UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ___)
First Financial Bancorp, Inc.
(Name of Issuer)
Common Stock, $.10 par value
(Title of Class of Securities)
32020X 10 6
(CUSIP Number)
Douglas M. Kratz
Financial Services Corporation of the Midwest
224 18th Street, Suite 202
Rock Island, Illinois 61201
(309) 794-1120
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
June 5, 1997
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [__].
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d(a) for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following page(s))
<PAGE>
SCHEDULE 13D
CU0SIP No. 32020X 10 6 Page 2 of 8 Pages
1 NAMES OF REPORTING PERSONS; S.S. OR I.R.S. IDENTIFICATION NOS. OF
ABOVE PERSONS
Douglas M. Kratz
SSN: ###-##-####
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF 7 SOLE VOTING POWER
SHARES 20,000 shares
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0 shares
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 20,000 shares
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0 shares
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
20,000 shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.8%
14 TYPE OF REPORTING PERSON*
IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 32020X 10 6 Page 3 of 8 Pages
1 NAMES OF REPORTING PERSONS; S.S. OR I.R.S. IDENTIFICATION NOS.
OF ABOVE PERSONS
Perry B. Hansen
SSN: ###-##-####
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |X|
(b) |_|
3 SEC USE ONLY
4 SOURCE OF FUNDS
AF
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF 7 SOLE VOTING POWER
SHARES 20,000 shares
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0 shares
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 20,000 shares
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0 shares
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
20,000 shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.8%
14 TYPE OF REPORTING PERSON*
IN
* SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
ITEM 1. SECURITY AND ISSUER.
This statement relates to the common stock, par value $.10 per share (the
"Common Stock"), of First Financial Bancorp, Inc. ("Issuer"), a Delaware
corporation, having its principal executive offices at 121 East Locust Street,
Belvidere, Illinois 61008.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This Schedule is being filed jointly by the following reporting persons
(hereinafter collectively referred to as the "Report Persons") pursuant to
an Agreement of Joint Filing attached hereto as Exhibit A. Information
about each of the Reporting Persons, their business address and their
principal occupations, is set forth below.
(i) Douglas M. Kratz is an individual with a business address of 224 18th
Street, Suite 202, Rock Island, Illinois 61201. Mr. Kratz is the
chairman of the board and chief executive officer of Financial
Services Corporation of the Midwest, a one bank holding company which
owns THE Rock Island Bank, National Association. Mr. Kratz is also
the vice chairman of said bank.
(ii) Perry B. Hansen is an individual with business address of 224 18th
Street, Suite 202, Rock Island, Illinois 60201. Mr. Hansen is the
president of Financial Services Corporation of the Midwest and is the
chairman of the board and chief executive officer of THE Rock Island
Bank, National Association.
(b) See (a) above.
(c) See (a) above.
(d) See (e) below.
(e) The Reporting Persons have not, during the last five years, been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors), nor has he been a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction and as a result of such
proceedings was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
(f) The Reporting Persons are citizens of the United States of America.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Each of the Reporting Persons paid approximately $320,000 for their shares of
Common Stock (including broker's commissions and clearing fees). All of the
funds used by the Reporting Persons to purchase the Common Stock of the Issuer
were borrowed from Englehart Corporation, a corporation owned by the Reporting
Persons and members of their immediate families. The loans are evidenced by
promissory notes and security agreements between such corporation and the
Reporting Persons. Copies of such agreements are attached as Exhibits C through
F.
ITEM 4. PURPOSE OF TRANSACTION.
Each of the Reporting Persons has acquired the common stock of the Issuer for
investment purposes and does not have any current plans or proposals which
relate to or would result in the acquisition of additional securities of the
Issuer, any extraordinary corporate transactions affecting the Issuer, the sale
of its assets, changes in its Board of Directors or management, capitalization,
dividend policy, business or corporate structure, charter or by laws, or the
delisting of the Issuer's securities, termination of registration of the
Issuer's securities or similar actions.
