Thacher Proffitt & Wood
Two World Trade Center
New York, New York 10048
Direct Dial (212) 912-7825
November 17, 1997
VIA EDGAR
- ---------
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Proxy Materials for the Big Foot Financial Corp.
1997 Annual Meeting
Commission File No. 0-21491
------------------------------------------------
Ladies and Gentlemen:
In connection with the 1997 Annual Meeting of Shareholders for Big Foot
Financial Corp. (the "Company"), and pursuant to Regulation 14A of the
Securities Exchange Act of 1934, as amended, and Rule 14a-6(b) promulgated
thereunder, filed herewith on behalf of the Company, under cover of Schedule
14A, are the following definitive proxy materials:
1. Proxy Statement, including Notice of the 1997 Annual Meeting
and the Chief Executive Officer's Letter to Shareholders;
2. Form of proxy furnished to shareholders; and
3. Voting authorization forms and instruction letter for
participants in the Company's Employee Stock Ownership Plan
and 401(k) Plan.
The above items are scheduled to be released to shareholders and distributed to
plan participants, as applicable, on or about November 17, 1997.
<PAGE>
Securities and Exchange Commission
November 17, 1997 Page 2
Please direct any questions or comments regarding this filing to the
undersigned at (212) 912-7825.
Very truly yours,
/s/ Mark I. Sokolow
Mark I. Sokolow
Attachments
cc: Mr. Timothy L. McCue
<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
BIG FOOT FINANCIAL CORP.
------------------------
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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.]
November 17, 1997
Dear Shareholder:
You are cordially invited to attend the 1997 Annual Meeting of
Shareholders (the "Annual 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 December 22, 1997 at the Holiday Inn Mundelein,
located at 510 East Route 83, Mundelein, Illinois 60060 at 3:00 p.m., Central
Time.
The attached Notice of the 1997 Annual Meeting of Shareholders and
Proxy Statement describe the formal business to be transacted at the Annual
Meeting. Directors and officers of the Company, as well as a representative of
KPMG Peat Marwick LLP, the accounting firm appointed by the Board of Directors
to be the Company's independent auditors for the fiscal year ending June 30,
1997, will be present at the Annual Meeting to respond to appropriate questions.
The Board of Directors of the Company has determined that an
affirmative vote on each matter to be considered at the Annual Meeting is in the
best interests of the Company and its 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 Annual Meeting. YOUR VOTE IS IMPORTANT
REGARDLESS OF THE NUMBER OF SHARES YOU OWN. VOTING BY PROXY WILL NOT PREVENT YOU
FROM VOTING IN PERSON AT THE ANNUAL MEETING BUT WILL ASSURE THAT YOUR VOTE IS
COUNTED IF YOU ARE UNABLE TO ATTEND. IF YOU ARE A 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 ANNUAL MEETING.
EXAMPLES OF SUCH DOCUMENTATION INCLUDE A BROKER'S STATEMENT, LETTER OR OTHER
DOCUMENT CONFIRMING YOUR OWNERSHIP OF SHARES OF THE COMPANY.
On behalf of the Board of Directors and the employees of the Company
and the Bank, 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 THE 1997 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 22, 1997
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Shareholders of
Big Foot Financial Corp. (the "Company") will be held on December 22, 1997 at
the Holiday Inn Mundelein, located at 510 East Route 83, Mundelein, Illinois
60060, at 3:00 p.m., Central Time, to consider and vote upon the:
1. Election of three candidates to the Board of Directors, each
to serve for a term of three years;
2. Ratification of the appointment of KPMG Peat Marwick LLP as
independent auditors for the fiscal year ending June 30, 1998;
3. Approval of the Big Foot Financial Corp. 1997 Recognition and
Retention Plan;
4. Approval of Article X of the Big Foot Financial Corp. 1997
Stock Option Plan; and
5. Authorization of the Board of Directors, in its discretion, to
direct the vote of proxies upon such matters incident to the
conduct of the Annual Meeting as may properly come before the
Annual Meeting, and any adjournment or postponement thereof,
including, without limitation, a motion to adjourn the Annual
Meeting. The Company is not aware of any other business that
may properly come before the Annual Meeting.
The Board of Directors has fixed November 10, 1997 as the record date
for the determination of shareholders entitled to notice of and to vote at the
Annual 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 Annual 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
November 17, 1997
- --------------------------------------------------------------------------------
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT
THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER OF SHARES YOU
OWN. THE BOARD OF DIRECTORS URGES YOU TO SIGN, DATE AND MARK THE
ENCLOSED PROXY CARD PROMPTLY AND RETURN IT IN THE ENCLOSED ENVELOPE.
RETURNING THE PROXY CARD WILL NOT PREVENT YOU FROM VOTING IN PERSON IF
YOU ATTEND THE ANNUAL MEETING.
- --------------------------------------------------------------------------------
<PAGE>
BIG FOOT FINANCIAL CORP.
PROXY STATEMENT FOR THE
1997 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 22, 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
November 10, 1997 (the "Record Date"), for use at the 1997 Annual Meeting of
Shareholders of the Company (the "Annual Meeting") to be held on December 22,
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. This Proxy Statement, together with the enclosed proxy
card, is first being mailed to shareholders on or about November 17, 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 of
the Bank from the mutual form of organization into 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 November 10, 1997 as the Record Date for the determination of the Company's
shareholders entitled to notice of and to vote at the Annual Meeting.
Accordingly, only holders of record of shares of Common Stock at the close of
business on such date will be entitled to vote at the Annual Meeting. On the
Record Date, there were 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 Annual 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 votes eligible to be cast in the
election of directors generally by the holders of the outstanding shares of
Common Stock entitled to vote at the Annual 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% threshold 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 be amended only upon the
approval of the Board of Directors or the vote of two-thirds
<PAGE>
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). The Company's
Articles of Incorporation authorizes and imposes a duty on the Board of
Directors, by action of a majority, to interpret all of the terms and provisions
of the Articles of Incorporation governing Excess Common Stock and to determine
on the basis of information known to them after reasonable inquiry all facts
necessary to ascertain compliance with the Articles of Incorporation, including,
without limitation, (i) the number of shares of Common Stock beneficially owned
by any person or purported owner; (ii) whether a person or purported owner is an
affiliate or associate of any other person or purported owner; or (iii) any
other matter relating to the applicability or effect of the Articles of
Incorporation.
All properly executed proxies received by the Company will be voted in
accordance with the instructions indicated thereon. IF NO INSTRUCTIONS ARE
GIVEN, EXECUTED PROXIES WILL BE VOTED FOR ELECTION OF EACH OF THE THREE NOMINEES
FOR DIRECTOR, AND FOR EACH OTHER PROPOSAL IDENTIFIED IN THE NOTICE OF THE 1997
ANNUAL MEETING OF SHAREHOLDERS. Management is not aware of any matters other
than those set forth in the Notice of the 1997 Annual Meeting of Shareholders
that may be brought before the Annual Meeting. If any other matters properly
come before the Annual Meeting, the persons named in the accompanying proxy card
will vote the shares represented by all properly executed proxies on such
matters in such manner as shall be determined by a majority of the Board of
Directors of the Company.
VOTE REQUIRED
The vote required for each proposal is set forth in the discussion of
such proposal under the caption "--Vote Required."
REVOCABILITY OF PROXIES
A proxy may be revoked at any time before it is voted by filing with
the Secretary of the Company a duly executed instrument revoking the proxy or by
submitting a duly executed proxy bearing a later date. A proxy may also be
revoked by attending and voting at the Annual Meeting or any adjournment or
postponement thereof, if a written revocation is filed with the Secretary of the
Annual Meeting prior to the voting of such proxy.
IF YOU ARE A 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 ANNUAL Meeting. Examples of such documentation would
include a broker's statement, letter or other document that will confirm your
ownership of shares of the Company.
SOLICITATION OF PROXIES
The Company will bear the costs of soliciting proxies from its
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, which firm
will be paid a fee of $3,000, plus expenses.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Director and executive officers of the Bank and the Company will be
awarded restricted stock of the Company under the Big Foot Financial Corp. 1997
Recognition and Retention Plan (the "RRP") being presented for shareholder
approval in Proposal 3 if shareholders approve Proposal 3. See "Proposal 3 --
1997 Recognition and Retention Plan." Directors, officers and employees of the
Bank and the Company will have the terms of Article X of the Big Foot Financial
Corp. 1997 Stock Option Plan (the "Stock Option Plan") being presented
2
<PAGE>
for shareholder approval in Proposal 4 made applicable to options granted to
them under the Stock Option Plan, if shareholders approve Proposal 4. See
"Proposal 4 -- Article X of the 1997 Stock Option Plan."
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
PRINCIPAL SHAREHOLDERS OF THE COMPANY
The following table sets forth, as of September 30, 1997, certain
information as to Common Stock beneficially owned by persons owning in excess of
5% of the outstanding shares of Common Stock. Management knows of no person,
except as listed below, who beneficially owned more than 5% of the Company's
outstanding shares of Common Stock as of September 30, 1997. Except as otherwise
indicated, the information provided in the following table was obtained from
filings with the Securities and Exchange Commission (the "SEC") and with the
Company pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Addresses provided are those listed in the filings as the
address of the person authorized to receive notices and communications. For
purposes of the table below and the table set forth under "Security Ownership of
Management," in accordance with Rule 13d-3 under the Exchange Act, a person is
deemed to be the beneficial owner of any shares of Common Stock (1) over which
such person has or shares, directly or indirectly, voting or investment power,
or (2) of which such person has the right to acquire beneficial ownership at any
time within 60 days after September 30, 1997. As used herein, "voting power" is
the power to vote or direct the voting of shares, and "investment power"
includes the power to dispose or direct the disposition of such shares.
<TABLE>
<CAPTION>
PERCENT OF
COMMON
NAME AND ADDRESS OF AMOUNT AND NATURE OF STOCK
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP OUTSTANDING
- --------------------- --------------------------------- ---------------------- -----------
<S> <C> <C> <C>
Common Stock, par Big Foot Financial Corp. 201,020(1) 8.0%
value $.01 per share Employee Stock Ownership Plan
Old McHenry Road and Route 83
Long Grove, Illinois 60047
</TABLE>
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(1) The Employee Stock Ownership Plan ("ESOP") is administered by a Plan
Administrator, who is an employee of the Company appointed by the Board of
Directors. The ESOP's assets are held in a trust (the "ESOP Trust"), for
which First Bankers Trust Company, N.A. serve as trustee (the "Trustee").
Under the terms of the ESOP, the Trustee votes the shares held by the ESOP
Trust based upon directions received from the participants in the ESOP. As
of September 30, 1997, 10,051 shares had been allocated to participants,
and 190,969 were unallocated. Under the terms of the ESOP, each participant
may direct the voting of the shares allocated to such participant. The
remaining unallocated shares are voted in the same manner and proportion as
the shares allocated, 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 all directors and executive officers of the
Company as a group, as of September 30, 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) President and Director 29,977 1.2%
F. Gregory Opelka Executive Vice President and 15,703 *
Director
Maurice F. Leahy(5) Director 4,317 *
Eugene W. Pilawski Director 15,000 *
Joseph J. Nimrod(6) Director 27,450 1.1%
Walter E. Powers, M.D.(7) Director 7,164 *
William B. O'Connell(8) Director 15,000 *
Timothy L. McCue Vice President and Chief 15,615 *
Financial Officer
All directors and executive
officers as a group 338,889 12.7%
(11 persons)(9)
</TABLE>
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* 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 September 30, 1997. No
officer or director has the right to acquire beneficial ownership of
additional shares of Common Stock within 60 days after
September 30, 1997.
(4) Includes 8,872 shares over which Mr. Briody has shared voting and
investment power.
(5) Includes 3,103 shares held jointly with Mr. Leahy's spouse as to which
Mr. Leahy has shared voting power.
(6) Includes 7,000 shares over which Mr. Nimrod has shared voting and
investment power.
(7) Includes 700 shares over which Dr. Powers has shared voting and
investment power.
(8) Includes 15,000 shares held jointly with Mr. O'Connell's wife as to
which Mr. O'Connell has shared voting power.
(9) The amount of shares for all executive officers and directors as a
group includes 190,969 shares held by the ESOP Trust, over which
certain directors and executive officers may be deemed to have shared
investment power, that have not yet been allocated to the individual
accounts of the executive officers as of September 30, 1997. The
individual participants in the ESOP have shared voting power with the
ESOP Trustee.
