<PAGE> 1
SCHEDULE 14A
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:
[X] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted
by Rule 14a-6(e)(2)).
[ ] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
Calumet Bancorp, Inc.
---------------------
(Exact name of registrant as specified in its charter)
James J. Kemp, Jr., Esq.
Kemp & Grzelakowski, Ltd.
1900 Spring Road, Suite 500
Oak Brook, IL 60523-1495
(630) 571-7711
---------------------------
(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:
- --------------------------------------------------------------------------------
<PAGE> 2
CALUMET BANCORP, INC.
1350 EAST SIBLEY BOULEVARD
DOLTON, ILLINOIS 60419
(708) 841-9010
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON WEDNESDAY APRIL 29, 1998
NOTICE IS HEREBY GIVEN, that the Annual Meeting of Shareholders
("Meeting") of Calumet Bancorp, Inc. ("Company") will be held at the
administrative office of the Company, 1350 East Sibley Boulevard, Dolton,
Illinois, on Wednesday, April 29, 1998, at 1:00 p.m.
A Proxy Card and a Proxy Statement for the Meeting are enclosed. The
Meeting is for the purpose of considering and acting upon:
1. The election of two directors of the
Company for terms of three years each;
2. The approval of an Amendment to
Certificate of Incorporation of the Company
increasing the authorized common shares par
value $.01 from 4,200,000 to 8,400,000;
3. The ratification of the appointment
of Crowe, Chizek and Company LLP as the
independent auditors of the Company for the
fiscal year ending December 31, 1998; and
4. Such other matters as may properly
come before the Meeting or any adjournments
thereof.
Pursuant to the Company's Bylaws, the Board of Directors has fixed the
close of business on March 16, 1998 as the record date for the determination of
the Shareholders entitled to vote at the Meeting. Only holders of common stock
of record at the close of business on the date will be entitled to notice of
and to vote at the Meeting or any adjournments thereof.
In the event there are not sufficient votes to approve any one or more of
the foregoing proposals at the time of the Meeting, the Meeting may be
adjourned in order to permit further solicitation of proxies by the Company. A
list of stockholders entitled to vote at the Meeting will be available at the
office of the Company at 1350 East Sibley Boulevard, Dolton, Illinois for a
period of ten days prior to the Meeting.
EACH SHAREHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE MEETING, IS
REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD WITHOUT DELAY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN BY THE SHAREHOLDER MAY BE
REVOKED AT ANY TIME BEFORE IT IS EXERCISED. A PROXY MAY BE REVOKED BY FILING
WITH THE CORPORATE SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A DULY
EXECUTED PROXY BEARING A LATER DATE. ANY SHAREHOLDER PRESENT AT THE MEETING
MAY REVOKE HIS OR HER PROXY AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE
THE MEETING, HOWEVER, IF YOU ARE A SHAREHOLDER WHOSE SHARES ARE NOT REGISTERED
IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD
HOLDER TO VOTE PERSONALLY AT THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
SUSAN M. LINKUS
SECRETARY
Dolton, Illinois
March __, 1998
<PAGE> 3
CALUMET BANCORP, INC.
1350 EAST SIBLEY BOULEVARD
DOLTON, ILLINOIS 60419
(708) 841-9010
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 29, 1998
SOLICITATION AND VOTING OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Calumet Bancorp, Inc. (hereinafter called
"Calumet Bancorp" or the "Company") to be used at the Annual Meeting of
Shareholders of the Company (hereinafter called the "Meeting"). The Company
owns one hundred (100%) percent of the issued and outstanding common stock of
Calumet Federal Savings and Loan Association of Chicago ("Calumet Federal" or
"Association"). The Meeting will be held at the administrative office of the
Company, 1350 East Sibley Boulevard, Dolton, Illinois, on Wednesday, April 29,
1998, at 1:00 p.m. The accompanying Notice of Meeting and this Proxy Statement
are being first mailed to Shareholders on or about March 26, 1998.
Regardless of the number of shares of common stock owned, it is important
that shareholders be represented by proxy or be present in person at the
Meeting. Shareholders are requested to vote by completing the enclosed proxy
card and returning it signed and dated in the enclosed postage-paid envelope.
Shareholders are urged to indicate their vote in the spaces provided on the
proxy card. Proxies solicited by the Board of Directors of the Company will be
voted in accordance with the directions given therein. Where no instructions
are indicated, proxies will be voted FOR the election of the Board of
Directors' nominees for directors, FOR the approval of the Amendment to the
Articles of Incorporation of the Company and FOR the ratification of Crowe,
Chizek and Company LLP as independent auditors for the fiscal year ending
December 31, 1998.
The Board of Directors knows of no additional matters that will be
presented for consideration at the Meeting. Execution of a proxy, however,
confers on the designated proxy holders discretionary authority to vote the
shares in accordance with their best judgment on such other business, if any,
that may properly come before the Meeting or any adjournments thereof.
A proxy may be revoked at any time prior to its exercise by the filing of
a written notice of revocation with the Secretary of the Company, by delivering
to the Company a duly executed proxy bearing a later date, or by attending the
Meeting, and voting in person. However, if you are a shareholder whose shares
are not registered in your own name, you will need additional documentation
from your record holder to vote personally at the Meeting.
The cost of solicitation of proxies in the form enclosed herewith will be
borne by the Company. In addition to the solicitation of proxies by mail, a
proxy solicitation firm, Morrow & Company, Inc., will assist the Company in
soliciting proxies for the Meeting and will be paid a fee of $3,500.00, plus
out-of-pocket expenses. Proxies may also be solicited personally or by
telephone or telegraph by directors, officers and regular employees of the
Company and Calumet Federal, without additional compensation therefor. Calumet
Bancorp will also request persons, firms and corporations holding shares in
their names, or in the name of their nominees, which are beneficially owned by
others, to send proxy material to and obtain proxies from such beneficial
owners, and will reimburse such holders for their reasonable expenses in doing
so.
<PAGE> 4
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The securities which may be voted at the Meeting consist of shares of
Common Stock of Calumet Bancorp, with each share entitling its owner to one
vote on all matters to be voted on at the Meeting except as described below.
There is no cumulative voting for the election of directors. The close of
business on March 16, 1998, has been fixed by the Board of Directors as the
record date ("Record Date") for the determination of shareholders entitled to
notice of and to vote at the Meeting and any adjournments thereof. The total
number of shares of Common Stock outstanding on the Record Date was 3,141,497
shares.
The presence, in person or by proxy, of at least a majority of the total
number of shares of Common Stock entitled to vote (after subtracting any shares
in excess of the limit pursuant to the provisions of Article XIII of the
Company's Certificate of Incorporation) is necessary to constitute a quorum at
the Meeting. In the event there are not sufficient votes for a quorum or to
approve any proposal at the time of the Meeting, the Meeting may be adjourned
in order to permit the further solicitation of proxies.
