UNITED
STATES
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SECURITIES
AND EXCHANGE COMMISSION
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Washington,
D.C. 20549
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SCHEDULE
14A
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Proxy
Statement Pursuant to Section 14(a) of
the
Securities Exchange Act of 1934 (Amendment No.
)
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Filed
by the Registrant ý
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Filed
by a Party other than the Registrant o
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Check
the appropriate box:
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o
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Preliminary
Proxy Statement
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o
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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ý
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Definitive
Proxy Statement
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Definitive
Additional Materials
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o
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Soliciting
Material Pursuant to §240.14a-12
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MB
Financial, Inc.
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(Name
of Registrant as Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment
of Filing Fee (Check the appropriate box):
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ý
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No
fee required.
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o
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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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):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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o
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Fee
paid previously with preliminary materials.
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o
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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.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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Persons
who are to respond to the collection of information contained in
this form
are not required to respond unless the form displays a currently
valid OMB
control number.
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Name
of
Beneficial
Owner
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Amount
and
Nature
of
Beneficial
Ownership(1)
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Percent
of
Class
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E.
M. Bakwin
Chairman
of the Board of the Company
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1,412,304
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5.01%
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David
P. Bolger
Director
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5,705
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*
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Robert
S. Engelman, Jr.
Director
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154,749
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*
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Alfred
Feiger
Vice
Chairman of the Board
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162,760
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*
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Mitchell
Feiger
Director
and President and Chief
Executive
Officer of the Company
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469,037
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1.66
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Lawrence
E. Gilford
Director
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182,766
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*
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Richard
I. Gilford
Director
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255,740
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*
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James
N. Hallene
Director
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17,837
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*
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Name
of
Beneficial
Owner
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Amount
and
Nature
of
Beneficial
Ownership(1)
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Percent
of
Class
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Thomas
H. Harvey
Director
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579,317
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2.05
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Patrick
Henry
Director
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1,498,854
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5.31
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Richard
J. Holmstrom
Director
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68,615
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*
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David
L. Husman
Director
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188,225
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*
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Karen
J. May
Director
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2,635
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*
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Ronald
D. Santo
Director
and Vice President of the Company;
Chairman
and Group President of the Bank
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113,181
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*
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Kenneth
A. Skopec
Vice
Chairman of the Board
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45,549
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*
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Burton
J. Field
Vice
President of the Company;
President,
Lease Banking of the Bank
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139,360
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*
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Thomas
D. Panos
President
and Chief Commercial Banking
Officer
of the Bank
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97,997
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*
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Jill
E. York
Vice
President and Chief Financial Officer of the
Company;
Executive Vice President and Chief
Financial
Officer of the Bank
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48,298
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*
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Directors
and executive officers as a group
(21
persons)
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5,530,355
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19.39
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Name
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Age
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Position(s)
Held
in
the Company
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Director
Since (1)
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Term
of Class
to
Expire
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NOMINEES
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David
P. Bolger
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49
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Director
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2004
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2009
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Robert
S. Engelman, Jr.
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64
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Director
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1993
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2009
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Alfred
Feiger
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80
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Vice
Chairman of the Board
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1992
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2009
(2)
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Richard
I. Gilford
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81
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Director
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1992
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2009
(2)
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Thomas
H. Harvey
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45
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Director
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1995
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2009
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Ronald
D. Santo
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63
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Director
and Vice President of the Company; Chairman and Group President
of the
Bank
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1990
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2009
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DIRECTORS
WHOSE TERMS EXPIRE IN 2007 and 2008
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E.
