As filed with the Securities and Exchange Commission on September 26, 2000.
================================================================================
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________________
COMMUNITY FINANCIAL SHARES, INC.
(Exact name of registrant as specified in charter)
DELAWARE 551111 36-4387843
(State or other jurisdiction of (Primary Standard (I.R.S. Employer
incorporation or organization) Industrial Classification Identification No.)
Code Number)
357 Roosevelt Road
Glen Ellyn, Illinois 60137
(630) 545-0900
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
DONALD H. FISCHER
CHAIRMAN, PRESIDENT & CEO
COMMUNITY FINANCIAL SHARES, INC.
357 Roosevelt Road
Glen Ellyn, Illinois 60137
(630) 545-0900
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of communications to:
WARD J. LARSON
822 Saddlewood Drive
Glen Ellyn, Illinois 60137
(630) 469-1120
Approximate date of commencement of proposed sale of the securities to the
public: The date of mailing the within Proxy Statement/Prospectus to the
stockholders of Community Bank-Wheaton/Glen Ellyn.
<PAGE>
If the securities being registered on this Form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities act registration statement number of the earlier effective
registration for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
CALCULATION OF REGISTRATION FEE
----------------------------------
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of each maximum maximum
class of securities Amount offering aggregate Amount of
to be to be price per offering registration
registered registered unit(1) price (2) fee
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 677,178 $26.47 $8,962,451 $2,367.00
no par value
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(f)(2), based on the book value of the common stock
to be exchanged in the merger which was $26.47 per share as of June 30,
2000.
(2)Aggregate offering price is estimated based on book value of common stock to
be exchanged in the merger, multiplied by 338,589, or the total number of
shares to be exchanged in the merger, in accordance with Rule 457(f)(2).
-----------------------------
ii
<PAGE>
PROXY STATEMENT OF COMMUNITY BANK-WHEATON/GLEN ELLYN
AND
PROSPECTUS OF COMMUNITY FINANCIAL SHARES, INC.
357 Roosevelt Road
Glen Ellyn, Illinois 60137
Telephone: (630) 545-0900
Special Meeting of Stockholders to be held
November ___, 2000
This Proxy Statement/Prospectus is furnished in connection with the solicitation
by the Board of Directors of the Community Bank-Wheaton/Glen Ellyn of proxies to
be voted at the Special Meeting of Stockholders of the Bank on November ___,
2000 or any adjournment or adjournments thereof.
Only stockholders of record at the close of business on October ___, 2000 will
be entitled to vote. On such date there were 338,589 shares of common stock,
$8.3333333 par value, issued and outstanding. Each outstanding share of common
stock is entitled to one vote on each matter submitted to a vote. The
approximate date on which this Proxy Statement/Prospectus and form of proxy were
first sent to stockholders was October ___, 2000.
Any stockholder who executes the enclosed proxy may revoke it either orally or
in writing at any time before it has been exercised. Otherwise, all properly
executed proxies received at or before the special meeting will be voted in
accordance with the instructions contained therein. If no instructions are
given, such proxies will be voted:
1. To approve the merger as reflected in the Merger Agreement dated August 16,
2000, a copy of which is attached hereto as Exhibit A providing for the
merger of the Community Bank-Wheaton/Glen Ellyn with and under the charter
of COMMBANK-WGE, following which the business of the Bank will be conducted
under the name "Community Bank-Wheaton/Glen Ellyn" as a wholly-owned
subsidiary of Community Financial Shares, Inc.
2. In the discretion of the named proxies, upon such other matters as may
properly come before the meeting or any adjournment or adjournments
thereof.
------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
------------------------------------------------------------
The date of this Proxy Statement/Prospectus is October ___, 2000.
<PAGE>
COMMUNITY BANK-WHEATON/GLEN ELLYN
---------------------------------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To the Stockholders of Community Bank-Wheaton/Glen Ellyn:
The Special Meeting of Stockholders of the Bank will be held at the offices of
the Bank on _______________, November ___, 2000 at 7:00 P.M., local time, for
the following purposes:
1. To consider and take action upon the proposal to approve the merger as
reflected in the Merger Agreement dated August 16, 2000, a copy of which is
attached as Exhibit A to the Proxy Statement/Prospectus providing for the
merger of the Community Bank-Wheaton/Glen Ellyn with and under the charter
of COMMBANK-WGE, following which the business of the Bank will be conducted
under the name "Community Bank-Wheaton/Glen Ellyn" as a wholly-owned
subsidiary of Community Financial Shares, Inc.
2. To transact such other matters as may properly come before the meeting or
any adjournment or adjournments thereof.
The close of business on October ___, 2000 has been selected as the record date
for the determination of stockholders entitled to notice of and to vote at the
special meeting.
Under the Illinois Banking Act, any stockholder not voting in favor of the
Merger Agreement will have the right to receive payment of the fair value of his
shares as of the day prior to the date on which the vote is taken approving the
merger, if he complies with and satisfies the requirements specified in Section
29 of the Illinois Banking Act (annexed to the Proxy Statement/Prospectus as
Exhibit C), the terms of which are summarized in the Proxy Statement/Prospectus
under the heading "Information Concerning Merger Agreement--Rights of Dissenting
Stockholders." Section 29 in substance provides that such a dissenting
stockholder must file with the Bank, prior to or at the special meeting, a
written objection to the merger, and also must within 20 days after the merger
becomes effective, make a written demand for the payment of such fair value.
By order of the Board of Directors.
--------------------------------
Donald H. Fischer
Chairman, President & CEO
October ___, 2000
-----------------------------------
THE AFFIRMATIVE VOTE OF HOLDERS OF AT LEAST TWO-THIRDS OF THE OUTSTANDING COMMON
STOCK OF THE BANK IS REQUIRED FOR APPROVAL OF THE MERGER AGREEMENT AND THE
MERGER.
YOUR VOTE IS IMPORTANT. EVEN IF YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE
DATE AND SIGN THE ENCLOSED PROXY FORM AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
-----------------------------------
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page Page
---- ----
<S> <C> <C> <C>
SUMMARY ......................................... DESCRIPTION OF BANK
Introduction ............................... COMMON STOCK ...............................
Business of the Bank and Company ........... Dividend Rights ............................
The Merger Agreement ....................... Liquidation Rights .........................
Reasons for Merger Agreement ............... Voting Rights ..............................
Approvals, Regulations and DESCRIPTION OF COMPANY
Supervision ............................ COMMON STOCK ...............................
Rights of Dissenting Stockholders .......... Dividend Rights ............................
Other Stockholder Considerations ........... Liquidation Rights .........................
Federal Tax Consequences ................... Voting Rights ..............................
GENERAL VOTING INFORMATION ...................... Shareholder Approval of Certain
Voting of Proxies .......................... Business Combinations ..... ...........
Revocability of Proxies .................... Interested Director Transactions ...........
Solicitation of Proxies .................... REGULATION AND SUPERVISION .....................
PRINCIPAL OWNERS OF VOTING MANAGEMENT OF BANK AND
SECURITIES ................................. COMPANY ........................................
INFORMATION CONCERNING Executive Compensation .........................
MERGER AGREEMENT ........................... Compensation Committee Interlocks
Certain Transactions ....................... and Related Transactions ....................
General .................................... GENERAL ........................................
Reasons for Merger Agreement ............... FINANCIAL STATEMENTS ...........................
General Description of Merger LEGAL OPINIONS ........................................
Agreement .............................. FURTHER INFORMATION ........................
Vote Required .............................. Annex A--Merger Agreement (certain
Regulatory Approvals Required .............. exhibits thereto not included) .............
Rights of Dissenting Stockholders .......... Annex B--Certificate of Incorporation
Other Stockholder Considerations ........... and Bylaws of Community Financial
FEDERAL TAX CONSEQUENCES ........................ Shares, Inc. ...............................
CAPITALIZATION .................................. Annex C--Provision of Illinois Banking
DIVIDENDS ....................................... Act with Respect to
MARKET PRICE OF BANK Stockholders ...............................
COMMON STOCK ...............................
BOOK VALUE OF BANK
COMMON STOCK ...............................
INFORMATION REGARDING THE
COMMUNITY BANK-WHEATON/
GLEN ELLYN .................................
Business ...................................
Banking Premises ...........................
Litigation .................................
</TABLE>
2
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS AND
IF GIVEN OR MADE SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY COMMUNITY FINANCIAL SHARES, INC. OR COMMUNITY
BANK-WHEATON/GLEN ELLYN. THIS PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL SECURITIES OR THE SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER IN SUCH STATE. THE DELIVERY OF THIS PROXY STATEMENT/PROSPECTUS
AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
-----------------------------------
3
<PAGE>
SUMMARY
Introduction
------------
This Proxy Statement/Prospectus is furnished in connection with the solicitation
of proxies by the Board of Directors of the Community Bank-Wheaton/Glen Ellyn,
an Illinois banking association, for a special meeting of its stockholders to be
held on November ___, 2000, and any adjournment or adjournments thereof. The
purpose of the special meeting is to consider and take action upon a Merger
Agreement dated August 16, 2000 providing for the merger of Bank with and under
the charter of COMMBANK-WGE, following which the business of the Bank will be
conducted under the name of the "Community Bank-Wheaton/Glen Ellyn" as a
wholly-owned subsidiary of Community Financial Shares, Inc., a newly-organized
holding company incorporated under the laws of Delaware.
The following is a brief summary of the information contained in this Proxy
Statement/Prospectus and is qualified in its entirety by the more detailed
information contained herein, including the Exhibits.
Business of the Bank and Company
--------------------------------
The Bank opened for business as an Illinois banking association on November 21,
1994 at 357 Roosevelt Road, Glen Ellyn, Illinois. On November 21, 1998 the Bank
opened a Wheaton facility at 100 North Wheaton Avenue, Wheaton, Illinois. The
Bank conducts a general banking business through its offices in Glen Ellyn and
Wheaton, Illinois. The Company was incorporated in July 2000 as a business
corporation under the laws of the State of Delaware to serve as a bank holding
company for the Bank. The Company has engaged in no activities since its
incorporation.
The Merger Agreement
--------------------
Pursuant to the Merger Agreement, the business of the Bank will be conducted as
a wholly-owned subsidiary of the Company and the stockholders of the Bank will
receive two shares of common stock of the Company in exchange for each share of
common stock of the Bank.
Reasons for Merger Agreement
----------------------------
The Merger Agreement will provide flexibility for meeting the future financing
needs of the Bank and will permit the Company to redeem its shares if it so
desires. It will provide an opportunity for diversification by the Company into
other banking-related ventures, either directly through newly-formed
subsidiaries or by the acquisition of established companies. Pursuant to the
Illinois Bank Holding Company Act of 1957, the Company has a vehicle for
possible future acquisitions of other banks. The Company does not have any
specific plans for diversification, for future financing or for the acquisition
of other banks.
The Board of Directors of the Bank has unanimously approved the Merger
Agreement. All of the directors and executive officers have indicated that they
intend to vote to approve the Merger Agreement at the special meeting and
recommend that the stockholders of the Bank vote to approve the Merger Agreement
at the special meeting. The Bank's directors and executive officers beneficially
own, in the aggregate, 11.27% of the outstanding shares of the Bank's common
stock.
Approvals, Regulation and Supervision
-------------------------------------
The affirmative vote of holders of at least two-thirds of the outstanding shares
of the Bank's common stock is required for approval of the Merger Agreement. An
application has been filed seeking prior approval of the Board of Governors of
the Federal Reserve System for the Company to acquire the stock of the Bank, as
defined hereinafter. An application to obtain the
4
<PAGE>
approval of the merger by the FDIC and the Illinois Commissioner of Banks and
Trust Companies has been filed and should receive final approval once approval
has been received from Bank stockholders.
The Company will be regulated by the Board of Governors of the Federal Reserve
System with respect to its operations as a bank holding company including
acquisitions or establishment of banking related activities. Following the
merger, the business of the Bank will be conducted by the merged bank, all of
the stock of which will be owned by the Company. The merged bank will continue
to do business as the Community Bank-Wheaton/Glen Ellyn and will continue to be
subject to the regulations of the Illinois Commissioner, the Federal Reserve
Board and the Federal Deposit Insurance Corporation.
Rights of Dissenting Stockholders
---------------------------------
Stockholders of the Bank who dissent from the proposal have the right to be paid
the fair cash value of their shares if they comply with the procedures of
Section 29 of the Illinois Banking Act.
