<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
MIDWEST BANC HOLDINGS, INC.
- --------------------------------------------------------------------------------
(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.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined.)
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid 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> 2
MIDWEST BANC HOLDINGS, INC.
501 WEST NORTH AVENUE
MELROSE PARK, ILLINOIS 60160
FELLOW STOCKHOLDERS:
You are cordially invited to attend the annual meeting of stockholders (the
"Annual Meeting") of Midwest Banc Holdings, Inc. (the "Company"), Melrose Park,
Illinois, which will be held on May 3, 2000, at 2:00 p.m., Chicago time, at
Elmcrest Banquets by Biancalana, 7370 West Grand Avenue, Elmwood Park, Illinois
60707.
The attached Notice of the Annual Meeting and the Proxy Statement describe
the formal business to be transacted at the Annual Meeting. Directors and
officers of the Company will be present at the Annual Meeting to respond to any
questions that our stockholders may have regarding the business to be
transacted.
The Board of Directors of the Company has determined that the matters to be
considered at the Annual Meeting are in the best interests of the Company and
its stockholders. FOR THE REASONS SET FORTH IN THE PROXY STATEMENT, THE BOARD
UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE MATTERS TO BE CONSIDERED.
PLEASE SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. YOUR COOPERATION
IS APPRECIATED SINCE A MAJORITY OF THE COMMON STOCK MUST BE REPRESENTED, EITHER
IN PERSON OR BY PROXY, TO CONSTITUTE A QUORUM FOR THE CONDUCT OF BUSINESS.
On behalf of the Board of Directors and all of the employees of the
Company, I thank you for your continued interest and support.
Sincerely yours,
ROBERT L. WOODS
President and Chief Executive Officer
March 29, 2000
<PAGE> 3
MIDWEST BANC HOLDINGS, INC.
501 WEST NORTH AVENUE
MELROSE PARK, ILLINOIS 60160
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 3, 2000
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders (the "Annual
Meeting") of Midwest Banc Holdings, Inc. (the "Company") will be held on May 3,
2000, at 2:00 p.m., Chicago time, at Elmcrest Banquets by Biancalana, 7370 West
Grand Avenue, Elmwood Park, Illinois 60707.
The purpose of the Annual Meeting is to consider and vote upon the
following matters:
1. The election of three (3) members of the Company's Board of Directors to
three-year terms of office;
2. The amendment of the Company's 1996 Stock Option Plan (the "Plan") to
increase the number of shares of the Company's common stock available
for awards under the Plan from 500,000 to 750,000;
3. The ratification of the appointment of Crowe, Chizek and Company LLP as
independent auditors of the Company for the fiscal year ending December
31, 2000; and
4. Such other matters as may properly come before the Annual meeting and at
any adjournments thereof, including whether or not to adjourn the
meeting.
The Board of Directors has established March 17, 2000 as the record date
for the determination of stockholders entitled to receive notice of and to vote
at the Annual Meeting and at any adjournments thereof. Only record holders of
the common stock of the Company as of the close of business on such record date
will be entitled to vote at the Annual Meeting or any adjournments thereof. In
the event there are not sufficient votes for a quorum, the Annual Meeting may be
adjourned in order to permit further solicitation of proxies by the Company. A
list of stockholders entitled to vote at the Annual Meeting will be available at
Midwest Banc Holdings, Inc., 501 West North Avenue, Melrose Park, Illinois
60160, for a period of ten days prior to the Annual Meeting and will also be
available at the Annual Meeting itself.
By Order of the Board of Directors
DANIEL NAGLE
Secretary
Melrose Park, Illinois
March 29, 2000
<PAGE> 4
MIDWEST BANC HOLDINGS, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 3, 2000
SOLICITATION AND VOTING OF PROXIES
This Proxy Statement is being furnished to stockholders of Midwest Banc
Holdings, Inc. (the "Company") in connection with the solicitation by the Board
of Directors ("Board of Directors" or "Board") of proxies to be used at the
annual meeting (the "Annual Meeting") of stockholders to be held on May 3, 2000
at 2:00 p.m., Chicago time, at Elmcrest Banquets by Biancalana, 7370 West Grand
Avenue, Elmwood Park, Illinois 60707, and at any adjournments thereof. The 1999
Annual Report to Stockholders, including consolidated financial statements for
the fiscal year ended December 31, 1999, and a proxy card, accompanies this
Proxy Statement, which is first being mailed to record holders of common stock
of the Company ("Common Stock") on or about March 29, 2000
Stockholders are requested to vote by completing the enclosed proxy card
and returning it signed and dated in the enclosed postage-paid envelope.
Stockholders are urged to indicate their vote in the spaces provided on the
proxy card. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED IN
ACCORDANCE WITH THE DIRECTIONS GIVEN THEREIN. WHERE NO INSTRUCTIONS ARE
INDICATED, SIGNED PROXY CARDS WILL BE VOTED FOR THE ELECTION OF THE THREE
NOMINEES FOR DIRECTOR NAMED IN THIS PROXY STATEMENT, FOR THE AMENDMENT OF THE
COMPANY'S 1996 STOCK OPTION PLAN AND FOR THE RATIFICATION OF CROWE, CHIZEK AND
COMPANY LLP AS INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31,
2000.
Other than the matters listed on the attached Notice of Annual Meeting of
Stockholders, the Board of Directors knows of no additional matter that will be
presented for consideration at the Annual Meeting. EXECUTION OF A PROXY,
HOWEVER, CONFERS ON THE DESIGNATED PROXY HOLDERS DISCRETIONARY AUTHORITY TO VOTE
THE SHARES IN ACCORDANCE WITH THEIR BEST JUDGMENT ON SUCH OTHER BUSINESS, IF
ANY, THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING AND AT ANY ADJOURNMENTS
THEREOF, INCLUDING WHETHER OR NOT TO ADJOURN THE ANNUAL MEETING.
A proxy may be revoked at any time prior to its exercise by filing a
written notice of revocation with the Secretary of the Company, by delivering to
the Company a duly executed proxy bearing a later date, or by attending the
Annual Meeting and voting in person. However, if you are a stockholder whose
shares are not registered in your own name, you will need appropriate
documentation from your record holder to vote personally at the Annual Meeting.
The cost of solicitation of proxies on behalf of management will be borne
by the Company. In addition to the solicitation of proxies by mail, proxies may
be solicited personally or by telephone by directors, officers and other
employees of the Company and its subsidiaries, without additional compensation
therefor. 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 their reasonable expenses
in doing so.
VOTING SECURITIES
The securities which may be voted at the Annual Meeting consist of shares
of Common Stock, with each share entitling its owner to one vote on all matters
to be voted on at the Annual Meeting.
The close of business on March 17, 2000, has been fixed by the Board of
Directors as the record date (the "Record Date") for the determination of
stockholders of record entitled to notice of and to vote at the Annual Meeting
and at any adjournments thereof. The total number of shares of Common Stock
outstanding on the Record Date was 10,777,392 shares.
The presence, in person or by proxy, of the holders of at least a majority
of the total number of the outstanding shares of Common Stock entitled to vote
is necessary to constitute a quorum at the Annual
<PAGE> 5
Meeting. Abstentions will be treated as shares present and entitled to vote for
purposes of determining whether a quorum is present, but as unvoted for purposes
of determining the approval of any matter submitted to the stockholders for a
vote. If a broker indicates on the proxy that it does not have discretionary
authority to vote certain shares on a particular matter, such shares, or
"non-votes," will be considered to be present for the purpose of determining
whether a quorum is present, but will not be considered as present and entitled
to vote with respect to that matter. In the event that there are not sufficient
votes for a quorum at the time of the Annual Meeting, the Annual Meeting may be
adjourned in order to permit the further solicitation of proxies.
As to the election of directors, the proxy card being provided by the Board
of Directors enables a stockholder to vote "FOR ALL" to vote in favor of the
nominees proposed by the Board of Directors, "WITHHELD FOR ALL" to vote against
all of the nominees being proposed, or "FOR ALL EXCEPT" to withhold authority to
vote for any individual nominee by writing the nominee's name in the space
provided. Under Delaware law and the Company's By-laws, an affirmative vote of
the holders of a plurality of shares, present at the Annual Meeting, represented
in person or by proxy, and entitled to vote, is required for a nominee to be
elected as a Director.
As to the approval of the amendment of the Company's 1996 Stock Option
Plan, by checking the appropriate box, a stockholder may: (i) vote "FOR" the
item; (ii) vote "AGAINST" the item; or (iii) "ABSTAIN" from voting on such item.
Under Delaware law, an affirmative vote of the holders of a majority of the
shares of Common Stock present at the Annual Meeting, represented in person or
by proxy, and entitled to vote, is required to constitute stockholder approval
of Proposal 2.
As to the approval of Crowe, Chizek and Company LLP as independent auditors
of the Company, by checking the appropriate box, a stockholder may: (i) vote
"FOR" the item; (ii) vote "AGAINST" the item; or (iii) "ABSTAIN" from voting on
such item. Under Delaware law, an affirmative vote of the holders of a majority
of the shares of Common Stock present at the Annual Meeting, represented in
person or by proxy, and entitled to vote, is required to constitute stockholder
approval of Proposal 3.
Proxies solicited hereby will be returned to the Company's transfer agent,
Harris Trust and Savings Bank. The Board of Directors has also designated Harris
Trust and Savings Bank to act as inspectors of election and to tabulate the
votes at the Annual Meeting. After the final adjournment of the Annual Meeting,
the proxies will be returned to the Company.
INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
All persons standing for election as director were unanimously nominated by
the Board of Directors. No person being nominated as a director is being
proposed for election pursuant to any agreement or understanding between any
such person and the Company.
