<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
CHECK THE APPROPRIATE BOX:
[ ] Preliminary Proxy Statement
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
PROGRESSIVE BANCORP, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NOT APPLICABLE
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[ X ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other identifying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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 offset 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 Number:
----------------------
3) Filing Party:
----------------------
4) Date Filed:
12/18/98
<PAGE>
December 18, 1998
Dear Stockholder:
We cordially invite you to attend the Annual Meeting of Stockholders of
Progressive Bancorp, Inc. (the "Company"), the bank holding company of Pekin
Savings Bank (the "Bank"). The Annual Meeting will be held at the Company's main
office at 601 Court Street, Pekin, Illinois, at 2:00 p.m. (Illinois time) on
Tuesday, January 19, 1999.
The enclosed Notice of Annual Meeting and Proxy Statement describe the formal
business to be transacted. During the meeting we will also report on the
operations of the Company and the Bank. Directors and officers of the Company
and the Bank, as well as a representative of our independent auditors, will be
present to respond to any questions that stockholders may have.
At the Annual Meeting, stockholders will be requested to ratify the appointment
of Clifton, Gunderson & Co. as auditors for the Company's fiscal year ending
September 30, 1999 and to elect three directors of the Company.
The Board of Directors of the Company has determined that the matters to be
considered at the Annual Meeting are in the best interest of the Company and its
stockholders. For the reasons set forth in the Proxy Statement, the Board of
Directors unanimously recommends a vote "FOR" each matter to be considered.
On behalf of the Board of Directors, we urge you to sign, date and return the
enclosed proxy card as soon as possible even if you currently plan to attend the
Annual Meeting. This will not prevent you from voting in person, but will assure
that your vote is counted if you are unable to attend the meeting.
Sincerely,
Arthur E. Krile, Jr.
President and Chief Executive Officer
<PAGE>
PROGRESSIVE BANCORP, INC.
601 Court Street
Pekin, Illinois 61554
(309) 347-5101
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
To Be Held On January 19, 1999
Notice is hereby given that the Annual Meeting of Progressive Bancorp,
Inc. (the "Company") will be held at the Company's main office at 601 Court
Street, Pekin, Illinois, on Tuesday, January 19, 1999, at 2:00 p.m., Illinois
time.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of three directors of the Company;
2. The ratification of the appointment of Clifton, Gunderson &
Co. as auditors for the Company for the fiscal year ending
September 30, 1999; and
such other matters as may properly come before the Meeting, or any adjournments
thereof. The Board of Directors is not aware of any other business to come
before the Meeting.
Any action may be taken on the foregoing proposals at the Meeting on
the date specified above, or on any date or dates to which the Meeting may be
adjourned. Stockholders of record as of December 11, 1998, are the stockholders
entitled to vote at the Meeting, and any adjournments thereof. A list of
stockholders entitled to vote at the Meeting will be available at the main
office of the Company for a period of ten days prior to the Meeting, and will
also be available for inspection at the Meeting itself.
EACH STOCKHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE MEETING, IS
REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WITHOUT DELAY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN BY THE STOCKHOLDER MAY BE
REVOKED AT ANY TIME BEFORE IT IS EXERCISED. A PROXY MAY BE REVOKED BY FILING
WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A DULY EXECUTED PROXY
BEARING A LATER DATE. ANY STOCKHOLDER PRESENT AT THE MEETING MAY REVOKE HIS OR
HER PROXY AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE MEETING.
HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN
NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER TO VOTE
PERSONALLY AT THE MEETING.
By Order of the Board of Directors
E. Glen Rittenhouse
Secretary
Pekin, Illinois
December 18, 1998
- --------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED IF MAILED WITHIN THE UNITED STATES.
- --------------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
PROGRESSIVE BANCORP, INC.
601 Court Street
Pekin, Illinois 61554
(309) 347-5101
ANNUAL MEETING OF STOCKHOLDERS
January 19, 1999
This Proxy Statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of Progressive Bancorp, Inc. (the
"Company") to be used at the Annual Meeting of Stockholders of the Company (the
"Meeting"), which will be held at the Company's main office at 601 Court Street,
Pekin, Illinois, on Tuesday, January 19, 1999, at 2:00 p.m., Illinois Time, and
all adjournments of the Meeting. The accompanying Notice of Annual Meeting of
Stockholders and this Proxy Statement are first being mailed to stockholders on
or about December 18, 1998.
REVOCATION OF PROXIES
Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted at
the Meeting and all adjournments thereof. Proxies may be revoked by written
notice to the Secretary of the Company at the address of the Company set forth
above, or the filing of a later proxy prior to a vote being taken on a
particular proposal at the Meeting. A proxy will not be voted if a stockholder
attends the Meeting and votes in person. Proxies solicited on behalf of the
Board of Directors of the Company will be voted in accordance with the
directions given therein. Where no instructions are indicated, proxies will be
voted "FOR" the nominees for directors named in this Proxy Statement and "FOR"
the ratification of Clifton, Gunderson & Co. as auditors for the year ending
September 30, 1999.