Other Stockholder Considerations
--------------------------------
Common stock of the Company will be similar to common stock of the Bank. Neither
holders of common stock of the Bank nor the Company will have cumulative voting
rights.
Federal Tax Consequences
------------------------
It is intended that the transaction will be treated as a tax-free reorganization
and that no gain or loss will be recognized by the stockholders of the Bank who
exchange their stock in the Bank solely for stock of the Company pursuant to the
Merger Agreement. YOU SHOULD CONSULT YOUR OWN TAX ADVISORS WITH RESPECT TO THE
UNITED STATES FEDERAL, STATE, LOCAL AND OTHER TAX CONSEQUENCES OF THE EXCHANGE
OF STOCK PURSUANT TO THE MERGER.
5
<PAGE>
GENERAL VOTING INFORMATION
Voting of Proxies
-----------------
Proxies in the form accompanying this Proxy Statement/Prospectus which are
properly executed, duly returned to the Bank and not revoked will be voted in
accordance with the instructions therein. IF NO INSTRUCTION IS GIVEN WITH
RESPECT TO THE PROPOSAL TO BE ACTED UPON, THE PROXY WILL BE VOTED IN FAVOR OF
THE APPROVAL OF THE MERGER AGREEMENT. No matters are expected to be considered
at the special meeting other than the proposal to approve the Merger Agreement,
but if any other matters are validly presented to the special meeting for
action, it is intended that the persons named in the proxy and acting thereunder
will vote in accordance with their discretion on such matters. The affirmative
vote of holders of at least two-thirds of the outstanding shares of the Bank's
common stock is required for approval.
Revocability of Proxies
-----------------------
Any proxy may be revoked at any time before it is voted. Revocation may be
effected by a subsequently dated proxy or by written notice to the Bank
addressed to Donald H. Fischer, Chairman, President and CEO, at the principal
offices of the Bank. No revocation shall be effective, however, until and unless
such notice has been received by the Bank at or prior to the special meeting.
Such revocation will not affect a vote on any matters taken prior to the receipt
of such revocation. Any stockholder of the Bank entitled to vote at the special
meeting may attend the special meeting and vote in person on any matter
presented for a vote of stockholders at such special meeting, whether or not
such holder has previously given a proxy. However, mere attendance at the
special meeting will not of itself revoke the proxy.
Solicitation of Proxies
-----------------------
The accompanying proxy is solicited by the Board of Directors of the Bank. The
cost of such solicitation will be paid by the Bank. In addition to the use of
the mails, proxies may be solicited by personal interview, telephone and
telegram by directors, officers and employees of the Bank. Such officers,
directors and employees will not be specially compensated for their solicitation
efforts.
The Board of Directors of the Bank urges each stockholder to execute and return
the enclosed Proxy as soon as possible and recommends that the shares
represented by such Proxy be voted for the Merger Agreement. This Proxy
Statement/Prospectus was mailed to the Bank stockholders on or about October
___, 2000.
BENEFICIAL OWNERSHIP OF BANK'S COMMON STOCK
As of October ___, 2000, there were no stockholders known to Company or to the
Bank to be the owners or who might be deemed to be the beneficial owners of more
than 5% of the Bank's common stock. The following table contains certain
information about each director and executive officer as of October ___, 2000.
6
<PAGE>
<TABLE>
<CAPTION>
Number of
Shares of Bank
Principal Stock Owned
Name (Age) Occupation (1) Beneficially (%) (2)
---------- ----------- ----------------
<S> <C> <C>
William F. Behrmann (57) Co-owner, McChesney & Miller, 1,249 (0.369%)
Inc., Glen Ellyn (1994)
H. David Clayton, DVM (61) Veterinarian, Glen Ellyn Animal 5,883 (1.738%)
Hospital, Glen Ellyn (1994)
Joseph S. Morrissey, DDS (61) Dentist, Dental Health of 8,147 (2.406%)
Wheaton, Wheaton (1994)
Raymond A. Dieter, MD (66) Surgeon, Glen Ellyn Clinic, S.C., 1,745 (0.515%)
Glen Ellyn (1994)
Harold Gaede (71) Owner/President, Gaede's, Inc., 1,713 (0.506%)
Wheaton (1994)
John Mulherin (58) Partner, Mulherin, Rehfeldt & 1,234 (0.364%)
Varchetto P.C., Wheaton (1995)
Donald H. Fischer (64) Chairman, President & CEO, 11,260 (3.326%)
Community Bank-Wheaton/
Glen Ellyn (1994)
E. Lawrence Young (72) Owner, Young's Appliance, 3,260 (0.963%)
Glen Ellyn
Mark S. Daniels (39) (3) Senior Vice President of 250 (0.074%)
Community Bank-Wheaton/
Glen Ellyn
Christopher P. Barton (42) (3) Senior Vice President of 3,420 (1.010%)
Community Bank-Wheaton/
Glen Ellyn
All Directors and Executive 38,161 (11.271%)
Officers as a group (10 persons)
</TABLE>
(1)The date shown in parentheses is the year originally elected to the Board.
Each director has served continuously since each respective date. All of the
directors have been in their principal occupation for at least 5 years. Mark
Daniels started with the Bank as a Senior Vice President on October 27, 1994
and Christopher Barton started with the Bank as a Senior Vice President on
October 26, 1998.
(2)The number of shares listed includes, in addition to shares owned directly,
shares held by the spouse or dependents of the person and in certain trusts.
(3)Individuals are executive officers but not directors.
7
<PAGE>
INFORMATION CONCERNING MERGER AGREEMENT
General
-------
Stockholders will consider and vote upon the Merger Agreement, pursuant to which
the business of the Bank will be conducted as a wholly-owned subsidiary of the
Company, a Delaware corporation and a one-bank holding company. The Company's
offices will have the same address and telephone number as the Bank.
Stockholders of the Bank will receive 2 shares of common stock of the Company in
exchange for each share of common stock of the Bank held by them.
The Board of Directors of the Bank has unanimously approved the Merger Agreement
and recommends a vote for the Merger Agreement.
Reasons for Merger Agreement
----------------------------
In the opinion of the Board of Directors of the Bank, the Merger Agreement under
which the Company will become the sole shareholder of the Bank, will permit
greater flexibility in responding to the following: (1) changes in banking which
are evolving at an increasing rate; (2) changes required by customers wanting
new and more services; (3) changes to meet the competition of other financial
institutions; and (4) changes brought about by legislation and government
regulation.
The bank holding company structure can be used to move into other
financially-related activities, either directly, through newly-formed
subsidiaries, or by acquiring companies already established in such activities.
At the present time the Company has no specific plans of engaging in activities
other than operating the Continuing Bank as a subsidiary. Prior to entering into
any such ventures, the Company would need to obtain approval of the Federal
Reserve Board.
The Illinois Bank Holding Company Act permits Illinois bank holding companies to
acquire additional bank subsidiaries located anywhere in the state or in other
states. If the Merger Agreement is approved, the Bank will be an integral part
of an existing bank holding company, and as such will have increased flexibility
to conduct its business under Illinois banking law. The Company has no present
plans to acquire any other banks.
The Company can redeem its shares of stock which the Bank is currently
prohibited from doing the same. The holding company form of organization will
also provide greater flexibility for meeting future financing needs than is
presently available to the Bank. The Company can borrow to provide additional
capital for the Bank. The Company has authorized 900,000 shares of common stock
(see Exhibit B for copy of the Company's Certificate of Incorporation). If the
Merger Agreement is approved, 677,178 shares of common stock will be issued in
exchange for shares in the Bank. The balance of the shares will be authorized
but unissued common stock. These shares may be issued for any corporate purpose
(including mergers) without further authorization by the stockholders of the
Company. There are at present no arrangements, plans or understandings for the
issuance of such shares.
The Merger Agreement may be amended at any time before the Effective Time (the
date set by the Illinois Commissioner of Banks after shareholder approval of the
Merger Agreement) by consent of the parties to the agreement. After the Merger
Agreement has been approved by the stockholders of the Bank, no such amendment
may affect the rights of such stockholders in a manner which is materially
adverse to them.
8
<PAGE>
General Description of the Merger Agreement
-------------------------------------------
The Company has been organized under the General Corporation Law of Delaware at
the direction of the Board of Directors of the Bank and owns 100% of
COMMBANK-WGE, the entity into which the Bank will be merged, pursuant to the
terms of the Merger Agreement, a copy of which is annexed hereto as Exhibit A.
Upon the consummation of the Merger Agreement, the stockholders of the Bank will
receive 2 shares of common stock of the Company for each outstanding share of
common stock of the Bank, and the name of the Bank will continue to be
"Community Bank-Wheaton/Glen Ellyn."
The Company has filed an application with the Federal Reserve Board to become a
one-bank holding company. An application has been filed with the Federal Deposit
Insurance Corporation and the Illinois Commissioner for approval of the proposed
merger. The Federal Deposit Insurance Corporation and the Illinois Commissioner
will not issue final approval of the merger until it has been approved by the
stockholders.
Consummation of the Merger Agreement requires the affirmative vote of holders of
two-thirds of the shares of common stock of the Bank, and the approval of the
Federal Deposit Insurance Corporation, the Illinois Commissioner and the Federal
Reserve Board, and is subject to the conditions specified in the Merger
Agreement. It also requires shareholder approval for COMMBANK-WGE, which such
approval has already been obtained from the Company, the sole shareholder.
Subject to receipt of all necessary approvals, including stockholders', the
Merger Agreement will be consummated on the effective date specified in the
Merger Agreement. After the consummation of the Merger Agreement, the business
of the Bank will then be carried on as a subsidiary of the Company with the same
directors, officers, personnel, properties and name as the Bank and such merged
institution will continue to be known as "Community Bank-Wheaton/Glen Ellyn."
The Company will incur certain administrative expenses and taxes in its
operation, which will be in addition to those of the Bank after the merger.
The Merger Agreement may be terminated, as specified in Section 11 thereof, if,
among other things: (1) necessary approvals are not obtained from the Illinois
Commissioner, the Federal Deposit Insurance Corporation and the Federal Reserve
Board; (2) written objections to the merger are filed by stockholders of the
Bank holding an aggregate number of shares of common stock which is deemed
excessive by its Board of Directors; or (3) in the opinion of the Board of
Directors of either the Bank or COMMBANK-WGE, the consummation of the merger is
inadvisable for any reason.
Upon consummation of the merger, stockholders of the Bank will become
stockholders of the Company. Outstanding certificates representing shares of
common stock of the Bank will represent twice that number of shares of common
stock of the Company. Stockholders of the Bank will be entitled to exchange
their present share certificates for new certificates evidencing shares of
common stock of the Company. Until so exchanged, the certificates for Bank
shares will represent the Company shares into which the Bank shares have been
converted. However, the Company at any time may withhold any dividends declared
upon Company common stock in respect of shares represented by unexchanged
certificates until such certificates are presented for exchange, at which time
the dividends so withheld on such shares shall be paid without interest.
However, management of the Company has no present plans to withhold dividends
and in the event that management should determine that such action has become
prudent, prior written notice and a grace period will be given.
The expenses of this entire transaction are currently estimated at $60,000. In
the event the merger is not consummated, such expenses as are incurred,
including the cost of reorganizing the Company, will be assumed by the Bank. If
the Merger Agreement is approved, the Bank, after the merger, will issue a
dividend to the Company to pay such expenses.
9
<PAGE>
Regulatory Approvals Required
------------------------------
The Company has filed an application with the Federal Reserve Board to become a
one-bank holding company. Both the Illinois Commissioner and the Federal Deposit
Insurance Corporation still need to approve the merger, but they will not act
until after required approval is secured from the stockholders of Bank.
The Company cannot become a bank holding company and the merger cannot be
consummated until at least 30 days following FDIC approval and then only on a
date specified by the Illinois Commissioner. Management currently has no reason
to believe that these approvals will not be granted providing the necessary
stockholder approval is secured at the special meeting on November _____, 2000.
Rights of Dissenting Stockholders
---------------------------------
IF A STOCKHOLDER OF THE BANK WHO OBJECTS TO THE MERGER AND DESIRES TO PERFECT
THE RIGHT OF DISSENT, IS NOT TIMELY IN TAKING ANY OF THE FOLLOWING STEPS, THE
SHARES OWNED BY SUCH STOCKHOLDER WILL BE CONVERTED AS OF THE EFFECTIVE TIME OF
THE MERGER INTO COMPANY COMMON STOCK IN ACCORDANCE WITH THE TERMS OF THE MERGER
AGREEMENT.