INFORMATION WITH RESPECT TO BENEFICIAL OWNERS, NOMINEES FOR DIRECTOR AND CERTAIN
EXECUTIVE OFFICERS
The following table sets forth as of the Record Date information for: (i)
those people believed by management to be the beneficial owners of more than
5.0% of the Company's Common Stock; (ii) the nominees and continuing directors
of the Board of Directors of the Company; and (iii) certain executive officers
of the Company. The table includes, with respect to directors, the year in which
each became a director of the Company and the year in which their terms as
director of the Company will expire. The table also sets forth the amount of
Common Stock and the percent thereof beneficially owned by each person and all
directors and executive officers as a group as of the Record Date. Ownership
information is based upon information furnished by the respective individuals.
<TABLE>
<CAPTION>
SHARES OF
EXPIRATION COMMON STOCK
DIRECTOR OF OF TERM BENEFICIALLY PERCENT
NAME(1) AGE COMPANY SINCE AS DIRECTOR OWNED(2) OF CLASS
------- --- ------------- ----------- ------------ --------
<S> <C> <C> <C> <C> <C>
NOMINEES
Angelo DiPaolo....................... 61 1983 2000 500,532(3) 4.6%
Joseph Rizza......................... 57 1997 2000 317,780(4) 2.9
Leon Wolin........................... 73 1991 2000 327,302(5) 3.0
</TABLE>
2
<PAGE> 6
<TABLE>
<CAPTION>
SHARES OF
EXPIRATION COMMON STOCK
DIRECTOR OF OF TERM BENEFICIALLY PERCENT
NAME(1) AGE COMPANY SINCE AS DIRECTOR OWNED(2) OF CLASS
------- --- ------------- ----------- ------------ --------
<S> <C> <C> <C> <C> <C>
CONTINUING DIRECTORS
Robert L. Woods...................... 70 1983 2002 353,416(6) 3.3%
Robert D. Small...................... 69 1983 2002 158,544(7) 1.5
E.V. Silveri......................... 69 1983 2001 1,545,206(8) 14.3
Daniel Nagle......................... 66 1983 2001 304,500 2.8
LeRoy Rosasco........................ 67 1983 2001 1,002,450(9) 9.3
NON-DIRECTOR, EXECUTIVE OFFICERS
Brad A. Luecke....................... 49 -- -- 123,190(10) 1.1
Edward H. Sibbald.................... 51 -- -- 34,479(11) *
Stephen M. Karaba.................... 42 -- -- 29,551(12) *
Christopher Gavin.................... 38 -- -- 4,075(13) *
Mary M. Henthorn..................... 42 -- -- 16,081(14) *
All directors and executive officers as
a group (13 persons)................. 4,815,488(15) 44.7%
</TABLE>
- -------------------------
* Less than one percent.
(1) The address of each principal stockholder is 501 West North Avenue, Melrose
Park, Illinois 60160.
(2) Unless otherwise stated below, each person has sole voting and investment
power with respect to all such shares.
(3) Includes 700 shares held by Mr. DiPaolo's minor grandchild.
(4) Includes 84,480 shares held by a trust for which Mr. Rizza acts as trustee.
(5) Includes 308,082 shares held by a trust for which Mr. Wolin acts as trustee
and 19,220 shares held in a IRA account by First Albany Corporation for the
benefit of Mr. Wolin.
(6) Represents shares held by trusts for which Mr. Woods or his spouse acts as
trustee and 30,000 shares subject to currently exercisable options.
(7) Includes the indirect ownership of 122,400 shares held in a retirement
trust account for the benefit of Mr. Small.
(8) Includes 5,656 shares held by trusts for which Mr. Silveri acts as trustee;
34,716 shares held directly by Mr. Silveri's spouse; 2,100 shares held by
trusts for which Mr. Silveri's spouse acts as trustee; and 948,494 shares
held by Go-Tane Service Stations, Inc., a company controlled by Mr.
Silveri, and the Go-Tane Pension Plan.
(9) Includes 220,880 shares held by trusts for which Mr. Rosasco acts as
trustee and 168,000 shares held directly by Mr. Rosasco's spouse.
(10) Includes 24,723 shares subject to currently exercisable options.
(11) Includes 22,079 shares subject to currently exercisable options and the
indirect ownership of 4,300 shares held in a retirement trust account for
the benefit of Mr. Sibbald.
(12) Includes 21,511 shares subject to currently exercisable options and 2,000
shares held directly by Mr. Karaba's spouse.
(13) Includes 3,075 shares subject to currently exercisable options.
(14) Includes 12,881 shares subject to currently exercisable options.
(15) Includes an aggregate of 114,269 shares subject to currently exercisable
options. Includes 98,382 shares held in the Company's 401(k) Plan, for
which LaSalle Bank, acts as trustee. The trustee under the 401(k) Plan has
sole voting and investment power with respect to such shares.
3
<PAGE> 7
Nominees
Angelo DiPaolo has served as a Director of the Company since 1983. He has
also served as a director of Midwest Bank and Trust Company since 1982. He has
served as President of DiPaolo Company, a heavy construction company, and
DiPaolo Center, a commercial complex in Glenview, Illinois, since 1963.
Joseph Rizza has served as a Director of the Company since April 1997. He
was elected a director of Midwest Bank in 1994. Mr. Rizza is the owner of Joe
Rizza Enterprises which owns several automobile dealerships and financial
service companies in the Chicago metropolitan area.
Leon Wolin has served as a Director of the Company since 1991. He was
elected a director of Midwest Bank and Trust Company in 1989. Mr. Wolin has
served as a director of Midwest Bank since 1996. Mr. Wolin has been President of
both Wolin-Levin, Inc., a real property management and consulting firm, and
Price Associates, Inc., a real estate appraisal and consulting firm, since 1950.
Continuing Directors
Robert L. Woods has served as President and Chief Executive Officer and as
a Director of the Company since 1983. Previously, he was the President of
Midwest Bank and Trust Company from 1967 to 1991. Mr. Woods also serves as
Chairman of the Board of Directors of Midwest Bank. In addition, he is a
director of Midwest Bank and Trust Company and First Midwest Data Corp. Mr.
Woods also served as a director of Midwest Trust Services, Inc. and Midwest One
Mortgage Services, Inc. prior to their dissolution in 1999.
Robert D. Small has served as a Director of the Company since 1983. He was
originally elected to serve as a director of Midwest Bank and Trust Company in
1974. He has previously served as President and director of Midwest Bank of
McHenry County from 1989 to 1993. Mr. Small has been President of Small's
Furniture City since 1980.
E.V. Silveri has served as Chairman of the Board of the Company since 1983.
Mr. Silveri was elected a director of Midwest Bank and Trust Company in 1972 and
has been Chairman of the Board of Midwest Bank and Trust Company since 1975. He
is also a member of the board of directors of Midwest Bank, and served as
Chairman of the Board of Directors of Midwest Trust Services, Inc. and Midwest
One Mortgage Services, Inc. prior to their dissolution in 1999. He also serves
as Chairman of First Midwest Data Corp. Since 1984, Mr. Silveri has been the
President and also a director of Go-Tane Service Stations, Inc., a firm he
co-founded in 1966.
Daniel Nagle has served as Corporate Secretary and a Director of the
Company and as a director of Midwest Bank and Trust Company since 1983 and 1975,
respectively. Mr. Nagle is Chairman of the Audit Committee of the Company. He
also has served as a director of Midwest Bank since 1991 and Midwest Trust
Services, Inc. prior to its dissolution in 1999. Mr. Nagle is an attorney with
the law firm of Nagle & Nagle.
LeRoy Rosasco has served as a Director of the Company since 1983. He has
also served as a director of Midwest Bank and Trust Company since 1969. Mr.
Rosasco has been the owner and President of ProTacTic Golf, Inc. since 1996.
Prior thereto, Mr. Rosasco was a private investor with LPR Enterprises, Inc., a
real estate investment firm, for 10 years.
4
<PAGE> 8
PROPOSAL 1. -- ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of eight (8)
directors and is divided into three classes. Directors are elected for staggered
terms of three years each, with the term of office of only one of the three
classes of directors expiring each year. Directors serve until their successors
are elected and qualified.
The nominees proposed for election at this Annual Meeting are Mr. Angelo
DiPaolo, Mr. Joseph Rizza and Mr. Leon Wolin.
In the event that Mr. DiPaolo, Mr. Rizza or Mr. Wolin is unable to serve or
declines to serve for any reason, it is intended that the proxies will be voted
for the election of such other person as may be designated by the present Board
of Directors. The Board of Directors has no reason to believe Mr. DiPaolo, Mr.
Rizza or Mr. Wolin will be unable or unwilling to serve. UNLESS AUTHORITY TO
VOTE FOR THE NOMINEES IS WITHHELD, IT IS INTENDED THAT THE SHARES REPRESENTED BY
THE ENCLOSED PROXY CARD, IF EXECUTED AND RETURNED, WILL BE VOTED FOR THE
ELECTION OF THE NOMINEES PROPOSED BY THE BOARD OF DIRECTORS.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THE
NOMINEES NAMED IN THIS PROXY STATEMENT.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors conducts its business through meetings of the Board
of Directors and through activities of its committees. The Board of Directors
meets regularly and may schedule special meetings as needed. During fiscal year
1999, the Board of Directors of the Company held eight meetings primarily
related to general company matters. Each of the directors of the Company
attended at least 75% of the total number of the Company's Board meetings held
and committee meetings on which such directors served during fiscal year 1999.