By letter dated June 9, 1997 (Exhibit B), the Reporting Persons advised the
Issuer that they had each purchased 20,000 shares of the Issuer's Common Stock
and that they intended to prepare, deliver and file a Schedule 13D reflecting
their acquisition of Common Stock. In their letter, the Reporting Persons
identified certain concerns regarding the Issuer, including the Issuer's
proposal to open a new facility in Rockford, Illinois, the Issuer's policies
regarding executive and director compensation and the Issuer's overall
management of overhead. The purpose of the Reporting Persons' letter was to
identify their concerns and to invite discussion with and among members of the
Issuer's management and board of directors regarding such issues. The stated
goal of the Reporting Persons is to work closely with the Issuer's board of
directors and management to maximize shareholder value and not to currently
implement any plans or proposals which would result in the types of actions
described in the preceding paragraph.
<PAGE>
The Reporting Persons intend to review their investment in the Issuer after the
date hereof, and from time to time, in light of the Issuer's operations,
prospects, business development and competitive strategic matters. After such
review, the Reporting Persons may change their intention with respect to
proposing one or more of such actions to enhance or maximize shareholder value.
As such, the Reporting Persons expect to continually explore alternatives and
modifications of their investment in the Issuer, including through discussions
with market analysts, stock brokers, industry sources and other interested
parties. Based on such discussions, the Reporting Persons may take other steps,
change their intentions as stated above, acquire additional securities of the
Issuer, or dispose of the securities of the Issuer in the open market or
pursuant to private transactions.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) The beneficial ownership of each of the Reporting Persons of Common Stock
of the issuer as of the date hereof is as follows:
(i) Mr. Douglas M. Kratz is the beneficial owner of 20,000 shares of
Common Stock, all of which have been acquired directly in open market
transactions. The total number of shares of Common Stock beneficially
owned by Mr. Kratz represents 4.8% of the shares of Common Stock
outstanding.
(ii) Mr. Perry B. Hansen is the beneficial owner of 20,000 shares of
Common Stock, all of which have been acquired directly in open market
transactions. The total number of shares of Common Stock beneficially
owned by Mr. Hansen represents 4.8% of the shares of Common Stock
outstanding.
(iii) Together, the Reporting Persons own an aggregate of 40,000 shares of
Common Stock, representing 9.6% of the Issuer's outstanding Common
Stock.
The number of shares beneficially owned and the percentages of
outstanding shares represented thereby, for each of the Reporting
Persons, have been computed in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934, as amended. The percentages of
ownership described above are based on the 415,488 shares of Common
Stock of the Issuer outstanding at April 30, 1997 as reported in the
Issuer's quarterly report on Form 10-QSB for the quarter ended March
31, 1997.
(b) Each of the Reporting Persons has the sole power to vote and to dispose of
or to direct the voting or to direct the disposition of the Common Stock of
the Issuer beneficially owned by him.
(c) Information with respect to transactions in the Common Stock of the Issuer
that were effected during the last sixty (60) days by the Reporting Person
is set forth below:
Shares
Acquired Per Where
Name of Persons Date (Disposed of) Share Transacted
---------------- ------------ ------------- ----- -----------
Douglas M. Kratz June 5, 1997 20,000 $16. Open market
Perry B. Hansen June 5, 1997 20,000 $16. Open market
(d) No other person has the right to receive dividends from, or the proceeds
from the sale of, the shares held by the Reporting Person.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATION-SHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
There are no contracts, arrangements, understandings or relationships (legal or
otherwise) between the Reporting Persons and any person with respect to any
securities of the Issuer.
<PAGE>
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A. Agreement of Joint Filing pursuant to Section 13d-1(f)(1) of
Securities Exchange Act of 1934.
Exhibit B. Letter to Board of Directors and Management of the Issuer dated
June 9, 1997.
Exhibit C. Promissory Note between Douglas M. Kratz and Englehart Corporation
dated June 10, 1997.
Exhibit D. Security Agreement between Douglas M. Kratz and Englehart
Corporation dated June 10, 1997.
Exhibit E. Promissory Note between Perry B. Hansen and Englehart Corporation
dated June 10, 1997.
Exhibit F. Security Agreement between Perry B. Hansen and Englehart Corporation
dated June 10, 1997.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: June 11, 1997.
/s/Douglas M. Kratz
-----------------------------
Douglas M. Kratz
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: June 11, 1997.
