<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
Amcore Financial Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Amcore Financial Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
AMCORE LOGO
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 9, 2000
TO THE STOCKHOLDERS OF AMCORE FINANCIAL, INC.:
The Annual Meeting of Stockholders of AMCORE Financial, Inc., a Nevada
corporation, will be held at Clock Tower, 7801 East State Street, Rockford,
Illinois on May 9, 2000, at 5:30 p.m., Rockford time, for the following
purposes:
1. To elect three directors;
2. To ratify the appointment of KPMG LLP as auditors;
3. To approve the AMCORE Financial, Inc. 2000 Stock Incentive Plan, as set
forth in Exhibit A of the Proxy Statement appended to this Notice; and
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only stockholders of record at the close of business on March 15, 2000 are
entitled to notice of and to vote at the meeting or any adjournment of the
meeting.
Stockholders are cordially invited to attend the Annual Meeting. Whether or
not you are able to attend the meeting, we would appreciate if you would
complete and deliver your proxy as promptly as convenient. This year we are
pleased to be able to offer you the option of delivering your proxy by telephone
or by Internet transmission in addition to the traditional method of completing,
signing and mailing a proxy card. Further information about delivering your
proxy via telephone or the Internet can be found on the enclosed proxy card. The
proxy may be revoked at any time before it is voted, provided that written
notice thereof has been given to the Secretary of the Company. If you are
present at the meeting, you may vote your shares in person and the proxy will
not be used.
For further information concerning individuals nominated as directors, the
appointment of KPMG LLP as auditors, approval of the 2000 Stock Incentive Plan,
and the use of the proxy, you are respectfully urged to read the Proxy Statement
on the following pages.
By order of the Board of Directors,
/s/ JAMES S. WADDELL
James S. Waddell
Secretary
March 24, 2000
Rockford, Illinois
<PAGE> 3
AMCORE FINANCIAL, INC.
501 SEVENTH STREET
ROCKFORD, ILLINOIS 61104
MARCH 24, 2000
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of
proxies to be voted at the Annual Meeting of Stockholders of AMCORE Financial,
Inc. (Company), a Nevada corporation, to be held on May 9, 2000 at 5:30 p.m.,
Rockford time, at Clock Tower, 7801 East State Street, Rockford, Illinois and
any adjournment thereof, and further to inform the stockholders concerning the
use of the proxy and the business to be transacted at the meeting.
The enclosed proxy is solicited by the Board of Directors of the Company.
The proxy may be revoked at any time before it is voted. Proxies may be revoked
by filing written notice of revocation with the Secretary of the Company before
the meeting or by attending the meeting and voting in person. The items
enumerated herein constitute the only business which the Board of Directors
intends to present or is informed that others will present at the meeting. The
proxy does, however, confer discretionary authority upon the persons named
therein, or their substitutes, with respect to any other business which may
properly come before the meeting. Stockholders are entitled to one vote for each
share. Only stockholders of record at the close of business on March 15, 2000
are entitled to notice of and to vote at the meeting.
Pursuant to the Bylaws of the Company, a majority of the outstanding shares
of the Company entitled to vote, represented in person or by proxy, shall
constitute a quorum at the meeting. Directors shall be elected by a plurality of
the votes cast in the election of directors. Any action to be taken by a vote of
the stockholders, other than the election of directors, must be authorized by a
majority of the votes cast at a meeting of stockholders by the holders of shares
entitled to vote thereon. Under applicable Nevada law, in tabulating the vote,
broker non-votes will be disregarded and will have no effect on the outcome of
the vote.
The expenses in connection with the solicitation of proxies will be borne
by the Company. Solicitation will be made by mail, but may in some cases also be
made by telephone or personal call by officers, directors or regular employees
of the Company who will not be specially compensated for such solicitation. This
proxy statement and the accompanying proxy are first being mailed or delivered
to stockholders on or about March 24, 2000.
ITEM 1 -- ELECTION OF DIRECTORS
In the election of the Board of Directors, stockholders are entitled to one
vote for each common share owned by them for each of the three nominees. They
may not cumulate their votes. As of March 15, 2000, the Company had outstanding
27,098,080 shares of common stock. Proxy votes not limited to the contrary will
be cast for the election of the nominees named below, but should any of such
individuals unexpectedly become unavailable for election, the proxies reserve
the right to nominate and vote for such other person or persons as they shall
designate.
The following sets forth the names, ages, principal occupations and other
information regarding the director nominees and those directors whose terms
continue after the meeting.
There are three Class II directors to be elected at the 2000 Annual
Meeting. Nominees for Class II directors whose terms will expire in 2003 are:
Milton R. Brown, Richard C. Dell, and William R. McManaman.
1
<PAGE> 4
CLASS II (TERMS EXPIRE 2000)
Milton R. Brown -- Director since 1989
Mr. Brown, age 68, is Chairman, President and Chief Executive Officer of
Suntec Industries Incorporated (manufacturer of fuel unit components). He is a
Director of CLARCOR (diversified manufacturer).
Carl J. Dargene -- Director since 1982
Mr. Dargene, age 69, is Chairman of the Board of Directors of the Company.
He was previously President and Chief Executive Officer of the Company. He is
Vice Chairman and Director of AMCORE Investment Group, N.A. He is a Director of
Woodward Governor Company (manufacturer of controls for various types of
engines) and of CLARCOR (diversified manufacturer). He was previously Chairman
of the Board of Directors for AMCORE Bank N.A., Rockford until December 1996.
Richard C. Dell -- Director since 1994
Mr. Dell, age 54, is Group President of Newell Rubbermaid Corporation
(diversified manufacturer).
William R. McManaman -- Director since 1997
Mr. McManaman, age 52, has been Vice President -- Finance and Chief
Financial Officer of Dean Foods Company since October 1995. He was previously
Vice President -- Finance of Brunswick Corporation.
Those directors whose terms do not expire this year are:
CLASS III (TERMS EXPIRE 2001)
Paula A. Bauer -- Director since 1999
Ms. Bauer, age 45, has been Vice President of Supply Chain Management at
RAYOVAC Corporation since June 1997. She was previously Director of Supply Chain
at RAYOVAC Corporation from July 1994 to June 1997.
Paul Donovan -- Director since 1998
Mr. Donovan, age 52, has been Senior Vice President and Chief Financial
Officer of Wisconsin Energy Corporation since August 1999. He was previously
Executive Vice President and Chief Financial Officer of Sundstrand Corporation
(manufacturer of industrial and aerospace products) until August 1999. He was
previously a Director of AMCORE Bank N.A., Rockford until August 1998.
Jack D. Ward -- Director since 1995
Mr. Ward, age 47, is an Attorney at Law and Partner with the law firm of
Reno, Zahm, Folgate, Lindberg & Powell, and was previously a Director of AMCORE
Mortgage, Inc. until May 1995.
Gary L. Watson -- Director since 1987
Mr. Watson, age 54, is President of Newspaper Division, Gannett Co., Inc.
CLASS I (TERMS EXPIRE 2002)
Lawrence E. Gloyd -- Director since 1987
Mr. Gloyd, age 67, is Chairman and Chief Executive Officer of CLARCOR
(diversified manufacturer) and is a Director of CLARCOR. He is a Director of
Thomas Industries, Inc. (manufacturer of lighting, fixtures, pumps and
compressors) and a Director of Woodward Governor Company (manufacturer of
controls for various types of engines).
2
<PAGE> 5
John A. Halbrook -- Director since 1997
Mr. Halbrook, age 54, is Chairman and CEO of Woodward Governor Company
(manufacturer of controls for various types of engines) and is a director of
Woodward Governor Company. Mr. Halbrook served as a Director of AMCORE
Investment Group, N.A. until November 1997.
Frederick D. Hay -- Director since 1997
Mr. Hay, age 55, has been Senior Vice President -- Operations of Snap-on
Incorporated (manufacturer of tools) since September 1998. He was Senior Vice
President -- Transportation of Snap-On Incorporated from February 1996 to
September 1998, and previous to that was President of Interior Systems and
Components Division at United Technologies Automotive.
Robert J. Meuleman -- Director since 1995
Mr. Meuleman, age 60, has been President and Chief Executive Officer of the
Company since January 1996. He was previously Executive Vice President and Chief
Operating Officer, Banking Subsidiaries. He is a director of AMCORE Bank, N.A.
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Company has an Executive Committee whose members are Messrs. Brown,
Dargene, Gloyd, Halbrook, McManaman and Meuleman. The Executive Committee
exercises those powers of the Board of Directors in the management of the
Company, which have been delegated to it by the Board of Directors. The
Executive Committee met once during 1999.
The Company has an Audit Committee whose members are Messrs. Brown,
Halbrook, McManaman, Ward and Watson. Mr. Dargene serves as an ex-officio member
of this Committee. The Audit Committee is appointed by the Board to assist the
Board in monitoring (1) the integrity of the financial statements of the
Company, (2) the compliance by the Company with legal and regulatory
requirements, and (3) the independence and performance of the Company's internal
and external auditors. The Audit Committee met three times during 1999.
The Company has an Investment Committee whose members are Ms. Bauer,
Messrs. Donovan, Halbrook, McManaman and Meuleman. Messrs. Kenneth E. Edge,
Executive Vice President and Chief Operating Officer of the Company, John R.
Hecht, Executive Vice President and Chief Financial Officer of the Company,
James F. Warsaw, President and Chief Operating Officer of AMCORE Bank, N.A.,
serve as ex-officio members of the committee. The Investment Committee
establishes the investment policies of the Company and its subsidiaries. During
1999, the Investment Committee met four times.
The Company has a Compensation Committee whose members are Messrs. Dell,
Donovan, Gloyd and Hay. Messrs. Dargene and Meuleman serve as ex-officio members
of this committee. The Compensation Committee advises the Company concerning its
employee compensation and benefit policies and administers employee stock,
retirement and deferred compensation plans. The Compensation Committee also
administers the Restricted Stock Plan for Non-Employee Directors of the Company
and its Participating Subsidiaries and the 1994 Stock Option Plan for
Non-Employee Directors. During 1999, the Compensation Committee met five times.
A report of the Compensation Committee is set forth on page 10 of this Proxy
Statement.
The Company has a Directors Affairs Committee whose members are Messrs.
Brown, Dell, Hay and Ward. Messrs. Dargene and Meuleman serve as ex-officio
members of this Committee. The primary duties of the Directors Affairs Committee
are to provide nominations to the Board of Directors, make recommendations
regarding directors' remuneration, recommend policies for the retirement of
directors and fulfill other responsibilities as may be delegated to it by the
Board of Directors. The Directors Affairs Committee met one time during 1999.
As of December 31, 1999, the Company had no other committees of the Board
of Directors.
3
<PAGE> 6
The Board of Directors met six times during 1999. All directors attended at
least 75% of the Board meetings and meetings held by all committees of the Board
on which they served during the period they were directors in 1999.
Directors of the Company, other than Messrs. Dargene and Meuleman, earned
an annual retainer of $10,000 of the Company's common stock, pursuant to the
Non-Employee Director's Stock Plan, for services rendered to the Company as a
member of its Board of Directors. All non-employee directors earned a fee of
$1,000 for each Board and committee meeting attended during 1999. All
non-employee committee chairmen earned a one-time fee of $1,500. Mr. Dargene was
paid $225,000 for services rendered as Chairman of the Board of Directors of the
Company in 1999. Messrs. David A. Carlson, Thomas L. Clinton, and C. Roger
Greene, as Director Emeriti, receive a lifetime retainer of $7,000 per year. Mr.
Robert A. Doyle, Dr. Robert A. Henry and Mr. Ted Ross, as Director Emeriti,
receive a lifetime retainer of $10,000 per year. All non-employee directors were
granted 1,000 common stock options on May 19, 1999 at $21.84 per share pursuant
to the 1994 Stock Option Plan for Non-Employee Directors.
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following tabulation sets forth the number of shares of common stock of
the Company beneficially owned by each of the directors and nominees for
election to the Board of Directors, by each named executive officer, and by all
directors and officers as a group as of March 1, 2000 and the percentage that
these shares bear to the total common stock outstanding on that date.
