMENDMENTS
----------
1. ARTICLE V - Effective as of April 17, 1997, the proviso appearing at the end
of section 5.3(b) shall be amended and restated in its entirety to read as
follows:
PROVIDED, HOWEVER, that such an Option shall become fully exercisable,
and all optioned Shares not previously purchased shall become available
for purchase, on the date of the Option holder's death, Disability or
Retirement or upon the date of a Change in Control.
2. ARTICLE VI - Effective as of April 17, 1997, the proviso appearing at the end
of section 6.5(c) shall be amended and restated in its entirety to read as
follows:
PROVIDED, HOWEVER, that such an Option shall become fully exercisable,
and all optioned Shares not previously purchased shall become available
for purchase, on the date of the Option holder's death, Disability or
Retirement or upon the date of a Change in Control; AND PROVIDED,
FURTHER, that the Committee, in its discretion, may establish a
different vesting schedule in a particular case or as a matter of
policy.
3. ARTICLE VIII - Effective as of April 17, 1997, section 8.3 shall be amended
and restated in its entirety to read as follows:
SECTION 8.3 ADJUSTMENTS IN THE EVENT OF A BUSINESS
REORGANIZATION.
(a) In the event of any merger, consolidation, or other
business reorganization in which the Company is the surviving entity,
and in the event of any stock split, stock dividend or other event
generally affecting the number of Shares held by each Person who is
then a holder of record of Shares, the number of Shares covered by each
outstanding Option and the number of Shares available pursuant to
section 3.1 shall be ad justed to account for such event. Such
adjustment shall be effected by multiplying such number of Shares by an
amount equal to the number of Shares that would be owned after such
event by a Person who, immediately prior to such event, was the holder
of record of one Share, and the Exercise Price of the Options shall be
adjusted by dividing the Exercise Price by such number of Shares;
provided, however, that the Committee may, in its discretion, establish
another appropriate method of adjustment.
(b) In the event of any merger, consolidation, or other
business reorganization in which the Company is not the surviving
entity, any Options granted under the Plan which remain outstanding,
whether or not exercisable, may be canceled as of the effective date of
such merger, consolidation, business reorganization, liquidation or
sale by the Board upon 30 days' written notice to the Option holder.
A-1
<PAGE>
(c) In the event that the Company shall declare and pay any
dividend with respect to Shares (other than a dividend payable in
Shares) which results in a nontaxable return of capital to the holders
of Shares for federal income tax purposes or otherwise than by dividend
makes distribution of property to the holders of its Shares, the
Company shall, in the discretion of the Committee, either:
(i) make an equivalent payment to each Person holding
an outstanding Option as of the record date for such dividend.
Such payment shall be made at substantially the same time, in
substantially the same form and in substantially the same
amount per optioned Share as the dividend or other
distribution paid with respect to outstanding Shares;
provided, however, that if any dividend or distribution on
outstanding Shares is paid in property other than cash, the
Company, in the Committee's discretion, may make such payment
in a cash amount per optioned Share equal in fair market value
to the fair market value of the non-cash dividend or
distribution; or
(ii) adjust the Exercise Price of each outstanding
Option in such manner as the Committee may determine to be
appropriate to equitably reflect the payment of the dividend;
or
(iii) take the action described in section 8.3(c)(i)
with respect to certain outstanding Options and the action
described in section 8.3(c)(ii) with respect to the remaining
outstanding Options;
provided, however, that no such action shall be taken without the
approval of the Office of Thrift Supervision until the stockholders of
the Company have approved the provisions of this section 8.3(c) by the
vote of a majority of outstanding shares of Common Stock represented,
in person or by proxy, at a meeting duly called therefor after
September 26, 1997, and entitled to vote thereon.
A-2
<PAGE>
APPENDIX B
HOME BANCORP OF ELGIN, INC.
1997 RECOGNITION AND
RETENTION PLAN
(ADOPTED ON JANUARY 16, 1997
EFFECTIVE AS OF APRIL 17, 1997)
AMENDMENTS
----------
1. ARTICLE II - Effective as of April 17, 1997, Article II shall be amended by
adding the following new section 2.20 "Retirement" immediately after section
2.19 appearing therein and redesignating all remaining sections of Article II
and all cross-references thereto accordingly. Section 2.20 shall read in its
entirety as follows:
SECTION 2.20 RETIREMENT means retirement at the
normal or early retirement date as set forth in any
tax-qualified retirement plan of the Association.
