<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X] Filed by a Party other than the Registrant [ ]
Check the appropriate item:
[ ] 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 under Rule 14a-12
CIB MARINE BANCSHARES, INC.
(Name of Registrant as Specified in Its Charter)
CIB MARINE BANCSHARES, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate item):
[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:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check item 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 this filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
CIB MARINE BANCSHARES, INC.
N27 W24025 PAUL COURT
PEWAUKEE, WISCONSIN 53072
April 3, 2000
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders of
CIB Marine Bancshares, Inc. to be held on April 27, 2000 at 2:00 p.m., Central
Standard Time, in conference rooms C and D at the Holiday Inn, 500 Holiday Plaza
Drive, Matteson, Illinois. At the meeting, we will be asking you to elect three
directors of CIB Marine.
Included with this letter are an attached notice of meeting and Proxy
Statement, as well as a proxy form and a copy of CIB Marine's Annual Report on
Form 10-K for its 1999 fiscal year, as filed with the Securities and Exchange
Commission.
Your vote is important. Whether or not you plan to attend the meeting and
regardless of the size of your holdings, we encourage you to sign, date and
promptly return the enclosed proxy form in the envelope provided. This will
ensure that your shares are represented at the meeting. Your right to vote in
person at the meeting is not affected by returning the proxy form.
On behalf of the Board of Directors, and officers and employees of CIB
Marine, we would like to thank you for your continued interest and support, and
your attention to this important matter.
Sincerely,
/s/ J. Michael Straka
J. Michael Straka
President and Chief Executive
Officer
<PAGE> 3
CIB MARINE BANCSHARES, INC.
N27 W24025 PAUL COURT
PEWAUKEE, WISCONSIN 53072
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 27, 2000
To the Shareholders of CIB Marine Bancshares, Inc.
Notice is hereby given that the annual meeting of shareholders of CIB
Marine Bancshares, Inc. will be held in conference rooms C and D at the Holiday
Inn, 500 Holiday Plaza Drive, Matteson, Illinois on Thursday, April 27, 2000, at
2:00 P.M., Central Standard Time. The purpose of the meeting is to:
1. elect three directors of CIB Marine, each for a three-year term; and
2. to transact any other business that may properly come before the
meeting.
The Board of Directors has fixed the close of business on March 15, 2000 as
the record date for determining shareholders entitled to notice of, and to vote
at the meeting. A Proxy Statement with respect to the meeting accompanies and
forms a part of this Notice. A list of shareholders entitled to vote at the
meeting will be available for inspection at CIB Marine's executive office, N27
W24025 Paul Court, Pewaukee, Wisconsin , for a period beginning two business
days after the date of this Notice and ending on the date of the meeting. The
shareholder list will also be available for inspection at the meeting itself.
By Order of the Board of Directors
/s/ Donald J. Straka
Donald J. Straka
General Counsel and Secretary
April 3, 2000
<PAGE> 4
CIB MARINE BANCSHARES, INC.
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 27, 2000
The Board of Directors of CIB Marine Bancshares, Inc., a Wisconsin
corporation, is soliciting proxies for the 2000 annual meeting of shareholders
of CIB Marine to be held on April 27, 2000, beginning at 2:00 p.m., Central
Standard Time, in conference rooms C and D at the Holiday Inn, 500 Holiday Plaza
Drive, Matteson, Illinois. Voting materials, which include the Proxy Statement,
proxy form, and CIB Marine's 1999 Annual Report on Form 10-K, are being mailed
to shareholders on or about April 3, 2000, and contain important information for
you to consider in voting on the matters brought before the meeting. Please read
the materials carefully.
The Board has set the close of business on March 15, 2000 as the record
date for the meeting. Shareholders who owned CIB Marine common stock on that
date are entitled to attend and vote at the meeting, with each share entitled to
one vote. There were 109,901 shares of CIB Marine common stock outstanding on
the record date.
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- --------------------------------------------------------------------------------
WHY AM I RECEIVING THIS PROXY STATEMENT AND PROXY FORM?
You are receiving a Proxy Statement and proxy form from us because you own
shares of CIB Marine common stock. This Proxy Statement describes issues on
which we would like you, as a shareholder, to vote. It also gives you
information on these issues so that you can make an informed decision.
When you sign the enclosed proxy form, you appoint the proxy holder as your
representative at the meeting. The proxy holder will vote your shares as you
have instructed in the proxy form, thereby ensuring that your shares will be
voted whether or not you attend the meeting. Even if you plan to attend the
meeting, you should complete, sign and return your proxy form in advance of the
meeting just in case your plans change.
If you have signed and returned the proxy form and an issue comes up for a
vote at the meeting that is not identified on the form, the proxy holder will
vote your shares, under your proxy, in accordance with his or her best judgment.
WHAT MATTERS WILL BE VOTED ON AT THE MEETING?
You are being asked to vote on the election of three directors of CIB
Marine. This matter is more fully described in this Proxy Statement.
HOW DO I VOTE?
You may vote either by mail or in person at the meeting. To vote by mail,
complete and sign the enclosed proxy form and mail it in the enclosed, prepaid
addressed envelope. No postage is required if mailed in the United States. If
you mark your proxy form to indicate how you want your shares voted, your shares
will be voted as you instruct.
If you sign and return your proxy form but do not mark the form to provide
voting instructions, the shares represented by your proxy form will be voted
"for" all three nominees for director named in this Proxy Statement.
