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:
<PAGE>
[LETTERHEAD OF HOME BANCORP OF ELGIN, INC.]
March 12, 1998
Dear Stockholder:
You are cordially invited to attend the 1998 Annual Meeting of
Stockholders of Home Bancorp of Elgin, Inc. (the "Company"), the holding company
for Home Federal Savings and Loan Association of Elgin (the "Association"),
Elgin, Illinois, which will be held on April 16, 1998 at 16 North Spring Street,
Elgin, Illinois 60120 at 2:00 p.m., Central Time (the "Annual Meeting").
The attached Notice of the 1998 Annual Meeting of Stockholders and
Proxy Statement describe the formal business to be transacted at the Annual
Meeting. Directors and officers of the Company, as well as a representative of
KPMG Peat Marwick LLP, the accounting firm appointed by the Board of Directors
to be the Company's independent auditors for the fiscal year ending December 31,
1998, will be present at the Annual 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 Annual 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 Annual 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 ANNUAL 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 ANNUAL 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.
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 THE 1998 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 16, 1998
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Stockholders
(the "Annual Meeting") of Home Bancorp of Elgin, Inc. (the "Company") will be
held on April 16, 1998 at 16 North Spring Street, Elgin, Illinois 60120, at 2:00
p.m., Central Time, to consider and vote upon:
1. The election of three directors, each to serve for a term of
three years;
2. The ratification of the appointment of KPMG Peat Marwick LLP
as independent auditors for the fiscal year ending December
31, 1998; and
3. Such other matters as may properly come before the Annual
Meeting or any adjournment or postponement thereof. The
Company is not aware of any other business that may properly
come before the Annual Meeting.
The Board of Directors has fixed March 6, 1998 as the record date for
the determination of stockholders entitled to notice of and to vote at the
Annual 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 Annual 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
March 12, 1998
- - --------------------------------------------------------------------------------
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER OF SHARES YOU OWN. THE BOARD
OF DIRECTORS URGES YOU TO SIGN, DATE AND MARK 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 ANNUAL MEETING.
- - --------------------------------------------------------------------------------
<PAGE>
HOME BANCORP OF ELGIN, INC.
PROXY STATEMENT FOR THE
1998 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 16, 1998
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 March
6, 1998 (the "Record Date"), for use at the 1998 Annual Meeting of Stockholders
of the Company (the "Annual Meeting") to be held on April 16, 1998 at 16 North
Spring Street, Elgin, Illinois 60120, at 2:00 p.m., Central Time, 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 March 12,
1998.
On September 26, 1996, the Company became the holding company for Home
Federal Savings and Loan Association of Elgin (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 March 6, 1998 as the Record Date for the determination of the Company's
stockholders entitled to notice of and to vote at the Annual 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 Annual Meeting. On the
Record Date, there were 6,855,799 shares of Common Stock issued and outstanding.
The presence of the holders of at least a majority of the total number of votes
eligible to be cast in the election of directors generally by the holders of the
outstanding shares of Common Stock of the Company entitled to vote thereat,
represented in person or by proxy, shall constitute a quorum for the transaction
of business at a meeting of stockholders, except as otherwise provided by law,
the Certificate of Incorporation or the Bylaws of the Company.
Each holder of shares of Common Stock outstanding on the Record Date
will be entitled to one vote for each share of capital stock registered in his
or her name on the transfer books or records of the Company at the Annual
Meeting and at any adjournment or postponement thereof. 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
<PAGE>
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; or (v) any
other matter relating to the applicability or effect of the Certificate of
Incorporation.
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 ELECTION OF EACH OF THE THREE NOMINEES
FOR DIRECTOR AND FOR EACH OTHER PROPOSAL IDENTIFIED IN THE NOTICE OF THE 1998
ANNUAL MEETING OF STOCKHOLDERS. Management is not aware of any matters other
than those set forth in the Notice of the 1998 Annual Meeting of Stockholders
that may be brought before the Annual Meeting. If any other matters properly
come before the Annual 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
The vote required for each proposal is set forth in the discussion of
such proposal under the caption "--Vote Required."
REVOCABILITY OF PROXIES
A proxy may be revoked at any time before it is voted by filing with
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 Annual Meeting or any adjournment or postponement
thereof, if a written revocation is filed with the secretary of the Annual
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 ANNUAL 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.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
PRINCIPAL STOCKHOLDERS OF THE COMPANY
The following table sets forth, as of January 31, 1998 (except where a
later date is specified), 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
January 31, 1998. 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 January 31, 1998. 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, par Employee Stock Ownership Plan 560,740(1) 8.1%
value $.01 per share of Home Bancorp of Elgin, Inc.
16 North Spring Street
Elgin, Illinois 60120
Common Stock, par Janus Capital Corporation 435,755(2) 6.4%
value $.01 per share 100 Fillmore Street
Denver, Colorado 80206-4923
- - ------------------------------
</TABLE>
(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 Trust
purchased these shares with funds borrowed from the Company, initially
placed these shares in a suspense account for future allocation and intends
to allocate them to employees over a period of years as its acquisition
debt is retired. The ESOP Trustee is the beneficial owner of the shares
held in the ESOP Trust. 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 January 31, 1998, 88,256 shares of
Common Stock held by the ESOP Trust have been allocated to eligible
participants in the ESOP. The ESOP Committee must generally vote 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. The ESOP Committee must generally direct the 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 13, 1998, 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, the "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
<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 January 31, 1998. 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)(4) OUTSTANDING
- - ----------------------------- -------------------------------- --------------------- --------------
<S> <C> ` <C> <C>
George L. Perucco Director, President and Chief 95,465 1.4%
Executive Officer
Lyle N. Dolan Director, Executive Vice 57,002 *
President and Treasurer
Orval M. Graening Director 24,018(5) *
Thomas S. Rakow Director 82,318(6) 1.2%
Henry R. Hines Director 24,018 *
Donald E. Laird Director 17,058(7) *
Leigh C. O'Connor Director 17,518 *
Richard S. Scheflow Director 17,018 *
Kenneth L. Moran Senior Vice President and 40,127 *
Chief Lending Officer ------- -----
All directors and executive 991,601(8) 14.5%
officers as a group (13 persons)
</TABLE>
- - -----------------------------------
* 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) Includes restricted stock awards of 14,018 shares of Common Stock made
to each outside director under the Home Bancorp of Elgin, Inc. 1997
Recognition and Retention Plan (the "RRP"). Under the RRP, Messrs.