2. ARTICLE VI - Effective as of September 27, 1997, the first sentence of
section 6.5(a) shall be amended by changing the period at the end thereof to a
semi-colon and then adding the following proviso immediately thereafter to read
as follows:
PROVIDED, HOWEVER, effective as of September 27, 1997, any
such dividends or distributions declared and paid shall be
promptly distributed to such Eligible Director or Eligible
Employee.
3. ARTICLE VI - Effective as of September 27, 1997, the proviso appearing at the
end of section 6.8(a)(iii) shall be amended and restated in its entirety to read
as follows:
PROVIDED, HOWEVER, that such an Award shall become fully
vested on the date of the Award holder's death, Disability, or
Retirement or upon the date of a Change of Control; AND
PROVIDED, FURTHER, that the Committee, in its discretion, may
establish a different vesting schedule in a particular case or
as a matter or policy.
4. ARTICLE VII - Effective as of September 27, 1997, the second proviso of
section 7.1 shall be amended and restated to read as follows:
AND PROVIDED, FURTHER, that such an Award shall become 100%
vested on the date of the Award holder's death, Disability, or
Retirement or upon the date of a Change of Control;
5. ARTICLE VII - Effective as of April 17, 1997, the proviso appearing at the
end of section 7.2 shall be amended and restated in its entirety to read as
follows:
PROVIDED, HOWEVER, that such an Award shall become fully
vested on the date of the Award holder's death, Disability, or
Retirement or upon the date of a Change of Control; AND
PROVIDED, FURTHER, that the Committee, in its discretion, may
establish a different vesting schedule in a particular case or
as a matter or policy.
B-1
<PAGE>
HOME BANCORP OF ELGIN, INC. REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
HOME BANCORP OF ELGIN, INC. FOR THE SPECIAL MEETING OF
STOCKHOLDERS TO BE HELD ON SEPTEMBER 29, 1997.
The undersigned stockholder of Home Bancorp of Elgin, Inc. hereby
appoints George L. Perucco, Lyle N. Dolan and Kenneth L. Moran, and each of
them, with full powers of substitution, to represent and to vote as proxy, as
designated, all shares of common stock of Home Bancorp of Elgin, Inc. held of
record by the undersigned on August 15, 1997, at the Special Meeting of
Stockholders (the "Special Meeting") to be held at 2:00 p.m., Central Time, on
September 29, 1997, or at any adjournment or postponement thereof, upon the
matters described in the accompanying Notice of Special Meeting of Stockholders
and Proxy Statement. The undersigned hereby revokes all prior proxies.
This Proxy, when properly executed, will be voted in the manner
directed herein by the undersigned stockholder. IF NO DIRECTION IS GIVEN, THIS
PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS LISTED IN ITEMS 1, 2 AND 3.
PLEASE MARK, SIGN AND DATE THIS PROXY ON THE
REVERSE SIDE AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE.
<PAGE>
<TABLE>
<CAPTION>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" EACH OF THE Please mark your vote as
PROPOSALS IN ITEMS 1, 2 AND 3. indicated in this example. |X|
----------------------------------------------------------------------
I will attend the
Special Meeting. |_|
<C> <C> <C> <C> <C> <C> <C> <C>
1. Approval of Amendments to the FOR AGAINST ABSTAIN 3. Authorization of the Board of
Home Bancorp of Elgin, Inc. |_| |_| |_| Directors, in its discretion, to
1997 Stock Option Plan. direct the vote of proxies upon
such matters incident to the FOR AGAINST ABSTAIN
conduct of the Special Meeting as |_| |_| |_|
may properly come before the
Special Meeting, and any
adjournment or postponement
thereof, including, without
limitation, a motion to adjourn the
Special Meeting.
2. Approval of Amendments to the FOR AGAINST ABSTAIN
Home Bancorp of Elgin, Inc. |_| |_| |_|
1997 Recognition and Retention
Plan.