If you want to vote in person, please come to the meeting. CIB Marine will
distribute written ballots to anyone who wants to vote at the meeting. Please
note, however, that if your shares are held in the name of your broker (or in
what is usually referred to as "street name"), you will need to arrange to
obtain a proxy from your broker in order to vote in person at the meeting.
<PAGE> 5
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY FORM?
It means that you have multiple holdings reflected in our stock transfer
records and/or in accounts with stockbrokers. Please sign and return ALL proxy
forms to ensure that all your shares are voted.
IF I HOLD SHARES IN THE NAME OF A BROKER, WHO VOTES MY SHARES?
If you received this Proxy Statement from your broker, your broker should
have given you instructions for directing how your broker should vote your
shares. It will then be your broker's responsibility to vote your shares for you
in the manner you direct.
Under the rules of various national and regional securities exchanges,
brokers may generally vote on routine matters, such as the election of
directors. Nevertheless, CIB Marine encourages you to provide directions to your
broker as to how you want it to vote your shares on the matters to be brought
before the meeting. You should do this by carefully following the instructions
your broker gives you concerning its procedures. This ensures that your shares
will be voted at the meeting.
WHAT IF I CHANGE MY MIND AFTER I RETURN MY PROXY?
If you hold your shares in your own name, you may revoke your proxy and
change your vote at any time before the polls close at the meeting. You may do
this by:
- signing another proxy with a later date and returning that proxy to CIB
Marine;
- sending notice to CIB Marine that you are revoking your proxy; or
- voting in person at the meeting.
You should send any later dated proxy or notice of revocation to: CIB
Marine Bancshares, Inc., N27 W24025 Paul Court, Pewaukee, Wisconsin 53072,
Attention: Donald J. Straka, Secretary.
If you hold your shares in the name of your broker and desire to revoke
your proxy, you will need to contact your broker to revoke your proxy.
HOW MANY VOTES DO WE NEED TO HOLD THE ANNUAL MEETING?
A majority of the shares that were outstanding and entitled to vote as of
the record date must be present in person or by proxy at the meeting in order to
hold the meeting and conduct business.
Shares are counted as present at the meeting if the shareholder either:
- is present and votes in person at the meeting; or
- has properly submitted a signed proxy form or other proxy.
WHAT HAPPENS IF ANY NOMINEE IS UNABLE TO STAND FOR RE-ELECTION?
The Board may, by resolution, provide for a lesser number of directors or
designate a substitute nominee. In the latter case, shares represented by
proxies may be voted for a substitute nominee. Proxies cannot be voted for more
than three nominees. The Board has no reason to believe any nominee will be
unable to stand for re-election.
WHAT OPTIONS DO I HAVE IN VOTING ON EACH OF THE PROPOSALS?
You may vote "for" or "withhold authority to vote for" each nominee for
director. You may vote "for," "against", or "abstain" on any other proposal that
may properly be brought before the meeting.
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<PAGE> 6
HOW MANY VOTES ARE NEEDED FOR THE ELECTION OF A DIRECTOR?
The three individuals receiving the highest number of votes cast "for"
their election will be elected as directors of CIB Marine.
HOW ARE VOTES COUNTED?
Voting results will be tabulated and certified by our transfer agent,
Marine Trust and Investment Company.
WHERE DO I FIND THE VOTING RESULTS OF THE MEETING?
CIB Marine will announce voting results at the meeting.
WHO BEARS THE COST OF SOLICITING PROXIES?
CIB Marine will bear the cost of soliciting proxies. In addition to
solicitations by mail, officers, directors or employees of CIB Marine or its
subsidiaries may solicit proxies in person or by telephone. These persons will
not receive any special or additional compensation for soliciting proxies. CIB
Marine may reimburse brokerage houses and other custodians, nominees and
fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and
solicitation materials to shareholders.
- --------------------------------------------------------------------------------
PROPOSAL 1 -- ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------
CIB Marine currently has ten directors on its Board of Directors. The
directors serve staggered terms. This is accomplished as follows:
- the directors are divided into three classes;
- two classes consist of three directors, and the third class consists of
four directors;
- each director serves a three-year term; and
- the term of each class of directors expires in different years.
Three directors will be elected at the meeting to serve for a three-year
term expiring at our annual meeting in 2003. The Board has nominated J. Michael
Straka, John T. Bean and Steven C. Hillard. Each nominee is currently serving as
a director and has consented to serve for a new term.
INFORMATION REGARDING NOMINEES AND DIRECTORS
<TABLE>
<CAPTION>
SERVING POSITION WITH CIB MARINE OR OTHER
NAME AND AGE SINCE PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Nominees for Election at the Annual Meeting to Serve Until 2003:
John T. Bean (39) 1998 President, Chief Executive Officer and Director of CIB
Bank (Chicago), a subsidiary bank of CIB Marine, since
January 1997; and Executive Vice President of Central
Illinois Bank MC, a subsidiary bank of CIB Marine,
from October 1994 to January 1997.
</TABLE>
-3-
<PAGE> 7
<TABLE>
<CAPTION>
SERVING POSITION WITH CIB MARINE OR OTHER
NAME AND AGE SINCE PRINCIPAL OCCUPATION AND OTHER DIRECTORSHIPS
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Steven C. Hillard (37) 1992 Executive Vice President of CMI Corporation (CMI), a
manufacturer of construction equipment, since March
1999; President of CMI Johnson-Ross Corporation, a
manufacturer of construction equipment and subsidiary
of CMI, since July 1997; Chairman of the Board of
Pinnacle Door Company, a distributor and installer of
garage doors, since September 1992; and President of
HILMUN Holdings, Inc., a diversified holding company
with interests in manufacturing, real estate
development and financial investments, since September
1991.