/s/ Perry B. Hansen
-----------------------------
Perry B. Hansen
<PAGE>
EXHIBIT A
AGREEMENT OF JOINT FILING
Each of the undersigned hereby consents and agrees to the joint filing on behalf
of each of them of the foregoing Joint Statement on Schedule 13D, and any and
all amendments thereto, in accordance with Rule 13d-1(f)(1) under the Securities
Exchange Act of 1934, as amended, with respect to his beneficial ownership of
the shares of the Issuer and consents to the filing of this Agreement as an
exhibit to the Schedule 13D.
IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of this
11th day of June, 1997.
/s/ Douglas M. Kratz
----------------------------
Douglas M. Kratz
/s/ Perry B. Hansen
----------------------------
Perry B. Hansen
<PAGE>
EXHIBIT B
June 9, 1997
Board of Directors
First Financial Bancorp, Inc.
121 East Locust Street
Belvidere, IL 61008
Re: Observations relative to First Financial Bancorp, Inc. ("First Financial")
and its wholly owned subsidiary, First Federal Savings Bank ("Savings Bank")
Dear Members of the Board:
Last week, we each purchased 20,000 shares of First Federal and thus, have
become principal shareholders of the company. We will be filing our Schedules
13-D with the SEC on or before June 13, 1997. By way of background information,
we are principal shareholders of Financial Services Corporation of the Midwest
which is the parent company of THE Rock Island Bank, N.A., a $440 million
community bank based in the Quad Cities. No, FSCM as an entity is not interested
in acquiring control of First Financial. Mr. Hansen is also a principal
shareholder of a $150 million community bank in Bangor, Maine and we both have
ownership positions in various non-banking entities. We hold strong convictions
toward community banking, believing that community banks should operate in a
safe and sound manner, be well capitalized, grow at an acceptable level, achieve
sustained earnings and provide an acceptable return to shareholders. Enclosed
please find financial data from our banking organization...the results reflect
our beliefs. Also enclosed is a list of references...feel free to check us out.
We would like to share with each of you via this letter and subsequently, in
person, our initial observations and concerns.
1) Savings Bank's proposed facility in Rockford. It is our understanding
that Savings Bank will invest between $1,700,000 to $2,000,000 in said
facility. Although the proposed location appears acceptable, the
overall cost (facility, funding and personnel) of the project, in a
highly competitive market, could be detrimental to Savings Bank's
capital position. For example, should Savings Bank not grow at an
acceptable rate of at least $10 million of core deposits annually,
Savings Bank will essentially be saddled with a non-earning asset that
will cause a deterioration in earnings and thus, capital. On the other
hand, should Savings Bank grow at an acceptable core deposit level but
not offset such with high quality earning assets, there will be
tremendous pressure on its capital structure. Either way, due to
Savings Bank's current and past earnings performance, capital levels
will become strained and regulatory concerns will ensue. To that end,
we would be most appreciative to receive, prior to construction of the
proposed facility, Savings Bank's due diligence reports (market
research, earnings projections, capital budget, etc.). We might also
suggest that the board take a "second look" at such information prior
to construction to ensure management has fully apprised the board of
the aforementioned issues. If for some reason, written due diligence
reports have not been completed, we would be more than willing to
provide input to the board relative to these issues. Assuredly, from a
regulatory and shareholder point of view, the board does not want to
put itself in a position of not providing proper oversight of
management when significant dollars are at stake.
2) Review of First Financial's proxy for the April, 1997 shareholders'
meeting was somewhat of an eye opener for us. We were quite surprised
to see that the current (active) members of the board owned, in the
aggregate, less than 5% of the company. Nominal ownership levels by
board members becomes especially heightened when major decisions such
as building a new facility or ratifying employee compensation and
benefits plans are made. In other words, who is looking out for the
shareholders of the company? As I am sure each of you are aware, the
board of directors of a company has a fiduciary responsibility to its
shareholders.