The undersigned hereby acknowledges receipt of the Notice of
Special Meeting of Stockholders and the Proxy Statement for the
Special Meeting.
_______________________________________________________________
_______________________________________________________________
(Signature(s)
Dated:______________________________________________, 1997
Please sign exactly as your name appears on this proxy. Joint
owners should each sign personally. If signing as attorney,
executor, administrator, trustee or guardian, please include
your full title. Corporate or partnership proxies should be
signed by an authorized officer.
</TABLE>
<PAGE>
August 29, 1997
TO ALL RECOGNITION AND RETENTION PLAN ("RRP") PARTICIPANTS
Re: SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON SEPTEMBER 29, 1997
----------------------------------------------------------------
As you know, after Home Federal Savings and Loan Association of Elgin
("Association") completed its stock conversion last year, its parent company,
Home Bancorp of Elgin, Inc. ("Company"), established a new benefit plan and
trust for the benefit of eligible employees of the Company and the Association.
This Plan is known as the "Home Bancorp of Elgin, Inc. 1997 Recognition and
Retention Plan" or "RRP." Shares of the Company's common stock ("Common Stock")
were purchased by the RRP, and are held in trust by its trustee Harris Bank
Barrington, N.A. ("Trustee"). The RRP allows its participants to have certain
voting rights at the Company's stockholder meetings with respect to shares of
Common Stock held by the Trustee.
In connection with the Special Meeting of Stockholders of Home Bancorp
of Elgin, Inc. to be held on September 29, 1997, enclosed are the following
documents:
1. Confidential Voting Instruction card for the RRP; and
2. Proxy Statement dated August 29, 1997, including a
Notice of Special Meeting of Stockholders.
As a participant in the RRP, you have the right to direct the Trustee
how to vote the shares awarded to you under the RRP as of August 15, 1997, the
record date for the Special Meeting ("Record Date"), on the proposals to be
voted on by the Company's stockholders.
Each RRP participant has the right to specify how the RRP Trustee
should vote the shares awarded to such participant under the RRP as of the
Record Date. In general, the Trustee will vote the shares awarded to you by
casting votes FOR, AGAINST or ABSTAIN with respect to each proposal as you
specify on the Confidential Voting Instruction card accompanying this letter.
The number of shares awarded to you under the RRP are shown on the enclosed
Confidential Voting Instruction card.
<PAGE>
-2-
The Trustee's fiduciary duties require it to vote any shares for which
it receives no voting instructions, as well as any shares not yet awarded under
the RRP, in a manner determined to be prudent and solely in the interest of the
RRP participants and beneficiaries. With respect to shares of Common Stock not
yet awarded under the RRP, the Trustee will, to the extent consistent with its
fiduciary duties, vote such shares in a manner calculated to most accurately
reflect the instructions received from other participants in the RPP. If you do
not direct the Trustee how to vote the shares awarded to you under the RRP, such
shares will not be voted.
* * * * *
Your instruction is very important. You are encouraged to review the
enclosed material carefully and to complete, sign and date the enclosed
Confidential Voting Instruction card to signify your direction to the Trustee.
YOU SHOULD THEN SEAL THE COMPLETED CARD IN THE ENCLOSED ENVELOPE AND RETURN IT
DIRECTLY TO THE TRUSTEE USING THE POSTAGE-PAID RETURN ENVELOPE PROVIDED. The
Confidential Voting Instruction card must be received by the Trustee no later
than September 22, 1997.
PLEASE NOTE THAT THE VOTING INSTRUCTIONS OF INDIVIDUAL PARTICIPANTS ARE
TO BE KEPT CONFIDENTIAL BY THE TRUSTEE, WHO HAS BEEN INSTRUCTED NOT TO DISCLOSE
THEM TO ANYONE AT THE ASSOCIATION OR THE COMPANY. IF YOU HAVE ANY QUESTIONS
REGARDING YOUR VOTING RIGHTS OR THE TERMS OF THE RRP, PLEASE CALL PAT A. LENART
AT (847) 742-3800.
Very truly yours,
THE COMPENSATION COMMITTEE OF
HOME BANCORP OF ELGIN, INC.