4
<PAGE>
-----------------------------------------------------------------
PROPOSAL 1
ELECTION OF DIRECTORS
-----------------------------------------------------------------
GENERAL
The Articles of Incorporation and Bylaws of the Company provide for the
election of directors by the shareholders. For this purpose, the Board of
Directors of the Company is divided into three classes with respect to term of
office, each class to contain, as near as may be possible, one-third of the
entire number of the Board, with the terms of office of one class expiring at
each annual meeting. At each annual meeting of shareholders, the successors to
the class of directors (other than directors elected by holders of shares of one
or more series of Preferred Stock, of which there currently are none) whose term
expires at that time shall be elected by the shareholders to serve for a term of
three years. There are currently seven directors of the Company.
The terms of three directors expire at the Annual Meeting. Each of the
three incumbent directors, George M. Briody, F. Gregory Opelka and Joseph J.
Nimrod, has been nominated by the Board of Directors to be re-elected at the
Annual Meeting for a three-year term expiring at the annual meeting of
shareholders to be held in 2000, or when their successors are otherwise duly
elected and qualified. Each nominee has consented to being named in this Proxy
Statement and to serve if elected. The terms of the remaining two classes of
directors expire at the annual meetings of shareholders to be held in 1998 and
1999, or when their successors are otherwise duly elected and qualified.
In the event that any nominee for election as a director at the Annual
Meeting is unable or declines to serve, which the Board of Directors has no
reason to expect, the persons named in the Proxy Card will vote with respect to
a substitute nominee. Such substitute shall be designated by the incumbent Board
of Directors by delivery to the Secretary, not fewer than five (5) days prior to
the date of the Annual Meeting, of a written notice of substitution.
VOTE REQUIRED
Directors are elected by a plurality of the votes cast by each class of
shares present and entitled to vote in the election at the Annual Meeting. The
holders of Common Stock may not vote their shares cumulatively for the election
of directors. Shares underlying broker non-votes will not be counted as having
been voted in person or by proxy and will have no effect on the election of
directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" THE NOMINEES FOR ELECTION AS DIRECTORS.
5
<PAGE>
INFORMATION AS TO NOMINEES AND CONTINUING DIRECTORS
The following table sets forth certain information with respect to each
nominee for election as a director and each director whose term does not expire
at the Annual Meeting ("Continuing Director"). There are no arrangements or
understandings between the Company and any director or nominee pursuant to which
such person was elected or nominated to be a director of the Company. For
information with respect to security ownership of directors, see "Security
Ownership of Certain Beneficial Owners and Management -- Security Ownership of
Management."
<TABLE>
<CAPTION>
POSITIONS HELD WITH DIRECTOR TERM
NOMINEES AGE(1) THE COMPANY SINCE(2) EXPIRES
- -------- ------ ------------------------ ---------- -------
<S> <C> <C> <C> <C>
George M. Briody........... 70 President, Director 1951 1997
F. Gregory Opelka.......... 69 Executive Vice 1972 1997
President, Director
Joseph J. Nimrod........... 68 Director 1978 1997
CONTINUING DIRECTORS
- --------------------
Maurice F. Leahy........... 67 Director 1978 1999
Eugene W. Pilawski......... 74 Director 1990 1998
Walter E. Powers, M.D...... 69 Director 1977 1998
William B. O'Connell....... 74 Director 1989 1999
</TABLE>
- ----------
(1) At June 30, 1997.
(2) Includes terms as a director of Fairfield Savings Bank, F.S.B.
The principal occupation and business experience of each nominee for
election as director and each Continuing Director are set forth below. Positions
held by a director or executive officer have been held for
at least the past five years unless stated otherwise.
NOMINEES FOR ELECTION AS DIRECTOR
GEORGE M. BRIODY serves as the President and a director of the Bank and
the Company. Mr. Briody has been involved in the financial institutions industry
for more than 40 years and has served as President of the Bank since 1966 and as
a director since 1951. He also has served as a director of the Chicago Area
Council, the Illinois Savings and Loan League, the FHLB of Chicago, the U.S.
League of Savings Institutions, Inc. and Electronic Funds Transfer Corporations
I and II. Mr. Briody is currently a member of the Central Savings and Loan
Group. He is also a member of the Illinois and Chicago Bar Associations. He is a
past president of the Central Savings and Loan Group and the Illinois Savings
and Loan League. Mr. Briody and Mr. Opelka are brothers-in-law.
F. GREGORY OPELKA serves as the Executive Vice President and a director
of the Bank and the Company. Mr. Opelka joined the Bank in 1954 and has served
as a director since 1972. He is a member of the Appraisal Institute and holds
Member, Senior Real Estate Analyst, and Senior Residential Appraiser
designations. He is currently a director of the Market Data Center and an
appraisal consultant authoring "Appraisal Report," a quarterly article for the
America's Community Banker's member magazine. Mr. Opelka and Mr. Briody are
brothers-in-law.
JOSEPH J. NIMROD serves as a director of the Bank and the Company and
has been a director of the Bank since 1978. Mr. Nimrod is the owner of Joseph
Nimrod Decorating Inc., a painting and paperhanging business. He also serves as
an officer and a director of the Painters and Decorators Contractors Association
and is Chairman of the Washburn Apprentice School of Painting.
6
<PAGE>
CONTINUING DIRECTORS
MAURICE F. LEAHY serves as a director of the Bank and the Company and
has been a director of the Bank since 1978. Now retired, he was an account
executive for P.M.P. Sales, Inc., a meat and poultry broker. Previously he owned
and operated a meat and poultry retail business for more than 25 years.
EUGENE W. PILAWSKI joined the Bank in 1949 and serves as a director of
the Bank and the Company. Now retired, he had served as Senior Vice President of
the Bank from 1987 to 1992. Prior to this promotion, he served as Vice President
and Senior Loan Officer. He was elected to the Board of Directors in September,
1990. Mr. Pilawski is a member of the Chicago Bar Association. Mr. Pilawski and
Dr. Powers are brothers.
WALTER E. POWERS, M.D. serves as a director of the Bank and the Company
and has served as a director of the Bank since 1977. Dr. Powers, now retired,
was a radiologist-flight surgeon for United Airlines, Inc. from 1973 to 1985. He
is a member of the American Medical Association, Illinois State Medical Society,
Chicago Medical Society, American College of Radiology, Radiology Society of
North America and Illinois Radiology Society. Dr. Powers and Mr. Pilawski are
brothers.
WILLIAM B. O'CONNELL serves as a director of the Bank and the Company
and has served as a director of the Bank since November, 1989. Immediately prior
thereto, Mr. O'Connell served as a Chairman of U.S. League Management Services,
Inc. (the "League"), a coordinating organization for the special service
projects of the U.S. League of Savings Institutions, Inc. He served as President
of the League from 1980 to 1988.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS OF THE COMPANY AND THE BANK
The Board of Directors meets on a monthly basis and may have additional
special meetings from time to time. During the fiscal year ended June 30, 1997
(a short fiscal year consisting of 11 months), the Board of Directors met 11
times. No current director attended fewer than 75% of the total number of Board
meetings and committee meetings of which such director was a member.
The Company and the Bank have established the following committees of
each of their respective Boards of Directors:
The MANAGEMENT SALARY COMPENSATION COMMITTEE of both the Company and
the Bank consists of Messrs. Powers, Leahy and Nimrod. Each such committee
reviews and makes recommendations to the Board regarding the compensation for
the Executive Officers.
The AUDIT COMMITTEE of both the Company and the Bank consists of
Messrs. Nimrod, Powers and O'Connell. The Audit Committee meets periodically
with its independent Certified Public Accountants to arrange the Company's
annual financial statement audit and to review and evaluate recommendations made
during the annual audit. The Audit Committee also reviews the regulatory reports
of examination.
7
<PAGE>
EXECUTIVE OFFICERS
The following individuals are executive officers of the Company and
hold the offices set forth below opposite their names.
NAME POSITION HELD WITH THE COMPANY
---- ------------------------------
George M. Briody President and Chief Executive Officer
F. Gregory Opelka Executive Vice President
Timothy L. McCue Vice President, Chief Financial Officer
Robert Jones Vice President, Chief Savings Officer
Michael Cahill Vice President, Controller
Jerome A. Maher Vice President, Chief Lending Officer
The executive officers of the Company are elected annually and hold
office until their respective successors have been elected and qualified, or
until death, resignation or removal by the Board of Directors. The Company has
entered into Employment Agreements with certain of its executive officers which
set forth the terms of their employment. See "--Employment Agreements."
Biographical information of executive officers of the Company or the
Bank who are not directors is set forth below.
TIMOTHY L. MCCUE, age 51, has served as the Bank's Vice President,
Chief Financial Officer since December 1984. He is a member of the American
Institute of Certified Public Accountants and the Illinois CPA Society. Mr.
McCue is the Regional District Director for Financial Managers Society.
ROBERT JONES, age 54, has served as the Bank's Vice President, Chief
Savings Officer since April 1987.
MICHAEL CAHILL, age 43, has served as Vice President, Controller of the
Bank since 1986.
JEROME A. MAHER, age 62, joined the Bank in June, 1996 and has served
as Vice President, Chief Lending Officer since February, 1997. Mr. Maher served
as Vice President and director of Covenant Mortgage Corporation from March 1994
to September 1996 and as a Senior Vice President of Hanover Capital Mortgage
Corporation from July 1993 to February 1994. Prior to that, Mr. Maher was an
Executive Vice President and director of Labe Federal Savings and Loan
Association.
8
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
MANAGEMENT SALARY COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
THE FOLLOWING REPORT OF THE COMPANY'S MANAGEMENT SALARY COMPENSATION
COMMITTEE IS PROVIDED IN ACCORDANCE WITH THE RULES AND REGULATIONS OF THE SEC.
PURSUANT TO SUCH RULES AND REGULATIONS, THIS REPORT SHALL NOT BE DEEMED
"SOLICITING MATERIAL," FILED WITH THE SEC, SUBJECT TO REGULATION 14A OR 14C OF
THE SEC OR SUBJECT TO THE LIABILITIES OF SECTION 18 OF THE EXCHANGE ACT.
Big Foot Financial, Corp. was formed in 1996 for the purpose of
becoming the holding company for Fairfield Savings Bank, FSB in a stock
conversion that took effect in December 1996. For the fiscal year ended June 30,
1997, substantially all of the business of the Company was conducted through the
Bank. During such fiscal year, the Company's Chief Executive Officer and other
executive officers served as the Chief Executive Officer and executive officers,
respectively, of the Bank and performed substantially all of their services in
connection with the management and operation of the Bank. As a result,
substantially all compensation of the Chief Executive Officer and all other
executive officers for such period was paid by the Bank and determined by the
Board of Directors of the Bank on the recommendation of its Management Salary
Compensation Committee (the "Bank Management Salary Compensation Committee").
The Board of Directors of the Bank accepted without modification all of the Bank
Management Salary Compensation Committee's recommendations on executive
compensation for the fiscal year ended June 30, 1997. The Composition of the
Bank Management Salary Compensation Committee is the same as that of the
Company's Management Salary Compensation Committee.
It is the Company's policy to cause its executive officers to be
compensated, either directly or through its affiliates, using a combination of
cash compensation (consisting of base salary and discretionary cash bonuses) and
fringe benefit plans. These elements are intended to provide an overall
compensation package that is commensurate with the Company's financial
resources, that is appropriate to assure the retention of experienced management
personnel and align their financial interests with those of the Company's
stockholders, and that is responsive to the immediate and long-term needs of
executive officers and their families. The compensation practices of other
savings and community banks in the geographic area are considered, using
information obtained through trade groups and commercial salary surveys, in
establishing the overall level of compensation and the components of the
compensation package; although salaries are not determined by formula, it has
been a general goal to set salaries at levels designed to achieve a ranking at
or around the average for thrift institutions of similar asset size operating in
urban areas in the Midwest.
For the fiscal year ended June 30, 1997 (which fiscal year commenced
August 1, 1996), base salaries of all executive officers were set at levels
determined, in the subjective judgment of the Bank Management Salary
Compensation Committee, to be commensurate with the executive officers'
customary respective duties and responsibilities and to enable them to maintain
appropriate standards of living within their communities. Annual salary rates
were increased by an average of 3.6% over the prior year's salary rates. A cash
incentive plan in effect for the fiscal year ended June 30, 1997 did not result
in the payment of bonuses as the target return on average Bank assets was not
attained. Fringe benefit plans, consisting of a pension plan, profit sharing
401(k) plan with employer matching contributions and group insurance coverage,
are designed to provide for the health and welfare of the executives and their
families as well as for their long-term financial needs. In addition, all
executive officers participated in the Company's ESOP for the fiscal year ended
June 30, 1997. Each executive officer has an individual account within the ESOP
Trust which is invested in employer common stock with the result that a portion
of each executive officer's long-term retirement savings is tied to the
performance of the Bank and the Company. Concurrently with the establishment of
the ESOP, the Bank discontinued its prior practice of making profit-sharing
contributions, other than matching contributions under the 401(k) plan,
reflecting the role of the ESOP as a substitute for such profit-sharing
contributions.