Perucco, Dolan and Moran were also granted restricted stock awards of
70,092, 42,055 and 28,037 shares of Common Stock, respectively. 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. The restricted stock awards will vest in 20% increments on an
annual basis, with the first installment scheduled to vest on May 1,
1998.
(4) The figures shown include shares held in trust pursuant to the ESOP
that have been allocated as of December 31, 1997 to individual accounts
as follows: Mr. Perucco, 5,373 shares; Mr. Dolan, 4,947 shares; Mr.
Moran, 4,490 shares; and all directors and executive officers as a
group, 26,201 shares. 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) 10,000 of these shares are held by a trust for Mr. Graening.
(6) Mr. Rakow owns 10,840 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 6,660 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 6,660 shares.
(7) 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.
(8) The amount of shares for all directors and executive officers as a
group includes 472,484 shares held by the ESOP Trust that have not been
allocated to eligible participants as of December 31, 1997, over which
the ESOP Committee has sole "investment power" but no "voting" power.
Each such person disclaims beneficial ownership of these shares. The
individual participants in the ESOP have shared voting power with the
ESOP Trustee.
4
<PAGE>
-----------------------------------------------------------------
PROPOSAL 1
ELECTION OF DIRECTORS
-----------------------------------------------------------------
GENERAL
The Certificate of Incorporation and Bylaws of the Company provide for
the election of directors by the stockholders. For this purpose, the Board of
Directors of the Company is divided into three classes with respect to term of
office, each class to contain, as near as may be possible, one-third of the
entire number of the Board, with the terms of office of one class expiring at
each annual meeting of stockholders. At each annual meeting of stockholders, the
successors to the class of directors (other than directors elected by holders of
shares of one or more series of preferred stock, of which there currently are
none) whose term expires at that time shall be elected by the stockholders to
serve for a term of three years. There are currently eight directors of the
Company.
The terms of three directors expire at the Annual Meeting. Each of the
three incumbent directors, George L. Perucco, Lyle N. Dolan and Donald E. Laird,
has been nominated by the Board of Directors to be re-elected at the Annual
Meeting for a three-year term expiring at the annual meeting of stockholders to
be held in 2001, or when their successors are otherwise duly elected and
qualified. Each nominee has consented to being named in this Proxy Statement and
to serve if elected. The terms of the remaining two classes of directors expire
at the annual meetings of stockholders to be held in 1999 and the year 2000, or
when their successors are otherwise duly elected and qualified.
In the event that any nominee for election as a director at the Annual
Meeting is unable or declines to serve, which the Board of Directors has no
reason to expect, the persons named in the Proxy Card will vote with respect to
a substitute nominee. Such substitute shall be designated by the incumbent Board
of Directors by delivery to the Secretary, not fewer than five (5) days prior to
the date of the Annual Meeting, of a written notice of substitution.
VOTE REQUIRED
Directors are elected by a plurality of the votes cast by each class of
shares entitled to vote at a meeting of stockholders, present and entitled to
vote in the election at the Annual Meeting. The holders of Common Stock may not
vote their shares cumulatively for the election of directors. Shares underlying
broker non-votes will not be counted as having been voted in person or by proxy
and will have no effect on the election of directors.
5
<PAGE>
INFORMATION AS TO NOMINEES AND CONTINUING DIRECTORS
The following table sets forth certain information with respect to each
nominee for election as a director and each director whose term does not expire
at the Annual Meeting ("Continuing Director"). There are no arrangements or
understandings between the Company and any director or nominee pursuant to which
such person was elected or nominated to be a director of the Company. For
information with respect to security ownership of directors, see "Security
Ownership of Certain Beneficial Owners and Management -- Security Ownership of
Management."
<TABLE>
<CAPTION>
DIRECTOR TERM POSITION(S) HELD WITH THE
NOMINEES AGE(1) SINCE(2) EXPIRES COMPANY AND THE ASSOCIATION
- - -------- ------ -------------- ---------------- ----------------------------------------------------------
<S> <C> <C> <C> <C>
George L. Perucco 71 1965 2001 Director, President and Chief Executive Officer
Lyle N. Dolan 56 1984 2001 Director, Executive Vice President and Treasurer
Donald E. Laird 66 1985 2001 Director
CONTINUING DIRECTORS
- - --------------------
Orval M. Graening 87 1967 1999 Director
Henry R. Hines 78 1975 2000 Director
Leigh C. O'Connor 85 1967 1999 Director
Thomas S. Rakow 55 1980 2000 Director
Richard S. Scheflow 73 1974 2000 Director
- - --------------------------------
</TABLE>
(1) As of December 31, 1997.
(2) Includes service as a Director with the Association prior to the
Company's incorporation in 1996.
The principal occupation and business experience of each nominee for
election as director and each Continuing Director are set forth below. Unless
otherwise indicated, each of the following persons has held
his present position for the last five years.