<TABLE>
<CAPTION>
AMOUNT OF SHARES PERCENT OF
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) CLASS
- ------------------------ ------------------------------ ----------
<S> <C> <C> <C>
Paula A. Bauer...................................... 1,932 (2) *
Milton R. Brown..................................... 29,950 (2)(3)(4) *
Carl J. Dargene..................................... 234,015 (3)(4)(5)(6) 0.86%
Richard C. Dell..................................... 11,461 (2)(4) *
Paul Donovan........................................ 6,752 (2)(4) *
Kenneth E. Edge..................................... 64,665 (2)(4)(5)(6) *
Lawrence E. Gloyd................................... 30,240 (2)(4)(7) *
John A. Halbrook.................................... 7,329 (2)(4) *
Frederick D. Hay.................................... 5,312 (2)(4) *
John R. Hecht....................................... 51,498 (2)(4)(5)(6) *
William R. McManaman................................ 7,596 (2)(4) *
Robert J. Meuleman.................................. 240,749 (2)(3)(4)(5) 0.88%
James S. Waddell.................................... 105,172 (2)(4)(5)(6) *
Jack D. Ward........................................ 13,824 (2)(4) *
James F. Warsaw..................................... 66,152 (2)(4)(5) *
Gary L. Watson...................................... 22,868 (2)(4)(7) *
All executive officers and directors (24 persons)... 1,216,640 (2)(3)(4)(5)(6)(7) 4.47%
</TABLE>
- ---------------
* The amount shown is less than 1/2% of the outstanding shares of such class.
1. The information contained in this column is based upon information furnished
to the Company by the persons named above or obtained from records of the
Company. The nature of beneficial ownership for shares shown in this column
is sole voting and investment power unless otherwise indicated herein.
2. Includes shares of restricted stock granted by the company as follows: Paula
A. Bauer -- 1,932 shares, Milton R. Brown -- 775 shares, Richard C.
Dell -- 1,163 shares, Paul Donovan -- 977 shares, Kenneth E. Edge -- 2,627
shares, Lawrence E. Gloyd -- 775 shares, John A. Halbrook -- 1,110 shares,
Frederick D. Hay -- 1,172 shares, John R. Hecht -- 2,189 shares, William R.
McManaman -- 650 shares, Robert J. Meuleman -- 4,378 shares, James S.
Waddell -- 2,189 shares, Jack D. Ward -- 947 shares, James F. Warsaw -- 2,189
shares, Gary L. Watson -- 775 shares and all executive officers and
directors -- 28,885 shares.
4
<PAGE> 7
3. Includes shares held individually by certain family members of the directors
and officers as follows: Milton R. Brown -- 1,369 shares, Carl J.
Dargene -- 22,870 shares, Robert J. Meuleman -- 23,587 shares, and all
executive officers and directors -- 48,476 shares.
4. Includes shares which such person has a right to acquire within sixty days
through the exercise of stock options as follows: Milton R. Brown -- 8,000
shares, Carl J. Dargene -- 111,329 shares, Richard C. Dell -- 6,500 shares,
Paul Donovan -- 3,750 shares, Kenneth E. Edge -- 32,204 shares, Lawrence E.
Gloyd -- 8,000 shares, John A. Halbrook -- 4,250 shares, Frederick D.
Hay -- 2,000 shares, John R. Hecht -- 35,906 shares, William R.
McManaman -- 3,500 shares, Robert J. Meuleman -- 148,880 shares, James S.
Waddell -- 58,401 shares, Jack D. Ward -- 6,500 shares, James F.
Warsaw -- 40,922 shares, Gary L. Watson -- 8,000 shares and all executive
officers and directors -- 570,827 shares.
5. Includes shares held in trust with power to vote but without investment
authority as follows: Carl J. Dargene -- 10,513 shares, shares, Kenneth E.
Edge -- 8,937 shares, John R. Hecht -- 5,843 shares, Robert J.
Meuleman -- 12,340 shares, James S. Waddell -- 3,439 shares, James F.
Warsaw -- 2,045 shares, and all executive officers and directors -- 120,965
shares.
6. Includes shares held in joint tenancy with the spouses of certain of the
directors and executive officers as to which voting and investment power is
shared as follows: Carl J. Dargene -- 1,732 shares, Kenneth E. Edge -- 20,897
shares, John R. Hecht -- 7,049 shares, James S. Waddell -- 4,500 shares, and
all executive officers and directors -- 49,585 shares.
7. Includes shares held in trusts of which such persons are trustees having sole
voting and investment power as follows: Lawrence E. Gloyd -- 5,424 shares,
Gary L. Watson -- 703 shares and all executive officers and
directors -- 6,227 shares.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16 of the Exchange Act, the Company's officers,
directors and holders of more than ten percent of the Company's Capital Stock
are required to file reports of their trading in equity securities of the
Company with the Commission, the Company and the NASDAQ Stock Market. Based
solely on its review of the copies of such reports received by it, or written
representations from certain reporting persons that no reports on Form 5 were
required for those persons, the Company believes that during 1999 all filing
requirements applicable to its officers, directors and more than ten percent
shareholders were complied with. James F. Warsaw had two unfiled transactions
from September 1997 that the Company became aware of in 1999. William R.
McManaman had one incorrect filing from September 1997 that the Company became
aware of in 1999.
BENEFICIAL OWNERSHIP BY CERTAIN PERSONS
The following table lists the beneficial ownership of the Company's common
stock with respect to all persons, other than those listed above, known to the
Company as of March 1, 2000 to be the beneficial owner of more than five percent
of such common stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL INTEREST(1) OF CLASS
- ------------------------------------ ---------------------- --------
<S> <C> <C>
AMCORE Investment Group, N.A. .............................. 2,133,330(2)(3) 7.83%
501 Seventh Street, Rockford, IL 61104
</TABLE>
- ---------------
1. The information contained in this column is based upon information furnished
to the Company by the persons named above or obtained from records of the
Company.
2. Includes 2,133,330 shares held by nominees acting on behalf of AMCORE
Investment Group, N.A. Excludes 955,788 shares held as trustee of various
trusts over which AMCORE Investment Group, N.A. has neither voting nor
investment power, and as to which beneficial ownership is disclaimed on these
shares. The nature of beneficial ownership for the shares shown in this
column is as follows: sole voting power -- 1,901,906 shares, shared voting
power -- 1,550 shares, no voting power -- 229,874 shares, sole
5
<PAGE> 8
investment power -- 1,682,978 shares, shared investment power -- 435,477
shares and no investment power -- 14,875 shares.
3. Although there is no affirmative duty or obligation to do so, it is the
general practice of AMCORE Investment Group, N.A. to solicit the direction of
trust beneficiaries or grantors with regard to the voting of shares held in
trust on all issues which are subject to vote by proxy. The shares are then
voted as directed by the trust beneficiary or grantor.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding compensation
earned during each of the Company's last three fiscal years by the Company's
chief executive officer and each of the Company's four other most highly
compensated executive officers based on salary and bonus earned during the year
ended December 31, 1999:
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-----------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION ---------- ----------
------------------------------------------------ SECURITIES
OTHER ANNUAL UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS(1)(2) COMPENSATION(3) OPTIONS PAYOUTS(4) COMPENSATION(5)
- --------------------------- ---- --------- ----------- --------------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert J. Meuleman............ 1999 $380,000 $127,464 $5,770 40,079 $184,953 $255,621
President & Chief 1998 360,000 90,146 8,622 18,000 183,099 210,638
Executive Officer 1997 320,000 17,336 9,182 60,000 35,608 334,691
Kenneth E. Edge............... 1999 260,000 59,186 335 24,756 57,843 51,462
Executive Vice President & 1998 230,000 51,479 394 21,448 50,138 26,457
Chief Operating Officer 1997 180,000 24,447 254 15,000 6,820 68,759
James S. Waddell.............. 1999 230,000 54,519 437 17,000 85,747 68,664
Executive Vice President & 1998 215,000 46,451 613 22,401 84,251 55,367
Chief Administrative Officer 1997 200,000 22,580 785 15,000 17,986 80,706
John R. Hecht................. 1999 200,000 58,382 1,231 17,000 47,247 30,688
Executive Vice President & 1998 170,000 44,756 1,309 15,406 41,626 17,994
Chief Financial Officer 1997 135,000 12,480 2,542 9,000 7,266 18,213
James F. Warsaw............... 1999 185,000 57,451 176 24,965 14,774 22,892
President and Chief
Operating 1998 172,500 36,078 53 16,094 9,155 18,226
Officer, AMCORE Bank, N.A. 1997 160,000 31,432 163 10,500 3,699 20,048
</TABLE>
- ---------------
1. Compensation deferred pursuant to the Company's deferred compensation plan
is included in Salary and Bonus totals.
2. Reflects bonus and profit sharing earned during the year which was paid
during the following year.
3. These amounts represent reimbursements during the year for taxes.
4. Reflects long term incentive plan payouts earned during the year and
dividend equivalent payments made on all outstanding Performance Units.
5. Amounts shown for 1999 consist of the following:
<TABLE>
<CAPTION>
MEULEMAN EDGE WADDELL HECHT WARSAW
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Imputed income life insurance............................... $ 2,590 $ 3,686 $ 3,545 $ 1,256 $ 841
Above market interest on deferred compensation.............. 191 42 59 42 25
AMCORE Financial Security Plan.............................. 11,200 8,967 11,200 11,200 11,200
Company's contributions to Top Hat Plan..................... 82,561 38,767 25,478 18,190 10,826
Accrued Supplemental Executive
Retirement Plan benefits.................................... 159,079 0 28,382 0 0
-------- ------- ------- ------- -------
Total other compensation.................................... $255,621 $51,462 $68,664 $30,688 $22,892
======== ======= ======= ======= =======
</TABLE>
6
<PAGE> 9
Prior year reported amounts include contributions to the security plan, top
hat plan, above market interest on deferred compensation, life insurance imputed
income and the value of life insurance premiums. The value of life insurance for
Messrs. Meuleman, Edge, Waddell and Hecht include the reportable income under a
split-dollar life insurance agreement with the Company. For further discussion
of these agreements, see "Employee Agreements" on page eight.
OPTION GRANTS
The following table provides information related to options granted to the
named executive officers during 1999.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------------------
NUMBER OF PERCENT OF POTENTIAL NET REALIZABLE
SECURITIES TOTAL OPTIONS VALUE AT ASSUMED
UNDERLYING GRANTED TO EXERCISE ANNUAL RATES OF STOCK
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION PRICE APPRECIATION FOR
NAME GRANTED(2)(3) FISCAL YEAR SHARE(2)(3)(4) DATE OPTION TERM(1)
- ---- ------------- ------------- -------------- ---------- -------------------------
5% 10%
-------- ----------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Meuleman...... 35,000 10.0% $23.407 8/13/2009 $515,219 $1,305,666
Kenneth E. Edge......... 20,000 5.7 23.407 8/13/2009 294,411 746,095
James S. Waddell........ 17,000 4.9 23.407 8/13/2009 250,249 634,180
John R. Hecht........... 17,000 4.9 23.407 8/13/2009 250,249 634,180
James F. Warsaw......... 17,000 4.9 23.407 8/13/2009 250,249 634,180
Reload Options Granted
Robert J. Meuleman...... 5,079 N/A $20.813 12/31/2001 $ 66,480 $ 168,473
Kenneth E. Edge......... 4,756 N/A 22.657 5/9/2005 67,768 171,736
James S. Waddell........ -- -- -- -- -- --
John R. Hecht........... -- -- -- -- -- --
James F. Warsaw......... 7,965 N/A 20.813 5/15/2006 104,255 264,204
</TABLE>
- ---------------
1. Values are reported net of the option exercise price, but before taxes
associated with exercise. These amounts represent certain assumed rates of
appreciation only. Actual gains, if any, on stock option exercises are
dependent on the future performance of the Common Stock, overall stock
conditions and the optionholders' continued employment.
2. Reflects options granted on August 13, 1999 to acquire shares of Common Stock
pursuant to the 1995 Stock Incentive Plan.
3. Options granted pursuant to the 1995 Stock Incentive Plan have an exercise
price of not less than 100% of the fair market value of the Common Stock on
the date of the grant. Options generally become fully exercisable in four
years (25% per year) following the date of grant and remain exercisable until
ten years from the date of the grant unless the optionee ceases to be an
employee of the Company or its subsidiaries. The option exercise price may be
paid in cash, shares of Common Stock having a fair market value equal to the
exercise price, stock withholding or any combination of the above.
4. Reload options granted pursuant to the 1995 Stock Incentive Plan have an
exercise price of not less than 100% of the fair market value of the Common
Stock on the date of the exercise of the option that created the reload.
Reload options become exercisable immediately and remain exercisable until
the expiration date of the original grant unless the optionee ceases to be an
employee of the Company or its subsidiaries. The option exercise price may be
paid in cash, shares of Common Stock having a fair market value equal to the
exercise price, stock withholding or any combination of the above.
7
<PAGE> 10
OPTION EXERCISES AND YEAR-END HOLDINGS
The following table sets forth information with respect to the named
executives concerning the exercise of options during the last year and
unexercised options held as of December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
NUMBER OF UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT YEAR END(1) OPTIONS AT YEAR END(2)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Meuleman............ 9,000 $118,998 148,880 48,500 $1,261,961 $20,773
Kenneth E. Edge............... 6,750 66,869 32,204 29,000 88,890 11,870
James S. Waddell.............. -- -- 58,401 26,000 414,049 10,090
John R. Hecht................. -- -- 35,906 26,000 271,937 10,090
James F. Warsaw............... 10,500 77,874 42,809 23,000 241,576 10,090
</TABLE>
- ---------------
1. Options granted to acquire shares of Common Stock pursuant to various stock
incentive plans.
