GREAT AMERICAN BANCORP, INC.
1311 South Neil Street
Champaign, Illinois 61820
(217) 356-2265
March 28, 1997
Dear Stockholder:
You are cordially invited to attend the annual meeting of
stockholders of Great American Bancorp, Inc., the holding
company for First Federal Savings Bank of Champaign-Urbana,
which will be held on Tuesday, April 29, 1997, at 9:30 a.m.,
Central Time, at the offices of First Federal Savings Bank of
Champaign-Urbana, 1311 South Neil Street, Champaign, Illinois
61820.
The attached notice of the annual meeting and the proxy
statement describe the formal business to be transacted at the
annual meeting. Directors and officers of Great American
Bancorp, Inc., as well as representatives of George S. Olive
& Co., LLC, whom the Company has appointed as independent
auditor for the fiscal year ending December 31, 1997 will be
present. In November 1995, the Company changed its fiscal year
end from September 30 to December 31 and, accordingly, the
three months ended December 31, 1995 are included in the audit
of the fiscal year ending December 31, 1996.
The Board of Directors of Great American Bancorp, Inc. has
determined that the matters to be considered at the annual
meeting are in the best interests of Great American and its
stockholders. For the reasons set forth in the proxy
statement, the Board of Directors unanimously recommends that
you vote "FOR" each matter to be considered.
Your cooperation is appreciated since a majority of the
common stock must be represented, either in person or by proxy,
to constitute a quorum for the conduct of business. Whether
or not you expect to attend, please sign, date and return the
enclosed proxy card promptly in the postage-paid envelope
provided so that your shares will be represented.
On behalf of the Board of Directors and all of the
employees of Great American Bancorp, Inc. and First Federal
Savings Bank of Champaign-Urbana, I thank you for your
continued interest and support.
Sincerely yours,
George R. Rouse
President and Chief
Executive Officer
<PAGE>
GREAT AMERICAN BANCORP, INC.
1311 South Neil Street
Champaign, Illinois 61820
(217) 356-2265
__________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on April 29, 1997
__________________________________
NOTICE IS HEREBY GIVEN that the annual meeting of
stockholders (the "Annual Meeting") of Great American Bancorp,
Inc. (the "Company") will be held on Tuesday, April 29, 1997,
at 9:30 a.m., Central Time, at the offices of First Federal
Savings Bank of Champaign-Urbana, 1311 South Neil Street,
Champaign, Illinois 61820.
The purpose of the Annual Meeting is to consider and vote
upon the following matters:
1. The election of two directors to a three-year term of
office;
2. The ratification of the appointment of George S.
Olive & Co., LLC as independent auditors of the
Company for the fiscal year ending December 31, 1997;
and
3. Such other matters as may properly come before the
Annual Meeting and at any adjournments thereof,
including whether or not to adjourn the meeting.
The Board of Directors has established March 4, 1997, as
the record date for the determination of stockholders entitled
to receive notice of and to vote at the Annual Meeting and at
any adjournments thereof. Only record holders of the common
stock of the Company as of the close of business on that date
will be entitled to notice of and to vote at the Annual
Meeting or any adjournments thereof. In the event there are
not sufficient votes for a quorum or to approve or ratify any
of the foregoing proposals at the time of the Annual Meeting,
the Annual Meeting may be adjourned in order to permit further
solicitation of proxies by the Company. A list of stockholders
entitled to vote at the Annual Meeting will be available at
Great American Bancorp, Inc., 1311 South Neil Street, Champaign,
Illinois 61820, for a period of ten days prior to the Annual
Meeting and will also be available at the meeting itself.
By Order of the Board of Directors
Jane F. Adams
Corporate Secretary
Champaign, Illinois
March 28, 1997
<PAGE>
GREAT AMERICAN BANCORP, INC.