J. Michael Straka 1987 President and Chief Executive Officer of CIB Marine
(62)(1) since 1987; and Director or Chairman and Director of
each of CIB Marine's bank and non-bank subsidiaries,
including Central Illinois Bank since 1987, CIB Bank
(Chicago) since 1994, Marine Bank (Milwaukee) since
1997, CIB Bank (Indiana) since 1998, Marine Bank
(Omaha) since November 1999, C.I.B. Data Processing
Services, Inc. since 1990, Mortgage Services, Inc.
since 1995, and Marine Trust and Investment Company
since 1998.
</TABLE>
- ---------------
(1) J. Michael Straka is the father of Donald J. Straka, Senior Vice President,
Secretary and General Counsel of CIB Marine, and Patrick J. Straka, Senior
Vice President and Chief Investment Officer of CIB Marine.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" JOHN T. BEAN, STEVEN
C. HILLARD AND J. MICHAEL STRAKA.
<TABLE>
<S> <C> <C>
Directors Continuing to Serve Until 2001:
Norman E. Baker 1988 President and Chief Executive Officer of Estoy Pronto,
(53) Inc., a consulting and investment company, since July
1994; and President and Chief Executive Officer of
Associated Storage and Transfer, a warehousing and
trucking company, from July 1969 to July 1996.
W. Scott Blake (39) 1987 President of Blake Capital Corp., a real estate
development, investment and property management company,
since July 1998; and President of Blake-Weise Real Estate
Corp., a real estate development, investment and property
management company, from October 1988 to June 1998.
Dean M. Katsaros 1995 Owner of Katsaros & Associates, a tax and accounting
(44) business, since September 1981; Chairman of KSB Benefit
Consultants, Inc., a provider of third-party
administrative services for defined contribution plans,
since May 1994; and General Partner, KB Consultants, a
computer equipment sales and computer consulting services
company, since May 1990.
Donald M. Trilling 1987 Secretary and Treasurer of Illini Tile Distributors Inc.,
(69) an importer and distributor of ceramic tiles, since 1983,
and President of Tiles of Italy, Ltd., an importer of
ceramic tiles, since 1975.
Directors Continuing to Serve Until 2002:
Jose Araujo (54) 1988 President of Joaraucar Consulting, Inc., an industrial gas
service company, since October 1997; and President of
Gascarb, a carbon dioxide manufacturing company, from
February 1969 to September 1997.
</TABLE>
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<PAGE> 8
<TABLE>
<S> <C> <C>
Jerry D. Maahs (68) 1987 President and Chief Executive Officer of Alto Shaam, Inc.
and Enthermics, Inc., manufacturers of food service
equipment, since 1968; and Chairman of AS International,
an international sales company since 1975.
Howard E. Zimmerman 1987 Chairman of the Board of Zimmerman Real Estate Group, a
(71) real estate appraisal and consulting company, since 1986.
</TABLE>
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors of CIB Marine held 12 meetings during 1999. The
Board of Directors has standing Audit/Examination, Compensation and Stock Option
Committees. CIB Marine does not have a standing nominating committee. During
1999, each director of CIB Marine, except Steven C. Hillard, attended at least
75% of the aggregate number of meetings of the Board of Directors and meetings
of any committee on which such director served.
The Audit/Examination Committee consists of Jose Araujo, W. Scott Blake,
Dean M. Katsaros and Donald M. Trilling. Mr. Katsaros is the Chairman of this
Committee. This Committee met three times during 1999. This Committee's duties
include:
- reviewing with management and CIB Marine's independent public accountants
the basis for their respective reports;
- reviewing with management and CIB Marine's independent public accountants
the scope of the audit services, significant accounting policies, and
audit conclusions regarding significant accounting estimates;
- reviewing with management and CIB Marine's independent public accountants
their assessments regarding internal controls and the resolution of
identified weaknesses or reportable conditions, if any, in internal
controls, including the prevention or detection of management override or
compromise of the internal control system;
- discussing with management the selection and/or termination of CIB
Marine's independent public accountants and any significant disagreements
between the accountants and management; and
- overseeing the internal audit function.
From January 28, 1998 until February 25, 1999, the Compensation Committee
consisted of Norman E. Baker, W. Scott Blake, John T. Bean, Jerry D. Maahs, J.
Michael Straka and Howard E. Zimmerman. Effective February 25, 1999, this
committee consists of W. Scott Blake, Dean M. Katsaros and Howard E. Zimmerman.
Mr. Zimmerman is the Chairman of this committee. The Compensation Committee met
twice during 1999. Its duties include:
- establishing policies relating to executive compensation;
- determining the salary and bonus of the President and Chief Executive
Officer and the four other highest paid executive officers of CIB Marine
(sometimes referred to herein as the "Named Executive Officers"; and
- recommending to the Board of Directors the adoption of, or any
substantive amendments to, any employee benefit or long-term executive
compensation plan or program in which Named Executive Officers
participate.
From January 28, 1998 until June 24, 1999, the Stock Option Committee
consisted of Norman E. Baker, Jerry D. Maahs, W. Scott Blake and Howard E.
Zimmerman. Effective June 24, 1999, this committee consists of W. Scott Blake,
Dean M. Katsaros and Howard E. Zimmerman, the same members as the
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<PAGE> 9
Compensation Committee. Mr. Zimmerman is the Chairman of this committee. The
Stock Option Committee met twice during 1999. Its duties include:
- administering the CIB Marine Bancshares, Inc. 1999 Stock Option and
Incentive Plan (the "Stock Option Plan");
- recommending to the Board of Directors individuals to receive option
grants; and
- recommending the material terms of such option grants.