9
<PAGE>
The determination of the Chief Executive Officer's compensation for the
fiscal year ended June 30, 1997 was based on the same general principles applied
to other executive officers and resulted in a 2.8% salary
increase, with no cash incentive payment.
The Bank Management Salary Compensation Committee recognizes the
significant additional efforts required of the Chief Executive Officer and other
executive officers of the Bank and the Company in bringing about the Bank's
successful stock conversion and the Company's initial public offering. It also
recognizes that successfully managing and operating a public company will entail
additional ongoing duties and responsibilities for each executive officer. No
additional cash compensation has been awarded on this basis. It is the Bank
Management Salary Compensation Committee's current judgment that such
compensation should take the form of stock-based compensation under stock
benefit plans which encourage and reward performance that enhances shareholder
value. In this connection, the Company, with the approval of shareholders,
implemented its 1997 Stock Option Plan on June 24, 1997. Option grants were made
to all executive officers on such date, as disclosed in the Proxy Statement for
the Special Meeting of Shareholders held on June 24, 1997, in amounts and on
terms comparable to those of other recently converted thrift institutions. These
option grants vest over a five-year period to assist the Bank and the Company in
retaining its management team in place during the transition to operation as a
public entity.
MANAGEMENT SALARY COMPENSATION
COMMITTEE OF BIG FOOT FINANCIAL
CORP.
JOSEPH J. NIMROD, CHAIRMAN
MAURICE F. LEAHY, MEMBER
WALTER E. POWERS, MEMBER
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended June 30, 1997, the Management Salary
Compensation Committee consisted of Messrs. Powers, Leahy and Nimrod. During the
1997 fiscal year there were no interlocks, as defined under the rules and
regulations of the SEC, between members of the Management Salary Compensation
Committee or executive officers of the Company and corporations with respect to
which such persons are affiliated, or otherwise.
10
<PAGE>
PERFORMANCE GRAPH
The following graph compares the Company's total cumulative shareholder
return from December 19, 1996, the date of the Company's initial public
offering, to June 30, 1997, to the total return for the Nasdaq Stock Market
(U.S.) and the total return for the Nasdaq Bank Index.
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
12/20/96 12/31/96 1/31/97 2/28/97 3/31/97 4/30/97 5/31/97 6/30/97
-------- -------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Big Foot Financial $ 100 $ 130 $ 138 $ 139 $ 141 $ 149 $ 159 $ 161
Corp.
NASDAQ Stock Market 100 100 107 101 95 98 109 112
(U.S.)
NASDAQ Bank Index 100 101 106 112 108 111 118 126
Assumes $100 Invested on December 20, 1996.
Assumes dividends reinvested.
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
THERE CAN BE NO ASSURANCE THAT STOCK PERFORMANCE WILL CONTINUE INTO THE FUTURE
WITH THE SAME OR SIMILAR TRENDS DEPICTED IN THE GRAPH ABOVE.
11
<PAGE>
DIRECTORS' COMPENSATION
FEE ARRANGEMENTS. Currently, each director of the Bank receives a
monthly fee of $1,100. The aggregate amount of fees paid to such directors by
the Bank for the year ended June 30, 1997 was approximately $69,300. No
additional fees are paid for attendance at board committee meetings. Directors
of the Company are not separately compensated for their services as such.
Directors have also been granted options under the Stock Option Plan. Effective
on June 24, 1997, each person who was an Eligible Director was granted a
non-qualified stock option to purchase 10,051 Shares. Such Options have an
Exercise Price of $15.625 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 Stock
Option Plan), all optioned Shares not previously exercisable will automatically
become exercisable and remain exercisable for the balance of the original ten
year term. If shareholders approve Article X of the Stock Option Plan, Options
granted to directors will also become exercisable upon retirement or a change in
control. See "Proposal 4 -- Article X of the 1997 Stock Option Plan." It is also
anticipated that directors will become eligible to receive awards pursuant to
the RRP. See "Proposal 3 -- 1997 Recognition and Retention Plan."
EXECUTIVE COMPENSATION
COMPENSATION DECISIONS. Substantially all of the compensation of the
officers of the Bank is paid by the Bank. Decisions regarding executive
compensation are made by the Bank's Board of Directors based on recommendations
of the Management Salary Compensation Committee, the membership of which
excludes those directors employed by the Bank. Under this structure, no
interlocks exist between members of the Management Salary Compensation Committee
and employees of the Bank.
12
<PAGE>
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 June 30, 1997, 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($) ($)(3) ($)((4 ) (#) ($)(4) ($)(5)
- ---------------------------- -------- ---------- ---------- ------------ ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
George M. Briody,
President................. 1997 $147,840 $14,888 -- -- 55,280 -- $ 25,384
1996 $157,180 $14,550 -- -- -- -- $ 14,907
F. Gregory Opelka, Executive
Vice President........... 1997 $ 97,850 $ 9,485 -- -- 37,693 -- $ 16,153
1996 $103,145 $ 9,240 -- -- -- -- $ 9,376
Timothy L McCue, Vice
President and Chief
Financial Officer........ 1997(2) $ 87,276 $ 8,351 -- -- 37,691 -- $ 14,136
1996 $ 91,180 $ 8,130 -- -- -- -- $ 8,220
</TABLE>
- ----------
(1) Under Annual Compensation, the column titled "Salary" includes base
salary, director's and management's fees and payroll deductions for
health insurance under the Bank's health insurance plan for the 11
months ended June 30, 1997.
(2) Figures for the fiscal year ended June 30, 1997 represent amounts paid
for the period of 11 months coinciding with the short fiscal year. If
the annual salary and bonus reported for Mr. McCue reflected
compensation for a full 12- month period, the aggregate of Mr. McCue's
annual salary and bonus for fiscal 1997 would have exceeded $100,000.
(3) For 1997, there were no: (a) perquisites with an aggregate value for
any named individual in excess of the lesser of $50,000 or 10% of the
total of the individual's salary and bonus for the year; (b) payments
of above-market preferential earnings on deferred compensation; (c)
payments of earnings with respect to long-term incentive plans prior to
settlement or maturation; or (d) preferential discounts on stock.
(4) For the years reported, the Company did not maintain any restricted
stock or long-term incentive plan.
(5) Includes (a) employer contributions to the Profit Sharing and Savings
Plan for 1997 and 1996 as follows: Mr. Briody, $7,566 and $14,907; Mr.
Opelka, $4,817 and $9,376; and Mr. McCue, $4,219 and $8,220; and (b)
allocations of Common Stock under the Employee Stock Ownership Plan
(valued using a price per share of $16.125, the closing sales price for
shares of Common Stock on the NASDAQ Stock Market on June 30, 1997) for
1997 and 1996 as follows: Mr. Briody, $17,818 and $0; Mr. Opelka,
$11,336 and $0; and Mr. McCue, $9,917 and $0.
EMPLOYMENT AGREEMENTS
Effective December 19, 1996, the Company and the Bank entered into
Employment Agreements with each of Messrs. Briody, Opelka, McCue, Jones, and
Cahill (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. 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 on each anniversary date thereafter, the 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
13
<PAGE>
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. This review will be performed by the Management Salary
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 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 each 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. 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.
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 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 Management
Salary 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
14
<PAGE>
performance necessary to trigger an award is a return on assets in excess of a
designated amount for each applicable fiscal year. No annual awards were made
for fiscal years 1996 or 1997.
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
- ---------------------- ------------- ------------- -------------- --------------- -------------------
<S> <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 June 30, 1997, 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 June 30, 1997, 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. The
Company does not maintain a supplemental plan to make up for benefits that
would be paid under the Pension Plan formula in the
absence of the limitations under the Code.
The following table sets forth the years of credited service and the
final average compensation (as defined above) determined as of June 30, 1997,
the end of the 1997 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......... 47 0 $137,596
Mr. Opelka......... 42 7 88,891
Mr. McCue.......... 12 6 78,259
15
<PAGE>
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 $160,000 (for
1997), or to a limit imposed under the Code ($9,500 for 1997). 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 matching contributions, were
discontinued on a prospective basis in connection with the implementation of the
ESOP described herein.
The Profit Sharing and Savings Plan permits participating employees 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 December 19, 1996. 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'
base taxable salary 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.
In connection with the establishment of the ESOP, a Plan Administrator
was appointed to administer the ESOP (the "Plan Administrator"). The Plan
Administrator may instruct the ESOP Trustee regarding investment of funds
contributed to the ESOP. The ESOP Trustee, 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
16
<PAGE>
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 Stock Option Plan was
approved by the shareholders of the Company at a special meeting of the
shareholders on June 24, 1997. For a description of the terms and provisions of
the Stock Option Plan, as well as certain provisions of the Stock Option Plan
that will become effective if the shareholders approve Article X of the Stock
Option Plan, see "Proposal 4 -- Article X of the 1997 Stock Option Plan."
The following table summarizes the grants of Options that were made to
the Named Executive Officers pursuant to the Stock Option Plan during fiscal
1997. The Stock Option Plan does not provide for the grant of
stock appreciation rights ("SARs").
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN FISCAL YEAR 1997(1)
INDIVIDUAL GRANTS
--------------------------- POTENTIAL REALIZABLE
PERCENT OF VALUE OF ASSUMED ANNUAL
NUMBER OF TOTAL RATE OF STOCK PRICE
SECURITIES OPTIONS/SARS APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERM
OPTIONS/SARS EMPLOYEES EXERCISE OR -----------------------------
GRANTED FISCAL YEAR BASE PRICE EXPIRATION 5% 10%
NAME (#) (%) ($ PER SHARE) DATE ($) ($)
- ------------------ ------------ ------------ ------------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
George M. Briody 55,280 27.50% 15.625 6/23/2007 543,208 1,376,595
F. Gregory Opelka 37,693 18.75 15.625 6/23/2007 370,389 938,640
Timothy L. McCue 37,691 18.75 15.625 6/23/2007 370,370 938,590
</TABLE>
- --------------
(1) All options were granted on June 24, 1997, the date of shareholder
approval of the 1997 Stock Option Plan and vest at the rate of 20% per
year beginning on June 23, 1998, with accelerated vesting in the case
of death or disability, or, if, shareholders approve Proposal 4 (see
"Proposal 4 -- Article X of the 1997 Stock Option Plan"), change in
control or retirement while in the service of the Company or the Bank.
17
<PAGE>
The following table provides certain information with respect to the
number of shares of Common Stock acquired through the exercise of, or
represented by, outstanding stock options held by the Named Executive Officers
on June 30, 1997. Also reported is the value of any "in-the-money" options,
which represent the positive spread between the exercise price of any such
existing stock options and the fiscal year-end price of Common Stock, which was
$16.125 per share.
<TABLE>
<CAPTION>
FISCAL YEAR END OPTIONS/SAR VALUES
NUMBER OF SECURITIES VALUE OF UNEXCERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT FISCAL OPTIONS/SARS AT FISCAL
YEAR-END YEAR-END
(#) ($)
NAME (1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(2)
- --------------------------- ------------------------------ -------------------------------
<S> <C> <C>
George M. Briody 0/55,280 0/$27,640
F. Gregory Opelka 0/37,693 0/$18,847
Timothy L. McCue 0/37,691 0/$18,846
</TABLE>
- -------------
(1) None of the Named Executive Officers exercised options during the
fiscal year ended June 30, 1997.
(2) Of the total outstanding stock options held by Mr. Briody, Mr. Opelka
and Mr. McCue, all of the unexercisable options are "in-the-money"
options.
The Company has reserved 251,275 shares of the Company Stock 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 Stock Option Plan which expire or are terminated,
forfeited or canceled without having been exercised or vested in full, shall
again be available to support additional grants under the Stock Option Plan.
STOCK PROGRAMS. Directors and executive officers of the Bank and the
Company will be awarded restricted stock of the Company under the Big Foot
Financial Corp. 1997 Recognition and Retention Plan being presented for
shareholder approval in Proposal 3 if shareholders approve Proposal 3. See
"Proposal 3 -- 1997 Recognition and Retention Plan."
TRANSACTIONS WITH CERTAIN RELATED PERSONS
The Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA") requires that all loans or extensions of credit to executive officers
and directors must be made on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with the general public and must not involve more than the normal
risk of repayment or present other unfavorable features. The Bank has made loans
or extended credit to executive officers and directors and also to certain
persons related to executive officers and directors. All such loans were made by
the Bank in the ordinary course of business and were not made with more
favorable terms nor did they involve more than the normal risk of collectibility
or present unfavorable features. The outstanding principal balance of such loans
to directors, executive officers and their associates totaled $483,079 or 1.31%
of the Company's shareholders' equity at June 30, 1997.