The following table sets forth certain information as to those persons
believed by management to be beneficial owners of more than 5% of the
outstanding shares of Common Stock on March 16, 1998. Persons and groups
owning in excess of 5% of the Common Stock are required to file certain reports
regarding such ownership with the Company and with the Securities and Exchange
Commission, in accordance with the Securities Exchange Act of 1934 (the
"Exchange Act"). Additionally, certain other publicly available Exchange Act
reports may provide information regarding the identities of persons or groups
who hold in excess of 5% of the common stock. Other than those persons listed
below, the Company is not aware of any person or group, as such term is defined
in the Exchange Act, that owns more than 5% of the Common Stock as of March 16,
1998.
2
<PAGE> 5
<TABLE>
<CAPTION>
Name and Amount and Nature Percent of
Address of of Beneficial Common Stock
Beneficial Owner Ownership Outstanding (a)
- ---------------- ----------------- ---------------
<S> <C> <C>
Calumet Federal Savings & Loan
Association of Chicago
Employee Stock Ownership Plan
and Trust
1350 East Sibley Boulevard
Dolton, Illinois 60419 391,365(b) 12.5%
Thaddeus Walczak
38 East Road
Chesterton, Indiana 46304 389,006(c) 12.4%
Carole J. Lewis
38 East Road
Chesterton, Indiana 46304 302,239(d) 9.6%
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199 207,000(e) 6.6%
</TABLE>
(a) The total number of shares of Common Stock outstanding on March 16, 1998
was 3,141,497.
(b) The trustee of the Calumet Federal Savings and Loan Association of
Chicago Employee Stock Ownership Plan and Trust, Cole Taylor Bank,
Chicago, Illinois, has sole voting and dispositive power over 42,435
unallocated shares of Common Stock of the Company held in the Trust
and shared voting and dispositive power over 349,930 allocated
shares of common stock held in the Trust. Allocated shares will be
voted by the ESOP trustee in accordance with the instructions of
participating employees. Unallocated shares will be voted by the
ESOP trustee as directed by the ESOP Committee. The ESOP Committee
is composed of Company Directors Henry J. Urban, Louise Czarobski
and William A. McCann.
(c) The number of shares owned by Mr. Walczak, an Officer and Director
of the Company, include 161,310 shares of the Common Stock of the
Company which may be acquired pursuant to presently exercisable
options.
(d) The number of shares owned by Ms. Lewis, an Officer and Director of
the Company, includes 99,368 shares of Common Stock of the Company
which may be acquired pursuant to presently exercisable options.
(e) Based on information filed in a Schedule 13G by John Hancock
Advisers, Inc. on January 29, 1998.
3
<PAGE> 6
PROPOSAL 1. ELECTION OF DIRECTORS
The Company's Board of Directors is currently composed of seven members.
The Company's Bylaws provide that Directors are to be elected for terms of
three years, approximately one-third of whom are elected annually. Two
directors will be elected at the Meeting to serve for a three year period, or
until their respective successors have been elected and qualified. The
Nominating Committee, consisting of all the Directors of the Company, has
nominated for election as Directors Thaddeus Walczak and Dr. Henry J. Urban,
each for a three year term. The nominees are currently members of the Board of
Directors of the Company and the Association. Each director of the Company is
also a director of the Association.
If any nominee is unable to serve, the shares represented by all valid
proxies will be voted for the election of such substitute as the Board of
Directors may recommend or the Board of Directors may amend the Bylaws and
reduce the size of the Board. At this time, the Board knows of no reason why
any nominee might be unavailable or unwilling to serve. Unless authority to
vote for the directors is withheld, it is intended that the shares represented
by the enclosed Proxy will be voted FOR the election of both nominees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES
NAMED IN THIS PROXY STATEMENT.
The following table sets forth as to each nominee and director continuing
in office, his or her name, age, the year he or she first became a director and
the number of shares of Common Stock and the percent thereof beneficially owned
at March 16, 1998. The table also sets forth the number of shares of Common
Stock and the percent thereof beneficially owned by non-director executive
officers and by all directors and executive officers as a group at March 16,
1998.
<TABLE>
<CAPTION>
Shares of
Common Stock
Year Beneficially
First Elected Year Owned at Percent of
Name Age(1) Director(2) Term Expires March 16, 1998(3) Class
---- ------ --------------- ------------ ----------------- ----------
<S> <C> <C> <C> <C> <C>
BOARD NOMINEES
Thaddeus Walczak(5) 69 1950 2001(4) 389,006 12.4%
Dr. Henry J. Urban(5)
(7) 73 1953 2001(4) 43,527 1.4%
DIRECTORS CONTINUING IN OFFICE
Carole J. Lewis(6) 59 1975 1999 302,239 9.6%
Louise Czarobski(7) 73 1982 1999 18,848 0.6%
Tytus R. Bulicz 53 1991 1999 1,753 0.1%
William A. McCann(7) 60 1991 2000 49,174 1.6%
Darryl Erlandson(6) 37 1996 2000 11,691 0.4%
</TABLE>
4
<PAGE> 7
OTHER EXECUTIVE OFFICERS
John Garlanger 51 N/A N/A 103,209 3.3%
All directors and executive officers as a group (14 persons) 1,078,973 34.4%
(1) At December 31, 1997.
(2) Includes prior service on the Board of Directors of Calumet Federal.
(3) In accordance with Rule 13d-3 under the Exchange Act, a person is
deemed to be the beneficial owner, for purposes of this table, of any
shares of Common Stock if he or she has shared voting and/or
investment power with respect to such security. The table includes
shares owned by spouses, other immediate family members in trust,
shares held in retirement accounts or funds for the benefit of the
named individuals, and other forms of ownership, over which shares the
persons named in the table possess voting and investment power. This
table also includes 379,971 shares of Common Stock subject to
outstanding options which will be exercisable within sixty days from
March 16, 1998.
(4) Assuming re-election at the Meeting.
(5) Thaddeus Walczak is a first cousin to Dr. Henry J. Urban.
(6) Darryl Erlandson is the son-in-law of Carole J. Lewis.
(7) Member of the ESOP Committee which directs ESOP Trustee vote for
42,435 shares of unallocated shares held by ESOP Trust.
Set forth below is certain information with respect to the nominees for
directors and the continuing directors of the Company. Unless otherwise
indicated, the principal occupation listed for each person below has been
his or her occupation for the past five years.