Enclosures
<PAGE>
HOME BANCORP OF ELGIN, INC.
CONFIDENTIAL VOTING INSTRUCTION
SOLICITED BY THE COMPENSATION COMMITTEE
OF HOME BANCORP OF ELGIN, INC.
FOR THE HOME BANCORP OF ELGIN, INC.
1997 RECOGNITION AND RETENTION PLAN
The undersigned participant of the Home Bancorp of Elgin, Inc. 1997
Recognition and Retention Plan (the "RRP") hereby provides the voting
instructions specified to the trustee (the "Trustee") of the RRP trust (the "RRP
Trust"), which instructions shall be taken into account by the Trustee in
voting, in person, by limited or general power of attorney, or by proxy, the
shares of common stock of Home Bancorp of Elgin, Inc. that are held by the
Trustee, in its capacity as Trustee of the RRP, as of August 15, 1997, at the
Special Meeting of Stockholders of Home Bancorp of Elgin, Inc. to be held on
September 29, 1997, and at any adjournment or postponement thereof.
As to the proposals listed on the reverse side, which are more
particularly described in the Proxy Statement dated August 29, 1997, the Trustee
will vote the common stock of Home Bancorp of Elgin, Inc. held by the RRP Trust
to reflect the voting instructions on this Confidential Voting Instruction, in
the manner described in the accompanying letter from the Compensation Committee
dated August 29, 1997.
(CONTINUED ON REVERSE SIDE. PLEASE COMPLETE, SIGN AND DATE ON THE
REVERSE SIDE AND PROMPTLY RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE.)
<PAGE>
<TABLE>
<CAPTION>
THE BOARD OF DIRECTORS OF HOME BANCORP OF ELGIN, INC. RECOMMENDS A VOTE"FOR" EACH OF THE PROPOSALS IN ITEMS 1, 2, AND 3. IF
YOU DO NOT DIRECT THE TRSUTEE HOW TO VOTE THE SHARES AWARDED TO YOU UNDER THE RRP, SUCH SHARES WILL NOT BE VOTED. THE DIRECTIONS, IF
ANY, GIVEN IN THIS CONFIDENTIAL VOTING INSTRUCTION WILL BE KEPT CONFIDENTIAL FROM ALL DIRECTORS, OFFICERS AND EMPLOYEES OF HOME
BANCORP OF ELGIN, INC. OR HOME FEDERAL SAVINGS AND LOAN ASSOCIATION OF ELGIN.
Please mark your votes like this
|X|
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C>
FOR AGAINST ABSTAIN
1. Approval of Amendments to the Home Bancorp of Elgin, Inc. 1997 Stock Option |_| |_| |_|
Plan.
- ------------------------------------------------------------------------------------------------------------------------------------
2. Approval of Amendments to the Home Bancorp of Elgin, Inc. 1997 Recognition and |_| |_| |_|
Retention Plan.
- ------------------------------------------------------------------------------------------------------------------------------------
3. Authorization of the Board of Directors, in its discretion, to direct the vote of
proxies upon such matters incident to the conduct of the Special Meeting as may
properly come before the Special Meeting, and any adjournment or postponement
thereof, including, without limitation, a motion to adjourn the Special Meeting. |_| |_| |_|
- ------------------------------------------------------------------------------------------------------------------------------------
All proposals listed above in this Confidential Voting Instruction were proposed by Home Bancorp of Elgin, Inc.
The undersigned hereby instructs the Trustee to vote in accordance with the voting instruction indicated above and hereby
acknowledges receipt, prior to the execution of this Confidential Voting Instruction, of a Voting Instruction Letter, a Notice of
Special Meeting of Stockholders of Home Bancorp of Elgin, Inc. and a Proxy Statement dated August 29, 1997 for the Special Meeting.
PLEASE SIGN AND DATE BELOW AND RETURN PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. YOUR CONFIDENTIAL VOTING INSTRUCTION
MUST BE RECEIVED NO LATER THAN SEPTEMBER 22, 1997.
DATE______________________________________________
SIGNATURE_________________________________________
Signature of participant, former participant or
designated beneficiary of deceased former
participant. Please sign name exactly as it
appears herein. When signing as attorney,
executor, administrator, trustee or guardian,
please give your full title as such.