On July 29, 1999, pursuant to authority set forth in the Stock Option Plan,
the Stock Option Committee delegated to J. Michael Straka, President and Chief
Executive Officer, the authority to grant options to key employees of CIB Marine
and its subsidiaries and to establish the material terms of such option grants,
subject to approval by the Board of Directors.
DIRECTORS' FEES AND COMPENSATION
During the 1999 fiscal year, (i) each director, except Mr. J. Michael
Straka and Mr. John T. Bean, received an annual retainer fee in the amount of
$8,000, and (ii) each director, except Mr. Bean, was paid a fee of $600 for each
meeting of the Board of Directors attended through July 1999. Effective August
1, 1999, each director, except Mr. Bean, was paid a fee of $750 for each Board
of Directors meeting attended. Effective August 1, 1999, each director serving
on a committee received $300 for each committee meeting attended. Prior to this
date directors did not receive any fees for committee meetings.
On July 29, 1999, under the Stock Option Plan, each director of CIB Marine
who was not an employee of CIB Marine or any of its subsidiaries received an
option to purchase 37 shares of common stock. The exercise price per share for
each option granted was $2,434.48, which represents the fair market value of the
common stock at the grant date as determined in accordance with the provisions
of the Stock Option Plan. The options become exercisable in five equal annual
installments, beginning July 29, 2000, and expire on July 29, 2009.
DIRECTORS' DEFERRED COMPENSATION PLAN
Effective December 1994, CIB Marine adopted a plan allowing directors to
elect to defer receipt of all or a portion of their directors' fees. Under the
plan, any director may enter into a written deferred compensation agreement
under which that director's fees are retained by CIB Marine in a segregated
account. These fees remain an asset of CIB Marine, subject to the claims of its
creditors, until paid to the director under the agreement. The deferred
directors' fees accrue interest, and a director has a right to cancel future
deferrals at any time. The fees may be withdrawn and are payable in equal
monthly installments over a period of five years at the time of retirement or
upon the death of the director, either before or after retirement. If the
director resigns from the Board, the deferred fees are paid in full in a single
lump sum payment.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Compensation Committee since February 25, 1999,
is or has been an officer or employee of CIB Marine. During 1998, Mr. John T.
Bean was the President, Chief Executive Officer and a Director of CIB Bank
(Chicago), a subsidiary bank of CIB Marine. During that time, Mr. Bean also
served on the Compensation Committee of the Board of Directors, which was
responsible for, among other things, fixing the compensation of Mr. J. Michael
Straka. During 1998, Mr. J. Michael Straka was the President and Chief Executive
Officer of CIB Marine and a Director of CIB Bank (Chicago), served on the
Compensation Committee, and was responsible for fixing Mr. Bean's compensation.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CIB Marine has business relationships with entities in which directors of
CIB Marine or members of their immediate family have ownership interests. These
business relationships are summarized below. CIB Marine believes each
transaction described was on commercially reasonable terms.
-6-
<PAGE> 10
Mr. Katsaros is a Director of CIB Marine and a general partner of KB
Consultants, a partnership that sells computer equipment and services. CIB
Marine purchased $84,100 in computer hardware and services from KB Consultants
in 1999. Mr. Katsaros is also an owner and officer of KSB Benefit Consultants,
Inc., a corporation providing benefit plan consulting and administration
services. In 1999, CIB Marine's ESOP and 401(k) Plans paid KSB Benefit
Consultants, Inc. $19,400 for administering such plans. In 1999, KSB Consultants
also paid $46,900 in rental payments to one of CIB Marine's subsidiary banks for
space that KSB Consultants subleased from the subsidiary bank.
MANAGEMENT INDEBTEDNESS
Directors and executive officers of CIB Marine, including members of their
immediate families and companies with which they are affiliated, were customers
of, and had banking transactions with, CIB Marine's subsidiary banks in the
ordinary course of business during 1999. These transactions included loans,
fiduciary relationships, and deposits. All loans to CIB Marine's directors and
executive officers, any member of their immediate family, or any corporation or
organization of which any of them is an executive officer or partner or is,
directly or indirectly, the beneficial owner of 5% or more of any class of
equity securities were (1) made in the ordinary course of business, (2) made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with unrelated persons, and
(3) did not involve more than the normal risk of collectibility or contain other
unfavorable features.
STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 15, 2000, the number of shares
of common stock beneficially owned by (1) each director of CIB Marine (including
nominees), (2) each of the "Named Executive Officers," (as such term is defined
below under the caption "Executive Compensation -- Summary of Cash and Certain
Other Compensation") and (3) all directors and executive officers of CIB Marine
as a group. Except as otherwise indicated, each person listed has sole voting
and investment power over shares beneficially owned.
<TABLE>
<CAPTION>
COMMON SHARES
BENEFICIALLY PERCENT
NAME OF BENEFICIAL OWNER OWNED OF CLASS
- ------------------------ ------------- ----------------
<S> <C> <C>
Jose Araujo 610(1) *
Norman E. Baker 2,508(2) 2.28%
John T. Bean 287(3) *
W. Scott Blake 948(4) *
Stephen C. Bonnell 431(5) *
Steven C. Hillard 1,035(6) *
Dean M. Katsaros 2,122(7) 1.93%
Steven T. Klitzing 311(8) *
Jerry D. Maahs 1,958(9) 1.78%
Michael L. Rechkemmer 208(10) *
Donald J. Straka 100(11) *
J. Michael Straka 1,929(12) 1.75%
Donald M. Trilling 1,503(13) 1.37%
Howard E. Zimmerman 1,060(14) *
All directors and executive Officers as a group (15
persons) 15,042(15) 13.46%
</TABLE>
- ---------------
* Less than one percent.