M. Bakwin
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77
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Chairman
of the Board
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1981
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2007
(3)
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Mitchell
Feiger
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47
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Director
and President and Chief
Executive
Officer of the Company
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1992
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2007
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James
N. Hallene
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45
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Director
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2000
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2007
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David
L. Husman
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71
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Director
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1992
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2007
(3)
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Lawrence
E. Gilford
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82
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Director
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1992
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2008
(3)
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Patrick
Henry
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66
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Director
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1981
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2008
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Richard
J. Holmstrom
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48
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Director
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1998
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2008
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Karen
J. May
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48
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Director
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2004
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2008
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Kenneth
A. Skopec
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71
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Vice
Chairman of the Board
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1981
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2008
(3)
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(1) |
For
each director other than Directors Bolger and May, denotes year in
which
the individual first became a director of Old MB Financial or MidCity
Financial. With the exception of Directors Bolger and May, each individual
has served as a director of the Company since 2001, the year in which
the
MB-MidCity Merger was completed. Prior to the MB-MidCity Merger,
Directors
Lawrence Gilford, Engelman, Alfred Feiger, Richard Gilford, Mitchell
Feiger and Husman served as directors of Old MB Financial, and Directors
Henry, Holmstrom, Skopec, Harvey, Santo, Bakwin and Hallene served
as
directors of MidCity Financial. For the former Old MB Financial directors,
includes service on the board of directors of Coal City Corporation
and
Avondale Financial Corp., which was merged into Old MB Financial
(known
prior to that merger as Avondale Financial Corp.) in a merger of
equals
transaction in February 1999 (the “Coal City Merger”). While Avondale
Financial Corp., renamed MB Financial, Inc., was the legal survivor
of the
Coal City Merger, Coal City Corporation was the survivor for accounting
purposes.
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(2)
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Pursuant
to the mandatory director retirement policy discussed above, if
re-elected
at the Meeting, Directors A. Feiger and R. Gilford will retire from
the Board effective December 31,
2006.
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(3)
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Pursuant
to the mandatory director retirement policy discussed above, Directors
L.
Gilford, Skopec, Bakwin and Husman will retire from the Board effective
December 31, 2006.
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Long-Term
Compensation
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Annual
Compensation
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Awards
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Name
and
Principal
Position
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Calendar
Year
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Salary
($)
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Bonus
($)
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Other
Annual
Compensation
($) (4)
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Restricted
Stock
Award(s)
($) (5)
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Securities
Underlying
Options/
SARs
(#)
(11)
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All
Other
Compensation
($)
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Mitchell
Feiger
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2005
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$525,000
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$157,500
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$32,890
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$173,234 (6)
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39,210
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$100,120 (12)
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President
and Chief Executive
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2004
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525,000
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262,500 (3)
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52,861
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246,120 (6)
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38,441
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96,402
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Officer
of the Company
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2003
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525,000
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249,375
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40,941
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—
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75,300
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84,686
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Burton
J. Field
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2005
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$411,788 (1)
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$78,023
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$20,926
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$18,532 (7)
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4,196
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$94,472 (13)
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Vice
President of the Company
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2004
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424,360
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101,000 (3)
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19,524
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17,196 (7)
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4,039
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76,107
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and
President, Lease Banking
of
the Bank
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2003
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412,000
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54,625
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19,125
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—
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9,904
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54,598
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Ronald
D. Santo
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2005
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$297,692 (2)
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$107,169
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$14,884
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$71,992 (8)
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16,295
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$73,003 (14)
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Vice
President of the Company
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2004
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279,231
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65,980 (3)
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10,014
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50,733 (8)
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3,222
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71,132
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and
Chairman and Group President of the Bank
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2003
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262,500
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59,850
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10,003
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—
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5,850
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56,142
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Thomas
D. Panos
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2005
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$300,000
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$108,000
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$14,194
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$71,992 (9)
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16,295
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$45,036 (15)
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President
and Chief Commercial
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2004
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275,000
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137,472 (3)
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11,385
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64,809 (9)
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8,054
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38,396
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Banking
Officer of the Bank
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2003
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220,000
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110,000 (3)
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10,561
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4,957 (9)
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12,450
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25,219
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Jill
E. York
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2005
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$235,523
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$85,680
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$36,553
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$60,463 (10)
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13,688
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$35,802 (16)
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Vice
President and Chief
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2004
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240,000
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119,992 (3)
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48,189
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59,915 (10)
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7,029
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34,219
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Financial
Officer of the Company
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2003
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208,500
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99,038
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9,404
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—
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11,700
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25,738
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and
Executive Vice President and
Chief
Financial Officer of the Bank
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(1)
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Excludes
$25,212 in salary forgone by Mr. Field, reflecting vacation time
taken at
reduced pay pursuant to his employment agreement. See “Employment
Agreements - Employment Agreement with Burton J.
Field.”
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(2)
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Excludes
$2,308 in salary forgone by Mr. Santo, reflecting reduced pay while
working from his second home. See “Employment Agreements - Employment
Agreement with Ronald D. Santo.”