</TABLE>
<PAGE>
August 29, 1997
TO: ALL EMPLOYEE STOCK OWNERSHIP PLAN ("ESOP") PARTICIPANTS
Re: SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON SEPTEMBER 29, 1997
-----------------------------------------------------------------
As you know, when Home Federal Savings and Loan Association of Elgin
("Association") completed its stock conversion last year, its parent company,
Home Bancorp of Elgin, Inc. ("Company"), established a new benefit plan and
trust for the benefit of eligible employees of the Company and the Association.
This Plan is known as the "Home Bancorp of Elgin, Inc. Employee Stock Ownership
Plan" or "ESOP." Shares of the Company's common stock ("Common Stock") were
purchased by the ESOP, are held in trust by its trustee, Harris Bank Barrington,
N.A. ("Trustee"), and then allocated to the accounts of ESOP participants over a
period of years. The ESOP allows its participants (including any former
participants and beneficiaries) to have certain voting rights at the Company's
stockholder meetings with respect to shares of Common Stock held by the Trustee.
In connection with the Special Meeting of Stockholders of Home Bancorp
of Elgin, Inc. to be held on September 29, 1997, enclosed are the following
documents:
1. Confidential Voting Instruction card for the ESOP; and
2. Proxy Statement dated August 29, 1997, including a
Notice of Special Meeting of Stockholders.
As a participant in the ESOP, you have the right to direct the Trustee
how to vote the shares allocated to your account under the ESOP as of August 15,
1997, the record date for the Special Meeting ("Record Date"), on the proposals
to be voted on by the Company's stockholders.
Each ESOP participant has the right to specify how the ESOP Trustee
should vote the shares in his or her ESOP account as of the Record Date. In
general, the Trustee will vote the shares in your ESOP account by casting votes
FOR, AGAINST or ABSTAIN with respect to each proposal as you specify on the
Confidential Voting Instruction card accompanying this letter. The number of
shares in your ESOP account are shown on the enclosed Confidential Voting
Instruction card.
<PAGE>
-2-
The Trustee's fiduciary duties require it to vote any shares for which
it receives no voting instructions, as well as any shares not yet allocated to
ESOP participants, in a manner determined to be prudent and solely in the
interest of the ESOP participants and beneficiaries. If you do not direct the
Trustee how to vote the shares in your ESOP account, the Trustee will, to the
extent consistent with its fiduciary duties, vote your shares in a manner
calculated to most accurately reflect the instructions received from other
participants in the ESOP. The same is true of shares of Common Stock not yet
placed in anyone's ESOP account.
* * * * *
Your instruction is very important. You are encouraged to review the
enclosed material carefully and to complete, sign and date the enclosed
Confidential Voting Instruction card to signify your direction to the Trustee.
YOU SHOULD THEN SEAL THE COMPLETED CARD IN THE ENCLOSED ENVELOPE AND RETURN IT
DIRECTLY TO THE TRUSTEE USING THE POSTAGE-PAID RETURN ENVELOPE PROVIDED. The
Confidential Voting Instruction card must be received by the Trustee no later
than September 22, 1997.
PLEASE NOTE THAT THE VOTING INSTRUCTIONS OF INDIVIDUAL PARTICIPANTS ARE
TO BE KEPT CONFIDENTIAL BY THE TRUSTEE, WHO HAS BEEN INSTRUCTED NOT TO DISCLOSE
THEM TO ANYONE AT THE ASSOCIATION OR THE COMPANY. IF YOU HAVE ANY QUESTIONS
REGARDING YOUR VOTING RIGHTS OR THE TERMS OF THE ESOP, PLEASE CALL PAT A. LENART
AT (847) 742-3800.
Very truly yours,
THE COMPENSATION COMMITTEE OF
HOME BANCORP OF ELGIN, INC.
Enclosures
<PAGE>
HOME BANCORP OF ELGIN, INC.
CONFIDENTIAL VOTING INSTRUCTION
SOLICITED BY THE COMPENSATION COMMITTEE
OF HOME BANCORP OF ELGIN, INC.
FOR THE HOME BANCORP OF ELGIN, INC.