The Board of Directors of the Company maintains an Audit Committee. The
Audit Committee recommends the annual appointment of the Company's auditors and
reviews the scope and results of the audit and other services provided by the
Company's independent auditors. The Audit Committee consists of Messrs. Nagle,
Rosasco, Small, Wolin, DiPaolo and Rizza. The Audit Committee met three times in
fiscal year 1999. The Board of Directors also functions as a Compensation
Committee for the purpose of administering the Company's 1996 Stock Option Plan,
and otherwise is responsible for determining the compensation of the Company's
executive officers.
DIRECTORS' COMPENSATION
All Directors of the Company receive a retainer of $12,000 per year for
serving on the Board and receive $500 per Board meeting attended. Except for
Joseph Rizza and Robert Small, all Directors of the Company are also members of
the board of directors of Midwest Bank and Trust Company. Six Directors serve as
members of the Audit Committee and receive annual fees of $3,000. Five Directors
of the Company also serve on the board of directors of Midwest Bank. Each
director of the Company's subsidiaries received between $3,200 and $8,400 per
year in base directors' fees. Each subsidiary maintains its own fee structure
for director compensation. Certain subsidiaries also provide fees for director
participation in specific board of directors committees (such as loan
committees, audit committees and executive committees) which range between $600
and $7,200 annually. One Director of the Company, Daniel Nagle, also serves as
Secretary and received a fee of $17,150 for legal services rendered to the board
of directors of Midwest Bank and Trust Company and Midwest Bank.
5
<PAGE> 9
EXECUTIVE COMPENSATION
The following table shows, for the years ended December 31, 1999, 1998 and
1997, the cash compensation paid by the Company, as well as certain other
compensation paid or accrued for those years, to the President and Chief
Executive Officer and other executive officers of the Company in fiscal years
1999, 1998 and 1997 ("Named Executive Officers"). No other executive officer of
the Company earned and/or received salary and bonus in excess of $100,000 in
fiscal year 1999, 1998 and 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
------------------------------------------------ SECURITIES
NAME AND PRINCIPAL OTHER ANNUAL UNDERLYING ALL OTHER
POSITION YEAR SALARY($) BONUS($) COMPENSATION($) OPTIONS(#) COMPENSATION($)
- ------------------ ---- --------- -------- --------------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Woods............ 1999 325,000 0 35,171(1) 0 12,557(2)
President and Chief 1998 325,000 75,000 37,879(1) 60,000 12,200(2)
Executive Officer 1997 325,000 150,000 39,550(1) 0 12,072(2)
Edward H. Sibbald.......... 1999 168,500 36,477 12,577(3) 9,250 7,453(4)
Senior Vice President 1998 158,500 25,500 14,200(3) 15,000 7,163(4)
and Chief Financial
Officer 1997 133,500 29,931 13,650(3) 7,000 6,160(4)
Brad A. Luecke............. 1999 185,000 43,106 18,175(5) 9,038 6,404(4)
President, Midwest Bank 1998 175,000 24,225 18,355(5) 10,000 6,394(4)
and Trust Company 1997 165,000 23,967 19,530(5) 7,000 6,029(4)
James I. McMahon........... 1999 170,000 31,150 16,622(7) 9,150 4,577(4)
President, Midwest
Bank(6) 1998 160,000 24,900 19,543(7) 10,000 4,615(4)
1997 150,000 29,462 15,920(7) 7,000 4,327(4)
Stephen M. Karaba.......... 1999 130,000 28,036 11,128(8) 8,338 6,668(9)
President, Midwest Bank 1998 120,000 20,025 12,400(8) 10,000 6,238(9)
of McHenry County 1997 100,000 29,082 9,000(8) 7,000 4,231(9)
</TABLE>
- -------------------------
(1) Consists of directors' fees of $29,000, $31,200 and $34,150 in 1999, 1998
and 1997, respectively, and an automobile allowance of $6,171, $6,679 and
$5,400 in 1999, 1998 and 1997, respectively.
(2) Consists of a matching contribution made by the Company pursuant to the
Company's 401(k) Plan of $8,750, $8,500 and $8,414 in 1999, 1998 and 1997,
respectively, and life insurance premiums paid by the Company on behalf of
Mr. Woods in the amount of $3,700 and $3,658 in 1998 and 1997, respectively.
(3) Consists of directors' fees of $9,100, $9,800 and $8,850 in 1999, 1998 and
1997, respectively, and an automobile allowance of $3,477, $4,400 and $4,800
in 1999, 1998 and 1997, respectively.
(4) Consists of a matching contribution made by the Company pursuant to the
Company's 401(k) Plan.
(5) Consists of directors' fees of $13,200, $13,200 and $13,900 in 1999, 1998
and 1997, respectively, and membership fees of $4,975, $5,155 and $5,630 in
1999, 1998 and 1997, respectively.
(6) Mr. McMahon resigned as President of Midwest Bank effective March 1, 2000.
(7) Consists of directors' fees of $3,600, $4,200 and $4,200 in each of 1999,
1998 and 1997, respectively, membership fees of $2,200, $2,200 and $2,885 in
1999, 1998 and 1997, respectively, and tuition reimbursement of $10,802,
$13,143 and $8,835 in 1999, 1998 and 1997, respectively.
(8) Consists of directors' fees of $8,759, $8,000 and $4,200 in 1999, 1998 and
1997, respectively, and an automobile allowance of $2,378, $4,400 and $4,800
in 1999, 1998 and 1997, respectively.
(9) Consists of a matching contribution of $6,250, $5,854 and $3,611 made by the
Company pursuant to the Company's 401(k) Plan in 1999, 1998 and 1997,
respectively, and $418, $382 and $620 in life insurance premiums paid by the
Company in 1999, 1998 and 1997, respectively.
6
<PAGE> 10
The information presented below summarizes certain information about the
Common Stock underlying options which were granted in 1999 by the Company to the
Named Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1)
---------------------------------------------------------
PERCENT OF POTENTIAL REALIZABLE VALUE AT
NUMBER OF TOTAL ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OF FOR OPTION TERM(4)
OPTION EMPLOYEES IN BASE PRICE EXPIRATION -----------------------------
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
---- ---------- ------------ ----------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Woods............ -- -- -- -- -- --
Edward H. Sibbald.......... 4,250(2) 11.7% 15.88 2009 42,458 106,803
5,000(3) 14.0 16.13 2009 50,720 128,550
Brad A. Luecke............. 4,038(2) 11.3 15.88 2009 40,340 101,475
5,000(3) 14.0 16.13 2009 50,720 128,550
James I. McMahon........... 4,150(2) 11.6 15.88 2009 41,459 104,290
5,000(3) 14.0 16.13 2009 50,720 128,550
Stephen M. Karaba.......... 3,338(2) 9.3 15.88 2009 33,347 83,884
5,000(3) 14.0 16.13 2009 50,720 128,550
</TABLE>
- -------------------------
(1) No stock appreciation rights (SARs) were granted to Named Executive Officers
during fiscal 1999.
(2) Options granted to non-director executive officers on January 27, 1999.
These options vested immediately and are exercisable at any time prior their
expiration on January 27, 2009.
(3) Options granted to non-director executive officers on April 14, 1999. These
options become exercisable in cumulative annual installments of 25 percent
of the shares covered thereby on each of the first, second, third and fourth
anniversaries of the grant date.
(4) The amounts set forth represent the value that would be received by the
Named Executive Officer upon exercise of the option on the day before the
expiration date of the option based upon assumed annual growth rates in the
market value of the Company's Common Stock of 5 percent and 10 percent,
rates prescribed by applicable Securities and Exchange Commission rules.
Actual gains, if any, on stock option exercises are dependent on the future
performance of the Company's Common Stock and other factors such as the
general condition of the stock markets and the timing of the exercise of the
options. The Company did not use an alternative formula for a potential
realizable value as the Company is not aware of any formula that will
determine with reasonably accuracy a present value based on future unknown
or volatile factors.
7
<PAGE> 11
The following table summarizes the number and value of stock options
relating to Common Stock that were unexercised at December 31, 1999. No stock
options were exercised by the Named Executive Officers during 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END
OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES VALUE OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
ACQUIRED ON REALIZED YEAR-END(#) FISCAL YEAR-END($)(1)
NAME EXERCISE(#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Robert L. Woods................. 0 0 30,000/30,000 0/0
Edward H. Sibbald............... 0 0 16,000/21,250 28,790/11,930
Brad A. Luecke.................. 0 0 17,538/18,500 45,650/17,550
James I. McMahon................ 0 0 17,650/18,500 45,650/17,550
Stephen M. Karaba............... 0 0 16,838/18,500 45,650/17,550
</TABLE>
- -------------------------
(1) Options are considered "in-the-money" if the fair market value of the
underlying Common Stock exceeds the exercise price of the related stock
option. The value of the unexercised options at the end of fiscal 1999 is
based on the closing price of $13.75 report on the Nasdaq National Market on
December 31, 1999, the last trading day of fiscal 1999.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION FOR 1999 PERIOD
The Board of Directors is responsible for making decisions regarding
executive officers' compensation, including bonuses and other benefits. The full
Board also acts as the Compensation Committee for purposes of administering the
Company's 1996 Stock Option Plan and determines the awards granted thereunder.
The Board of Directors has developed a compensation program which is
comprised of salary, annual cash incentive bonuses, long-term incentives in the
form of stock options and other benefits typically offered to executives by
corporations similar to the Company. The Board of Directors recognizes that
attracting and retaining key executives is critical to the Company's long term
success. The Board has set certain guidelines regarding executive officers'
compensation. Each executive officer is reviewed annually, and that officer's
compensation is based on that individual's contribution to the Company.