The Illinois Banking Act provides that a stockholder of the Bank who dissents to
the merger may receive in cash the fair value of his shares as of the day prior
to the day on which the vote is taken approving the merger (November _____,
2000, assuming the merger is approved at the special meeting on November _____,
2000). In order to claim this right the dissenting stockholder must:
1. File with the Bank at or prior to the special meeting a written objection
to the merger;
2. Not vote his shares in favor of the merger; and
3. Within 20 days after the merger becomes effective, make written demand on
the Bank after the merger for such payment.
Any stockholder failing to make demand within the 20-day period is conclusively
presumed to have consented to the merger and shall be bound by the terms
thereof. Fair value of a dissenting stockholder's share is to be determined by
agreement between the dissenting stockholder and the Bank within 30 days after
the date on which the merger is effected. If no such agreement is reached, then
fair value is to be determined by a court in a suit instituted by the dissenting
stockholder within 60 days after the expiration of the initial 30-day period.
This summary of the rights of dissenting stockholders is qualified in its
entirety by the provisions of the statute, which are included as Exhibit C
hereto.
Any stockholder of the Bank who files with the Bank prior to or at the special
meeting on November _____, 2000, a written objection to the merger and who does
not vote in favor thereof at such meeting, will be notified of the effective
date, addressed to such stockholder at his address as it appears upon the
records of the Bank. A vote against the merger will not be treated as a written
objection thereto.
10
<PAGE>
Other Stockholder Considerations
--------------------------------
Directors, officers, employees and agents of the Company or persons serving at
the request of the Company as directors, officers, employees or agents of
another corporation or organization are entitled to indemnification as expressly
permitted by Delaware law. Generally Delaware law provides for indemnification
against expenses or losses when the person acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
Company. In addition, Illinois law provides for similar indemnification for
directors, officers, employees or agents of the Bank. Neither the Bank nor the
Company knows of any pending or threatened litigation which might result in
claims for indemnification against the Bank, after the merger or the Company.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
FEDERAL TAX CONSEQUENCES
The reorganization is intended to be tax-free to the Bank, the Company and Bank
stockholders (other than those dissenting stockholders who receive cash
payments). The following discussion does not address all of the federal income
tax consequences that may be relevant to Bank stockholders in light of such
holders' particular circumstances or to holders subject to special rule such as
foreign persons, financial institutions, tax-exempt organizations or insurance
companies. There may be other federal, state, local or foreign considerations
applicable to the circumstances of a particular stockholder. Each stockholder
should consult his or her own tax adviser to determine the particular tax
consequences of the merger to him or her.
The Company has received an opinion from its special tax counsel that the
federal income tax consequences of the reorganization will be as follows:
1. The merger of the Bank with COMMBANK-WGE will constitute a tax-free
reorganization within the meaning of Section 368(a)(1) of the Internal
Revenue Code of 1986, as amended (the "Code"). The Company and Bank will
each be a "party to the reorganization within the meaning of Section 368(b)
of the Code.
2. No gain or loss will be recognized by the Bank upon the transfer of its
assets to, and the assumption of its liabilities by, COMMBANK-WGE in the
merger. No gain or loss will be recognized by the Company upon its
acquisition of shares of Bank common stock in the merger;
3. No gain or loss will be recognized to the stockholders of the Bank upon
receipt of shares of common stock of the Company solely in exchange for
common stock of the Bank;
4. The tax basis of the shares of common stock of the Company to be received
by the stockholders of the Bank in exchange for common stock of the Bank
will be the same as the tax basis of the shares of common stock of the Bank
exchanged therefor; and
5. The holding period of the shares of common stock of the Company received by
stockholders of the Bank in the merger will include the holding period of
the shares of common stock of the Bank exchanged therefor, provided that
such Bank stock isheld as a capital asset in the hands of the Bank
shareholder on the date of the consummation of the merger.
11
<PAGE>
Stockholders who perfect their dissenters' rights and receive cash from the Bank
for the value of their shares of the Bank in lieu of common stock of the
Company, will recognize gain or loss upon receipt of such cash. Such gain or
loss may be long- or short-term, depending on the facts or circumstances.
Stockholders should consult their own tax advisors with respect to the tax
effects, if any, of the merger and the exchange of shares under federal and
state laws.
DIVIDENDS
The Bank has paid cash dividends during the last three calendar years. Such
dividends were in the amount of $.20, $.15 and $.20 per share of Bank common
stock in 1997, 1998 and 1999, respectively. Dividends per share have been
adjusted for a 15% stock dividend paid January 1998. As in the past with the
Bank, Company's future cash dividends will depend on its earnings, general
economic conditions, financial condition of the business and other factors as
may be appropriate in determining dividend policy.
CAPITALIZATION
Set forth below, on a pooling of interests basis, are the pro forma
capitalization of the Bank, and the consolidated capitalization of the Company
at June 30, 2000 and such capitalization as adjusted to give effect to the
consummation of the merger.
<TABLE>
<CAPTION>
June 30, 2000 As Adjusted
------------- ------------
<S> <C> <C>
BANK:
Capital Debenture: On May 8, 2000 Community
Bank issued a $1,000,000 Five-Year Term
Subordinate Debenture to a commercial bank
for the purpoes of additional regulatory capital.
Stockholders' equity:
Common stock, par value $8.3333333
Authorized 460,000 Shs. --
Issued and outstanding 338,589 Shs. --
==========================================
Par value of shares issued and
outstanding $2,822,000 $ --
Surplus 5,223,000 --
Undivided profits 1,595,000 --
==========================================
Total stockholders' equity $9,640,000 $ --
==========================================
12
<PAGE>
<CAPTION>
CAPITALIZATION (Continued)
June 30, 2000 As Adjusted
-------------- -------------
<S> <C> <C>
COMMBANK-WGE (pre-merger):
Stockholders' equity:
Common stock par value $8.3333333
Authorized -- 460,000 Shs.
Issued and outstanding -- 338,589 Shs.
==========================================
Par value of shares issued and
outstanding $ -- $2,822,000
Surplus $ -- 5,223,000
Undivided profits $ -- 1,595,000
==========================================
Total stockholders' equity $ -- $9,640,000
==========================================
COMPANY:
Stockholders' equity:
Common stock, no par value
Authorized 900,000 Shs. 900,000 Shs.
Issued and outstanding -- 677,178 Shs.
Value of shares issued and
outstanding $ -- $2,822,000
Capital surplus $ -- 5,223,000
Undivided profits $ -- 1,595,000
==========================================
Total stockholders' equity $ -- $9,640,000
==========================================
</TABLE>
NOTES TO CAPITALIZATION: Except for the dividend declared to pay off the $60,000
in organization expenses, the stockholders' equity accounts in the COMMBANK-WGE
will be the same as in the Bank immediately prior to the merger.
13
<PAGE>
MARKET PRICE OF BANK'S COMMON STOCK
There is no recognized market for the Bank's common stock. Bank management is
aware of three sales transactions during the period December 31, 1999 to July
31, 2000 aggregating 764 shares. The sales prices in these transactions ranged
from $42.00 to $50.00 per share. It is not anticipated that there will be a
market for the common stock of the Company. There were 472 holders of record of
the Bank's common stock as of October ___, 2000.
BOOK VALUE OF BANK'S COMMON STOCK
The table below shows the per share book value of the sum of the par value of
the Bank's common stock, capital surplus and undivided profits, as adjusted for
a 15% stock dividend paid in 1998.
December 31, 1996 ...............................$18.76
December 31, 1997 ...............................$21.84
December 31, 1998 ...............................$21.78
December 31, 1999 ...............................$25.77
The per share book value of the Company would be approximately the same as above
at the dates indicated if the merger provided for in the Merger Agreement had
been effected prior to said dates.
INFORMATION REGARDING COMMUNITY BANK-WHEATON/GLEN ELLYN
Business
--------
The Bank opened for business on November 21, 1994 at 357 Roosevelt Road in Glen
Ellyn, Illinois. On November 21, 1998, pursuant to an amendment to the Bank's
charter, it opened for business at 100 North Wheaton Avenue in Wheaton,
Illinois. The Bank has enjoyed very successful operations since it opened for
business in 1994. On July 31, 2000 the Bank had 34 full-time employees and 19
part-time employees. At June 30, 2000 the Bank had total assets of $149,742,000,
deposits of $122,669,000 and stockholder's equity of $9,640,000.
The Bank, located in a suburban residential area, is a full service commercial
bank providing services to individuals, businesses and local governmental units
in and around Wheaton and Glen Ellyn. The Bank also actively engages in all
other areas of commercial banking including demand, savings and time deposits;
real estate, commercial, revolving and consumer loans; collections; exchange and
safe deposit facilities and other services tailored for individual customers.
Active competition exists in all activities in which the Bank is engaged, not
only with other banks, but also with savings and loan associations, credit
unions, finance companies, personal loan companies and others serving the
surrounding area.
14
<PAGE>
Banking Premises
----------------
The Bank owns the land, building and attached drive-up facility located at 357
Roosevelt Road, Glen Ellyn, Illinois 60137. It also owns the land, building and
attached drive-up facility located at 100 North Wheaton Avenue, Wheaton,
Illinois 60187.
There are no material pending legal proceedings, other than ordinary routine
litigation incidental to the business of the Bank, to which the Bank is a party
or to which any of its property is subject. Neither Company nor the Interim Bank
are involved in any litigation.
DESCRIPTION OF COMMON STOCK OF THE BANK
Under the charter of the Bank currently in effect, the total number of shares of
stock which Bank has authority to issue is 460,000 shares of common stock, par
value $8.3333333.
Dividend Rights
---------------
The holders of Bank's common stock have the right to receive, pro rata, such
dividends as are declared by the Board of Directors out of funds legally
available therefor.
Liquidation Rights
------------------
In the event of liquidation of the Bank, the stockholders are entitled to
receive, pro rata, all the remaining assets available for distribution to
stockholders.
Voting Rights
-------------
In all elections of directors and all other matters coming to the stockholders,
each outstanding share shall be entitled to one vote on each matter submitted to
a vote at a meeting of stockholders. Voting on all matters is non-cumulative.
The affirmative vote of two-thirds of all shares of Bank common stock is
required for (1) the amendment, alteration, change or repeal of the charter; (2)
the adoption of a merger or consolidation with or into another corporation; (3)
the sale, lease or other exchange of all or substantially all the assets of the
Bank; or (4) the dissolution of the Bank. Stockholders have or will have
appraisal rights in connection with a merger or consolidation.
DESCRIPTION OF COMMON STOCK OF THE COMPANY
Under the Certificate of Incorporation of Company currently in effect, the total
number of shares of stock which Company has authority to issue is 900,000 shares
of stock with no par value per share. The Certificate of Incorporation also
eliminates the personal liability of a director to the Company or its
stockholders for monetary damages for breach of fiduciary duty, but it does not
cover the liability of a director for breaching his duty of loyalty, failing to
act in good faith, engaging in intentional misconduct or knowingly violating a
law, paying a dividend or approving a stock repurchase which was illegal or
obtaining an improper personal benefit.
15
<PAGE>
Dividend Rights
---------------
The holders of Company stock have the right to receive, pro rata, such dividends
as are declared by the Board of Directors out of funds legally available
therefor.
Liquidation Rights
------------------
In the event of liquidation of Company the holders of Company stock shall be
entitled to receive, pro rata, all the remaining assets available for
distribution to stockholders.
Voting Rights
-------------
Each outstanding share of Company stock shall entitle the holder thereof one
vote on all matters which are to be voted on, including the election of
directors. Voting on all matters is non-cumulative. A majority of the shares
entitled to vote, present in person or represented by proxy, shall constitute a
quorum at a meeting of stockholders. The affirmative vote of a majority of all
shares of Company entitled to vote permits (1) the amendment, alteration, change
or repeal of the Certificate of Incorporation; (2) the adoption of a merger or
consolidation with or into another corporation; (3) the sale, lease or other
exchange of all or substantially all the assets of Company; or (4) the
dissolution of Company. Stockholders have or will have appraisal rights in
connection with a merger or consolidation, but will not have appraisal rights in
the event of a sale of all or substantially all of the Company assets.