<PAGE>
It appears that presently First Financial has the following benefit
plans for its chief executive officer and/or directors:
1) Employee Stock Option Plan
2) Employee Recognition Plan
3) Incentive Stock Option Plan
4) Director Option Plan
5) Director Recognition Plan
6) 401(k) Plan
7) Director fees
8) Membership dues
9) Reimbursement for income taxes on gains on
stock granted by company
10) Three year employment agreement
11) Executive Salary Continuation Agreement
12) Supplemental Executive Agreement
We suspect that most, if not all of the programs, were approved by the
majority of the shareholders of First Financial at the time the company
went public. However, it is fair to state that the aforementioned
compensation and benefit plans are nothing short of outrageous
especially in view of the asset size of the company, its past and
current earnings performance and its stock performance in the
marketplace. Although the programs may have initially been approved by
the shareholders, they more than likely believed that the benefits
would be tied to various performance standards...it appears that such
has not been the case.
We would be most appreciative if the company would forward to us the
minutes of the compensation committee for the last three years in
addition to any policies or guidelines that the board or the committee
has established relative to the relationship of earnings and/or stock
market performance of the company to the chief executive officer's
annual compensation. We might also suggest that the outside members of
the board meet with the company's external accountants to review the
company's existing benefit plans and chief executive officer's total
compensation package in order to become more enlightened as to industry
norms as such relates to the relationship of a company's overall
performance and its chief executive officer's compensation. Crowe
Chizek and Company is an outstanding firm that could assist you in this
area. Further, we would be more than happy to share industry
information that we have access to. We believe that this could be
fertile ground for shareholder litigation against the company and its
directors, not to mention regulatory litigation should the company's
capital position begin to deteriorate.
3) Overhead. First Financial's overhead and efficiency ratios of 73% and
77%, respectively, are clearly excessive and significantly above peer
group financial institutions. In our view, to be a thriving,
competitive financial institution, said ratios need to be in the 45%
and 55%, respectively, range. Accordingly, we would suggest that the
board require management to educate it on the components that make up
these ratios, address how the ratios are going to be reduced to
acceptable levels and provide the ratios on a monthly basis. Along this
line of thinking, the board should continually be reviewing First
Financial's returns on assets and equity. If said returns are not at
least comparable to peer group numbers, the board should be asking
management why not and its plans to remedy the situation. Relative to
the first quarter, exclusive of securities gains, operating income was
dismal at best...hopefully, the second quarter will be much improved.
4) Shareholder value. It appears that the stock price of First Financial
has ranged from $15.00 to $16.50 during the past 24 months. The board
should be extremely concerned about this in view of the raging bull
market that has occurred in the financial sector in recent years. We
suspect that the board feels amply protected by all of the
anti-takeover provisions that were established when First Financial
went public. However, we doubt that those provisions will protect the
board from improper oversight of the company.
<PAGE>
5) Shareholder Communications. Based on what have read to date about First
Financial, it appears that management is not communicating, on a
regular basis, with the representatives of the investment firms that
make a market for the company's stock. We believe it behooves the board
to direct management to take a proactive approach with the stock
analysts. Said approach results in the stock analysts being much more
knowledgeable about the company and as a result, improves the lines of
communication and (hopefully) relations between the company and its
shareholders.
In closing, we would prefer to take the high road and work closely with the
board and management to enhance shareholder value. To that end, we would very
much enjoy the opportunity to meet in the next couple of weeks. Please feel free
to contact Mr. Kratz at 309/794-1443. Hopefully, this will be an exciting and
rewarding process for all of us. Have a great day!
Very truly yours, Very truly yours,
/s/ Perry B. Hansen /s/ Douglas M. Kratz
- ------------------- ---------------------
Perry B. Hansen Douglas M. Kratz
p.s. Please forward the requested information, in addition to Savings Bank's
investment and loan policies, to Mr. Kratz's attention on or before June
18, 1997.
<PAGE>
EXHIBIT C
Douglas M. Kratz Englehart Corporation Loan Number_________________
% FSCM 5317 Victoria Avenue Date: June 10, 1997
P.O. Box 4870 Davenport, IA 52807 Maturity Date: June 10, 1998
Rock Island, IL Loan Amount $350,000.00
61204-4870 Renewal Of _________________
BORROWER'S NAME AND LENDER'S NAME AND
ADDRESS "I" includes ADDRESS "You" means
each borrower above, the lender, its
joint and severally. successors and
assigns.
For value received, I promise to pay you, or your order, at your address
listed above the PRINCIPAL sum of Three Hundred Fifty Thousand and 00/100-------
Dollars $350,000.00.