The Company intends that all transactions in the future between the
Company and its executive officers, directors, holders of 10% or more of the
shares of any class of its common stock and affiliates thereof, will contain
terms no less favorable to the Company than could have been obtained by it in
arm's-length negotiations with unaffiliated persons and will be approved by a
majority of independent outside directors of the Company not having any interest
in the transaction.
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SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934 BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and certain officers, and persons who own more than 10% of a
registered class of the Company's equity securities to file reports of ownership
and changes in ownership with the SEC. Officers, directors and greater than 10%
shareholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file. Other than the statement of changes in
beneficial ownership of securities on Form 4 for Mr. Nimrod, which was accurate
in all respects but was filed on June 16, 1997, based solely on a review of
copies of such reports of ownership furnished to the Company, or written
representations that no forms were necessary, the Company believes that, during
the last fiscal year, all filing requirements applicable to its officers,
directors and greater than ten percent shareholders were complied with.
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PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
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GENERAL
The Board of Directors has appointed the firm of KPMG Peat Marwick LLP
to act as independent auditors for the Company for the fiscal year ending June
30, 1998, subject to ratification of such appointment by the Company's
shareholders. A representative of KPMG Peat Marwick LLP is expected to be
present at the Annual Meeting and will be given an opportunity to make a
statement if he or she desires to do so and will be available to respond to
appropriate questions. No determination has been made as to what action the
Board of Directors would take if the shareholders do not ratify KPMG Peat
Marwick LLP's appointment.
VOTE REQUIRED
The ratification of the appointment by the Board of Directors of KPMG
Peat Marwick LLP as the Company's independent auditors requires the affirmative
vote of the holders of a majority of the number of votes eligible to be cast by
the holders of shares of Common Stock represented in person or by proxy and
entitled to vote at the Annual Meeting. Accordingly, shares as to which the
"ABSTAIN" box has been selected on the Proxy Card will be counted as present and
entitled to vote and will have the effect of a vote against Proposal 2. Shares
underlying broker non-votes will not be counted as having been voted in person
or by proxy and will have no effect on the vote for Proposal 2.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" APPROVAL OF THE RATIFICATION OF APPOINTMENT OF INDEPENDENT
AUDITORS.
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PROPOSAL 3
1997 RECOGNITION AND RETENTION PLAN
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GENERAL PLAN INFORMATION
The Company has adopted, subject to the approval by shareholders of the
Company, The Big Foot Financial Corp. 1997 Recognition and Retention Plan (the
"RRP"). The RRP provides for restricted stock awards ("Awards") to executive
officers and eligible directors of the Company, the Bank or any affiliate
approved by the Board. The RRP is not subject to ERISA and is not a
tax-qualified plan under the Code. The principal provisions of the RRP are
summarized below. The full text of the RRP 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.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the number of
votes eligible to be cast by the holders of shares of Common Stock represented
in person or by proxy and entitled to vote at the Annual Meeting is required to
approve Proposal 3. Accordingly, shares as to which the "ABSTAIN" box has been
selected on the Proxy Card will be counted as present and entitled to vote and,
accordingly, will have the effect of a vote against Proposal 3. Shares
underlying broker non-votes will not be counted as present and entitled to vote
and will therefore have no effect on the vote for Proposal 3. If approved by the
shareholders, the RRP will be established and implemented and Awards will be
granted on December 22, 1997 (the "RRP Effective Date").
PURPOSE OF THE RRP
The purpose of the RRP is to promote the growth and profitability of
the Company and to provide eligible directors and executive officers of the
Company and its affiliates with an incentive to achieve corporate objectives, to
attract and retain eligible directors and key officers of outstanding competence
and to provide such directors and officers with an equity interest in the
Company.
DESCRIPTION OF THE RRP
ADMINISTRATION. The members of the Compensation Committee who are
Disinterested Directors (the "RRP Committee") will administer the RRP and will
determine, within the limitations of the RRP, the executive officers to whom
Awards will be granted, the number of shares subject to each Award, the terms of
such Awards (including provisions regarding exercisability and acceleration of
exercisability) and the procedures by which the Awards shall be exercised.
Awards to outside directors will be determined by automatic formula grant and
the RRP Committee has no discretion over the material terms of such grants.
Subject to certain specific limitations and restrictions set forth in the RRP,
the RRP Committee has full and final authority to interpret the RRP, to
prescribe, amend and rescind rules and regulations, if any, relating to the RRP
and to make all determinations necessary or advisable for the administration of
the RRP. The costs and expenses of administering the RRP will be borne by the
Company and not charged to any grant of an Award nor to any participating
director or executive officer.
STOCK SUBJECT TO THE RRP. The Company will establish a trust ("Trust")
and will contribute, or cause to be contributed, to the Trust, from time to
time, such amounts of money or property as shall be determined by the Board, in
its discretion. No contributions by participants will be permitted. A trustee
will invest the assets of the Trust in Common Stock and in such investments
including savings accounts, time or other interest bearing deposits or in other
interest bearing obligations of the Bank, in such proportions as shall be
determined by the RRP Com mittee. In no event shall the assets of the Trust be
used to purchase more than 100,510 shares of Common Stock. As of November 10,
1997, the aggregate fair market value of the Common Stock to be purchased for
the RRP
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<PAGE>
was $1,834,308 based on the closing sales price per share $18.25 on The Nasdaq
Stock Market on such Record Date. It is currently anticipated that the Trust
will purchase Common Stock on the open market, but it may also purchase stock
from the Company (treasury shares or authorized but unissued shares) or in
private transactions.
ELIGIBILITY. Any executive officer of the Company, the Bank or any
affiliate approved by the Board who is selected by the RRP Committee is eligible
to participate in the RRP as an "Eligible Individual." As of the Record Date,
there were 6 Eligible Individuals. Members of the Board or of the Board of
Directors of the Bank or any affiliate approved by the Board who are not
employees or officers of the Company, the Bank or such affiliate are eligible to
participate as an "Eligible Director." As of the Record Date, there were 5
Eligible Directors.
AWARDS TO OUTSIDE DIRECTORS. On the RRP Effective Date, each Eligible
Director will receive an Award of 4,020 shares.
AWARDS TO EXECUTIVE OFFICERS. After the RRP Effective Date, the RRP
Committee may, in its discretion, grant Awards of restricted stock to Eligible
Individuals. The RRP Committee will determine the number of shares of Common
Stock subject to an Award and the vesting schedule applicable to the Award and
may, in its discretion, establish other terms and conditions applicable to the
Award.
TERMS AND CONDITIONS OF AWARDS. Stock subject to Awards is held in
trust pursuant to the RRP until vested. An individual to whom an Award is
granted is entitled to exercise voting rights and receive cash dividends with
respect to stock subject to Awards granted to him whether or not vested. The RRP
Committee will exercise voting rights with respect to shares in the Trust that
have not been allocated to reflect the voting directions of shares granted under
the RRP. Each individual to whom an Award is granted is entitled to direct the
manner of response to any tender offer, exchange offer or other offer made to
shareholders with respect to stock subject to Awards granted to such person
whether or not vested. If no direction is given, the shares will not be tendered
or exchanged. For shares that are not allocated in connection with an Award, the
RRP Committee will direct the Trustee to respond to reflect the responses given
with respect to shares allocated in connection with Awards.
The shares covered by an Award will become vested in accordance with
the terms of the Award and as soon as practicable following such vesting, the
Trustee will transfer the shares to the recipient. The shares covered by an
Award will vest, for an Eligible Director, at a rate of 10% at June 30, 1998;
20% at June 30,
1999,
2000, 2001 and 2002; and 10% at January 1, 2003; however, any shares covered by
the Award will become 100% vested as of the date of the recipient's death,
disability, retirement while in service and after attaining age 65 or on the
effective date of any change in control of the Company. The RRP Committee may
prescribe a different vesting schedule for Eligible Individuals. If an
individual covered by an Award terminates employment or ceases to be a director
for reasons other than death, disability, retirement while in service and after
attaining normal retirement age under any applicable tax-qualified retirement
plan or prior to the effective date of any change in control of the Company,
then the individual forfeits all rights to his unvested shares remaining in the
RRP trust. Eligible Individuals may designate a beneficiary to receive
distributions on account of death. In addition, pursuant to the RRP, the
Committee may distribute cash payments representing dividends declared and paid
on shares, whether or not vested, covered by an Award held by a recipient under
the RRP.
MERGERS AND REORGANIZATIONS. The number of shares available under the
RRP and the Awards will be adjusted to reflect any merger, consolidation or
business reorganization in which the Company is the surviving entity and to
reflect any stock split, stock dividend or other event generally affecting the
number of shares. If a merger, consolidation or other business reorganization
occurs and the Company is not the surviving entity, the Trustee will hold any
money, stock, securities or other property received in the trust fund, and
adjusting any Award by allocating such money, stock, securities or other
property to the Eligible Director or Eligible Individual.
TERMINATION OR AMENDMENT OF THE RRP
The Board may suspend or terminate the RRP in whole or in part at any
time by giving written notice of such suspension or termination to the RRP
Committee, but the RRP may not be terminated while there are outstanding Awards
that may thereafter become vested. Upon the termination of the RRP, the Trustee
shall make
21
<PAGE>
distributions from the Trust in such amounts and to such persons as the RRP
Committee may direct and shall return the remaining assets of the Trust, if any,
to the Company.
The Board may amend or revise the RRP in whole or in part at any time
but, no such amendment shall authorize the issuance of additional Awards under
the RRP without the approval of the shareholders of the Company to the extent
required by law; and no such amendment shall adversely affect the rights of any
person in or with respect to any Award granted hereunder prior to the date on
which such amendment is adopted or made effective, whichever is later.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion is intended only as a summary and does not
purport to be a comprehensive description of the federal tax laws, regulations
and policies affecting the Company and recipients of Awards that may be granted
under the RRP. Any descriptions of the provisions of any law, regulation or
policy contained herein are qualified in their entirety by reference to the
particular law, regulation or policy. Any change in applicable law or regulation
or in the policies of various taxing authorities may have a material effect on
the discussion contained herein. The RRP does not constitute a qualified plan
under Section 401(a) of the Code.
The award of Common Stock under the RRP does not result in federal
income tax consequences to either the Company or the award recipient. Upon the
vesting of an award and the distribution of the vested shares, the award
recipient will generally be required to include in ordinary income, for the
taxable year in which the vesting date occurs, an amount equal to the fair
market value of the shares on the vesting date, and the Company will generally
be allowed to claim a deduction, for compensation expense, in a like amount. To
the extent that dividends are paid with respect to unvested shares held under
the RRP and distributed to the award recipient, such dividend amounts will
likewise be includible in the ordinary income of the recipient and allowable as
a deduction, for compensation expense, to the Company. Section 162(m) of the
Code limits the Company's deductions of compensation in excess of $1,000,000 per
year for the chief executive officer and the four other most highly paid
executives named in its proxy statement. No executive of the Company currently
receives compensation subject to this limitation. Compensation amounts resulting
from the award and vesting of shares will be subject to this deduction
limitation, if such amount when added to other includible compensation exceeds
$1,000,000. Dividends declared and paid with respect to vested shares, as well
as any gain or loss realized upon an award recipient's disposition of the
shares, will be treated as dividend income and capital gain or loss,
respectively, in the same manner as for other shareholders.
The foregoing statements are intended to summarize the general
principles of current federal income tax law applicable to Awards that may be
granted under the RRP. State and local tax consequences may also be
significant.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE BIG FOOT FINANCIAL CORP. 1997 RECOGNITION AND RETENTION PLAN.
22
<PAGE>
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PROPOSAL 4
ARTICLE X OF THE 1997 STOCK OPTION PLAN
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GENERAL PLAN INFORMATION
The Company adopted the Big Foot Financial Corp. 1997 Stock Option Plan
(the "Stock Option Plan") on April 22, 1997, subject to approval by its
shareholders, and the shareholders approved the Stock Option Plan on June 24,
1997 (the "Effective Date"). The Stock Option Plan provides for the grant of
options to purchase Common Stock of the Company ("Options") to certain officers,
employees and directors of the Company, the Bank or any affiliate approved by
the Board of Directors. The Stock Option Plan is not subject to ERISA and is not
a tax-qualified plan under the Code. Pursuant to regulations of the Office of
the Thrift Supervision (the "OTS") applicable to Stock Option Plans established
or implemented within one year following the completion of a mutual-to-stock
conversion, the Stock Option Plan contains certain restrictions and limitations,
including among others: provisions requiring the vesting of options granted to
occur no more rapidly than ratably over a five year period; and the resultant
prohibition against accelerated vesting of option grants upon retirement of the
optionee or the occurrence of a "change in control" (as defined in the Stock
Option Plan) of the Company. In addition, OTS ruling positions may restrict the
Company's ability to provide for, and implement, anti-dilutive provisions in the
Stock Option Plan that would apply in the event that an extraordinary dividend,
including a non-taxable return of capital, is to be paid to shareholders.