_______________________
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
April 29, 1997
_______________________
Solicitation and Voting of Proxies
This proxy statement is being furnished to stockholders of
Great American Bancorp, Inc. (the "Company") in connection with
the solicitation by the Board of Directors ("Board of
Directors" or "Board") of proxies to be used at the annual
meeting of stockholders (the "Annual Meeting"), to be held on
Tuesday, April 29, 1997, at 9:30 a.m., Central Time, at the
offices of First Federal Savings Bank of Champaign-Urbana, 1311
South Neil Street, Champaign, Illinois 61820 and at any
adjournments thereof. The 1996 Annual Report to Stockholders,
including consolidated financial statements for the fiscal year
ended December 31, 1996, and a proxy card, accompanies this
proxy statement, which is first being mailed to record holders
on or about March 28, 1997.
Regardless of the number of shares of common stock owned,
it is important that record holders of a majority of the
outstanding shares of common stock be represented by proxy or
in person at the Annual Meeting. Stockholders are requested
to vote by completing the enclosed proxy card and returning it
signed and dated in the enclosed postage-paid envelope.
Stockholders 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,
signed proxy cards will be voted "FOR" the election of the
nominees for director named in this proxy statement, and "FOR"
the ratification of George S. Olive & Co., LLC as independent
auditors for the fiscal year ending December 31, 1997.
Other than the matters set forth on the attached Notice
of Annual Meeting of Stockholders, the Board of Directors knows
of no additional matters that will be presented for
consideration at the Annual 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 Annual Meeting and at any adjournments thereof,
including a motion as to whether or not to adjourn the Annual
Meeting.
A proxy may be revoked at any time prior to its exercise
by filing a written notice of revocation with the Corporate
Secretary of the Company, by delivering to the Company a duly
executed proxy bearing a later date, or by attending the Annual
Meeting and voting in person. However, if you are a
stockholder whose shares are not registered in your own name,
you will need appropriate documentation from your record holder
to vote personally at the Annual Meeting.
<PAGE>
The cost of solicitation of proxies on behalf of the Board
of Directors will be borne by the Company. In addition to the
solicitation of proxies by mail, Kissel Blake Inc. will assist
the Company in soliciting proxies for the Annual Meeting and
will be paid a fee of $1,500, plus out-of-pocket expenses.
Proxies may also be solicited personally or by mail or
telephone by directors, officers and other employees of the
Company and its subsidiary, the Bank, without additional
compensation therefor. The Company 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.
Voting Securities
The securities which may be voted at the Annual Meeting
consist of shares of common stock of the Company ("Common
Stock"), with each share entitling its owner to one vote on
all matters to be voted on at the Annual Meeting, except as
described below. There is no cumulative voting for the
election of directors.
The close of business on March 4, 1997, has been fixed by
the Board of Directors as the record date (the "Record Date")
for the determination of stockholders of record entitled to
notice of and to vote at the Annual Meeting and at any
adjournments thereof. The total number of shares of Common
Stock outstanding on the Record Date was 1,759,976 shares.
In accordance with the provisions of the Company's
certificate of incorporation, record holders of Common Stock who
beneficially own in excess of 10% of the outstanding shares of
Common Stock (the "Limit") are not entitled to any vote with
respect to the shares held in excess of the Limit. A person
or entity is deemed to beneficially own shares owned by an
affiliate of, as well as by persons acting in concert with,
such person or entity. The Company's certificate of
incorporation authorizes the Board of Directors (i) to make all
determinations necessary to implement and apply the Limit,
including determining whether persons or entities are acting in
concert, and (ii) to demand that any person who is reasonably
believed to beneficially own stock in excess of the Limit
supply information to the Company to enable the Board of
Directors to implement and apply the Limit.
The presence, in person or by proxy, of the holders of at
least a majority of the total number of shares of Common Stock
entitled to vote (after giving effect to the Limit described
above, if applicable) is necessary to constitute a quorum at
the Annual Meeting. In the event that there are not
sufficient votes for a quorum, or to approve or ratify any
matter being presented at the time of the Annual Meeting, the
Annual Meeting may be adjourned in order to permit the further
solicitation of proxies.
As to the election of directors, the proxy card being
provided by the Board of Directors enables a stockholder to
vote "FOR" the election of the nominees proposed by the Board
of Directors, or to "WITHHOLD AUTHORITY" to vote for any of
the nominees being proposed. Under Delaware law and the
Company's bylaws, directors are elected by a plurality of votes
cast,
<PAGE>
without regard to either broker non-votes, or proxies as to
which authority to vote for one or more of the nominees being
proposed is withheld.