[ ] Single Advance: I will receive all of this principal sum on
____________. No additional advances are contemplated under this note.
[x] Multiple Advance: The principal sum shown above is the maximum amount of
principal I can borrow under this note. On June 10, 1997 I will receive
the amount of $320,000.00 and future principal advances are contemplated.
Conditions: The conditions for future advances are ____________________________
________________________________________________________________________________
________________________________________________________________________________
[x] Open End Credit: You and I agree that I may borrow up to the maximum
amount of principal more than one time. This feature is subject to
all other conditions and expires on June 10, 1998.
[ ] Closed End Credit: You and I agree that I may borrow up to the
maximum only one time (and subject to all other conditions).
INTEREST: I agree to pay interest on the outstanding principal balance from
June 10, 1997 at the rate of 6.50% per year until maturity,
June 10, 1998.
[ ] Variable Rate: This rate may then change as stated below.
[ ] Index Rate: The future rate will be ________________ the following
index rate: ________________________________________________________
____________________________________________________________________
____________________________________________________________________
[ ] No Index: The future rate will not be subject to any internal or
external index. It will be entirely in your control.
[ ] Frequency and Timing: The rate on this note may change as often as
_______________________________. A change in the interest rate
will take effect ___________________________________________________
[ ] Limitations: During the term of this loan, the applicable annual
interest rate will not be more than _________________% or less than
___________________%
Effect of Variable Rate: A change in the interest rate will have the
following effect on the payments:
[ ] The amount of each scheduled payment will change.
[ ] The amount of the final payment will change.
[ ] ____________________________________________________________________
ACCRUAL METHOD: Interest will be calculated on an actual/365 basis.
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this
note owing after maturity, and until paid in full, as stated below:
[x] on the same fixed or variable rate basis in effect before maturity
(as indicated above).
[ ] at a rate equal to _________________________________________________
[x] LATE CHARGE: lf a payment is made more than 10 days after it is due, I
agree to pay a late charge of 2.50%
[ ] ADDITIONAL CHARGES: In addition to interest, I agree to pay the following
charges which |_| are |_| are not included in the principal amount above:
__________________________________________________________________________
<PAGE>
PAYMENTS: I agree to pay this note as follows:
[x] Interest: I agree to pay accrued interest at maturity, June 10, 1998
__________________________________________________________________________
[x] Principal: I agree to pay the principal at maturity, June 10, 1998
__________________________________________________________________________
[ ] Installments: I agree to pay this note in _____ payments. The first
payment will be in the amount of $__________________ and will be
due ________________. A payment of $________________ will be due
________________________________________________ thereafter. The final
payment of the entire unpaid balance of principal and interest will be due
__________________________________________________________________________
ADDITIONAL TERMS:
PURPOSE: The purpose of this loan is purchase stocks.
SIGNATURES: I AGREE TO THE TERMS OF THIS NOTE (INCLUDING
THOSE ON PAGE 2). I have received a copy on today's date.
/s/ Douglas M. Kratz
-------------------------
Signature for Lender Douglas M. Kratz
Englehart Corporation
- ------------------------------------------
/s/ Perry B. Hansen
- ------------------------------------------
Perry B. Hansen, President
<PAGE>
EXHIBIT D
Douglas M. Kratz Englehart Corporation
% FSCM 5317 Victoria Avenue
P.O. Box 4870 Davenport, IA 52807-2989
Rock Island, IL 61204-4870
DEBTOR'S NAME, ADDRESS AND SSN OR TIN SECURED PARTY'S NAME AND ADDRESS
("I" means each Debtor who signs.) ("You" means the Secured Party, its
successors and assigns.)
I am entering into this security agreement with you on June 10, 1997 (date).
SECURED DEBTS. I agree that this security agreement will secure the payment and
performance of the debts, liabilities or obligations described below that
(Check one) [x] I [ ] (name) Douqlas M. Kratz owe(s) to you now or in the
future.
(Check one below):
[ ] Specific Debt(s). The debt(s), liability or obligations evidenced by
(describe): ____________________________________________________________
________________________________________________________________________
extensions, renewals, refinancing, modifications and replacements of
the debt, liability or obligation.