The Board of Directors has reviewed compensation structures and other
information from various sources, including, among others, The Illinois Bankers
Association, SNL Securities and Sheshunoff Information Services. Although no
company is an exact match, consideration was given to salaries and bonuses that
are paid to executives at similar community bank holding companies. Additional
considerations were the greatly increased responsibilities of running a public
company, the individual's contributions to the Company and individual's
experience and tenure with the Company.
The salary of Mr. Robert L. Woods, the Company's Chief Executive Officer,
was set at $325,000 for fiscal 1999, which is the same amount of salary paid to
Mr. Woods in 1998 and 1997. His salary was determined based on corporate results
over the past five years, plus a review of his individual performance. Mr. Woods
did not receive a bonus in 1999 nor a grant of non-qualified stock options under
the 1996 Stock Option Plan. In making decisions regarding CEO compensation, the
Board of Directors took into account results of operations of the Company,
conditions in the banking industry as a whole and Mr. Woods' long-term
contributions to the Company. Mr. Woods has been with the Company for over 39
years.
The Internal Revenue Code limits the deductions a publicly held company may
take for compensation paid to its most highly paid executive officers.
Typically, salaries and bonuses in excess of $1 million (excluding
performance-based compensation) which are paid in one tax year cannot be
deducted. The Board
8
<PAGE> 12
of Directors did not consider this section of the Internal Revenue Code when
establishing compensation because current executive salaries and bonuses are
well below the $1 million threshold.
COMPENSATION COMMITTEE
E.V. Silveri
Robert L. Woods
Angelo DiPaolo
Daniel Nagle
Joseph Rizza
LeRoy Rosasco
Robert D. Small
Leon Wolin
EMPLOYMENT AGREEMENTS
The Company and certain subsidiaries of the Company have entered into
separate Transitional Employment Agreements with each of the Named Executive
Officers and certain other officers of the Company's subsidiaries. The
Transitional Employment Agreements are designed to minimize the impact of change
in control transactions on the performance of key officers and executives. In
the event of a "change in control" (generally, the acquisition of 50% or more of
the voting power or the sale of more than 40% of the assets of the Company or
the relevant subsidiary), the agreements require the Company, the relevant
subsidiary or any successor, as the case may be, to continue the employment of
the affected officers for either 12 or 24 months in their respective positions
and at their respective salaries (including directors' fees, if any) with the
right to participate in new or continuing bonus, incentive, benefit and other
plans. In the event the employment of an officer is terminated by (i) the
officer for any reason during the first year following the change in control
(subject to the requirement that certain officers must wait 90 days following
the change of control to exercise such right of termination), (ii) by an
acquiror for any reason other than death, disability or cause, or (iii) due to
constructive discharge (e.g., a reduction in salary or benefits, a material
diminution in title, duties or responsibilities, or a significant change in
hours worked or location), the acquiror is obligated to continue the affected
officer's salary (including directors' fees, if any) for 12 or 24 months after
the termination of employment.
1996 STOCK OPTION PLAN
Under the Company's 1996 Stock Option Plan (the "Plan"), incentive stock
options and nonqualified stock options may be granted to executives, key
personnel, consultants and nonemployee directors of the Company. The incentive
stock options granted under the Plan will be qualified as such under the
Internal Revenue Code of 1986, as amended (the "Code"). The purpose of the Plan
is to offer executives, key personnel, consultants and nonemployee directors
stock-based incentives in the Company, thereby giving them a stake in the
Company's growth and prosperity and encouraging them to continue their services
with the Company and its subsidiaries. The Plan permits the grant of options to
purchase up to 500,000 shares of Common Stock. In the event of the approval by
the stockholders of the amendment to the Plan presented to the stockholders at
the Annual Meeting, the Plan will permit the grant of options to purchase up to
750,000 shares of Common Stock. See "Proposal 2: Amendment to Stock Option
Plan." In the event of corporate changes affecting the Common Stock such as
stock splits, stock dividends, reorganizations, mergers or consolidations,
appropriate adjustments will be made in the number of shares for which options
may thereafter be granted under the Plan and the option price and the number of
shares subject to outstanding options granted pursuant to the Plan. Incentive
stock options may be granted only to employees of the Company. Nonqualified
stock options may be granted to all employees of, and consultants who provide
services to, the Company or its subsidiaries. Options may be granted to
employees or consultants at any time and from time to time in the sole
discretion of the Board of Directors acting as the Compensation Committee. The
full Board of Directors currently serves as the Compensation Committee. No
employee or consultant may receive options covering more than 100,000 shares in
any single fiscal year.
9
<PAGE> 13
401(K) PLAN
The Company maintains a 401(k) Plan, which is designed to be qualified
under Section 401(k) of the Code. An employee is eligible to participate in the
401(k) Plan following attainment of the age of 21 and the completion of one year
of service with the Company (1,000 hours within a twelve-month period). Under
the 401(k) Plan, subject to the limitations imposed under Section 401(k) and
Section 415 of the Code, a participant is able to elect to defer not more than
15% of his or her compensation by directing the Company to contribute such
amount to the 401(k) Plan on such employee's behalf. The Company may elect to
make matching contributions equal to the participating employee's contribution
plus 1%, subject to a maximum matching contribution of no more than 5% of the
participant's salary.
Under the 401(k) Plan, a separate account is established for each employee.
Participants are 100% vested at all times in their contributions and vest in
employer matching contributions in one-third increments, becoming fully vested
in employer contributions after 3 years of service. Distributions from the
401(k) Plan are made upon termination of service, retirement, disability or
death in a lump sum or in annual installments. LaSalle Bank acts as trustee for
the 401(k) Plan. Participants in the 401(k) Plan can choose from a number of
investment vehicles, including investment in the Company's Common Stock. The
trustee has sole voting and investment power with respect to all shares of the
Company's Common Stock held in each participant's account under the 401(k) Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors functions as the Compensation Committee for purposes
of administering the Company's 1996 Stock Option Plan, and otherwise is
responsible for determining the compensation of the Company's executive
officers. Robert L. Woods, President and Chief Executive Officer of the Company,
serves on the Board of Directors.
Angelo DiPaolo, a Director of the Company, and five companies controlled by
Mr. DiPaolo received loans and lines of credit from the Company which had an
aggregate outstanding loan balance of $7.2 million as of December 31, 1999. Each
loan was made in the ordinary course of business on terms substantially the same
as those prevailing at the time for comparable transactions with unaffiliated
persons and did not involve more than the normal risk of collectibility or
present other unfavorable features. Midwest Bank and Trust Company contracted
with a general construction contractor for building a new banking center in
Roselle, Illinois. A company controlled by Angelo DiPaolo was a subcontractor
for the construction project. Mr. DiPaolo's company received $480,260 in
payments for work performed on the construction project.
SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires directors, certain officers and certain other owners
to periodically file notices of changes in beneficial ownership of Common Stock
with the Securities and Exchange Commission. To the best of the Company's
knowledge, during 1999 all required filings were timely submitted, except as
follows. During 1999, one filing representing one transaction was not timely
submitted due merely to an administrative oversight by the Company on behalf of
Director E.V. Silveri and Director Robert L. Woods. In addition, each of Brad A.
Luecke, Edward H. Sibbald, Stephen M. Karaba and James I. McMahon failed to
timely submit one filing representing two stock option grants in 1999 due to an
administrative oversight in recognizing the appropriate deadline. Finally, three
filings representing one transaction each were inadvertently submitted late by
Director Joseph Rizza. The proper filings have subsequently been made.
TRANSACTIONS WITH CERTAIN RELATED PERSONS
The Company's current policy provides that all loans made by the Company to
its directors and executive officers are made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons and do not involve more than the
normal risk of collectibility or present other unfavorable features. At December
31, 1999, the Company's directors and executive officers had loans outstanding,
whose individual aggregate indebtedness to the Company exceeded
10
<PAGE> 14
$60,000, totaling approximately $14.5 million in the aggregate, which
represented 21.4% of total stockholders equity as of that date. Such loans were
made by the Company in the ordinary course of business, were not made with
favorable terms, and did not involve more than the normal risk of collectibility
or present other unfavorable features.
PERFORMANCE GRAPH
The graph below sets forth a comparison of the percentage change in the
cumulative total stockholder return for the period beginning February 24, 1998
and ending December 31, 1999 for the Company's Common Stock, the Russell 2000
Index and a Peer Group, the CRSP Index for Nasdaq Bank Stocks.
[PERFORMANCE GRAPH]<QC>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
02/24/98 06/30/98 12/31/98 06/30/99 12/31/99
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Midwest Banc Holdings, Inc. $100.00 $ 98.59 $ 85.92 $107.04 $ 77.46
- --------------------------------------------------------------------------------------------------------------
Russell 2000 Index 100.00 100.68 92.88 100.74 111.10
- --------------------------------------------------------------------------------------------------------------
Nasdaq Bank Stocks 100.00 103.40 99.20 102.20 95.30
- --------------------------------------------------------------------------------------------------------------
</TABLE>
PROPOSAL 2: AMENDMENT TO STOCK OPTION PLAN
The Midwest Banc Holdings, Inc. 1996 Stock Option Plan, as amended (the
"Plan"), permits the grant of incentive stock options and non-qualified stock
options to executives, key personnel, consultants and non-employee directors of
the Company and its subsidiaries. The Plan currently permits the grant of
options to purchase up to 500,000 shares of Common Stock of the Company. Subject
to approval by the stockholders, the Board of Directors has approved an
amendment to the Plan which would increase from 500,000 to 750,000 the number of
shares of Common Stock with respect to which options may be granted under the
Plan. As of March 17, 2000, there were awards outstanding under the Plan which
grant the right to purchase up to 461,842 shares of Common Stock of the Company.