The Board of Directors knows of no additional matters that will be
presented for consideration at the Meeting. Execution of a proxy, however,
confers on the designated proxyholders discretionary authority to vote the
shares in accordance with their best judgment on such other business, if any,
that may properly come before the Meeting or any adjournments thereof.
Proxies may be revoked by sending written notice of revocation to the
Secretary of the Company, E. Glen Rittenhouse, at the address of the Company
shown above. The presence at the Meeting of any stockholder who has given a
proxy shall not revoke such proxy unless the stockholder delivers his or her
ballot in person at the Meeting or delivers a written revocation to the
Secretary of the Company prior to the voting of such proxy.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The securities entitled to vote at the Meeting consist of the common
stock, $.01 par value per share, of the Company (the "Common Stock"). Each share
of the Common Stock entitles the record holder to one vote on all matters.
December 11, 1998 has been fixed by the Board of Directors as the record date
(the "Record Date") for determining stockholders entitled to notice of and to
vote at the Meeting. As of the Record Date, the Company had 149,473 shares of
Common Stock issued and outstanding. The presence in person or by proxy of at
least a majority of the outstanding shares of Common Stock entitled to vote is
necessary to constitute a quorum at the Meeting. In the event there are not
sufficient votes for a quorum, or to approve or ratify any matter being
presented at the time of the Meeting, the Meeting may be adjourned in order to
permit the further solicitation of proxies.
<PAGE>
As provided in the Certificate of Incorporation of the Company,
recordholders of Common Stock who beneficially own in excess of 10% of the
outstanding shares of Common Stock (the "Limit") are not entitled to vote any
shares held in excess of the Limit. A person or entity is deemed to beneficially
own shares owned by an affiliate of, as well as persons acting in concert with,
such person or entity.
As to the election of directors, the proxy card being provided by the
Board of Directors enables a stockholder to vote FOR the election of the three
nominees proposed by the Board, or to WITHHOLD AUTHORITY to vote for the
nominees being proposed. Under Delaware law and the Company's Certificate of
Incorporation and Bylaws, directors are elected by a plurality of votes cast,
without regard to either broker non-votes, or proxies as to which authority to
vote for the nominees being proposed is withheld.
As to the ratification of the appointment of independent auditors, the
proxy card being provided by the Board of Directors enables a stockholder to
check the appropriate box on the proxy card to (i) vote "FOR", (ii) vote
"AGAINST", or (iii) vote to "ABSTAIN" from voting on, such matter. Under the
Company's Certificate of Incorporation and Bylaws, the ratification of this
matter shall be determined by a majority of the votes cast, without regard to
broker non-votes, or proxies marked "ABSTAIN."
Proxies solicited hereby will be returned to the Company, and will be
tabulated by inspectors of election designated by the Board.
Persons and groups owning in excess of five percent of the Common Stock
are required to file certain reports with the Securities and Exchange Commission
("SEC") regarding such ownership pursuant to the Securities Exchange Act of
1934. The following table sets forth, as of the Record Date, the shares of
Common Stock beneficially owned by all directors and executive officers as a
group and by each person who was the beneficial owner of more than five percent
of the Company's outstanding shares of Common Stock. This information is based
solely upon information supplied to the Company and the filings required
pursuant to the Securities Exchange Act of 1934.
<TABLE>
<CAPTION>
Amount of Shares
Owned and Nature Percent of Shares
Name and Address of of Beneficial of Common Stock
Beneficial Owners Ownership(1) Outstanding(3)
- -------------------- ---------------- -----------------
<S> <C> <C>
Arthur E. Krile, Jr. 14,646 9.4%
224 Cypress
Pekin, Illinois 61554
E. Glen Rittenhouse 12,699 8.1
1804 Columbus Drive
Pekin, Illinois 61554
All Directors and Executive Officers 36,703(2) 23.5
as a Group (11 persons)
</TABLE>
- ------------------------
(1) In accordance with Rule 13d-3 under the Securities Exchange Act of
1934, a person is deemed to be the beneficial owner for purposes of
this table, of any shares of Common Stock if he has shared voting or
investment power with respect to such security, or has a right to
acquire beneficial ownership at any time within 60 days from the Record
Date. As used herein, "voting power" is the power to vote or direct the
voting of shares, and "investment power" is the power to dispose or
direct the disposition of shares. Includes all shares held directly as
well as by spouses and minor children, in trust and other indirect
ownership, over which shares the named individuals effectively exercise
sole or shared voting and investment power.
(2) Includes 6,462 shares of Common Stock underlying options granted
pursuant to the Pekin Savings and Loan Association 1992 Stock Option
Plan.
(3) Includes shares underlying options exercisable at any time within 60
days from the Record Date.