2. The amounts shown reflect the value of unexercised options calculated by
determining the difference between the closing price of the Company's Common
Stock on the last day of the year ($24.00) and the applicable exercise price
of such options.
LONG-TERM INCENTIVE PLAN AWARDS TABLE
The following table sets forth information with respect to the named
executives concerning Performance Unit Awards granted during 1999 pursuant to
the Company's 1995 Stock Incentive Plan.
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
NON-STOCK PRICE-BASED PLANS
NUMBER OF PERFORMANCE ----------------------------------
PERFORMANCE PERIOD UNTIL THRESHOLD TARGET OUTSTANDING
NAME UNITS(1) PAYOUT 13.5% 14.5% 16%
- ---- ------------ ------------ --------- -------- -----------
<S> <C> <C> <C> <C> <C>
Robert J. Meuleman.................. 38,171 3 years $169,861 $254,601 $424,080
Kenneth E. Edge..................... 19,490 3 years 86,731 129,998 216,534
James S. Waddell.................... 17,241 3 years 76,722 114,997 191,548
John R. Hecht....................... 14,993 3 years 66,719 100,003 166,572
James F. Warsaw..................... 9,430 3 years 41,964 62,898 104,767
</TABLE>
- ---------------
1. Performance units were granted to certain executive officers on January 1,
1999 pursuant to the 1995 Stock Incentive Plan. The holders of these
performance units will be entitled to cash or stock payments, or a
combination thereof, if certain performance targets are met during the
three-year period ending December 31, 2001. The holders are also entitled to
dividend equivalent payments on these Performance Units. The target levels
applicable to the Performance Units as shown in the table above are achieved
if the average consolidated return on stockholders' equity (ROE) for the
performance period is as shown above for each of the performance levels. Each
Performance Unit shall be of no value unless at least the minimum level is
achieved. If the Company achieves an average ROE in excess of the minimum
performance level set forth above, each Performance Unit shall have the
following values: $4.45 per unit for threshold performance, $6.67 per unit
for target performance and $11.11 per unit for outstanding performance. It is
the Company's intention to make incremental payments to executive officers
for performance levels that are between these specified target levels.
EMPLOYEE AGREEMENTS
The Company has entered into individual Transitional Compensation
Agreements with current executive officers, including Messrs. Robert J.
Meuleman, Kenneth E. Edge, James S. Waddell, and John R. Hecht. If, during the
three-year period following a change of control of the Company (as defined in
the agreements), the
8
<PAGE> 11
executive officer's employment is ended through (1) termination by the Company
without cause (as defined in the agreements) or (2) termination by the executive
officer for good reason (as defined in the agreements) based upon a breach of
the agreement by the Company or a significant adverse change in the executive
officer's responsibilities, compensation or benefits, then a termination payment
will be made to the executive. The agreements provide that such payment will
equal three times the sum of the executive's then current annual salary and
annual bonus. In addition, the agreements provide that, if any portion of the
termination payment is subject to an excise tax as an excess parachute payment,
as defined in the Internal Revenue Code Section 4999, the Company shall pay the
executive the amount necessary to offset the excise tax and any applicable taxes
on this additional payment. Additional provisions provide for the continuation,
for three years after termination, of welfare and other benefits to the
executive and his family unless termination is for cause. Upon a change of
control of the Company, the executive is entitled to a lump sum cash payment
equivalent to the present value of the projected benefits under certain
supplemental retirement plans.
The Company also entered into Transitional Compensation Agreements with
James F. Warsaw and five other executive officers. These agreements provide that
if such executive's employment is terminated within one year after a change in
control of the Company either (i) by the Company other than for "cause" or other
than as a consequence of disability or retirement (all as defined in such
agreements) or (ii) by such executive for reasons relating to a diminution of
responsibilities, compensation or benefits or relocation requiring a change in
residence or a significant increase in travel, he will receive: (a) lump sum
payment equal to his monthly salary in effect at the date of termination for a
period of time determined pursuant to each agreement based upon his salary,
years of service and age at the time of his termination, and a prorata portion
of his annual bonus; (b) life, disability, accident and health insurance as
provided in the Company's insurance programs for a period of 24 months after
termination of employment; and (c) certain perquisites and outplacement
services. The agreements provide for a commensurate reduction in the amount of
cash payments to be made to an executive under the agreement in the event that
the payments fail to be deductible by the Company as a result of Section 280G of
the Internal Revenue Code of 1986, as amended. If these severance agreements had
become operative in December 1999, the maximum number of monthly payments
payable to the following individual (subject to reduction as described in the
previous sentence) would have been approximately: James F. Warsaw, 23 months.
On August 10, 1998, the Company entered into Endorsement Split Dollar
Insurance Agreements (Agreement(s)) with Robert J. Meuleman, Kenneth E. Edge,
James S. Waddell, and John R. Hecht, replacing prior agreements. The Company
purchased split-dollar and/or bank-owned life insurance policies for the named
executives pursuant to each Agreement in conjunction with the Supplemental
Executive Retirement Plan. The Company may terminate any such Agreement and
receive its interest in the life insurance policy under certain conditions,
including termination of employment (other than due to death, disability or
retirement, unless such terminated employee becomes affiliated with a competitor
following any such termination due to disability or retirement), provided the
Company may not terminate any of the Agreements if such termination of
employment or affiliation occurs after a "change in control" of the Company.
The Company has also adopted a non-qualified, unfunded supplemental pension
program for Messrs. Meuleman, Edge, Waddell, and Hecht (the "Supplemental
Executive Retirement Plan" (SERP)), which provides retirement benefits in excess
of the maximum benefit accruals for qualified plans which are permitted under
the Code. The benefits under the SERP are provided by the Company on a
non-contributory basis. The Company has not funded these supplemental retirement
benefits other than accruing a liability in the amount of the actuarially
determined present value of the retirement benefits.
A participant's annual retirement benefits payable under the SERP are based
upon three percent of such participant's final base salary times the number of
years of service and shall not exceed 70% of a participant's final base salary
and shall be no less than 45% of a participant's final base salary. The benefits
payable shall be reduced by any other AMCORE provided benefits and also reduced
by 50% of applicable Social Security benefits. The benefits shall be payable in
the form of installment payments for the remainder of the participant's life,
but in no event less than ten years, with payment continuing to the
participant's designated
9
<PAGE> 12
beneficiary for the remaining period of such ten years in the event of the
participant's death after payments have commenced but prior to the expiration of
the ten-year period.
The Company provides a Top Hat plan (entitled "AMCORE Top Hat Plan") for
senior executive officers to maintain certain levels of retirement benefits and
maximize the effectiveness and flexibility of compensation arrangements for
participants in the AMCORE Financial Security Plan (Security Plan). This is
accomplished by crediting each participating executive with contributions that
would be made to the Security Plan, but for certain limitations imposed by the
Internal Revenue Code.
In August 1997, the Company adopted a Transitional Compensation policy
(Policy) to provide severance pay for substantially all of the Company's
employees whose employment is terminated within one year following a change in
control (as defined in the Policy). The Policy provides for semi-monthly
payments, depending on employment status, equal to such employee's current
weekly or monthly salary for a period of time determined pursuant to the Policy
based upon his or her salary, years of service and age.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Carl J. Dargene serves as an ex-officio member of the Company's
Compensation Committee and is the Company's Chairman of the Board. Mr. Dargene
also serves as Chairman of the Compensation Committee of Woodward Governor
Company. John A Halbrook is Chairman and CEO of Woodward Governor Company and is
a director of the Company. Mr. Dargene also serves as a Director of CLARCOR and
Lawrence E. Gloyd, Chairman and Chief Executive Officer of CLARCOR serves on the
Company's Compensation Committee.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors reviews the Company's
compensation and benefit policies, including individual salaries of the
executive officers, and submits recommendations to the Board of Directors.
During 1999, the Compensation Committee, with the assistance of an outside
compensation consulting firm, completed an extensive review of AMCORE's
executive total compensation offerings to ensure such offerings are
market-competitive, attractive to AMCORE's executives and supportive of the
Company's short-and long-term goals. With the exception of a change to AMCORE's
1999 long-term incentive plan implemented during 1999, all other changes to the
executive compensation program are effective in 2000.
AMCORE believes that base compensation should be competitive in the
marketplace, but that incentive opportunities should increase the amount of
compensation available to key personnel. Incentive opportunities should be tied
directly to Company performance using quantitative measures designed to enhance
short and long term shareholder value.
It is the philosophy of management, supported by the Compensation
Committee, that senior management cash compensation (base pay plus annual
incentive) should be at or near the median for similar positions in the
industry, and that incentives for meeting long-term business objectives should
provide the opportunity for total rewards to reach the 65th percentile and
beyond based on performance relative to industry and peer applicable
comparisons.
EXECUTIVE OFFICER COMPENSATION
Consistent with this philosophy, the Compensation Committee has established
a compensation program consisting of an annual base salary and the opportunity
to earn incentive compensation competitive with comparable external pay levels
and tied directly to performance of the Company, personal performance and
increases in stockholder value. The Company's executive officer compensation
program in 1999 consisted of the following components:
- Base Salary
- Short-Term Incentive Plan
10
<PAGE> 13
- Intermediate-Term Incentive Plan
- Long-Term Incentive Plan
BASE SALARY
The Compensation Committee, working with the compensation consulting firm,
determines a range for the executive officers' base salaries in order to be
competitive and consistent with amounts paid to executives performing similar
functions in comparable companies. The amount of each executive's base salary is
set within the range based upon performance of the Company, performance of
particular business units, the personal performance of such executive officers,
market base salary increases and such other factors as the Compensation
Committee and the Board of Directors deem appropriate.
SHORT-TERM INCENTIVE
The short-term incentive component of each executive officer's compensation
is based upon participation in the Company's cash profit sharing plan, generally
available to all of the Company's employees, and an annual cash incentive plan.
Amounts payable under the Company's profit sharing plan range between 0%
and 5% of the executive officer's total eligible wages, and are based upon the
profitability of the Company. The cash profit sharing payout earned in 1999 was
2% of total eligible wages.
Annual incentive amounts are payable contingent upon the attainment of
financial targets such as consolidated or affiliate earnings, which are
established at the beginning of the year; the personal performance of the
executive; and, where appropriate, attainment of earnings goals of the operating
unit(s) for which the executive has responsibility. The targets may be adjusted
from time to time to take into account unforeseen or extraordinary events.
Generally, if certain minimum financial results are not achieved, no annual
incentive will be paid. The opportunity under the annual incentive plan is
expressed as a maximum opportunity percentage tied to the participant's base
salary range midpoint, or salary, whichever is higher. The plan has a threshold
at 86% of target performance and a maximum at 110% of target performance. Each
1% increment above the threshold performance increases the percentage of the
maximum opportunity paid by 4%. Thus, at 90% of target performance, 20% of the
maximum incentive is paid. At 100% of target performance, 60% of the maximum
incentive is paid. At 110% of target performance, 100% of the maximum incentive
is paid. For the executive officers, the maximum incentive opportunities range
from 40% to 70% of the respective base pay range midpoint. At target
performance, the incentive opportunities range from 24% to 42% of the respective
base pay range midpoint, or salary, whichever is higher.
In 1999, the consolidated earnings objective was $45.5 million, an increase
of 5% over the prior year, whereas affiliate earnings goals varied by company.
In 1999, the total short-term incentive payouts to the executive officers were
approximately 53% of the maximum levels established under the plan.
In 1999, the Compensation Committee decided to increase the target
incentive opportunity for the senior executive team over a three-year period
starting in 2000 and to express the target opportunity as a percentage of actual
base salary instead of a percentage of base salary range midpoint. This increase
in the targets reflects the opportunities available to comparable positions of
peer organizations, the elimination of executive management participation in the
cash profit sharing plan and the elimination of the intermediate incentive plan,
which is discussed below. Also in 1999, the Committee decided to pro-rate the
1999 restructuring charge as it relates to the intermediate incentive plan over
a three-year period. The Committee feels that the restructuring charge related
to the consolidation of AMCORE's bank charters into one charter will have a
significant positive impact on AMCORE in the future and that the related
negative impact on the annual incentive plan and intermediate incentive plan
should be amortized against the benefits and should not be entirely realized in
1999.