CAROLE J. LEWIS has been with Calumet Federal since 1965. Ms. Lewis
was appointed President and Chief Operating Officer of the Association in
January, 1987 and has been a director since 1975. Prior to being appointed
President of the Association, Ms. Lewis has served as Executive Vice
President, Chief Loan Officer and Marketing Director of the Association.
LOUISE CZAROBSKI, now retired, was previously an executive secretary
for Continental Bank of Illinois, now known as Bank of America Illinois.
THADDEUS WALCZAK joined Calumet Federal in 1955 and has served as
Chairman of the Board and Chief Executive Officer since January, 1987. For
the past forty-one years Mr. Walczak has been a member of the Association's
Board of Directors. He was appointed President of the Association in 1961
and served in that capacity until January, 1987.
DR. HENRY J. URBAN is a self-employed dentist in Chicago, Illinois.
5
<PAGE> 8
WILLIAM A. MCCANN is the President and sole stockholder of William A.
McCann Associates, Inc., a real estate appraisal and consulting firm in
Chicago, Illinois. William A. McCann Associates, Inc. has been periodically
engaged by the Association to provide real estate appraisal services. Mr.
McCann serves on the Mayor of Chicago's Task Force Committee on institutional
land uses.
TYTUS R. BULICZ is a Senior Development Engineer for the Advanced
Combustion Group of Navistar International Transportation Corporation. Mr.
Bulicz has been a member of the Board of Directors of the Association since
November, 1991 and a director of Calumet Bancorp since August, 1995.
DARRYL ERLANDSON is a Vice President of the Association and president of
its subsidiaries, Calumet Savings Service Corporation and Calumet Financial
Corporation. Mr. Erlandson was elected to the Board of the Company and
Association in June, 1996 to fill the vacancy created by the resignation of
Sylvester Lulinski who resigned for medical reasons.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company and Association conduct their
business through meetings of the Board and through their committees. During
the fiscal year ended December 31, 1997, the Board of Directors of the Company
held 12 meetings and the Board of Directors of Calumet Federal held 12
meetings. No director of the Company or Calumet Federal attended fewer than
75% of the total meetings of the Board and committee meetings on which such
Board member served during this period.
The Board of Directors of the Company has also established a Stock Option
Committee. This committee did not meet during the year ended December 31,
1997.
The Board of Directors of the Association has established Executive, Audit
and Compliance, Compensation and Community Reinvestment Act ("CRA") Committees.
The Executive Committee consists of Mr. Walczak, Ms. Lewis and Dr. Urban.
This Committee has the authority to exercise most powers of the Board of
Directors between meetings of the full Board of Directors. The Executive
Committee also recommends employee salaries and benefits (except with regard to
its members), as well as the election of officers, the establishment of
Association committees and various other organizational activities of the
Association on an annual basis. All activities of this Committee are reported
to the Association's Board of Directors on a periodic basis. This Committee
met twice during 1997.
The Audit and Compliance Committee consists of Dr. Urban, Mr. Bulicz and
Ms. Czarobski. This Committee reviews the Company's budget and audit
performance and meets with the Company's auditors. This Committee met _ times
in 1997. In addition, this Committee oversees and monitors the Company's
system of internal control by, among other things, monitoring and reviewing
regulatory reports and the Internal Audit Department activities.
The members of the Compensation Committee are William McCann, who serves
as Chairman, Tytus R. Bulicz, Louise Czarobski and Dr. Henry J. Urban. This
Committee met once during 1997.
6
<PAGE> 9
The board members of the CRA Committee are William McCann, Henry J. Urban,
Carole J. Lewis and Tytus Bulicz. This committee implements CRA policies and
programs and monitors the Association's activities in the CRA area. This
Committee met four times during 1997.
Article II, Section 14 of the Company's Bylaws provides that the Board of
Directors of the Company shall act as a nominating committee for selecting the
management nominees for election as directors. Such section of the Bylaws also
provides as follows: "No nominations for directors except those made by the
nominating committee shall be voted upon at the annual meeting unless other
nominations by shareholders are made in writing and delivered to the Secretary
of the Company in accordance with the provisions of the Company's Certificate
of Incorporation." Article II, Section 15 further provides that any new
business to be taken up at the annual meeting shall be stated in writing and
filed with the Secretary of the Company in accordance with the provisions of
the Company's Certificate of Incorporation. Article X of the Certificate of
Incorporation provides that notice of a stockholder's intent to make a
nomination or present new business at the meeting ("stockholder notice") must
be given not less than thirty days nor more than sixty days prior to any such
meeting; provided, however, that if less than thirty-one days' notice of the
meeting is given to Shareholders by the Company, a stockholder's notice shall
be delivered or mailed, as prescribed, to the Secretary of the Company not
later than the close of the tenth day following the day on which notice of the
meeting was mailed to Shareholders. If properly made, such nominations shall
be considered by Shareholders at such meeting. The Board of Directors of the
Company held a meeting in such capacity on February 24, 1998, in order to
nominate the individuals for election at the Meeting.
REPORT OF COMPENSATION COMMITTEE
Under rules established by the Securities and Exchange Commission, the
Company is required to provide certain data and information in regard to the
compensation and benefits provided to the Company's Chief Executive Officer and
other executive officers of the Company. The disclosure requirements for the
Chief Executive Officer and such executive officers include the use of tables
and a report explaining the rationale and considerations that led to
fundamental compensation decisions affecting those individuals. In fulfillment
of this requirement, the Compensation Committee of the Company, at the
direction of the Board of Directors has prepared the following report for
inclusion in this proxy statement.
The Compensation Committee is responsible for establishing the
compensation for the senior executive officers of the Company and its
subsidiaries consistent with the Company's and the Association's business
plans, strategies, and goals. The Compensation Committee establishes the
factors and criteria upon which the executive officers' compensation is based
and how such compensation relates to the Company's performance, general
compensation policies, competitive realities, and regulatory requirements.
The Compensation Committee's functions and objectives are to: (A)
determine the competitiveness of current base salary, annual incentives and
long-term incentives relative to specific competitive markets for the Chairman
and President; (B) develop a performance review mechanism that has written
objectives and goals which are used to make salary increase determinations; (C)
develop an annual incentive plan for senior management; and (D) provide
guidance to the Board of Directors in their role in establishing objectives
regarding executive compensation.
7
<PAGE> 10
The overall compensation philosophy of the Company is as follows:
- to attract and retain quality talent, which is critical to both
the short-term and long-term success of this Company;
- to reinforce strategic performance objectives through the use
of incentive compensation programs.
- to create a mutuality of interest between executive officers
and shareholders through compensation structures that share the
rewards and risks of strategic decision-making.
- to encourage executives to achieve substantial levels of
ownership of stock in the Company.