2
<PAGE>
- ------------------------------------------------------------------------------
PROPOSAL I--ELECTION OF DIRECTORS
- ------------------------------------------------------------------------------
The Company's Board of Directors is currently composed of seven
members. The Company's bylaws provide that approximately one-third of the
directors are to be elected annually. Directors of the Company are generally
elected to serve for a three year period or until their respective successors
shall have been elected and shall qualify. Three directors will be elected at
the Meeting to serve for a three-year period and until their respective
successors have been elected and qualified. The Board of Directors has nominated
to serve as directors R.H. More, William J. Leman and John L. Steger, each of
whom currently is a member of the Board of Directors.
The table below sets forth certain information regarding the
composition of the Company's Board of Directors, including the terms of office
of Board members. It is intended that the proxies solicited on behalf of the
Board of Directors (other than proxies in which the vote is withheld as to one
or more nominees) will be voted at the Meeting for the election of the nominees
identified below. If any nominee is unable to serve, the shares represented by
all such proxies will be voted for the election of such substitute as the Board
of Directors may recommend. At this time, the Board of Directors knows of no
reason why any of the nominees might be unable to serve, if elected. Except as
indicated herein, there are no arrangements or understandings between any
nominee and any other person pursuant to which such nominee was selected.
<TABLE>
<CAPTION>
Shares of
Common Stock
Beneficially
Positions Owned on
Held in the Director Current Term the Record Percent
Name (1) Age (5) Company Since (2) to Expire Date (3) Of Class
-------- ------- ------------- --------- --------- --------------- --------
NOMINEES
<S> <C> <C> <C> <C> <C> <C>
R.H. More 85 Vice Chairman of 1953 1998 2,641 1.8%
the Board
John L. Steger 35 Director 1996 1998 200 *
William J. Leman 44 Director 1998 1998 200 *
DIRECTORS CONTINUING IN OFFICE
Arthur E. Krile, Jr. 62 President, Chief Executive 1985 2000 16,646 9.4
Officer and Director
E. Glen Rittenhouse 50 Senior Vice President, 1987 2000 12,699 (4) 8.1
Secretary and Director
Patrick E. Oberle 52 Director 1994 1999 933 *
James S. Wolf 53 Director 1994 1999 2,233 1.5
</TABLE>
(footnotes on following page)
3
<PAGE>
- -----------------------------------
(*) Less than 1%.
(1) The mailing address for each person listed is 601 Court Street, Pekin,
Illinois 61554.
(2) May reflect initial appointment to the Board of Directors of the Bank's
mutual predecessor.
(3) Includes shares subject to options granted under the Pekin Savings and
Loan Association 1992 Stock Option Plan (the "Option Plan") and
exercisable within 60 days of the Record Date; does not include shares
subject to options that are not exercisable within 60 days of the
Record Date.
(4) Includes 5,474 shares subject to options granted pursuant to the Option
Plan.
(5) As of September 30, 1998.
The principal occupation during the past five years of each director
and executive officer of the Company is set forth below. All directors and
executive officers have held their present positions for five years unless
otherwise stated.
R.H. More has been a director of the Bank since 1953 and of the Company
since its formation. He is currently retired, and was the former publisher of
The Pekin Daily Times.
Arthur E. Krile, Jr. has been President and Chief Executive Officer of
the Bank since 1985 and of the Company upon its formation, and has been employed
by the Bank since 1961.
E. Glen Rittenhouse has been the Senior Vice President and Secretary of
the Bank since 1985 and of the Company upon its formation, and has been employed
by the Bank since 1973.
John L. Steger became a director of the Bank in 1996 and of the Company
upon its formation. Mr. Steger is President of Steger's Ltd., a furniture
retailer located in Pekin, Illinois.
James S. Wolf became a director of the Bank in 1994 and Chairman in
1998. He became a director of the Company upon its formation and was appointed
Chairman in 1998. Mr. Wolf is a certified public accountant and has been
President of Wolf, Tesar & Company, P.C., an accounting firm, since 1980.
William J. Leman was appointed as a director of the Company effective
August 1, 1998 to fill the unexpired term of Orville G. Deppert. Mr. Leman is
President and Chief Executive Officer of Monge Property Management Company in
Pekin, Illinois.
Patrick E. Oberle became a director of the Bank in 1994 and was
appointed Vice Chairman in 1998. He became a director of the Company upon its
formation and was appointed Vice Chairman in 1998. Mr. Oberle has been a
principal of the law firm Elliff, Keyser, Oberle & Dancey, P.C. since 1976.
James A. Crafton has been employed by the Bank since 1977 and presently
serves as Vice President-Installment Loans.
Lisa M. Harness has been employed by the Bank since 1976, and presently
serves as Vice President-Mortgage Loans-Servicing.
David Earl Riley has been employed by the Bank since 1986, and
presently serves as Vice President-Mortgage Loan Originations.
Eugene Van Vooren has been employed by the Bank since 1985 and the
Company upon its formation and presently serves as Vice President and Treasurer.