11
<PAGE> 14
INTERMEDIATE-TERM INCENTIVE
The intermediate-term incentive component of each executive officer's
compensation is based upon the award of performance units which provide for cash
or stock payouts, or a combination thereof, based upon the achievement of
targeted average consolidated returns on stockholders' equity (ROE) by the
Company over a three-year performance period. The holders are also entitled to
dividend equivalent payments on these performance units. A grant was made in
1999 to the executive officer team. For the 1999 grant, the three target levels
applicable to the performance units granted are: Threshold at 13.5% ROE; Target
at 14.5% ROE; and Outstanding at 16.0% ROE. Each performance unit shall be of no
value unless at least the minimum performance level is achieved. If the Company
achieves an average ROE in excess of the minimum performance level set forth
above, each performance unit shall have the following values: $4.45 per unit for
Threshold performance; $6.67 per unit for Target performance; and $11.11 per
unit for Outstanding performance. Average return on equity in excess of 13% but
less than 14% was obtained for the 1997 units expiring in 1999. Therefore,
payouts of $536,857 were made in January 2000 pursuant to these units.
The Compensation Committee felt that this plan diluted management's focus
and decided to stop granting performance units after 1999 and replace the
opportunity with higher annual incentive opportunities, larger stock option
grants and moderate restricted stock grants. If performance threshold are met or
exceeded, the performance unit grants made in 1998 will be cashed out in 2000
and the grants made in 1999 will be cashed out in 2001.
LONG-TERM INCENTIVE
The long-term incentive component of each executive officer's compensation
involves the award of restricted stock and stock options pursuant to the AMCORE
Long-Term Incentive Plan and the 1992 and 1995 Stock Incentive Plans. Long-term
incentives are provided to award executives for achieving long-term strategic
goals and to provide a balance against overemphasis on short-term results.
Through stock ownership, executives' long-term incentives are tied to
stockholder value.
In 1999, the Compensation Committee has recommended annual stock option
grant targets for AMCORE's top five executives that have an approximate present
value of 70% to 85% of base salary. (This estimate was derived using the
Black-Scholes valuation methodology.) This enhanced earnings opportunity
reflects AMCORE's shift toward a longer term value creation focus and the
elimination of the Intermediate-Term Plan effective January 1, 2000.
CHIEF EXECUTIVE OFFICER COMPENSATION
The compensation package for Mr. Robert J. Meuleman, who was the Chief
Executive Officer of the Company during 1999, was determined in the same manner
as for all other executive officers, except that Mr. Meuleman's short-term
incentive was based 100% on the Company's total performance without reference to
any particular business unit of the Company or personal objectives. For this
purpose, Company performance was measured by comparing the consolidated
operating earnings of the Company to earnings goals established by the
Compensation Committee. Consolidated operating earnings were $43.4 million in
1999 and represented 95% of the earnings goal of $45.5 million.
Mr. Meuleman's base salary in 1999 was $380,000, which was in the first
quartile of his salary range; his short-term incentive bonus was $124,264, a
payout of 40% of the maximum, for a combined total cash compensation of
$504,264. During 1998, Mr. Meuleman earned a base salary of $360,000 and
short-term incentive of $90,146 for a total of $450,146.
12
<PAGE> 15
The Compensation Committee believes that the executive team of the Company
will receive appropriate rewards under this program of corporate incentives, but
only if they achieve the performance goals established for them and the Company
and if they succeed in increasing stockholder value.
Paul Donovan, Chairman
Richard C. Dell
Lawrence E. Gloyd
Frederick D. Hay
Carl J. Dargene, ex-officio member
Robert J. Meuleman, ex-officio
member
COMPANY PERFORMANCE
The graph below compares the cumulative total shareholder return on the
Common Stock of the Company for the last five years with the cumulative total
returns on the NASDAQ Stock Market Index and a selected peer group index.
Cumulative total returns have been measured by dividing the sum of the
cumulative amount of dividends for the measurement period, assuming dividend
reinvestment, and the difference between the share price at the end and the
beginning of the measurement period by the share price at the beginning of the
measurement period.
During 1999, the Company's Compensation Committee modified the short term
incentive plan for executive officers to reflect opportunities available to
comparable positions of peer organizations. A group of fourteen banks with
similar revenue characteristics, including income from fiduciary activities, and
located in one of the ten North Central states was selected as peer
organizations and consists of the following companies:
1st Source (SRCE), Chemical Financial Corp. (CHFC), Citizens Banking
Corp. (CBCF), Community First Bankshares, Inc. (CFBX), First Financial
Bancorp (FFBC), First Midwest Bancorp (FMBI), Firstmerit Corp. (FMER),
Fulton Financial Corp. (FULT), Old National Bancorp (OLDB), One Valley
Bancorp, Inc. (OV), Park National Corp. (PRK), Provident Financial
Group, Inc. (PFGI), Susquehanna Bancshares, Inc. (SUSQ), USBancorp. Inc.
(UBAN).
Comparison of the yearly percentage change in the cumulative shareholder
return with this peer group was determined to be more representative due
primarily to similar revenue profiles and geographic markets and the use of this
group for evaluating financial performance for incentive purposes. The NASDAQ
Bank Stocks index which had previously been used for comparison reflected a
12/31/99 index of 314.6.
13
<PAGE> 16
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
(AMCORE FINANCIAL, INC., NASDAQ STOCK MARKET INDEX, BANK PEER GROUP)
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
AMCORE NASDAQ STOCK PEER GROUP
------ ------------ ----------
<S> <C> <C> <C>
12/31/94 100.000 100.000 100.000
101.333 100.527 99.340
108.810 105.809 101.337
103.437 108.951 101.096
103.437 112.381 102.195
94.817 115.288 103.454
100.235 124.622 107.517
108.362 133.775 110.120
111.071 136.490 115.056
124.112 139.634 115.647
122.748 138.830 118.562
121.516 142.086 121.925
12/31/95 111.218 141.335 123.316
115.337 142.042 123.338
119.457 147.456 125.629
115.514 147.952 126.661
110.672 160.208 126.370
111.364 167.558 127.600
110.163 160.005 129.355
107.374 145.762 127.244
111.558 153.938 132.623
115.256 165.704 138.724
116.661 163.870 141.047
125.095 174.037 152.928
12/31/96 151.476 173.892 157.791
135.196 186.232 161.794
141.566 175.932 169.046
160.984 164.463 165.310
152.436 169.582 171.964
162.408 188.791 184.716
156.157 194.590 195.892
166.185 215.098 206.827
170.483 214.787 204.826
196.723 227.521 223.855
203.208 215.666 222.070
205.370 216.809 225.622
12/31/97 218.316 213.073 244.417
212.885 219.818 233.891
222.660 240.486 248.985
235.729 249.365 260.522
225.907 253.567 261.541
214.993 239.491 252.241
210.746 256.214 248.832
223.918 253.213 242.000
188.793 203.152 209.153
200.960 231.347 222.008
211.450 241.334 228.034
208.137 265.721 234.261
12/31/98 203.388 300.184 235.394
204.360 343.848 226.514
207.414 313.013 220.931
184.914 336.019 226.090
187.707 345.423 236.587
189.383 337.595 237.862
207.500 367.463 238.616
206.938 361.742 234.195
196.816 376.003 226.515
186.764 375.966 216.717
213.930 403.775 229.538
228.644 447.425 227.593
12/31/99 218.542 545.673 210.905
</TABLE>
NOTES:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The index level for all series was set to 100.0 as of December 31, 1994.
14
<PAGE> 17
TRANSACTIONS WITH MANAGEMENT
Directors and principal officers of the Company and their associates were
customers of, and had transactions with, the Company's subsidiaries in the
ordinary course of business during 1999. Comparable transactions may be expected
to take place in the future. All outstanding loans, commitments to loan,
transactions in repurchase agreements and certificates of deposit, and
depository relationships in the ordinary course of business, were on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for transactions with other persons, and, in the opinion
of management of the Company, did not involve more than the normal risk of
collectibility or present other unfavorable features. As of December 31, 1999,
various directors and officers of the Company were indebted to the Company's
subsidiaries in the amount of approximately $4.09 million. This amount
represents 0.15 percent of the Company's subsidiaries' outstanding loans and
1.39 percent of the Company's stockholders' equity as of that date. The maximum
aggregate amount of their indebtedness to the Company's subsidiaries during 1999
was $6.20 million. As of December 31, 1999, associates of directors and officers
of the Company were indebted in the amount of $1.17 million to the Company's
subsidiaries. Further, the Company's subsidiaries have additional committed, but
unfunded, lines of credit of $5.71 million to associates of directors and
officers of the Company. The maximum aggregate amount of such associates'
indebtedness to the Company's subsidiaries during 1999 was $3.21 million.
The Board of Directors, on February 22, 1984, authorized the Executive
Committee to negotiate such agreements as may be necessary to accomplish stock
redemptions pursuant to Section 303 of the Internal Revenue Code to pay death
taxes of certain stockholders. Such redemptions will be conditioned upon any
requisite bank regulatory agency or debt covenant approvals. Bank holding
companies, such as the Company, are required to notify the Federal Reserve Board
prior to paying 10% or more of consolidated net worth to redeem shares over a
twelve-month period.
ITEM 2 -- APPOINTMENT OF INDEPENDENT AUDITORS
KPMG LLP has been appointed to serve as the independent auditors for the
Company and subsidiaries for the fiscal year ending December 31, 2000. This
appointment is being submitted to the stockholders for ratification.
Representatives of the firm are expected to be present at the Annual Meeting to
respond to appropriate questions from stockholders and to have the opportunity
to make any statements they consider appropriate. In the event the stockholders
do not ratify the appointment of KPMG LLP, the selection of independent auditors
will be determined by the Audit Committee and the Board of Directors after
careful consideration of all information submitted by the stockholders.
Accounting services rendered by KPMG LLP during 1999 included the
examination of the annual consolidated financial statements, review of unaudited
quarterly statements, assistance with Securities and Exchange Commission
filings, legally required special audits of subsidiaries, and consultations in
connection with various tax and accounting-related matters.
During 1999, the Board of Directors reviewed and approved in advance or
ratified the engagement of all of KPMG LLP's professional services rendered to
the Company and related entities.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR RATIFICATION OF
KPMG LLP AS AUDITORS FOR THE YEAR 2000.
15
<PAGE> 18
ITEM 3 -- APPROVAL OF THE AMCORE FINANCIAL, INC. 2000 STOCK INCENTIVE PLAN
On February 16, 2000, the Board of Directors adopted the AMCORE Financial,
Inc. 2000 Stock Incentive Plan (the "Plan"), subject to stockholder approval.
The Plan will replace the AMCORE Financial, Inc. 1995 Stock Incentive Plan
adopted by the Company in February 1995. Nearly all of the shares of common
stock reserved for issuance under the AMCORE Financial, Inc. 1995 Stock
Incentive Plan have been issued or reserved for issuance pursuant to outstanding
grants. The Board of Directors has determined that a new incentive plan is
needed in order to continue to attract and retain outstanding individuals as
officers and key employees and to increase their proprietary interest in, and
their identification with, the Company and its subsidiaries. The Plan will
become effective (The "Effective Date") immediately upon approval by the
stockholders and, if approved, will continue in effect until all awards under
the Plan have been satisfied by the issuance of shares or the payment of cash,
but no award may be granted more than five years after the Effective Date. There
shall be reserved and available for issuance under the Plan (i) during the first
year of the Plan, 2.5% of the total number of shares of the Company's common
stock outstanding at the Effective Date and (ii) during each subsequent year of
the Plan, an additional 1.5% of the total number of shares of the Company's
common stock outstanding as of the first day of each subsequent year of the
Plan, not to exceed 425,000 shares in any such year. Available shares not used
during any year of the Plan will be available for issuance in the subsequent
years.
The summary of the Plan which follows is qualified in its entirety by
reference to the complete text of the Plan as set forth in Exhibit A attached
hereto.
GENERAL DESCRIPTION
The Plan will be administered by a committee (the "Committee") of the Board
of Directors, provided that each member of the Committee shall be (i) a
"disinterested person" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and (ii) an "outside
director" within the meaning of Section 162 (m) of the Internal Revenue Code of
1986, as amended (the "Code"). It is currently contemplated that the Committee
would consist of the members of the Compensation Committee described herein.
Eligible participants in the Plan will consist of such officers and other key
employees of the Company and its subsidiaries as the Committee may select from
time to time. Non-officer directors of the Company are not eligible to
participate in the Plan. In the discretion of the Committee, participants may
receive stock options, stock appreciation rights, restricted stock awards,
performance unit awards or stock bonus awards, either singly or in combination.
The amount of any grant or award, whether measured by shares of common stock or
otherwise, is subject to the discretion of the Committee; provided, that no
participant may receive in any Plan Year awards of stock options, stock
appreciation rights, stock bonus awards or performance unit awards payable in
shares of stock covering more than 20% of the shares of stock reserved for
issuance in such plan year; and provided, further, that no participant may be
granted in any Plan Year performance unit awards payable other than in shares of
stock in an amount in excess of such individual's base compensation for the
first year of the Plan. Shares to be issued under the Plan may be authorized and
unissued shares of common stock, treasury shares of common stock, or any
combination thereof. Any shares subject to a grant of award which terminates,
expires or is cancelled prior to its vesting or exercise may again be available
for future grants under the Plan. Awards under the plan may be evidenced by an
agreement or instrument which may contain such terms, provisions and conditions,
not inconsistent with the Plan, as may be determined by the Committee in its
discretion.