As to the approval of George S. Olive & Co., LLC as
independent auditors of the Company and all other matters that
may properly come before the Annual Meeting, by checking the
appropriate box, a stockholder may: (i) vote "FOR" the item;
(ii) vote "AGAINST" the item; or (iii) "ABSTAIN" from voting
on the item. Under the Company's bylaws, unless otherwise
required by law, all such matters shall be determined by a
majority of the votes cast, without regard to either broker
non-votes, or proxies marked "ABSTAIN" as to that matter.
Proxies solicited hereby will be returned to the Company's
transfer agent, and will be tabulated by inspectors of election
designated by the Board of Directors, who will not be employed
by, or be a director of, the Company or any of its affiliates.
After the final adjournment of the Annual Meeting, the proxies
will be returned to the Company for safekeeping.
Security Ownership of Certain Beneficial Owners
The following table sets forth information as to those
persons believed by the Company to be beneficial owners of more
than 5% of the Company's outstanding shares of Common Stock on
the Record Date as disclosed in certain reports regarding such
ownership filed by such persons with the Company and with the
Securities and Exchange Commission ("SEC"), in accordance with
Sections 13(d) and 13(g) of the Securities Exchange Act of
1934, as amended ("Exchange Act"). Other than those persons
listed below, the Company is not aware of any person, as such
term is defined in the Exchange Act, that owns more than 5%
of the Company's Common Stock as of the Record Date.
Amount and
Nature of
Name and Address Beneficial Percent of
Title of Class of Beneficial Owner Ownership Class
- --------------- ------------------------------- ----------- ----------
Common Stock First Federal Savings Bank of 160,138 (1) 9.10%
Champaign-Urbana Employee Stock
Ownership Plan ("ESOP")
1311 South Neil Street
Champaign, Illinois 61820
Common Stock Daniel Churchill, Esq. 115,000 (2) 6.53%
Churchill & Churchill
1610 Fifth Avenue
Moline, IL 61265
Common Stock Clinton C. Atkins 149,175 (3) 8.48%
2001 Kankakee Drive
Champaign, IL 61821
(footnotes on following page)
<PAGE>
- ------------------------------
(1) Shares of Common Stock were acquired by the ESOP in the
Conversion. The Personnel and Salary Committee of the
board of directors administers the ESOP. The ESOP
Trustee, First Bank, N.A., must vote all allocated shares
held in the ESOP in accordance with the instructions of
the participants. As of March 4, 1997, 50,654 shares had
been allocated under the ESOP. Under the ESOP,
unallocated shares will be voted by the ESOP Trustee in
a manner calculated to most accurately reflect the
instructions received from participants regarding the
allocated stock so long as such vote is in accordance with
the provisions of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA").
(2) Pursuant to a Schedule 13D (amendment #1) dated as of
August 30, 1996, 17,500 shares held in the name of Daniel
Churchill Trustee UTA August 6, 1985, and 97,500 shares
held by Illinois Holding Company, a one bank holding
company 100% owned by Daniel Churchill.
(3) Pursuant to a Schedule 13D (amendment #1) dated February
28, 1997, 145,375 shares owned directly by Mr. Atkins,
2,400 shares represent unissued stock awards granted under
the 1995 Great American Bancorp, Inc. Incentive Plan (the
"Incentive Plan") and 1,400 additional shares represent
shares underlying options granted under the Incentive Plan.
PROPOSALS TO BE VOTED ON AT THE MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists
of five (5) directors and is divided into three classes.
Currently, each of the members of the Board of Directors of
the Company also serves as a director of the Bank, with the
exception of Mr. Atkins. There are a total of nine directors
of the Bank. On March 10, 1997, two of the Bank directors
retired and Mr. Atkins resigned as a Bank director. Three new
Bank directors have been appointed to fill those vacancies.
Directors of the Company are elected for staggered terms of
three years each, with the term of office of only one of the
three classes of directors expiring each year. Directors serve
until their successors are elected and qualified.
The nominees proposed for election at this Annual Meeting
are Clinton C. Atkins and Ronald Kiddoo, each of whom currently
serves as a director of the Company.