Shareholder Approval of Certain Business Combinations
------------------------------------------------------
In the last several years, a number of states have adopted special laws designed
to make certain kinds of "unfriendly" corporate takeovers, or other transactions
involving a corporation and one or more of its significant shareholders, more
difficult. Under Section 203 of the Delaware General Corporation Law, certain
"business combinations" by Delaware corporations with "interested shareholders"
are subject to a 3-year moratorium unless specified conditions are met.
For purposes of Section 203, the term "business combination" is defined broadly
to include mergers with or caused by the interested shareholder; sales or other
dispositions to the interested shareholder (except proportionately with the
corporation's other shareholders) of assets of the corporation or a subsidiary
equal to ten percent or more of the aggregate market value of the corporation's
consolidated asset or its outstanding stock; the issuance or transfer by the
corporation or a subsidiary of stock of the corporation or such subsidiary to
the interested shareholder (with certain exceptions); or receipt by the
interested shareholder (except proportionately as a shareholder), directly or
indirectly, of any loans, advances, guarantees, pledges or other financial
benefits provided by or through the corporation or a subsidiary.
The 3-year moratorium imposed on business combinations by Section 203 does not
apply if:
1. Prior to the date on which such shareholder becomes an interested
shareholder, the Board of Directors approves either the business
combination or the transaction which resulted in the person becoming an
interested shareholder;
16
<PAGE>
2. The interested shareholder owns 85% of the corporation's voting stock upon
consummation of the transaction which made him or her an interested
shareholder (excluding from the 85% calculation shares owned by directors
who are also officers of the target corporation and shares held by employee
stock plans which do not permit employees to decide confidentially whether
to accept a tender or exchange offer); or
3. On or after the date such person becomes an interested shareholder, the
board approves the business combination and it is also approved at a
shareholder meeting by 66-2/3% of the voting stock not owned by the
interested shareholder.
Interested Director Transactions
--------------------------------
Under Delaware law, certain contracts or transactions in which one or more of a
corporation's directors has an interest are not void or voidable because of such
interest provided that certain conditions, such as obtaining the required
approval and fulfilling the requirements of good faith and full disclosure, are
met. Under Delaware law, either
1. The stockholders or the disinterested members of the Board of Directors
must approve any such contract or transaction after full disclosure of the
material facts, or
2. The contract or transaction must have been "fair" as to the corporation at
the time it was approved.
REGULATION AND SUPERVISION
The operations of the Bank are subject to federal and state statutes and
regulations applicable to banks chartered under the banking laws of the State of
Illinois and to members of the Federal Deposit Insurance Corporation, and to
regulation by the Illinois Commissioner.
The Bank is a member of the Federal Deposit Insurance Corporation, and its
deposits are insured as provided by law. The Federal Deposit Insurance
Corporation regularly examines such areas as reserves, loans, investments,
management practices and other aspects of the Bank's operations. These
examinations are designed for the protection of the Bank's depositors and not
for its stockholders. In addition to these regular examinations, the Bank must
furnish periodic call reports to the regulatory authorities containing a full
and accurate statement of its affairs.
Federal and state banking laws and regulations govern, among other things, the
scope of a bank's business, the investments a bank may make, the reserves
against deposits a bank must maintain, loans a bank makes and collateral it
takes, the activities of a bank with respect to mergers and consolidations and
the establishment of branches. Banks chartered by the State of Illinois are
subject to provisions of the Illinois Banking Act which, among other things,
provide restrictions on the payment of dividends.
"Company" is a legal entity separate and distinct from the Bank. There are
various legal limitations which would limit the ability of the Bank to finance,
pay dividends or otherwise to supply funds to the Company. Under the provisions
of the Illinois Banking Act, dividends may not be declared by state banks (1)
except out of the Bank's net profits and (2) unless the Bank has transferred to
surplus at least one-tenth of its net profits since the date of the declaration
of the last preceding dividend, until the amount of its surplus is at least
equal to its capital. Net profits under the Illinois Banking Act must be
adjusted for losses and bad debts unless such debts are secured and in the
process of collection.
17
<PAGE>
A subsidiary bank of a bank holding company (which the Bank would become upon
consummation of the merger) is subject to certain restrictions imposed by the
Federal Reserve Act on any extensions of credit to the bank holding company or
any of its other subsidiaries, on investments in the stock or other securities
of the bank holding company or any of its subsidiaries, and on taking such stock
or securities as collateral for loans. Legislation and Federal Reserve Board
regulations also place certain limitations and reporting requirements on
extensions of credit by a bank to principal shareholders of its parent holding
company, among others, and to "related interests" of such principal
shareholders. In addition, such legislation and regulations may affect the terms
upon which any person becoming a principal shareholder of a holding company may
obtain credit from banks with which the subsidiary bank maintains a
correspondent relationship.
Furthermore, federal legislation prohibits acquisition of "control" of a bank or
bank holding company without prior notice to certain federal bank regulators.
"Control" is defined in certain cases as acquisition of as little as 10% of the
outstanding shares of the bank or bank holding company. From time to time,
various types of federal and state legislation have been proposed that could
result in additional regulation of, and restrictions on, the business of the
Bank. It cannot be predicted whether any such legislation will be adopted or how
such legislation would affect the business of the Bank.
The earnings of commercial banks and bank holding companies are affected not
only by general economic conditions but also by the policies of various
governmental regulatory authorities. In particular, the Federal Reserve System
regulates money and credit conditions and influences interest rates in order to
affect general economic conditions, primarily through open-market operations in
U.S. Government securities, varying the discount rate on member and non-member
bank borrowings, setting reserve requirements against bank deposits and
regulating interest rates payable by banks on certain time and savings deposits.
These policies and acts have a significant influence on overall growth and
distribution of bank loans, investments and deposits and affect interest rates
charged on loans and earned on investments or paid for time and savings
deposits. Federal Reserve System monetary policies have had a significant effect
on the operating results of commercial banks in the past and this is expected to
continue in the future. The general effect, if any, of such policies upon the
future business and earnings of Company and the Continuing Bank cannot
accurately be predicted.
The Company anticipates that it will become a bank holding company within the
meaning of the Bank Holding Company act of 1956, as amended (the "Act"). As a
bank holding company, the Company will be required to file with the Federal
Reserve Board an annual report and such additional information as the Board of
Governors may require pursuant to the Act. The Federal Reserve Board may also
make examinations of the Company and its subsidiaries.
The Act limits the activities which may be engaged in by the Company and its
subsidiaries to certain specified activities, including those activities which
the Federal Reserve Board may find, by order or regulation, to be so closely
related to banking or managing or controlling banks as to be a proper incident
thereto. Under current regulations, bank holding companies and their
subsidiaries are permitted to engage in such banking-related business ventures
as consumer finance, equipment leasing, computer service bureau and software
operations, data processing and services transmission, mortgage banking and
brokerage, sale and leaseback and other forms of real estate financing and
making investments in corporations or projects designed primarily to promote
community welfare.
18
<PAGE>
The Company is required to obtain the prior approval of the Federal Reserve
Board before it could acquire either ownership or control, directly or
indirectly, of more than 5% of the voting shares, or substantially all the
assets, of any bank. The Company has no present plans to acquire any other
banks.
After consummation of the merger, the Company periodically will file reports
with the Securities and Exchange Commission pursuant to the Securities Exchange
Act of 1933. Company stock received and beneficially owned by those stockholders
of the Bank who are deemed to be "affiliates" will be restricted with respect to
resale as provided for by Rule 145 promulgated under the 1933 Act and may not be
publicly reoffered except in accordance with applicable federal securities laws.
The term "affiliate" means each person who controls, or who is a member of a
group that controls, or who is under common control with the Bank, and for the
purposes hereof should be deemed to include all executive officer and directors
of the Bank. Such shares may be traded freely by those stockholders not deemed
to be "affiliates" of the Bank as that term is defined under the 1933 Act. The
stock of Company (unlike the common stock of the Bank) will be subject to the
registration requirements of the 1933 Act.
From time to time, various legislation in the United States and Congress has
been proposed which could result in additional regulation of, and restrictions
on, the business of the Continuing Bank. It cannot be predicted whether any such
legislation will be adopted or how such legislation would affect the business of
the Continuing Bank.
The foregoing references to applicable statutes, regulations and pending
legislation and litigation are brief summaries thereof which do not purport to
be complete and which are qualified in their entirety by reference to such
statutes, regulations, proposed legislation and pending litigation.
MANAGEMENT OF BANK AND COMPANY
Of the eight directors of the Bank immediately prior to the merger, all will
continue to be, upon consummation of the merger, directors of the Bank and the
Company. Each director of the Company and the Bank will serve until the
respective 2001 annual meeting of stockholders and until the election and
qualification of his or her respective successor. After consummation of the
merger, directors of the Bank will be elected by the Company, sole stockholder
of the Bank after the merger. The principal officers of the Bank will also be
officers of the Company.
From January 1 through July 31, 2000 the Board of Directors of the Bank held
nine meetings. All directors attended at least 75% of the meetings of the board
and the committees on which they served during this period.
The Board of Directors of the Bank has established the following committees,
among others, to assist in the discharge of its responsibilities.
The Executive Committee operates on behalf of the board between regular
meetings. Current members are Donald H. Fischer, E. Lawrence Young,
Raymond A. Dieter and H. David Clayton.
The Audit Committee approves the internal programs, oversees accounting systems,
meets with independent accountants and reviews all audit reports. Current
members of this committee are Joseph S. Morrissey, Harold W. Gaede,
William F. Behrmann and John M. Mulherin.
19
<PAGE>
The Compensation Committee reviews officer performance and recommends all
officer salaries to the board. Current members are John M. Mulherin,
Joseph S. Morrissey, E. Lawrence Young and Donald H. Fischer.
The Bank's Nominating Committee consists of John M. Mulherin,
Joseph S. Morrissey, E. Lawrence Young and Donald H. Fischer.
Directors are currently paid fees at the rate of $450 per board meeting
attended.
Executive Compensation
The following table sets forth the total cash compensation paid by the Bank
during the years 1997, 1998 and 1999 to its Chairman and Chief Executive
Officer. No other executive officer of the Bank made at least $100,000 in salary
and bonuses for the year 1999.
<TABLE>
<CAPTION>
Summary Compensation Table
--------------------------
Annual Compensation
-------------------
Securities
Name and Underlying All Other
Principal Options/ Compen-
Position Year Salary ($) Bonus ($) SARs sation ($)
-------- ---- ---------- --------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Donald H. Fischer 1999 148,370 30,000 300 6,270(1)
Chairman, President 1998 135,600 23,800 200 5,250(2)
and CEO 1997 134,200 20,110 200 7,170(3)
</TABLE>
<TABLE>
<CAPTION>
Opinion/SAR Grants in Last Fiscal Year
--------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term
---------------------------------------------------------------------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g)
Number of
Securities
Underlying % of Total
Options/ Options/SARs Exercise
SARs Granted to or Base
Granted Employees in Price Expiration
Name (#) Fiscal Year ($/Sh) Date 5% ($) 10% (%)
---- ---------- ------------- --------- ---------- ------ -------
Donald H. Fischer, 300 16.48% $23.33 2004 12,144 17,433
CEO
(1)life insurance--708, health insurance--5,562
(2)life insurance--1,151, health insurance--4,099
(3)life insurance--2,481, health insurance--4,689
</TABLE>
20
<PAGE>
Compensation Committee Interlocks and Related Transactions
----------------------------------------------------------
Directors and principal officers of the Bank and their associates were customers
of, and have had transactions with, the Bank from time to time in the ordinary
course of business during 1997, 1998 and 1999; additional transactions may be
expected to take place in the future.
All outstanding loans, commitments to loan, transactions in repurchase
agreements and certificates of deposits, and depository relationships in such
ordinary course of business, were on substantially the same terms, including
interest rates, collateral and repayment terms, as those prevailing at the time
for transactions with other persons and, in the opinion of management of the
Bank, did not involve more than the normal risk of collectibility or present
other unfavorable features. As of June 30, 2000, various directors and executive
officers of the Bank were indebted to the Bank in the amount of approximately
$844,000. This figure represents 6.1% of the Bank's outstanding loans as of this
date.
John Mulherin is a partner in the firm of Mulherin, Rehfeldt and Varchetto,
which during 1997, 1998 and 1999 rendered certain legal services to the Bank. E.