The compensation package offered to executive officers consists of a mix
of salary, incentive bonus awards, and stock option awards as well as benefits
under several employee benefit plans offered by the Association.
For the fiscal year ended December 31, 1997, the Company experienced
strong core earnings. In setting executive compensation, for the Chairman and
Chief Executive Officer, and the President and Chief Operating Officer, the
Compensation Committee considered the return on assets, return on equity, asset
quality and the maintenance of an appropriate interest rate spread as it
relates to overall industry performance.
At June 30, 1997 those measures were: Return on Assets 1.25%, Return on
Equity 11.19%, Non-performing Loans to Total Loans 1.41%, and Interest Rate
Spread 3.17%. These are the primary factors, although not the exclusive ones
considered, on which the Compensation Committee bases executive compensation.
This Committee expects to review these standards, adjusting them for unique
factors, such as the increase in equity of the Association as a result of its
conversion to a stock company and the lower interest rate environment of the
last year which helped maintain favorable interest rate spreads, in the
consideration of executive compensation and incentive compensation.
The Compensation Committee investigates the competitiveness of the
compensation of the Chairman and the President by having the following survey
data updated at least annually. Among the sources consulted are the America's
Community Bankers Peer Group Report, and SNL Securities L.P. Peer Group
Analysis.
These surveys encompass Financial Service Companies, Banks, Savings Banks,
and Thrifts throughout the United States with assets ranging from $200 million
to $1 billion. The information is used as a frame of reference for annual
salary adjustments. The base compensation of the Chairman, as given on the
summary compensation table as compared with the base compensation for similar
executives, is in the 75th percentile and that of the President is in the 75th
percentile. The Committee viewed work performance as the most important
measurement factor in setting base compensation.
8
<PAGE> 11
The Committee established certain goals and objectives in 1997 with which
to measure the performance of the Chairman and the President for the purpose of
awarding incentive bonuses based on the attainment of certain goals which were
measured as of June 30, 1997. The goals were: Return on Assets 1%; Return on
Equity 11%; Asset Quality (ratio of non-performing loans to total loans) 2.75%;
Interest rate spread 2.5%. Notwithstanding the attainment of the goals no
incentive bonus would be paid unless an incentive plan "trigger" was achieved.
The Committee determined that the "trigger" would be equal to 75% of the
performance level of the Association's peer group. The peer group selected for
this comparison consists of those savings institutions included in the
America's Community Bankers Peer Group Report. This report is prepared on a
quarterly basis and submitted to the Company and special attention is given to
the peer group referred to as the East North Central Financial Institutions
Having an Asset Size of $300 to $500 Million Residential Lenders, Utilizing
Savings and Time Funding and those that are Well Capitalized. The Peer Group
Report covers 14 profit, efficiency and exposure measures.
The Committee adopted the weighting factors establishing the importance of
the corporate goals as follows:
<TABLE>
<CAPTION>
PERFORMANCE
RELATIVE TO
DESCRIPTION GOALS WEIGHTING CALUMET PEER GROUP PEER GROUP
- ----------- ----- --------- ------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Return on Assets 1% 60% 1.25% .95% 132%
Return on Equity 11% 20% 11.19% 9.65% 116%
Asset Quality
(Ratio of
non-performing
loans to
total loans) 2.75% 15% 1.41% .88% .62%
Interest Rate Spread 2.50% 5% 3.17% 2.94% 108%
</TABLE>
Based on this weighting, average bonuses would be awarded in a range of
25% of base salary to 85% of base salary in the case of the Chairman and in a
range of 25% to 65% of base salary for President, absent special circumstances
or non-recurring items that would mandate the payment of a bonus in excess of
these limitations or the elimination of a bonus entirely. The Committee stated
such items that could be excluded in their consideration of incentive bonuses
would be profits resulting from an extraordinary or non-recurring item, profits
or losses resulting from imposition of Generally Accepted Accounting Principle
changes, regulatory changes, acquisition as a result of a merger or bulk
purchase of assets by the Company or similar circumstances. The Compensation
Committee members in the exercise of their fiduciary duty and with their
dedication to operating a safe and sound Company reserved unto themselves the
right to amend or alter, based on general economic conditions and other factors
governing the performance of the Company, the guidelines and goals established
at any time.
The members of the Compensation Committee are William McCann, who serves
as Chairman, Tytus R. Bulicz, Louise Czarobski and Dr. Henry J. Urban. No
member of the Compensation Committee is or was an officer of the Company or the
Association. McCann and Associates, a company controlled by Mr. McCann was
paid $6,000 during 1997 for appraisal work performed by that company for the
Association.
9
<PAGE> 12
The complete Board of Directors serves as the Compensation Committee for
the remainder of the executive employees of the Company. Both the Compensation
Committee and the Board will continue to review the standards of performance of
the Association and the appropriate peer group to which comparisons may be
made. They reserve the right to change the standard and peer group comparables
as they see fit in order to assure that the standards reflect the reality of
the market place and the actual performance of the Company.
DIRECTORS COMPENSATION
Directors received from the Association $1,250 for each Board meeting in
1997. Members of the Audit Committee of the Association receive $150 for each
meeting attended; members of the Special Compensation Committee receive $300
for each meeting attended with the chairman of the committee receiving $500;
members of the Executive Committee receive $1,250 for each meeting attended.
Directors Urban, Czarobski, Bulicz and McCann received $19,000, $16,500,
$16,500 and $15,500 respectively from the Association in 1997. Non-employee
directors of the Company received $200 for each meeting attended. Directors
Urban, Czarobski, McCann and Bulicz each received $2,400 from the Company in
1997. Certain non-employee directors received the non-incentive stock options
in 1992 which vest over a five year period ending February 1996 at an exercise
price of $6.67 per share adjusted for the 3 for 2 stock split in November 1997.
Directors Urban, Czarobski and McCann received 26,521; 10,609; and 10,609
options for the purchase of shares respectively. On January 24, 1995 all
non-employee directors received additional non-incentive stock options which
vest over a five year period ending January, 1999 at an exercise price of
$14.92 per share adjusted for the 3 for 2 stock split in November 1997.
Directors Urban, Czarobski, McCann and Bulicz received 2,664; 1,066; 1,332; and
1,066 options for the purchase of shares respectively. Mr. William McCann also
performs appraisal work for the Association.