He is the chief financial officer of the Bank and the Company.
4
<PAGE>
Meetings and Committees of the Board of Directors
The primary business of the Company is to hold the common stock of its
wholly-owned subsidiary, the Bank. The business of the Company's Board of
Directors is conducted through meetings and activities of the Board and its
committees. During the fiscal year ended September 30, 1998, the Board of
Directors of the Company held 12 regular meetings. During the fiscal year ended
September 30, 1998, no director attended fewer than 75% of the total meetings of
the Board of Directors of the Company and committees on which such director
served.
The Executive Committee of the Board of Directors consists of directors
Patrick E. Oberle, R.H. More, James S. Wolf and Arthur E. Krile, Jr. The purpose
of the Executive Committee is to consider issues and formulate recommendations
to be presented to the entire Board of Directors. All actions of the Executive
Committee must be ratified by the full Board of Directors. The Executive
Committee meets as necessary in between meetings of the full Board of Directors.
The Executive Committee did not meet in fiscal year 1998.
The full Board of Directors also serves as the compensation committee
of the Company, and meets periodically to review the performance of the
Company's and the Bank's officers and employees, and to determine compensation
programs and adjustments. The Company's Board of Directors met once jointly with
the Bank's Board in its capacity as the compensation committee in fiscal year
1998.
The Audit Committee consists of directors Patrick E. Oberle, John L.
Steger and James S. Wolf. This committee meets with the Company's and the Bank's
outside auditors to discuss the results of the annual audit and any related
matters. The members of this committee also receive and review all the reports
and findings and other information presented to them by the Bank's officers
regarding financial reporting policies and practices. The Audit Committee met
once in fiscal year 1998.
The Company's full Board of Directors serves as a nominating committee.
The Board of Directors met once in its capacity as the nominating committee
during fiscal year 1998.
The Company's Option Committee did not meet during fiscal 1998 and
consists of directors Patrick E. Oberle, R.H. More and James S. Wolf. This
committee determines the award of stock options under the Stock Option Plan.
The Asset/Liability Management Committee of the Bank is composed of the
full Board of Directors. The purpose of the Asset/Liability Management Committee
is to promulgate asset and liability management strategies and to monitor
asset/liability management results. The Asset/Liability Management Committee met
four times in fiscal year 1998.
Executive Compensation
The Company has not paid any compensation to its executive officers
since its formation. The following table sets forth for the fiscal years ended
September 30, 1998, 1997, and 1996, certain information as to the total
remuneration paid by the Bank to the Chief Executive Officer of the Bank as of
September 30, 1998.
<TABLE>
<CAPTION>
Annual Compensation (1)
--------------------------------------------------------------------------------------
Fiscal
Name and Years Ended Other Annual All Other
Principal Position (2) September 30, Salary (3) Bonus Compensation (4) Compensation (5)
- ---------------------- ------------- ---------- --------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Arthur E. Krile, Jr. 1998 $ 67,961 $ 8,440 $ -- $ 1,931
President and Chief 1997 66,353 8,062 -- 2,013
Executive Officer 1996 64,473 5,875 -- 2,096
</TABLE>
- ------------------------------------
(1) Does not include benefits pursuant to the Bank's Pension Plan. See
"Benefits."
(2) No other executive officer received salary and bonuses that in the
aggregate exceeded $100,000.
(footnotes continued on following page)
5
<PAGE>
- ------------------------
(3) Includes amounts deferred at the election of the named executive
officer pursuant to the Bank's 401(k) Plan.
(4) Does not include earnings on the named executive officer's 401(k) Plan
account. No long-term compensation, stock options (other than pursuant
to the Option Plan), or other stock awards were awarded to this
executive officer during the fiscal years ended September 30, 1998,
1997, or 1996.
(5) Includes matching payments made by the Bank on deferred amounts under
the Bank's 401(k) Plan.
Compensation Committee Interlocks and Insider Participation. During the
year ended September 30, 1998, the Compensation Committee, which consisted of
the entire Board of Directors, met once to review the performance of officers
and employees and to determine compensation programs and adjustments. Mr. Krile
and Mr. Rittenhouse, members of the Board of Directors, also serve as President
and Chief Executive Officer, and Senior Vice President and Secretary,
respectively, of the Company and the Bank. The Company does not separately
compensate senior officers and employees of the Bank.
Report of the Compensation Committee on Executive Compensation. The
Compensation Committee evaluates the performance of the Chief Executive Officer
and Senior Vice President and Secretary, and reviews and approves increases in
base compensation as well as any bonus to be awarded. The Compensation Committee
also approves any perquisites payable to such officers. In addition, the
Compensation Committee determines the budget for salaries for other officers,
and reviews the report of the Chief Executive Officer regarding the allocation
of compensation to such other officers. In determining whether the base salary
of the Chief Executive Officer and Senior Vice President and Secretary should be
increased, the budget for other officers and whether to approve the Chief
Executive Officer's allocation of such amounts, the Compensation Committee takes
into account individual performance, performance of the Bank and information
regarding compensation paid to executives performing similar duties for
financial institutions in the Bank's market area. The Compensation Committee
uses a peer comparison in determining the salary and benefits of the Chief
Executive Officer.