The Committee has general authority to administer the Plan. The Committee
may amend the Plan in any respect, provided that no amendment may be made which
would increase the maximum number of shares available for issuance pursuant to
the Plan, extend the maximum period during which any award may be exercised,
extend the term of the Plan, decrease the minimum option price to less than the
fair market value of the common stock on the date of the grant of the option or
change the employees or class of employees eligible to participate in the Plan
without stockholder approval as required by Rule 16b-3 under the Exchange Act.
In addition, the Committee may amend the terms of any award previously granted
to an employee, provided that no such amendment may adversely affect the rights
of a holder without his or her consent. Notwithstanding
16
<PAGE> 19
the foregoing, stockholder approval of any material amendment to the Plan will
be required only at such time as Rule 16b-3 under the Exchange Act shall require
such approval.
The maximum number of shares of common stock issuable under the Plan and
the number, kind and option price of shares or other consideration subject to
any outstanding award granted under the Plan may be adjusted, as deemed
appropriate by the Committee, to reflect changes in the capitalization of the
Company by reason of stock dividends or distributions, recapitalizations,
reorganizations, mergers, consolidations, combinations, spin-offs, exchanges or
other relevant changes in capitalization or corporate structure.
No award granted under the Plan will be assignable or transferable except
by will, by the laws of descent and distribution or pursuant to a "qualified
domestic relations order" and by such other means as the Committee may approve
from time to time for participants whose transactions in the Company's common
stock are not subject to Section 16(b) of the Exchange Act.
STOCK OPTIONS
Options granted under the Plan may be (i) options which are intended to
qualify under particular provisions of the Code as incentive stock options
("Incentive Stock Options") or (ii) options which are not intended to so qualify
("Non-Qualified Stock Options"). The Committee will determine the number of
shares subject to each stock option and the manner and time of exercise. No
option however will be exercisable more than ten years after the date of grant.
The per-share option price will not be less than 100% of the fair market value
of a share of common stock as of the date of grant. Upon exercise, the option
price may be paid in cash, in shares of common stock having a fair market value
equal to the option price or by a combination thereof. Options may, unless
otherwise determined by the Committee, be exercised by means of a cashless
exercise procedure involving successive transfers of newly issued shares of
common stock to the Company. The Plan sets forth conditions for the exercise of
options under certain circumstances upon termination of employment by reason of
death, disability, retirement or otherwise.
RELOAD OPTIONS
Reload Options are additional options that are granted to eligible officers
of the Company. An officer is eligible to receive a Reload Option if Company
policy requires the officer to meet minimum ownership requirements in Company
stock and the officer sells or tenders mature shares of Company stock that the
officer already owns to pay the cost of exercising an existing stock option. A
Reload Option will be either an Incentive Stock Option or a Non-Qualified Stock
Option, depending upon the type of existing option that is exercised. Only one
Reload Option grant is permitted per existing stock option grant and only one
Reload Option grant is permitted per year. Reload Options are granted only when
the existing stock option is exercised and will have the same expiration date as
the existing stock option. The exercise price of a Reload Option will be no less
than the fair market value of Company stock on the date the Reload Option is
granted.
STOCK APPRECIATION RIGHT
Stock appreciation rights ("SARs") may be granted either alone or in tandem
with a related stock option. The Committee will determine the manner and time of
exercise of SARs, but no such right will be exercisable less than six months or
more than ten years after the date of grant. The Plan sets forth conditions for
the exercise of SARs upon termination of employment by reason of death,
disability, retirement or otherwise.
Upon exercise of a SAR, the grantee will be paid the excess of the then
fair market value of the number of shares of common stock to which the right
relates over a specified price, which may not be less than the fair market value
of such number of shares at the date of grant of the right, or the fair market
value, at the time of grant, of the related stock options, as the case may be.
Such amount may be paid in cash or in shares of common stock having a fair
market value equal to such excess, or in such combination thereof, as the
Committee shall determine upon exercise of the right. The number of shares which
may be issued pursuant to all grants under the Plan will be reduced upon the
exercise of any SAR by the number of shares covered by the SAR.
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PERFORMANCE UNITS
Performance unit awards may be made from time to time and shall be
contingent on the achievement over a period of not less than two nor more than
five years of such corporate, division, subsidiary, group or other objectives as
shall be established by the Committee. Such objectives will be established by
the Committee prior to the beginning of the performance period but may be
revised by the Committee from time to time during the performance period to take
into account significant unforeseen events or changes in circumstances.
Performance targets will relate to corporate, division, subsidiary, group or
unit performances and may be established in terms of growth in gross revenue,
earnings per share, ratios of earnings to equity or assets, or, with respect to
participants not subject to Section 162(m) of the Code, such other measures or
standards determined by the Committee in its discretion.
Except as may otherwise be determined by the Committee, a performance unit
award shall terminate if the holder of the award will not remain continuously in
the employ of the Company and its subsidiaries at all times during the
applicable performance period, provided that if a participant ceases to be
employed by the Company prior to the end of the performance period by reason of
death, disability or retirement, with the consent of the Company, any
performance unit award, to the extent earned under the applicable performance
targets, will be payable at the end of the performance period according to the
length of time employed.
Following the end of the performance period, the holder of a performance
unit award will be entitled to receive payment of an amount, not exceeding the
maximum value of the performance unit award established by the Committee, based
on the level of achievement of the objectives for the performance period as
determined by the Committee. Payment will be made in a lump sum or installments,
as determined by the Committee, commencing as promptly as practicable following
the end of the performance period unless deferred in such form as may be
prescribed by the Committee.
RESTRICTED STOCK
Restricted stock awards consisting of shares of common stock may be made
from time to time and shall be contingent on the employee continuing employment
with the Company or its subsidiaries for a period to be specified in the award.
The Committee may, in its sole discretion, provide for the lapse of any
restrictions on the shares of common stock in installments and may accelerate or
waive restrictions in whole or in part based on such factors and circumstances
as the Committee may determine. The holder of a restricted stock award will have
the right to vote the restricted shares and to receive dividends thereon, unless
and until such shares are forfeited. If all conditions to which such award is
subject have been satisfied, the holder will be entitled to such shares free
from all restrictions.
STOCK BONUSES
Stock bonus awards consisting of shares of common stock may be made from
time to time and will be (i) based on the achievement of performance objectives
which are established by the Committee based on the same criteria as with
respect to performances unit awards described above, and which may be adjusted
to take into account unforeseen events or changes in circumstances, or (ii) in
lieu of some or all of a cash bonus payable under the Company's bonus
compensation policy. Shares of common stock subject to a stock bonus award may
be granted directly to an employee free of any restrictions or issued pursuant
to a stock bonus award agreement.
CHANGE IN CONTROL OF THE COMPANY
In the event of a "Change in Control" of the Company, unless otherwise
determined by the Committee of the Board of Directors prior to the occurrence of
such "Change in Control", (i) any SARs outstanding for at least six months and
any stock options awarded under the Plan not previously exercisable and vested
will become fully exercisable and vested; and (ii) the restrictions applicable
to any restricted stock, performance unit or stock bonus awards will lapse, and
such shares and awards will be deemed fully vested.
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Generally, a "Change in Control" is defined under the Plan as: (i) the
acquisition by any person or group of 30% or more of the combined voting power
of the Company's then outstanding securities; (ii) the removal, by election or
any other means, of a majority of the members of the Board of Directors in any
period of two consecutive years; or (iii) stockholder approval of a (a) merger
of the Company with any other corporation, other than a merger whereby the
voting securities of the Company outstanding immediately prior to the merger
would represent at least 66 2/3% of the combined voting power of the voting
securities of the surviving entity immediately after such merger; (b) plan of
complete liquidation of the Company; or (c) sale of all or substantially all of
the Company's assets.
FEDERAL TAX CONSEQUENCES
The following is a general summary of certain Federal income tax
consequences under current laws to participants in the Plan. It does not purport
to be a complete discussion of all relevant aspects of Federal income taxation
and does not discuss state, local or foreign tax consequences. Each employee is
urged to consult his personal tax advisor as to the precise Federal, state,
local, foreign and other tax consequences of participation in the Plan.
Non-Qualified Stock Options. An employee will not recognize any income, and
the Company will not be entitled to a deduction, upon the grant of a
Non-Qualified Stock Option. Upon the exercise of a Non-Qualified Stock Option,
an employee generally will recognize ordinary income in an amount equal to the
excess of the fair market value of the shares acquired over the option price,
and the Company will be entitled to a corresponding deduction.
An employee's aggregate basis in shares acquired upon the cash exercise of
a Non-Qualified Stock Option will be equal to the fair market value of such
shares on the date of exercise, and the holding period of such shares will begin
on such date. Upon a sale of shares acquired pursuant to the exercise of a Non-
Qualified Stock Option, an employee generally will recognize capital gain or
loss in an amount equal to the difference between the amount realized on such
sale and the employee's basis in such shares. Such gain or loss generally will
be long-term capital gain or loss if the employee has held such shares for more
than one year.
Incentive Stock Options. An employee will not recognize any income, and the
Company will not be entitled to any deduction, upon the grant or timely exercise
of an Incentive Stock Option. Exercise of an Incentive Stock Option will be
timely if made while the optionee is employed by the Company or within three
months after the cessation of such employment (three years if the optionee is
disabled within the meaning of Section 22(e) (3) of the Code). The timely
exercise of an Incentive Stock Option may, however, affect the computation of
the employee's alternative minimum tax. An employee's aggregate basis of shares
acquired upon cash exercise of an Incentive Stock Option will be equal to the
option price paid for such shares. The holding period for such shares will begin
on the date of exercise.
If an employee disposes of shares acquired pursuant to the exercise of an
Incentive Stock Option more than two years after the date of grant and more than
one year after the exercise of such Incentive Stock Option, any gain or loss
recognized upon such disposition generally will be treated as a long-term
capital gain or loss, and the Company will not be entitled to any deduction. If,
however, shares acquired pursuant to the exercise of an Incentive Stock Option
are disposed of prior to the expiration of either holding period described above
(a "disqualifying disposition"), generally (i) the employee will recognize
ordinary income at the time of the disposition in an amount equal to the excess
(if any) of the fair market value of the shares at the time of exercise (or, if
less, the amount realized on the deposition of the shares) over the option price
thereof, and (ii) the Company will be entitled to a corresponding deduction. Any
additional gain recognized by the employee on the disqualifying disposition of
such shares generally will be taxed as a short-term or long-term capital gain,
as the case may be, and will not result in any deduction by the Company.
Payment in Shares. The Treasury Department has issued proposed regulations
and the Internal Revenue Service has issued a published ruling that would appear
to apply the following rules with respect to the exercise of a Non-Qualified
Stock Option by the surrender of previously owned shares of company stock. An
employee who pays the option price upon exercise of a Non-Qualifying Stock
Option, in whole or in part, with shares of common stock already owned by him
will recognize no gain or loss on the shares surrendered, but
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otherwise will be taxed on the options according to the rules described above
for Non-Qualified Stock Options. The number of shares acquired upon exercise
that is equal in number to the shares surrendered will have a basis equal to the
basis of the shares surrendered, and the holding period for such shares will
include the holding period for the shares surrendered. Any additional shares
received will have a basis equal to the fair market value of such shares when
received, and the holding period for such shares will begin on such date. If the
shares delivered in payment of the option price were previously acquired by the
employee through the exercise of an Incentive Stock Option ("ISO Stock"), then
the shares acquired in exchange for such ISO Stock will be treated as ISO Stock.
The Treasury Department has issued proposed regulations that if adopted in
their current form, would appear to provide for the following rules with respect
to the exercise of an Incentive Stock Option by the surrender of previously
owned shares of Company stock. If an employee exercises an Incentive Stock
Option with shares of common stock or ISO Stock for which the applicable holding
period requirements have been met, in general, (i) no gain or loss will be
recognized as a result of the exchange, (ii) the number of shares acquired upon
exercise that is equal in number to the shares surrendered will have a basis
equal to the shares surrendered and (except for purposes of determining whether
a disposition will be a disqualifying disposition) will have a holding period
that includes the holding period for the shares surrendered, and (iii) any
additional shares acquired will have a zero basis and will have a holding period
that begins on the date of exchange. If the shares surrendered in payment of the
option price are statutory option stock (including ISO Stock) and the applicable
holding period for such statutory stock has not been met, such surrender will
constitute a "disqualifying disposition" and any gain realized on such transfer
will be taxable to the employee, as discussed above. If any of the shares so
acquired are disposed of within two years from the date of the grant of the
Incentive Stock Option or within one year after exercise, the shares with the
lowest basis will be deemed to be disposed of first, and such disposition will
be a disqualifying disposition that may give rise to ordinary income as
discussed above.