EXECUTIVE COMPENSATION
The following tables set forth for the fiscal years ended December 31,
1997, 1996 and 1995 certain information as to the total compensation received
by each of the four most highly compensated executive officers of the Company
and the Association receiving total cash compensation in excess of $100,000
during this period for services in all capacities to the Company and the
Association. These amounts reflect total cash compensation paid by the
Association to these individuals during the period. For the fiscal year ended
December 31, 1997 forty percent (40%) of the compensation paid to Mr. Walczak,
thirty percent (30%) of the compensation paid to Mr. Garlanger, and twenty-five
percent (25%) of the compensation paid to Ms. Lewis was reimbursed by the
Company to the Association, to compensate the Association for the time devoted
by those individuals to Company business. Mr. Erlandson's compensation was
paid solely by the Association.
On January 24, 1995 stock awards under the Calumet Federal Savings and
Loan Association of Chicago Management Development and Recognition Plan ("MRP")
in the amount of 21,051 shares, 21,051 shares and 5,359 shares were awarded to
Mr. Walczak, Ms. Lewis and Mr. Garlanger, respectively (the "1995 MRP Awards").
The value of those awards were set at $14.92 per share, which was the market
value of the shares at the close of business on January 23, 1995 adjusted for
the 3 for 2 stock split in November 1997. One-third of the 1995 MRP Awards
vested on the date of grant, one-third vested on January 1, 1996 and the final
one-third vested on January 1, 1997.
On January 24, 1995, incentive and non-incentive options under the 1991
Stock Option Plan of Calumet Bancorp for 19,185 shares, 11,724 shares and 2,558
shares were granted to Mr. Walczak, Ms. Lewis and Mr. Garlanger respectively
(the "1995 Options"). The exercise price for the 1995 Options is $14.92 which
was the market value of the shares at the close of business on January 23, 1995
adjusted for the 3 for 2 stock split in November 1997. Twenty percent (20%) of
the 1995 Options vested on the date of grant and twenty percent (20%) vests on
January 24, 1996, 1997, 1998 and 1999.
10
<PAGE> 13
SUMMARY COMPENSATION SCHEDULE
<TABLE>
<CAPTION>
Long-Term Compensation
------------------------
Annual Compensation Awards Payouts
------------------------ ------------------------ ----------
Other Restricted Securities
Name and Annual Stock Underlying LTIP All Other
Principal Position Years Salary($) Bonus($) Compensation($)(1) Award ($) Options(#) Payouts($) Compensation($)(2)
- ------------------ ----- --------- -------- ------------------ ---------- ---------- ---------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Thaddeus Walczak 1997 $360,700 $225,438 $19,900 $ 0 0 $0 $149,625
Chairman & CEO 1996 350,200 249,500 19,900 0 0 0 99,750
1995 340,000 202,300 18,650 314,011 19,185 0 83,250
Carole J. Lewis 1997 214,300 102,864 19,900 0 0 0 149,625
President & COO 1996 208,060 114,430 19,900 0 0 0 99,750
Director 1995 202,000 91,910 18,650 314,011 11,724 0 83,250
John Garlanger 1997 123,900 24,000 0 0 0 0 149,625
Sr. Vice President, 1996 119,600 27,000 0 0 0 0 99,750
Treasurer & CFO 1995 115,000 27,000 0 79,946 2,558 0 83,250
Darryl Erlandson 1997 74,000 10,000 17,400 0 0 0 86,947
Vice President 1996 68,500 12,000 10,150 0 0 0 26,534
Director 1995 46,273 15,000 0 0 0 0 0
</TABLE>
(1) DIRECTORS' AND COMMITTEE FEES
(2) VALUE OF ESOP SHARES ALLOCATED
11
<PAGE> 14
OPTION VALUE AT DECEMBER 31, 1997
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT DECEMBER 31, 1997 AT DECEMBER 31, 1997 (1)
NAME OPTION ---------------------------------- ----------------------------------
PRICE EXERCISABLE (#) UNEXERCISABLE (#) EXERCISABLE (#) UNEXERCISABLE (#)
---------------- ------ ---------------------------------- ----------------------------------
<S> <C> <C> <C> <C> <C>
Thaddeus Walczak $ 6.67 145,962 -- $3,879,670 $ --
14.92 11,511 7,674 210,997 140,664
Carole J. Lewis $ 6.67 89,989 -- 2,391,908 --
14.92 7,034 4,690 128,933 85,968
John Garlanger $ 6.67 25,461 -- 676,753 --
14.92 1,535 1,023 28,137 18,752
</TABLE>
(1) BASED ON A MARKET VALUE OF $33.25 AT DECEMBER 31, 1997, LESS THE OPTION
PRICE INDICATED.
12
<PAGE> 15
CALUMET BANCORP, INC.
1997 Performance Graph
<TABLE>
<CAPTION>
12/92 12/93 12/94 12/95 12/96 12/97
<S> <C> <C> <C> <C> <C> <C>
NASDAQ INDEX 100.0 114.8 112.2 158.7 195.2 239.5
PEER INDEX 100.0 131.8 133.5 204.7 266.2 455.9
CBCI INDEX 100.0 134.2 125.9 172.5 206.7 311.9
</TABLE>
The above performance graph was prepared from data obtained from the
Center for Research in Security Prices at the University of Chicago. The
market index being used is the CRSP Total Return Index for the NASDAQ Stock
Market (US Companies). The peer group index was based on data from all
companies listed on NASDAQ as depository institutions and includes both banks
and thrifts.
13
<PAGE> 16
EMPLOYMENT AGREEMENTS. The Association at the time of its conversion to
stock form (the "Conversion") entered into three-year employment agreements
with Mr. Walczak, Ms. Lewis and Mr. Garlanger these employment agreements were
restated and amended January 31, 1997. The annual compensation of each of the
above officers may be increased by action of the Board of Directors upon an
annual performance review. In accordance with the terms of the employment
agreements, the Board of Directors on January 27, 1998 extended each agreement
until December 31, 2000. The Association on January 31, 1997 entered into a
three year employment agreement with Mr. Erlandson which was extended on
January 27, 1998 for an additional year. The agreements are terminable by the
Association for just cause at any time or in certain events specified by Office
of Thrift Supervision regulations.
The employment agreements provide for severance payments and other
benefits in the event of involuntary termination of employment in connection
with any change in control of the Company. Severance payments also will be
provided on a similar basis in connection with a voluntary termination of
employment where, subsequent to a change in control, officers are assigned
duties inconsistent with their positions, duties, responsibilities and status
immediately prior to such change in control. The term "change in control" is
defined in the agreements as, among other things, any time during the period of
employment when a change of control is deemed to have occurred under
regulations of the OTS or a change in the composition of more than a majority
of the Board of Directors of the Company occurs.