NOMINEES FOR ELECTION AS DIRECTOR
GEORGE L. PERUCCO has served as the President and Chief Executive
Officer of the Association since 1965. Mr. Perucco joined the Association in
1961 and has also served as Assistant Secretary, Secretary and Executive Vice
President of the Association. Prior to joining the Association, Mr. Perucco was
an executive in the Accounting Division of the United States League of Savings
Associations.
LYLE N. DOLAN has served as the Association's Executive Vice President
and Treasurer since 1986 and as a director of the Association since 1984. Prior
to that, Mr. Dolan served as Vice President and Treasurer of the Association
since 1974 and Treasurer of the Association since 1970.
DONALD E. LAIRD has served as a director of the Association since 1985.
He is the President of Laird Funeral Home, PC.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
ELECTION OF EACH NOMINEE AS DIRECTOR.
CONTINUING DIRECTORS
ORVAL M. GRAENING has served as a director of the Association since
1967. He is the former President of Woodruff & Edwards, Inc., a foundry company,
and retired in 1990.
6
<PAGE>
HENRY R. HINES has served as a director of the Association since 1975.
He retired from his position as Vice President of Williams Manufacturing Co., a
medical equipment manufacturer, in 1980.
LEIGH C. O'CONNOR has served as a director of the Association since
1967. He retired from his position as Office Manager of Illinois Hydraulic Inc.,
a construction company, in 1980.
THOMAS S. RAKOW has served as a director of the Association since 1980.
He is the President of IHC Group, Inc., a general contractor, the President of
Rakow Enterprises, Inc., an equipment leasing company, and a partner in Harkow
Partnership, a real estate company.
RICHARD S. SCHEFLOW has served as a director of the Association since
1974. He is a partner with the law firm of Scheflow & Rydell, located in Elgin,
Illinois.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS OF THE COMPANY AND THE
ASSOCIATION
The Board of Directors of each of the Company and Association meet on a
monthly basis and may have additional special meetings from time to time. During
the fiscal year ended December 31, 1997, the Board of Directors of the
Association met 13 times, and the Company's Board of Directors met 12 times. No
current director attended fewer than 75% of the total number of board meetings
and committee meetings of which such director was a member.
The Company has established the following committees of its Board of
Directors:
The EXECUTIVE COMMITTEE of the Company consists of Messrs. O'Connor
(Chairman), Dolan, Graening, Rakow, Perucco, Hines, Scheflow and Laird. This
Committee is authorized to exercise certain powers of the Board of Directors in
the interim period between meetings of the Board. The Executive Committee will
meet periodically to review and monitor operating expenses with a particular
emphasis on expense savings. The Executive Committee will consider longer-term
strategic and industry issues. The Company's Executive Committee did not meet in
1997.
The AUDIT COMMITTEE of each of the Company and the Association consists
of Messrs. Graening (Chairman), Rakow, Hines, Scheflow, Laird and O'Connor. The
Audit Committee of the Association meets periodically to arrange the
Association's annual financial statement audit through its independent Certified
Public Accountants, KPMG Peat Marwick LLP, and to review and evaluate
recommendations made during the annual audit. The Audit Committee of the Company
performs a similar function for the Company. The Audit Committee met once in
1997.
The COMPENSATION COMMITTEE of the Company consists of Messrs. Graening,
Hines, Laird, O'Connor, Rakow and Scheflow. This Committee establishes the
compensation of the Chief Executive Officer, approves the compensation of other
officers and determines the compensation and benefits to be paid to the
Association's employees. The Compensation Committee met once in 1997.
7
<PAGE>
EXECUTIVE OFFICERS
The following individuals are executive officers of the Company and
hold the offices set forth below opposite their names.
NAME POSITION HELD WITH THE COMPANY
---- ------------------------------
George L. Perucco President and Chief Executive Officer
Lyle N. Dolan Executive Vice President and Treasurer
Kenneth L. Moran Senior Vice President and Chief Lending Officer
David G. Towe Vice President Loan Operations and Marketing
Raymond G. Bandemer Vice President
Kathleen A. Schroeder Vice President and Secretary
Pat A. Lenart Vice President
The executive officers of the Company are elected annually and hold
office until their respective successors have been elected and qualified, or
until death, resignation or removal by the Board of Directors. The Company has
entered into Employment Agreements with certain of its executive officers which
set forth the terms of their employment. See "--Employment Agreements."
Biographical information of executive officers of the Company or the
Association who are not directors is set forth below.
KENNETH L. MORAN, age 52, has served as the Association's Senior Vice
President and Chief Lending Officer since 1986. He has worked at the Association
in various capacities since 1970.
DAVID G. TOWE, age 45, has served as the Association's Vice President,
Loan Operations & Marketing since 1986. He has served the Association in various
capacities since 1973.
RAYMOND G. BANDEMER, age 54, has served as Vice President of the
Association since 1986 and has served the Association since 1981. Prior to that,
he was employed at Tel-A-Data Corporation and was Assistant Vice President at
Unity Savings Association of Chicago.
KATHLEEN A. SCHROEDER, age 50, has served as Vice President and
Secretary of the Association since 1989. She has been employed by the
Association since 1964.
PAT A. LENART, age 57, has served as the Association's Vice President,
Personnel Director since 1989. She has worked at the Association in various
capacities since 1976.
8
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
REPORT OF COMPENSATION COMMITTEE
THE FOLLOWING REPORT OF THE COMPANY'S COMPENSATION COMMITTEE IS
PROVIDED IN ACCORDANCE WITH THE RULES AND REGULATIONS OF THE SEC. PURSUANT TO
SUCH RULES AND REGULATIONS, THIS REPORT SHALL NOT BE DEEMED "SOLICITING
MATERIAL," FILED WITH THE SEC SUBJECT TO REGULATION 14A OR 14C OF THE SEC OR
SUBJECT TO THE LIABILITIES OF SECTION 18 OF THE EXCHANGE ACT.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Company annually reviews and
recommends changes to the compensation levels of the executive officers to the
Board of Directors. The Compensation Committee continues to review the
compensation program to better reflect the Company's public company status. It
is intended that the executive compensation program will enable the Company and
the Association to attract, develop and retain strong executive officers who are
capable of maximizing the Company's performance for the benefit of its
stockholders.
