SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
<TABLE>
<CAPTION>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
<S> <C>
/ / 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
</TABLE>
BIG FOOT FINANCIAL CORP.
------------------------------------------------
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(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 BIG FOOT FINANCIAL CORP.]
May 22, 1997
Dear Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders
(the "Special Meeting") of Big Foot Financial Corp. (the "Company"), the holding
company for Fairfield Savings Bank, F.S.B. (the "Bank"), Long Grove, Illinois,
which will be held on June 24, 1997 at 3:00 p.m., Central Time, at the Holiday
Inn Mundelein, located at 510 East Route 83, Mundelein, Illinois 60060.
The attached Notice of Special Meeting of Shareholders 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 from our shareholders.
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 shareholders 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 SHAREHOLDER 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 the Company
and Fairfield Savings Bank, F.S.B., we thank you for your continued support and
appreciate your interest.
Sincerely yours,
/s/ George M. Briody
George M. Briody
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
BIG FOOT FINANCIAL CORP.
OLD MCHENRY ROAD AND ROUTE 83
LONG GROVE, ILLINOIS 60047
(847) 634-2100
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 24, 1997
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of Big
Foot Financial Corp. (the "Company") will be held at the Holiday Inn Mundelein,
located at 510 East Route 83, Mundelein, Illinois 60060, on June 24, 1997 at
3:00 p.m., Central Time, to consider and vote upon the:
1. Approval of the Big Foot Financial Corp. 1997 Stock Option
Plan; and
2. 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.
In accordance with the Company's Bylaws, no business shall be transacted and no
corporate action shall be taken at the Special Meeting other than that stated in
this Notice of Special Meeting.
The Board of Directors has fixed May 14, 1997 as the record date for
the determination of shareholders entitled to notice of and to vote at the
Special Meeting and any adjournment or postponement thereof. Only shareholders
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/ Barbara J. Urban
Barbara J. Urban
SECRETARY
Long Grove, Illinois
May 22, 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 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 SPECIAL MEETING.
- --------------------------------------------------------------------------------
<PAGE>
BIG FOOT FINANCIAL CORP.
PROXY STATEMENT FOR THE
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 24, 1997
GENERAL INFORMATION
GENERAL
This Proxy Statement and accompanying proxy card are being furnished to
the shareholders of Big Foot Financial Corp. (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 May
14, 1997 (the "Record Date"), for use at the Special Meeting of Shareholders of
the Company to be held on June 24, 1997 at the Holiday Inn Mundelein, located at
510 East Route 83, Mundelein, Illinois 60060 at 3:00 p.m., Central Time, and at
any adjournment or postponement thereof (the "Special Meeting"). This Proxy
Statement, together with the enclosed proxy card, is first being mailed to
shareholders on or about May 22, 1997.
On December 19, 1996, the Company became the holding company for
Fairfield Savings Bank, F.S.B. (the "Bank") upon completion of the conversion
and reorganization of the Bank from the mutual to the stock form of organization
(the "Conversion"). The Company, an Illinois corporation, operates as a savings
association holding company for its wholly-owned subsidiary, the Bank.
RECORD DATE AND VOTING RIGHTS
The Board of Directors of the Company has fixed the close of business
on May 14, 1997 as the Record Date for the determination of the Company's
shareholders 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 2,512,750 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 for each share held of record (other than Excess
Common Stock as defined below) at the Special Meeting and at any adjournment or
postponement thereof. The presence, in person or by proxy, of the holders of at
least a majority of the total number of outstanding shares of Common Stock
entitled to vote at the Special Meeting is necessary to constitute a quorum
thereat.
The Articles of Incorporation of the Company provide that if any person
beneficially owns, directly or indirectly, shares of Common Stock in excess of
10% of the then outstanding shares of Common Stock, all such shares beneficially
owned by such person in excess of the 10% threshhold shall be automatically
converted into shares of Excess Common Stock. Shares of Excess Common Stock are
identical to shares of Common Stock except that they are permitted only one
one-hundredth (1/100) of a vote per share. Beneficial ownership of shares
includes shares beneficially owned by such person or any of his or her
affiliates, shares which such person or his or her affiliates have the right to
acquire upon the exercise of conversion rights or options and shares as to which
such person and his or her affiliates have or share investment or voting power,
but shall not include shares beneficially owned by the Company's Employee Stock
Ownership Plan (the "ESOP") or shares that are subject to a revocable proxy and
that are not otherwise beneficially owned or deemed by the Company to be
beneficially owned by such person and his or her affiliates. The Articles of
Incorporation further provide that this provision may
<PAGE>
only be amended upon the approval of the Board of Directors or the vote of
two-thirds of the votes eligible to be cast by holders of all outstanding shares
of voting stock (after giving effect to the limitation on voting rights).
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 THE PROPOSALS IDENTIFIED IN THE NOTICE
OF SPECIAL MEETING. In accordance with the Company's Bylaws, no business shall
be transacted and no corporate action shall be taken at the Special Meeting
other than that stated in the Notice of Special Meeting.
VOTE REQUIRED
Pursuant to the rules and regulations of the Office of Thrift
Supervision ("OTS"), approval of the Big Foot Financial Corp. 1997 Stock Option
Plan (the "Option Plan" or "Proposal 1") for implementation prior to the first
anniversary of the effective date of the Conversion requires the affirmative
vote of a majority of votes eligible to be cast at the Special Meeting. For all
other purposes, the Bylaws of the Company provide that the approval of Proposal
1, as well as the other proposal identified in the Notice of Special Meeting,
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 Special Meeting
and entitled to vote thereon. 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 each matter presented. Shares underlying
broker non-votes will not be counted as having been voted in person or by proxy
and will have the same effect as a vote against Proposal 1 for purposes of the
OTS approval requirement, but such shares will not be counted as present and
entitled to vote, and will therefore have no effect on the vote for any other
purposes with respect to Proposal 1 or for the other proposal identified in the
Notice of Special Meeting.
REVOCABILITY OF PROXIES
A proxy may be revoked at any time before it is voted by filing a
written revocation of the proxy with the Secretary of the Company or by
submitting a duly executed proxy bearing a later date. A proxy also may be
revoked by attending and voting at the Special Meeting or any adjournment or
postponement thereof, only if a written revocation is filed with the Secretary
of the Special Meeting prior to the voting of such proxy.
IF YOU ARE A SHAREHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN
NAME, YOU WILL NEED APPROPRIATE DOCUMENTATION FROM YOUR SHAREHOLDER 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
shareholders. In addition to the use of mail, proxies may be solicited by
officers, directors or employees of the Company and the Bank, 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 Morrow & Co. to assist in the solicitation of proxies. The
estimated cost of such solicitation is $3,500 plus expenses.
2
<PAGE>
INTEREST OF CERTAIN PERSONS IN MATTER TO BE ACTED UPON
Directors and officers of the Bank and the Company will be granted
stock options under the Option Plan being presented for shareholder approval in
Proposal 1, if the shareholders approve the Option Plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
PRINCIPAL SHAREHOLDERS OF THE COMPANY
The following table sets forth, as of May 1, 1997, certain information
as to the 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 May 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, for purposes of the table, of any shares of Common Stock (1) over which
he has or shares, directly or indirectly, voting or investment power, or (2) of
which he has the right to acquire beneficial ownership at any time within 60
days after May 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.
NAME AND ADDRESS OF AMOUNT AND NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT
---------------- -------------------- -------
Big Foot Financial Corp. Employee Stock 201,020(1) 8.0%
Ownership Plan Trust
1190 RFD, Long Grove, IL 60047
- ---------------------
(1) The ESOP is administered by a Plan Administrator, who is an employee of
the Company appointed by the Board of Directors. The assets of the ESOP
are held in a trust (the "ESOP Trust") for which George M. Briody,
Timothy L. McCue and F. Gregory Opelka serve as interim trustees (the
"Trustees"). The Company is in the process of appointing an unrelated
corporate trustee. Under the terms of the ESOP, the Trustees vote the
shares held by the ESOP Trust based upon directions received from the
participants in the ESOP. As of the Record Date, none of the 201,020
shares were allocated to participants. Under the terms of the ESOP,
however, each participant as of the Record Date who was also a
participant effective as of July 31, 1996 will be granted a number of
votes in proportion to such participant's compensation for the most
recent plan year. The remaining shares will be voted in the same manner
and proportion as the shares considered allocated for the purpose of
voting at the Special Meeting, so long as such vote is in accordance
with the provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA").
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 by all directors and executive officers of
the Company or the Company's wholly-owned subsidiary, the Bank, as a group as of
May 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 OF COMMON
BENEFICIAL STOCK
NAME TITLE (1) OWNERSHIP(2) OUTSTANDING(3)
- ---- --------- ------------ --------------
<S> <C> <C> <C>
George M. Briody(4)(5) President and Director 30,127 1.2%
F. Gregory Opelka(5)(6) Executive Vice President and 25,000 *
Director
Maurice F. Leahy Director 5,000 *
Eugene W. Pilawski(7) Director 15,000 *
Joseph J. Nimrod(8) Director 25,427 1.0%
Walter E. Powers, M.D.(9) Director 11,063 *
William B. O'Connell(10) Director 15,000 *
All directors and executive
officers as a group 359,173 14.3%
(11 persons)(5)(11)
</TABLE>
* Less than 1.0% of outstanding Common Stock.
(1) Titles are for both the Company and the Bank.
(2) See "Principal Shareholders of the Company" for a definition of
"beneficial ownership."
(3) Percentages with respect to each person or group of persons have been
calculated on the basis of 2,512,750 shares of Common Stock, the number
of shares of Common Stock outstanding as of May 1, 1997. No officer or
director has the right to acquire beneficial ownership of additional
shares of Common Stock within 60 days after May 1, 1997.
(4) Includes 8,872 shares over which Mr. Briody has shared voting and
investment power. Also includes 1,255 shares held in Mr. Briody's
spouse's individual retirement account as to which Mr. Briody has no
voting and investment power and as to which Mr. Briody disclaims
beneficial ownership.
(5) The amount of shares for all executive officers and directors as a
group includes 201,020 shares held by the ESOP Trust that have not yet
been allocated to the individual accounts of the executive officers as
of May 1, 1997. Messrs. Briody, Opelka and McCue, in their capacity as
interim trustees of the ESOP Trust, may be deemed to have shared voting
power and sole investment power except in limited circumstances. The
individual participants in the ESOP have shared voting power with the
Trustees. Each of the Trustees disclaims ownership of such shares, and
accordingly, such shares are not attributed to the Trustees
individually.
(6) Includes 6,000 shares held by Mr. Opelka's spouse and 4,000 shares
held by Mr. Opelka's children, in both cases as to which Mr. Opelka
has no voting or investment power and as to which Mr. Opelka disclaims
beneficial ownership.