In the event that either Mr. Atkins or Mr. Kiddoo is
unable to serve or declines to serve for any reason, it is
intended that the proxies will be voted for the election of
such other person as may be designated by the present Board of
Directors. The Board of Directors has no reason to believe
that Mr. Atkins or Mr. Kiddoo will be unable or unwilling to
serve. Unless authority to vote for the nominee is withheld,
it is intended that the shares represented by the enclosed
proxy card, if executed and returned, will be voted "FOR" the
election of the nominee proposed by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE
ELECTION OF THE NOMINEES NAMED IN THIS PROXY STATEMENT.
<PAGE>
Information with Respect to the Nominee, Continuing Directors
and Certain Executive Officers
The following table sets forth, as of the Record Date, the
names of the nominee, continuing directors and "named executive
officers" of the Company, as defined below, their ages, a brief
description of their recent business experience, including
present occupations and employment, certain directorships held
by each, the year in which each became a director of the Bank,
and the year in which their terms (or in the case of the
nominee, proposed term) as director of the Company expire. The
table also sets forth the amount of Common Stock and the
percent thereof beneficially owned by each director and named
executive officer and all directors and executive officers as
a group as of the Record Date.
<TABLE>
<CAPTION>
Shares of
Name and Principal Expiration Common Stock
Occupation at Present Director of Term as Beneficially Percent of
and for Past Five Years Age Since (1) Director Owned(2)(3)(4) Class
- ------------------------------------ ----- --------- ---------- -------------- ----------
<S> <C> <C> <C> <C> <C>
NOMINEE
Clinton C. Atkins 51 1984 2000 149,175 8.48%
Chairman of Hobbico Inc., a
hobby retailer and supplier, Herr's
Inc., a craft wholesale retailer,
and owner of The Atkins Group,
a real estate development concern.
Ronald Kiddoo 54 1987 2000 15,400 .88%
Chief Investment Officer and
Chairman of Cozad Asset
Management, Inc., an investment
advisory concern; Registered
representative of FSC Security
Corp. of Atlanta, Georgia and
member of the National
Association of Security Dealers,
Inc. Mr. Kiddoo also serves as a
director of the Bank's wholly-
owned subsidiary, Park Avenue
Service Corporation, ("PASC").
CONTINUING DIRECTORS
George R. Rouse(5) 46 1982 1998 66,028 3.75%
President and Chief Executive
Officer of the Company; President
of the Bank and PASC.
<PAGE>
<CAPTION>
Shares of
Name and Principal Expiration Common Stock
Occupation at Present Director of Term as Beneficially Percent of
and for Past Five Years Age Since (1) Director Owned(2)(3)(4) Class
- ------------------------------------ ----- --------- ---------- -------------- ----------
<S> <C> <C> <C> <C> <C>
Dr. Morgan C. Powell 61 1977 1998 5,400 .31%
Chairman of the Board of the
Company; self-employed
orthodontist and member of the
board of directors of the
Champaign Park District. Dr.
Morgan also serves as a director
of PASC.
James S. Acheson 63 1977 1999 24,950 1.42%
Owner and Chief Executive
Officer of Central Material Co.,
a concrete and building materials
supply business; Director of
PASC.
Stock Ownership of all -- -- -- 321,650 18.28%
Directors and Executive Officers
as a Group (10 persons) (6)
</TABLE>
- ---------------------------
(1) Includes years of service as a director of the Bank.
(2) Each person effectively exercises sole (or shares with
spouse or other immediate family member) voting or
dispositive power as to shares reported herein (except as
noted).
(3) Includes 2,400 shares of common stock granted to each
outside director and 17,422 shares of common stock granted
to Mr. Rouse under the Great American Bancorp, Inc. 1995
Incentive Plan (the "Incentive Plan"). These shares
represent the unvested Stock Awards under the Incentive
Plan. Stock Awards granted under the Incentive Plan vest
in five equal annual installments and began vesting on
February 14, 1997, the first anniversary of the effective
date of the grant of the stock award.
(4) Includes 1,400 shares subject to options that are
currently exercisable and does not include 5,600 shares
subject to options which are not currently exercisable
granted to each outside director under the Incentive Plan.