OTS ruling positions permit the elimination of the provisions of the
Stock Option Plan which reflect the restrictions and limitations described
above, provided that shareholder approval therefor is obtained more than one
year following the completion of the mutual-to-stock conversion. Article X of
the Stock Option Plan, which was included in the Stock Option Plan approved by
shareholders on June 24, 1997 but by its terms will become effective only if
approved by the shareholders of the Company again at a meeting held after
December 19, 1997, eliminates such restrictions and limitations (these changes
to the Stock Option Plan are collectively referred to herein as "Article X").
Article X does not increase the number of shares reserved for issuance under the
Stock Option Plan, decrease the price per share at which Options were granted
under the Stock Option Plan or alter the classes of individuals eligible to
participate in the Stock Option Plan. In the event that Article X is not
approved by the shareholders at the Annual Meeting, Article X will not take
effect, but the Stock Option Plan will remain in effect. The principal
provisions of the Stock Option Plan, including the provisions set forth in
Article X, are summarized below. The full text of Article X of the Stock Option
Plan is set forth as Appendix B to this Proxy Statement, to which reference is
made, and the summary of Article X provided below is qualified in its entirety
by such reference.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the number of
votes eligible to be cast by the holders of shares of Common Stock represented
in person or by proxy and entitled to vote at the Annual Meeting is required to
approve Proposal 4. Accordingly, shares as to which the "ABSTAIN" box has been
selected on the Proxy Card will be counted as present and entitled to vote and
will have the effect of a vote against Proposal 4. Shares underlying broker
non-votes will not be counted as having been voted in person or by proxy and
will have no effect on the vote for Proposal 4.
PURPOSE OF THE STOCK OPTION PLAN
The purpose of the Stock Option Plan is to promote the growth and
profitability of the Company and the Bank, 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.
23
<PAGE>
DESCRIPTION OF THE STOCK OPTION PLAN
ADMINISTRATION. The disinterested members of the Management Salary
Compensation Committee will administer the Stock 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 determined, within the limitations of the Stock Option Plan, the
officers and employees to whom Options were 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 are exercised. Options granted to directors under the Stock
Option Plan were granted automatically pursuant to a formula, and the Committee
had no discretion over the material terms of such grants. Subject to certain
specific limitations and restrictions set forth in the Stock Option Plan, the
Committee has full and final authority to interpret the Stock Option Plan, to
prescribe, amend and rescind rules and regulations, if any, relating to the
Stock Option Plan and to make all determinations necessary or advisable for the
administration of the Stock Option Plan. The costs of administering the Stock
Option Plan will be borne by the Company.
STOCK SUBJECT TO THE STOCK 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 Stock Option Plan which expire or are terminated, forfeited or
canceled without having been exercised or vested in full, shall again be
available to support additional grants under the Stock Option Plan. The
aggregate fair market value of the Shares reserved for issuance was $4,585,769,
based on the closing sales price per share of Common Stock of $18.25 on The
Nasdaq Stock Market on November 10, 1997.
ELIGIBILITY. Any employee of the Company or its affiliates who is
selected by the Committee is eligible to participate in the Stock Option Plan as
an "Eligible Individual." As of November 10, 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 November 10, 1997,
there were 5 Eligible Directors.
TERMS AND CONDITIONS OF OPTIONS GRANTED TO OFFICERS AND EMPLOYEES. The
Stock 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 Stock Option Plan are
NQSOs, are 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, retirement or discharge for 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.
Currently, the Stock Option Plan requires that Options granted to
Eligible Individuals become exercisable no more rapidly than ratably over a five
year period (with accelerated vesting triggered only upon death or disability)
and would prohibit the accelerated vesting of Options upon retirement or a
"change in control" (as such terms are defined in the Stock Option Plan). As
permitted by OTS ruling positions, Article X would eliminate these requirements,
both with respect to outstanding Options and any Options that may be granted in
the future. Pursuant to the Stock Option Plan, including the provisions set
forth in Article X, upon a change in control or retirement of an Eligible
Individual, all Options granted to such individual that are outstanding as of
the date of
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<PAGE>
such individual's retirement or a change in control will automatically become
fully vested and exercisable. The Stock Option Plan, including the provisions
set forth in Article X, also permits the Committee to establish a vesting
schedule that is either more or less favorable than the current five year
vesting schedule applicable to an Option granted to an Eligible Individual under
the Stock Option Plan.
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 of Common Stock represented in person or by proxy and entitled to vote at
a meeting of shareholders duly called and held after December 19, 1997.
TERMS AND CONDITIONS OF OPTIONS GRANTED TO DIRECTORS. As of the
Effective Date, each Eligible Director was granted a NQSO to purchase 10,051
Shares. Such Options have an Exercise Price of $15.625, 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, disability, retirement or change
in control (as defined in the Stock 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.
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.
Currently, the Stock Option Plan requires that Options granted to
Eligible Directors become exercisable no more rapidly than ratably over a five
year period (with accelerated vesting triggered only upon a Director's death or
disability) and would prohibit the accelerated vesting of Options upon
retirement or a "change in control" (as such terms are defined in the Stock
Option Plan). As permitted by OTS ruling positions, Article X would eliminate
these requirements, both with respect to outstanding Options and any Options
that may be granted in the future. Pursuant to the Stock Option Plan, including
the provisions set forth in Article X, upon a change in control or retirement of
an Eligible Director, all Options granted to such Eligible Director that are
outstanding as of the date of such Eligible Director's retirement or a change in
control will automatically become fully vested and exercisable.
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 of Common Stock represented in person or by proxy and entitled to vote at
a meeting of shareholders duly called and held after December 19, 1997.
MERGERS AND REORGANIZATIONS; ADJUSTMENTS FOR EXTRAORDINARY DIVIDENDS.
The number of shares available under the Stock Option Plan and the outstanding
options will be adjusted to reflect any merger, consolidation or business
reorganization in which the Company is the surviving entity, and to reflect any
stock split, stock dividend or other event generally affecting the number of
shares. If a merger, consolidation or other business reorganization occurs and
the Company is not the surviving entity, outstanding Options may be canceled
upon 30 days' written notice to the option holder so long as the option holder
receives payment determined by the Board to be the equivalent value of the
canceled Options. Article X of the Stock Option Plan also authorizes the
Committee, in its discretion, to adjust outstanding Options to equitably reflect
any extraordinary dividend that 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.
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<PAGE>
TERMINATION OR AMENDMENT OF THE STOCK OPTION PLAN
Unless sooner terminated, the Stock Option Plan will terminate
automatically on the day preceding the tenth anniversary of the Effective Date.
The Board may suspend or terminate the Stock 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 Committee. In the event of any
suspension or termination of the Stock Option Plan, all Options theretofore
granted under the Stock Option Plan that are outstanding on the date of such
suspension or termination of the Stock Option Plan will remain outstanding under
the terms of the agreements granting such Options.
The Board may amend or revise the Stock Option Plan in whole or in part
at any time, but if the amendment or revision (i) materially increases the
benefits accruing under the Stock Option Plan, (ii) materially increases the
number of Shares which may be issued under the Stock Option Plan or (iii)
materially modifies the requirements as to eligibility for Options under the
Stock 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 Stock 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 Stock Option Plan. Any change in applicable law or regulation
or in the policies of various taxing authorities may have a material effect on
the discussion contained herein.
There are no federal income tax consequences for the Company or the
option holder at the time an ISO is granted or upon the exercise of an ISO. If
there is no sale or other disposition of the shares acquired upon the exercise
of an ISO within two years after the date the ISO was granted, or within one
year after the exercise of the ISO, then at no time will any amount be
deductible by the Company with respect to the ISO. If the option holder
exercises an ISO and sells or otherwise disposes of the shares so acquired after
satisfying the foregoing holding period requirements, then he will realize a
capital gain or loss on the sale or disposition. If the option holder exercises
his ISO and sells or disposes of his shares prior to satisfying the foregoing
holding period requirements, then an amount equal to the difference between the
amount realized upon the sale or other disposition of such shares and the price
paid for such shares upon the exercise of the ISO will be includible in the
ordinary income of such person, and such amount will ordinarily be deductible by
the Company at the time it is includible in such person's income.
With respect to the grant of NQSOs, there are no federal income tax
consequences for the Company or the option holder at the date of the grant. Upon
the exercise of a NQSO, an amount equal to the difference between the fair
market value of the shares to be purchased on the date of exercise and the
aggregate purchase price of such shares is generally includible in the ordinary
income of the person exercising such NQSO, although such inclusion may be at a
later date in the case of an option holder whose disposition of such shares
could result in liability under Section 16(b) of the Exchange Act. The Company
will ordinarily be entitled to a deduction for federal income tax purposes at
the time the option holder is taxed on the exercise of the NQSO equal to the
amount which the option holder is required to include as ordinary income.
Section 162(m) of the Code limits the Company's deductions of compensation in
excess of $1,000,000 per year for the chief executive officer and the four other
most highly paid executives named in its proxy statement, but provides for
certain exceptions for performance based compensation. The Company intends the
Stock Option Plan to comply with the requirements for an exception to Section
162(m) applicable to stock option plans so that the Company's deduction for
compensation related to the exercise of stock options would not be subject to
the $1,000,000 limitation. No executive of the Company currently receives
compensation that would be rendered nondeductible by this limitation.
The foregoing statements are intended to summarize the general
principles of current federal income tax law applicable to Options that may be
granted under the Stock Option Plan. State and local tax consequences may
also be significant.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
APPROVAL OF ARTICLE X OF THE BIG FOOT FINANCIAL CORP. 1997 STOCK OPTION PLAN.
26
<PAGE>
NEW PLAN BENEFITS
BIG FOOT FINANCIAL CORP. STOCK PLANS
The following table sets forth the Options granted under the Stock
Option Plan and discloses the benefits that will be received by directors (and
may be received by others) under the RRP if the shareholders approve
Proposal 3.
<TABLE>
<CAPTION>
==========================================================================================================
Stock Option Plan(1) RRP(2)
------------------------- --------------------------
Name/Position # $ Value(3) # $ Value(4)
- --------------------------------------------- ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
George M. Briody, President & 55,280 -- 19,235 351,039
Director Nominee
F. Gregory Opelka, Executive Vice President & 37,693 -- 15,735 287,164
Director Nominee
Joseph J. Nimrod, Director Nominee(5) 10,051 -- 4,020 73,365
Timothy L. McCue, Vice President & 37,691 -- 15,735 287,164
Chief Financial Officer
All Current Executive Officers as a Group 201,020 -- 80,410 1,467,483
All Non-Employee Directors as a Group(1)(5) 50,255 -- 20,100 366,825
All Non-Executive Employees as a Group(6) 0 0 N/A N/A
==========================================================================================================
</TABLE>
(1) On June 24, 1997, the Stock Option Plan Effective Date, each outside
director, including Joseph J. Nimrod, who is a nominee, received a
non-qualified stock option to purchase 10,051 Shares with an Exercise
Price equal to $15.625, the Fair Market Value of a Share on the Stock
Option Plan 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 or, if Article X of the Stock
Option Plan is approved, upon retirement or change in control. 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.
(2) As of the Record Date, no grants have been made under the RRP. It is
not determinable at this time what benefits, if any, each of the
persons or groups listed above (other than Eligible Directors) will
receive under such plan. The numbers in the table reflect the RRP
Committee's intentions of grants to be made upon the RRP Effective
Date. The shares covered by an Award will vest, for an Eligible
Director, at a rate of 10% at June 30, 1998; 20% at June 30, 1999,
2000, 2001 and 2002; and 10% at January 1, 2003; however, any shares
covered by the Award will become 100% vested as of the date of the
recipient's death, disability, retirement while in service and after
attaining age 65 or on the effective date of any change in control of
the Company. The RRP Committee may prescribe a different vesting
schedule for Eligible Individuals.
(3) Value is based on the fair market value of a Share on the date of
exercise and is not currently determinable.
(4) Value is based on the price per share on the vesting date. For purposes
of disclosure, the estimated value was calculated as of the Record Date
at $18.25 per share.