(7) Includes 15,000 shares as to which Mr. Pilawski has shared voting and
investment power.
(8) Includes 6,500 shares over which Mr. Nimrod has shared voting and
investment power. Also includes 1,255 shares held by Mr. Nimrod's
spouse in an individual retirement account as to which Mr. Nimrod has
no voting and investment power and as to which Mr. Nimrod disclaims
beneficial ownership.
(9) Includes 700 shares over which Dr. Powers has shared voting and
investment power. Also includes 2,899 shares held by Dr. Powers' spouse
in an individual retirement account and 1,000 held in a joint account
by Dr. Powers' wife and Dr. Powers' daughter, in both cases as to which
Dr. Powers has no voting or investment power and as to which Dr. Powers
disclaims beneficial ownership.
(10) Includes 15,000 shares held jointly with Mr. O'Connell's wife as to
which Mr. O'Connell has shared investment and voting power.
(11) Includes 46,072 shares over which the directors and executive officers
share voting and investment power.
4
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS' COMPENSATION
FEE ARRANGEMENTS. Currently, each director of the Bank receives a
monthly fee of $900. The aggregate amount of fees paid to such directors by the
Bank for the year ended July 31, 1996 was approximately $75,600. No additional
fees are paid for attendance at board committee meetings. Directors of the
Company will not be separately compensated for their services as such. It is
anticipated that directors will also be covered by the Stock Option Plan
expected to be implemented by the Company.
See "-- Benefits -- Stock Option Plan."
EXECUTIVE COMPENSATION
COMPENSATION DECISIONS. Decisions regarding the Company's executive
compensation are made by the Company's Board of Directors based on
recommendations of the Compensation Committee, the membership of which excludes
those directors employed by the Company. Under this structure, no interlocks
exist between members of the Compensation Committee and employees of the
Company.
CASH COMPENSATION. The following table sets forth the cash compensation
paid by the Bank for services rendered in all capacities during the fiscal year
ended July 31, 1996, to the Chief Executive Officer and all executive officers
of the Bank who received compensation in excess of $100,000 (the "Named
Executive Officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
------------------------------------------------
ANNUAL COMPENSATION(1) AWARDS PAYOUTS
------------------------------------- --------------------- ------------
OTHER RESTRICTED
ANNUAL STOCK LTIP ALL OTHER
NAME AND PRINCIPAL COMPENSATION AWARDS OPTIONS PAYOUTS COMPENSATION
POSITIONS YEAR SALARY($) BONUS($) ($)(2) ($)(3) (#)(3) ($)(3) ($)
- --------------------------------- ---- --------- -------- -------------- ----------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
George M. Briody, President...... 1996 $157,180 $14,550 -- -- -- -- --
F. Gregory Opelka, Executive Vice
President..................... 1996 $103,145 $ 9,240 -- -- -- -- --
</TABLE>
- ----------
(1) Under Annual Compensation, the column titled "Salary" includes base
salary, director's fees and payroll deductions for health insurance
under the Bank's health insurance plan.
(2) For 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. For
1996, the Bank had no restricted stock or stock related plans in
existence.
(3) During the fiscal year ended July 31, 1996, the Bank did not maintain
any restricted stock, stock option or other long-term incentive plans.
EMPLOYMENT AGREEMENTS
Effective upon the Conversion, the Company and the Bank entered into
Employment Agreements with each of Messrs. Briody, Opelka, Timothy L. McCue,
Vice President and Chief Financial Officer, Robert A. Jones, Vice President and
Michael I. Cahill, Vice President and Comptroller (the "Senior Executives").
These Employment Agreements establish the respective duties and compensation of
the Senior Executives and are intended to ensure that the Bank and the Company
will be able to maintain a stable and competent management base after the
Conversion. The continued success of the Bank and the Company depends to a
significant degree on the skills and competence of the Senior Executives.
The Employment Agreements provide for three-year terms. The Bank's
Employment Agreements provide that, commencing on the first anniversary date and
continuing each anniversary date thereafter, the
5
<PAGE>
Board of Directors may, with the Senior Executive's concurrence, extend the
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 the Compensation Committee, and the Senior
Executive's base salary may be increased on the basis of such officer's job
performance and the overall performance of the Bank. The base salaries for
Messrs. Briody, Opelka, McCue, Jones and Cahill as of May 1, 1997 were $150,480,
$95,945, $84,410, $53,305 and $54,527 respectively. The Employment Agreements
also 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 Bank or Company and the
Senior Executive. The Employment Agreements provide for termination by the Bank
or the Company at any time for cause as defined in the Employment Agreements.
In the event the Bank 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 Bank and the Company for the reasons
specified in the Employment Agreements, the Senior Executive would be entitled
to a lump sum cash payment in an amount equal to the present value of the
remaining cash compensation due to the Senior Executive and the additional
contributions or benefits that would have been earned under any employee benefit
plans of the Bank 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. If
permitted by applicable law, provision will also be made for the cash out of
stock options, appreciation rights or restricted stock as if the Senior
Executive was fully vested. The Bank and the Company would also continue the
Senior Executive's life, health and any disability insurance or other benefit
plan coverage for specified periods. Reasons specified as grounds for
resignation for purposes of the Employment Agreements are: failure to elect or
re-elect the Senior Executive to such officer's offices; failure to vest in the
Senior Executive the functions, duties or authority associated with such
offices; any material breach of contract by the Bank 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), demotion, loss of title,
office or significant authority or responsibility, any reduction in any element
of compensation or benefits, any adverse change of location of the principal
place of employment or working conditions. In general, for purposes of the
Employment Agreements and the plans maintained by the Company or the Bank, 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 Bank, upon shareholder approval
of a merger or consolidation or a change of the majority of the Board of
Directors of the Company or the Bank or upon liquidation or sale of
substantially all the assets of the Company or the Bank. The amount to be paid
under the Employment Agreements in the event of a change of control of the Bank
or the Company cannot be estimated at this time, because the actual amount is
based on the compensation and benefit costs applicable to these individuals and
other factors existing at the time of the change of control which cannot be
determined at this time.
Payments to the Senior Executives under the Bank's Employment
Agreements will be guaranteed by the Company in the event that payments or
benefits are not paid by the Bank. 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 Bank's Employment Agreements are
duplicative, payments due under the Company's Employment Agreements would be
offset by amounts actually paid by the Bank. 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 Bank or the Company may constitute an "excess parachute"
payment under Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), resulting in the imposition of a 20% excise tax on the recipient and
the denial of the
6
<PAGE>
deduction for such excess amounts to the Company and the Bank. The Company's
Employment Agreements include a provision indemnifying each Senior Executive on
an after-tax basis for any "golden parachute" excise taxes.
BENEFITS
MANAGEMENT BONUS PROGRAM FOR THE SENIOR MANAGEMENT OFFICERS. In fiscal
year 1995, the Board of Directors of the Bank adopted an annual bonus program
applicable to senior management officers (the "SMO"). Amounts awarded as the
annual bonus under the SMO are determined at the discretion of the Compensation
Committee of the Board considering such factors as completion of specific goals
or projects, financial performance compared to a peer group, amount and type of
classified assets and a comparison of the officer's compensation to peer group
officers. The minimum guidelines for Bank financial performance necessary to
trigger an award is a return on assets in excess of a designated amount for each
applicable fiscal year. The SMO had a total payout for fiscal year 1995 of
approximately $68,000. No annual award was made for fiscal year 1996.
PENSION PLAN. The Bank maintains the Fairfield Savings Bank Retirement
Plan, a non-contributory, tax-qualified defined benefit pension plan (the
"Pension Plan") for eligible employees. All employees with more than 1,000 hours
of service per year, except leased employees, who have attained age 21 and
completed one year of service are eligible to participate in the Pension Plan.
The Pension Plan provides a benefit for each participant, including executive
officers named in the Summary Compensation Table above. The benefit is equal to
an amount (A) minus (B) where (A) is an amount equal to (i) 2% of the
participant's final average compensation multiplied by the participant's
projected benefit service, reduced by (ii) the participant's social security
offset allowance, and such result multiplied by (iii) a fraction, the numerator
of which equals the participant's benefit service and the denominator of which
is the participant's projected benefit service, and (B) is the amount to which
the participant is entitled under the Fairfield Savings and Loan Association
Pension Plan (the predecessor of the Pension Plan). A participant's social
security offset allowance shall equal 0.6% multiplied by the participant's years
of projected benefit service not in excess of 35 years, multiplied by the lesser
of the participant's (i) final average offset compensation or (ii) covered
compensation, divided by twelve.
Final average offset compensation is the monthly average of a
participant's compensation over sixty (60) consecutive months of employment out
of the participant's last 120 month period of employment during which the
participant's compensation is the highest. A participant is fully vested in his
or her pension after five years of service. The Pension Plan is funded by the
Bank on an actuarial basis, and all assets are held in trust by the Pension Plan
trustee. 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
straight life annuity) at various levels of annual compensation (12 times final
average offset compensation) and years of service under the Pension Plan. The
amounts in the table are subject to a social security benefit offset allowance
and further reduction by the amount to which a participant is entitled under the
Fairfield Savings and Loan Association Pension Plan, a predecessor qualified
plan.
<TABLE>
<CAPTION>
YEARS OF SERVICE AT RETIREMENT
---------------------------------------------------------------------------------------------
ANNUAL AVERAGE
COMPENSATION 15 20 25 30 35
- -------------- -------------- -------------- -------------- -------------- --------------
<C> <C> <C> <C> <C> <C>
$ 125,000 $ 37,500 $ 50,000 $ 62,500 $ 75,000 $ 87,500
150,000(1) 45,000 60,000 75,000 90,000 105,000
175,000(1) 52,500 70,000 87,500 105,000 122,500(2)
200,000(1) 60,000 80,000 100,000 120,000(2) 140,000(2)
</TABLE>
- ----------
(1) For the Pension Plan year ended July 31, 1996, the annual compensation
for calculating benefits may not exceed $150,000 (as adjusted for
subsequent years pursuant to Code provisions).
(2) For the Pension Plan year ended July 31, 1996, the maximum annual
benefit under the Pension Plan may not exceed $120,000. The maximum
annual benefit will be adjusted in subsequent years pursuant to Code
provisions.
7
<PAGE>
The following table sets forth the years of credited service and the
final average compensation (as defined above) determined as of July 31, 1996,
the end of the 1996 plan year, for each of the individuals named in the Summary
Compensation Table. The final average compensation includes the base salary
component of the figures shown in the salary column of the Summary Compensation
Table.