While the Compensation Committee does not use strict numerical formulas
to determine changes in compensation for the Chief Executive Officer and other
officers of the Company and the Bank, and while it weighs a variety of different
factors in its deliberations, it has emphasized and will continue to emphasize
earnings, profitability and return on average assets as factors in setting the
compensation of such officers. Other nonquantitative factors considered by the
Committee in fiscal 1998 included general management oversight of the Company
and the Bank, the quality of communication with the Board of Directors, and the
productivity of employees. Finally, the Committee considered the standing of the
Bank with customers and the community, as evidenced by the level of
customer/community complaints and compliments. While each of the quantitative
and nonquantitative factors described above was considered by the Committee,
such factors were not assigned a specific weight in evaluating the performance
of such officers. Rather, all factors were considered, and based upon the
effectiveness of such officer in addressing each of the factors, and the range
of compensation paid to officers of peer institutions, the Committee decided to
increase the base salary of the Chief Executive Officer by $2,100, or 3.0%, from
$67,700 for fiscal year 1997 to $69,800 for fiscal year 1998.
The above report has been provided by the members of the Compensation
Committee: directors Deppert, More, Krile, Rittenhouse, Steger, Oberle and Wolf.
Filing of Beneficial Ownership Reports
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who own more than ten
percent of the Company's shares of common stock outstanding, to file reports of
ownership and changes in ownership with the SEC. Officers, directors and greater
than ten-percent shareholders are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms that they file. Based on reports
available to the Company, all such reports during fiscal year 1998 were timely
filed.
6
<PAGE>
Directors' Compensation
Beginning with the third quarter of the fiscal year ended September 30,
1998, the Company began paying board members $3,000 each per annum. The Company
paid a total of $9,500 in director's fees for the fiscal year ended September
30, 1998.
Members of the Board of Directors of the Bank each received $6,000
during the fiscal year ended September 30, 1998. The Vice Chairman of the Board
received an additional fee of $600 and the Chairman received an additional fee
of $1,200 during the fiscal year ended September 30, 1998. Members of the Board
committees are not paid additional amounts for attendance at committee meetings.
The Bank paid a total of $41,800 in directors' fees for the fiscal year ended
September 30, 1998.
Benefits
Change of Control Agreements. The continued success of the Bank depends
to a significant degree on the skills and competence of its officers. In August
1995, the Bank approved Change of Control Agreements for each of the following
officers: Arthur E. Krile, Jr., President and Chief Executive Officer; E. Glen
Rittenhouse, Senior Vice President and Secretary; James A. Crafton, Vice
President-Installment Loans; D. Earl Riley, Vice President-Mortgage Loan
Originations; and Lisa M. Harness, Vice President-Mortgage Loans-Servicing. The
Change of Control Agreements are intended to assist the Bank in maintaining a
stable and competent management base by enabling the Bank to offer to the
designated officers certain protections against termination without cause in the
event of a "change in control" as defined in the agreements.
Each of the Change of Control Agreements for Messrs. Krile and
Rittenhouse has a term of 36 months. Each of the Change of Control Agreements
for Messrs. Crafton and Riley and Ms. Harness has a term of 12 months. Each
agreement provides that at any time following a "change in control" of the Bank,
if the officer's employment with the Bank is involuntarily, or in certain
circumstances voluntarily, terminated during the term of the agreement, for any
reason other than "cause" (as defined in the agreement), the officer would be
entitled to receive a payment in an amount determined by the average of the five
preceding years' annual base salary, including bonuses and any other cash
compensation paid during such years, and the amount of any benefits received
pursuant to any employee benefit plans on behalf of such officer maintained by
the Bank during such years, excluding life, medical, dental and disability
insurance coverage. For the purposes of the agreements, a "change in control" is
defined to include the execution of an agreement for the sale of all, or a
substantial portion, of the assets of the Bank, or for a merger or
recapitalization of the Bank whereby the Bank is not the surviving entity.
If the "change in control" provisions are triggered under the terms of
the Change of Control Agreements, the following officers would receive
approximately the amounts set forth opposite their names in severance
compensation if the termination of employment occurred in the fiscal year ended
September 30, 1998:
<TABLE>
<CAPTION>
Termination
Officers Amount
-------------------- -----------
<S> <C>
Arthur E. Krile, Jr. $217,786
E. Glen Rittenhouse 192,073
</TABLE>
The aggregate amount of severance compensation for all officers of the
Bank if termination of employment occurred in the fiscal year ended September
30, 1998 would be $527,206.