Includes 10,263 shares subject to options that are
immediately exercisable and does not include 41,056 shares
subject to options which are not currently exercisable
granted to Mr. Rouse under the Incentive Plan. All
options granted under the Incentive Plan to Mr. Rouse are
exercisable in five equal annual installments and began
vesting on February 14, 1997, the first anniversary of the
effective date of the grant of the options.
(5) Mr. Rouse is the sole Named Executive Officer of the
Company.
(6) Includes directors of the Bank.
Meetings of the Board of Directors and Committees of the Board
of Directors
The Board of Directors conducts its business through
meetings of the Board of Directors and through activities of
its committees. The Board of Directors meets monthly and may
have additional meetings as needed. During fiscal 1996, the
Board of Directors of the Company held 23 meetings. All of
the directors of the Company attended at least 75% of the
total number of the Company's Board meetings held and committee
meetings on which such directors served during fiscal 1996.
<PAGE>
The Boards of Directors of the Company and the Bank
maintain committees, the nature and composition of which are
described below:
Audit Committee. The Audit Committee of the Company
consists of Messrs. Kiddoo (Chairman) and Atkins and Dr.
Powell, all of whom are outside directors. This committee
meets quarterly or as called by the committee chairman. The
purpose of this committee is to provide assurance that
financial disclosures made by management portray the financial
condition and results of operations. The committee also
maintains a liaison with the outside auditors and reviews the
adequacy of internal controls. The Audit Committee met 2 times
in fiscal 1996.
Nominating Committee. The Company's Nominating Committee
for the 1997 Annual Meeting consists of Messrs. Powell, Acheson
and Rouse. The committee considers and recommends the nominees
for director to stand for election at the Company's annual
meeting of stockholders. The Company's bylaws also provide for
stockholder nominations of directors. These provisions require
such nominations to be made pursuant to timely notice in
writing to the Secretary of the Company. The stockholder'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. The Nominating Committee met
on January 13, 1997.
Compensation/Benefits Committee. The Compensation/Benefits
Committee of the Company consists of Messrs. Powell (Chairman),
Acheson, Kiddoo and Atkins. This committee meets to establish
compensation for the Chief Executive Officer, approves the
compensation of senior officers and various compensation and
benefits to be paid to employees and to review the incentive
compensation programs when necessary. The Compensation/Benefits
Committee met 2 times in fiscal 1996.
Directors' Compensation
Directors' Fees. The directors of the Company did not
receive any fees or retainer for serving on the Company's Board
of Directors during the quarter ended December 31, 1995.
During this quarter, the monthly retainer for service on the
Board of Directors of the Bank was $1,000. In addition,
directors of the Bank received $200 for each committee meeting
attended with the exception of Loan Committee members who
received $400 per month. The Chairman of the Board of the
Bank received a monthly fee of $1,500 in addition to any Board
committee fees.
For calendar year 1996, directors of the Company and
directors of the Bank received a monthly fee of $500 per month
for serving on each board, and no additional fees were paid
for serving on board committees.
Incentive Plan. The Company maintains the Great American
Bancorp, Inc. 1995 Incentive Plan (the "Incentive Plan").
Under the Plan, each outside director was granted non-statutory
stock options to purchase 7,000 shares of Common Stock and
Stock Awards for 3,000 shares of Common Stock on February 14,
1996. The Incentive Plan previously provided that
<PAGE>
to the extent options for shares are available for grant under the
Incentive Plan, each subsequently elected Outside Director would
be granted non-statutory stock options to purchase 2,791 shares
of Common Stock and Stock Awards for 316 shares of Common
Stock. In January 1997, the Incentive Plan was amended to,
among other things, remove the limitations on the amount of
common stock and stock options which may be awarded to
subsequently elected outside directors. Unless otherwise
accelerated, the options and Stock Awards to Outside Directors
will vest over a five-year period, with 20% of the initial
number of each option and Stock Award vesting each year in
which the Outside Director remains on the Board or serves as
a consultant or advisory director, commencing on February 14,
1997, the first anniversary of the date of the grant of the
Award.