YEARS OF CREDITED SERVICE
-------------------------
FINAL AVERAGE
YEARS MONTHS COMPENSATION
----- ------ ------------
Mr. Briody........................ 46 1 $ 128,620
Mr. Opelka........................ 41 8 84,990
PROFIT SHARING AND SAVINGS PLAN. The Bank maintains a Profit Sharing
and Savings Plan, which permits salaried employees with at least one year of
service to make pre-tax salary deferrals under section 401(k) of the Code and
after-tax contributions under section 401(a) of the Code. Salary deferrals are
made by election and are limited to 15% of compensation up to $150,000 (for
1996), or to a limit imposed under the Code ($9,500 for 1996). The Bank makes
matching contributions equal to 25% of the amount of salary contributions, up to
6% of salary. The Profit Sharing and Savings Plan also provides for
discretionary contributions as the Bank may determine. For plan years beginning
prior to August 1, 1996, the Profit Sharing and Savings Plan required the Bank
to contribute annually an amount equal to 2% of the base annual salary of
participants. Employer contributions, other than monthly contributions, were
discontinued on a prospective basis in connection with the implementation of the
ESOP described herein.
The Bank amended the Profit Sharing and Savings Plan in connection with
the Conversion to provide for the investment of Plan assets in Common Stock of
the Company. In addition, participating employees may elect to invest all or any
part of their account balances in the Company's Common Stock. Common Stock held
by the Profit Sharing and Savings Plan may be newly issued or treasury shares
acquired from the Company or outstanding shares purchased in the open market or
in privately negotiated transactions. All Common Stock held by the Profit
Sharing and Savings Plan is held by an independent trustee and allocated to the
accounts of individual participants. Participants control the exercise of voting
and tender rights relating to the Common Stock held in their accounts.
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST. The Company has established,
and the Bank has adopted for the benefit of eligible employees, an ESOP and
related trust which became effective upon the Conversion. Substantially all
employees of the Bank 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.
Although contributions to the ESOP are discretionary, the Company and the Bank
intend 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, with interest at the rate of 8% per annum and level annual
payments of principal plus accrued interest, designed to amortize the loan over
its term. The loan also permits optional prepayments. The Company and the Bank
may make additional annual contributions to the ESOP to the maximum extent
deductible for federal income tax purposes.
Shares purchased by the ESOP are initially 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 participants'
total taxable compensation for the year of allocation. Benefits generally become
vested at the rate of 20% per year beginning on completion of a participant's
third year of service with 100% vesting after seven years of service (including
past 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 of unvested amounts will
be reallocated among remaining participating employees in the same proportion as
contributions. Vested benefits may be paid in
8
<PAGE>
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 Plan Administrator
was appointed to administer the ESOP (the "Plan Administrator"). The assets of
the ESOP are held in trust for which George M. Briody, Timothy L. McCue and F.
Gregory Opelka serve as interim Trustees. The Company is in the process of
appointing an unrelated corporate trustee. The Plan Administrator may instruct
the Trustees regarding investment of funds contributed to the ESOP. The ESOP
Trustees, subject to their 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 received from participants regarding the
allocated stock as long as such vote is in accordance with the provisions of
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 Bank to offer purchase money financing or
guarantee purchase money financing offered by third parties.
STOCK OPTION PLAN. The Board of Directors of the Company has adopted
the Big Foot Financial Corp. 1997 Stock Option Plan. The Plan is subject to the
approval of the shareholders of the Company at the Special Meeting. See
"Proposal 1 - Big Foot Financial Corp. 1997 Stock Option Plan."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended July 31, 1996, the Compensation Committee
consisted of Messrs. Powers, Leahy and Nimrod. During the 1996 fiscal year there
were no 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
BIG FOOT FINANCIAL CORP. 1997 STOCK OPTION PLAN
-----------------------------------------------------------------
GENERAL PLAN INFORMATION
The Company has adopted, subject to approval by the shareholders of the
Company, the Big Foot Financial Corp. 1997 Stock Option Plan ("Option Plan").
The Option Plan provides for the grant of options to purchase Common Stock of
the Company ("Options") to certain officers, employees and outside directors of
the Company. The Option Plan will not take effect, and no Options granted
thereunder will be effective, prior to the date of such shareholder approval
("Effective Date"). The Option Plan is not subject to ERISA. The principal
provisions of the Option Plan are summarized below. The full text of the Option
Plan is set forth as Appendix A to this Proxy Statement, to which reference is
made, and the summary provided below is qualified in its entirety by such
reference.
9
<PAGE>
Pursuant to the regulations of the OTS applicable to management stock
benefit plans to be established by a federal association or its holding company
sooner than one year after the association's stock conversion, the affirmative
vote of a majority of the votes eligible to be cast is required for approval of
the Option Plan. Under the Company's Bylaws, the affirmative vote of a majority
of the shares present and entitled to vote at a meeting at which a quorum is
present would ordinarily be required for such approval. In the event that less
than a majority of the votes eligible to be cast at the Special Meeting, but at
least a majority of the votes present and entitled to vote at the Special
Meeting, vote in favor of approval, the Option Plan will be considered approved,
but it will not be established or implemented and no options will be granted
prior to December 19, 1997, which is the first anniversary of the Conversion.
PURPOSE OF THE OPTION PLAN
The purpose of the Option Plan is to promote the growth and
profitability of the Company, 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 Compensation Committee of the Board (or any
successor committee) or such other committee as the Board may designate
("Committee") will administer the Option Plan. Such Committee will be comprised
of at least two directors of the Company, and all directors on the Committee
will be "disinterested directors" (as that term is defined under Section 162(m)
of the Code or Rule 16b-3 promulgated under the Exchange Act). The Committee
will 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 directors under the Option Plan are granted
automatically pursuant to a formula, and the 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 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 of administering the Option Plan will be borne by the Company.
STOCK SUBJECT TO THE OPTION PLAN. The Company has reserved 251,275
shares of Company Common Stock (the "Shares") for issuance upon exercise of
Options. Such Shares may be authorized and unissued shares or shares previously
issued and reacquired by the Company. Any Shares subject to options under the
Option Plan which expire or are terminated, forfeited or cancelled without
having been exercised or vested in full, shall again be available to support
additional grants under the Option Plan. The aggregate fair market value of the
Shares reserved for issuance was $3,863,353, based on the closing sales price
per share of Common Stock of $15.375 on The Nasdaq Stock Market on the Record
Date.
ELIGIBILITY. Any employee of the Company or its affiliates who is
selected by the Committee is eligible to participate in the Option Plan as an
"Eligible Individual." As of May 14, 1997, there were 6 Eligible Individuals.
Members of the board of directors of the Company or of the board of directors of
the Bank who are not employees or officers of the Company or Bank are eligible
to participate as an "Eligible Director." As of May 14, 1997, there were 5
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"). Unless otherwise
designated by the Committee, Options granted under the Option Plan will be
NQSOs, will be exercisable for a price per Share equal to the fair market value
of a Share 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
10
<PAGE>
cause; one year after termination of employment due to death, disability or
retirement; or immediately upon termination for cause). In no event may an
Option be granted with an exercise price per Share that is less than the fair
market value of a Share when the Option is granted, or for a term exceeding ten
years from the date of grant. 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.
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
Committee deems appropriate, including, but not limited to, Shares already owned
by the option holder or Shares to be acquired by the option holder upon exercise
of the Option, provided that the delivery of Shares concurrently with the
exercise of an Option does not violate section 16(b) of the Exchange Act, or any
rules or regulations promulgated thereunder.
TERMS AND CONDITIONS OF OPTIONS GRANTED TO DIRECTORS. Effective on the
Effective Date, each person who is an Eligible Director on such date will be
granted a NQSO to purchase 10,051 Shares. Such Options will have an Exercise
Price equal to the fair market value of a Share on the date of grant and an
Exercise Period commencing on the date of grant and expiring on the earliest of
(i) the date such Eligible Director ceases to be an Eligible Director due to a
removal for cause (in accordance with the bylaws) of the Bank or the Company, as
applicable and (ii) the last day of the ten-year period commencing on the date
the Option was granted. On the first anniversary of the date of grant and on
each anniversary thereof until all 10,051 Shares subject to the grant are
exercisable, the Option will become exercisable as to 20% of the Shares as to
which such Eligible Director's outstanding Option has been granted. In the event
of the Option holder's termination of service due to death or disability (as
defined in the Option Plan), all optioned Shares not previously exercisable will
automatically become exercisable and remain exercisable for the balance of the
original ten year term. A maximum of 50,255 shares may be issued to Eligible
Directors upon exercise of Options.
Options granted to directors under the Option Plan will be NQSOs. 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 Committee deems
appropriate, including, but not limited to, Shares already owned by the option
holder or Shares to be acquired by the option holder upon exercise of the
Option, provided that the delivery of Shares concurrently with the exercise of
an Option does not violate section 16(b) of the Exchange Act, or any rules or
regulations promulgated thereunder.
REGULATORY RESTRICTIONS
The Option Plan is subject to certain restrictions imposed by the OTS
with respect to stock benefit plans that are established or implemented by a
federal savings association or its holding company within one year after the
association's conversion from a mutual association to a stock association. The
restrictions apply to the Option Plan because the Conversion of the Bank
occurred within one year prior to the date of this Special Meeting. To reflect
these requirements, the Option Plan provides (i) that no Options may be granted
prior to the date on which the Company's shareholders approve the Option Plan;
(ii) that no individual officer or employee may be granted Options to purchase
more than 62,819 Shares; and (iii) that any Options granted shall have an
exercise price no less than the fair market value of a Share on the date the
Option is granted and will become exercisable at a rate no more rapid than 20%
per year beginning on the first anniversary date of the grant, with accelerated
vesting only in cases of death or disability. Management of the Company has been
advised by its legal counsel that the Option Plan complies with all applicable
OTS regulations. The OTS has not endorsed or approved the Option Plan. No
representation to the contrary shall be made.
Article X of the Option Plan provides for accelerated vesting of
outstanding Options in the event of a Change in Control or termination of
service constituting Retirement (as defined in the Option Plan). Article X also
provides that after December 19, 1997, the Compensation Committee may, in its
discretion, establish a different vesting schedule than presently provided in
the Option Plan in determining the exercisability of Options granted to Eligible
Employees. Article X of the Option Plan also authorizes the Compensation
Committee, in its discretion, to adjust outstanding Options to equitably reflect
any extraordinary dividend that
11
<PAGE>
may be paid after December 19, 1997, including any non-taxable return of
capital. Such adjustment may take the form of a cash payment or an adjustment of
the Exercise Price. No representation is made that any such dividend will be
declared or paid. The provisions of Article X will not be applicable, and will
be of no force or effect, unless and until the shareholders of the Company have
approved such provisions by an affirmative vote of the holders of a majority of
the shares represented in person or by proxy and entitled to vote at a meeting
of shareholders duly called and held after December 19, 1997.
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 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 Effective Date by giving written notice of such
suspension or termination to the Compensation 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 (i) materially increases the benefits
accruing under the Option Plan, (ii) materially increases the number of Shares
which may be issued under the Option Plan or (iii) materially modifies the
requirements as to eligibility for Options under the Option Plan, such amendment
or revision will be subject to approval by the shareholders of the Company.