It is the Company's policy to cause its executive officers to be
compensated, either directly or through its affiliates, using a combination of
cash compensation, consisting of a base salary and discretionary bonus payments,
participation in the Association's fringe benefit plans and participation in the
Company's stock benefit plans. These elements are intended to provide an overall
compensation package that is commensurate with the Company's financial
resources, that aligns the executives' financial interests with those of the
Company's stockholders and that is responsive to the immediate and long-term
needs of the executive officers and their families. The compensation practices
of other savings and loan associations in the Chicago metropolitan area are
considered in establishing the overall level of compensation and the components
of the compensation package; however, it has not been a goal or policy to set
compensation at levels designed to achieve a predetermined percentile ranking
among an identified group of peer institutions.
The Board of Directors of the Company accepted without modification all
of the Compensation Committee's recommendations on executive compensation for
the fiscal year ended December 31, 1997. The composition of the Association's
Compensation Committee is the same as that of the Company's Compensation
Committee.
BASE SALARY
During 1996, an independent review of the competitiveness of the total
compensation of the executive group was conducted by a nationally recognized
compensation consulting firm. Compensation levels were compared to other
comparably-sized and similarly-located thrift institutions. Base salary levels
were found to be generally above competitive levels when compared to these
institutions, while total cash compensation was at competitive peer group
levels. The Association's base salaries, however, were found to be higher than
competitive levels, because the Association, unlike other institutions in its
peer group, historically did not provide annual or long-term incentives to its
executives.
For the fiscal year ended December 31, 1997, base salaries of all
executive officers were set at levels determined, in the subjective judgment of
the Compensation Committee, to be commensurate with the executive officers'
customary respective duties and responsibilities and to enable them to maintain
appropriate standards of living within their communities. Annual salary rates
were increased 4% over the prior year's rates, primarily to reflect cost of
living increases. Fringe benefit programs, consisting of life, disability and
group health insurance coverages, are designed to provide for the health and
welfare of the executives and their families as well as for their long-term
financial needs. In addition, all executive officers participated in the
Company's Employee Stock Ownership Plan (the "ESOP") for the fiscal year ended
December 31, 1997. Each executive officer has an individual account within the
ESOP Trust, which is invested primarily in employer securities,
9
<PAGE>
with the result that a portion of each executive officer's long-term retirement
savings is tied to the performance of the Association and the Company.
The determination of the Chief Executive Officer's compensation for the
fiscal year ended December 31, 1997 was based on the same general principles
applied to other executive officers.
LONG TERM INCENTIVES
On April 17, 1997, the Company's stockholders adopted the Company's
1997 Stock Option Plan (the "Stock Option Plan") and the Company's 1997
Recognition and Retention Plan ("RRP") for outside directors, executives and
other employees. Awards of stock options and restricted stock were made to the
executive officers at that time. The options become exercisable at the rate of
20% per year over a five year period, with the first installment scheduled to
vest on April 17, 1998. The restricted stock awards vest at the rate of 20% per
year over a five year period, with the first installment scheduled to vest on
May 1, 1998. The Committee believes that long term incentives are the most
effective way of aligning executive rewards with the creation of value for
stockholders through stock appreciation. It is intended that future awards be
dependent on Company and individual performance, as well as competitive market
conditions.
CHIEF EXECUTIVE OFFICER
During fiscal 1997, and as identified in the Summary Compensation
Table, the Chief Executive Officer was granted 175,231 stock options under the
Stock Option Plan and 70,092 stock awards under the RRP. The Compensation
Committee determined these awards based on: a study of competitive practices of
other comparable institutions, its philosophy on the importance of emphasizing
equity participation and its evaluation of the CEO's long term contribution to
the Company's and the Association's performance. The Committee sought to
recognize the CEO's successful efforts in building a high-quality institution
and management team capable of becoming a public company and his ability to
manage the ongoing transition and future direction that will focus on quality,
growth and profitability, and maximizing shareholder returns.
COMPENSATION COMMITTEE OF
HOME BANCORP OF ELGIN, INC.
ORVAL M. GRAENING
HENRY R. HINES
DONALD E. LAIRD
LEIGH C. O'CONNOR
THOMAS S. RAKOW
RICHARD S. SCHEFLOW
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Graening, Hines, Laird,
O'Connor, Rakow and Scheflow. Mr. Scheflow, a director of the Company, is also a
partner in the law firm of Scheflow & Rydell. During the 1997 fiscal year, this
law firm provided legal representation to the Association on corporate matters
and in foreclosure proceedings. The Association paid Scheflow & Rydell a total
of $18,485 for legal work performed during the 1997 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.
10
<PAGE>
PERFORMANCE GRAPH
The following graph compares the Company's total cumulative stockholder
return from September 26, 1996, the date of the Company's initial public
offering, to December 31, 1997, to the total return for the Nasdaq National
Market and the total return for the S&L Index, which is an index for publicly
traded thrift institutions that trade on a major exchange.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------------------------------------------
9/26/96 12/31/96 3/31/97 6/30/97 9/30/97 12/31/97
------- -------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Home Bancorp of Elgin, Inc. 100.00 135.00 150.00 165.00 178.75 178.75
NASDAQ Market Index 100.00 105.13 99.49 117.43 137.27 127.88
S & L Index 100.00 113.54 133.76 164.10 198.32 197.83
Assumes $100 Invested on September 26, 1996.