(5) On the RRP Effective Date, each Eligible Outside Director, including
Joseph J. Nimrod, who is a nominee, will receive an Award of 4,020
Shares. The dollar value is based on a price per Share of $18.25 (the
closing sale price for Common Stock as reported on The Nasdaq Stock
Market on the Record Date). The actual value of the benefits under this
Plan will depend on the fair market value of a Share on the applicable
vesting date, which is indeterminable at this time.
(6) As of the date of this Proxy Statement, no determination has been made
as to whether other employees will receive Awards under the RRP or, if
so, the amount of such grants.
27
<PAGE>
- --------------------------------------------------------------------------------
PROPOSAL 5
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 ANNUAL
MEETING AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING, AND ANY ADJOURNMENT OR
POSTPONEMENT THEREOF, INCLUDING, WITHOUT LIMITATION, A MOTION TO ADJOURN THE
ANNUAL MEETING
- --------------------------------------------------------------------------------
GENERAL
The Board of Directors is not aware of any other business that may
properly come before the Annual Meeting. The Board seeks the authorization of
the shareholders of the Company, in the event matters incident to the conduct of
the Annual Meeting properly come before the meeting, including, but not limited
to, the consideration of whether to adjourn the Annual Meeting once called to
order, to direct the manner in which those shares represented at the Annual
Meeting by proxies solicited pursuant to this Proxy Statement shall be voted. As
to all such matters, the Board intends that it would direct the voting of such
shares in the manner determined by the Board, in its discretion, and in the
exercise of its duties and responsibilities, to be in the best interests of the
Company and its shareholders, taken as a whole.
VOTE REQUIRED
The authorization of the Board of Directors, in its discretion, to vote
upon such other business as may properly come before the Annual Meeting requires
the affirmative vote of the holders of a majority of the number of votes
eligible to be cast by the holders of shares of Common Stock represented in
person or by proxy and entitled to vote at the Annual Meeting. Accordingly,
shares as to which the "ABSTAIN" box has been selected on the Proxy Card will be
counted as present and entitled to vote and will have the effect of a vote
against Proposal 5. Shares underlying broker non-votes will not be counted as
having been voted in person or by proxy and will have no effect on the vote for
Proposal 5.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
AUTHORIZATION OF THE BOARD OF DIRECTORS, IN ITS DISCRETION, TO DIRECT THE VOTE
OF THE PROXIES UPON SUCH OTHER MATTERS INCIDENT TO THE CONDUCT OF THE ANNUAL
MEETING AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING, AND ANY ADJOURNMENT OR
POSTPONEMENT THEREOF, INCLUDING, WITHOUT LIMITATION, A MOTION TO ADJOURN THE
ANNUAL MEETING.
ADDITIONAL INFORMATION
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
28
<PAGE>
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."
DATE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
Pursuant to the proxy soliciting regulation of the SEC, any shareholder
proposal intended for inclusion in the Company's proxy statement and proxy card
relating to the Company's 1998 Annual Meeting of Shareholders must be received
by the Company by July 20, 1998. 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.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of the
Company does not know of any other matters to be brought before the shareholders
at the 1997 Annual Meeting. See "Proposal 5 -- 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 Annual Meeting as may Properly Come
Before the Annual Meeting, and any Adjournment or Postponement Thereof,
Including, Without Limitation, a Motion to Adjourn the Annual Meeting."
By Order of the Board of Directors,
/s/ Barbara J. Urban
Barbara J. Urban
SECRETARY
Long Grove, Illinois
November 17, 1997
TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL MEETING, PLEASE
COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE
POSTAGE-PAID ENVELOPE PROVIDED.
29
<PAGE>
APPENDIX A
----------
BIG FOOT FINANCIAL CORP.
1997 RECOGNITION AND RETENTION 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 the Company and to provide eligible directors and certain key
officers of the Company and its affiliates with an incentive to achieve
corporate objectives, to attract and retain eligible directors and key officers
of outstanding competence and to provide such directors and officers with an
equity interest in the Company.
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 AWARD means a grant of Shares to an Eligible
Director or Eligible Individual.
SECTION 2.2 AWARD DATE means, with respect to a particular
Award, the date specified by the Committee in the notice of the Award issued to
the Eligible Director or Eligible Individual by the Committee.
SECTION 2.3 BANK means Fairfield Savings Bank, F.S.B., a
federally chartered stock savings bank, and any successor thereto.
SECTION 2.4 BENEFICIARY means the person designated by an
Eligible Director or Eligible Individual pursuant to section 7.3 to receive
distribution of any Shares available for distribution to such Eligible Director
or Eligible Individual, in the event such Eligible Director or Eligible
Individual dies prior to receiving distribution of such Shares.
SECTION 2.5 BOARD means the Board of Directors of Big Foot
Financial Corp.
SECTION 2.6 CHANGE IN CONTROL means any of the following
events:
(a) approval by the stockholders of Big Foot Financial Corp.
of a transaction that would result in the reorganization, merger or
consolidation of Big Foot Financial Corp. with one or more other
persons, other than a transaction following which:
(i) at least 51% of the equity ownership interests of
the entity resulting from such transaction are beneficially
owned (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) in substantially the same relative proportions
by persons who, immediately prior to such transaction,
beneficially owned (within the meaning of Rule 13d-3
promulgated under the Exchange Act) at least 51% of the
outstanding equity ownership interests in Big Foot Financial
Corp.; and
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(ii) at least 51% of the securities entitled to vote
generally in the election of directors of the entity resulting
from such transaction are beneficially owned (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) in
substantially the same relative proportions by persons who,
immediately prior to such transaction, beneficially owned
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) at least 51% of the securities entitled to vote
generally in the election of directors of Big Foot Financial
Corp.;
(b) the acquisition of all or substantially all of the assets
of Big Foot Financial Corp. or beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of the
outstanding securities of Big Foot Financial Corp. entitled to vote
generally in the election of directors by any person or by any persons
acting in concert, or approval by the stockholders of Big Foot
Financial Corp. of any transaction which would result in such an
acquisition;
(c) a complete liquidation or dissolution of Big Foot
Financial Corp., or approval by the stockholders of Big Foot Financial
Corp. of a plan for such liquidation or dissolution;
(d) the occurrence of any event if, immediately following such
event, at least 50% of the members of the Board of Directors of Big
Foot Financial Corp. do not belong to any of the following groups:
(i) individuals who were members of the Board of
Directors of Big Foot Financial Corp. on the effective date of
this Plan; or
(ii) individuals who first became members of the
Board of Directors of Big Foot Financial Corp. after the
effective date of this Plan either:
(A) upon election to serve as a member of
the Board of Directors of Big Foot Financial Corp. by
affirmative vote of three-quarters of the members of
such Board, or of a nominating committee thereof, in
office at the time of such first election; or
(B) upon election by the stockholders of Big
Foot Financial Corp. to serve as a member of the
Board of Directors of Big Foot Financial Corp., but
only if nominated for election by affirmative vote of
three-quarters of the members of such Board, or of a
nominating committee thereof, in office at the time
of such first nomination;
PROVIDED, HOWEVER, that such individual's election or
nomination did not result from an actual or threatened
election contest (within the meaning of Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents
(within the meaning of Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) other than by or on behalf
of the Board of Big Foot Financial Corp.; or
(e) any event which would be described in section 2.6(a), (b),
(c) or (d) if the term "Fairfield Savings Bank, F.S.B." were
substituted for the term "Big Foot Financial Corp." therein.
In no event, however, shall a Change in Control of Big Foot Financial Corp. be
deemed to have occurred as a result of any acquisition of securities or assets
of Big Foot Financial Corp. by a parent or subsidiary of Big Foot Financial
Corp. or by any employee benefit plan maintained by any of them. For purposes of
this section 2.6, the term "person" shall have the meaning assigned to it under
sections 13(d)(3) or 14(d)(2) of the Exchange Act.
SECTION 2.7 CODE means the Internal Revenue Code of 1986
(including the corresponding provisions of any succeeding law).
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<PAGE>
SECTION 2.8 COMMITTEE means the Committee described in section
4.1.
SECTION 2.9 COMPANY means Big Foot Financial Corp. And any
successor thereto and Fairfield Savings Bank, F.S.B. and any successor thereto,
and any direct or indirect subsidiary of either of them which, with the approval
of the Board of Directors of Big Foot Financial Corp., adopts this Plan.
SECTION 2.10 DISABILITY means a condition of total incapacity,
mental or physical, for further performance of duty with Big Foot Financial
Corp. which the Committee shall have determined, on the basis of
competent medical evidence, is likely to be permanent.
SECTION 2.11 DISINTERESTED BOARD MEMBER means a member of the
Board who (a) is not a current employee of Big Foot Financial Corp. or a
subsidiary; (b) does not receive remuneration from Big Foot Financial Corp. or a
subsidiary, either directly or indirectly, in any capacity other than as a
director; and (c) 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 Rule 16b-3 promulgated under the Exchange Act.
SECTION 2.12 EFFECTIVE DATE means December 22, 1997, or such
later date on which the stockholders of Big Foot Financial Corp. approve the
Plan as contemplated by section 9.8.
SECTION 2.13 ELIGIBLE DIRECTOR means a member of the Board of
Directors of Big Foot Financial Corp. who is not also an employee of Big Foot
Financial Corp. (or any parent, subsidiary or affiliate thereof).
SECTION 2.14 ELIGIBLE INDIVIDUAL means any executive officer
whom the Committee may determine to be a key officer of Big Foot Financial Corp.
(or any affiliate of Big Foot Financial Corp.) and select to receive an Award
pursuant to the Plan.
SECTION 2.15 EXCHANGE ACT means the Securities and Exchange
Act of 1934, as amended (including the corresponding provisions of any
succeeding law).
SECTION 2.16 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 2.17 PLAN means the Big Foot Financial Corp. 1997
Recognition and Retention Plan, as amended from time to time.
SECTION 2.18 SERVICE means service for Big Foot Financial
Corp. (or any parent, subsidiary or affiliate of Big Foot Financial Corp.) as an
employee in any capacity, service as a director or emeritus director or advisory
director of Big Foot Financial Corp., or, with respect to any individual who is
contractually bound by restrictive covenants against competition or solicitation
which operate to benefit Big Foot Financial Corp. (or any parent, subsidiary or
affiliate of Big Foot Financial Corp.), performance under such covenants.
SECTION 2.19 SHARE means a share of common stock of Big Foot
Financial Corp., par value $.01 per share.
SECTION 2.20 TRUST means the legal relationship created by the
Trust Agreement pursuant to which the Trustee holds the Trust Fund in trust. The
Trust may be referred to as the "Recognition and Retention
Plan Trust of Big Foot Financial Corp."
SECTION 2.21 TRUST AGREEMENT means the agreement between Big
Foot Financial Corp. and the Trustee therein named or its successor pursuant to
which the Trust Fund shall be held in trust.
SECTION 2.22 TRUST FUND means the corpus (consisting of
contributions paid over to the Trustee, and investments therein), and all
earnings, appreciations or additions thereof and thereto, held by the
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<PAGE>
Trustee under the Trust Agreement in accordance with the Plan, less any
depreciation thereof and any payments made therefrom pursuant to the Plan.
SECTION 2.23 TRUSTEE means the Trustee of the Trust Fund from
time to time in office. The Trustee shall serve as Trustee until it is removed
or resigns from office and is replaced by a successor Trustee
or Trustees appointed by Big Foot Financial Corp.
ARTICLE III
-----------
SHARES AVAILABLE UNDER PLAN
---------------------------
SECTION 3.1 SHARES AVAILABLE UNDER PLAN.
The maximum number of Shares available for Awards under the
Plan shall be 100,510. Such Shares may be authorized but unissued Shares or
treasury Shares purchased from Big Foot Financial Corp. or they
may be outstanding Shares purchased from other holders.
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 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:
(a) to interpret and construe the Plan, and to determine all
questions that may arise under the Plan as to eligibility for Awards
under the Plan, the amount of Shares, if any, to be granted pursuant to
an Award, and the terms and conditions of such Award;
(b) to adopt rules and regulations and to prescribe forms for
the operation and administration of the Plan; and
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<PAGE>
(c) to take any other action not inconsistent with the
provisions of the Plan that it may deem necessary or appropriate.
ARTICLE V
---------
THE TRUST FUND
--------------
SECTION 5.1 CONTRIBUTIONS.
Big Foot Financial Corp. shall contribute, or cause to be
contributed, to the Trust, from time to time, such amounts of money or property
as shall be determined by the Board, in its discretion. No contributions by
Eligible Directors or Eligible Individuals shall be permitted.
SECTION 5.2 THE TRUST FUND.
The Trust Fund shall be held and invested under the Trust
Agreement with the Trustee. The Trust Agreement shall include provisions
conferring powers on the Trustee as to the investment, control and disbursement
of the Trust Fund, and such other provisions not inconsistent with the Plan as
may be prescribed by or under the authority of the Board. No bond or security
shall be required of any Trustee at any time in office.