Executive Compensation
Summary Compensation Table. The following table shows, for
the fiscal years ended December 31, 1996 and September 30, 1995
and 1994, the cash compensation paid by the Bank, as well as
certain other compensation paid or accrued for those years, to
the chief executive officer ("Named Executive Officer").
<TABLE>
<CAPTION>
Long-Term Compensation
------------------------------------
Annual Compensation(1) Awards Payouts
------------------------------------ --------------------------- -------
Other Restricted Securities
Name and Annual Stock Underlying LTIP All Other
Principal Compensation Awards Options/ Payouts Compensation
Positions Year Salary($)(1) Bonus($) ($)(2) ($)(3) SARs(#)(4) ($)(5) ($)(6)
- ---------------- ---- ------------ -------- ------------- ------------ ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
George R. Rouse 1996 $198,250 $14,750 - $287,392 51,319 - $96,548
President 1995 161,900 11,750 - - - - 781
1994 149,370 11,500 - - - - 3,125
</TABLE>
- -------------------
(1) Under Annual Compensation, the column titled "Salary" includes
directors fees of $12,000, $19,400 and $15,600 in fiscal 1996,
1995 and 1994, respectively.
(2) There were no (a) perquisites over the lesser of $50,000 or 10%
of the individual's total salary and bonus for the year;
(b) payments of above-market preferential earnings on deferred
compensation; (c) payments of earnings with respect to long-term
incentive plans prior to settlement or maturation; (d) tax payment
reimbursements; or (e) preferential discounts on stock. For 1995
and 1994, the Bank had no restricted stock or stock-related plans
in existence.
(3) Pursuant to the Incentive Plan, Mr. Rouse held an aggregate of
20,528 shares of common stock which had a market value of $14 per
share on the effective date of grant, February 14, 1996. Awards
to Mr. Rouse vest in five equal annual installments, the first of
which commenced on February 14, 1997, the first anniversary date
of the effective date of the award. All awards vest immediately
upon termination of employment due to death, disability or change
of control. As of December 31, 1996, no shares of stock awarded
to Mr. Rouse under the Incentive Plan had vested.
(4) Includes options awarded under the Incentive Plan. Options granted
to Mr. Rouse become exercisable in five equal annual installments,
the first of which commenced on February 14, 1997, the first
anniversary date of the grant. To the extent not already
exercisable, the options become exercisable upon death, disability
or a change of control. As of December 31, 1996, no options
granted to Mr. Rouse were exercisable. See "Incentive Plan."
(5) For 1996, 1995 and 1994, the Bank had no long-term incentive
plans, accordingly, there were no payouts or awards under any
long-term incentive plan.
(6) Reflects 6,518 shares allocated to Mr. Rouse under the Bank's
Employee Stock Ownership Plan.
<PAGE>
Employment Agreements. The Bank and the Company have
entered into employment agreements with Mr. Rouse (the
"Executive"). These employment agreements are intended to
ensure that the Bank and the Company will be able to maintain
a stable and competent management base. The continued success
of the Bank and the Company depends, to a significant degree,
on the skills and competence of Mr. Rouse.
The Bank's and the Company's employment agreements
(collectively, the "Employment Agreements") provide for a three-
year term. The Company's employment agreement provides for
automatic daily extensions such that the remaining term of the
agreement shall be three years unless written notice of
non-renewal is provided by either the Board of Directors or the
Executive. The Bank's employment agreement provides that,
commencing on the first anniversary date and continuing each
anniversary date thereafter, the Board of Directors may extend
the agreement for an additional year so that the remaining term
shall be three years, unless written notice of non-renewal is
given by the Board of Directors after conducting a performance
evaluation of the Executive. The Employment Agreements provide
that the Executive's base salary will be reviewed annually.