Assumes dividends reinvested.
- - ---------------------------------------------------------------------------------------------------------------
</TABLE>
THERE CAN BE NO ASSURANCE THAT STOCK PERFORMANCE WILL CONTINUE INTO THE FUTURE
WITH THE SAME OR SIMILAR TRENDS DEPICTED IN THE GRAPH ABOVE.
11
<PAGE>
DIRECTORS' COMPENSATION
FEE ARRANGEMENTS. Currently, each director of the Association, other
than Messrs. Perucco and Dolan, receives an annual retainer of $27,528 for
attendance at board meetings. The aggregate amount of fees paid to such
directors by the Association for the year ended December 31, 1997 was $165,168.
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 of the Company are also eligible to receive stock options and
restricted stock awards pursuant to the Company's Stock Option Plan and RRP. For
descriptions of the Stock Option Plan, RRP and awards granted under such plans,
see "Stock Option Plan" and "Recognition and Retention Plan."
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, 1997, 1996 and 1995, to the Chief Executive
Officer and all executive officers of the Association who received aggregate
salary and bonus in excess of $100,000 (the "Named Executive Officers").
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG TERM COMPENSATION
------------------------------------------------
ANNUAL COMPENSATION(1) AWARDS PAYOUTS
-------------------------------------- ---------------------- -------
OTHER RESTRICTED
ANNUAL STOCK LTIP ALL OTHER
NAME AND PRINCIPAL COMPENSATION AWARDS OPTIONS PAYOUTS COMPENSATION
POSITIONS YEAR SALARY($) BONUS($) ($)(2) ($)(3) (#)(4) ($) ($)(5)
- - --------------------------------- ---- --------- -------- --------------- ------------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
George L. Perucco, President..... 1997 $223,241 -- $3,986 $1,038,063 175,231 -- $96,822
and Chief Executive Officer 1996 $214,655 -- $4,104 -- -- -- $17,613
1995 $204,433 -- $2,884 -- -- -- $ 734
Lyle N. Dolan, Executive Vice.... 1997 $140,143 -- $5,976 $ 622,835 105,138 -- $90,375
President and Treasurer 1996 $134,753 -- $4,682 -- -- -- $12,872
1995 $128,336 -- $4,635 -- -- -- $ 1,430
Kenneth L. Moran, Senior Vice.... 1997 $113,612 -- $4,872 $ 415,228 70,092 -- $81,845
President and Chief Lending 1996 $109,242 -- $3,547 -- -- -- $10,340
Officer 1995 $104,040 -- $3,625 -- -- -- $ 1,145
</TABLE>
- - --------------------------------------------
(1) Under Annual Compensation, the column titled "Salary" includes base
salary, director's fees and payroll deductions for health insurance
under the Association's health insurance plan.
(2) Represents amounts reimbursed for the payment of taxes. For 1997, 1996
and 1995, 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.
(3) Pursuant to the RRP, Mr. Perucco, Mr. Dolan and Mr. Moran were awarded
70,092, 42,055 and 28,037 shares of restricted stock, respectively, as
of April 17, 1997, which vest in 20% increments on an annual basis,
with the first installment scheduled to vest on May 1, 1998. Dividends
attributable to such shares are paid to the individuals on the payment
date for such dividends. The dollar amounts shown in the table for 1997
are based on the fair market value of a share of Common Stock on April
17, 1997, which was $14.813. The aggregate fair market value of the
restricted stock awards made to Mr. Perucco, Mr. Dolan and Mr. Moran
were $1,252,895, $751,722 and $501,161, respectively, on December 31,
1997, based on a closing price of $17.875 per share. During the fiscal
years ended December 31, 1996 and 1995, neither the Association nor the
Company maintained any restricted stock plans. In the case of death,
disability, retirement or a change in control, as defined in the RRP,
all restricted stock awards become immediately exercisable.
(4) Includes 175,231, 105,138 and 70,092 shares of Common Stock subject to
options granted to Messrs. Perucco, Dolan and Moran, respectively,
pursuant to the Stock Option Plan. The options granted under the Stock
Option Plan are intended to qualify as "incentive stock options" under
Section 422 of the Internal Revenue Code, as amended (the "Code") to
the maximum extent possible, and any options that do not qualify will
constitute non-qualified stock options. The Stock Option Plan provides
for options to become exercisable in five equal installments, beginning
on April 17, 1998, and generally remain exercisable until the tenth
anniversary of the grant date of April 17, 1997, subject to earlier
expiration upon termination of employment. In the case of death,
disability, retirement or a change in control, as defined in the Stock
Option Plan, all options granted become immediately exercisable.
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
12
<PAGE>
(5) Includes (a) dollar value of premiums 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 1997, 1996 and 1995 as follows: Mr. Perucco, $774, $603
and $734; Mr. Dolan, $1,948, $1,518 and $1,430; and Mr. Moran, $1,581,
$1,214 and $1,145; and (b) allocations of Common Stock under the ESOP
(valued at a price per share of $17.875 and $13.50, which was the
closing sales price for the Common Stock on The Nasdaq Stock Market
National Market System on December 31, 1997 and 1996, respectively) for
1997 and 1996 as follows: Mr. Perucco, $96,048 and $17,010; Mr. Dolan,
$88,427 and $11,354; and Mr. Moran, $80,264 and $9,126.
EMPLOYMENT AGREEMENTS
Effective upon the Conversion, the Company and the Association entered
into 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 and two years, respectively,
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, 1997 were $223,241, $140,143 and $113,612 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
13
<PAGE>
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.
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 entered into 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.
14
<PAGE>
BENEFITS
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. 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, a Committee of the
Company's Board of Directors was appointed to administer the ESOP (the "ESOP
Committee"). Harris Bank Barrington, N.A. has been appointed as the ESOP's
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").