As of that same date, the closing price for the Common Stock was $15.00 as
reported by the Nasdaq National Market. In order to permit the grant of
additional options under the Plan, the Board of Directors believes the number of
authorized shares under the Plan should be increased to 750,000. The following
is a summary of the Plan as proposed to be amended. A copy of the Plan, as
amended and restated, is attached as Appendix A to this Proxy Statement and
should be read in its entirety. In addition to the proposed amendment, the
attached copy of the Plan reflects other administrative revisions and certain
amendments which were adopted by the Board of Directors in accordance with the
terms of the Plan and did not require stockholder approval.
11
<PAGE> 15
PURPOSE
The purpose of the Plan is to allow the Company to offer executives, key
personnel, consultants and non-employee directors stock-based incentives in the
Company, thereby giving them a stake in the Company's growth and prosperity and
encouraging them to continue their services with the Company, its subsidiaries
or affiliated companies.
RESERVATION OF SHARES
The Plan permits the grant of options to purchase up to 750,000 shares of
Common Stock of the Company. Authorized but unissued shares and treasury shares
may be made available for issuance under the Plan. In the event of corporate
changes affecting the Common Stock such as stock splits, stock dividends,
reorganizations, mergers or consolidations, appropriate adjustments will be made
in the number of shares of Common Stock for which options may thereafter be
granted under the Plan and the option price and the number of shares of Common
Stock subject to outstanding options granted pursuant to the Plan.
ADMINISTRATION
The Plan will be administered, construed and interpreted by either the
Board of Directors of the Company, the Compensation Committee of the Board of
Directors of the Company or such other committee to whom the Board may delegate
this function. Consistent with the terms of the Plan, the Board or a committee
will select the individuals who shall participate in the Plan, will determine
the sizes, types, terms and conditions of stock options granted and establish
and amend the rules and regulations for the Plan's administration.
AMENDMENT AND TERMINATION OF THE PLAN
The Board of Directors may at any time alter, amend, suspend or terminate
the Plan. Unless earlier terminated by the Board of Directors, the Plan will
terminate on November 19, 2006.
ELIGIBILITY
Incentive stock options may be granted only to employees of the Company or
its subsidiaries. Nonqualified stock options may be granted to all employees and
non-employee directors of the Company or its subsidiaries and consultants who
provide services to the Company or its subsidiaries.
Options may be granted to employees or consultants at any time and from
time to time in the Committee's sole discretion. However, no employee or
consultant may receive options covering more than 100,000 shares of the Common
Stock in any single fiscal year.
OPTION PRICE AND PAYMENT OF THE OPTION PRICE
The price to be paid for shares of Common Stock upon the exercise of each
option pursuant to the Plan may not be less than the fair market value of such
shares on the date on which the option is granted, as determined by the Board or
a committee. The exercise price of any incentive stock option granted to a
person owning more than 10% of the total combined voting power of all classes of
stock of the Company or any of its subsidiaries must not be less than 110% of
the fair market value of the option shares on the date of grant. The fair market
value of the option shares shall be the most recent closing sales price for
shares of the Common Stock as reported by the Nasdaq National Market.
Upon exercise, the option price shall be paid either in cash or, if lawful
and permitted, (a) by the exchange of a number of previously acquired shares of
Common Stock of the Company with a fair market value at the time of exercise
equal to the total exercise purchase price; or (b) by any other means which the
Board or a committee, in its sole discretion, determines to be legal
consideration for the shares and to be consistent with the Plan's purposes.
12
<PAGE> 16
The Plan also permits optionees who exercise options to elect to have the
Company withhold a portion of the option shares purchased in order to satisfy
any federal, state or local tax liability imposed on the optionee by virtue of
the exercise of the option.
PERIOD OF OPTION
Each option granted shall be effective until the termination date set forth
in the written award agreement. If no date is set forth in the award agreement,
each option granted under the Plan shall be effective for a period of ten years
from the date of grant thereof, unless the period is reduced because of death or
termination of the optionee's employment, except that any incentive stock option
granted to a person owning more than 10% of the outstanding shares of Common
Stock of the Company must terminate not later than five years from the date of
the grant.
EXERCISE OF OPTION
Options granted under the Plan shall be exercisable as prescribed in the
award agreement. If the award agreement does not set forth times with respect to
the exercisability of the options, then each option may be exercised up to 25%
in the first year following the grant thereof, up to 50% in the second year, up
to 75% in the third year, and after the third year up to 100%. This limitation
shall not be effective in the event of the death of an optionee while in the
employ of the Company or its subsidiaries. Upon termination of employment for a
reason other than death, disability or for cause, the optionee may exercise any
nonqualified stock option or any incentive stock option within three months of
the date of termination, to the extent such optionee was otherwise entitled to
exercise such options.
The Plan provides that the aggregate fair market value (determined as of
the time the option is granted) of the Common Stock for which incentive stock
options may be exercised for the first time by any optionee during any calendar
year may not exceed $100,000.
LIMITED TRANSFERABILITY OF OPTIONS
Options (other than incentive stock options) may not be transferred except
to immediate family members, a trust for the benefit of immediate family members
or a partnership of solely immediate family members so long as there is no
consideration given for the transfer, the award agreement expressly permits the
transfer and subsequent transfers are prohibited.
FEDERAL INCOME TAX CONSEQUENCES
The Plan provides for the grant of incentive stock options and nonstatutory
stock options. It is intended that the incentive stock options will be qualified
as such under Section 422 of the Internal Revenue Code of 1986, as amended. The
federal income tax consequences to the Company and the optionee arising out of
the grant and exercise of incentive stock options and nonstatutory stock options
and out of the subsequent sale of the shares acquired pursuant thereto are
discussed below.
An optionee will generally not be deemed to have recognized taxable income
upon grant or exercise of any incentive stock option, provided that shares
transferred in connection with the exercise are not disposed of by the optionee
until the later of one year after the date the shares are transferred in
connection with the exercise of the incentive stock option or two years after
the date of grant of such option. If the holding periods are satisfied, upon
disposal of the shares, the aggregate difference between the per share option
exercise price and the per share fair market value of the Common Stock is
recognized as income taxable at long-term capital gains rates. No compensation
deduction may be taken by the Company as a result of the grant or exercise of
incentive stock options, assuming these holding periods are met.
In the case of the exercise of a nonqualified stock option, an optionee
will be deemed to have received ordinary income upon exercise of the stock
option in an amount equal to the aggregate amount by which the per share
exercise price is exceeded by the per share fair market value of the Common
Stock.
13
<PAGE> 17
In the event shares received through the exercise of an incentive stock
option are disposed of prior to the satisfaction of the holding periods (a
"disqualifying disposition"), the exercise of the option will be treated as the
exercise of a nonqualified stock option, except that the optionee will recognize
the ordinary income for the year in which the disqualifying disposition occurs.
The amount of any ordinary income deemed to have been received by an optionee
upon the exercise of a nonqualified stock option or due to a disqualifying
disposition will be a deductible expense of the Company for tax purposes.
PLAN BENEFITS
The following table provides certain information with respect to all grants
which have been made under the Plan to specific individuals and groups of
individuals, specifying the amounts granted to Named Executive Officers
individually, all current directors who are not executive officers as a group,
all director nominees individually, all current executive officers as a group
and all employees, including current officers who are not executive officers as
a group. The amount and terms of any future grants of stock options to the above
individuals or groups of individuals is not determinable.
All grants of stock options made to the officers, directors and employees
of the Company reflected in the table below have an exercise price equal to the
fair market value of the capital stock of the Company on the date of grant. All
options have a term of 10 years.
PLAN BENEFITS
<TABLE>
<CAPTION>
NAME AND POSITION TOTAL OPTION AWARDS(1)
- ----------------- ----------------------
<S> <C>
Robert L. Woods............................................. 60,000
President and Chief Executive Officer
Edward H. Sibbald........................................... 43,329
Senior Vice President and Chief Financial Officer
Brad A. Luecke.............................................. 43,223
President, Midwest Bank and Trust Company
James I. McMahon............................................ 41,341
President, Midwest Bank
Stephen M. Karaba........................................... 40,011
President, Midwest Bank of McHenry County
Angelo DiPaolo.............................................. --
Director Nominee
Joseph Rizza................................................ --
Director Nominee
Leon Wolin.................................................. --
Director Nominee
All current executive officers as a group (6 persons)....... 217,519
All current directors who are not executive officers as a --
group (7 persons).........................................
All employees, including current officers who are not 242,362
executive officers, as a group............................
</TABLE>
- ---------------
(1) Includes all options awarded to each specific individual or group of
individuals as of March 17, 2000.
UNLESS MARKED TO THE CONTRARY, THE SHARES REPRESENTED BY THE ENCLOSED PROXY
CARD WILL BE VOTED FOR THE AMENDMENT OF THE PLAN INCREASING THE NUMBER OF SHARES
RESERVED UNDER THE PLAN.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE AMENDMENT TO THE
PLAN.
14
<PAGE> 18
PROPOSAL 3. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Crowe, Chizek and Company LLP as
independent auditors for the Company for the year ending December 31, 2000,
subject to ratification of such appointment by the stockholders.
Representatives of Crowe, Chizek and Company LLP will be present at the
Annual Meeting. They will be given an opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions from
stockholders present at the Annual Meeting.