(1) Includes 60 shares that Mr. Araujo has the right to acquire within 60 days
upon the exercise of stock options.
(2) Includes 60 shares Mr. Baker has the right to acquire within 60 days upon
the exercise of stock options.
(3) Includes 50 shares jointly owned by Mr. Bean and his wife, 13 shares owned
by Mr. Bean's wife, and 135 shares that Mr. Bean has the right to acquire
within 60 days upon the exercise of stock options.
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<PAGE> 11
(4) Includes 60 shares that Mr. Blake has the right to acquire within 60 days
upon the exercise of stock options.
(5) Includes 222 shares that Mr. Bonnell has the right to acquire within 60
days upon the exercise of stock options.
(6) Includes 185 shares Mr. Hillard has the right to acquire within 60 days
upon the exercise of stock options.
(7) Includes 804 shares jointly owned by Mr. Katsaros and his wife, and 65
shares that Mr. Katsaros has the right to acquire within 60 days upon the
exercise of stock options.
(8) Includes 189 shares that Mr. Klitzing has the right to acquire within 60
days upon the exercise of stock options.
(9) Includes 1,900 shares jointly owned by Mr. Maahs and his wife, and 58
shares that Mr. Maahs has the right to acquire within 60 days upon the
exercise of stock options.
(10) Includes 136 shares that Mr. Rechkemmer has the right to acquire within 60
days upon the exercise of stock options.
(11) Includes 59 shares Mr. Straka has the right to acquire within 60 days upon
exercise of stock options and 32 shares owned by a partnership with respect
to which Mr. Straka shares voting and investment power.
(12) Includes 860 shares jointly owned by Mr. Straka and his wife, 20 shares
owned by Mr. Straka's wife, 57 shares owned by partnerships with respect to
which Mr. Straka shares voting and investment power, and 465 shares that
Mr. Straka has the right to acquire within 60 days upon the exercise of
stock options.
(13) Includes 531 shares held in a trust for the benefit of Mr. Trilling's wife,
and 67 shares that Mr. Trilling has the right to acquire within 60 days
upon the exercise of stock options.
(14) Includes 75 shares held in a trust for the benefit of Mr. Zimmerman's wife
and 60 shares Mr. Zimmerman has the right to acquire within 60 days upon
the exercise of stock options.
(15) Includes, in addition to those shares footnoted above, 38 shares which the
executive officers as a group have the right to acquire within 60 days upon
the exercise of stock options.
-8-
<PAGE> 12
- --------------------------------------------------------------------------------
EXECUTIVE COMPENSATION
- --------------------------------------------------------------------------------
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth the cash and noncash compensation for each
of the last three fiscal years awarded to or earned by the Chief Executive
Officer of CIB Marine and the four other highest paid executive officers of CIB
Marine. These executive officers are sometimes referred to in this Proxy
Statement as the "Named Executive Officers."
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION(1) COMPENSATION
------------------ ---------------------
SECURITIES
UNDERLYING ALL
STOCK LTIP OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(#) PAYOUTS COMP.(4)
- --------------------------- ---- -------- ------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
J. Michael Straka................... 1999 $260,000 $26,000 214 $250,000(3) $59,958
President and 1998 207,338 20,539 159 -- 63,297
Chief Executive Officer 1997 150,000 -- -- -- 44,379
Donald J. Straka.................... 1999 124,000 12,400 79 -- 4,453
Senior Vice President, 1998 107,934 10,793 103 -- 4,118
General Counsel and 1997(2) 43,771 -- 46 -- --
Secretary
Steven T. Klitzing.................. 1999 110,195 11,020 71 -- 3,077
Senior Vice President, 1998 92,961 9,296 84 -- 2,893
Chief Financial Officer and 1997 69,195 -- -- -- 7,415
Treasurer
Stephen C. Bonnell.................. 1999 111,440 11,144 46 -- 3,458
Senior Vice President 1998 94,593 9,459 88 -- 3,278
1997 73,605 -- -- -- 8,310
Michael L. Rechkemmer............... 1999 106,348 11,143 47 -- 4,845
Executive Vice President and 1998 97,863 14,870 38 -- 4,313
Chief Operating Officer 1997 94,050 4,703 -- -- 5,001
</TABLE>
- ---------------
(1) Includes amounts earned in the fiscal year, whether or not deferred.
(2) Partial year only. Mr. Donald J. Straka was hired on July 15, 1997 at an
annual salary of $95,000.
(3) In January 1998, the Board of Directors approved, upon the recommendation of
the Compensation Committee, a long-term cash incentive plan for Mr. J.
Michael Straka, which superseded the long-term incentive plan for Mr. Straka
that was adopted in 1996. The plan provided for the payment of a cash bonus
of $250,000 to Mr. Straka on the fifth business day of the year 2000 if two
of three specified performance goals were met in fiscal years 1998 and 1999.
The goals relate to CIB Marine's asset size, net income and value per share.