SECTION 5.3 INVESTMENTS.
The Trustee shall invest the Trust Fund in Shares and in such
other investments as may be per mitted under the Trust Agreement, including
savings accounts, time or other interest bearing deposits in, or other interest
bearing obligations of, Fairfield Savings Bank, F.S.B., in such proportions as
shall be determined by the Committee; PROVIDED, HOWEVER, that in no event shall
the Trust Fund be used to purchase more than 100,510 Shares. Notwithstanding the
immediately preceding sentence, the Trustee may temporarily invest the Trust
Fund in short-term obligations of, or guaranteed by, the U.S. Government or an
agency thereof, or the Trustee may retain the Trust Fund uninvested or may sell
assets of the Trust Fund to provide amounts required for purposes of the Plan.
ARTICLE VI
----------
AWARDS
------
SECTION 6.1 TO ELIGIBLE DIRECTORS.
On the Effective Date, each Person who is then an Eligible
Director shall be granted an Award of 4,020 Shares.
SECTION 6.2 TO ELIGIBLE INDIVIDUALS.
Subject to such limitations as the Board may from time to time
impose, the number of Shares as to which an Eligible Individual may be granted
an Award shall be determined by the Committee in its discretion.
SECTION 6.3 AWARDS IN GENERAL.
Any Award shall be evidenced by a written notice issued by the
Committee to the Eligible Director or Eligible Individual, which notice shall:
(a) specify the number of Shares covered by the Award;
(b) specify the Award Date;
(c) specify the dates on which such Shares shall become
available for distribution to the Eligible Director or Eligible
Individual; and
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<PAGE>
(d) contain such other terms and conditions not inconsistent
with the Plan as the Board may, in its discretion, prescribe.
SECTION 6.4 SHARE ALLOCATIONS.
Upon the grant of an Award to an Eligible Director or Eligible
Individual, the Committee shall notify the Trustee of the Award and of the
number of Shares subject to the Award. Thereafter, until such time as the Shares
subject to such Award become vested or are forfeited, the books and records of
the Trustee shall reflect that such number of Shares are being held for the
benefit of the Award recipient.
SECTION 6.5 DIVIDEND RIGHTS.
Any dividends or distributions declared and paid with respect
to Shares shall be held in the Trust Fund. If, as of the record date for such
dividend or distribution, the Shares with respect to which it is paid are
allocated to an Eligible Director or Eligible Individual in connection with an
Award, the dividends or distributions shall be distributed as soon as
administratively feasible to the holder of the Award.
SECTION 6.6 VOTING RIGHTS.
(a) Each Eligible Director or Eligible Individual to whom an
Award has been made that is not fully vested shall have the right to direct the
manner in which all voting rights appurtenant to the Shares related to such
Award will be exercised while such Shares are held in the Trust Fund. Such a
direction shall be given by completing and filing, with the inspector of
elections, the Trustee or such other person as the Committee shall designate, a
written direction in the form and manner prescribed by the Committee. If no such
direction is given by an Eligible Director or Eligible Individual, then the
voting rights appurtenant to the Shares allocated to him shall not be exercised.
(b) To the extent that the Trust Fund contains Shares that are
not allocated in connection with an Award, all voting rights appurtenant to such
Shares shall be exercised by the Trustee in such manner as the Committee shall
direct to reflect the voting directions given by Eligible Director or Eligible
Individuals with respect to Shares allocated in connection with their Awards.
(c) The Committee shall furnish, or cause to be furnished, to
each Eligible Director or Eligible Individual, all annual reports, proxy
materials and other information furnished by Big Foot Financial Corp., or by any
proxy solicitor, to the holders of Shares.
SECTION 6.7 TENDER OFFERS.
(a) Each Eligible Director or Eligible Individual to whom an
Award has been made that is not fully vested shall have the right to direct,
with respect to the Shares related to such Award, the manner of response to any
tender offer, exchange offer or other offer made to the holders of Shares. Such
a direction shall be given by completing and filing, with the inspector of
elections, the Trustee or such other person as the Committee shall designate in
the direction, a written direction in the form and manner prescribed by the Com
mittee. If no such direction is given by an Eligible Director or Eligible
Individual, then the Shares shall not be tendered or exchanged.
(b) To the extent that the Trust Fund contains Shares that are
not allocated in connection with an Award, all responses to tender, exchange and
other offers appurtenant to such Shares shall be given by the Trustee in such
manner as the Committee shall direct to reflect the responses given by Eligible
Director or Eligible Individuals with respect to Shares allocated in connection
with their Awards.
(c) The Committee shall furnish, or cause to be furnished, to
each Eligible Director or Eligible Individual, all information furnished by the
offeror to the holders of Shares.
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ARTICLE VII
-----------
VESTING AND DISTRIBUTION OF SHARES
----------------------------------
SECTION 7.1 VESTING OF SHARES GRANTED TO ELIGIBLE DIRECTORS.
The Shares subject to each Award granted to Eligible Directors
under the Plan shall become vested as follows: (i) 10% of such Shares shall
become vested on June 30, 1998; (ii) 20% of such Shares shall become vested June
30, 1999; (iii) 20% of such Shares shall become vested on June 30, 2000; (iv)
20% of such Shares shall become vested June 30, 2001; (v) 20% of such Shares
shall become vested on June 30, 2002; and (vi) 10% of such Shares shall become
vested on January 1, 2003; PROVIDED, HOWEVER, that the Eligible Director has
remained in Service during the period beginning on the Effective Date and ending
on the applicable Vesting date; AND PROVIDED, FURTHER, an Award shall become
100% vested upon the Award holder's death, Disability or retirement while in
Service and after attaining age 65 or on the effective date of any Change in
Control.
SECTION 7.2 VESTING OF SHARES GRANTED TO ELIGIBLE INDIVIDUALS.
Each Award to an Eligible Individual made under the Plan shall
become vested at the times and upon the conditions specified by the Committee in
the Award notice, or, if not specified, as follows:
(a) 20% of the Shares covered by the Award shall be vested on
January 31st following the date of grant; and
(b) 20% of the Shares covered by the Award shall become vested
on each of the first, second, third and fourth anniversaries of January
31st following the date of grant;
PROVIDED, HOWEVER, that an Award shall become vested, and all Shares not
previously vested shall be distributed, on the date of the Award recipient's
death, Disability or retirement while in Service and after attaining normal
retirement age under any applicable tax-qualified retirement plan or on the
effective date of any Change in Control.
SECTION 7.3 DESIGNATION OF BENEFICIARY.
An Eligible Director or Eligible Individual who has received
an Award may designate a Beneficiary to receive any undistributed Shares that
are, or become, available for distribution on, or after, the date of his death.
Such designation (and any change or revocation of such designation) shall be
made in writing in the form and manner prescribed by the Committee. In the event
that the Beneficiary designated by an Eligible Director or Eligible Individual
dies prior to the Eligible Director or Eligible Individual, or in the event that
no Beneficiary has been designated, any undistributed Shares that are, or
become, available for distribution on, or after, the Eligible Director's or
Eligible Individual's death shall be paid to the executor or administrator of
the Eligible Director's or Eligible Individual's estate or other fiduciary
appointed or authorized by a court of competent jurisdiction to collect this
asset. If no court proceeding to initiate the administration or settlement of
the estate has been brought within one year after the death of the Eligible
Individual or Eligible Director and if no such executor or administrator or
other person is appointed within such time as the Committee, in its sole
discretion, shall deem reasonable (but in no event earlier than one year after
such death), any such undistributed Shares of such deceased person shall be paid
to one or more of the spouse and descendants and blood relatives of such
deceased person as the Committee may select.
SECTION 7.4 MANNER OF DISTRIBUTION.
(a) As soon as practicable following the date any Shares
granted pursuant to an Award be come vested pursuant to sections 7.1 and 7.2,
the Committee shall take such actions as are necessary to cause the transfer of
record ownership of the Shares that have become vested from the Trustee to the
Award holder and shall cause the Trustee to distribute to the Award holder all
property other than Shares then being held in connection with the Shares being
distributed.
A-7
<PAGE>
(b) Big Foot Financial Corp.'s obligation to deliver Shares
with respect to an Award shall, if the Committee so requests, be conditioned
upon the receipt of a representation as to the investment intention of the
Eligible Director or Eligible Individual or Beneficiary 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. Big Foot Financial Corp. 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.
SECTION 7.5 TAXES.
Big Foot Financial Corp., the Committee or the Trustee shall
have the right to require any person entitled to receive Shares pursuant to an
Award to pay the amount of any tax which is required to be withheld 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.
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 by giving written notice of such suspension or termination to
the Committee; PROVIDED, HOWEVER, that the Plan may not be terminated while
there are outstanding Awards that may thereafter become vested. Upon the
termination of the Plan, the Trustee shall make distributions from the Trust
Fund in such amounts and to such persons as the Committee may direct and shall
return the remaining assets of the Trust Fund, if any, to Big Foot Financial
Corp.
SECTION 8.2 AMENDMENT.
The Board may amend or revise the Plan in whole or in part at
any time; PROVIDED, however, that no such amendment shall authorize the issuance
of additional Shares under the Plan without the approval of the shareholders of
the Company to the extent required by law; and PROVIDED, FURTHER, that no such
amendment shall adversely affect the rights of any person in or with respect to
any Award granted hereunder prior to the date on which such amendment is adopted
or made effective, whichever is later.
SECTION 8.3 ADJUSTMENTS IN THE EVENT OF A BUSINESS
REORGANIZATION.
(a) In the event of any merger, consolidation, or other
business reorganization (including but not limited to a Change in Control) in
which Big Foot Financial Corp. 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 held in the Trust Fund, including Shares covered by Awards, 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; 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 (including but not limited to a Change in Control) in
which Big Foot Financial Corp. is not the surviving entity, the Trustee shall
hold in the Trust Fund any money, stock, securities or other property received
by holders of record of Shares in connection with such merger, consolidation, or
other business reorganization. Any Award with respect to which Shares had been
allocated to an Eligible Director or Eligible Individual shall be adjusted by
allocating to the Eligible Director or Eligible Individual receiving such Award
the amount of money, stock, securities or other
A-8
<PAGE>
property received by the Trustee for the Shares allocated to such Eligible
Director or Eligible Individual without any other change in the terms and
conditions of the Award.
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 Individual any right to a
continuation of employment by the Company or upon any Eligible Director any
right to a continuation of his position as a director of the Company. The
Company reserves the right to dismiss any Eligible Individual or remove any
Eligible Director or otherwise deal with any Eligible Individual or Eligible
Director to the same extent that it could if the Plan had not been adopted.
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 federal laws of the United States of America and, in the
absence of controlling federal law, according to the internal laws of the State
of Illinois applicable to contracts entered into between citizens and residents
of the State of Illinois to be performed wholly within the borders of such
State.
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.
SECTION 9.7 TAXES.
Big Foot Financial Corp. shall have the right to deduct from
all amounts paid and property distributed with respect to an Award under the
Plan any taxes required by law to be withheld with respect to such Award, or
require the person to whom such cash or property is paid or distributed to pay
Big Foot Financial Corp. the amount of any tax which Big Foot Financial Corp. is
required to withhold with respect to such payment or
A-9
<PAGE>
distribution, 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 and all Awards granted hereunder shall be conditioned
on the approval of the Plan by the majority of the votes eligible to be cast by
holders of Shares of the Company at a lawful meeting of shareholders. No Award
under the Plan shall be effective prior to such approval.
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) If to the Committee:
Compensation Committee of the Board of Directors
Big Foot Financial Corp.
1190 R.F.D.
Long Grove, Illinois 60047
(b) If to an Award recipient, to the Award recipient's address
as shown in the personnel records of Big Foot Financial Corp.
A-10
<PAGE>
APPENDIX B
ARTICLE X
OF THE BIG FOOT FINANCIAL CORP.
1997 STOCK OPTION PLAN
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.
B-1
<PAGE>
THE FOLLOWING TERMS ARE DEFINED IN THE STOCK OPTION PLAN AS FOLLOWS:
- --------------------------------------------------------------------
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
(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 paragraphs (a), (b) or
(c), above, if "the Bank" were substituted for "the Company"
therein.
RETIREMENT
----------
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.
B-2
<PAGE>
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
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON
DECEMBER 22, 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 November 10, 1997, at the Annual Meeting of
Shareholders (the "Annual Meeting") to be held at 3:00 p.m., Central Time, on
December 22, 1997, or at any adjournment or postponement thereof, upon the
matters described in the accompanying Notice of Annual 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 ELECTION OF ALL NOMINEES LISTED IN ITEM 1 AND
"FOR" THE PROPOSALS LISTED IN ITEMS 2, 3, 4 AND 5.