UNLESS MARKED TO THE CONTRARY, THE SHARES REPRESENTED BY THE ENCLOSED PROXY
CARD WILL BE VOTED FOR RATIFICATION OF THE APPOINTMENT OF CROWE, CHIZEK AND
COMPANY LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF THE
APPOINTMENT OF CROWE, CHIZEK AND COMPANY LLP AS THE INDEPENDENT AUDITORS OF THE
COMPANY.
15
<PAGE> 19
ADDITIONAL INFORMATION
STOCKHOLDER PROPOSALS
To be considered for inclusion in the Company's proxy and form of proxy
relating to the 2001 Annual Meeting of Stockholders, a stockholder proposal must
be received prior to November 27, 2000, by the Secretary of the Company at the
address set forth on the first page of this Proxy Statement. Any such proposal
will be subject to Rule 14a-8 under the Exchange Act.
NOTICE OF BUSINESS TO BE CONDUCTED AT AN ANNUAL MEETING
The By-laws of the Company set forth the procedures by which a stockholder
may properly bring business before a meeting of stockholders. Pursuant to the
By-laws, only business brought by or at the direction of the Board of Directors
may be conducted at an annual meeting. The By-laws of the Company provide an
advance notice procedure for a stockholder to properly bring business before an
annual meeting. For the 2001 Annual Meeting, the stockholder must give written
advance notice to the Secretary of the Company by January 2, 2001; provided,
however, that in the event the Company publicly announces or discloses less than
one hundred thirty (130) days prior to the meeting that the date of the 2001
Annual Meeting is to be held on a date other than May 2, 2001, notice by the
stockholder will be timely if received not later than the close of business on
the tenth (10th) day following the date on which the Company's notice to
stockholders of the annual meeting date was mailed or such public disclosure was
made. The advance notice by a stockholder must include the stockholder's name
and address, as they appear on the Company's record of stockholders, a brief
description of the proposed business, the reason for conducting such business at
the annual meeting, the class and number of shares of the Company's capital
stock that are beneficially owned by such stockholder and any material interest
of such stockholder in the proposed business. In the case of nominations to the
Board of Directors, certain information regarding the nominee must be provided.
These requirements apply to any matter that a stockholder wishes to raise at an
annual meeting, including those matters raised other than pursuant to the
procedures of Rule 14a-8 under the Exchange Act. Nothing in this paragraph shall
be deemed to require the Company to include in its proxy statement or the proxy
relating to any annual meeting any stockholder proposal which does not meet all
of the requirements for inclusion established by the United States Securities
and Exchange Commission in effect at the time such proposal is received.
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING
The Board of Directors knows of no business which will be presented for
consideration at the Annual Meeting other than as stated in the Notice of Annual
Meeting of Stockholders. If, however, other matters are properly brought before
the Annual Meeting, it is the intention of the persons named in the accompanying
proxy to vote the shares represented thereby on such matters in accordance with
their best judgment.
16
<PAGE> 20
Whether or not you intend to be present at the Annual Meeting, you are
urged to return your proxy card promptly. If you are then present at the Annual
Meeting and wish to vote your shares in person, your original proxy may be
revoked by voting at the Annual Meeting.
By Order of the Board of Directors
DANIEL NAGLE
Secretary
Melrose Park, Illinois
March 29, 2000
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO
SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
17
<PAGE> 21
APPENDIX A
MIDWEST BANC HOLDINGS, INC.
AMENDED AND RESTATED
1996 STOCK OPTION PLAN
ARTICLE 1.
ESTABLISHMENT, OBJECTIVES, AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. Midwest Banc Holdings, Inc., a Delaware
corporation (hereinafter referred to as the "Company"), hereby establishes an
incentive compensation plan to be known as the Midwest Banc Holdings, Inc. 1996
Stock Option Plan (hereinafter referred to as the "Plan"), as set forth in this
document.
Subject to approval by the Company's stockholders, the Plan shall become
effective as of November 19, 1996 (the "Effective Date") and shall remain in
effect as provided in Section 1.3 hereof.
1.2 PURPOSE OF THE PLAN. The purpose of this Plan is to benefit the
Company and its subsidiaries and affiliated companies by enabling the Company to
offer to certain present and future executives, key personnel, consultants and
non-employee directors stock based incentives in the Company, thereby giving
them a stake in the growth and prosperity of the Company and encouraging the
continuance of their services with the Company or subsidiaries or affiliated
companies.
1.3 DURATION OF THE PLAN. The Plan shall commence on the Effective Date
and shall remain in effect, subject to the right of the Board of Directors to
amend or terminate the Plan at any time pursuant to Article 16 hereof, until all
Shares subject to it shall have been purchased or acquired according to the
Plan's provisions. However, in no event may an Award be granted under the Plan
on or after November 19, 2006.
ARTICLE 2.
DEFINITIONS
Whenever used in the Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized:
"AWARD" means, individually or collectively, a grant under this Plan of
Nonqualified Stock Options or Incentive Stock Options.
"AWARD AGREEMENT" means a writing provided by the Company to each
Participant setting forth the terms and provisions applicable to Awards granted
under this Plan. The Participant's acceptance of the terms of the Award
Agreement shall be evidenced by his or her continued employment without written
objection before any exercise or payment of the Award. If the Participant
objects in writing, the grant of the Award shall be revoked.
"BENEFICIAL OWNER" or "BENEFICIAL OWNERSHIP" shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and Regulations under
the Exchange Act.
"BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the
Company.
"CAUSE" shall mean, with respect to termination of a Participant's
employment or directorship, the occurrence of any one or more of the following,
as determined by the Committee, in the exercise of good faith and reasonable
judgment:
(i) In the case where there is no employment, change in control or
similar agreement in effect between the Participant and the Company or a
Subsidiary at the time of the grant of the Award, or where there is such
an agreement but the agreement does not define "cause" (or similar
words) or a "cause" termination would not be permitted under such
agreement at that time because other
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conditions were not satisfied, the termination of an employment or
consulting arrangement due to the willful and continued failure or
refusal by the Participant to substantially perform assigned duties
(other than any such failure resulting from the Participant's
Disability), the Participant's dishonesty or theft, the Participant's
violation of any obligations or duties under any employee agreement, or
the Participant's gross negligence or willful misconduct; or
(ii) In the case where there is an employment, change in control or
similar agreement in effect between the Participant and the Company or a
Subsidiary at the time of the grant of the Award that defines "cause"
(or similar words) and a "cause" termination would be permitted under
such agreement at that time, the termination of an employment or
consulting arrangement that is or would be deemed to be for "cause" (or
similar words) as defined in such agreement.
No act or failure to act on a Participant's part shall be considered willful
unless done, or omitted to be done, by the Participant not in good faith and
without reasonable belief that his action or omission was in the best interest
of the Company.
"CHANGE OF CONTROL" of the Company shall mean:
(a) The Company is merged or consolidated or reorganized into or with
another corporation or other legal person (an "Acquiror") and as a
result of such merger, consolidation or reorganization less than
50% of the outstanding voting securities or other capital interests
of the surviving, resulting or acquiring corporation or other legal
person are owned in the aggregate by the stockholders of the
Company, directly or indirectly, immediately prior to such merger,
consolidation or reorganization, other than by the Acquiror or any
corporation or other legal person controlling, controlled by or
under common control with the Acquiror;
(b) The Company sells all or substantially all of its business and/or
assets to an Acquiror, of which less than 50% of the outstanding
voting securities or other capital interests are owned in the
aggregate by the stockholders of the Company, directly or
indirectly, immediately prior to such sale, other than by any
corporation or other legal person controlling, controlled by or
under common control with the Acquiror;
(c) Any person or group (as the terms "person" and "group" are used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act and the
rules and regulations promulgated thereunder) has become the
beneficial owner (as the term "beneficial owner" is defined under
Rule 13d-3 or any successor rule or regulation promulgated under
the Exchange Act) of more than 50% of the issued and outstanding
shares of voting securities of Company, other than (i) a trustee or
other fiduciary holding securities under any employee benefit plan
of the Company or any Subsidiary or (ii) a corporation owned
directly or indirectly by the stockholders of the Company in
substantially the same proportion as their ownership of stock in
the Company.
(d) Individuals who are members of the Incumbent Board cease to
constitute a majority of the Board of Directors of the Company. For
this purpose, "Incumbent Board" means (i) the members of the Board
of Directors of the Company on the Effective Date and (ii) any
individual who becomes a member of the Board of Directors of the
Company after the Effective Date, if such individual's election or
nomination for election as a Director was approved by the
affirmative vote of the then Incumbent Board.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation thereto.
"COMMITTEE" means the Committee as specified in Article 3 herein appointed
by the Board to administer the Plan with respect to grants of Awards.
"COMMON STOCK" or "SHARES" means the common stock, $0.01 par value per
share, of the Company.
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"COMPANY" means Midwest Banc Holdings, Inc., a Delaware corporation, as
well as any successor to such entity as provided in Article 12 herein.
"DIRECTOR" means any individual who is a member of the Board of Directors
of the Company.
"DISABILITY" shall have the meaning ascribed to such term in the
Participant's governing long-term disability plan. If no long term disability
plan is in place with respect to a Participant, then with respect to that
Participant, Disability shall have the same meaning ascribed to such term under
Section 22(e)(3) of the Code.
"EARLY RETIREMENT" means the Participant's termination of employment with
the Company and all Subsidiaries (for reasons other than Cause) on or after
attaining age 55 having completed five or more years of employment with the
Company or Subsidiaries.
"EFFECTIVE DATE" shall have the meaning ascribed to such term in Section
1.1 hereof.
"EMPLOYEE" means any employee of the Company or any Subsidiary, or any
consultant who provides services to the Company or any Subsidiary; provided,
that for purposes hereof, references to periods of employment or termination of
employment shall be deemed, in the case of a consultant, to be references to his
or her consulting arrangement with the Company or any Subsidiary.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor act thereto.