[ ] All Debt(s). Except in those cases listed in the "LIMITATIONS"
paragraph on page 2, each and every debt, liability and obligation of
every type and description (whether such debt, liability or obligation
now exists or is incurred or created in the future and whether it
is or may be direct or indirect, due or to become due, absolute
or contingent, primary or secondary, liquidated or unliquidated, or
joint, several or joint and several).
Security Interest. To secure the payment and performance of the above described
Secured Debts, liabilities and obligations, I give you a security interest in
all of the property described below that I now own and that I may own in the
future (including, but not limited to, all parts, accessories, repairs,
improvements, and accessions to the property), wherever the property is or may
be located, and all proceeds and products from the property.
[ ] Inventory: All inventory which I hold for ultimate sale or lease, or
which has been or will be supplied under contracts of service, or
which are raw materials, work in process, or materials used or
consumed in my business.
[ ] Equipment: All equipment including, but not limited to, all machinery,
vehicles, furniture, fixtures, manufacturing equipment. farm machinery
and equipment, shop equipment, office and recordkeeping equipment, and
parts and tools. All equipment described in a list or scheduled which I
give to you will also be included in the secured property, but such a
list is not necessary for a valid security interest in my equipment.
[ ] Farm Products: All farm products including, but not limited to:
(a) all poultry and livestock and their young, along with their
products, produce and replacements;
(b) all crops, annual or perennial, and all products of the crops;
and
(c) all feed, seed, fertilizer, medicines, and other supplies used or
produced in my farming operations.
[ ] Accounts, Instruments, Documents, Chattel Paper and Other Rights
to Payment: All rights I have now and that I may have in the future to
the payment of money including, but not Iimited to:
(a) payment for goods and other property sold or leased or for
services rendered, whether or not I have earned such payment by
performance; and
(b) rights to payment arising out of all present and future debt
instruments, chattel paper and loans and obligations receivable.
The above include any rights and interests (including all liens
and security interests) which I may have by law or agreement
against any account debtor or obligor of mine.
[ ] General Intangibles: All general intangibles including, but not limited
to, tax refunds, applications for patents, patents, copyrights,
trademarks, trade secrets, good will, trade names, customer lists, permits
and franchises, and the right to use my name.
[ ] Government Payments and Programs: All payments, accounts, general
intangibles, or other benefits (including, but not limited to, payments
in kind, deficiency payments, letters of entitlement, warehouse
receipts, storage payments, emergency assistance payments, diversion
payments, and conservation reserve payments) in which I now have and
in the future may have any rights or interest and which arise under or
as a result of any preexisting, current or future Federal or state
governmental program (including, but not limited to, all programs
administered by the Commodity Credit Corporation and the ASCS).
<PAGE>
[x ] The secured property includes, but is not limited by, the following:
20,000 shares of First Financial Bancorp, Inc. as evidenced by
certificate #
If this agreement covers timber to be cut, minerals (including oil and gas),
fixtures or crops growing or to be grown, the legal description is:
________________________________________________________________________________
I am a(n) [x] individual [ ] partnership [ ] corporation
[ ] ____________________________________________
I AGREE TO THE TERMS SET OUT ON BOTH PAGE 1 AND PAGE 2 0F
THIS AGREEMENT. I have received a copy of ths document on today's date.
[ ] If checked, file this agreement in the real estate records.
Record Owner (if not me): _____________________________________
_______________________________________________________________
_______________________________________________________________
Douglas M. Kratz
----------------------------
(Debtor's Name)
The property will be used for [ ] personal [ ] business
[ ] agricultural [ ] ____________________________reasons.
By: /s/ Douglas M. Kratz
-------------------------------
Englehart Corporation Title:
- ------------------------------------------ -----------------------------
(Secured Party's Name)
By: Perry B. Hansen By:
- ------------------------------------------ -------------------------------
Title: President Title:
- ------------------------------------------ -----------------------------
<PAGE>
EXHIBIT E
Perry B. Hansen Englehart Corporation Loan Number_________________
% The Rock Island Bank 5317 Victoria Avenue Date: June 10, 1997
N.A. Davenport, IA 52807 Maturity Date: June 10, 1998
P.O. Box 4870 Loan Amount $350,000.00
Rock Island, IL Renewal Of _________________
61204-4870
BORROWER'S NAME AND LENDER'S NAME AND
ADDRESS "I" includes ADDRESS "You" means
each borrower above, the lender, its
joint and severally. successors and
assigns.