SARs Performance Units. An employee will not recognize any income, and the
Company will not be entitled to a deduction, upon the grant of a SAR or a
performance unit award. Upon exercise of a SAR or upon payment of a performance
unit award, the amount of any cash and the fair market value as of the date of
exercise of any shares of Company stock received by the employee will be taxable
to the employee as ordinary income, and the Company will be entitled to a
corresponding deduction. Upon a sale of shares of Company stock acquired
pursuant to the exercise of SARs or on payment of a performance unit, an
employee generally will recognize capital gain or loss in an amount equal to the
difference between the amount realized on such sale and the employee's basis in
such shares.
Restricted Stock. An employee generally will not recognize any income upon
the receipt of a restricted stock award unless the employee elects under Section
83(b) of the Code, within thirty days of acquiring the restricted stock, to
recognize ordinary income in an amount equal to the excess of the fair market
value of such shares at the time of receipt (determined without regard to any
restriction on such shares other than a restriction which by its terms will
never lapse) over the amount, if any, paid for such shares. The Company will be
entitled to a corresponding deduction at the time when, and in the amount that,
the employee recognizes ordinary income. If shares in respect of which such
election was made are later forfeited, no tax deduction is allowable to the
employee for the amount previously included in income, and the Company will be
deemed to recognize ordinary income equal to the amount of the deduction taken
by the Company at the time of the election in respect of such forfeited shares.
If the election is not made, the employee generally will recognize ordinary
income, when the shares are no longer subject to a substantial risk of
forfeiture (as defined in the Code), in an amount equal to the excess of the
fair market value of the shares on such date over the amount, if any, paid for
such shares. The Company will be entitled to a corresponding deduction at the
time when, and in the amount that, the employee recognizes ordinary income.
Stock Bonus. An employee who receives shares pursuant to a stock bonus
award, that are not subject to a substantial risk of forfeiture, generally will
recognize ordinary income upon the receipt of such shares in an amount equal to
the fair market value of the shares received, and the Company will be entitled
to a corresponding deduction. If shares received pursuant to a stock bonus award
are subject to a substantial risk of forfeiture, the rules described above for
Restricted Stock may apply.
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General. The Plan provides that the Committee shall set grants, targets and
objectives under the Plan so as to protect against the loss of deductibility
pursuant to Section 162(m) of the Code, and allows the Committee to amend the
Plan so as to comply with the requirements of Section 162(m). The foregoing
summary of federal tax consequences assumes that the disposition of shares
received pursuant to the Plan would not subject he employee to liability under
Section 16(b) of the Exchange Act. Section 1(b) of the Exchange Act generally
does not impose Section 16(b) liability upon the sale of shares following
exercise of an option, SAR or performance unit award if the sale of such shares
took place more than six months following the date of grant of the option, SAR
or performance unit award (provided no other purchases have been made six months
before or after such sale).
OTHER INFORMATION
The Committee may, in its sole discretion, provide for supplemental cash
payments or loans to individuals in connection with all or any part of an award
under the Plan. Supplemental cash payments shall be subject to such terms and
conditions as shall be prescribed by the Committee at the time of grant,
provided that in no event shall the amount of payment exceed: (i) in the case of
an option, the excess of the fair market value of a share of common stock on the
date of exercise over the option price, multiplied by the number of shares of
common stock for which such option is exercised plus any applicable taxes; or
(ii) in the case of a SAR, performance unit, restricted stock or stock bonus
award, the value of the shares and other consideration issued in payment of such
award. Each loan issued by the Committee must comply with all applicable laws,
regulations and rules of the Board of Governors of the Federal Reserve System
and any other governmental agency having jurisdiction.
No grants or awards have been made under the Plan, and none will be made
unless the Plan is approved by the stockholders. In view of the discretionary
authority vested in the Committee, it is not possible to estimate the number of
shares in respect of which grants and awards will be made.
Approval of the Plan will require the favorable vote by the holders of a
majority of the shares present in person or represented by proxy at the Annual
Meeting of Stockholders or any adjournment thereof. Shares of AMCORE Financial,
Inc. are traded on the NASDAQ Stock Market's National Market under the symbol
AMFI. As of March 15, 2000, the closing bid and ask prices were $18.75 and
$18.8125 per share, respectively.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMCORE
FINANCIAL, INC. 2000 STOCK INCENTIVE PLAN.
STOCKHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
NOMINATIONS FOR THE BOARD OF DIRECTORS
The Company's Bylaws provide that the notice of proposed stockholder
nominations for the election of directors must be timely and given to the
Secretary of the Company prior to the meeting at which directors are to be
elected. To be timely, notice must be received by the Company not less than 50
days nor more than 75 days prior to the meeting. The date of an annual meeting
of stockholders may be obtained from the Secretary of the Company when
determined by the Board of Directors.
Notice to the Company from a stockholder who proposes to nominate a person
at the meeting for election as a director must contain certain information about
that person, including age, business and residence addresses and principal
occupation, the class and number of shares of the Company's stock beneficially
owned and such other information as would be required to be included in a proxy
statement soliciting proxies to nominate that person. The Company may also
require any proposed nominee to furnish other information reasonably required by
the Company to determine the proposed nominee's eligibility to serve as
director. If the chairman of the meeting of stockholders determines that a
person was not nominated in accordance with the foregoing procedures, such
person shall not be eligible for election as a director.
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OTHER PROPOSALS
Stockholders may submit proposals appropriate for stockholder action at the
Company's Annual Meeting consistent with the regulations of the Securities and
Exchange Commission. For proposals to be considered for inclusion in the Proxy
Statement for the 2001 Annual Meeting, they must be received by the Company no
later than November 30, 2000. Such proposals should be directed to AMCORE
Financial, Inc., Attention: Corporate Secretary, 501 Seventh Street, Rockford,
Illinois 61104.
By order of the Board of Directors,
/S/ JAMES S. WADDELL
James S. Waddell
Secretary
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APPENDIX A
AMCORE FINANCIAL, INC.
2000 STOCK INCENTIVE PLAN
1. Purpose. The purpose of the AMCORE Financial, Inc. 2000 Stock
Incentive Plan (the "Plan") is to foster and promote the long-term financial
success of the Company and thereby increase stockholder value. The Plan provides
for the award of long-term incentives to those officers and other key employees
who make substantial contributions to the Company by their loyalty, industry and
invention. The Company intends that the Plan will thereby facilitate securing,
retaining and motivating management employees of high caliber and potential. The
Plan was adopted by the Board on February 16, 2000, subject to the approval of
the Company stockholders at the annual meeting on May 9, 2000.
2. Certain Definitions.
"Board" means the Board of Directors of the Company.
"Change in Control" means a transaction whereby (A) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company, is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 30% or more of
the combined voting power of the Company's then-outstanding securities; or (B)
during any period of two consecutive years (not including any period prior to
the execution of this Plan), individuals who at the beginning of such period
constitute the Board and any new director (other than a director designated by a
person who shall have entered into an agreement with the Company to effect a
transaction described in clause (A) or (C) of this definition) whose election by
the Board or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or (C) the shareholders of the Company
approve (i) a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) at least 66 2/3% of the combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (ii) a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor thereto.
"Committee" shall have the meaning provided in Section 3 of the Plan.
"Company" means AMCORE Financial, Inc., a Nevada corporation, its
subsidiaries and other affiliates (or any successor to AMCORE Financial, Inc.).
"Disability" means permanent and total disability as determined under the
Company's disability program or policy.
"Effective Date" means the date the Plan is approved by the stockholders of
the Company.
"Fair Market Value" means for any day the average of the high and low price
or, in the event that no such sale takes place on such day, the average of the
reported closing bid and asked prices, in either case as reported on the
principal national securities exchange on which the Stock is listed or admitted
to trading or, if not listed or admitted to trading on any national securities
exchange, on the Nasdaq Stock Market's National Market ("Nasdaq"), or if the
Stock is not quoted on such National Market System, the average of the high and
low prices on each such day in the over-the-counter market as reported by Nasdaq
or, high and low prices for the Stock on each such day shall not have been
reported through Nasdaq, the average of the high and low prices for such day as
furnished by any New York Stock Exchange member firm regularly making a market
in
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the Stock selected for such purpose by the Board or a committee thereof, or, if
the Stock is not publicly traded, the fair market value of the Stock as
determined in good faith by the Committee.
"Incentive Stock Option" means any stock option intended to be designated
as an "incentive stock option" within the meaning of Section 422 of the Code.
"Non-Qualified Stock Option" means any stock option that is not intended to
be an Incentive Stock Option, including any stock option that provides (as of
the time such option is granted) that it will not be treated as an Incentive
Stock Option.
"Parent Corporation" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if, at the time of the
granting of the option, each of the corporations other than the Company owns
stock possessing 50% or more of the combined voting power of all classes of
stock in one of the other corporations in the chain.
"Plan Year" means the 12-month period beginning on the Effective Date (or
any anniversary thereof) during the Term of the Plan.
"Retirement" means retirement according to Company guidelines.
"Stock" means the common stock, par value of $.22 per share, of the
Company.
"Subsidiary" means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if, at the time of the granting
of the option, each of the corporations (other than the last corporation in the
unbroken chain) owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in the chain.
"Term of the Plan" means the five-year period beginning on the Effective
Date.
3. Administration. The Plan shall be administered by a committee of two or
more members of the Board ("the "Committee"), who shall be selected by the
Board. Each member of the Committee must, in addition, be an "outside director"
within the meaning of Section 162(m) of the Code and regulations pursuant
thereto and a non-employee director as defined by Rule 16(b) the Exchange Act.
The Committee shall have the power and authority to grant to eligible employees
of the Company, pursuant to the terms of the Plan: (a) stock options, (b) stock
option reloads, (c) stock appreciation rights, (d) restricted stock, (e) stock
bonus awards or (f) such additional forms of awards as the Committee may in its
discretion deem appropriate, including, without limitation, any combination of
the foregoing.
The Committee shall have authority in its discretion to interpret the
provisions of the Plan and to decide all questions of fact arising in its
applications; to determine the employees to whom awards shall be made under the
Plan; to determine the types of award to be made and the amount, size, terms and
conditions of each such award; to determine the time when the awards shall be
granted; to adopt, alter and repeal such administrative rules, guidelines and
practices governing the Plan as it shall from time to time deem advisable; and
to make all other determinations necessary or advisable for the administration
of the Plan.
All decisions made by the Committee pursuant to the provisions of the Plan
shall be final and binding on all persons, including the Company and the
officers and employees who participate in the Plan.
4. Stock Subject to the Plan. There shall be reserved and available for
issuance under the Plan (a) for the first Plan Year, that number of shares equal
to 2.5% of the total number of shares of Stock outstanding as of the Effective
Date and (b) for each subsequent Plan Year, (i) that number of shares equal to
1.5% of the total number of shares of Stock outstanding as of the first day of
each respective Plan Year, not to exceed 425,000 shares in any such Plan Year,
plus (ii) that number of shares of Stock reserved and available for issuance but
unissued during any prior Plan Year during the Term of the Plan; provided,
however, in no event shall the number of shares of Stock available for issuance
under the Plan as of the beginning of any Plan Year plus the number of shares of
Stock reserved for outstanding awards under the AMCORE Financial, Inc. 2000
Stock Incentive Plan and other similar plans previously adopted exceed twelve
percent of the total number of shares of Stock outstanding at that time. Such
shares may consist in whole or in part of authorized and unissued shares or
treasury shares or any combination thereof. The number of shares subject to
awards of
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(i) Stock Options, (ii) Stock appreciation rights or (iii) Stock bonus awards
made to any individual in any Plan Year may not exceed 20% of the shares of
Stock reserved and available for issuance in such Plan Year. Except as otherwise
provided herein, any shares subject to an option or right which for any reason
expires or is terminated unexercised as to such shares shall again be available
under the Plan. If any shares of stock have been pledged as collateral for
indebtedness incurred by an optionee in connection with the exercise of a stock
option and such shares are returned to the Company in satisfaction of such
indebtedness, such shares shall again be available for issuance in connection
with future awards under the Plan. No awards may be granted following the end of
the Term of the Plan.
5. Eligibility to Receive Awards. Persons eligible to receive awards under
the Plan shall be limited to those officers and other key employees of the
Company who are responsible for or contribute to the management, growth and/or
success of the Company. Directors of the Company who are not otherwise officers
or employees of the Company shall not be eligible to participate in the Plan.