CIB Marine met two of the three specified performance criteria in both 1998
and 1999 and Mr. Straka was paid the cash bonus on January 7, 2000.
continued on next page
-9-
<PAGE> 13
(4) All other compensation for each Named Executive Officer consists of the
following:
<TABLE>
<CAPTION>
BOARD OF LIFE
DIRECTOR INSURANCE ESOP
NAME YEAR FEES(A) PREMIUMS CONTRIBUTION TOTAL
- ---- ---- -------- --------- ------------ -----
<S> <C> <C> <C> <C> <C>
J. Michael Straka.................................... 1999 $52,300(a) $4,409 $3,249 $59,958
1998 53,550 3,697 6,050 63,297
1997 34,700 1,494 8,185 44,379
Donald J. Straka..................................... 1999 -- 171 4,282 4,453
1998 -- 158 3,960 4,118
1997 -- -- --
Steven T. Klitzing................................... 1999 -- 180 2,897 3,077
1998 -- 165 2,728 2,893
1997 -- 115 7,300 7,415
Stephen C. Bonnell................................... 1999 -- 763 2,695 3,458
1998 -- 726 2,552 3,278
1997 -- 154 8,156 8,310
Michael L. Rechkemmer................................ 1999 -- 1,294 3,551 4,845
1998 -- 749 3,564 4,313
1997 -- 188 4,813 5,001
</TABLE>
- ---------------
(a) Includes payment for meetings of the Board of Directors of CIB Marine and
its subsidiaries and for committee meetings of its subsidiaries.
OPTIONS
The following table sets forth information regarding individual grants of
stock options made for 1999 to the Named Executive Officers.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS IN 1999 10-YEAR OPTION TERM
------------------------------------------------ ---------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS
OPTIONS GRANTED TO EXERCISE EXPIRATION
NAME GRANTED EMPLOYEES PRICE DATE(1) 5% 10%
- ---- ---------- ---------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
J. Michael Straka................. 214 10.39% $2,434.48 7/29/09 $327,640 $830,305
Donald J. Straka.................. 79 3.84% 2,434.48 7/29/09 120,951 306,514
Steven T. Klitzing................ 71 3.45% 2,434.48 7/29/09 108,703 275,475
Stephen C. Bonnell................ 46 2.23% 2,434.48 7/29/09 70,427 178,477
Michael L. Rechkemmer............. 47 2.28% 2,434.48 7/29/09 71,958 182,357
</TABLE>
- ---------------
(1) These options become exercisable in 20% annual installments, beginning July
29, 2000.
-10-
<PAGE> 14
The following table sets forth information regarding the year-end values of
unexercised stock options held by the Named Executive Officers.
<TABLE>
<CAPTION>
TOTAL NUMBER OF SECURITIES
UNDERLYING UNEXERCISED TOTAL VALUE OF UNEXERCISED,
OPTIONS HELD AT IN-THE-MONEY OPTIONS HELD
FISCAL YEAR END AT FISCAL YEAR END(1)
NUMBER OF --------------------------- ---------------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. Michael Straka -- $-- 369 452 $477,972 $217,428
Donald J. Straka -- -- 38 190 21,432 75,863
Steven T. Klitzing -- -- 150 175 200,497 87,991
Stephen C. Bonnell -- -- 178 159 242,672 92,756
Michael L. Rechkemmer -- -- 101 117 114,065 67,411
</TABLE>
- ---------------
(1) This amount represents the difference between the fair market value of one
share of CIB Marine common stock on December 31, 1999 ($2,571.49) and the
option exercise price times the total number of shares subject to
exercisable or unexercisable options. Because there is no public market for
CIB Marine common stock, the $2,571.49 per share fair market value was
derived using the same method for establishing a fair market value for
option grants under the Stock Option Plan.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors is responsible for
developing executive compensation philosophies, determining the components of
the compensation to be paid to the President and Chief Executive Officer and the
four other highest paid executive officers, and assuring that the compensation
program is administered in a manner consistent with compensation objectives.
COMPENSATION OF PRESIDENT AND CHIEF EXECUTIVE OFFICER AND OTHER EXECUTIVE
OFFICERS
The Compensation Committee determines the salary of the President and Chief
Executive Officer and the four other highest paid executive officers of CIB
Marine. Although Mr. J. Michael Straka was a member of the committee in 1998, he
did not participate in discussions or vote on matters relating to his
compensation for 1999. The committee seeks to ensure that executive officer
compensation promotes both short and long term interests of the shareholders and
consults with Mr. J. Michael Straka relative to the setting of salaries and
compensation of the four other highest paid executive officers of CIB Marine.
Effective January 1, 1999, Mr. J. Michael Straka's 1999 base salary was
fixed at $260,000, an increase of 4% over his 1998 base salary of $250,000 which
became effective on July 30, 1998. In fixing Mr. Straka's compensation in 1999,
the Committee took into account peer group information concerning the
compensation levels of chief executive officers at comparable bank holding
companies or banks with total assets equal to or greater than $1 billion. The
Committee also took into account CIB Marine's growth and performance in 1998.
CIB Marine's net income in 1998 was $8.7 million, as compared to $5.3 million in
1997, an increase of 64.1%. Total assets at December 31, 1998 were approximately
$1.2 billion, as compared to $807.3 million at December 31, 1997, an increase of
47.0%. CIB Marine achieved these results primarily through internal growth,
including the opening of new banks and branches, and, to a lesser extent,
acquisitions.