Subject to these above provisions, the Board will also have broad authority to
amend the Option Plan to take into account changes in applicable financial
institution, securities and tax laws and accounting rules and regulations, as
well as other developments.
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 and any descriptions of the provisions of any 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.
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 such option holder
will realize a capital gain or loss on the sale or disposition. If the option
holder exercises an ISO and sells or disposes of the underlying 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.
12
<PAGE>
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. PARTICIPANTS ARE ADVISED TO CONSULT WITH THEIR TAX ADVISOR AS TO
THE TAX CONSEQUENCES OF THE OPTION PLAN.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" APPROVAL OF THE BIG FOOT FINANCIAL
CORP. 1997 STOCK OPTION PLAN.
NEW PLAN BENEFITS
BIG FOOT FINANCIAL CORP. 1997 STOCK OPTION PLAN
-----------------------------------------------
The following table discloses the benefits that will be received by
directors (and may be received by others) under the Stock Option Plan if the
shareholders approve Proposal 1.
================================================================================
Stock Option Plan(1)
--------------------------------
Name/Position # $ Value(2)
================================================================================
George M. Briody, President and Director 55,280(1) 0
- --------------------------------------------------------------------------------
F. Gregory Opelka, Exec. VP and Director 37,693(1) 0
- --------------------------------------------------------------------------------
All Current Executive Officers as a Group 201,020 0
- --------------------------------------------------------------------------------
All Non-Employee Directors as a Group(3) 50,255 0
- --------------------------------------------------------------------------------
All Non-Executive Employees as a Group 0 0
================================================================================
(1) As of the Record Date, no grants to non-executive employees have been
made under the Big Foot Financial Corp. 1997 Stock Option Plan. It is
not determinable at this time what benefits, if any, each of the
persons or groups listed will receive under such plan. The numbers in
the table reflect the Compensation Committee's intentions with respect
to grants to be made upon the effective date of approval of the Option
Plan. The grants will become effective only if the shareholders approve
the Option Plan.
(2) The Exercise Price of Options granted will be the fair market value of
a Share of the Company's Common Stock on the date of the grant. The
future value, if any, will be dependent on the price of the Company's
Common Stock in the future.
(3) On the Effective Date, each outside director will receive a
non-qualified stock option to purchase 10,051 Shares with an Exercise
Price equal to the fair market value of a Share on the Effective Date.
On each anniversary of the date of the grant until all Options are
exercisable, 20% will become exercisable, with full vesting on death or
disability. Such Options will expire on the earliest of the director's
removal for cause or on the tenth anniversary of the date of the grant.
13
<PAGE>
---------------------------------------------------------------------
PROPOSAL 2
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 Bylaws of the Company require that no business be transacted and no
corporate action be taken at a special meeting other than that stated in the
Notice of 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 shareholders 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 with respect to such matters. 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
shareholders, taken as a whole.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" AUTHORIZATION OF THE BOARD OF DIRECTORS OF BIG FOOT FINANCIAL
CORP., 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.
14
<PAGE>
ADDITIONAL INFORMATION
DATE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
Pursuant to the proxy soliciting regulations of the SEC, any
shareholder proposal intended for inclusion in the Company's proxy statement and
proxy card relating to the Company's 1997 Annual Meeting of Shareholders must be
received by the Company a reasonable time before the Company makes its proxy
solicitation in connection with the 1997 Annual Meeting of Shareholders. Nothing
in this paragraph shall be deemed to require the Company to include in its proxy
statement and proxy card for such meeting any shareholder 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.
NOTICE OF BUSINESS TO BE CONDUCTED AT ANNUAL MEETING
The Bylaws of the Company provide an advance notice procedure for a
shareholder to properly bring business before an annual meeting or to nominate
any person for election to the Board of Directors. The shareholder must be a
shareholder of record and have given timely notice thereof in writing to the
Secretary of the Company. To be timely, a shareholder'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 shareholders, 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 shareholders 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 shareholders. Notice shall be deemed to first be given to shareholders
when disclosure of such date of the meeting of shareholders 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
shareholder'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 shareholder 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
Shareholder Proposals."
By Order of the Board of Directors
/s/ Barbara J. Urban
Barbara J. Urban
SECRETARY
Long Grove, Illinois
May 22, 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.
15
<PAGE>
APPENDIX A
BIG FOOT FINANCIAL CORP. 1997 STOCK OPTION PLAN
ARTICLE I
PURPOSE
SECTION 1.1 GENERAL PURPOSE OF THE PLAN.
The purpose of the Plan is to promote the growth and
profitability of Big Foot Financial Corp., to provide eligible directors,
certain key officers and employees of Big Foot Financial Corp. 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 Big Foot Financial Corp.
ARTICLE II
DEFINITIONS
The following definitions shall apply for the purposes of this
Plan, unless a different meaning is plainly indicated by the context:
SECTION 2.1 BANK means Fairfield Savings Bank, F.S.B., a
federally chartered savings institution, and any successor thereto.
SECTION 2.2 BOARD means the board of directors of the Company.
SECTION 2.3 CHANGE IN CONTROL means any of the following
events:
(a) the occurrence of any event upon which any "person" (as
such term is used in sections 13(d) and 14(d) of the Exchange Act),
other than (A) a trustee or other fiduciary holding securities under an
employee benefit plan maintained for the benefit of employees of the
Company; (B) a corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as
their ownership of stock of the Company; or (C) any group constituting
a person in which employees of the Company are substantial members,
becomes the "beneficial owner" (as defined in Rule 13d-3 promulgated
under the Exchange Act), directly or indirectly, of securities issued
by the Company representing 25% or more of the combined voting power of
all of the Company's then outstanding securities; or
(b) the occurrence of any event upon which the individuals who
on the date the Plan is adopted are members of the Board, together with
individuals whose election by the Board or nomination for election by
the Company's shareholders was approved by the affirmative vote of at
least two-thirds of the members of the Board then in office who were
either members of the Board on the date this Plan is adopted or whose
nomination or election was previously so approved, cease for any reason
to constitute a majority of the members of the Board, but excluding,
for this purpose, any such individual whose initial assumption of
office is in connection with an actual or threatened election contest
relating to the election of directors of the Company (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act); or
(c) the shareholders of the Company approve either:
(i) a merger or consolidation of the Company with any
other corporation, other than a merger or consolidation
following which both of the following conditions are
satisfied:
(A) either (I) the members of the Board of
the Company immediately prior to such merger or
consolidation constitute at least a majority of the
members of the governing body of the institution
resulting from such merger or consolidation; or (II)
the shareholders of the Company own securities of the
institution resulting from such merger or
consolidation representing 80% or more of the
combined voting power of all such securities of the
resulting institution then outstanding in
substantially the same proportions as their ownership
of voting securities of the Company immediately
before such merger or consolidation; and
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(B) the entity which results from such
merger or consolidation expressly agrees in writing
to assume and perform the Company's obligations under
the Plan; or
(ii) a plan of complete liquidation of the Company or
an agreement for the sale or disposition by the Company of all
or substantially all of its assets; and
(d) any event that would be described in section 2.3(a), (b)
or (c) if the "Bank" were substituted for the "Company" therein.
SECTION 2.4 CODE means the Internal Revenue Code of 1986
(including the corresponding provisions of any succeeding law).
SECTION 2.5 COMMITTEE means the Committee described in section
4.1.
SECTION 2.6 COMPANY means Big Foot Financial Corp., a
corporation organized and existing under the laws of the State of Illinois, and
any successor thereto.
SECTION 2.7 DISABILITY means a condition of total incapacity,
mental or physical, for further performance of duty with the Company which the
Committee shall have determined, on the basis of competent medical evidence, is
likely to be permanent.
SECTION 2.8 DISINTERESTED BOARD MEMBER means a member of the
Board who (a) is not a current employee of the Company or a subsidiary, (b) is
not a former employee of the Company who receives compensation for prior
services (other than benefits under a tax-qualified retirement plan) during the
taxable year, (c) has not been an officer of the Company, (d) does not receive
remuneration from the Company or a subsidiary, either directly or indirectly, in
any capacity other than as a director, and (e) does not possess an interest in
any other transaction, and is not engaged in a business relationship, for which
disclosure would be required pursuant to Item 404(a) or (b) of the proxy
solicitation rules of the Securities and Exchange Commission. The term
Disinterested Board Member shall be interpreted in such manner as shall be
necessary to conform to the requirements of section 162(m) of the Code or Rule
16b-3 promulgated under the Exchange Act.
SECTION 2.9 EFFECTIVE DATE means June 24, 1997.
SECTION 2.10 ELIGIBLE DIRECTOR means a member of the board of
directors of an Employer who is not also an employee or an officer of an
Employer.
SECTION 2.11 ELIGIBLE EMPLOYEE means any employee whom the
Committee may determine to be a key officer or employee of an Employer and
select to receive a grant of an Option pursuant to the Plan.
SECTION 2.12 EMPLOYER means the Company, the Bank and any
successor thereto and, with the prior approval of the Board, and subject to such
terms and conditions as may be imposed by the Board, any other savings bank,
savings and loan association, bank, corporation, financial institution or other
business organization or institution. With respect to any Eligible Employee or
Eligible Director, the Employer shall mean the entity which employs such person
or upon whose board of directors such person serves.
SECTION 2.13 EXCHANGE ACT means the Securities Exchange Act of
1934, as amended.
SECTION 2.14 EXERCISE PRICE means the price per Share at which
Shares subject to an Option may be purchased upon exercise of the Option,
determined in accordance with section 5.2 or 6.3.
SECTION 2.15 FAIR MARKET VALUE means, with respect to a Share
on a specified date:
(a) the final reported sales price on the date in question (or
if there is no reported sale on such date, on the last preceding date
on which any reported sale occurred) as reported in the principal
consolidated reporting system with respect to securities listed or
admitted to trading on the principal United States securities exchange
on which the Shares are listed or admitted to trading; or
(b) if the Shares are not listed or admitted to trading on any
such exchange, the closing bid quotation with respect to a Share on
such date on the National Association of Securities Dealers Automated
Quotations
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System, or, if no such quotation is provided, on another similar
system, selected by the Committee, then in use; or
(c) if sections 2.15(a) and (b) are not applicable, the fair
market value of a Share as the Committee may determine.
SECTION 2.16 FAMILY MEMBER means the spouse, parent, child or
sibling of an Eligible Director or Eligible Employee.
SECTION 2.17 INCENTIVE STOCK OPTION means a right to purchase
Shares that is granted to Eligible Employees pursuant to section 6.1, that is
designated by the Committee to be an Incentive Stock Option and that is intended
to satisfy the requirements of section 422 of the Code.