6. Stock Options. A stock option may be an Incentive Stock Option or a
Non-Qualified Stock Option. To the extent that any stock option does not qualify
as an Incentive Stock Option, it shall constitute a separate Non-Qualified Stock
Option. Stock options may be granted alone or in addition to other awards
granted under the Plan. Stock options for the purchase of Stock shall be
evidenced by agreements in such form as the Committee shall approve from time to
time. The agreements shall contain in substance the following terms and
conditions and may contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable.
Each option granted under the Plan will have a ten-year term and will become
exercisable as stipulated under the option agreement.
(a) Type of Option. Each option agreement shall identify the options
represented thereby as an Incentive Stock Option or a Non-Qualified Stock
Option, as the case may be.
(b) Option Price. The purchase price of the Stock subject to option
shall not be less than the Fair Market Value of such Stock at the time the
option is granted, as determined by the Committee, but in no event less
than the par value of the Stock.
(c) Exercise Term. Each option agreement shall state the period or
periods of time within which the option may be exercised, in whole or in
part, which shall be such period or periods of time as may be determined by
the Committee, provided that no option shall be exercisable after ten years
from the date of grant thereof. The Committee shall have the power to
permit an acceleration of previously established exercise terms, subject to
the requirements set forth herein, upon such circumstances and subject to
such terms and conditions as the Committee deems appropriate.
(d) Payment for Shares. The purchase price of the Stock with respect
to which an option is exercised shall be payable in full at the time of
exercise in cash, cash equivalent, in Stock at the Fair Market Value of
such Stock on the exercise dates, a promissory note, or in a combination
thereof, as the Committee may determine and subject to such terms and
conditions prescribed by the Committee for such purpose.
(e) Rights upon Termination of Employment. In the event that an
optionee ceases to be an employee of the Company for any reason, other than
death, Disability or retirement meeting the Company's guidelines, the
optionee shall have the right to exercise the option during its term within
a period of three months after such termination to the extent that the
option was exercisable at the time of termination, or within such other
period, and subject to such terms and conditions as may be specified by the
Committee. In the event that an optionee dies or suffers a Disability prior
to the expiration of the option and without having fully exercised the
option, the optionee or his successor or legal representative shall have
the right to exercise the option during its term, within a period of
thirty-six months after termination of employment due to death or
Disability, to the extent that the option was exercisable at the time of
termination, or within such other period, and subject to such terms and
conditions as may be specified by the Committee.
In the event an optionee who has been terminated due to Disability
dies within twelve months of such termination and prior to the expiration
of the stated term of such stock option, any unexercised stock
25
<PAGE> 28
option held by such optionee shall thereafter be exercisable to the extent
to which it was exercisable at the time of death for a period of thirty-six
months from the time of death or until the expiration of the stated term of
such Stock Option, whichever period is shorter. In the event of a
termination of employment by reason of Disability, if an Incentive Stock
Option is exercised after the expiration of the exercise periods that apply
for purposes of Section 422 of the Code, such stock option will thereafter
be treated as a Non-Qualified Stock Option.
If the optionee ceases to be employed by the Company or its
subsidiaries due to retirement meeting the Company's guidelines for normal
retirement, the optionee or his or her legal representative may exercise
the option at any time within the period, beginning on the date of his or
her voluntary retirement and ending on the earlier of three years from the
date of such retirement by the optionee or the expiration of the stated
term of the option.
(f) Incentive Stock Option. Notwithstanding the foregoing, in the
case of an Incentive Stock Option, each option agreement shall contain such
other terms, conditions and provisions as the Committee determines
necessary or desirable in order to qualify such option as an Incentive
Stock Option under the Code including, without limitation, the following:
(i) To the extent that the aggregate Fair Market Value (determined
as of the time the option is granted) of the Stock, with respect to
which Incentive Stock Options granted under this Plan (and all other
plans of the Company and its Parent and subsidiary corporations) become
exercisable for the first time by any individual in any calendar year,
exceeds $100,000, such options shall be treated as Non-Qualified Stock
Options; and
(ii) No Incentive Stock Option shall be granted to any employee
if, at the time the option is granted, the individual (by reason of the
attribution rules applicable under Section 424(d) of the Code) owns more
than 10 percent of the combined voting power of all classes of stock of
the Company or any Parent Corporation or Subsidiary unless at the time
such option is granted the option price is at least 110 percent of the
Fair Market Value of the Stock subject to option and such option by its
terms is not exercisable after the expiration of five years from the
date of its grant.
(g) Stock Option Reload Program. Additional stock option grants (the
"Reload Option") are permitted where an eligible optionee delivers, swaps
or sells Company stock that they own in order to pay the cost of exercising
a stock option that was previously granted (the "Original Option").
(i) Optionees eligible to receive a Reload Option grant (the
"Eligible Optionee") shall be limited to officers of the Company that
are subject to Company policies providing for minimum ownership
requirements in Company Stock.
(ii) A Reload Option may be either an Incentive Stock Option or
a Non-Qualified Stock Option. If the Original Option that is exercised
is an Incentive Stock Option, the Reload Option shall also be an
Incentive Stock Option. If the Original Option that is exercised is a
Non-Qualified Stock Option, the Reload Option shall also be a
Non-Qualified Stock Option.
(iii) The number of shares underlying the grant of a Reload
Option shall be the number of shares delivered or sold in order to pay
the cost of exercising the Original Option.
(iv) Reload Options will not be granted unless the shares sold
or delivered to pay the cost of exercising the Original Option have been
held for more than six months.
(v) Reload Options will not be granted if the Original Option is
exercised via a "cashless" or "same-day sale" exercise.
(vi) The cost of exercising an Original Option is the sum of the
Original Option's exercise price plus all applicable withholding taxes.
Withholding taxes shall not exceed the mandated minimum tax withholding.
(vii) Only one Reload Option grant is permitted per each
Original Option grant.
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<PAGE> 29
(viii) Only one Reload Option grant is permitted per year.
(ix) The grant date of the Reload Option will be the date of the
exercise of the Original Option.
(x) The exercise price of a Reload Option shall not be less than
the fair market value of the Stock at the time the Reload Option is
granted.
(xi) The Reload Option shall have the same expiration date as
the Original Option.
7. Stock Appreciation Rights. Stock appreciation rights shall be
evidenced by stock appreciation rights agreements in such form as the Committee
shall approve from time to time. The agreements shall contain in substance the
following terms and conditions and may contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Committee shall
deem desirable:
(a) Award. Stock appreciation rights shall entitle the grantee,
subject to such terms and conditions determined by the Committee, to
receive upon exercise thereof all or a portion of the excess of (i) the
Fair Market Value of a specified number of shares of Stock at the time of
exercise, as determined by the Committee, over (ii) a specified price which
shall not be less than 100 percent of the Fair Market Value of the Stock at
the time the option was granted. Such excess may be paid by the Company in
cash, Stock (valued at its then Fair Market Value) or any combination
thereof, as the Committee may determine. Stock appreciation rights may be
granted in connection with a previously or contemporaneously granted stock
option, or not in connection with a stock option. In the event of the
exercise of a stock appreciation right, the number of shares reserved for
issuance hereunder shall be reduced by the number of shares covered by the
stock appreciation right.
(b) Term. Each agreement shall state the period or periods of time
within which the stock appreciation right may be exercised subject to such
terms and conditions prescribed for such purpose by the Committee, in whole
or in part, which shall be such period or periods of time as may be
determined by the Committee, provided that no stock appreciation right
shall be exercisable ten years from the date of grant thereof. The
Committee shall have the power to permit an acceleration of previously
established exercise terms, subject to the requirements set forth herein,
upon such circumstances and subject to such terms and conditions as the
Committee deems appropriate.
(c) Rights upon Termination of Employment. In the event that a
grantee ceases to be an employee of the Company for any reason, other than
death or Disability, the grantee shall have the right to exercise the stock
appreciation right during its term within a period of three months after
such termination to the extent that the stock appreciation right was
exercisable at the time of termination, or within such other period, and
subject to such terms and conditions as may be specified by the Committee.
In the event that a grantee dies or suffers a Disability prior to the
expiration of his stock appreciation right and without having fully
exercised his stock appreciation right, the grantee or his successor or
legal representative shall have the right to exercise the right during its
term, within a period of thirty-six months after termination of employment
due to death or Disability, to the extent that the stock appreciation right
was exercisable at the time of termination, or within such other period,
and subject to such terms and conditions as may be specified by the
Committee.
In the event a grantee who has been terminated due to Disability dies
within twelve months of such termination and prior to the expiration of the
stated term of such stock appreciation right, any unexercised stock
appreciation right held by such grantee shall thereafter be exercisable to
the extent to which it was exercisable at the time of death for a period of
thirty-six months from the time of death or until the expiration of the
stated term of such stock appreciation right, whichever period is shorter.
If the grantee ceases to be employed by the Company or its
subsidiaries due to retirement meeting the Company's guidelines for normal
retirement, the grantee or his or her legal representative may exercise any
unexercised stock appreciation rights held by such grantee at any time
within the period beginning on the date of his or her voluntary retirement
and ending on the earlier of thirty-six months from the date of such
retirement by the grantee or the expiration of the stated term of such
stock appreciation right.
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<PAGE> 30
(d) Other Terms. Stock appreciation rights shall be granted in such
manner and such form, and subject to such additional terms and conditions,
as the Committee in its sole discretion deems necessary or desirable,
including without limitation: (i) if in connection with an Incentive Stock
Option, in order to satisfy any requirements set forth under the Code; or
(ii) in order to avoid any insider-trading liability in connection with a
stock appreciation right under Section 16(b) of the Exchange Act.
8. Restricted Stock Awards. Restricted stock awards under the Plan shall
consist of shares of Stock, restricted against transfer, subject to forfeiture
and other terms and conditions intended to further the purpose of the Plan, and
shall be evidenced by restricted stock agreements in such form as the Committee
shall approve from time to time. The agreements shall contain in substance the
following terms and conditions and may contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Committee shall
deem desirable:
(a) Restriction Period. Shares awarded pursuant to this Plan shall be
subject to forfeiture to the Company either in whole or in part upon either
the termination of employment of a participant during the three year period
following a grant hereunder if the Company has not met both annual and
cumulative earnings and return on equity goals established by the Committee
or the termination of employment of a participant during the four to nine
year period following a grant hereunder without regard to the achievement
of the established performance goals. Such shares shall also be subject to
such additional terms, conditions and restrictions, including without
limitation prohibitions against transfer, substantial risks of forfeiture
and attainment of performance objectives, and for such period or periods as
shall be determined by the Committee. In addition, each participant, as a
condition of any restricted stock award, shall have delivered a stock
power, endorsed in blank, relating to the stock covered by such award. The
Committee shall have the power to permit, in its discretion, an
acceleration of the expiration of the applicable restrictions period with
respect to any part or all of the shares awarded to a participant.
(b) Restriction upon Transfer. Shares awarded, and the right to vote
such shares and to receive dividends thereon, may not be sold, assigned,
transferred, exchanged, pledged, hypothecated or otherwise encumbered,
except as herein provided or as provided in any agreement entered into
between the Company and a participant in connection with the Plan, during
the restriction period applicable to such shares. Notwithstanding the
foregoing, and except as otherwise provided in the Plan, the participant
shall have all the other rights of a stockholder including, but not limited
to, the right to receive dividends and the right to vote such shares.
(c) Certificates. Each certificate issued in respect of shares awarded
to a participant shall be registered in the name of the participant and
deposited with the Company, or its designee, and shall bear the following
legend:
"This certificate and the shares of stock represented hereby are
subject to the terms and conditions (including forfeiture provisions
and restrictions against transfer) contained in the AMCORE Financial,
Inc. 2000 Stock Incentive Plan and a Restricted Stock Award Agreement
entered into between the registered owner and AMCORE Financial, Inc.
Release from such terms and conditions shall be obtained only in
accordance with the provisions of the Plan and Agreement, a copy of
each of which is on file in the office of the Secretary of AMCORE
Financial, Inc."
(d) Lapse of Restrictions. The Committee may, in its sole
discretion, provide for the lapse of such restrictions in installments and
may accelerate or waive such restrictions in whole or in part based on such
factors and such circumstances as the Committee may determine. Upon the
lapse of such restrictions, shares of Stock, free of restrictive legend,
shall be issued to the participant or his legal representative.
(e) Termination Prior to Lapse Restrictions. In the event that a
recipient of a restricted stock award ceases to be employed by the Company
prior to the lapse of restrictions applicable to any shares awarded to such
recipient, unless provided otherwise in the event of a recipient's death,
Disability, retirement or other occurrence as prescribed by the Committee,
all shares as to which there still remain
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<PAGE> 31
unlapsed restrictions shall be forfeited to the Company without payment of
any consideration by the Company and neither the recipient nor any
successors, heirs, assigns or personal representatives of such recipient
shall thereafter have any further rights or interests in such shares or
certificates.