The ESOP may purchase additional shares of Common Stock in the future,
in the open market or otherwise, and may do so either on a leveraged basis with
borrowed funds or with cash dividends, periodic employer contributions or other
cash flow. Whether such purchases will be made and the terms and conditions of
any such purchases will be determined by the ESOP's fiduciaries taking into
account such factors as they consider relevant at the time, including their
judgment as to the attractiveness of the Common Stock as an investment, the
price at which Common Stock may be purchased and, in the case of leveraged
purchases, the terms and conditions on which borrowed funds are available and
the willingness of the Company or the Association to offer purchase money
financing or guarantee purchase money financing offered by third parties.
STOCK OPTION PLAN. The Home Bancorp of Elgin, Inc. 1997 Stock Option
Plan (the "Stock Option Plan") was adopted by the Board of Directors of the
Company and approved by the Company's stockholders at the 1997 Annual Meeting.
The purpose of the Stock Option Plan continues to be to promote the growth of
the Company, the Association and other affiliates by linking the incentive
compensation of officers, key executives and directors with the profitability of
the Company. The Stock Option Plan is not subject to ERISA and is not a
tax-qualified plan. The Company has reserved an aggregate of 700,925 shares of
Common Stock for issuance upon the exercise of stock options granted under the
Plan.
15
<PAGE>
The Stock Option Plan is administered by the members of the Board's
Compensation Committee who are disinterested directors ("Option Committee"). In
general, both "incentive stock options" and non-qualified stock options to
purchase Common Stock of the Company ("Options") may be granted to eligible
officers, employees and outside directors, subject to the restrictions of the
Code. The Option Committee has discretion under the Stock Option Plan to
establish certain material terms of the Options granted to officers and
employees provided such grants are made in accordance with the Plan's
requirements. All Options granted to outside directors are by automatic formula
grant and the Option Committee has no discretion over the material terms of
these grants. As of the effective date of the Stock Option Plan, each outside
director of the Company was granted a non-qualified stock option to purchase an
aggregate of 35,046 shares of Common Stock at an exercise price of $14.813 per
share.
All stock options granted under the Plan generally vest in 20%
increments over a five year period subject to automatic full vesting upon the
optionee's death, disability or retirement or upon a change in control of the
Company, as defined in the Stock Option Plan, beginning April 17, 1998. The
Company believes the use of a vesting schedule will encourage each Option
recipient to remain in the service of the Company (or an affiliate) and
contribute to its profitability in order to enjoy the full economic benefit of
the Option. All costs of the Stock Option Plan are borne by the Company. The
Company has reserved the right to amend or terminate the Plan, in whole or in
part, subject to the requirements of all applicable laws.
The following table summarizes the grants that were made to the Named
Executive Officers during 1997.
<TABLE>
OPTION/SAR GRANTS IN FISCAL YEAR 1997
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUME
ANNUAL RATE OF
PERCENT OF STOCK PRICE
NUMBER OF TOTAL APPRECIATION FOR
SECURITIES OPTIONS/SAR OPTION TERM
UNDERLYING GRANTED TO -------------------------
OPTIONS/SARS EMPLOYEES IN EXERCISE OR
GRANTED FISCAL YEAR BASE PRICE EXPIRATION 5% 10%
NAME (#)(1) (%) ($ PER SHARE) DATE ($) ($)
- - ---- ---------------- --------------- --------------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
George L. Perucco,
President and Chief Executive
Officer............................ 175,231 35.7 14.813 4/16/07 1,632,452 4,136,853
Lyle N. Dolan, Executive Vice
President and Treasurer............ 105,138 21.4 14.813 4/16/07 979,466 2,482,098
Kenneth L. Moran, Senior Vice
President and Chief Lending
Officer............................ 70,092 14.3 14.813 4/16/07 652,977 1,654,732
</TABLE>
(1) All Options granted are Incentive Stock Options which become
exercisable in 20% increments on an annual basis, with the first
installment scheduled to vest on April 17, 1998. In case of death,
disability, retirement or a change in control, as defined in the Stock
Option Plan, all Options granted become immediately exercisable.
16
<PAGE>
The following table provides the value for "in-the-money" options,
which represent the positive spread between the exercise price of any such
existing stock options and the year-end price of the Common Stock, which was
$17.875 per share. The first installment of options becomes exercisable on April
17, 1998. Therefore, no exercises occurred in 1997.
<TABLE>
AGGREGATED OPTIONS IN 1997 FISCAL YEAR AND 1997 FISCAL YEAR END OPTIONS
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT FISCAL OPTIONS/SARS AT FISCAL
YEAR-END YEAR-END(1)
(#) ($)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- - ---- ------------------------- -------------------------
<S> <C> <C>
George L. Perucco,
President and Chief Executive Officer...... 0/175,231 0/537,083
Lyle N. Dolan, Executive Vice President and
Treasurer.................................. 0/105,138 0/322,248
Kenneth L. Moran, Senior Vice President
and Chief Lending Officer.................. 0/70,092 0/214,832
</TABLE>
- - ---------------------
(1) None of the outstanding stock options held by the Named Executive
Officer are currently exercisable. The closing price per share of
Common Stock on December 31, 1997 was $17.875, and all Options have an
exercise price of $14.813 per share, which equals a spread of $3.062.
RECOGNITION AND RETENTION PLAN. The Home Bancorp of Elgin, Inc. 1997
Recognition and Retention Plan (the "RRP") was adopted by the Board of Directors
of the Company and approved by the Company's stockholders at the 1997 Annual
Meeting. Similar to the Stock Option Plan, the RRP functions as a long-term
incentive compensation program for eligible officers, employees and outside
directors of the Company, the Association and other affiliates. The RRP is
administered by the members of the Board's Compensation Committee who are
disinterested directors ("RRP Committee"). All costs and expenses of
administering the RRP are paid by the Company.