For value received, I promise to pay you, or your order, at your address
listed above the PRINCIPAL sum of Three Hundred Fifty Thousand and 00/100-------
Dollars $350,000.00.
[ ] Single Advance: I will receive all of this principal sum on
____________. No additional advances are contemplated under this note.
[x] Multiple Advance: The principal sum shown above is the maximum amount of
principal I can borrow under this note. On June 10, 1997 I will receive
the amount of $320,000.00 and future principal advances are contemplated.
Conditions: The conditions for future advances are ____________________________
________________________________________________________________________________
________________________________________________________________________________
[x] Open End Credit: You and I agree that I may borrow up to the maximum
amount of principal more than one time. This feature is subject to
all other conditions and expires on June 10, 1998.
[ ] Closed End Credit: You and I agree that I may borrow up to the
maximum only one time (and subject to all other conditions).
INTEREST: I agree to pay interest on the outstanding principal balance from
June 10, 1997 at the rate of 6.50% per year until maturity,
June 10, 1998.
[ ] Variable Rate: This rate may then change as stated below.
[ ] Index Rate: The future rate will be ________________ the following
index rate: ________________________________________________________
____________________________________________________________________
____________________________________________________________________
[ ] No Index: The future rate will not be subject to any internal or
external index. It will be entirely in your control.
[ ] Frequency and Timing: The rate on this note may change as often as
_______________________________. A change in the interest rate
will take effect ___________________________________________________
[ ] Limitations: During the term of this loan, the applicable annual
interest rate will not be more than _________________% or less than
___________________%
Effect of Variable Rate: A change in the interest rate will have the
following effect on the payments:
[ ] The amount of each scheduled payment will change.
[ ] The amount of the final payment will change.
[ ] ____________________________________________________________________
ACCRUAL METHOD: Interest will be calculated on an actual/365 basis.
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this
note owing after maturity, and until paid in full, as stated below:
[x] on the same fixed or variable rate basis in effect before maturity
(as indicated above).
[ ] at a rate equal to _________________________________________________
[x] LATE CHARGE: lf a payment is made more than 10 days after it is due, I
agree to pay a late charge of 2.50%
[ ] ADDITIONAL CHARGES: In addition to interest, I agree to pay the following
charges which |_| are |_| are not included in the principal amount above:
__________________________________________________________________________
<PAGE>
PAYMENTS: I agree to pay this note as follows:
[x] Interest: I agree to pay accrued interest at maturity, June 10, 1998
__________________________________________________________________________
[x] Principal: I agree to pay the principal at maturity, June 10, 1998
__________________________________________________________________________
[ ] Installments: I agree to pay this note in _____ payments. The first
payment will be in the amount of $__________________ and will be
due ________________. A payment of $________________ will be due
________________________________________________ thereafter. The final
payment of the entire unpaid balance of principal and interest will be due
__________________________________________________________________________
ADDITIONAL TERMS:
PURPOSE: The purpose of this loan is purchase stocks.
SIGNATURES: I AGREE TO THE TERMS OF THIS NOTE (INCLUDING
THOSE ON PAGE 2). I have received a copy on today's date.
/s/ Perry B. Hansen
-------------------------
Signature for Lender Perry B. Hansen
Englehart Corporation
- ------------------------------------------
/s/ Douglas M. Kratz
- ------------------------------------------
Douglas M. Kratz, Chairman
<PAGE>
EXHIBIT F
Perry B. Hansen Englehart Corporation
% The Rock Island Bank, N.A. 5317 Victoria Avenue
230 18th Street Davenport, IA 52807-2989
P.O. Box 4870
Rock Island, IL 61204-4870
DEBTOR'S NAME, ADDRESS AND SSN OR TIN SECURED PARTY'S NAME AND ADDRESS
("I" means each Debtor who signs.) ("You" means the Secured Party, its
successors and assigns.)
I am entering into this security agreement with you on June 10, 1997 (date).
SECURED DEBTS. I agree that this security agreement will secure the payment and
performance of the debts, liabilities or obligations described below that
(Check one) [x] I [ ] (name) Perry B. Hasen owe(s) to you now or in the
future.