In this regard, the current base salary of Mr. Rouse is
$155,000. In addition to base salary, the Employment
Agreements provide for, among other things, participation in
stock benefit plans and other fringe benefits applicable to
executive personnel. The Employment Agreements provide for
termination of the Executive by the Bank or the Company for
cause as defined in the Employment Agreements at any time. In
the event the Bank or the Company chooses to terminate the
Executive's employment for reasons other than for cause, or in
the event of the Executive's resignation from the Bank and the
Company upon (i) failure to re-elect the Executive to his
current offices, (ii) a material change in the Executive's
functions, duties or responsibilities, (iii) a relocation of the
Executive's principal place of employment by more than fifty
miles, (iv) liquidation or dissolution of the Bank or the
Company, or (v) a breach of the Employment Agreement by the
Bank or the Company, the Executive or, in the event of death,
his beneficiary would be entitled to an amount equal to the
remaining salary payments under the Employment Agreement and the
contributions that would have been made on the Executive's
behalf to any employee benefit plans of the Bank or the
Company during the remaining term of the Agreements. The Bank
and the Company would also continue the Executive's life,
health and disability coverage for the remaining term of the
Employment Agreements.
Under the agreements, if termination, voluntary or
involuntary, follows a change in control of the Bank or the
Company, as defined in the Employment Agreements, the Executive
or, in the event of death, his beneficiary, would be entitled
to a severance payment equal to the greater of (i) the
payments due for the remaining terms of the agreement or
(ii) three times the average of the five preceding years'
annual compensation. In addition, the Bank and the Company
would continue the Executive's life, health, and disability
coverage for thirty-six months. Payments to the Executive
under the Bank's employment agreement are guaranteed by the
Company in the event that payments or benefits are not paid by
the Bank.
Payments and benefits under the Employment Agreements
together with payments from other benefit plans may constitute
an excess parachute payment under Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), resulting in the
imposition of an excise
<PAGE>
tax on the recipient and denial of the
deduction for such excess amount to the Company and the Bank.
In the event of Mr. Rouse's termination following a change
in control, based solely upon the salary, bonus and other items
of cash compensation received by or payable to Mr. Rouse during
calendar year 1996, Mr. Rouse would receive approximately
$496,500 in severance payments under the Employment Agreement.
Such amount does not include the effect of any non-cash
benefits provided for under the Employment Agreements, such as
common stock or options which vested or were awarded to Mr.
Rouse in 1996.
Incentive Plan.
The Company maintains the Incentive Plan which provides
discretionary awards of common stock and options to purchase
common stock to officers and key employees as determined by a
committee of non-employee directors. The following table lists
all grants of options and stock appreciation rights ("SAR's)
under the Incentive Plan to the Named Executive Officers for
fiscal 1996 and contains certain information about the potential
value of those options based upon certain assumptions as to the
appreciation of the Company's stock over the life of the
option.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
Individual Grants
---------------------------------------------------------------------------
% of Total
Number of Securities Options/SARs
Underlying Granted to
Options/SARs Granted Employees in Exercise or Base Expiration
Name (#)(1)(2)(3)(4) Fiscal Year Price Per Share Date (6)
- ------------------- -------------------- ------------- ---------------- ----------
<S> <C> <C> <C> <C>
George R. Rouse 51,319 37.37% $14.00 2/14/06
</TABLE>
- -----------------
(1) Options granted pursuant to the Incentive Plan become
exercisable in equal installments at an annual rate of 20%
beginning February 14, 1997, unless otherwise accelerated.
(2) The purchase price may be paid in cash or in Common
Stock.
(3) Under limited circumstances, such as death or disability
of an employee, the employee (or his beneficiary) may
request that the Company, in exchange for the employee's
surrender of an option, pay to the employee (or
beneficiary), the amount by which the fair market value of
the Common Stock exceeds the exercise price of the option
on the date of the employee's termination of employment.
It is within the Company's discretion to accept or reject
such a request.
(4) To the extent possible, options will be treated as
"incentive stock options" under the Internal Revenue Code.
(5) The option term is ten years.
<PAGE>
The following table provides certain information with
respect to the number of shares of Common Stock represented by
outstanding options held by the Named Executive Officers as of
March 14, 1997. Also reported are the values for "in-the-
money" options which represent the positive spread between the
exercise price of any such existing stock options and the year
end price of the Common Stock.
<TABLE>
FISCAL YEAR END OPTION/SAR VALUES
<CAPTION>
Securities Underlying Number of Value of Unexercised In-the-Money
Unexercised Options/SARs at Fiscal Year Options/SARs at Fiscal Year End ($)(1)
End (#)
-------------------------------------- --------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- --------------- -------------- -------------------- ----------------- ------------------
<S> <C> <C> <C> <C>
George R. Rouse 10,263 41,056 8,313 33,255
</TABLE>
(1) Market value of underlying securities at fiscal year end
($14.81) minus the exercise or base price ($14) per share.