For each of the above officers, the severance payments from the Employers
will equal 1.00 times the officer's average annual compensation during the
prior year plus the balance of the officer's contract, but in no event will the
severance payment exceed 2.99 times the officers base compensation. Such
amount will be paid within five business days following the termination of
employment, unless the officer elects to receive equal monthly installments
over a three-year period. Section 280G of the Internal Revenue Code of 1986,
as amended ("Code"), states that severance payments which equal or exceed three
times the base compensation of the individual are deemed to be "excess
parachute payments" if they are contingent upon a change in control.
Individuals receiving excess parachute payments are subject to a 20% excise tax
on the amount of such excess payments, and the Association is not entitled to
deduct the amount of such excess payments. The employment agreements provide
that if the severance payments to the above officers constitute parachute
payments in the opinion of counsel to the Association, then (1) the officer may
elect to receive the maximum amount of severance payments that can be paid
without constituting excess parachute payments, or (2) if the officer does not
make such election, the Employer shall pay him a lump sum cash payment equal to
2.99 times his/her base compensation.
The agreements restrict the employee's right to compete against the
Employers for a period of one year from the date of termination of the
agreement if the employee voluntarily terminates his employment, except in the
event of a change in control, or if the Employers terminate for cause. The
Board of Directors of the Company or the Association may, from time to time,
also extend employment agreements to other senior executive officers.
SEVERANCE AGREEMENTS. The Association has entered into severance
agreements with Lorraine Straka, Susan Linkus, Deborah Cattoni and Jean A.
Adams. The severance agreements have a term of one year. The agreements
provide for severance payments if employment is terminated following a change
in control. The payments under the agreements for Ms. Straka, Ms. Linkus and
Ms. Cattoni are equal to the total amount of one times the annual compensation
paid to each executive officer during the year immediately preceding the change
in control.
14
<PAGE> 17
Ms. Adams' agreement provides that she would be paid fifty percent (50%) of the
annual compensation paid to her during the year immediately preceding the
change in control. The sum would be paid promptly after any change in control.
The term "change in control" is defined in the agreements as, among other
things, any time during the period of employment when a change in control is
deemed to have occurred under regulations of the OTS or a change in the
composition of more than a majority of the Board of Directors of the Company
occurs.
PROFIT SHARING PLAN. Calumet Federal maintains a deferred compensation
profit sharing plan, the Calumet Federal Savings and Loan Association of
Chicago 401(k) Profit Sharing Plan ("Profit Sharing Plan") for the benefit of
its employees. Employees become eligible to participate under the Profit
Sharing Plan after completing one year of service at the Association and
attaining age 21. Each year the Association, at the discretion of the Board of
Directors, may make contributions for each eligible individual. The
Association has not made any Profit Sharing contributions in 1995, 1996 or
1997. Employees are entitled to withdraw funds from the Profit Sharing Plan
upon retirement, death, disability or termination of employment. Normal
retirement age under the Plan is age 65. The Plan conforms to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
EMPLOYEE STOCK OWNERSHIP PLAN. The Association maintains an ESOP for the
exclusive benefit of participating employees. In order to participate under
the ESOP, employees are required to be 21 years old and have completed one year
of service with the Association.
The ESOP is funded by contributions made by the Association in cash or
Common Stock. Benefits may be paid either in shares of Common Stock or in
cash. The ESOP originally borrowed funds from an unrelated third party lender
to purchase 424,350 shares of Common Stock issued in the Conversion on February
20, 1992. The Company in 1994 repaid the original ESOP loan and extended a
loan to the ESOP for $2,263,200. This loan is secured by the shares purchased
with the proceeds and will be repaid by the ESOP with funds from the
Association's contributions and earnings on ESOP assets. Shares purchased with
the loan proceeds are held in a suspense account for allocation among
participants as the loan is repaid. The Association recorded $565,850,
$565,850 and $565,850 of compensation expense during the years ended December
31, 1995, 1996 and 1997. The principal balance of the loan is $282,900 at
December 31, 1997.
The Board of Directors of the Association has appointed a committee (the
"ESOP COMMITTEE"), composed of Dr. Urban, Louise Czarobski and William McCann
to administer the ESOP. Cole Taylor Bank is the independent trustee for the
ESOP. The ESOP Trustee is required to vote all allocated shares held in the
ESOP in accordance with the instructions of the participating employees.
Shares for which employees do not give instructions and unallocated shares are
voted by the ESOP Trustee in the same proportion as determined by the vote of
participants with respect to allocated shares.
STOCK OPTION PLAN. In connection with the Conversion, the Board of
Directors of the Corporation adopted the Calumet Bancorp, Inc. 1991 Stock
Option Plan (the "1991 PLAN"). In 1997 the shareholders approved the Calumet
Bancorp, Inc. 1997 Stock Option Plan (the "1997 Plan"). The 1991 Plan
authorizes granting of stock options and limited rights for 530,438 shares of
Common Stock to such officers, key employees and directors of the Corporation
or its affiliates as the Stock Option Committee of the Board of Directors (the
"COMMITTEE") may determine. The 1997 Plan authorizing the granting of stock
options and limited rights for 150,000 shares of Common Stock; no options have
been granted under the 1997 Plan. The members of the Committee are Dr. Henry
J. Urban, Louise Czarobski and William A. McCann.
15
<PAGE> 18
Options granted to date under the 1991 Plan become exercisable on a
cumulative basis in equal installments over a five year period from the date of
grant. The first installment of options became exercisable in February of
1992. The options will expire 10 years from the date of grant.
Options to purchase 1,749 shares of Common Stock were exercised in 1997.
At December 31, 1997, options to purchase 529,377 shares of Common Stock
have been granted to officers and directors. All options granted have included
limited rights which enable a holder, upon a change in control of the
Corporation, to elect to receive cash equal to the difference between the
exercise price of the option and the fair market value of the Common Stock on
the date of exercise (multiplied by the number of shares with respect to which
the rights are exercised).
MANAGEMENT RECOGNITION AND RETENTION PLAN AND TRUST. In connection with
the Conversion, the Association established the Calumet Federal Savings and
Loan Association of Chicago Management Recognition and Retention Plan and Trust
(the "MRP"). The Association contributed funds allowing the MRP to acquire
187,425 shares of Common Stock in the Conversion.
A Committee of the Board of Directors of the Association administers the
MRP. Under the MRP, awards ("AWARDS") have been granted to key employees in
the form of shares of Common Stock held by the MRP. Awards are
non-transferable and non-assessable. Prior to vesting, recipients of Awards
may not direct the voting of shares of Common Stock allocated to them. Shares
of Common Stock held by the MRP trust which have not been awarded or are not
vested, are voted by trustees as directed by the vote of the non-employee
members of the Board of Directors. At December 31, 1997, all MRP shares have
been awarded.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Under the Exchange Act, the Company's directors, executive officers and
any person holding more than 10% of the Company's Common Stock are required to
report their initial ownership of the Company's Common Stock and any subsequent
changes in that ownership to the Securities and Exchange Commission. Specific
due dates for these reports have been established and the Corporation is
required to disclose in this Proxy Statement any failure to file such reports
by these dates during 1997. Based solely on a review of copies of such reports
furnished to the Company, or written representations that no reports were
required, the Company believes that during 1997 all filing requirements
applicable to its directors and executive officers were satisfied.