The Compensation and Stock Option Committees believe it is appropriate to
link a portion of Mr. Straka's compensation to the future performance of CIB
Marine in order to more closely align his interests with the interests of the
shareholders. As a result, in July 1999, Mr. Straka was granted options to
acquire 214 shares of common stock. In addition, the Compensation Committee
approved a long-term cash incentive plan for Mr. Straka in 1998 which superseded
the long-term incentive plan for Mr. Straka that was adopted in 1996. The plan
provided for the payment of a cash bonus of $250,000 in 2000 if certain targeted
-11-
<PAGE> 15
performance goals were met. These goals were met and Mr. Straka was paid the
$250,000 cash bonus on January 7, 2000.
In 1999, the Committee also determined the salaries of the four other
highest paid executive officers of CIB Marine set forth in the Summary
Compensation Table. Executive officers' compensation principally consists of a
salary, bonus compensation under CIB Marine's bonus plan and stock options.
The Compensation Committee and Stock Option Committee periodically review
salaries, stock options and other aspects of executive compensation in order to
assure that CIB Marine's executive compensation remains competitive with similar
bank holding companies in both assets and geographic markets, and that such
compensation represents both the individual's performance as well as current and
past performance of CIB Marine. The committees compared executive compensation
data of other similar bank holding companies. In addition, the Compensation
Committee reviewed the salary history and performance levels for the four other
highest paid executive officers in determining their compensation.
CASH BONUS PROGRAM; OTHER BENEFIT PROGRAMS
Employees of CIB Marine and its subsidiaries, including executive officers,
are eligible to participate in a cash bonus program. Bonuses are based on a
percentage of base salary, which increases in graduated steps in the event that
CIB Marine achieves or surpasses budgeted earnings for the fiscal year. Since
executive officers and other senior officers are in a better position to
contribute to the achievement of such goals, the percentage of base salary that
they are eligible to receive as a bonus is proportionately higher.
CIB Marine provides its employees with vacation, holiday and insurance
protection plans, including medical, dental, life, accidental death and
dismemberment, travel and accident, and disability. CIB Marine also makes
available to all of its employees a 401(k) plan which permits participants to
make, subject to various limitations, voluntary tax deferred contributions of up
to 15% of annual compensation. CIB Marine does not match employee contributions
to the 401(k) plan. CIB Marine also has an employee stock ownership plan for the
benefit of employees who have achieved a certain length of service. Executive
officers are eligible to participate in all of these plans.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code (the "Code") and related
regulations provide that a public company may not deduct, for federal income tax
purposes, compensation in excess of $1 million per year paid to the Chief
Executive Officer and the four other most highly compensated executive officers
employed by CIB Marine at year-end, other than compensation which qualifies as
"performance-based compensation" under the Code and related regulations or is
otherwise exempt from the provisions of Section 162(m). In designing future
compensation programs for the Chief Executive Officer and the other highly
compensated executive officers, the committees will take into account the
deductibility of such compensation under Section 162(m).
Respectfully Submitted,
The Compensation and Stock Option
Committees
Howard E. Zimmerman (Committee
Chairman)
W. Scott Blake
Dean M. Katsaros
-12-
<PAGE> 16
- --------------------------------------------------------------------------------
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
- --------------------------------------------------------------------------------
The following persons are known to CIB Marine to be the beneficial owners
of more than 5% of the outstanding CIB Marine common stock as of March 15, 2000
based on information available to CIB Marine.
<TABLE>
<CAPTION>
NUMBER OF SHARES
OF COMMON STOCK PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED COMMON STOCK
------------------------------------ ------------------ ------------
<S> <C> <C>
Strategic Capital Management Inc./Strategic Capital 6,794(1) 6.18%
Trust................................................
1909 Fox Drive
Champaign, Illinois 61820
John and Mary Lydia Hadley............................. 7,268(2) 6.61%
915 W. Park Avenue
Champaign, Illinois 61821
</TABLE>
- ---------------
(1) Based on written information provided by Strategic Capital Management, Inc.
(SCM) to CIB Marine as of March 29, 2000. Mr. David Sinow, a former director
of CIB Marine, is an officer, director and shareholder of Strategic Capital
Trust Company ("SCTC"). Mr. Sinow is also an officer and director of SCM, a
wholly owned subsidiary of SCTC. SCTC owns 750 shares of CIB Marine's common
stock. CIB Marine understands that Mr. Sinow, SCTC, and SCM have direct or
indirect shared voting and investment authority over 6,044 shares of CIB
Marine's common stock purchased by investors for whom SCM provides
investment management services.
(2) Based solely on information in CIB Marine's stock transfer records.
-13-
<PAGE> 17
- --------------------------------------------------------------------------------
COMMON STOCK PERFORMANCE
- --------------------------------------------------------------------------------
The following graph compares, on a cumulative basis, the percentage changes
since June 25, 1998 in (a) the total shareholder return on the common stock,
based on CIB Marine's book value (b) the total return of all U.S. companies
listed on The Nasdaq Stock Market ("NASDAQ U.S."), and (c) the total return of
financial institutions traded on the NASDAQ Market ("NASDAQ Bank"). CIB Marine's
common stock was registered under Section 12(b) of the Securities Exchange Act
of 1934 on June 25, 1998, and information is therefore provided only since June
25, 1998.
[CHART]
<TABLE>
<CAPTION>
6/25/98(1) 9/30/98 12/31/98 3/31/99 6/30/99 9/30/99 12/31/99
---------- ------- -------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
NASDAQ U.S........... 100.00 90.908 117.681 132.103 144.163 147.385 218.398
NASDAQ Bank.......... 100.00 82.546 87.608 83.436 89.005 80.228 80.616
CIB Marine........... 100.00 102.203 104.220 106.155 107.813 109.898 113.880
</TABLE>
- ---------------
(1) Book value is calculated by CIB Marine only at month end; therefore, the
initial value for CIB Marine Bancshares, Inc. is based on the book value
as of June 30, 1998.