EMPLOYEE STOCK OWNERSHIP PLAN
The undersigned participant, former participant or beneficiary of a
deceased former participant of the Home Bancorp of Elgin, Inc. Employee Stock
Ownership Plan (the "ESOP") hereby provides the voting instructions specified to
the trustee ("Trustee") of the ESOP trust (the "ESOP Trust"), which instructions
shall be taken into account by the Trustee in voting, in person, by limited or
general power of attorney, or by proxy, the shares and fractional shares of
common stock of Home Bancorp of Elgin, Inc. that are held by the Trustee, in its
capacity as Trustee of the ESOP, as of August 15, 1997, at the Special Meeting
of Stockholders of Home Bancorp of Elgin, Inc. to be held on September 29, 1997,
and at any adjournment or postponement thereof.
As to the proposals listed on the reverse side, which are more
particularly described in the Proxy Statement dated August 29,1997, the Trustee
will vote the common stock of Home Bancorp of Elgin, Inc. held by the ESOP Trust
to reflect the voting instructions on this Confidential Voting Instruction, in
the manner described in the accompanying letter from the Compensation Committee
dated August 29, 1997.
(CONTINUED ON REVERSE SIDE. PLEASE COMPLETE, SIGN AND DATE ON THE
REVERSE SIDE AND PROMPTLY RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE.)
<PAGE>
<TABLE>
<CAPTION>
THE BOARD OF DIRECTORS OF HOME BANCORP OF ELGIN, INC. RECOMMENDS A VOTE"FOR" EACH OF THE PROPOSALS IN ITEMS 1, 2 AND 3. IF
THIS CONFIDENTIAL VOTING INSTRUCTION IS SIGNED BUT NO DIRECTION IS GIVEN, THIS VOTING INSTRUCTION CARD WILL BE DEEMED TO INSTRUCT
VOTES "FOR" EACH OF THE PROPOSALS IN ITEMS 1, 2 AND 3. THE DIRECTIONS, IF ANY, GIVEN IN THIS CONFIDENTIAL VOTING INSTRUCTION WILL BE
KEPT CONFIDENTIAL FROM ALL DIRECTORS, OFFICERS AND EMPLOYEES OF HOME BANCORP OF ELGIN, INC. OR HOME FEDERAL SAVINGS AND LOAN
ASSOCIATION OF ELGIN.
Please mark your votes like this
|X|
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C>
FOR AGAINST ABSTAIN
1. Approval of Amendments to the Home Bancorp of Elgin, Inc. 1997 Stock Option
Plan. |_| |_| |_|
- ------------------------------------------------------------------------------------------------------------------------------------
2. Approval of Amendments to the Home Bancorp of Elgin, Inc. 1997 Recognition and |_| |_| |_|
Retention Plan.
- ------------------------------------------------------------------------------------------------------------------------------------
3. Authorization of the Board of Directors, in its discretion, to direct the vote of
proxies upon such matters incident to the conduct of the Special Meeting as may
properly come before the Special Meeting, and any adjournment or postponement
thereof, including, without limitation, a motion to adjourn the Special Meeting. |_| |_| |_|
- ------------------------------------------------------------------------------------------------------------------------------------
All proposals listed above in this Confidential Voting Instruction were proposed by Home Bancorp of Elgin, Inc.
The undersigned hereby instructs the Trustee to vote in accordance with the voting instruction indicated above and hereby
acknowledges receipt, prior to the execution of this Confidential Voting Instruction, of a Voting Instruction Letter, a Notice of
Special Meeting of Stockholders of Home Bancorp of Elgin, Inc. and a Proxy Statement dated August 29, 1997 for the Special Meeting.
PLEASE SIGN AND DATE BELOW AND RETURN PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. YOUR CONFIDENTIAL VOTING INSTRUCTION
MUST BE RECEIVED NO LATER THAN SEPTEMBER 22,1997.
DATE______________________________________________
SIGNATURE_________________________________________
Signature of participant, former participant or
designated beneficiary of deceased former
participant. Please sign name exactly as it
appears herein. When signing as attorney,
executor, administrator, trustee or guardian,
please give your full title as such.
</TABLE>