SECTION 2.18 NON-PROFIT ORGANIZATION means any organization
which is exempt from federal income tax under section 501(c)(3), (4), (5), (6),
(7), (8) or (10) of the Code.
SECTION 2.19 NON-QUALIFIED STOCK OPTION means a right to
purchase Shares that is granted pursuant to section 5.1 or 6.1. For Eligible
Employees, an Option will be a Non-Qualified Stock Option if (a) it is not
designated by the Committee to be an Incentive Stock Option, or (b) it does not
satisfy the requirements of section 422 of the Code.
SECTION 2.20 OPTION means either an Incentive Stock Option or
a Non-Qualified Stock Option.
SECTION 2.21 OPTION PERIOD means the period during which an
Option may be exercised, determined in accordance with sections 5.3 and 6.4.
SECTION 2.22 OTS REGULATIONS means the regulations issued by
the Office of Thrift Supervision and applicable to the Plan, the Bank or the
Company.
SECTION 2.23 PERSON means an individual, a corporation, a
bank, a savings bank, a savings and loan association, a financial institution, a
partnership, an association, a joint-stock company, a trust, an estate, an
unincorporated organization and any other business organization or institution.
SECTION 2.24 PLAN means the Big Foot Financial Corp. 1997
Stock Option Plan, as amended from time to time.
SECTION 2.25 RETIREMENT means retirement at or after the
normal or early retirement date set forth in any tax-qualified retirement plan
of the Bank or the Company.
SECTION 2.26 SHARE means a share of Common Stock, par value
$.01 per share, of Big Foot Financial Corp.
SECTION 2.27 TERMINATION FOR CAUSE means one of the following:
(a) for an Eligible Employee who is not an officer or employee
of any bank or savings institution regulated by the Office of Thrift
Supervision, "Termination for Cause" means termination of employment with the
Employer upon the occurrence of any of the following: (i) the employee
intentionally engages in dishonest conduct in connection with his performance of
services for the Employer resulting in his conviction of a felony; (ii) the
employee is convicted of, or pleads guilty or NOLO CONTENDERE to, a felony or
any crime involving moral turpitude; (iii) the employee willfully fails or
refuses to perform his duties under any employment or retention agreement and
fails to cure such breach within sixty (60) days following written notice
thereof from the Employer; (iv) the employee breaches his fiduciary duties to
the Employer for personal profit; or (v) the employee's willful breach or
violation of any law, rule or regulation (other than traffic violations or
similar offenses), or final cease and desist order in connection with his
performance of services for the Employer; and
(b) for an Eligible Employee who is an officer or employee of
a bank or savings institution regulated by the Office of Thrift Supervision,
"Termination for Cause" means termination of employment for personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty involving personal
profit, intentional failure to perform stated duties, willful violation of any
law, rule or regulation (other than traffic violations or similar offenses) or
final cease and desist order, or any material breach of this Plan, in each case
as measured against standards generally prevailing at the relevant time in the
savings and community banking industry; PROVIDED, HOWEVER, that such individual
shall not be deemed to have been discharged for cause unless and until he shall
have received a written notice of termination from the Board, which notice shall
be given to such individual not later than five (5) business days after the
board of directors of the Employer adopts, and shall be accompanied by, a
resolution duly approved by
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affirmative vote of a majority of the entire board of directors of the Employer
at a meeting called and held for such purpose (which meeting shall be held not
less than fifteen (15) days nor more than thirty (30) days after notice to the
individual), at which meeting there shall be a reasonable opportunity for the
individual to make oral and written presentations to the members of the board of
directors of the Employer, on his own behalf, or through a representative, who
may be his legal counsel, to refute the grounds for the proposed determination)
finding that in the good faith opinion of the board of directors of the Employer
grounds exist for discharging the individual for cause.
ARTICLE III
AVAILABLE SHARES
SECTION 3.1 AVAILABLE SHARES.
Subject to section 8.3, the maximum aggregate number of Shares
with respect to which Options may be granted at any time shall be equal to the
excess of:
(a) 251,275 Shares; less
(b) the sum of:
(i) the number of Shares with respect to which
previously granted Options may then or may in the future be
exercised; plus
(ii) the number of Shares with respect to which
previously granted Options have been exercised.
A maximum aggregate of 201,020 Shares may be granted to Eligible Employees and
Options with respect to a maximum aggregate of 50,255 Shares may be granted to
Eligible Directors. For purposes of this section 3.1, an Option shall not be
considered as having been exercised to the extent that such Option terminates by
reason other than the purchase of related Shares; PROVIDED, HOWEVER, that for
purposes of meeting the requirements of section 162(m) of the Code, no Eligible
Employee who is a covered employee under section 162(m) of the Code shall
receive a grant of Options in excess of the amount specified under this section
3.1, computed as if any Option which is cancelled reduced the maximum number of
Shares.
ARTICLE IV
ADMINISTRATION
SECTION 4.1 COMMITTEE.
The Plan shall be administered by the members of the
Compensation Committee of Big Foot Financial Corp. who are Disinterested Board
Members. If the Committee consists of fewer than two Disinterested Board
Members, then the Board shall appoint to the Committee such additional
Disinterested Board Members as shall be necessary to provide for a Committee
consisting of at least two Disinterested Board Members.
SECTION 4.2 COMMITTEE ACTION.
The Committee shall hold such meetings, and may make such
administrative rules and regulations, as it may deem proper. A majority of the
members of the Committee shall constitute a quorum, and the action of a majority
of the members of the Committee present at a meeting at which a quorum is
present, as well as actions taken pursuant to the unanimous written consent of
all of the members of the Committee without holding a meeting, shall be deemed
to be actions of the Committee. All actions of the Committee shall be final and
conclusive and shall be binding upon the Company and all other interested
parties. Any Person dealing with the Committee shall be fully protected in
relying upon any written notice, instruction, direction or other communication
signed by the secretary of the Committee and one member of the Committee, by two
members of the Committee or by a representative of the Committee authorized to
sign the same in its behalf.
SECTION 4.3 COMMITTEE RESPONSIBILITIES.
Subject to the terms and conditions of the Plan and such
limitations as may be imposed from time to time by the Board, the Committee
shall be responsible for the overall management and administration of the Plan
and shall have such authority as shall be necessary or appropriate in order to
carry out its responsibilities, including, without limitation, the authority:
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(a) to interpret and construe the Plan, and to determine all
questions that may arise under the Plan as to eligibility for
participation in the Plan, the number of Shares subject to the Options,
if any, to be granted, and the terms and conditions thereof;
(b) to adopt rules and regulations and to prescribe forms for
the operation and administration of the Plan; and
(c) to take any other action not inconsistent with the
provisions of the Plan that it may deem necessary or appropriate.
ARTICLE V
STOCK OPTIONS FOR ELIGIBLE DIRECTORS
SECTION 5.1 IN GENERAL.
(a) On the Effective Date, each Eligible Director shall be
granted an Option to purchase 10,051 Shares.
(b) Any Option granted under this section 5.1 shall be
evidenced by a written agreement which shall specify the number of Shares
covered by the Option, the Exercise Price for the Shares subject to the Option
and the Option Period, all as determined pursuant to this Article V. The Option
agreement shall also set forth specifically or incorporate by reference the
applicable provisions of the Plan.
SECTION 5.2 EXERCISE PRICE.
The price per Share at which an Option granted to an Eligible
Director under section 5.1 may be exercised shall be the Fair Market Value of a
Share on the date on which the Option is granted.
SECTION 5.3 OPTION PERIOD.
(a) Subject to section 5.3(b), the Option Period during which
an Option granted to an Eligible Director under section 5.1 may be exercised
shall commence on the date the Option is granted and shall expire on the earlier
of:
(i) removal for cause in accordance with the
Employer's bylaws; or
(ii) the last day of the ten-year period commencing
on the date on which the Option was granted.
(b) During the Option Period, the maximum number of Shares as
to which an outstanding Option may be exercised shall be as follows:
(i) prior to the first anniversary of the date on
which the Plan is approved by shareholders pursuant to section
9.8, the Option shall not be exercisable;
(ii) on and after the first anniversary, but prior to
the second anniversary, of the date on which the Plan is
approved by shareholders pursuant to section 9.8, the Option
may be exercised as to a maximum of twenty percent (20%) of
the Shares subject to the Option;
(iii) on and after the second anniversary, but prior
to the third anniversary, of the date on which the Plan is
approved by shareholders pursuant to section 9.8, the Option
may be exercised as to a maximum of forty percent (40%) of the
Shares subject to the Option, when granted, less any number of
optioned Shares purchased prior to such second anniversary;
(iv) on and after the third anniversary, but prior to
the fourth anniversary, of the date on which the Plan is
approved by shareholders pursuant to section 9.8, the Option
may be exercised as to a maximum of sixty percent (60%) of the
Shares subject to the Option, when granted, less any number of
optioned Shares purchased prior to such third anniversary;
(v) on and after the fourth anniversary, but prior to
the fifth anniversary, of the date on which the Plan is
approved by shareholders pursuant to section 9.8, the Option
may be
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exercised as to a maximum of eighty percent (80%) of the
Shares subject to the Option, when granted, less any number of
optioned Shares purchased prior to such fourth anniversary;
and
(vi) on and after the fifth anniversary of the date
on which the Plan is approved by shareholders pursuant to
section 9.8 and for the remainder of the Option Period, the
Option may be exercised as to the entire number of optioned
Shares not theretofore purchased;
PROVIDED, HOWEVER, that such Option(s) 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 or Disability and remain exercisable for
the balance of the original ten year term.
ARTICLE VI
STOCK OPTIONS FOR ELIGIBLE EMPLOYEES
SECTION 6.1 SIZE OF OPTION.
Subject to sections 6.2 and 6.5 and such limitations as the
Board may from time to time impose, the number of Shares as to which an Eligible
Employee may be granted Options shall be determined by the Committee, in its
discretion. Except as provided in section 6.5, the maximum number of Shares that
may be optioned to any one individual under this Plan during its entire duration
shall be the entire number of Shares available under section 3.1 of the Plan.
SECTION 6.2 GRANT OF OPTIONS.
(a) Subject to the limitations of the Plan, the Committee may,
in its discretion, grant to an Eligible Employee an Option to purchase Shares.
The Option for such Eligible Employees must be designated as either an Incentive
Stock Option or a Non-Qualified Stock Option and, if not designated as either,
shall be a Non-Qualified Stock Option.
(b) Any Option granted under this section 6.2 shall be
evidenced by a written agreement which shall:
(i) specify the number of Shares covered by the
Option;
(ii) specify the Exercise Price, determined in
accordance with section 6.3, for the Shares subject to the
Option;
(iii) specify the Option Period determined in
accordance with section 6.4;
(iv) set forth specifically or incorporate by
reference the applicable provisions of the Plan; and
(v) contain such other terms and conditions not
inconsistent with the Plan as the Committee may, in its
discretion, prescribe with respect to an Option granted to an
Eligible Employee.