PLEASE MARK, SIGN AND DATE THIS PROXY ON THE REVERSE SIDE AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
<PAGE>
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" ALL OF THE
NOMINEES NAMED IN ITEM 1 AND A VOTE "FOR" EACH OF THE PROPOSALS IN ITEMS
2, 3, 4 AND 5.
1. Election of three Directors for FOR WITHHOLD FOR ALL
terms of three years each. ALL ALL EXCEPT
NOMINEES: George M. Briody, F. / / / / / /
Gregory Opelka and Joseph J.
Nimrod.
INSTRUCTIONS: TO WITHHOLD
AUTHORITY to vote for any
individual nominee, mark the oval
"For All Except" and write that
nominee's name in the space
provided:
__________________________________
Nominee Exception
2. Ratification of the appointment of FOR AGAINST ABSTAIN
KPMG Peat Marwick LLP as
independent auditors for the fiscal / / / / / /
year ending June 30, 1998.
3. Approval of the Big Foot Financial FOR AGAINST ABSTAIN
Corp. 1997 Recognition and
Retention Plan. / / / / / /
4. Approval of Article X of the Big FOR AGAINST ABSTAIN
Foot Financial Corp. 1997 Stock
Option Plan. / / / / / /
5. Authorization of the Board of
Directors, in its discretion, to direct
the vote of proxies upon such FOR AGAINST ABSTAIN
matters incident to the conduct of
the Annual Meeting as may
properly come before the Annual
Meeting, and any adjournment or / / / / / /
postponement thereof, including,
without limitation, a motion to
adjourn the Annual Meeting.
I will attend this Annual Meeting. / /
The undersigned hereby acknowledges receipt of the Notice of the 1997 Annual
Meeting of Shareholders and the Proxy Statement for the Annual Meeting.
________________________________________________________________________________
________________________________________________________________________________
(Signature(s)
Dated:____________________________________________________________________, 1997
Please sign exactly as your name appears on this proxy. Joint owners should each
sign personally. If signing as attorney, executor, administrator, trustee or
guardian, please include your full title. Corporate or partnership proxies
should be signed by an authorized officer.
<PAGE>
[LETTERHEAD OF BIG FOOT FINANCIAL CORP.]
November 17, 1997
TO: ALL EMPLOYEE STOCK OWNERSHIP PLAN
AND 401(K) SAVINGS PLAN PARTICIPANTS
Re: Annual Meeting of Shareholders to be held on December 22, 1997
--------------------------------------------------------------
Dear Participants:
As you know, the Fairfield Savings Bank (the "Bank") Profit Sharing and
Savings Plan ("401(k) Plan") includes 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"), and the
Company maintains the Employee Stock Ownership Plan (the "ESOP") for employees
of the Bank and the Company. The 401(k) Stock Fund and the ESOP each hold shares
of the Company for the benefit of participants in those plans. These shares are
held by independent trustees (in each case, the "Trustee"). Shares purchased by
the ESOP are being held by the Trustee to be given to ESOP participants over a
period of years. Shares that you have purchased for your account in the 401(k)
Stock Fund are being held by the Trustee for your benefit. Both the ESOP and the
401(k) Plan allow participants in each respective plan (including former
participants and beneficiaries) to have certain voting rights at the Company's
shareholder meetings.
In connection with the Annual Meeting of Shareholders of Big Foot
Financial Corp. to be held on December 22, 1997, enclosed are the following
documents:
1. Confidential Voting Instruction card for the ESOP (blue card)
with return envelope;
2. Confidential Voting Instruction card for the 401(k) Plan (yellow
card) with return envelope;
3. Proxy Statement dated November 17, 1997, including a Notice of
the 1997 Annual Meeting of Shareholders; and
4. 1997 Annual Report to Shareholders.
As a participant in the ESOP and/or the 401(k) Plan, you have the right
to direct the respective Trustee how to vote the shares held for your account by
the ESOP and/or shares in the 401(k) Stock Fund as of November 10, 1997, the
record date for the Annual Meeting (the "Record
<PAGE>
-2-
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."
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. In general, the Trustee will vote the shares in your ESOP
account by casting votes on each proposal as you specify on the blue
Confidential Voting Instruction card accompanying this letter. The number of
shares in your ESOP account are shown on the enclosed blue Confidential Voting
Instruction card.
The Trustee's fiduciary duties require it to vote any shares for which
it receives no voting instructions, as well as any shares not yet given 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 in anyone's ESOP account.
If you do not have any shares allocated to your account in the ESOP as
of November 10, 1997, there will be no blue Confidential Voting Instruction card
for the ESOP enclosed with this letter.
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 yellow 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 November
10, 1997. For purposes of the 401(k) Plan, if you ABSTAIN as to a proposal, or
if you do not return your yellow Confidential Voting Instruction card for the
401(k) Plan to the Trustee by December , 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 November 10, 1997, there will be no yellow Confidential Voting
Instruction card for the 401(k) Plan enclosed with this letter.
<PAGE>
-3-
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 1997 Annual Meeting of Shareholders. If this should
happen, the Trustee of the ESOP and the Trustee of the 401(k) 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.
* * * * *
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
respective Trustee. YOU SHOULD THEN SEAL THE COMPLETED CARD OR CARDS IN THE
ENCLOSED ENVELOPE AND RETURN IT DIRECTLY [TO THE RESPECTIVE TRUSTEE]. The
Confidential Voting Instruction card or cards must be received by the Trustees
no later than December __, 1997.
PLEASE NOTE THAT THE VOTING INSTRUCTIONS OF INDIVIDUAL PARTICIPANTS ARE
TO BE KEPT CONFIDENTIAL BY THE TRUSTEES, WHO HAVE 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
CALL MR. TIMOTHY L. MCCUE AT (847) 634-2100.
Very truly yours,
THE MANAGEMENT SALARY COMPENSATION
COMMITTEE OF BIG FOOT FINANCIAL CORP.
Enclosures
<PAGE>
BIG FOOT FINANCIAL CORP.
CONFIDENTIAL VOTING INSTRUCTION
SOLICITED BY THE MANAGEMENT SALARY COMPENSATION COMMITTEE
OF BIG FOOT FINANCIAL CORP.
FOR THE EMPLOYEE STOCK OWNERSHIP PLAN
OF BIG FOOT FINANCIAL CORP.
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 of the ESOP, as of November 10, 1997, at the 1997 Annual Meeting of
Shareholders of Big Foot Financial Corp. to be held on December 22, 1997, and at
any adjournment or postponement thereof.
As to the proposals listed on the reverse side, which are more
particularly described in the Proxy Statement dated November 17, 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
Management Salary Compensation Committee dated November 17, 1997.
(CONTINUED ON REVERSE SIDE. PLEASE COMPLETE, SIGN AND DATE ON THE
REVERSE SIDE AND PROMPTLY RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE.)
<PAGE>
THE BOARD OF DIRECTORS OF BIG FOOT FINANCIAL CORP. RECOMMENDS A VOTE
"FOR" ALL NOMINEES IN PROPOSAL NO. 1 AND "FOR" PROPOSALS NO. 2, NO. 3 AND NO. 4.
IF THIS CONFIDENTIAL VOTING INSTRUCTION IS SIGNED BUT NO DIRECTION IS GIVEN,
THIS VOTING INSTRUCTION CARD WILL BE DEEMED TO INSTRUCT VOTES "FOR" ALL NOMINEES
IN PROPOSAL NO. 1 AND "FOR" PROPOSALS NO. 2, NO. 3 AND NO. 4. 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. OR
FAIRFIELD SAVINGS BANK, FSB.
<TABLE>
<CAPTION>
Please mark your votes like this
/X/
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Election of three Directors for terms of three years each. Nominees: George M. FOR all nominees WITHHOLD as to all
Briody, F. Gregory Opelka and Joseph J. Nimrod (except as otherwise nominees
indicated) / /
/ /
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME
IN THE SPACE PROVIDED:
------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
2. Ratification of the appointment of KPMG Peat Marwick LLP as independent / / / / / /
auditors of Big Foot Financial Corp. for the fiscal year ending June 30, 1998.
- ------------------------------------------------------------------------------------------------------------------------------------
3. Approval of the Big Foot Financial Corp. 1997 Recognition and Retention Plan. / / / / / /
- ------------------------------------------------------------------------------------------------------------------------------------
4. Approval of Article X of the Big Foot Financial Corp. 1997 Stock Option Plan. / / / / / /
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
In its discretion, the Trustee is authorized to vote upon such other
business as may properly come before the Annual Meeting or any adjournment or
postponement thereof or to cause such matters to be voted upon in the discretion
of the individuals named in any proxies executed by the Trustee.
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 instructions indicated above and hereby acknowledges receipt, prior
to the execution of this Confidential Voting Instruction, of a Voting
Instruction Letter, a Notice of the 1997 Annual Meeting of Shareholders of Big
Foot Financial Corp., a Proxy Statement dated November 17, 1997 for the 1997
Annual Meeting and a 1997 Annual Report to Shareholders.
PLEASE SIGN AND DATE BELOW AND RETURN PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. YOUR CONFIDENTIAL VOTING INSTRUCTION MUST BE RECEIVED NO
LATER THAN DECEMBER __, 1997.
DATE
-----------------------------------------------
SIGNATURE
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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>
BIG FOOT FINANCIAL CORP.
CONFIDENTIAL VOTING INSTRUCTION
SOLICITED BY THE MANAGEMENT SALARY COMPENSATION COMMITTEE
OF BIG FOOT FINANCIAL CORP.
FOR 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 (the "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 of the 401(k) Plan, as of November 10, 1997, at the
1997 Annual Meeting of Shareholders of Big Foot Financial Corp. to be held on
December 22, 1997, and at any adjournment or postponement thereof.
As to the proposals listed on the reverse side, which are more
particularly described in the Proxy Statement dated November 17, 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
Management Salary Compensation Committee dated November 17, 1997.
(CONTINUED ON REVERSE SIDE. PLEASE COMPLETE, SIGN AND DATE ON THE
REVERSE SIDE AND PROMPTLY RETURN IN THE ENCLOSED POSTAGE-PAID ENVELOPE.)
<PAGE>
THE BOARD OF DIRECTORS OF BIG FOOT FINANCIAL CORP. RECOMMENDS A VOTE
"FOR" ALL NOMINEES IN PROPOSAL NO. 1 AND "FOR" PROPOSALS NO. 2, NO. 3 AND NO. 4.
IF THIS CONFIDENTIAL VOTING INSTRUCTION IS SIGNED BUT NO DIRECTION IS GIVEN,
THIS VOTING INSTRUCTION CARD WILL BE DEEMED TO INSTRUCT VOTES "FOR" ALL NOMINEES
IN PROPOSAL NO. 1 AND "FOR" PROPOSALS NO. 2, NO. 3 AND NO. 4. 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. OR
FAIRFIELD SAVINGS BANK, FSB.
<TABLE>
<CAPTION>
Please mark your votes like this
/X/
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<S> <C> <C>
1. Election of three Directors for terms of three years each. Nominees: George M. FOR all nominees WITHHOLD as to all
Briody, F. Gregory Opelka and Joseph J. Nimrod (except as otherwise nominees
indicated) / /
/ /
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME
IN THE SPACE PROVIDED:
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FOR AGAINST ABSTAIN*
2. Ratification of the appointment of KPMG Peat Marwick LLP, as independent / / / / / /
auditors of Big Foot Financial Corp. for the fiscal year ending June 30, 1998.
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3. Approval of the Big Foot Financial Corp. 1997 Recognition and Retention Plan. / / / / / /
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4. Approval of Article X of the Big Foot Financial Corp. 1997 Stock Option Plan. / / / / / /
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</TABLE>
*For purposes of your 401(k) Plan account, abstaining is the same as not voting.
In its discretion, the Trustee is authorized to vote upon such other
business as may properly come before the Annual Meeting or any adjournment or
postponement thereof or to cause such matters to be voted upon in the discretion
of the individuals named in any proxies executed by the Trustee.
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 instructions indicated above and hereby acknowledges receipt, prior
to the execution of this Confidential Voting Instruction, of a Voting
Instruction Letter, a Notice of the 1997 Annual Meeting of Shareholders of Big
Foot Financial Corp., a Proxy Statement dated November 17, 1997 for the 1997
Annual Meeting and a 1997 Annual Report to Shareholders.
PLEASE SIGN AND DATE BELOW AND RETURN PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. YOUR CONFIDENTIAL VOTING INSTRUCTION MUST BE RECEIVED NO
LATER THAN DECEMBER __, 1997.
DATE
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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.