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(4)
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Represents
the value of Company leased automobiles provided to the Named Executives
and club dues paid on behalf of the Named Executives, as follows:
Mr.
Feiger - 2005 $11,562 and $21,328; 2004 $18,298 and $34,563; and
2003
$11,827 and $29,114; Mr. Field - 2005 $8,915 and $12,011; 2004
$7,047 and
$12,477; and 2003 $6,877 and $12,248; Mr. Santo - 2005 $4,134 and
$10,750;
2004 $4,134 and $5,880; 2003 $4,523 and $5,480; Mr. Panos - 2005
$6,804 and $7,390; 2004 $4,665 and $6,720; and 2003 $4,081 and
$6,480; and
Ms. York -2005 $11,123 and $25,430; 2004 $12,564 and $35,625 ($32,000
of this amount represents a club initiation fee); and 2003 $6,404
and
$3,000.
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(5)
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Represents
the dollar value, based on the closing price of the Company’s Common Stock
on the grant date, of shares of restricted stock granted to the
Named
Executives under the Company’s Omnibus Incentive Plan. Dividends are paid
on the restricted shares to the same extent and on the same date
as
dividends are paid on all other outstanding shares of the Company’s Common
Stock.
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(6)
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Mr.
Feiger received a grant of 4,057 shares of restricted stock on
July 20,
2005 that will vest in full on July 20, 2008; based on the closing
price
of the Company’s Common Stock on July 20, 2005 of $42.70, the 4,057 shares
had a value on that date of $173,234. Mr. Feiger received a grant
of 4,415
shares of restricted stock on August 24, 2004 that will vest in full
on August 24, 2007; based on the closing price of the Company’s Common
Stock on August 24, 2004 of $37.06, the 4,415 shares had a value
on that
date of $163,620. Mr. Feiger also received, as a portion of his bonus
for 2004 under the Company’s Annual Incentive Bonus Plan, a grant of 2,062
shares of restricted stock on February 23, 2005 that will vest
in full on
February 23, 2007; based on the closing price of the Company’s Common
Stock on February 23, 2005 of $40.01, the 2,062 shares had a value
on that
date of $82,500. Based on the closing price of the Company’s Common Stock
on December 31, 2005 of $35.40, the dollar value of the 10,534
restricted shares of Company Common Stock held by Mr. Feiger on that
date was $372,904.
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(7)
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Mr.
Field received a grant of 434 shares of restricted stock on July
20, 2005
that will vest in full on July 20, 2008; based on the closing price
of the
Company’s Common Stock on July 20, 2005 of $42.70, the 434 shares had a
value on that date of $18,532. Mr. Field received a grant of 464
shares of
restricted stock on August 24, 2004 that will vest in full on August
24,
2007; based on the closing price of the Company’s Common Stock on August
24, 2004 of $37.06, the 464 shares had a value on that date of
$17,196.
Based on the closing price of the Company’s Common Stock on December 31,
2005 of $35.40, the dollar value of the 898 restricted shares of
Company
Common Stock held by Mr. Field on that date was
$31,789.
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(8)
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Mr.
Santo received a grant of 1,686 shares of restricted stock on July
20,
2005 that will vest in full on July 20, 2008; based on the closing
price
of the Company’s Common Stock on July 20, 2005 of $42.70, the 1,686 shares
had a value on that date of $71,992. Mr. Santo received a grant
of 370
shares of restricted stock on August 24, 2004 that will vest in
full on
August 24, 2007; based on the closing price of the Company’s Common Stock
on August 24, 2004 of $37.06, the 370 shares had a value on that
date of
$13,712. Mr. Santo also received, as a portion of his bonus for
2004 under
the Company’s Annual Incentive Bonus Plan, grants of 375 and 537 shares of
restricted stock on February 23, 2005 and March 8, 2005 that will
vest in
full on February 23, 2007 and March 8, 2007, respectively; based
on the
closing prices of the Company’s Common Stock on February 23, 2005 and
March 8, 2005 of $40.01 and $41.00, the 375 and 537 shares had
values on
those dates of $15,004 and $22,017. Based on the closing price
of the
Company’s Common Stock on December 31, 2005 of $35.40, the dollar value
of
the 2,968 restricted shares of Company Common Stock held by Mr.
Santo on
that date was $105,067.