Lawrence Young is president of Young's Appliance, which has sold appliances to
the Bank during 1997, 1998 and 1999. Payments to the law firm and Young's
Appliances did not exceed 5% of their respective gross revenues for the 1999
fiscal year.
GENERAL
The Board of Directors recommends that stockholders vote in favor of the merger
proposal and therefore urges that the enclosed proxy be returned promptly. The
affirmative vote of holders of at least two-thirds of the outstanding common
stock of the Bank is required for approval of the Merger Agreement. Your signing
and returning the enclosed proxy will not affect your right to revoke such proxy
or to vote in person should you decide to attend the special meeting. As of the
date of this Proxy Statement/Prospectus management knows of no matters to be
presented other than the above proposal. If other matters properly come before
the meeting, it is intended that the proxies be voted as the proxy designees
should determine.
The cost of the solicitation of proxies will be borne by the Bank. In addition
to solicitation by mail, officers and other regular employees of the Bank
without additional compensation may solicit proxies personally or by telephone
or telegraph.
The board would be pleased if you would make every effort to personally attend
the special meeting.
21
<PAGE>
FINANCIAL STATEMENTS
The Bank's financial statements for the year ended December 31, 1999 were mailed
to the Bank's stockholders on May 22, 2000. Such financial statements are not
deemed material to the exercise of prudent judgment in regard to any matter to
be acted upon at the special meeting and therefore are not incorporated in the
Proxy Statement/Prospectus by reference. Additional copies of such financial
statements are available from the Bank by written request to the Bank's
president. If the COMMBANK-WGE and the Company had been organized prior to
January 1, 1998, and the merger had been consummated and Company had owned all
the shares of the Bank since that date, except with respect to the expenses of
the transaction, the results of the operations of the Bank and Company would
have been the same in all material respects to those reported by the Bank for
the years ended December 31, 1998 and 1999.
LEGAL OPINIONS
The legality of the Company's common stock to be issued upon consummation of the
merger will be passed upon by Ward J. Larson, special counsel for the Bank and
the Company.
SHAREHOLDER PROPOSALS
If the merger is not consummated, and if a shareholder wishes to have a proposal
eligible for inclusion in the proxy materials for next year's Annual Meeting of
Shareholders of Community Bank-Wheaton/Glen Ellyn, the proposal must be in
compliance with Rule 14a-8 under the Securities Exchange Act of 1934, and
received at the Bank's offices not later than December 22, 2000. As to any
proposal that a shareholder intends to present to shareholders without inclusion
in the Bank's proxy statement for the 2001 Annual Meeting, the proxies named in
management's proxy for that meeting will be entitled to exercise their
discretionary authority on that proposal unless the Bank receives notice of the
matter to be proposed not later than March 8, 2001. Even if proper notice is
received on or prior to March 8, 2001, the proxies named in management's proxy
for that meeting may nevertheless exercise their discretionary authority with
respect to such matter by advising shareholders of such proposal and how they
intend to exercise their discretion to vote on such matter, unless the
shareholder making the proposal solicits proxies with respect to the proposal to
the extent required by Rule 14a-4(c)(2) under the Exchange Act.
22
<PAGE>
FURTHER INFORMATION
The Company has filed a Registration Statement with the Securities and Exchange
Commission relating to the stock of the Company offered in connection with the
proposed Merger described herein. This Proxy Statement/Prospectus does not
contain all the information set forth in the Registration Statement. Reference
is hereby made to the Registration Statement for further information about the
Company and its securities. The Registration Statement may be inspected without
charge by anyone at public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Washington, D.C., and copies of all or any part of it
may be obtained from the Commission upon payment of fees prescribed by the
Commission. Also, the Registration Statement is available on the Commission's
web site at http://www.sec.gov.
By the order of the Board of Directors,
/s/ Donald H. Fischer
--------------------------------------------
Donald H. Fischer
Chairman, President and CEO
23
<PAGE>
ANNEX A
MERGER AGREEMENT
MERGER AGREEMENT, dated August 16, 2000 between Community Bank-Wheaton/Glen
Ellyn (hereinafter called "Existing Bank") and Commbank-wge (hereinafter called
"Interim Bank" or, where appropriate, the "Continuing Bank"), and joined in by
Community Financial Shares, Inc. (hereinafter called the "Corporation").
WHEREAS:
(a) The Existing Bank and the Interim Bank are Illinois banking
associations with the principal office and place of business of each being
located at 357 Roosevelt Road, Glen Ellyn, Illinois 60137.
(b) As of June 30, 2000, the Existing Bank had common stock outstanding
of $2,822,000 divided into 338,589 shares of common stock, $8.3333333 per share,
surplus of $5,223,000 and undivided profits of $1,595,000.
(c) Under Sections 13.5 and 22 of the Illinois Banking Act, it is no
longer necessary to capitalize the Interim Bank since it will not engage in the
general banking business or any part thereof, unless and until the Interim Bank
becomes the Continuing Bank in a merger. As of the effective date of the merger
the Interim Bank will be completely owned by the Corporation.
(d) The Corporation is a corporation organized under the laws of the
State of Delaware with its registered office in the City of Wilmington, County
of New Castle, State of Delaware. As of the effective date of the merger, the
Corporation will have authorized common stock consisting of 900,000 shares of
common stock no par value per share.
(e) Attached hereto as Schedule I, and made a part hereof, is a list of
the stockholders of the Existing Bank and of the Interim Bank as of the date of
this Merger Agreement.
(f) A majority of the Directors of the Existing Bank and the five
incorporators of the Interim Bank have approved this Merger Agreement and
authorized its execution, and a majority of the Directors of the Corporation
have approved this Merger Agreement and the undertakings of the Corporation
herein set forth and have authorized the Corporation, by its execution hereof,
to join in and be bound hereby. When reference is made to the Board of Directors
of the Interim Bank, this shall mean the incorporators.
(g) For Federal income tax purposes, it is intended that the merger
shall qualify as a reorganization under the provisions of Section 368 of the
Internal Revenue Code of 1986, as amended (hereinafter referred to as the
"Code").
IN CONSIDERATION OF THE PREMISES, the Existing Bank and the Interim Bank, joined
in by the Corporation, hereby make this, Merger Agreement, and prescribe the
terms and conditions of the merger of the Existing Bank into the Interim Bank
and the method of carrying it into effect as follows:
SECTION 1. Subject to the terms and conditions hereof, the Existing
Bank shall be merged into, and under the charter of, the Interim Bank pursuant
to the provisions of, and with the effect provided in, the Illinois Banking Act,
and the Interim Bank shall be the Continuing Bank.
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<PAGE>
SECTION 2. From and after the time (hereinafter called the "Effective
Time") at which the merger becomes effective:
(a) The name of the Interim Bank (hereinafter called
the "Continuing Bank" whenever reference is made to it: as of the
Effective Time of the merger or thereafter) shall be the same as the
name of the Existing Bank, namely, Community Bank-Wheaton/Glen Ellyn,
and the office and place of business of the Continuing Bank shall be
that of the Existing Bank.
(b) The charter of the Continuing Bank shall be deemed
to be and is hereby amended so that as of such Effective Time the
amount, and number of shares, of common stock of the Continuing Bank,
the surplus and undivided profits shall be equal to the respective
amounts of such accounts for Existing Bank immediately prior to the
Effective Time of the merger (see Exhibit I).
SECTION 3. As of the Effective Time, the corporate existence of the
Existing Bank and the Interim Bank shall be merged into and continued in the
Continuing Bank, and the Continuing Bank shall be deemed to be the same business
and corporate entity as the Existing Bank and the Interim Bank with all the
property, rights, powers, duties and obligations of the Existing Bank and the
Interim Bank. The Continuing Bank shall be liable for all liabilities of the
Existing Bank and the Interim Bank and all rights, franchises and interests of
the Existing Bank and the Interim Bank, respectively, in and to every species of
property (real, personal and mixed) and choses in action shall be deemed to be
transferred to and vested in the Continuing Bank without any deed or other
transfer, and the Continuing Bank, without any order or other action on the part
of any court or otherwise, shall hold and enjoy the same and all rights of
property, franchises and interests, including appointments, designations and
nominations, and all other rights and interests as trustee, executor,
administrator, registrar or transfer agent of stocks and bonds, guardian,
conservator, assignee, received and in every other fiduciary capacity, in the
same manner and to the same extent as was held or enjoyed by the Existing Bank
and the Interim Bank, respectively, at the Effective Time.
SECTION 4. As of the Effective Time:
(a) Each share of common stock of the Existing Bank
which is issued and outstanding immediately prior to the Effective
Time, shall ipso facto and without any action on the part of the holder
thereof become and be converted into two (2) shares of common stock of
the Corporation, and outstanding certificate(s) (hereinafter called the
"Old Certificate(s)") representing shares of common stock of the
Existing Bank shall thereafter represent shares of common stock of the
Corporation. All shares of common stock of the Corporation, into which
common stock of the Existing Bank are converted, as above provided,
shall be fully paid and nonassessable.
(b) Each holder of shares of common stock of the
Existing Bank which shall have been so converted into common stock of
the Corporation, upon surrender of such Old Certificate(s) in proper
from to the Continuing Bank for cancellation, shall be entitled to
receive, as evidence of the shares of common stock so converted, stock
certificate(s) (hereinafter called "New Certificate(s)") bearing the
name of the Corporation as issuer, for the number of shares of the
Corporation represented by such Old Certificate(s) when surrendered.
Each share of common stock of Existing Bank shall be converted into two
(2) shares of common stock of Corporation. Until so surrendered, each
Old Certificate(s) shall be deemed, for all corporate purposes, to
evidence the ownership of the number of shares of common stock of the
Corporation which the holder thereof would be entitled to receive upon
its surrender, except that the Corporation may withhold, from the
holder of shares represented by such Old Certificate(s), distribution
of any or all
2
<PAGE>
dividends declared by the Corporation on such shares until such time
as such Old Certificate(s) shall be surrendered in exchange for New
Certificate(s), at which time dividends so withheld by the Corporation
with respect to such shares shall be delivered, without interest
thereon, to the stockholder to whom such New Certificate(s) are
issued.
(c) The number of shares of common stock of the
Continuing Bank outstanding as of the Effective Time, all of which
shall be held by the Corporation, shall be equal to the number of
shares of common stock of Existing Bank outstanding immediately prior
to the Effective Time, and the amount of Common Stock of Continuing
Bank represented thereby shall equal $2,822,000.
SECTION 5. The Board of Directors and officers of the Continuing Bank,
upon the merger becoming effective, shall consist of all the persons who are
directors and officers of the Existing Bank immediately before the Effective
Time. The Bylaws of the Continuing Bank shall be the Bylaws of Existing Bank.
SECTION 6. This Merger Agreement shall be submitted to the stockholders
of the Existing Bank for approval at a meeting to be called and held in
accordance with the applicable provisions of law and the charter and Bylaws of
the Existing Bank.
SECTION 7. The Existing Bank, the Interim Bank and the Corporation
shall proceed expeditiously and cooperate fully in the procurement of any other
consents and approvals and in the taking of any other action, and the
satisfaction of all other requirements, prescribed by law or otherwise,
necessary for consummation of the merger on the terms herein provided,
including, without being limited to, the preparation and submission of an
application to the Federal Deposit Insurance Corporation for the approval of the
merger under the provisions of Section 18(c) of the Federal Deposit Insurance
Act, as amended, of an application to the Board of Governors of the Federal
Reserve System for the approval of the Corporation's acquisition of the shares
of common stock of the Continuing Bank under the provisions of Section 3(a) (1)
of the Bank Holding Company Act of 1956, as amended, and to the Commissioner of
Banks and Trust Companies of the State of Illinois for approval of this Merger
Agreement under the provisions of Section 22 of the Illinois Banking Act.
SECTION 8. As provided for in Section 29 of the Illinois Banking Act,
any stockholder of the Existing Bank who shall not vote in favor of the merger
and who (i) shall file with the Existing Bank, prior to or at the meeting of
stockholders of the Existing Bank at which this Merger Agreement is submitted to
a vote, a written objection to the merger provided for hereby, and (ii) shall
within 20 days after the merger is effected make written demand on the
Continuing Bank for payment of the fair value of his shares as of the day prior
to the date on which the vote of stockholders of the Existing Bank was taken
approving the merger shall be entitled to be paid upon surrender of his
certificate or certificates representing his shares the said fair value thereof.