9. Stock Bonus Awards. The Committee may, in its sole discretion, grant a
stock bonus award (i) based upon corporate, division, subsidiary, group or unit
performance and such award may be established in terms of growth in gross
revenue, earnings per share or ratios of earnings to equity or assets or, with
respect to participants not subject to Section 162(m) of the Code, such other
measures or standards determined by the Committee in its discretion; provided
that such objectives may be adjusted to take into account unforeseen events or
changes in circumstances, or (ii) in lieu of some or all of a cash bonus payable
under the Company's bonus compensation policies as may be in effect from time to
time. To the extent the Committee deems necessary or appropriate to protect
against loss of deductibility pursuant to Section 162(m) of the Code, such
objectives shall be established in conformity with the requirements of Section
162(m) of the Code.
Shares of Stock subject to a stock bonus award may be (i) granted directly
to an employee free of any restrictions or (ii) issued pursuant to a stock bonus
award agreement which may contain such terms and conditions (including, without
limitation, restrictions on transfer), not inconsistent with the terms of the
Plan, as the Committee shall deem desirable.
10. Loans and Supplemental Cash. The Committee may, in its sole
discretion to further the purpose of the Plan, provide for supplemental cash
payments or loans to individuals in connection with all or any part of an award
under the Plan. Supplemental cash payments shall be subject to such terms and
conditions as shall be prescribed by the Committee at the time of grant,
provided that in no event shall the amount of payment exceed:
(a) in the case of an option, the excess of the Fair Market Value of
a share of Stock on the date of exercise over the option price multiplied
by the number of shares of Stock for which such option is exercised plus
any Federal, state or local income tax attributable to such exercise, or
(b) in the case of a stock appreciation right restricted stock award
or stock bonus award, the value of the shares of Stock and other
consideration issued in payment of such award.
In the case of loans, any such loan shall be evidenced by loan agreements,
promissory notes or other instruments in such form and which shall contain such
terms and conditions (including, without limitation, provisions for interest,
payment, schedules, collateral, forgiveness, acceleration of such loans or parts
thereof or acceleration in the event of termination) as the Board shall
prescribe from time to time. Notwithstanding the foregoing, each loan shall
comply with all applicable laws, regulations and rules of the Board of Governors
of the Federal Reserve System and any other governmental agency having
jurisdiction.
11. Change in Control. In the event of a "Change in Control," unless
otherwise determined by the Committee or the Board in writing at or after grant
(including under any individual agreement) but prior to the occurrence of such
Change in Control:
(a) any stock appreciation rights outstanding for at least six months
and any stock option awarded under the Plan not previously exercisable and
vested shall become fully exercisable and vested; and
(b) the restrictions applicable to any restricted stock or stock bonus
award under the Plan shall lapse, and such shares and awards shall be
deemed fully vested.
12. General Restrictions. Each award under the Plan shall be subject to
the requirement that if at any time the Committee shall determine that (i) the
listing, registration or qualification of the shares of Stock subject or related
thereto upon any securities exchange or under any state or federal law, (ii) the
consent or approval of any government regulatory body, or (iii) an agreement by
the recipient of an award with respect to the disposition of shares of Stock is
necessary or desirable as a condition of, or in connection with, the granting of
such award or the issue or purchase of shares of Stock thereunder, such award
may not be consummated in whole or in part unless such listing, registration,
qualification, consent, approval or agreement shall have been effected or
obtained free of any conditions not acceptable to the Committee.
29
<PAGE> 32
13. Single or Multiple Agreements. Multiple forms of awards or
combinations thereof may be evidenced by a single agreement or multiple
agreements, as determined by the Committee.
14. Rights of a Stockholder. The recipient of any award under the Plan,
unless otherwise provided by the Plan, shall have no rights as a stockholder
with respect thereto unless and until certificates for shares of Stock are
issued to him.
15. Rights to Terminate Employment. Nothing in the Plan or in any
agreement entered into pursuant to the Plan shall confer upon any participant
the right to continue in the employment of the Company or affect any right which
the Company may have to terminate the employment of such participant with or
without cause.
16. Withholding. The Company's obligation to (i) deliver shares of Stock
or to pay cash upon the exercise of any Non-Qualified Stock Option or any stock
appreciation right granted under the Plan, (ii) deliver stock certificates or to
pay cash upon the vesting of restricted shares, and (iii) deliver shares of
Stock upon the grant of any stock bonus award shall be subject to applicable
Federal, state and local tax withholding requirements. Federal, state and local
withholding tax due upon the exercise of any Non-Qualified Stock Option, the
vesting of restricted shares and the granting of any stock bonus award may be
paid in shares of Stock (either through the surrender of previously held shares
of Stock or the withholding of shares of Stock otherwise issuable upon the
exercise of such award) having a Fair Market Value equal to the required
withholding and upon such other terms and conditions as the Committee shall
determine; provided, however, that the Committee, in its sole discretion, may
disapprove such payment and require that such taxes be paid in cash; and
provided, further, that the election by a holder, whose transaction in Stock are
subject to Section 16(b) of the Exchange Act, to pay in shares of Stock shall be
subject to and must comply with Rule 16b-3(e) of the Exchange Act.
17. Indemnification. No member of the Board or the Committee, nor any
officer or employee of the Company acting on behalf of the board or the
Committee, shall be personally liable for any action, determination or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Board or the Committee and each and any officer or employee of
the Company acting on their behalf shall, to the extent permitted by law, be
fully indemnified and protected by the Company in respect of any such action,
determination or interpretation.
18. Non-Assignability. No award under the Plan shall be assignable or
transferable by the recipient thereof except by will, by the laws of descent and
distribution or pursuant to a qualified domestic relations order and by such
other means as the Committee may approve from time to time with respect to
holders whose transaction in the Stock are not subject to Section 16(b) of the
Exchange Act. No right or benefit hereunder shall in any manner be liable for or
subject to the debts, contracts, liabilities or torts of the person entitled to
such benefit.
19. Nonuniform Determinations. The Committee's determinations under the
Plan (including without limitation determinations of the persons to receive
awards, the form, amount and timing of such awards, the terms and provisions of
such awards and the agreements evidencing same, and the establishment of values
and performance targets) need not be uniform and may be made by it selectively
among persons who receive, or are eligible to receive, awards under the Plan,
whether or not such persons are similarly situated.
20. Adjustments. In the event of any change in the outstanding shares of
Stock, by reason of a stock dividend or distribution, recapitalization, merger,
reorganization, consolidation, split-up, spin-off, combination, exchange of
shares or other change in corporate structure affecting the Stock, a
substitution or adjustment shall be made in (i) the aggregate number of shares
of Stock reserved for issuance under the Plan and (ii) the kind, number and
option price of shares subject to outstanding stock options under the Plan as
may be determined by the Committee, in its sole discretion, which judgment shall
be conclusive, provided that the number of shares subject to any award shall
always be a whole number. Such other substitutions or adjustments shall be made
as may be determined by the Committee, in its sole discretion. An adjusted
option price shall be used to determine the amount payable by the Company upon
the exercise of any stock appreciation right.
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<PAGE> 33
21. Amendment. The Committee may terminate or amend the Plan or any
portion thereof at any time, including but not limited to amendments to the Plan
necessary to comply with the requirements of Section 16(b) of the Exchange Act,
except that the Committee may not increase the maximum number of shares which
may be issued under the Plan (other than increases pursuant to Section 20
hereof), extend the maximum period during which any award may be exercised,
extend the term of the Plan, decrease the minimum option price to less than the
Fair Market Value on the date of the grant of the option or change the employees
or class of employees eligible to participate in the Plan without stockholder
approval as required by Rule 16b-3 of the Exchange Act. The termination or any
modification or amendment of the Plan shall not, without the consent of a
participant, adversely affect his rights under an award previously granted. The
Committee may amend the terms of any award therefore granted, prospectively or
retroactively, but, subject to Section 20 above, no such amendment shall
adversely affect the rights of any holder without such Holder's consent.
Notwithstanding the foregoing, stockholder approval under this Section 21 shall
be required only at such time as Rule 16b-3 of the Exchange Act, and as such
Rule may be amended from time to time, shall require the approval of the
stockholders of the Company of any material amendment to any employee benefit
plan of the Company or as necessary to qualify compensation payable under the
Plan for purposes of Section 162(m) of the Code.
22. Separability. If any of the terms or provisions of this Plan conflict
with the requirements of Rule 16b-3 of the Exchange Act and/or Sections 162(m)
and 422 of the Code, then such terms or provisions shall be deemed inoperative
to the extent they so conflict with the requirements of said Rule 16b-3, and/or
with respect to Section 162(m) or 422 of the Code. With respect to an Incentive
Stock Option, if this Plan does not contain any provision required to be
included herein under Section 422 of the Code (as the same shall be amended from
time to time), such provision shall be deemed to be incorporated herein with the
same force and effect as if such provision had been set out at length herein.
23. Effect on Other Plans. Participation in this Plan shall not affect an
employee's eligibility to participate in any other benefit or incentive plan of
the Company and any awards made pursuant to this Plan shall not be used in
determining the benefits provided under any other plan of the Company unless
specifically provided.
24. Duration of the Plan. The Plan shall remain in effect until all
awards under the Plan have been satisfied by the issuance of shares or the
payment of cash, but no award shall be granted more than five years after the
date the Plan is adopted by the Company.
25. Governing Law. This Plan shall be governed by, and construed in
accordance with, the laws of the State of Nevada.
31
<PAGE> 34
AMCORE FINANCIAL, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF AMCORE FINANCIAL, INC.
FOR THE ANNUAL MEETING ON MAY 9, 2000
The Undersigned Holder of Common Stock of AMCORE Financial, Inc. hereby
appoints Robert J. Meuleman and James S. Waddell or each of them, with full
power of substitution, to act as proxy for and to vote the stock of the
undersigned at the Annual Meeting of Stockholders of AMCORE Financial, Inc. to
be held at Clock Tower, 7801 East State Street, Rockford, Illinois, at 5:30
p.m., Rockford time, on May 9, 2000 or any adjournment thereof.
In their discretion, the proxies are authorized to vote upon other
business as may properly come before the meeting. This proxy when properly
executed will be voted in the manner directed herein by the undersigned
stockholder.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3.
(SEE REVERSE SIDE TO VOTE)
<PAGE> 35
AMCORE FINANCIAL, INC. OFFERS THREE WAYS FOR YOU TO VOTE YOUR PROXY
As a shareholder you can now help us save both time and expense
by voting this proxy by touch tone phone or on the Internet.
OPTION 1: Call toll free 1-877-482-6154 using a touch tone phone 24 hours
VOTE BY a day, 7 days a week. You will be asked to enter the information
TELEPHONE listed below. Then, if you wish to vote as recommended by the
Board of Directors, simply press 1. That's all there is to
it...End of call. If you do not wish to vote as the Board
recommends, you need only respond to a few simply prompts. THERE
IS NO CHARGE FOR THIS CALL. (Do not return your proxy card if you
vote by phone.)
YOUR CONTROL NUMBER IS:
OPTION 2: Access https://www.css2.sungard.com/Firstar/InterLink?pb
VOTE ON THE ProxyVoting=1 Follow the simple instructions. (Do not return
INTERNET your proxy card if you vote on the internet.)
YOUR PROXY NUMBER IS:
YOUR ISSUE NUMBER IS:
YOUR ACCOUNT NUMBER IS:
OPTION 3: If you do not wish to vote by touch tone phone or the Internet,
MAIL YOUR please complete and return the proxy card.
PROXY CARD
DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED
<TABLE>
AMCORE FINANCIAL, INC. 2000 ANNUAL MEETING
<S> <S> <S> <S>
1. ELECTION OF DIRECTORS: 1 - Milton R. Brown [ ] FOR all nominees [ ] WITHHOLD AUTHORITY
2 - Richard C. Dell listed to the left (except to vote for all nominees
3 - William R. McManaman as specified below). listed to the left.
(Instructions: To withhold authority to vote for any indicated nominee, write the number(s) ------------------------------
of the nominee(s) in the box provided to the right.) ------- | |
------------------------------
2. Ratification of the appointment of KPMG LLP as independent auditors [ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approval of the AMCORE Financial, Inc. 2000 Stock Incentive Plan. [ ] FOR [ ] AGAINST [ ] ABSTAIN
Check appropriate box Date
Indicate changes below: -----------------------------
Address Change? [ ] Name Change? [ ]
------------------------------------
| |
| |
| |
------------------------------------
Signature(s) in Box Please sign
exactly as your name appears hereon.
When shares are held by joint owners,
both should sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give full
title as such. If a corporation,
please sign in full corporate name by
President or other authorized
officer. If a partnership, please
sign in partnership name by an
authorized person.
</TABLE>