SECTION 6.3 EXERCISE PRICE.
The price per Share at which an Option granted to an Eligible
Employee shall be determined by the Committee, in its discretion; PROVIDED,
HOWEVER, that the Exercise Price shall not be less than the Fair Market Value of
a Share on the date on which the Option is granted.
SECTION 6.4 OPTION PERIOD.
Subject to section 6.5, the Option Period during which an
Option granted to an Eligible Employee may be exercised shall commence on the
date specified by the Committee in the Option agreement and shall expire on the
date specified in the Option agreement or, if no date is specified, on the
earliest of:
(a) the close of business on the last day of the three-month
period commencing on the date of the Eligible Employee's termination of
employment with the Employer, other than on account of death or
Disability, Retirement or a Termination for Cause;
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(b) the close of business on the last day of the one-year
period commencing on the date of the Eligible Employee's termination of
employment due to death, Disability or Retirement;
(c) the date and time when the Eligible Employee ceases to be
an employee of the Employer due to a Termination for Cause; and
(d) the last day of the ten-year period commencing on the date
on which the Option was granted.
SECTION 6.5 REQUIRED REGULATORY PROVISIONS.
Notwithstanding anything contained herein to the contrary:
(a) no Option shall be granted to an Eligible Employee under
the Plan prior to shareholder approval under section 9.8;
(b) no Eligible Employee may be granted Options to purchase
more than 62,819 Shares.
(c) each Option granted to an Eligible Employee shall become
exercisable as follows:
(i) prior to the first anniversary of the date on
which the Plan is approved by shareholders pursuant to section
9.8, the Option shall not be exercisable;
(ii) on and after the first anniversary, but prior to
the second anniversary, of the date on which the Plan is
approved by shareholders pursuant to section 9.8, the Option
may be exercised as to a maximum of twenty percent (20%) of
the Shares subject to the Option when granted;
(iii) on and after the second anniversary, but prior
to the third anniversary, of the date on which the Plan is
approved by shareholders pursuant to section 9.8, the Option
may be exercised as to a maximum of forty percent (40%) of the
Shares subject to the Option when granted, less any optioned
Shares purchased prior to such second anniversary;
(iv) on and after the third anniversary, but prior to
the fourth anniversary, of the date on which the Plan is
approved by shareholders pursuant to section 9.8, the Option
may be exercised as to a maximum of sixty percent (60%) of the
Shares subject to the Option when granted, less any optioned
Shares purchased prior to such third anniversary;
(v) on and after the fourth anniversary, but prior to
the fifth anniversary, of the date on which the Plan is
approved by shareholders pursuant to section 9.8, the Option
may be exercised as to a maximum of eighty percent (80%) of
the Shares subject to the Option when granted, less any
optioned Shares purchased prior to such fourth anniversary;
and
(vi) on and after the fifth anniversary of the date
on which the Plan is approved by shareholders pursuant to
section 9.8 and for the remainder of the Option Period, the
Option may be exercised as to the entire number of optioned
Shares not theretofore purchased;
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 or Disability;
PROVIDED, FURTHER, that the Committee may establish a different vesting
schedule if not inconsistent with section 563b.3(g) of OTS Regulations.
(d) The Option Period of any Option granted to an Eligible
Employee hereunder, whether or not previously vested, shall be
suspended as of the time and date at which the Option holder has
received notice from the Board that his or her employment is subject to
a possible Termination for Cause. Such suspension shall remain in
effect until the Option holder receives official notice from the Board
that he or she has been cleared of any possible Termination for Cause,
at which time, the original Exercise Period shall be reinstated without
any adjustment for the intervening suspended period. In the event that
the Option Period under section 6.4 expires during such suspension, the
Company shall pay to the Eligible Employee, within 30 days after his or
her reinstatement as an employee of the Company, damages equal to the
value of the expired Options less the Exercise Price of such Options.
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(e) No Option granted to an Eligible Employee hereunder,
whether or not previously vested, shall be exercised after the time and
date at which the Option holder's employment with the Employer is
terminated in a Termination for Cause.
SECTION 6.6 ADDITIONAL RESTRICTIONS ON INCENTIVE STOCK
OPTIONS.
In addition to the limitations of section 7.2, an Option
granted to an Eligible Employee designated by the Committee to be an Incentive
Stock Option shall be subject to the following limitations:
(a) If, for any calendar year, the sum of (i) plus (ii)
exceeds $100,000, where (i) equals the Fair Market Value (determined as
of the date of the grant) of Shares subject to an Option intended to be
an Incentive Stock Option which first become available for purchase
during such calendar year, and (ii) equals the Fair Market Value
(determined as of the date of grant) of Shares subject to any other
options intended to be Incentive Stock Options and previously granted
to the same Eligible Employee which first become exercisable in such
calendar year, then that number of Shares optioned which causes the sum
of (i) and (ii) to exceed $100,000 shall be deemed to be Shares
optioned pursuant to a Non-Qualified Stock Option or Non-Qualified
Stock Options, with the same terms as the Option or Options intended to
be an Incentive Stock Option;
(b) The Exercise Price of an Incentive Stock Option granted to
an Eligible Employee who, at the time the Option is granted, owns
Shares comprising more than 10% of the total combined voting power of
all classes of stock of the Company shall not be less than 110% of the
Fair Market Value of a Share, and if an Option designated as an
Incentive Stock Option shall be granted at an Exercise Price that does
not satisfy this requirement, the designated Exercise Price shall be
observed and the Option shall be treated as a Non-Qualified Stock
Option;
(c) The Option Period of an Incentive Stock Option granted to
an Eligible Employee who, at the time the Option is granted, owns
Shares comprising more than 10% of the total combined voting power of
all classes of stock of the Company, shall expire no later than the
fifth anniversary of the date on which the Option was granted, and if
an Option designated as an Incentive Stock Option shall be granted for
an Option Period that does not satisfy this requirement, the designated
Option Period shall be observed and the Option shall be treated as a
Non-Qualified Stock Option;
(d) An Incentive Stock Option that is exercised during its
designated Option Period but more than:
(i) three (3) months after the termination of
employment with the Company, a parent or a subsidiary (other
than on account of disability within the meaning of section
22(e)(3) of the Code or death) of the Eligible Employee to
whom it was granted; and
(ii) one (1) year after such individual's termination
of employment with the Company, a parent or a subsidiary due
to disability (within the meaning of section 22(e)(3) of the
Code);
may be exercised in accordance with the terms but shall at the time of
exercise be treated as a Non-Qualified Stock Option; and
(e) Except with the prior written approval of the Committee,
no individual shall dispose of Shares acquired pursuant to the exercise
of an Incentive Stock Option until after the later of (i) the second
anniversary of the date on which the Incentive Stock Option was
granted, or (ii) the first anniversary of the date on which the Shares
were acquired.
ARTICLE VII
OPTIONS -- IN GENERAL
SECTION 7.1 METHOD OF EXERCISE.
(a) Subject to the limitations of the Plan and the Option
agreement, an Option holder may, at any time during the Option Period, exercise
his or her right to purchase all or any part of the Shares to which the Option
relates; PROVIDED, HOWEVER, that the minimum number of Shares which may be
purchased at any time shall be 100, or, if less, the total number of Shares
relating to the Option which remain unpurchased. An Option holder shall exercise
an Option to purchase Shares by:
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(i) giving written notice to the Committee, in such
form and manner as the Committee may prescribe, of his intent
to exercise the Option;
(ii) delivering to the Committee full payment,
consistent with section 7.1(b), for the Shares as to which the
Option is to be exercised; and
(iii) satisfying such other conditions as may be
prescribed in the Option agreement.
(b) The Exercise Price of Shares to be purchased upon exercise
of any Option shall be paid in full in cash (by certified or bank check or such
other instrument as the Company may accept) or, if and to the extent permitted
by the Committee, by one or more of the following: (i) in the form of Shares
already owned by the Option holder having an aggregate Fair Market Value on the
date the Option is exercised equal to the aggregate Exercise Price to be paid;
(ii) by requesting the Company to cancel without payment Options outstanding to
such Person for that number of Shares whose aggregate Fair Market Value on the
date of exercise, when reduced by their aggregate Exercise Price, equals the
aggregate Exercise Price of the Options being exercised; or (iii) by a
combination thereof. Payment for any Shares to be purchased upon exercise of an
Option may also be made by delivering a properly executed exercise notice to the
Company, together with a copy of irrevocable instructions to a broker to deliver
promptly to the Company the amount of sale or loan proceeds to pay the purchase
price. To facilitate the foregoing, the Company may enter into agreements for
coordinated procedures with one or more brokerage firms.
(c) When the requirements of section 7.1(a) and (b) have been
satisfied, the Committee shall take such action as is necessary to cause the
issuance of a stock certificate evidencing the Option holder's ownership of such
Shares. The Person exercising the Option shall have no right to vote or to
receive dividends, nor have any other rights with respect to the Shares, prior
to the date as of which such Shares are transferred to such Person on the stock
transfer records of the Company, and no adjustments shall be made for any
dividends or other rights for which the record date is prior to the date as of
which such transfer is effected, except as may be required under section 8.3.
SECTION 7.2 LIMITATIONS ON OPTIONS.
(a) An Option by its terms shall not be transferable by the
Option holder other than to Family Members or Nonprofit Organizations or by will
or by the laws of descent and distribution and shall be exercisable, during the
lifetime of the Option holder, only by the Option holder, a Family Member or a
Non-profit Organization. Any such transfer shall be effected by written notice
to the Company given in such form and manner as the Committee may prescribe and
shall be recognized only if such notice is received by the Company prior to the
death of the person giving it. Thereafter, the transferee shall have, with
respect to such Option, all of the rights, privileges and obligations which
would attach thereunder to the transferor if the Option were issued to such
transferor. If a privilege of the Option depends on the life, employment or
other status of the transferor, such privilege of the Option for the transferee
shall continue to depend on the life, employment or other status of the
transferor. The Committee shall have full and exclusive authority to interpret
and apply the provisions of this Plan to transferees to the extent not
specifically described herein. Notwithstanding the foregoing, an Incentive Stock
Option is not transferable by an Eligible Employee other than by will or the
laws of descent and distribution, and is exercisable, during his lifetime,
solely by him.
(b) The Company's obligation to deliver Shares with respect to
an Option shall, if the Committee so requests, be conditioned upon the receipt
of a representation as to the investment intention of the Option holder to whom
such Shares are to be delivered, in such form as the Committee shall determine
to be necessary or advisable to comply with the provisions of applicable
federal, state or local law. It may be provided that any such representation
shall become inoperative upon a registration of the Shares or upon the
occurrence of any other event eliminating the necessity of such representation.