If within 30 days after the date on which such merger is effected the value of
such shares is agreed upon between the dissenting stockholder and the Continuing
Bank, payment therefor shall be made within 90 days after the date on which the
merger was effected, and upon payment of the agreed value the dissenting
stockholder shall cease to have any interest in such shares or in the Continuing
Bank. If within such period of 30 days the stockholder and the Continuing Bank
do not so agree, then the dissenting stockholder may, within the 60 days after
the expiration of the 30-day period, file a complaint in the circuit court
asking for a finding and determination of the fair value of such shares and
shall be entitled to judgment against the Continuing Bank for the amount of such
fair value as of the day prior to the date on which such vote was taken
approving such merger, with interest thereon on the date of such judgment. The
judgment shall be payable only upon and simultaneously with the surrender of the
certificate or certificates representing said shares. Upon payment of the
judgment the dissenting stockholder shall cease to have any interest in such
shares or in the Continuing Bank. Unless a dissenting stockholder shall have
complied with the terms of
3
<PAGE>
this Section 8 within the time and in the manner herein provided, such
stockholder and all persons claiming under him shall be conclusively presumed to
have approved and ratified the merger and shall be bound by the terms hereof.
Notwithstanding compliance by a dissenting stockholder with the terms hereof,
the certificate or certificates for the shares of such dissenting stockholders
shall be deemed to be and shall be converted into a share or shares of common
stock of the Corporation as provided for in Section 4(a) hereof, and the
certificate or certificates surrendered by the dissenting stockholder shall be
delivered to the Corporation and may be held and disposed of by the Corporation.
SECTION 9. Effectuation of the merger herein provided for is
conditioned upon:
(a) Approval of this Merger Agreement by vote of the
stockholders of the Existing Bank and the Interim Bank as required by
law; and
(b) Procurement of all other consents and approvals,
and satisfaction of all other requirements prescribed by law, which are
necessary for consummation of the merger.
SECTION 10. At any time before the Effective Time, if any of the
following circumstances occur, this Merger Agreement may be terminated, at the
election of the Existing Bank or the Interim Bank, by written notice from the
party so electing to the other thereof, pursuant to a resolution authorized and
approved by the board of Directors of the party so electing:
(a) The number of shares of common stock of the
Existing Bank voted against the merger, or in respect of which written
notice is given purporting to dissent from the merger, shall make
consummation of the merger unwise in the opinion of either the Board of
Directors of the Existing Bank or the Board of Directors of the Interim
Bank; or
(b) Any action, suit, proceeding or claim has been
instituted, made or threatened relating to the proposed merger which
shall make consummation of the merger inadvisable in the opinion of
either the Board of Directors of the Existing Bank or the Board of
Directors of the Interim Bank; or
(c) Any action, consent or approval, governmental or
otherwise, which, in the opinion of counsel for the Existing Bank, is
necessary or advisable to permit or enable the Continuing Bank, upon
and after the consummation of the merger, to conduct all or any part of
the business and activities theretofore conducted by the Existing Bank,
in substantially the manner so conducted, shall not have been obtained;
or
(d) For any other reason consummation of the merger is
inadvisable in the opinion of the Board of Directors of either the
Existing Bank or the Interim Bank.
Upon termination by written notice as provided in this Section, this Merger
Agreement shall be void and of no further effect, and there shall be no
liability by reason of this Merger Agreement or the termination thereof on the
part of either the Existing Bank, the Interim Bank, the Corporation or the
directors, officers, employees, agents or stockholders of any of them.
SECTION 11. Subject to and upon satisfaction of all requirements of law
and other conditions specified in this Merger Agreement, this Merger Agreement
together with certified copies of resolutions of the stockholders of the
Existing Bank and the Interim Bank approving the same shall be filed with the
Commissioner of Banks and Trust Companies of the State of Illinois pursuant to
and in the manner required by Section 24 of the Illinois Banking Act, and the
merger herein shall become effective at 12:01 A.M., Central Standard Time, of
the day next succeeding
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<PAGE>
such filing, such time and day being hereby declared to be the Effective Time as
that term is used herein, all on the terms and with the effect in this Merger
Agreement provided for.
SECTION 12. The Existing Bank and the Interim Bank, by mutual consent
of their respective Boards of Directors and with the consent of the Board of
Directors of the Corporation, may amend this Merger Agreement before the
Effective Time, provided, however, that, after this Merger Agreement has been
approved by the stockholders of the Existing Bank, no such amendment shall
affect the rights of such stockholders of the Existing Bank in a manner which is
materially adverse to such stockholders subsequent to the approval of the
stockholders.
SECTION 13. If the merger becomes effective, Existing Bank, Continuing
Bank, Corporation and their respective shareholders, shall each pay their own
expenses, if any, incurred in the proposed transactions. If the merger does not
become effective, the Existing Bank shall pay all reasonable and necessary
expenses associated with the transactions proposed herein. In either event the
Existing Bank agrees to pay the expenses of examination by the Commissioner of
Banks and Trust Companies of the State of Illinois.
SECTION 14. Attached hereto and marked Exhibit I and made a part hereof
is a pro forma statement of condition of the Continuing Bank giving effect to
the merger on the terms herein provided for as if the merger had occurred on
June 30, 2000.
SECTION 15. Tax Consequences. It is intended by the parties hereto
that the merger shall constitute a reorganization within the meaning of
Section 368 of the Code. The parties hereto adopt this Agreement as a "plan of
reorganization" within the meaning of Treasury Regulations Section 1.368-2(g)
and 1.368-3(a)
5
<PAGE>
IN WITNESS WHEREOF, the Existing Bank has caused this Merger Agreement
to be executed by its duly authorized officers and the corporate seal to be
hereunto affixed as of the date first above written. The incorporators of the
Interim Bank have executed this Merger Agreement as set forth below as of the
date first above written.
COMMUNITY BANK-WHEATON/GLEN ELLYN
BY/s/ Donald H. Fischer
-------------------------------------------------
Chairman, President & CEO
(SEAL)
Attest:
/s/ Susan Bennor
----------------------------------
Cashier COMMBANK-WGE
/s/ Donald H. Fischer /s/ John H. Mulherin
---------------------------------- -----------------------------------
Incorporator Incorporator
/s/ Harold W. Gaede /s/ E. Lawrence Young
---------------------------------- -----------------------------------
Incorporator Incorporator
/s/ Joseph S. Morrissey
----------------------------------
Incorporator
Community Financial Shares, Inc. hereby joins in the foregoing Merger
Agreement and undertakes that it will be bound thereby, that it will do and
perform all the acts and things therein provided to be done by it, and that it
will cooperate in carrying out the transactions therein contemplated.
IN WITNESS WHEREOF, Community Financial Shares, Inc. has caused this
undertaking to be made in counterparts by its duly authorized officers and its
corporate seal to be hereunto affixed as of the date first above written.
COMMUNITY FINANCIAL SHARES, INC.
BY/s/ Donald H. Fischer
-------------------------------------------------
Chairman, President & CEO
(SEAL)
Attest:
/s/ Mark S. Daniels
----------------------------------
Secretary
6
<PAGE>
EXHIBIT I
COMMUNITY BANK-WHEATON/GLEN ELLYN
PRO-FORMA STATEMENT OF CONDITION
(After merger; 000's Omitted)
<TABLE>
<CAPTION>
ASSETS LIABILITIES
<S> <C> <C> <C>
Cash and Due From Banks $5,853 Deposits $122,669
Securities $37,393 Federal Funds Purchase $3,550
Commercial Loans $58,222 Federal Home Loan Bank Advances $13,300
Residential First Mortgages $19,834 Subordinated Capital Debenture $1,000
Home Equity Loans $19,764 Other Liabilities $656
Personal Instalment Loans $3,362 Common Stock $2,822
Reserve for Loans Losses -$841 Surplus $5,223
Total Loans $100,341 Undivided Profits $1,535
Premises and Fixed Assets $5,075 Unrealized Securities Losses -$489
Other Assets $1,604 Total Equity Capital $9,091
TOTAL ASSETS $150,266 TOTAL ASSETS $150,266
</TABLE>
Note: The State of Illinois does not require capitalization of the Interim Bank
prior to the merger becoming effective.
7
<PAGE>
ANNEX B
CERTIFICATE OF INCORPORATION
OF
COMMUNITY FINANCIAL SHARES, INC.
1. The name of the corporation is:
COMMUNITY FINANCIAL SHARES, INC.
2. The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle. The name of its registered agent at such address is
The Corporation Trust Company.
3. The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
4. The total number of shares of stock which the corporation shall have
authority to issue is nine hundred thousand (900,000); all of such shares
shall be without par value.
5a. The name and mailing address of the incorporator is as follows:
NAME MAILING ADDRESS
---- ---------------
Ward J. Larson 822 Saddlewood Drive
Glen Ellyn, IL 60137
5b. The name and mailing address of each person who is to serve as a director
until the first annual meeting of the stockholders or until a successor
is elected and qualified is as follows:
NAME MAILING ADDRESS
---- ---------------
William F. Behrmann 858 Saddlewood Drive
Glen Ellyn, IL 60137
H. David Clayton 22W676 Ahlstrand Drive
Glen Ellyn, IL 60137
Raymond A. Dieter 22W240 Stanton
Glen Ellyn, IL 60137
Donald H. Fischer 1676 Thompson Drive
Wheaton, IL 60187
Harold W. Gaede 1005 South Hale
Wheaton, IL 60187
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<PAGE>
Joseph S. Morrissey 108 East Farnham Road
Wheaton, IL 60187
John M. Mulherin 569 Dorset Avenue
Glen Ellyn, IL 60137
E. Lawrence Young 1481 Sandy Hook
Wheaton, IL 60187
6. The corporation is to have perpetual existence.
7. In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors is expressly authorized to make, alter or repeal
the by-laws of the corporation.
8. Elections of directors need not be by written ballot unless the by-laws
of the corporation so provide.
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws may provide. The books of the corporation may be
kept (subject to any provision contained in the statutes) outside the
State of Delaware at such place of places as may be designated from time
to time by the Board of Directors or in the by-laws of the corporation.
9. The corporation reserves the right to amend, alter, change of repeal any
provision contained in this Certificate of Incorporation, in the manner
now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
10. In all elections of directors and all matters coming to the stockholders,
each outstanding share shall be entitled to one vote on each matter
submitted to a vote at a meeting of stockholders. Voting on all matters
is non-cumulative.
11. A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of
fiduciary as a director except for liability (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, or (iv) for any transaction from which
the director derived any improper personal benefit.
The undersigned, being the incorporator herein before named, for the
purpose of forming a corporation pursuant to the General Corporation Law
of the State of Delaware, does make this Certificate hereby declaring and
certifying that this is his act and deed and the facts herein stated are
true, and accordingly has hereunto set his hand this 11th day of July,
2000.
/s/ Ward J. Larson
-----------------------------------
Ward J. Larson
2
<PAGE>
BYLAWS
OF
COMMUNITY FINANCIAL SHARES, INC.
ARTICLE I
---------
The name of the corporation shall be COMMUNITY FINANCIAL SHARES, INC.,
and it has been organized under the General Corporation Law of Delaware. While
the registered office shall be in the City of Wilmington, County of New Castle,
State of Delaware, the corporation shall operate out of offices located in the
Village of Glen Ellyn, County of DuPage and State of Illinois.
ARTICLE II
----------
SECTION 1. ANNUAL MEETINGS. The annual meeting of stockholders
shall be held on the 2nd Wednesday of April each year, or such other date as
shall be established, at the hour of 7:00 p.m., for the purpose of electing
directors and transaction of such other business as may come before the meeting.
If the election of directors shall not be held on the day designated herein for
any annual meeting, or at any adjournment thereof, the Board of Directors shall
cause the election to be held at a meeting of the stockholders as soon
thereafter as conveniently may be.
SECTION 2. SPECIAL MEETINGS. Special meetings of the
stockholders may be called by the Chairman of the Board, by the Board of
Directors or by the holders of not less than one-fifth of all the outstanding
shares of stock of the corporation.
SECTION 3. PLACE OF MEETING. The Board of Directors may
designate any place within this State of Illinois as the place of meeting for
any annual meeting or for any special meeting called by the Board of Directors.