Pension Plan. All full-time salaried employees who have attained the
age of 21 and completed one year of service with the Bank are enrolled in the
Bank's defined benefit multiple employer non-contributory pension plan sponsored
by the Financial Institutions Retirement Fund. Employees remain eligible for
plan benefits for so long as such
7
<PAGE>
employees complete 1,000 hours of service in each calendar year. The pension
plan provides for monthly payments to or on behalf of each covered employee upon
the employee's attainment of normal retirement age, at age 65. These payments
are calculated in accordance with a formula based on the employee's average
annual salary for the five consecutive years of highest salary during benefit
service and his number of years of benefit service. Early retirement and
disability benefits are also payable under the Plan. In addition, if an eligible
employee dies while in active service, his beneficiary is entitled to a lump sum
death benefit equal to 100% of such employee's last 12 months' salary, plus an
additional 10% of such salary for each year of benefit service until a maximum
of 300% of such salary is reached for 20 or more years. Forms of payment, in
addition to an annuity, are also available under the Plan.
Under the Plan, the Bank makes an annual contribution for the benefit
of eligible employees computed on an actuarial basis. At September 30, 1998, the
market value of the pension plan trust fund equaled approximately $1,074,000.
Employee benefits under the Plan vest as designated in the schedule below:
<TABLE>
<CAPTION>
Years of Credited Service Vested
for Vesting Purposes* Percentages
------------------------- -----------
<S> <C>
Less than 5............................. 0%
5 or more............................... 100%
</TABLE>
- ------------------------
* Eligible employees who have reached age 65 are automatically 100%
vested, regardless of completed years of employment.
The following table illustrates annual pension benefits at age 65 under the
most advantageous plan provisions available at various levels of compensation
and years of service. Under the Plan, the benefit amounts in the following table
are not subject to any deduction for social security or other offset amounts.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Years of Benefit Service
- ---------------------------------------------------------------------------------------------------------
Average
Salary 10 15 20 25 30
-------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$20,000 $ 3,000 $ 4,600 $ 6,000 $ 7,600 $ 9,000
$30,000 $ 4,500 $ 6,900 $ 9,000 $11,400 $13,500
$50,000 $ 7,500 $11,500 $15,000 $19,000 $22,500
$75,000 $11,250 $17,250 $22,500 $28,500 $33,750
$100,000 $15,000 $23,000 $30,000 $38,000 $45,000
$150,000 $22,500 $34,500 $45,000 $57,000 $67,500
- ---------------------------------------------------------------------------------------------------------
</TABLE>
As of September 30, 1998, Arthur E. Krile and E. Glen Rittenhouse had
37 years and 25.25 years of creditable service, respectively, under the Plan.
Flexible Benefits Program (Section 125 Plan). The Bank has established
a Flexible Benefits Program pursuant to Section 125 of the Internal Revenue Code
of 1986, as amended. The Program provides for payment of eligible employee
health care and dependent care expenses through fixed payroll deductions. All
full-time employees of the Bank are eligible to participate in the Program after
six continuous months of employment. The Bank absorbs the costs of
administration of the Program. The third party administrator of the Program is
Employee Benefits Cooperative, Madison, Wisconsin.
8
<PAGE>
Stock Option Plan. The Bank adopted the Pekin Savings and Loan
Association 1992 Stock Option Plan (the "Option Plan"), pursuant to which a
number of options have been granted to officers, directors and employees of the
Bank. The Option Plan was assumed by the Company, as successor to the Bank,
subsequent to the formation of the Company as the Bank's holding company in
1997. The purpose of the Option Plan is to provide additional incentive to
certain officers, directors and employees by facilitating their purchase of
stock in the Company. The Option Plan provides for a term of ten years, after
which no awards may be made, unless earlier terminated by the Board of Directors
pursuant to the Option Plan.
The Option Plan is administered by a committee of non-employee
directors designated by the Board of Directors (the "Option Committee"). Such
members of the Option Committee are "disinterested" within the meaning of Rule
16b-3 pursuant to the Securities Exchange Act of 1934. The Option Committee
selects those to whom options are to be granted and the number of such options
to be granted.
Officers, directors and employees are eligible to receive, at no cost
to them, options under the Option Plan. Options granted under the Option Plan
constitute both incentive stock options (options that afford favorable tax
treatment to recipients upon compliance with certain restrictions pursuant to
Section 422 of the Code and that do not normally result in tax deductions to the
Company) and options that do not so qualify. The option price may not be less
than 100% of the fair market value of the shares on the date of the grant, and
no option shall be exercisable after the expiration of ten years from the date
it is granted; provided, however, that in the case of any employee who owns more
than 10% of the outstanding Common Stock at the time the option is granted, the
option price may not be less than 110% of the fair market value of the shares on
the date of the grant, and the option shall not be exercisable after the
expiration of five years from the date it is granted. Option shares may be paid
in cash, shares of the Common Stock, or a combination of both.