The Company shall not be required to deliver any Shares under the Plan prior to
(i) the admission of such Shares to listing on any stock exchange on which
Shares may then be listed, or (ii) the completion of such registration or other
qualification under any state or federal law, rule or regulation as the
Committee shall determine to be necessary or advisable.
ARTICLE VIII
AMENDMENT AND TERMINATION
SECTION 8.1 TERMINATION.
The Board may suspend or terminate the Plan in whole or in
part at any time prior to the tenth anniversary of the Effective Date by giving
written notice of such suspension or termination to the Committee. Unless sooner
terminated, the Plan shall terminate automatically on the day preceding the
tenth anniversary of the Effective Date. In the event of any suspension or
termination of the Plan, all Options theretofore granted under the Plan that are
outstanding on the date of such suspension or
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termination of the Plan shall remain outstanding and exercisable for the period
and on the terms and conditions set forth in the Option agreements evidencing
such Options.
SECTION 8.2 AMENDMENT.
The Board, after December 19, 1997, may amend or revise the
Plan in whole or in part at any time; PROVIDED, HOWEVER, that, to the extent
required to comply with section 162(m) of the Code, no such amendment or
revision shall be effective if it amends a material term of the Plan unless
otherwise approved at an annual or special meeting of the shareholders of Big
Foot Financial Corp.
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 adjusted 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
currently exercisable Options granted under the Plan which remain outstanding
may be cancelled 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; PROVIDED, HOWEVER, that on or as soon as
practicable following the date of cancellation, each Option holder shall receive
a monetary payment in such amount, or other property of such kind and value, as
the Board determines in good faith to be equivalent in value to the Options that
have been cancelled.
(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, then the Company may, with the prior written
approval of or prior written notice of non-objection from the Office of Thrift
Supervision, adjust the Exercise Price of each outstanding Option in such
uniform and nondiscriminatory manner as the Committee, in its discretion, may
determine to be necessary to equitably reflect the effect of such dividend or
other distribution on the market prices at which Shares may be bought and sold
on the open market.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 STATUS AS AN EMPLOYEE BENEFIT PLAN.
This Plan is not intended to satisfy the requirements for
qualification under section 401(a) of the Code or to satisfy the definitional
requirements for an "employee benefit plan" under section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended. It is intended to be a
non-qualified incentive compensation program that is exempt from the regulatory
requirements of the Employee Retirement Income Security Act of 1974, as amended.
The Plan shall be construed and administered so as to effectuate this intent.
SECTION 9.2 NO RIGHT TO CONTINUED EMPLOYMENT.
Neither the establishment of the Plan nor any provisions of
the Plan nor any action of the Board or the Committee with respect to the Plan
shall be held or construed to confer upon any Eligible Director or Eligible
Employee any right to a continuation of his or her position as a director or
employee of the Company. The Employers reserve the right to remove any Eligible
Director or dismiss any Eligible Employee or otherwise deal with any Eligible
Director or Eligible Employee to the same extent as though the Plan had not been
adopted.
A-10
<PAGE>
SECTION 9.3 CONSTRUCTION OF LANGUAGE.
Whenever appropriate in the Plan, words used in the singular
may be read in the plural, words used in the plural may be read in the singular,
and words importing the masculine gender may be read as referring equally to the
feminine or the neuter. Any reference to an Article or section number shall
refer to an Article or section of this Plan unless otherwise indicated.
SECTION 9.4 GOVERNING LAW.
The Plan shall be construed, administered and enforced
according to the laws of the State of Illinois without giving effect to the
conflict of laws principles thereof, except to the extent that such laws are
preempted by federal law. The Plan shall be construed to comply with applicable
OTS Regulations.
SECTION 9.5 HEADINGS.
The headings of Articles and sections are included solely for
convenience of reference. If there is any conflict between such headings and the
text of the Plan, the text shall control.
SECTION 9.6 NON-ALIENATION OF BENEFITS.
The right to receive a benefit under the Plan shall not be
subject in any manner to anticipation, alienation or assignment, nor shall such
right be liable for or subject to debts, contracts, liabilities, engagements or
torts, except to the extent provided in a qualified domestic relations order as
defined in section 414(p) of the Code.
SECTION 9.7 TAXES.
The Company shall have the right to deduct from all amounts
paid by the Company in cash with respect to an Option under the Plan any taxes
required by law to be withheld with respect to such Option. Where any Person is
entitled to receive Shares pursuant to the exercise of an Option, the Company
shall have the right to require such Person to pay the Company the amount of any
tax which the Company is required to withhold with respect to such Shares, or,
in lieu thereof, to retain, or to sell without notice, a sufficient number of
Shares to cover the amount required to be withheld.
SECTION 9.8 APPROVAL OF SHAREHOLDERS.
The Plan shall not be effective or implemented unless approved
by shareholders of Big Foot Financial Corp. as follows:
(1) if, prior to the one year anniversary of the stock
conversion of Fairfield Savings Bank, F.S.B. to stock form, the Plan is
approved by the holders of a majority of the total votes eligible to be
cast at any duly called annual or special meeting of the Company, the
Plan shall be effective as of the date of such approval; and
(2) if subsequent to the one year anniversary of such
conversion, the Plan is approved by the affirmative vote of the holders
of a majority of Shares present or represented by proxy at the meeting
and entitled to vote at an annual or special meeting at which a quorum
is present, the Plan shall be effective as of the date of such
approval.
Shareholder approval shall not be obtained at an annual or special meeting held
earlier than six months following such conversion unless permitted by the Office
of Thrift Supervision. No Option shall be granted prior to shareholder approval
of the Plan.
SECTION 9.9 NOTICES.
Any communication required or permitted to be given under the
Plan, including any notice, direction, designation, comment, instruction,
objection or waiver, shall be in writing and shall be deemed to have been given
at such time as it is delivered personally or five (5) days after mailing if
mailed, postage prepaid, by registered or certified mail, return receipt
requested, addressed to such party at the address listed below, or at such other
address as one such party may by written notice specify to the other party:
A-11
<PAGE>
(a) If to the Committee:
Big Foot Financial Corp.
1190 RFD
Long Grove, Illinois 60047
Attention: CORPORATE SECRETARY
(b) If to an Option holder, to the Option holder's
address as shown in the Employer's records.
ARTICLE X
ADDITIONAL PROVISIONS SUBJECT TO FURTHER SHAREHOLDER APPROVAL
SECTION 10.1 ACCELERATED VESTING UPON RETIREMENT OR
CHANGE IN CONTROL.
Notwithstanding anything in the Plan to the contrary, but
subject to section 10.4: (a) in the event that any Option holder terminates
service with the Employer and such termination constitutes a Retirement, all
Options outstanding to such holder on the date of his Retirement shall, to the
extent not already exercisable, become exercisable upon Retirement; and (b) in
the event of a Change in Control, all Options outstanding under the Plan on the
date of the Change in Control shall, to the extent not already exercisable,
become exercisable on the date of the Change in Control.
SECTION 10.2 DISCRETION TO ESTABLISH VESTING SCHEDULES.
Notwithstanding anything in the Plan to the contrary, but
subject to section 10.4, after December 19, 1997, section 6.5(c) shall apply in
determining the exercisability of Options granted to Eligible Employees only if
no different vesting schedule is established by the Committee and specified in
the agreement evidencing an outstanding Option.
SECTION 10.3 ADJUSTMENTS FOR EXTRAORDINARY DIVIDENDS.
Notwithstanding anything in the Plan to the contrary, but
subject to section 10.4, in the event that the Company shall, after December 19,
1997, 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:
(a) 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
(b) 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
(c) take the action described in section 10.3(a) with
respect to certain outstanding Options and the action
described in section 10.3(b) with respect to the remaining
outstanding Options.
SECTION 10.4 NO EFFECT PRIOR TO SHAREHOLDER APPROVAL.
Notwithstanding anything contained in this Article X to the
contrary, the provisions of this Article X shall not be applied, and shall be of
no force or effect, unless and until the shareholders of the Company shall have
approved such provisions by affirmative vote of the holders of a majority of the
Shares represented in person or by proxy and entitled to vote at a meeting of
shareholders duly called and held after December 19, 1997.
A-12
<PAGE>
REVOCABLE PROXY REVOCABLE PROXY
BIG FOOT FINANCIAL CORP.
OLD MCHENRY ROAD AND ROUTE 83
LONG GROVE, ILLINOIS 60047
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF BIG FOOT FINANCIAL CORP.
FOR THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 24, 1997
The undersigned shareholder of Big Foot Financial Corp. hereby appoints
George M. Briody, F. Gregory Opelka and Timothy L. McCue, or any of them, with
full powers of substitution, to represent and to vote as proxy, as designated,
all shares of common stock of Big Foot Financial Corp. held of record by the
undersigned on May 14, 1997, at the Special Meeting of Shareholders (the
"Special Meeting") to be held at 3:00 p.m., Central Time, on June 24, 1997, or
at any adjournment or postponement thereof, upon the matters described in the
accompanying Notice of Special Meeting 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 shareholder. IF NO DIRECTION IS GIVEN, THIS
PROXY WILL BE VOTED "FOR" THE PROPOSALS LISTED IN ITEMS 1 AND 2.
PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE SIDE AND RETURN IT PROMPTLY
IN THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
<PAGE>
<TABLE>
<CAPTION>
BIG FOOT FINANCIAL CORP.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
THE BOARD OF DIRECTORS OF BIG FOOT FINANCIAL CORP. UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE PROPOSALS IN ITEMS 1 AND 2.
<S> <C>
1. Approval of the Big Foot Financial Corp. 1997 Stock Option Plan.
FOR AGAINST ABSTAIN
/ / / / / /
CHECK HERE IF YOU PLAN TO ATTEND THE SPECIAL MEETING. / /
2. 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.
FOR AGAINST ABSTAIN
/ / / / / / The undersigned hereby acknowledges receipt of the Notice of
Special Meeting of Shareholders and the Proxy Statement for
the Special Meeting.
Dated:_______________________ , 1997
Signature(s)-------------------------------------------------
------------------------------------------------------------
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>
June 2, 1997
TO: ALL EMPLOYEE STOCK OWNERSHIP PLAN ("ESOP")
AND 401(K) SAVINGS PLAN ("401(K) PLAN") PARTICIPANTS
Re: Special Meeting of Shareholders to be Held on June 24, 1997
-----------------------------------------------------------
Dear Participants:
As you know, Fairfield Savings Bank, F.S.B. (the "Bank"), when it
completed its stock conversion last year, introduced a new benefit plan -- an
Employee Stock Ownership Plan, or "ESOP" -- and introduced a new feature to the
Bank's existing 401(k) Plan -- an investment alternative to purchase the stock
of the Bank's parent company, Big Foot Financial Corp. (the "Company") using
funds from your 401(k) Plan account (the "401(k) Stock Fund"). Shares purchased
by the ESOP are presently held by George M. Briody, F. Gregory Opelka and
Timothy L. McCue, in their capacity as interim trustee for the ESOP, and will be
allocated to ESOP participants over a period of years. The first allocation will
occur as of June 30, 1997. Interests in shares that you have purchased in the
401(k) Stock Fund are also being held by Messrs. Briody, Opelka and McCue, in
their capacity as trustee. Both the ESOP and the 401(k) Plan allow participants
of each respective plan (including former participants and beneficiaries) to
have certain voting rights at the Company's shareholder meetings.