TRANSACTIONS WITH MANAGEMENT Prior to the enactment of the Financial
Institution Reform, Recovery and Enforcement Act of 1989, Calumet Federal
offered residential mortgage loans to officers, directors and employees at
current market rates but reduced points and waived application fees on a
case-by-case basis. Since FIRREA, all loans are made to officers, directors
and employees on the same terms as loans granted to members of the general
public, except the Association may waive application fees for non-management
employees. No director or executive officer or member of their immediate
families or affiliates had any loans with Calumet Federal at December 31, 1997.
16
<PAGE> 19
PROPOSAL 2. AMENDMENT OF CERTIFICATE OF INCORPORATION
OF THE COMPANY TO INCREASE AUTHORIZED SHARES
OF COMMON STOCK PAR VALUE $.01
FROM 4,200,000 SHARES TO 8,400,000 SHARES
On February 24, 1998, the Board of Directors unanimously approved and
recommended that the shareholders consider and approve an amendment to Article
IV of the Company's Certificate of Incorporation (the "Certificate") that would
increase the number of authorized shares of the Company's Common Stock par
value $.01 per share from 4,200,000 shares to 8,400,000 shares. To be adopted,
this proposal requires the affirmative vote of the holders of a majority of all
of the outstanding shares of Common Stock of the Company entitled to vote
thereon at the meeting. The Board of Directors believes that it is in the best
interests of the Company and its shareholders to amend the Certificate to give
effect to the proposed amendment.
Article IV of the Certificate is amended by the proposed amendment, as
follows:
The first sentence of the first paragraph of Article IV of the
Company's Certificate of Incorporation shall be deleted in its
entirety, and the following inserted in place thereof: "The
aggregate number of shares of all classes of capital stock which the
Corporation has authority to issue is 10,400,000, of which 8,400,000
are to be shares of common stock, $.01 par value per share, and of
which 2,000,000 are to be shares of serial preferred stock, $.01 par
value per share."
As of February 28, 1998, there were 3,141,497 shares of Common Stock
issued and outstanding. Approximately 559,520 additional shares of Common
Stock may be issued pursuant to the Company's 1992 Stock Option Plan and 1997
Stock Option Plan. As of such date, 474,593 shares were held in treasury.
This leaves a balance of 24,390 authorized shares available for future use as
of February 28, 1998.
The Board of Directors considers the proposed increase in the number of
authorized shares desirable because it would give the Board the necessary
flexibility to issue Common Stock in connection with stock dividends and
splits, acquisitions, financings and employee benefits and for other general
corporate purposes without the expense and delay incidental to obtaining
shareholder approval of an amendment to the Certificate increasing the number
of authorized shares at the time of such action, except as may be required for
a particular issuance by applicable law or by the rules of any stock exchange
on which the Company's securities may then be listed. The shareholders of the
Company do not have any preemptive rights with respect to the issuance of any
additional shares of Common Stock, and the shares of Common Stock authorized
pursuant to this proposal would likewise contain no preemptive rights. The
Company has no current plans, understandings or agreements regarding stock
dividends and splits, acquisitions, financings and employee benefits that would
cause the Company to issue any of the additional shares of Common Stock
authorized by this proposal.
DILUTIVE EFFECT OF ISSUANCE OF ADDITIONAL SHARES
The authorization of additional shares of Common Stock pursuant to this
proposal will have no dilutive effect upon the proportionate voting power of
the present shareholders of the Company. However, to the extent that shares
are subsequently issued to persons other than the present shareholders and/or
in proportions other than the proportion that presently exists, such issuance
could have a substantial dilutive effect on present shareholders.
17
<PAGE> 20
The Board of Directors of the Company believes, however, that the proposed
amendment to Article IV of the Certificate will provide several long-term
benefits to the Company and its shareholders, including the flexibility to
pursue acquisitions in exchange for Common Stock of the Company. While the
Company has no specific plans, proposals, understandings or agreements for any
such acquisition, the issuance of additional shares of Common Stock for an
acquisition may have a dilutive effect on earnings per share and book value per
share, as well as a dilutive effect on the voting power of existing
shareholders. The Company would expect that any such dilutive effect on
earnings per share and/or book value per share would be relatively short-term
in duration.
ANTI-TAKEOVER EFFECT
The issuance of additional shares of Common Stock by the Company also may
potentially have an anti-takeover effect by making it more difficult to obtain
shareholder approval of various actions, such as a merger. The proposed
increase in the number of authorized shares of Common Stock could enable the
Board of Directors to render more difficult an attempt by another person or
entity to obtain control of the Company, though the Board of Directors has no
present intention of issuing additional shares for such purposes and has no
present knowledge of any such takeover efforts.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE AMENDMENT
TO THE CERTIFICATE OF INCORPORATION OF THE COMPANY TO INCREASE AUTHORIZED
SHARES OF COMMON STOCK PAR VALUE $.01 FROM 4,200,000 TO 8,400,000.
18
<PAGE> 21
PROPOSAL 3. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Company's independent auditors for the fiscal year ended December 31,
1997 were Crowe, Chizek and Company LLP. The Board of Directors has
reappointed Crowe, Chizek and Company LLP to continue as independent auditors
for the Company and its affiliates, including the Association, for the fiscal
year ending December 31, 1998 subject to ratification of such appointment by
the shareholders. Representatives of Crowe, Chizek and Company LLP are
expected to attend the Meeting. They will be given an opportunity to make a
statement if they desire to do so and will be available to respond to
appropriate questions from shareholders present at the Meeting.
Unless marked to the contrary, the shares represented by the enclosed
Proxy will be voted FOR ratification of the appointment of Crowe, Chizek and
Company LLP as the independent auditors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPOINTMENT OF CROWE
CHIZEK AND COMPANY LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY.
SHAREHOLDER PROPOSALS
To be considered for inclusion in the proxy statement and proxy relating
to the annual meeting of shareholders to be held in 1999, a shareholder
proposal must be received by the Secretary of the Company at the address set
forth on the first page of this Proxy Statement, not later than November 25,
1998. Any such proposal shall be subject to 17 C.F.R. Section 240.14a-8 of the
Rules and Regulations of the Securities and Exchange Commission.
NOTICE OF BUSINESS TO BE CONDUCTED AT AN ANNUAL MEETING AND SHAREHOLDER
NOMINATIONS.