Set forth in the following table is certain additional information
concerning options outstanding to Mr. Krile at September 30, 1998.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Number of Unexercised Value of Unexercised In-
Options at The-Money Options at
Fiscal Year-End Year-End
Shares Acquired Value Exercisable/Unexercisable Exercisable/Unexercisable
Name Upon Exercise Realized (#) ($)
- ---------------------- --------------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Arthur L. Krile, Jr. 6,172 $308,600 -- --
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
No federal income tax consequences are incurred by the Bank or the
optionee at the time of grant of an option. The exercise of an option which is
an incentive stock option will generally not by itself result in the recognition
of taxable income to the optionee nor entitle the Bank to a deduction at the
time of such exercise. However, the difference between the exercise price and
the fair market value of the option shares on the date of exercise is an item of
tax preference which may, in certain situations, trigger the alternative minimum
tax under the Code. The optionee will recognize capital gain or loss upon resale
of the shares received upon such exercise; provided that he held such shares for
at least one year after transfer of the shares to him or two years after the
grant of the option, whichever is later. If the shares are not held for that
period, the optionee will recognize ordinary income upon disposition in an
amount equal to the lesser of (i) the difference between the exercise price and
the fair market value on the date of the exercise of the shares or (ii) the gain
realized upon the sale. The exercise of a non-incentive stock option will
generally result in the recognition of ordinary income by the optionee on the
date of exercise in an amount equal to the difference between the exercise price
and the fair market value of the shares acquired pursuant to the option. The
Company will be entitled to a deduction for federal income tax purposes at the
same time and in the same amount as any ordinary income is recognized by the
optionee.
9
<PAGE>
The Option Plan provides that, in the event of a change in control or
imminent change in control of the Company, any option which provides for its
exercise in installments shall become immediately exercisable, and the optionee
shall, at the discretion of the Option Committee, be entitled to receive cash in
an amount equal to the excess of the fair market value of the stock subject to
the option over the option price in exchange for the surrender of the option.
"Control" generally refers to the acquisition by any person or group of the
ownership or power to vote more than 25% of the Company's stock, the control of
the election of a majority of the directors or the exercise of a controlling
influence over the management or policies of the Company.
The Company will receive no monetary consideration for granting of
stock options under the Option Plan. It will receive no monetary consideration
other than the option price for each share issued to optionees upon the exercise
of such options.
Transactions with Certain Related Persons. The Bank, like many
financial institutions, has followed a policy of granting loans to its officers,
directors and employees. All loans by the Bank to its directors and executive
officers are subject to FDIC regulations regarding loans and other transactions
with affiliated persons of the Bank. Federal laws regarding transactions with
affiliates require that all loans to directors and executive officers must
generally be made on terms and conditions substantially the same as offered in
comparable transactions to other persons. The Bank's policy is to make loans to
affiliates in compliance with current federal laws.
Set forth below is certain information as to loans made by the Bank to
each of its directors and executive officers whose aggregate indebtedness to the
Bank exceeded $60,000 at any time since October 1, 1997. Unless otherwise
indicated, all of the loans are secured loans and all loans designated as
residential loans are first mortgage loans secured by the borrower's principal
place of residence.
<TABLE>
<CAPTION>
Highest
Balance Interest Rate on
Original During Balance as of September 30,
Name of Officer or Date Loan 1998 Fiscal September 30, 1998
Director Loan Type Originated Amount Year 1998
- ------------------- ------------------- ---------- ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
James J. Wolf Residential 8/97 $ 160,000 $ 160,000 $ 158,169 6.375%
Director
Patrick E. Oberle Residential 5/98 $ 135,000 $ 135,000 $ 133,761 6.125%
Director Second Mortgage 6/97 $ 20,000 $ 19,436 $ 17,046 6.250%
Co-Sign Residential 10/94 $ 61,200 $ 53,693 $ 51,071 8.250%
John L. Steger Residential 4/98 $ 210,000 $ 210,000 $ 206,347 6.250%
Director
Arthur E. Krile, Jr. Residential 5/98 $ 93,200 $ 93,200 $ 92,600 6.125%
President and Chief Second Mortgage 8/97 $ 19,000 $ 18,864 $ 16,607 6.250%
Executive Officer
E. Glen Rittenhouse Residential 02/96 $ 61,600 $ 61,600 $ 59,065 6.250%
Sr. Vice Second Mortgage 06/97 $ 14,000 $ 13,456 $ 11,919 6.250%
President/Secretary
James A. Crafton Residential 8/97 $ 50,000 $ 49,730 $ 46,291 6.125%
Vice President Home Improvement 2/98 $ 4,000 $ 4,000 $ 3,501 8.500%
Second Mortgage 4/98 $ 10,400 $ 10,400 $ 10,104 6.500%
Single Pay Note 7/98 $ 3,000 $ 3,000 $ 3,000 7.500%
D. Earl Riley Residential 7/97 $ 100,000 $ 99,902 $ 98,694 6.125%
Vice President Residential 7/93 $ 75,000 $ 71,764 $ 70,816 7.500%
Auto/Second 10/97 $ 35,000 $ 35,000 $ 32,699 6.500%
Mortgage 7/95 $ 108,000 $ 105,264 $ 103,971 7.250%
Residential
</TABLE>
10
<PAGE>
- ------------------------------------------------------------------------------
PROPOSAL II--RATIFICATION OF APPOINTMENT OF AUDITORS
- ------------------------------------------------------------------------------
The Board of Directors of the Company has approved the engagement of
Clifton, Gunderson & Co. to be the Company's auditors for the 1999 fiscal year,
subject to the ratification of the engagement by the Company's stockholders. At
the Meeting, the stockholders will consider and vote on the ratification of the
engagement of Clifton, Gunderson & Co. for the Company's fiscal year ending
September 30, 1999. A representative of Clifton, Gunderson & Co. is expected to
attend the Meeting to respond to appropriate questions and to make a statement
if he so desires.