A waiver of notice signed by all stockholders may designate any place within the
State of Illinois, as the place for the holding of such meeting. If no
designation is made, or if a special meeting were otherwise called, the place of
meeting shall be the office of the corporation, except as otherwise provided in
Section 5 of this Article.
SECTION 4. NOTICE OF MEETINGS. Written or printed notice
stating the place, day and hour of the meeting and, in case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered not less than ten nor more than forty days before the date of the
meeting, either personally or by mail, by or at the direction of the President,
or the Secretary, or the Officer or persons calling the meeting, to each
stockholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail,
addressed to the stockholder at his address as it appears on the records of the
corporation, with postage thereon prepaid.
SECTION 5. MEETING OF ALL STOCKHOLDERS. If all of the stock-
holders shall meet at any time and place within the State of Illinois and
consent to the holding of a meeting at such time and place, such meeting shall
be valid without call or notice, and at such meeting, any corporate action may
be taken.
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<PAGE>
SECTION 6. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE.
For the purpose of determining stockholders entitled to notice of or to vote at
any meeting of stockholders, or stockholders entitled to receive payment of any
dividend, or in order to make a determination of stockholders for any other
proper purpose, the Board of Directors of the corporation may provide that the
stock transfer books shall be closed for a stated period not to exceed, in any
case, forty days. If the stock transfer books shall be closed for the purpose of
determining stockholders entitled to notice of or to vote at a meeting of
stockholders, such books shall be closed for at least ten days immediately
preceding such meeting. In lieu of closing the stock transfer books, the Board
of Directors may fix in advance a date as the record date for any such
determination of stockholders, such date in any case to be not more than forty
days, and, in case of a meeting of stockholders, not less than ten days prior to
the date on which the particular action, requiring such determination of
stockholders is to be taken. If the stock transfer books are not closed and no
record date is fixed for the determination of stockholders entitled to receive
payment of a dividend, the date on which notice of the meeting is mailed or the
date on which the resolution of the Board of Directors declaring such dividend
is adopted, as the case may be, shall be the record date for such determination
of stockholders.
SECTION 7. VOTING LISTS. The officer or agent having charge
of transfer books for shares of stock of the corporation shall make, prior to
each meeting of stockholders, a complete list of the stockholders entitled to
vote at such meeting, arranged in alphabetical order, with the address of and
the number of shares held by each. Such list shall be produced and kept open at
the time and place of the meeting and shall be subject to the inspection of any
stockholder during the whole time of the meeting. The original stock ledger or
transfer book shall be prima facie evidence as to who are the stockholders
entitled to examine such list or stock ledger or transfer book or to vote at any
meeting of stockholders.
SECTION 8. QUORUM. A majority of the outstanding
shares of stock, represented in person or by proxy, shall constitute a quorum at
any meeting of stockholders, provided, that if less than a majority of the
outstanding shares of stock are represented at said meeting, a majority of the
shares of stock so represented may adjourn the meeting from time to time without
further notice.
SECTION 9. PROXIES. At all meetings of stockholders, a
stockholder may vote by proxy executed in writing by the stockholder or by his
duly authorized attorney-in-fact. Such proxy shall be filed with the secretary
of the corporation before or at the time of the meeting. No proxy shall be valid
after eleven months from the date of its execution, unless otherwise provided in
the proxy.
SECTION 10. VOTING OF STOCK. Subject to the provisions of
Section 12 of this Article, each outstanding share of stock shall be entitled to
one vote upon each matter submitted to vote at a meeting of stockholders.
SECTION 11. VOTING OF STOCK BY CERTAIN HOLDERS. Stock standing
in the name of another corporation, domestic or foreign, may be voted by such
officer, agent or proxy as the bylaws of such corporation may prescribe, or, the
absence of such provision, as the Board of Directors of such corporation may
determine.
Stock standing in the name of a deceased person may be voted by his
administrator or executor, either in person or by proxy. Stock standing in the
name of a guardian, conservator or trustee may be voted by such fiduciary,
either in person or by proxy, but no guardian, conservator or trustee shall be
entitled, as such fiduciary, to vote stock held by him without a transfer of
such stock into his name.
2
<PAGE>
Stock standing in the name of a receiver may be voted by such receiver,
and stock held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority so to do be
contained in an appropriate order of the court by which such receiver was
appointed.
A stockholder whose shares of stock are pledged shall be entitled to
vote such shares until the shares have been transferred into the name of the
pledgee, and thereafter the pledgee shall be entitled to vote the shares so
transferred.
Shares of its own stock belonging to this corporation shall not be
voted, directly or indirectly, at any meeting and shall not be counted in
determining the total number of outstanding shares at any given time, but shares
of its own stock held by it in a fiduciary capacity may be voted and shall be
counted in determining the total number of outstanding shares at any given time.
SECTION 12. NON-CUMULATIVE VOTING. In all elections of directors
and all other matters coming to the stockholders, each outstanding share shall
be entitled to one vote on each matter submitted to a vote at a meeting of
stockholders. Voting on all matters is non-cumulative.
SECTION 13. INFORMAL ACTION BY STOCKHOLDERS. Any action
required to be taken at a meeting of the stockholders, or any other action which
may be taken at a meeting of the stockholders, may be taken without a meeting if
a consent in writing, setting forth the action so taken, shall be signed by all
of the stockholders entitled to vote with respect to the subject matter thereof.
SECTION 14. VOTING BY BALLOT. Voting on any question or in any
election may be via voice unless the presiding officer shall order, or any
stockholder shall demand that voting be by ballot.
ARTICLE III
-----------
DIRECTORS
SECTION 1. GENERAL POWERS. The business and affairs of the
corporation shall be managed by its Board of Directors.
SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of
directors of the corporation shall be eight. Each director shall hold office
until the next annual meeting of stockholders, or until their successor shall
have been elected and qualified.
SECTION 3. ORGANIZATION MEETING. The meeting for the
organization of the Board of Directors shall take place immediately after, and
at the same place as, the annual stockholders' meeting. If at the time fixed for
the meeting of the directors-elect, there shall not be a quorum present, the
members present may adjourn from time to time until a quorum is obtained.
SECTION 4. REGULAR MEETINGS. A regular meeting of the Board of
Directors shall be held once each month. The Board of Directors may provide, by
resolution, the time and place within the State of Illinois for the holding of
such regular meeting, or of additional regular meetings without other notice
than such resolution.
3
<PAGE>
SECTION 5. ORDER OF BUSINESS. At all regular meetings of the
Board of Directors, the following shall be included in the order of business:
1. Review of the minutes of previous meeting(s)
2. Unfinished business
3. New business
SECTION 6. SPECIAL MEETINGS. Special meeting of the Board of
Directors may be called at the request of the Chairman of the Board or
President, or any three directors. The person or persons authorized to call
special meetings of the Board of Directors may fix any place within the State of
Illinois as the place for holding any special meeting of the Board of Directors
called by them.
SECTION 7. NOTICE. Notice of any special meeting shall
be given at least two days previously thereto by written notice delivered
personally or mailed to each director at his home address, or by telegram. If
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail so addressed, with postage thereon prepaid. If notice be given by
telegram, such notice shall be deemed to be delivered when the telegram is
delivered to the telegraph company. Any director may waive notice of any
meeting. The attendance of a director at any meeting shall constitute a waiver
of notice of such meeting, except when a director attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the Board
of Directors need be specified in the notice or waiver of notice of such
meeting.
SECTION 8. QUORUM. A majority of the Board of
Directors shall constitute a quorum for transaction of business at any meeting
of the Board of Directors, provided, that if less than a majority of the
directors are present at said meeting, a majority of the directors present may
adjourn the meeting from time to time without further notice.
SECTION 9. MANNER OF ACTING. The act of the majority of the
directors present at a meeting at which a quorum is present shall be the act of
the Board of Directors.
SECTION 10. VACANCIES. Any vacancy occurring in the Board
of Directors may be filled by appointment by the Board of Directors until the
next annual meeting or a special stockholder meeting called for the purpose of
an election to fill the directorship.
SECTION 11. ATTENDANCE. Directors must attend all meetings
for which there is not good cause for absenteeism, and must serve on all
committees to which they may be respectively appointed by the Board of
Directors.
SECTION 12. COMPENSATION. By resolution of the Board of
Directors, the directors may be paid their expenses, if any, of attendance at
each meeting of the board, and may be paid a fixed sum for attendance at
meetings. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
SECTION 13. PRESUMPTION OF ASSENT. A director of the corporation
who is present at a meeting of the Board of Directors at which action on any
corporation matter is taken shall be conclusively presumed to have assented to
the action taken unless his dissent shall be entered in the minutes of the
meeting or unless he shall file his written dissent to such action with the
person acting as the secretary of the meeting before the adjournment thereof or
shall forward
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such dissent by certified mail to the Secretary of the corporation immediately
after the adjournment of the meeting. Such right to dissent shall not apply to a
director who voted in favor of such action.
ARTICLE IV
----------
OFFICERS
SECTION 1. NUMBER. The officers of the corporation
shall be a chairman of the board, a president, secretary and such vice
presidents or other officers, as may be elected or appointed by the Board of
Directors.
SECTION 2. ELECTION AND TERM OF OFFICE. The Chairman of the
Board, President and other officers of the corporation shall be elected annually
by the Board of Directors at the organization meeting of the Board of Directors
held after each annual meeting of stockholders. If the election of officers
shall not be held at such meeting, such election shall be held as soon
thereafter as conveniently may be. Vacancies may be filled or new offices
created and filled at any meeting of the Board of Directors. Each officer shall
hold office until his successor shall have been duly elected and shall have
qualified or until his death or until he shall resign or shall have been removed
in the manner hereinafter provided.
SECTION 3. REMOVAL. Any officer or agent elected or
appointed by the Board of Directors may be removed by the Board of Directors
whenever in its judgment the best interests of the corporation would be served
thereby, but such removal shall be without prejudice to the contract rights, if
any, of the person so removed.
SECTION 4. VACANCIES. A vacancy in any office because of
death, resignation, removal, disqualification or otherwise, may be filled by
the Board of Directors for the unexpired portion of the term.
SECTION 5. CHAIRMAN OF THE BOARD. The Chairman of the Board
shall be a member of the Board of Directors and shall preside at all meetings of
the stockholders and the Board of Directors.
SECTION 6. PRESIDENT. The President shall be the
principal executive officer of the corporation and shall be in charge of the
affairs and business of the corporation and the management thereof subject to
the direction of the Board of Directors and the executive committee. In all
cases where the duties of the other officers of the corporation are not
prescribed by statute, these bylaws or by resolution of the directors, they
shall be performed under the orders and instruction of the President. He may
sign with the Secretary, Assistant Secretary or any other proper officer of the
corporation, thereunto authorized by the Board of Directors, certificates for
shares of stock of the corporation, any deeds, mortgages, bonds, contracts or
other instruments which the Board of Directors has authorized to be executed,
except in cases where the signing and execution thereof shall be expressly
delegated by the Board of Directors or these bylaws to some other officer or
agent of the corporation, or shall be required by law to be otherwise signed or
executed, and in general shall perform ex officio on all standing committees of
the board.
SECTION 7. THE VICE PRESIDENTS. In the absence of the
President, or in the event of his inability or refusal to act, the Vice
President (or in the event there be more than one Vice President, the Vice
Presidents in the order designated, or in the absence of any designation, then
in the order of their election) shall perform the duties of the President, and
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when so acting, shall have all the powers of and be subject to all restrictions
upon the President. Any Vice President shall perform such other duties as from
time to time may be assigned to him by the Chairman of the Board, President or
by the Board of Directors.
SECTION 8. THE SECRETARY. The Secretary shall: (a) keep the
minutes of the stockholders' and directors' meetings in one or more books
provided for that purpose: (b) see that all notices are duly given in accordance
with the provisions of these bylaws or as required by law: (c) be custodian of
the seal of the corporation and see that it is affixed to all certificates for
shares of stock prior to the issuance thereof and to all documents, the
execution of which on behalf of the corporation under its seal is duly
authorized in accordance with the provisions of these bylaws; (d) keep a
register of the post office address of each stockholder which shall be furnished
to the Secretary by such stockholder; (e) sign with the Chairman of the Board or
President certificates for shares of stock of the corporation, the issuance of
which shall have been authorized by resolution of the Board of Directors; (f)
have general charge of the stock transfer books of the corporation; (g) in
general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him by the Chairman of the Board,
President or by the Board of Directors.