As required by the terms of the RRP, the Company has established a
trust ("Trust") and has contributed to the Trust, funds sufficient to purchase
up to 280,370 shares of Common Stock, the maximum number of restricted stock
awards ("Restricted Stock Awards") that may be granted under the RRP. Shares of
Common Stock subject to a Restricted Stock Award are held in the Trust until the
Award vests and which time the shares of Common Stock attributable to the
portion of the Award that have vested are distributed to the Award holder. An
Award recipient is entitled to exercise voting rights and receive cash dividends
with respect to the shares of Common Stock subject to his Award, whether or not
the underlying shares have vested. As of December 26, 1997, ownership of shares
subject to restricted stock awards was transferred from the Trust to each
individual granted awards. If an individual award recipient terminates service
prior to full vesting of the restricted stock awards granted pursuant to the
RRP, the shares subject to the award will be forfeited and returned to the
Company.
Restricted Stock Awards are granted under the RRP on a discretionary
basis to eligible officers and executives selected by the RRP Committee and are
awarded to outside directors pursuant to the terms of the RRP. As of January 31,
1998, each outside director has been granted a Restricted Stock Award with
respect to 14,018 shares of Common Stock. All outstanding Restricted Stock
Awards will vest and become distributable at the rate of 20% per year, over a
five year period, commencing on May 1, 1998, subject to automatic full vesting
on the date of the Award holder's death, disability or retirement or upon a
change in control of the Company.
The Company may amend or terminate the RRP, in whole or in part, at any
time, subject to the requirements of all applicable laws.
17
<PAGE>
TRANSACTIONS WITH CERTAIN RELATED PERSONS
The Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA") requires that all loans or extensions of credit to executive officers
and directors must be made on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with the general public and must not involve more than the normal
risk of repayment or present other unfavorable features. The Association has
made loans or extended credit to executive officers and directors and also to
certain persons related to executive officers and directors. All such loans were
made by the Association in the ordinary course of business and were not made
with more favorable terms nor did they involve more than the normal risk of
collectibility or present unfavorable features. The outstanding principal
balance of such loans to directors, executive officers and their associates
totaled $1,640,860 or 1.72% of the Association's total equity at December 31,
1997.
The Company intends that all transactions in the future between the
Company and its executive officers, directors, holders of 10% or more of the
shares of any class of its common stock and affiliates thereof, will contain
terms no less favorable to the Company than could have been obtained by it in
arm's-length negotiations with unaffiliated persons and will be approved by a
majority of independent outside directors of the Company not having any interest
in the transaction.
Richard S. Scheflow, a director of the Association and the Company, is
a partner in the law firm of Scheflow & Rydell, which firm represents the
Association on corporate matters and foreclosure proceedings. In connection with
such representation of the Association, Scheflow & Rydell received fees of
$18,485 for the year ended December 31, 1997.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors, and persons who own more than 10% of Common Stock to
file with the SEC reports of ownership and changes of ownership. Officers,
directors and greater than 10% stockholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on its review of the copies of such forms received by it, or written
representations from certain reporting persons, the Company believes that all
filing requirements applicable to its executive officers, directors and greater
than 10% beneficial owners for the fiscal year ended December 31, 1997 were
complied with.
18
<PAGE>
-----------------------------------------------------------------
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
-----------------------------------------------------------------
GENERAL
The Board of Directors has appointed the firm of KPMG Peat Marwick LLP
to act as independent auditors for the Company for the fiscal year ending
December 31, 1998, subject to ratification of such appointment by the Company's
stockholders. A representative of KPMG Peat Marwick LLP is expected to be
present at the Annual Meeting and will be given an opportunity to make a
statement if he or she desires to do so and will be available to respond to
appropriate questions. No determination has been made as to what action the
Board of Directors would take if the stockholders do not ratify KPMG Peat
Marwick LLP's appointment.
VOTE REQUIRED
The ratification of the appointment by the Board of Directors of KPMG
Peat Marwick LLP as the Company's independent auditors requires the affirmative
vote of the holders of a majority of the outstanding shares of Common Stock
represented, in person or by proxy, at the Annual Meeting and entitled to vote
thereon. Accordingly, shares as to which the "ABSTAIN" box has been selected on
the Proxy Card will be counted as present and entitled to vote and will have the
effect of a vote against Proposal 2. Shares underlying broker non-votes will not
be counted as present and entitled to vote and will have no effect on the vote
for Proposal 2.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
APPROVAL OF THE RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS.
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."
19
<PAGE>
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 1999 Annual Meeting of
Stockholders must be received by the Company by November 12, 1998, 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.
Section 240.14a-8 of the Rules and Regulations promulgated by the SEC under the
Exchange Act.
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 1998 Annual Meeting. If any other matters properly come before the Annual
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.
By Order of the Board of Directors,
/s/ Kathleen A. Schroeder
-----------------------------------
Kathleen A. Schroeder
VICE PRESIDENT AND SECRETARY
Elgin, Illinois
March 12, 1998
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING, PLEASE
COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE
POSTAGE-PAID ENVELOPE PROVIDED.
20
<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 ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON APRIL 16, 1998.
The undersigned stockholder of Home Bancorp of Elgin, Inc. hereby
appoints Kenneth L. Moran, Thomas S. Rakow and Richard S. Scheflow, 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 March 6, 1998, at the 1998 Annual Meeting of
Stockholders (the "Annual Meeting") to be held at 2:00 p.m., Central Time, on
April 16, 1998, or at any adjournment or postponement thereof, upon the matters
described in the accompanying Notice of the 1998 Annual Meeting of Stockholders
and Proxy Statement, dated March 12, 1998, and upon such other matters as may
properly come before the Annual Meeting. 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" THE ELECTION OF ALL NOMINEES LISTED IN ITEM 1 AND
"FOR" THE PROPOSAL LISTED IN ITEM 2.