In order to ratify the selection of Clifton, Gunderson & Co. as the
auditors for the 1999 fiscal year, the proposal must receive at least a majority
of the votes cast, either in person or by proxy, in favor of such ratification.
The Board of Directors recommends a vote "FOR" the ratification of Clifton,
Gunderson & Co. as auditors for the 1999 fiscal year.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials
for next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's executive office,
601-617 Court Street, Pekin, Illinois, no later than August 21, 1999. Any such
proposals shall be subject to the requirements of the proxy rules adopted under
the Securities Exchange Act of 1934.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than the matters described above in this Proxy Statement. However,
if any matters should properly come before the Meeting, it is intended that
holders of the proxies will act in accordance with their best judgment.
MISCELLANEOUS
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitations by mail,
directors, officers and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without additional compensation. The
Company's 1998 Annual Report to Stockholders has been included with this Proxy
Statement. Any stockholder who has not received a copy of such Annual Report may
obtain a copy by writing the Company. Such Annual Report is not to be treated as
a part of the proxy solicitation material nor as having been incorporated herein
by reference.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1998, WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE
RECORD DATE UPON WRITTEN REQUEST TO E. GLEN RITTENHOUSE, SECRETARY, PEKIN
SAVINGS, 601 COURT STREET, PEKIN, ILLINOIS 61554.
BY ORDER OF THE BOARD OF DIRECTORS
E. Glen Rittenhouse
Secretary
Pekin, Illinois
December 18, 1998
11
<PAGE>
REVOCABLE PROXY
PROGRESSIVE BANCORP, INC.
ANNUAL MEETING OF STOCKHOLDERS
January 19, 1999
The undersigned hereby appoints the official proxy committee consisting
of the four members of the Board of Directors of Progressive Bancorp, Inc. (the
"Company") not standing for election, with full powers of substitution to act as
attorneys and proxies for the undersigned to vote all shares of Common Stock of
the Company which the undersigned is entitled to vote at the Annual Meeting of
Stockholders ("Meeting") to be held at the Company's main office at 601 Court
Street, Pekin, Illinois at 2:00 p.m. (Illinois time) on Tuesday, January 19,
1999. The official proxy committee is authorized to cast all votes to which the
undersigned is entitled as follows:
<TABLE>
<CAPTION>
VOTE
FOR WITHHELD
------ --------
<S> <C> <C>
1. The election as directors of all nominees
listed below (except as marked to the
contrary below)
R.H. More
John L. Steger
William J. Leman
</TABLE>
INSTRUCTION: To withhold your vote for
one or more nominees, write the name of
the nominee(s) on the line(s) below.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--- ------- -------
<S> <C> <C> <C>
2. The ratification of the appointment of
Clifton, Gunderson & Co. as auditors for
the fiscal year ending September 30,
1999.
</TABLE>
The Board of Directors recommends a vote "FOR" each of the listed proposals.
- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED ABOVE. IF ANY OTHER
BUSINESS IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THE MAJORITY
OF THE BOARD OF DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF
NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
- --------------------------------------------------------------------------------
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting or
at any adjournment thereof and after notification to the Secretary of the
Company at the Meeting of the stockholder's decision to terminate this proxy,
then the power of said attorneys and proxies shall be deemed terminated and of
no further force and effect. This proxy may also be revoked by sending written
notice to the Secretary of the Company at the address set forth on the Notice of
Annual Meeting of Stockholders, or by the filing of a later proxy statement
prior to a vote being taken on a particular proposal at the Meeting.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of notice of the Meeting, a proxy statement dated
December 18, 1998, and audited financial statements.
Dated: , 199 Check Box if You Plan to Attend Meeting
--------- --
- ------------------------------- -----------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- ------------------------------- -----------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this card. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title. If
shares are held jointly, each holder should sign.
- --------------------------------------------------------------------------------
Please complete and date this proxy and return it promptly
in the enclosed postage-prepaid envelope.
- --------------------------------------------------------------------------------