The bylaws of the Company provide an advance notice procedure for certain
business to be brought before an annual meeting. In order for a shareholder to
properly bring business before an annual meeting, the shareholder must give
written notice to the Secretary of the Company not less than thirty (30) days
before the time originally fixed for such meeting; provided, however, that in
the event that less than thirty-one (31) days notice or prior public disclosure
of the date of the meeting is given or made to shareholders, notice by the
shareholder to be timely must be received not later than the close of business
on the tenth day following the day on which such notice of the date of the
annual meeting was mailed or such public disclosure was made. The notice must
include the shareholder's name and address, as it appears on the Company's
record of shareholders, a brief description of the proposed business, the
reason for conducting such business at the Annual Meeting, the class and number
of shares of the Company's capital stock that are beneficially owned by such
shareholder and any material interest of such shareholder in the proposed
business. In the case of nominations to the Board, certain information
regarding the nominee must be provided. The shareholder's notice of nomination
must contain all information relating to the nominee which is required to be
disclosed by the Company's bylaws and by the Exchange Act. Nothing in this
paragraph shall be deemed to require the Company to include in its proxy
statement and proxy relating to the 1998 Annual Meeting any shareholder
proposal which does not meet all of the requirements for inclusion established
by the Securities and Exchange Commission in effect at the time such proposal
is received.
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING
The Board of Directors knows of no business which will be presented for
consideration at the Meeting other than as stated in the Notice of Annual
Meeting of Shareholders. If, however, other matters are properly brought
before the Meeting, it is the intention of the persons named in the
accompanying proxy to vote the shares represented thereby on such matters in
accordance with their best judgment.
19
<PAGE> 22
Whether or not you intend to be present at the Meeting, you are urged to
return your proxy promptly. If you are present at the Meeting and wish to vote
your shares in person, your proxy may be revoked by voting at the Meeting.
INCORPORATION BY REFERENCE
The Annual Report to the shareholders of the Company and the Form 10-K for
the year ended December 31, 1997 as filed with the Securities and Exchange
Commission are hereby incorporated by reference. The Annual Report is enclosed
with these proxy materials, and the Form 10-K will be furnished without charge
to shareholders of record upon written request to SUSAN M. LINKUS, SECRETARY,
CALUMET BANCORP, INC., 1350 EAST SIBLEY BOULEVARD, DOLTON, ILLINOIS 60419.
By Order of the Board of Directors
Susan M. Linkus
Corporate Secretary
Dolton, Illinois
March __, 1998
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN AND PROMPTLY RETURN
THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
20
<PAGE> 23
March __, 1998
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders
(the "Meeting") of Calumet Bancorp, Inc. (the "Company"), to be held at the
administrative office of the Company, 1350 East Sibley Boulevard, Dolton,
Illinois, on Wednesday, April 29, 1998, at 1:00 p.m.
The attached Notice of the Annual Meeting and Proxy Statement describes
the formal business to be transacted at the meeting. During the meeting, we
will also report on the operations of the Company. Directors and officers of
the Company, as well as a representative of Crowe, Chizek and Company LLP, our
independent auditors, will be present to respond to any appropriate questions
stockholders may have.
The Board of Directors of the Company has determined that the matters to
be considered at the Meeting are in the best interests of the Company and its
shareholders. For the reasons set forth in the Proxy Statement, the Board
unanimously recommends a vote "FOR" each matter to be considered.
To ensure proper representation of your shares at the Annual Meeting,
please sign, date and return the enclosed proxy card in the enclosed
postage-prepaid envelope as soon as possible even if you currently plan to
attend the meeting. This will not prevent you from voting in person, but will
assure that your vote is counted if you are unable to attend the meeting.
On behalf of the Board of Directors and all the employees of the Company
and Calumet Federal Savings and Loan Association of Chicago, I wish to thank
you for your support and interest. I look forward to seeing you at the
Meeting.
Sincerely,
Thaddeus Walczak
Chairman of the Board
and Chief Executive Officer
<PAGE> 24
FRONT
CALUMET BANCORP, INC.
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 29, 1998
THIS BALLOT IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Calumet Bancorp, Inc. Does hereby acknowledge
receipt of Notice of said Annual Meeting and accompanying Proxy Statement and
constitutes and appoints William A. McCann, Carole J. Lewis and/or Darryl
erlandson or any of them, with full power of substitution, to vote all shares
of stock of Calumet Bancorp, Inc. which the undersigned is entitled to vote, as
fully as the undersigned could do if personally present at the Annual Meeting
of Stockholders of said Corporation to be held on Wednesday, April 29, 1998 at
1:00 p.m., and at any adjournments thereof, at the office of the Corporation at
1350 East Sibley Boulevard, Dolton, Illinois as follows:
BACK PLEASE MARK IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY /
- ----
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
1. The election of Thaddeus Walczak and FOR WITHHELD FOR ALL
Henry J. Urban as Directors for terms EXCEPT
expiring in 2001
--- -------- ------- -----------------
NOMINEE EXCEPTION
2. Ratification of the appointment of FOR WITHHELD ABSTAIN
Crowe, Chizek and Company LLP as
Independent Auditors of the Corporation --- -------- -------
for the fiscal year ending December 31, 1998
3. Approval of the Amendment to Certificate FOR WITHHELD ABSTAIN
of Incorporation of Calumet Bancorp, Inc.
increasing the authorized common shares, --- -------- -------
par value $.01 to 8,400,000 from 4,200,000
4. As such proxies may in their discretion FOR WITHHELD ABSTAIN
determine upon such other matters as may
properly come before the meeting --- -------- -------
</TABLE>
THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN AND IN THE
ABSENCE OF SUCH INSTRUCTIONS SHALL BE VOTED FOR ALL OF THE DIRECTORS, NOMINEES
AND FOR APPROVAL OF THE RATIFICATION OF THE APPOINTMENT OF CROWE, CHIZEK AND
COMPANY LLP AND THE APPROVAL OF THE CHARTER AMENDMENT. IF OTHER BUSINESS IS
PRESENTED AT SAID MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE
BEST JUDGMENT OF THE PROXIES ON THOSE MATTERS.
You are urged to mark, sign and return your proxy without delay in the return
envelope provided for that purpose, which required no postage if mailed in the
United States.
When signing the proxy, please date it and take care to have the signature
conform to the stockholder's name as it appears on this side of the proxy. If
shares are registered in the names of two or more persons, each person should
sign. Executors, administrators, trustees and guardians should so indicate
when signing.
Signature(s):
- ----------------------------------
- ----------------------------------
Date:
-----------------------------
(Be sure to date your Proxy)