"FAIR MARKET VALUE" shall mean, as of any date, the fair market value of
the Common Stock as determined by the Committee based upon the most recent
closing sales price for Common Stock as reported by the Nasdaq National market.
"INCENTIVE STOCK OPTION" or "ISO" means an option to purchase Shares
granted under Article 6 herein and which is designated as an Incentive Stock
Option and which is intended to meet the requirements of Code Section 422.
"NONQUALIFIED STOCK OPTION" or "NQSO" means an option to purchase Shares
granted under Article 6 herein and which is not intended to meet the
requirements of Code Section 422.
"OPTION" means an Incentive Stock Option or a Nonqualified Stock Option, as
described in Article 6 herein.
"OPTION PRICE" means the price at which a Share may be purchased by a
Participant pursuant to an Option.
"PARTICIPANT" means an individual who has outstanding an Award granted
under the Plan.
"PERSON" shall have the meaning ascribed to such term in Section 3(a)(9) of
the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a group
as defined in Section 13(d) thereof.
"RETIREMENT" means the Participant's termination of employment with the
Company or its Subsidiaries (for reasons other than Cause) on or after the date
the Participant attains age 65, or, in the case of Non-Employee Directors, shall
mean the termination of his or her directorship (for reasons other than Cause)
on or after attaining age 55.
"SUBSIDIARY" means any corporation, partnership, joint venture, affiliate,
or other entity in which the Company is the direct or indirect beneficial owner
of not less than 20% of all issued and outstanding equity interests.
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ARTICLE 3.
ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered by the Board, or by the
Compensation Committee of the Board, or by any other Committee appointed by the
Board. The functions of the Committee may be exercised by the full Board.
3.2 AUTHORITY OF THE COMMITTEE. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to select Employees and
consultants who shall participate in the Plan; determine the sizes and types of
Awards; determine the terms and conditions of Awards in a manner consistent with
the Plan; construe and interpret the Plan and any agreement or instrument
entered into under the Plan; establish, amend, or waive rules and regulations
for the Plan's administration; and (subject to the provisions of Article 10
herein) amend the terms and conditions of any outstanding Award to the extent
such terms and conditions are within the discretion of the Committee as provided
in the Plan. Further, the Committee shall make all other determinations which
may be necessary or advisable for the administration of the Plan. As permitted
by law, the Committee may delegate the authority granted to it herein.
3.3 DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders and
resolutions of the Board shall be final, conclusive and binding on all persons,
including the Company, its stockholders, Employees, Participants, and their
estates and beneficiaries.
ARTICLE 4.
SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1 SHARES AVAILABLE FOR AWARDS. The aggregate number of Shares which may
be issued or used for reference purposes under this Plan or with respect to
which Awards may be granted shall not exceed 750,000 Shares (subject to
adjustment as provided in Section 4.3), which may be either authorized and
unissued Shares or Shares held in or acquired for the treasury of the Company.
Of the aggregate number of Shares, up to all of such Shares may be issued with
respect to Incentive Stock Option Awards. Upon:
(a) a cancellation, termination, expiration, forfeiture, or lapse for any
reason of any Award; or
(b) payment of an Option Price and/or payment of any taxes arising upon
exercise of an Option with previously acquired Shares or by withholding
Shares which otherwise would be acquired on exercise or issued upon such
payout,
then the number of Shares underlying any such Award which were not issued as a
result of any of the foregoing actions shall again be available for the purposes
of Awards under the Plan.
4.2 INDIVIDUAL PARTICIPANT LIMITATIONS. Subject to adjustment as provided
in Section 4.3 herein, the maximum aggregate number of Shares with respect to
which Options may be granted in any one fiscal year to a Participant shall be
100,000.
4.3 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any change in
corporate capitalization, such as a stock split, or a corporate transaction,
such as any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization (whether or
not such reorganization comes within the definition of such term in Code Section
368) or any partial or complete liquidation of the Company, such adjustment
shall be made in the number and class of Shares available for Awards, the number
and class of and/or price of Shares subject to outstanding Awards granted under
the Plan and the number of Shares set forth in Sections 4.1 and 4.2, as may be
determined to be appropriate and equitable by the Committee, in its sole
discretion, to prevent dilution or enlargement of rights; provided, however,
that the number of Shares subject to any Award shall always be a whole number.
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ARTICLE 5.
ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible to participate in this Plan include all
Employees of the Company and its Subsidiaries, as determined by the Committee.
5.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees, those to
whom Awards shall be granted and shall determine the nature and amount of each
Award.
ARTICLE 6.
STOCK OPTIONS
6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the Plan,
Options may be granted to Employees at any time and from time to time as
determined by the Committee in its sole discretion. The Committee, in its sole
discretion, shall determine the number of Shares subject to each Option,
provided that during any Fiscal Year, no Participant shall be granted Options
covering more than 100,000 Shares. The Committee may grant Incentive Stock
Options, Nonqualified Stock Options, or a combination thereof.
6.2 AWARD AGREEMENT. Each Option shall be evidenced by an Award Agreement
that shall specify the Exercise Price, the expiration date of the Option, the
number of Shares to which the Option pertains, any conditions to exercise of the
Option, and such other terms and conditions as the Committee, in its discretion,
shall determine. The Award Agreement shall specify whether the Option is
intended to be an Incentive Stock Option or Nonqualified Stock Option.
6.3 EXERCISE PRICE. Subject to the provisions of this Section 6.3, the
Exercise Price for each Option shall be determined by the Committee in its sole
discretion.
(a) NONQUALIFIED STOCK OPTIONS. In the case of a Nonqualified Stock
Option, the Exercise Price shall be not less than the Fair Market Value
of a Share on the Grant Date.
(b) INCENTIVE STOCK OPTIONS. In the case of an Incentive Stock Option, the
Exercise Price shall be not less than one hundred percent (100%) of the
Fair Market Value of a Share on the Grant Date; provided, however, that
if on the Grant Date, the Employee (together with persons whose stock
ownership is attributed to the Employee pursuant to Section 424(d) of
the Code) owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any of its
Subsidiaries, the Exercise Price shall be not less than one hundred and
ten percent (110%) of the Fair Market Value of a Share on the Grant
Date.
(c) SUBSTITUTE OPTIONS. Notwithstanding the provisions of Sections 6.3(a)
and 6.3(b), in the event that the Company or a Subsidiary consummates a
transaction described in Section 424(a) of the Code (e.g., the
acquisition of property or stock from an unrelated corporation),
persons who become Employees on account of such transaction may be
granted Options in substitution for options granted by their former
employer. If such substitute Options are granted, the Committee, in its
sole discretion and consistent with Section 424(a) of the Code, shall
determine the Exercise Price of such substitute Options.
6.4 EXPIRATION OF OPTIONS. Subject to the provisions of Section 6.8,
Options granted pursuant to this Article 6 shall expire in accordance with this
Section 6.4.
(a) EXPIRATION DATES. Each Option granted pursuant to this Article 6 shall
terminate no later than the first to occur of the following events:
(i) The date for termination of the Option set forth in the written
Award Agreement; or
(ii) The expiration of ten (10) years from the Grant Date; or
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(iii) The expiration of three (3) months from the date of the
Participant's termination of employment for a reason other than
the Participant's death, Disability, or for Cause; or
(iv) The expiration of one (1) year from the date of the Participant's
termination of employment by reason of death or Disability; or
(v) The date of termination of employment in the event of a termination
for Cause.
(b) EFFECT OF DEATH, DISABILITY, RETIREMENT AND EARLY
RETIREMENT. Notwithstanding Section 6.4(a) or 6.5:
(i) Upon the death or Disability of the Participant, each Option held
by the Participant shall become exercisable in full (without
regard to any installment or other vesting provisions thereof) and
shall be exercisable thereafter until the first to occur of the
dates set forth in Section 6.4(a)(i), (ii) or (iv).
(ii) Upon Retirement, each Option held by the Participant shall become
exercisable in full (without regard to any installment or other
vesting provisions thereof) and shall be exercisable by the
Participant until the earlier of the dates set forth in Section
6.4(a)(i), (ii) or (iv).
(iii) Upon Early Retirement, each Option held by a Participant who from
such Early Retirement retires and agrees to remain retired from
the industry (a "sunset arrangement") shall become exercisable in
full (without regard to any installment or other vesting
provisions thereof) and shall be exercisable by the Participant
until the earlier of the dates set forth in Section 6.4(a)(i),
(ii) or (iii).
(iv) In the event of the death of the Participant after his or her
termination of employment, but prior to the expiration of his or
her Options, then his or her Options shall be exercisable in full
by his or her beneficiaries until the earlier of the date such
Options would have expired had the Participant survived until such
date or the expiration of one (1) year from the date of the
Participant's termination of employment.
(c) COMMITTEE DISCRETION. Subject to the limits of Section 6.4(a) and (b)
above, the Committee, in its sole discretion shall provide in each
Award Agreement when each Option expires and becomes unexercisable. In
the event the Award Agreement does not set forth such provisions, then
the Option evidenced thereby shall expire and become unexercisable in
accordance with the provisions of Section 6.4(a) and (b) above.
(d) In the case of Options awarded to Employees in lieu of annual cash
incentive payments approved by the Board of Directors, the Committee,
in its sole discretion, shall provide in each Award Agreement when
each Option expires and becomes unexercisable, notwithstanding the
limits of Section 6.4(a) and (b) above. In the event the Award
Agreement does not set forth such provisions, then the Option
evidenced thereby shall expire and become unexercisable in accordance
with the provisions of Section 6.4(a) and (b) above.