(Check one below):
[ ] Specific Debt(s). The debt(s), liability or obligations evidenced by
(describe): ____________________________________________________________
________________________________________________________________________
extensions, renewals, refinancing, modifications and replacements of
the debt, liability or obligation.
[ ] All Debt(s). Except in those cases listed in the "LIMITATIONS"
paragraph on page 2, each and every debt, liability and obligation of
every type and description (whether such debt, liability or obligation
now exists or is incurred or created in the future and whether it
is or may be direct or indirect, due or to become due, absolute
or contingent, primary or secondary, liquidated or unliquidated, or
joint, several or joint and several).
Security Interest. To secure the payment and performance of the above described
Secured Debts, liabilities and obligations, I give you a security interest in
all of the property described below that I now own and that I may own in the
future (including, but not limited to, all parts, accessories, repairs,
improvements, and accessions to the property), wherever the property is or may
be located, and all proceeds and products from the property.
[ ] Inventory: All inventory which I hold for ultimate sale or lease, or
which has been or will be supplied under contracts of service, or
which are raw materials, work in process, or materials used or
consumed in my business.
[ ] Equipment: All equipment including, but not limited to, all machinery,
vehicles, furniture, fixtures, manufacturing equipment. farm machinery
and equipment, shop equipment, office and recordkeeping equipment, and
parts and tools. All equipment described in a list or scheduled which I
give to you will also be included in the secured property, but such a
list is not necessary for a valid security interest in my equipment.
[ ] Farm Products: All farm products including, but not limited to:
(a) all poultry and livestock and their young, along with their
products, produce and replacements;
(b) all crops, annual or perennial, and all products of the crops;
and
(c) all feed, seed, fertilizer, medicines, and other supplies used or
produced in my farming operations.
[ ] Accounts, Instruments, Documents, Chattel Paper and Other Rights
to Payment: All rights I have now and that I may have in the future to
the payment of money including, but not Iimited to:
(a) payment for goods and other property sold or leased or for
services rendered, whether or not I have earned such payment by
performance; and
(b) rights to payment arising out of all present and future debt
instruments, chattel paper and loans and obligations receivable.
The above include any rights and interests (including all liens
and security interests) which I may have by law or agreement
against any account debtor or obligor of mine.
[ ] General Intangibles: All general intangibles including, but not limited
to, tax refunds, applications for patents, patents, copyrights,
trademarks, trade secrets, good will, trade names, customer lists, permits
and franchises, and the right to use my name.
[ ] Government Payments and Programs: All payments, accounts, general
intangibles, or other benefits (including, but not limited to, payments
in kind, deficiency payments, letters of entitlement, warehouse
receipts, storage payments, emergency assistance payments, diversion
payments, and conservation reserve payments) in which I now have and
in the future may have any rights or interest and which arise under or
as a result of any preexisting, current or future Federal or state
governmental program (including, but not limited to, all programs
administered by the Commodity Credit Corporation and the ASCS).
<PAGE>
[x ] The secured property includes, but is not limited by, the following:
20,000 shares of First Financial Bancorp, Inc. as evidenced by
certificate #
If this agreement covers timber to be cut, minerals (including oil and gas),
fixtures or crops growing or to be grown, the legal description is:
________________________________________________________________________________
I am a(n) [x] individual [ ] partnership [ ] corporation
[ ] ____________________________________________
I AGREE TO THE TERMS SET OUT ON BOTH PAGE 1 AND PAGE 2 0F
THIS AGREEMENT. I have received a copy of ths document on today's date.
[ ] If checked, file this agreement in the real estate records.
Record Owner (if not me): _____________________________________
_______________________________________________________________
_______________________________________________________________
Perry B. Hansen
----------------------------
(Debtor's Name)
The property will be used for [ ] personal [ ] business
[ ] agricultural [ ] ____________________________reasons.
By: /s/ Perry B. Hansen
------------------------------
Englehart Corporation Title:
- ------------------------------------------ -----------------------------
(Secured Party's Name)
By: Douglas M. Kratz By:
- ------------------------------------------ -------------------------------
Douglas M. Kratz
Title: Chairman Title:
- ------------------------------------------ -----------------------------