There is no established public trading market for CIB Marine's common
stock, and CIB Marine has information concerning only isolated transactions in
its common stock in 1998 and 1999. The information provided for CIB Marine is
therefore based on changes in book value and may not be representative of
shareholder return.
- --------------------------------------------------------------------------------
INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
CIB Marine's independent public accountants for the fiscal year ended
December 31, 1999 were KPMG LLP. CIB Marine's Board of Directors has reappointed
KPMG LLP to continue as the independent public accountants for the fiscal year
ending December 31, 2000. Representatives of KPMG LLP are expected to attend the
meeting. They will be given the opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions from
shareholders present at the meeting.
KPMG LLP replaced Striegel Knobloch & Company, LLC following Striegel
Knobloch's resignation as CIB Marine's independent accountants effective
November 9, 1998. The change in independent accountants was the result of a
formal process involving proposals from two prospective accounting firms. The
decision to change accountants was approved by CIB Marine's Board of Directors.
During the 1998 and 1997 fiscal years
-14-
<PAGE> 18
there were no disagreements with Striegel Knobloch on any matter of accounting
principles or practices, financial statement disclosure, auditing scope or
procedure.
- --------------------------------------------------------------------------------
YEAR 2001 STOCKHOLDER PROPOSALS
- --------------------------------------------------------------------------------
To be considered for inclusion in CIB Marine's proxy statement in
connection with next year's annual meeting, a shareholder proposal to take
action at such meeting must be in writing and received by the Secretary of CIB
Marine, at the address set forth on the first page of this Proxy Statement, no
later than November 2, 2000. Any shareholder proposal submitted to CIB Marine
for inclusion in the proxy statement will be subject to Rule 14a-8 under the
Securities Exchange Act of 1934. Also, under CIB Marine's Bylaws, other
proposals that are not included in the proxy statement will be considered timely
and may be presented at next year's annual meeting if the requirements described
below are satisfied.
]
- --------------------------------------------------------------------------------
ADVANCE NOTICE PROVISIONS
- --------------------------------------------------------------------------------
The Bylaws of CIB Marine provide an advance notice procedure for
nominations to the Board of Directors and certain business to be brought before
an annual meeting. Generally, in order for a shareholder to make a nomination or
bring business before an annual meeting, the shareholder must give notice
thereof in writing to the Secretary of CIB Marine no later than the close of
business on the 60th day nor earlier than the close of business on the 90th day
before the first anniversary of the preceding year's annual meeting. The
shareholder must also comply with certain other provisions set forth in CIB
Marine's Bylaws. For a copy of CIB Marine's Bylaws, which includes the
provisions relating to advance notice for nominations and proposals, an
interested shareholder should contact the Secretary of CIB Marine at N27 W24025
Paul Court, Pewaukee, Wisconsin 53072.
- --------------------------------------------------------------------------------
OTHER MATTERS
- --------------------------------------------------------------------------------
The Board of Directors is not aware of any business or matter which will be
presented for consideration at the meeting other than as stated in the Notice of
Annual Meeting of shareholders. If, however, any other matter properly comes
before the meeting, it is the intention of the persons named in the accompanying
proxy form to vote the shares represented thereby on such matters in accordance
with their best judgment.
-15-
<PAGE> 19
REVOCABLE PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
OF CIB MARINE BANCSHARES, INC.
The undersigned hereby appoints Steven T. Klitzing and Donald J. Straka, or
either of them, as proxies for the undersigned, with full power of substitution,
to act and to vote all of the shares of common stock of CIB Marine Bancshares,
Inc. that the undersigned would be entitled to vote if personally present at the
annual meeting of shareholders to be held on Thursday, April 27, 2000, or at any
adjournment or postponement thereof. Said proxies are directed to vote as
instructed on the matters set forth in this proxy and otherwise at their
discretion. Receipt of a copy of the notice of said meeting and proxy statement
is hereby acknowledged.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTIONS ARE GIVEN, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES LISTED UNDER PROPOSAL 1.
(PLEASE SIGN AND DATE BELOW AND MAIL IN THE ENCLOSED RETURN ENVELOPE TO:
MARINE TRUST AND INVESTMENT COMPANY, 333 QUADRANGLE DRIVE, BOLINGBROOK, ILLINOIS
60440.)
PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE: [X]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL THE NOMINEES IN PROPOSAL 1.
<TABLE>
<CAPTION>
WITHHOLD FOR ALL
FOR AUTHORITY EXCEPT
<S> <C> <C> <C> <C>
1. The election as directors of all the nominees listed [ ] [ ] [ ]
below (except as marked to the contrary below):
NOMINEES:
JOHN T. BEAN; STEVEN C. HILLARD; J. MICHAEL STRAKA
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK "FOR ALL EXCEPT"
AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
----------------------------------------------------------------------------
2. In their discretion, on such other matters that may properly come before the meeting and any
adjournment or postponement thereof.
</TABLE>
<TABLE>
<S> <C>
- ------------------------------------ ------------------------------------
Signature Signature (if held jointly)
Dated:
------------------------------,
2000
</TABLE>
IMPORTANT: Please sign exactly as your name or names appear above. If stock is
held jointly, all joint owners must sign. Executors, administrators, trustees,
guardians, custodians, corporate officers and others signing in a representative
capacity should give their full titles.