In connection with the Special Meeting of Shareholders of Big Foot
Financial Corp. to be held on June 24, 1997, enclosed are the following
documents:
1. Confidential Voting Instruction card for the ESOP (blue card);
2. Confidential Voting Instruction card for the 401(k) Plan (yellow
card); and
3. Proxy Statement dated May 22, 1997, including a Notice of Special
Meeting of Shareholders.
As a participant in the ESOP and/or the 401(k) Plan, you have the right
to direct the trustee of the respective plan how to vote the shares held by the
ESOP and/or shares in the 401(k) Stock Fund as of May 14, 1997, the record date
for the Special Meeting ("Record Date"), on the proposals to be voted by the
Company's shareholders. Your rights as a participant in the ESOP and/or 401(k)
Plan will vary depending on whether the matter being voted on is an "Anticipated
Proposal" or an "Unanticipated Proposal."
<PAGE>
-2-
ANTICIPATED PROPOSALS.
ESOP PARTICIPANTS.
Each ESOP participant has the right to specify how the trustee, as
trustee for the ESOP, should vote the shares in his or her ESOP account as of
the Record Date. Even though allocations under the ESOP will not occur until
June 30, 1997, and as of the Record Date, you will have no shares allocated to
your ESOP account, the ESOP provides that you shall have the right to express
your voting preferences which will be weighted based upon your compensation for
1996. The number of shares for which you may express a preference are shown on
the enclosed Confidential Voting Instruction card. In general, the trustee will
vote the shares considered allocated to your ESOP account for purposes of voting
by casting votes FOR and AGAINST each proposal as you specify on the
Confidential Voting Instruction accompanying this letter.
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 considered
allocated to ESOP participants, in a manner determined to be prudent and solely
in the interest of the 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 not yet placed considered
allocated to anyone's ESOP account.
401(K) PLAN PARTICIPANTS.
In general, 401(k) Plan participants have the right to direct how the
trustee, as trustee for the 401(k) Plan, should vote the shares in the 401(k)
Stock Fund. In general, the trustee will vote FOR and AGAINST each proposal
specified on the Confidential Voting Instruction card in the same proportions as
instructions to cast votes FOR and AGAINST such proposal are given by 401(k)
Plan participants entitled to give voting instructions. The instructions given
by each 401(k) Plan participant will be weighted according to value of his or
her respective interest in the 401(k) Stock Fund as of May 14, 1997. For
purposes of the 401(k) Plan, if you ABSTAIN as to a proposal, or if you do not
return your Confidential Voting Instruction card for the 401(k) Plan to Harris
Trust and Savings Bank (the "Transfer Agent") by June 16, 1997, your
instructions will not be counted.
If you do not have any shares of Company stock allocated to your 401(k)
Stock Fund as of May 14, 1997, there will be no Confidential Voting Instruction
card for the 401(k) Plan enclosed with this letter.
UNANTICIPATED PROPOSALS.
It is possible, although very unlikely, that proposals other than those
specified on the Confidential Voting Instruction cards will be presented for
shareholder action at the Special Meeting of Shareholders. If this should
happen, the trustee or each respective plan 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.
<PAGE>
-3-
* * * * *
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 or cards to signify your direction to the
trustee of each plan. YOU SHOULD THEN SEAL THE COMPLETED CARD OR CARDS IN THE
ENCLOSED ENVELOPE AND RETURN IT DIRECTLY TO THE TRANSFER AGENT USING THE
POSTAGE-PAID RETURN ENVELOPE PROVIDED. The Confidential Voting Instruction card
or cards must be received by the Transfer Agent no later than June 16, 1997.
PLEASE NOTE THAT THE VOTING INSTRUCTIONS OF INDIVIDUAL PARTICIPANTS ARE
TO BE KEPT CONFIDENTIAL BY THE TRANSFER AGENT, WHO HAS BEEN INSTRUCTED NOT TO
DISCLOSE THEM TO ANYONE AT THE BANK OR THE COMPANY. IF YOU HAVE ANY QUESTIONS
REGARDING YOUR VOTING RIGHTS OR THE TERMS OF THE ESOP OR 401(K) PLAN, PLEASE SEE
TIMOTHY L. MCCUE.
Very truly yours,
THE COMPENSATION COMMITTEE OF
BIG FOOT FINANCIAL CORP.
Enclosures
<PAGE>
[FRONT]
BIG FOOT FINANCIAL CORP.
CONFIDENTIAL VOTING INSTRUCTION
SOLICITED BY THE COMPENSATION COMMITTEE OF BIG FOOT FINANCIAL CORP.
FOR THE BIG FOOT FINANCIAL CORP. EMPLOYEE STOCK OWNERSHIP PLAN
The undersigned participant, former participant or beneficiary of a
deceased former participant in the Big Foot Financial Corp. Employee Stock
Ownership Plan (the "ESOP") hereby provides the voting instructions hereinafter
specified to the Trustee of the ESOP (the "Trustee"), 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 Big Foot Financial Corp. that are held by the Trustee, in its capacity as
Trustee, as of May 14, 1997 at the Special Meeting of Shareholders of Big Foot
Financial Corp. to be held on June 24, 1997 at 3:00 p.m., Central Time, at the
Holiday Inn Mundelein, 510 East Route 83, Mundelein, Illinois and at any
adjournment or postponement thereof.
As to the proposals listed below, which are more particularly described
in the Proxy Statement dated May 22, 1997, the Trustee will vote the common
stock of Big Foot Financial Corp. 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 June 2, 1997.
(CONTINUED ON REVERSE SIDE. PLEASE COMPLETE, SIGN AND DATE ON THE
REVERSE SIDE AND PROMPTLY RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE.)
<PAGE>
[BACK]
THE BOARD OF DIRECTORS OF BIG FOOT FINANCIAL CORP. RECOMMENDS A VOTE
"FOR" PROPOSAL NO. 1 AND "FOR" PROPOSAL NO. 2. IF THIS CONFIDENTIAL VOTING
INSTRUCTION IS SIGNED BUT NO DIRECTION IS GIVEN, THE ESOP SHARES ALLOCATED TO
YOUR ACCOUNT WILL BE VOTED "FOR" PROPOSALS NOS. 1 AND 2. THE DIRECTIONS, IF ANY,
GIVEN IN THIS CONFIDENTIAL VOTING INSTRUCTION WILL BE KEPT CONFIDENTIAL FROM ALL
DIRECTORS, OFFICERS AND EMPLOYEES OF BIG FOOT FINANCIAL CORP. AND FAIRFIELD
SAVINGS BANK, FSB.
- -------------------------- Please mark
ESOP SHARES (as of May 14, 1997) /X/ your votes
like this
1. Approval of the Big Foot Financial Corp. 1997 Stock Option Plan.
FOR AGAINST ABSTAIN
/ / / / / /
2. Authorization of the Board of Directors, in its discretion, to direct
the vote of proxies upon such matters incident to the conduct to 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.
FOR AGAINST ABSTAIN
/ / / / / /
All proposals listed above in this Confidential Voting Instruction were
proposed by Big Foot Financial Corp.
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 Notice of Special
Meeting of Shareholders of Big Foot Financial Corp., a Proxy Statement dated May
22, 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 JUNE 16, 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.
<PAGE>
[FRONT]
BIG FOOT FINANCIAL CORP.
CONFIDENTIAL VOTING INSTRUCTION
SOLICITED BY THE COMPENSATION COMMITTEE OF BIG FOOT FINANCIAL CORP.
FOR THE FAIRFIELD SAVINGS BANK PROFIT SHARING AND SAVINGS PLAN
The undersigned participant, former participant or beneficiary of a
deceased former participant in the Fairfield Savings Bank Profit Sharing and
Savings Plan ("401(k) Plan") hereby provides the voting instructions hereinafter
specified to the Trustee of the 401(k) Plan (the "Trustee"), 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 Big Foot Financial Corp. that are held by the Trustee, in its
capacity as Trustee, as of May 14, 1997 at the Special Meeting of Shareholders
of Big Foot Financial Corp. to be held on June 24, 1997 at 3:00 p.m., Central
Time, at the Holiday Inn Mundelein, 510 East Route 83, Mundelein, Illinois and
at any adjournment or postponement thereof.
As to the proposals listed below, which are more particularly described
in the Proxy Statement dated May 22, 1997, the Trustee will vote the common
stock of Big Foot Financial Corp. held by the 401(k) Plan Trust to reflect the
voting instructions on this Confidential Voting Instruction, in the manner
described in the accompanying letter from the Compensation Committee dated June
2, 1997.
(CONTINUED ON REVERSE SIDE. PLEASE COMPLETE, SIGN AND DATE ON THE
REVERSE SIDE AND PROMPTLY RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE.)
<PAGE>
[BACK]
THE BOARD OF DIRECTORS OF BIG FOOT FINANCIAL CORP. RECOMMENDS A VOTE
"FOR" PROPOSAL NO. 1 AND "FOR" PROPOSAL NO. 2. IF THIS CONFIDENTIAL VOTING
INSTRUCTION IS SIGNED BUT NO DIRECTION IS GIVEN, THE SHARES ALLOCATED TO YOUR
401(K) PLAN ACCOUNT WILL BE VOTED "FOR" PROPOSALS NOS. 1 AND 2. THE DIRECTIONS,
IF ANY, GIVEN IN THIS CONFIDENTIAL VOTING INSTRUCTION WILL BE KEPT CONFIDENTIAL
FROM ALL DIRECTORS, OFFICERS AND EMPLOYEES OF BIG FOOT FINANCIAL CORP. AND
FAIRFIELD SAVINGS BANK, FSB.
- -------------------------------- Please mark
401(k) PLAN SHARES (as of May 14, 1997) /X/ your votes
3. Approval of the Big Foot Financial Corp. 1997 Stock Option Plan.
FOR AGAINST ABSTAIN
/ / / / / /
4. Authorization of the Board of Directors, in its discretion, to direct
the vote of proxies upon such matters incident to the conduct to 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.
FOR AGAINST ABSTAIN
/ / / / / /
All proposals listed above in this Confidential Voting Instruction were
proposed by Big Foot Financial Corp.
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 Notice of Special
Meeting of Shareholders of Big Foot Financial Corp., a Proxy Statement dated May
22, 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 JUNE 16, 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.