SECTION 9. SALARIES. The salaries of the officers shall
be fixed from time to time by the Board of Directors and no officer shall be
prevented from receiving such salary by reason of the fact that he is also a
director of the corporation.
ARTICLE V
---------
COMMITTEES OF THE BOARD
The Board of Directors may appoint, from time to time, committees of
directors for such purposes and with such powers as the board may determine.
ARTICLE VI
----------
CERTIFICATES FOR SHARES AND THEIR TRANSFER
Certificates of stock properly signed as herein indicated shall be
issued to the stockholders and the certificate shall state upon the face thereof
that the stock shall be transferable only upon the books of the corporation, and
when the stock is transferred, the certificate thereof shall be returned to the
corporation and canceled and new certificates issued. A transfer book shall be
kept in which all assignments and transfers of stock shall be made and also a
stock register book shall be kept in which shall be shown the names of the
shareholders, the number of shares and the certificate number of the stock held
by each. The person in whose name shares of stock stand on the stock register
books of the corporation shall be deemed the owner thereof for all purposes.
ARTICLE VII
-----------
FISCAL YEAR
The fiscal year of the corporation shall begin on the first day of
January in each year and end on the last day of December in each year.
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ARTICLE VIII
------------
DIVIDENDS
The Board of Directors may, from time to time, declare and the
corporation may pay, dividends on its outstanding shares of stock in the manner
and upon the terms and conditions provided by law.
ARTICLE IX
----------
SEAL
The Board of Directors shall provide a corporate seal, which shall be
in the form of a circle and shall have inscribed thereon the name of the
corporation and the words "Corporate Seal."
ARTICLE X
---------
WAIVER OF NOTICE
Whenever any notice whatever is required to be given under the
provisions of these bylaws or under the provisions of the General Corporation
Law of Delaware, a waiver thereof in writing, signed by the person or persons
entitled to such notice, whether before or after the time stated therein, shall
be deemed equivalent to the giving of such notice.
ARTICLE XI
----------
AMENDMENTS
These bylaws may be altered, amended or repealed and new bylaws may be
adopted (not inconsistent with the General Corporation Law of Delaware) at any
meeting of the Board of Directors of the corporation by a majority vote of the
whole number of directors.
ARTICLE XII
-----------
DIRECTORS AND OFFICERS INDEMNIFICATION
(a) The corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than any action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses for which such person has
not otherwise been reimbursed (including attorneys' fees, judgment, fines and
amounts paid in settlement) actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in
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good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation, or, with respect to any criminal
action or proceeding, had reasonable cause to believe that his conduct was
unlawful.
(b) The corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its favor
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses for which such person has
not otherwise been reimbursed (including attorneys' fees, judgment and amounts
paid in settlement) actually and reasonably incurred by him in connection with
the defense or settlement of such suit or action, if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of the corporation; except that no indemnification shall be made in respect of
any claim, issue or matter as to which such person shall have been adjudged to
be liable for negligence or misconduct in the performance of his duties, unless,
and only to the extent that, the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, and the purpose and intent of this
Article XII such person is fairly and equitably entitled to indemnity for such
expense, and shall so order.
To the extent that a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in defense of any
action, claim or proceeding referred to in paragraphs (a) and (b) of Article XII
or in defense of any other claim, issue or matter, he shall be indemnified
against expense, including attorneys' fees actually and reasonably incurred by
him in connection therewith.
Any indemnification under paragraphs (a) and (b) of this Article XII,
unless ordered by a court, shall be made by the corporation only as authorized
in the specific case upon a determination that the indemnification of the
director, officer, employee or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in such paragraphs (a) and
(b). Such determination shall be made (i) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding or (ii) if such a quorum is not obtainable, or, even
if obtainable, a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion or (iii) by the stockholders.
Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by the corporation in advance of the final disposition of
such action, suit or proceeding as authorized by the Board of Directors in the
specific case upon receipt of an undertaking by or on behalf of the director,
officer, employee or agent to repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified by the corporation.
The indemnification provided in this Article XII shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, or of any other indemnification which may be granted to
any person apart from this Article XII both as to action in his official
capacity and as to action in another capacity while holding such office and
shall continue as to a person who has ceased to be a director, officer, employee
or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
ARTICLE XIII
------------
Director's qualifying shares are not required to serve on the Board of
Directors.
<PAGE>
ANNEX C
Section 29 of Illinois Banking Act
----------------------------------
S/29. Dissenting Stockholders
------------------------------
If a stockholder of a state bank which is a party to a merger other than a
merger which is to result in a national bank, shall file with such bank prior to
or at the meeting of stockholders at which the plan of merger is submitted to a
vote, a written objection to such plan or merger, and shall not vote in favor
thereof, and such stockholder, within 20 days after receiving written notice of
the date the merger became effective, shall make written demand on the
continuing bank for payment of the fair value of his shares as of the day prior
to the date on which the vote was taken approving the merger, the continuing
bank shall pay to such stockholder, upon surrender of his certificate or
certificates representing said stock, the fair value thereof. Such demand shall
state the number of the shares owned by such dissenting stockholder. The
continuing bank shall provide written notice of the effective date of the merger
to all shareholders who have filed written objections in order that such
dissenting shareholders may know when they must file written demand if they
choose to do so. Any stockholder failing to make demand within the 20-day period
shall be conclusively presumed to have consented to the merger and shall be
bound by the terms thereof. If within 30 days after the date on which such
merger was effected the value of such shares is agreed upon between the
dissenting stockholders and the continuing bank, payment therefor shall be made
within 90 days after the date on which such merger was effected, upon the
surrender of his certificate or certificates representing said shares. Upon
payment of the agreed value the dissenting stockholder shall cease to have any
interest in such shares or in the continuing bank. If within such period of 30
days the stockholder and the continuing bank do not so agree, then the
dissenting stockholder may, within 60 days after the expiration of the 30-day
period, file a complaint in the circuit court asking for a finding and
determination of the fair value of such shares, and shall be entitled to
judgment against the continuing bank for the amount of such fair value as of the
day prior to the date on which such vote was taken approving such merger with
interest thereon to the date of such judgment. The practice, procedure and
judgment shall be governed by the Civil Practice Law of this state.1 The
judgment shall be payable only upon and simultaneously with the surrender to the
continuing bank of the certificate or certificates representing said shares.
Upon the payment of the judgment, the dissenting stockholder shall cease to have
any interest in such shares or in the continuing bank. Such shares of stock may
be held and disposed of by the continuing bank. Unless the dissenting
stockholder shall file such complaint within the time herein limited, such
stockholder and all persons claiming under him shall be conclusively presumed to
have approved and ratified the merger, and shall be bound by the terms thereof.
The right of a dissenting stockholder to be paid the fair value of his shares of
stock as herein provided shall cease if and when the continuing bank shall
abandon the merger.
(Source: P.A. 85-211.)
(1)735 ILCS 5/2-101 et seq.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
AND PROXY STATEMENT
Item 20. Indemnification of Directors and Officers.
Pursuant to the provisions of Section 145 of the Delaware
General Corporation Law, the registrant has the power to
indemnify certain persons, including its officers and
directors, under stated circumstances and subject to
certain limitations, for liabilities incurred in
connection with services performed in good faith for the
registrant. The Bylaws of the registrant, which is Exhibit
3.01 to this registration statement provide for
indemnification of officers and directors of the
registrant, and certain other persons, against liabilities
and expenses incurred by any of them in certain stated
proceedings and under certain stated conditions.
The position of the Securities and Exchange Commission on
indemnification for 1933 Act liabilities is set forth in
the Prospectus and Proxy Statement under "Information
Concerning Merger Agreement--Other Stockholder
Considerations."
Item 21. Exhibits Filed.
The following exhibits are filed with this registration
statement.
See "Exhibit Index" on page II-5.
Item 22. Undertakings.
A. The registrant hereby undertakes as follows:
1. To file, during any period in which it offers or
sells securities, a post-effective amendment to
this registration statement to:
a. Include any prospectus required by section
10(a)(3) of the Securities Act;
b. Reflect in the prospectus any facts or
events which, individually or together,
represent a fundamental change in the
information in the registration statement.
Notwithstanding the foregoing, any increase
or decrease in volume of securities offered
(if the total dollar value of securities
offered would not exceed that which was
registered) and any deviation from the low
or high end of the estimated maximum
offering range may be reflected in the form
of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price
represent no more than a 20% change in the
maximum aggregate offering price set forth
in the "Calculation of Registration Fee"
table in the effective registration
statement; and
c. Include any additional or changed material
information on the plan of distribution.
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2. For determining liability under the Securities
Act, to treat each post-effective amendment as a
new registration statement of the securities
offered, and the offering of the securities at
that time to be the initial bona fide offering.
3. To file a post-effective amendment to remove
from registration any of the securities that
remain unsold at the end of the offering.
4. That prior to any public reoffering of the
securities registered hereunder through the use
of a prospectus which is a part of this
registration statement, by any person or party
who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes
that such reoffering prospectus will contain the
information called for by the applicable
registration form with respect to reoffering by
persons who may be deemed underwriters, in
addition to the information called for by the
other Items of the applicable form.
5. That every prospectus (i) that is filed pursuant
to paragraph (1) immediately preceding, or (ii)
that purports to meet the requirements of Section
10(a)(3) of the Act and is used in connection
with an offering of securities subject to Rule
415, will be filed as a part of an amendment to
the registration statement and will not be used
until such amendment is effective, and that, for
purposes of determining any liability under the
Securities act of 1933, each such post-effective
amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and offering of such securities
at that time shall be deemed to be the initial
bona fide offering thereof.
B. The undersigned registrant hereby undertakes to
supply by means of a post-effective amendment all
information concerning a transaction, and the company
being acquired involved therein, that was not the
subject of and included in the registration statement
when it became effective.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Village of Glen Ellyn, State of
Illinois, on the 25th day of September 2000.
COMMUNITY FINANCIAL SHARES, INC.
By /s/ Donald H. Fischer
---------------------------------------------------
Donald H. Fischer, Chairman, President and
Chief Executive Officer
Each person whose signature appears below authorizes Donald H. Fischer and Mark
S. Daniels, or either one of them, to execute in the name of each such person
who is then an officer or director of the registrant, and to file, any
amendments to this registration statement necessary or advisable to enable the
registrant to comply with the Securities Act of 1933, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission, in
respect thereof, in connection with the registration of the common stock which
is the subject of this registration statement, which amendment may make such
changes in such registration statement as the above-named attorneys, or either
one of them, may deem appropriate.
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities
indicated on September 25, 2000.
Signature Capacity
/s/ Donald H. Fischer Chairman, President, CEO and Director
---------------------------
Donald H. Fischer
/s/ Mark S. Daniels Vice President, Secretary and
---------------------------
Mark S. Daniels Chief Financial Officer
/s/ Christopher P. Barton Vice President, Assistant Secretary and
---------------------------
Christopher P. Barton Chief Accounting Officer
II-3
<PAGE>
/s/ William F. Behrmann Director
---------------------------
William F. Behrmann
/s/ H. David Clayton Director
---------------------------
H. David Clayton
/s/ Raymond A. Dieter Director
---------------------------
Raymond A. Dieter
/s/ Harold W. Gaede Director
---------------------------
Harold W. Gaede
/s/ Joseph S. Morrissey Director
---------------------------
Joseph S. Morrissey
/s/ John M. Mulherin Director
---------------------------
John M. Mulherin
/s/ E. Lawrence Young Director
---------------------------
E. Lawrence Young
II-4
<PAGE>
EXHIBIT INDEX
The following exhibits are filed with this registration statement.
2.01 Merger Agreement dated August 16, 2000 by and among the Registrant,
Community Bank-Wheaton/Glen Ellyn and COMMBANK-WGE (included as
Annex A to the Proxy Statement/Prospectus).
3.01 Certificate of Incorporation and Bylaws of registrant, (included as
Annex B to the Proxy Statement/Prospectus).
5.01 Opinion of Ward J. Larson, special counsel to the Registrant.
8.01 Opinion of Chapman and Cutler, as to tax matters.
23.01 Consent of Ward J. Larson (included in Exhibit 5.01).
23.02 Consent of Chapman and Cutler (included in Exhibit 8.01).
24.01 Power of Attorney (included on page II-3 herein).
99.01 Form of Proxy.
II-5