6.5 EXERCISABILITY OF OPTIONS. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall determine in its sole discretion and prescribe in the Award
Agreement. In the event that the Award Agreement does not set forth times with
respect to the exercisability of Options, then each such Option granted to an
Employee shall become exercisable on the first anniversary of the Grant Date to
the extent of one-fourth (25%) of the Shares which may be purchased under the
Option (rounded down to the nearest whole number), and on each of the second,
third and fourth anniversary of the Grant Date to the extent of an additional
one-fourth (25%) of such Shares. After an Option is granted, the Committee, in
its sole discretion, may accelerate the exercisability of the Option.
Notwithstanding the foregoing, upon a Change in Control or an event described
ion Section 6.4(b)(i), (ii) or (iii), any and all Options granted under this
Article 6 shall become immediately exercisable in full.
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6.6 PAYMENT. Options shall be exercised by the Participant's delivery of
a written notice of exercise to the President of the Company (or its designee),
setting forth the number of Shares with respect to which the Option is to be
exercised, accompanied by full payment for the Shares.
Upon the exercise of any Option, the Exercise Price shall be payable to the
Company in full in cash or its equivalent. The Committee, in its sole
discretion, also may permit exercise (a) by tendering previously acquired Shares
having an aggregate Fair Market Value at the time of exercise equal to the total
Exercise Price, or (b) by any other means which the Committee, in its sole
discretion, determines to both provide legal consideration for the Shares, and
to be consistent with the purposes of the Plan.
As soon as practicable after receipt of a written notification of exercise
and full payment for the Shares purchased, the Company shall deliver to the
Participant (or the Participant's designated broker), Share certificates (which
may be in book entry form) representing such Shares.
6.7 RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option as it
may deem advisable, including, but not limited to, restrictions related to
applicable Federal securities laws, the requirements of any national securities
exchange or system upon which Shares are then listed or traded, or any blue sky
or state securities laws.
6.8 CERTAIN ADDITIONAL PROVISIONS FOR INCENTIVE STOCK OPTIONS.
(a) EXERCISABILITY. The aggregate Fair Market Value (determined on the
Grant Date(s)) of the Shares with respect to which Incentive Stock
Options are exercisable for the first time by any Employee during any
calendar year (under all plans of the Company and its Subsidiaries)
shall not exceed $100,000, provided, however, that in the event that
acceleration of the exercisability of an Incentive Stock Option would
cause such $100,000 limitation to be exceeded, then those Incentive
Stock Options up to such $100,000 limitation (determined in the order
such Options were granted) shall continue to be Incentive Stock Options
and the remainder shall be Nonqualified Stock Options.
(b) TERMINATION OF EMPLOYMENT. No Incentive Stock Option may be exercised
more than three (3) months after the Participant's termination of
employment with the Company and all Subsidiaries for any reason other
than Disability or death (in which case the Incentive Stock Option may
be exercised until the expiration of one (1) year from the date of
death or disability), unless (i) the Participant dies during such
three-month period, in which case the Incentive Stock Option may be
exercised by his or her beneficiaries until the expiration of one (1)
year from the date of death, or (ii) the Award Agreement or the
Committee permits later exercise, provided that if the Incentive Stock
Option is not exercised within such three (3) month or one (1) year
periods, whichever is applicable, then such Incentive Stock Option
shall become a Nonqualified Stock Option.
(c) EMPLOYEES ONLY. Incentive Stock Options may be granted only to
individuals who are Employees (other than consultants) on the Grant
Date.
(d) EXPIRATION. No Incentive Stock Option may be exercised after the
expiration of ten (10) years from the Grant Date; provided, however,
that if the Option is granted to an Employee who, together with persons
whose stock ownership is attributed to the Employee pursuant to section
424(d) of the Code, owns stock possessing more than 10% of the total
combined voting power of all classes of the stock of the Company or any
of its Subsidiaries, the Option may not be exercised after the
expiration of five (5) years from the Grant Date.
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ARTICLE 7.
BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his or her death before
he or she receives any or all of such benefit. Each such designation shall
revoke all prior designations by the same Participant, shall be in a form
prescribed by the Company, and will be effective only when filed by the
Participant in writing with the Secretary of the Company during the
Participant's lifetime. In the absence of any such designation, benefits
remaining unpaid at the Participant's death shall be paid to the Participant's
estate.
ARTICLE 8.
DEFERRALS
The Committee may permit a Participant to defer such Participant's receipt
of the delivery of Shares that would otherwise be due to such Participant upon
the exercise of any Option.
ARTICLE 9.
LIMITED TRANSFERABILITY
The Committee may, in its discretion, authorize all or a portion of the
Options (other than Incentive Stock Options) granted to a Participant to be on
terms which permit transfer by such Participant to (a) the spouse, children or
grandchildren of the Participant ("Immediate Family Members"), (b) a trust or
trusts for the exclusive benefit of such Immediate Family Members, or (c) a
partnership in which such Immediate Family Members are the only partners,
provided that (i) there may be no consideration for any such transfer, (ii) the
Award Agreement pursuant to which such Options are granted expressly provides
for transferability in a manner consistent with this Article 9, and (iii)
subsequent transfers of transferred Options shall be prohibited except those in
accordance with Article 7. Following transfer, any such Options shall continue
to be subject to the same terms and conditions as were applicable immediately
prior to transfer, provided that for purposes of Article 7 hereof the term
"Participant" shall be deemed to refer to the transferee. The provisions of
Article 6 relating to the period of exercisability and expiration of the Option
shall continue to be applied with respect to the original Participant, and the
Options shall be exercisable by the transferee only to the extent, and for the
periods, set forth in said Article 6.
ARTICLE 10.
AMENDMENT, MODIFICATION, AND TERMINATION
10.1 AMENDMENT, MODIFICATION, AND TERMINATION. The Board may at any time
and from time to time, alter, amend, suspend or terminate the Plan in whole or
in part; subject to any requirement of stockholder approval imposed by
applicable law, rule or regulation.
10.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment, or
modification of the Plan shall adversely affect in any material way any Award
previously granted under the Plan, without the written consent of the
Participant holding such Award.
ARTICLE 11.
WITHHOLDING
11.1 TAX WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes,
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domestic or foreign, required by law or regulation to be withheld with respect
to any taxable event arising as a result of the Plan.
11.2 SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options, or upon any other taxable event arising as a result of
Awards granted hereunder, Participants may elect to satisfy the withholding
requirement, in whole or in part, by having the Company withhold Shares having a
Fair Market Value on the date the tax is to be determined equal to the minimum
statutory total tax which would be imposed on the transaction. All such
elections shall be irrevocable, made in writing, signed by the Participant, and
shall be subject to any restrictions or limitations that the Committee, in its
sole discretion, deems appropriate.
ARTICLE 12.
SUCCESSORS
All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect merger,
consolidation, purchase of all or substantially all of the business and/or
assets of the Company or otherwise.
ARTICLE 13.
LEGAL CONSTRUCTION
13.1 GENDER AND NUMBER. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
13.2 SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
13.3 REQUIREMENTS OF LAW. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
13.4 GOVERNING LAW. To the extent not preempted by Federal law, the Plan,
and all agreements hereunder, shall be construed in accordance with and governed
by the laws of the State of Delaware.
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MIDWEST BANC HOLDINGS, INC.
501 WEST NORTH AVENUE
MELROSE PARK, IL 60160
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder(s) of Midwest Banc Holdings, Inc., a Delaware
corporation (the "Company"), does (do) hereby constitute and appoint Londi J.
Arquilla, Robert Figarelli and Kenneth Murphy, and each of them, the true and
lawful attorney of the undersigned with full power of substitution, to appear
and act as the proxy or proxies of the undersigned at the Annual Meeting of
Stockholders of the company to be held at Elmcrest Banquets by Biancalana, 7370
West Grand Avenue, Elmwood Park, Illinois 60707, on May 3, 2000, at 2:00 p.m.
and at any adjournment thereof, and to vote all the shares of Midwest Banc
Holdings, Inc. standing in the name of undersigned, or which the undersigned
may be entitled to vote, as fully as the undersigned might or could do if
personally present, as set forth below.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder(s). If no direction is made, this proxy
will be voted "FOR ALL" of the three nominees for director, "FOR" the amendment
of the 1996 Stock Option Plan of the Company and "FOR" the ratification of the
appointment of Crowe, Chizek and Company LLP as independent auditors of the
Company for the fiscal year ending December 31, 2000.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
(Continued and to be signed on reverse)
<PAGE> 31
MIDWEST BANC HOLDINGS, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
1. Election of three directors--for a three year term For Withhold For All
Nominees: Angelo DiPaolo, Leon Wolin and Joseph Rizza All All Except
Instructions: To withhold authority to vote for any
individual nominee, write that nominee in the space / / / / / /
provided below.
------------------------------------------------------
2. Amendment of the Company's 1996 Stock Option Plan For Against Abstain
(the "Plan") to increase the number of shares of the
Company's common stock available for awards under / / / / / /
the Plan from 500,000 to 750,000.
3. Ratification of the appointment of Crowe, Chizek and / / / / / /
Company LLP as independent auditors of the Company for
the fiscal year ending December 31, 2000.
Dated: _____________________, 2000
Signature _____________________________________________
Signature if held jointly _____________________________
Please sign exactly as name appears hereon. When shares
are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a
corporation, please sign in corporation's name by
president or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
- -------------------------------------------------------------------------------
/\ FOLD AND DETACH HERE /\
YOUR VOTE IS IMPORTANT!
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
USING THE ENCLOSED ENVELOPE.