PLEASE MARK, SIGN AND DATE THIS PROXY ON THE
REVERSE SIDE AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE.
<PAGE>
<TABLE>
<CAPTION>
HOME BANCORP OF ELGIN, INC.
I will attend
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/ the Annual Meeting. /_/
- - ------------------------------------------------------------------------------
The Board of Directors unanimously recommends a vote "FOR" all of the nominees
named in Item 1 and a vote "FOR" the proposal in Item 2.
- - ------------------------------------------------------------------------------
<S> <C>
1. Election of three Directors for FOR WITHHOLD FOR ALL 2. Ratification of the appointment of
terms of three years each. ALL ALL EXCEPT KPMG Peat Marwick LLP as FOR AGAINST ABSTAIN
NOMINEES: George L. Perucco, /_/ /_/ /_/ independent auditors for the fiscal /_/ /_/ /_/
Lyle N. Dolan and year ending December 31, 1998.
Donald E. Laird
INSTRUCTION: TO WITHHOLD
AUTHORITY to vote for any
individual nominee, write that
nominee's name in the space
provided:
------------------------------
Nominee Exception
The undersigned hereby acknowledges receipt of the Notice of
the 1998 Annual Meeting of Stockholders and the Proxy
Statement, dated March 12, 1998 for the Annual Meeting.
---------------------------------------------------------------
---------------------------------------------------------------
Signature(s)
Dated:___________________________________________________, 1998
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.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Fold and Detach here.
Please vote, sign, date and return this proxy form promptly using the enclosed envelope.
</TABLE>
<PAGE>
[LETTERHEAD OF HOME BANCORP OF ELGIN, INC.]
March 12, 1998
TO: ALL EMPLOYEE STOCK OWNERSHIP PLAN ("ESOP") PARTICIPANTS
Re: ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 16, 1998
As you know, Home Bancorp of Elgin, Inc. ("Company"), maintains the
Employee Stock Ownership Plan (the "ESOP") for the benefit of eligible employees
of the Company and the Home Federal Savings and Loan Association of Elgin.
Shares of the Company's common stock ("Common Stock") are purchased by the ESOP,
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 Annual Meeting of Stockholders of Home Bancorp
of Elgin, Inc. to be held on April 16, 1998, enclosed are the following
documents:
1. Confidential Voting Instruction card for the ESOP;
2. Proxy Statement dated March 12, 1998, including a
Notice of Annual Meeting of Stockholders; and
3. The Company's 1998 Annual Report to 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 March 6,
1998, the record date for the Annual Meeting ("Record Date"), on the proposals
to be voted on by the Company's stockholders. Your rights as a participant in
the ESOP will vary depending on whether the matter being voted on is an
"Anticipated Proposal" or an "Unanticipated Proposal."
<PAGE>
ANTICIPATED PROPOSALS
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.
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.
UNANTICIPATED PROPOSALS
It is possible, although very unlikely, that proposals other than those
specified on the enclosed Confidential Voting Instruction card will be presented
for stockholder action at the 1998 Annual Meeting of Stockholders. If this
should happen, the Trustee will vote upon such matters in its discretion, or
cause such matters to be voted upon in the discretion of the individuals named
in any proxies executed by it.
* * * * *
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 April 6, 1998.
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 March 6, 1998, at the 1998 Annual Meeting
of Stockholders of Home Bancorp of Elgin, Inc. to be held on April 16, 1998, 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 March 12, 1998, 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 March 12, 1998.
(CONTINUED ON REVERSE SIDE. PLEASE COMPLETE, SIGN AND DATE ON THE
REVERSE SIDE AND PROMPTLY RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE.)
<PAGE>
THE BOARD OF DIRECTORS OF HOME BANCORP OF ELGIN, INC. RECOMMENDS A VOTE
"FOR" ALL NOMINEES IN PROPOSAL NO. 1 AND "FOR" PROPOSAL NO. 2. IF THIS
CONFIDENTIAL VOTING INSTRUCTION IS SIGNED BUT NO DIRECTION IS GIVEN, THIS VOTING
INSTRUCTION CARD WILL BE DEEMED TO INSTRUCT VOTES "FOR" ALL NOMINEES IN PROPOSAL
NO. 1 AND "FOR" PROPOSAL NO. 2. 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.
<TABLE>
Please mark your votes like this
/X/
- - ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Election of three Directors for terms of three years each.
Nominees: George L. Perucco, Lyle N. Dolan, and Donald E. Laird FOR all nominees
(except as otherwise WITHHOLD
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S indicated) as to all nominees
NAME IN THE SPACE PROVIDED:_____________________________________________________ /_/ /_/
2. Ratification of the appointment of KPMG Peat Marwick LLP as independent FOR AGAINST ABSTAIN
auditors of Home Bancorp of Elgin, Inc. for the fiscal year ending
December 31, 1998. /_/ /_/ /_/
- - ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
In its discretion, the Trustee is authorized to vote upon such other
business as may come before the Annual Meeting or any adjournment or
postponement thereof or to cause such matters to be voted upon in the discretion
of the individuals named in any proxies executed by the Trustees.
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 Annual Meeting of Stockholders of Home Bancorp of Elgin,
Inc., a Proxy Statement dated March 12, 1998 for the Annual Meeting and a 1998
Annual Report to Stockholders.
PLEASE SIGN AND DATE BELOW AND RETURN PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. YOUR CONFIDENTIAL VOTING INSTRUCTION MUST BE RECEIVED NO
LATER THAN APRIL 6, 1998.
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.