Options vest at an annual rate of 20% of the original
amount granted beginning on February 14, 1997, unless
otherwise accelerated.
Transactions with Certain Related Persons
It is the policy of the Bank to make loans to directors
and executive officers on their principal residence. The Bank
also makes available to each director of the Bank and each
director of the Company an approved line of credit in an
amount up to $100,000. The directors may then apply for a
loan from the Bank which may be approved by the Bank's loan
officers without further Board approval, provided that terms of
such loan applied for thereunder, including the collateral
securing such loan, are consistent with the Bank's loan
underwriting policies for loans generally available to its
customers. The Bank's policy provides that all loans made by
the Bank to its directors and officers, including the lines of
credit to directors, are made in the ordinary course of
business, are made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time
for comparable transactions with other persons and do not
involve more than the normal risk of collectibility or present
other unfavorable features. As of December 31, 1996, all
outstanding loans to directors and executive officers were made
by the Bank in the ordinary course of business, were not made
with favorable terms, and did not involve more than the normal
risk of collectibility or present other unfavorable features.
<PAGE>
PROPOSAL 2. RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Company's Board of Directors has appointed George S.
Olive & Co., LLC as independent auditors for the Bank and the
Company for the year ending December 31, 1997, subject to
ratification of such appointment by the stockholders. In
November 1995, the Company determined to change its fiscal year
end from September 30 to December 31 and, accordingly, the
three months ended December 31, 1995 are included in the audit
of the fiscal year ending December 31, 1996.
Representatives of George S. Olive & Co., LLC will be
present at the Annual 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
stockholders present at the Annual Meeting.
Unless marked to the contrary, the shares represented by
the enclosed proxy card will be voted "FOR" ratification of the
appointment of George S. Olive & Co., LLC as the independent
auditors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF GEORGE S. OLIVE & CO. LLC
AS THE INDEPENDENT AUDITORS OF THE COMPANY.
ADDITIONAL INFORMATION
Stockholder Proposals
To be considered for inclusion in the Company's proxy
statement and form of proxy relating to the 1998 Annual Meeting
of Stockholders, a stockholder 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 28, 1997.
Any such proposal will be subject to 17 C.F.R. 240.14a-8 of
the Rules and Regulations under the Securities Exchange Act of
1934, as amended.
Notice of Business to be Conducted at an Annual Meeting
The bylaws of the Company provide an advance notice
procedure for a stockholder to properly bring business before
an Annual Meeting. The stockholder must give written advance
notice to the Secretary of the Company not less than ninety
(90) days before the date originally fixed for such meeting,
provided, however, that in the event that less than one hundred
(100) days notice or prior public disclosure of the date of
the meeting is given or made to stockholders, notice by the
stockholder to be timely must be received not later than the
close of business on the tenth day following the date on which
the Company's notice to stockholders of the annual meeting date
was mailed or such public disclosure was made. The advance
notice by stockholders must include the stockholder's name and
address, as they appear on the Company's
<PAGE>
record of stockholders, 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 stockholder and any material
interest of such stockholder in the proposed business. In the
case of nominations to the Board of Directors, certain
information regarding the nominee must be provided. Nothing in
this paragraph shall be deemed to require the Company to
include in its proxy statement or the proxy relating to an
annual meeting any stockholder proposal which does not meet all
of the requirements for inclusion established by the SEC 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 Stockholders. If, however,
other matters are properly brought before the Annual 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.
Whether or not you intend to be present at the Annual
Meeting, you are urged to return your proxy card promptly. If
you are then present at the Annual Meeting and wish to vote
your shares in person, your original proxy may be revoked by
voting at the Annual Meeting.
By Order of the Board of
Directors
Jane F. Adams
Corporate Secretary
Champaign, Illinois
March 28, 1997
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE
REQUESTED TO SIGN, DATE AND PROMPTLY RETURN THE
ACCOMPANYING PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