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(9)
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Mr.
Panos received a grant of 1,686 shares of restricted stock on July
20,
2005 that will vest in full on July 20, 2008; based on the closing
price
of the Company’s Common Stock on July 20, 2005 of $42.70, the 1,686 shares
had a value on that date of $71,992. Mr.
Panos received a grant of 925 shares of restricted stock on August
24,
2004 that will vest in full on August 24, 2007; based on the closing
price
of the Company’s Common Stock on August 24, 2004 of $37.06, the 925 shares
had a value on that date of $34,281. Mr. Panos also received, as
a portion
of his bonus for 2004 under the Company’s Annual Incentive Bonus Plan, a
grant of 763 shares of restricted stock on February 23, 2005 that
will
vest in full on February 23, 2007; based on the closing price of
the
Company’s Common Stock on February 23, 2005 of $40.01, the 763 shares had
a value on that date of $30,528. In addition, Mr. Panos received,
as a
portion of his bonus for 2003 under the Company’s Annual Incentive Bonus
Plan, a grant of 127 shares of restricted stock on March 11, 2004
that
vested in full on March 11, 2006; based on the closing price of the
Company’s Common Stock on March 11, 2004 of $39.03, the 127 shares had
a
value on that date of $4,957.
Based on the closing price of the Company’s Common Stock on December 31,
2005 of $35.40, the dollar value of the 3,501 restricted shares
of Company
Common Stock held by Mr. Panos on that date was
$123,935.
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(10) |
Ms.
York received a grant of 1,416 shares of restricted stock on July
20, 2005
that will vest in full on July 20, 2008; based on the closing price
of the
Company’s Common Stock on July 20, 2005 of $42.70, the 1,416 shares had
a
value on that date of $60,463. Ms.
York received a grant of 807 shares of restricted stock on August
24, 2004
that will vest in full on August 24, 2007; based on the closing
price of
the Company’s Common Stock on August 24, 2004 of $37.06, the 807 shares
had a value on that date of $29,907. Ms. York also received, as
a portion
of her bonus for 2004 under the Company’s Annual Incentive Bonus Plan, a
grant of 750 shares of restricted stock on February 23, 2005 that
will
vest in full on February 23, 2007; based on the closing price of
the
Company’s Common Stock on February 23, 2005 of $40.01, the 750 shares had
a value on that date of $30,008.
Based on the closing price of the Company’s Common Stock on December 31,
2005 of $35.40, the dollar value of the 2,973 restricted shares
of Company
Common Stock held by Ms. York on that date was
$105,244.
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(11) | Represents incentive and non-qualified stock options granted pursuant to the Omnibus Plan. |
(12) | Includes non-qualified supplemental retirement contributions under the Company’s non-stock deferred compensation plan of $54,652, supplemental disability insurance premiums paid on Mr. Feiger’s behalf of $4,153 and 401(k) matching and profit sharing contribution of $19,715. Also includes director fees of $21,600, which were deferred pursuant to the Company’s stock deferred compensation plan and for which, in lieu of cash, Mr. Feiger was allocated 576 shares of Company Common Stock to his plan account. |
(13) | Includes non-qualified supplemental retirement contributions under the Company’s stock deferred compensation plan of $32,445, supplemental health, life and disability insurance premiums paid on Mr. Field’s behalf of $20,712 and 401(k) matching and profit sharing contribution of $19,715. Also includes director fees of $21,600, which were deferred pursuant to the Company’s stock deferred compensation plan and for which in lieu of cash, Mr. Field was allocated 576 shares of Company Common Stock to his plan account. |
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Name
|
Number
of
Securities
Underlying
Options
Granted
(1)
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%
of Total
Options
Granted
to
Employees
in
Fiscal
2005
|
Exercise
Price
Per
Share
|
Expiration
Date
|
Potential
Realizable Value at
Assumed
Annual Rates of
Stock
Price Appreciation for
Option
Term
|
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5.00%
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10.00%
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Mitchell
Feiger
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39,210
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11.60%
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$42.700
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07/20/15
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$1,052,938
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$2,668,350
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Burton
J. Field
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4,196
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1.24
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42.700
|
07/20/15
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112,679
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285,550
|
Ronald
D. Santo
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16,295
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4.82
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42.700
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07/20/15
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437,583
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1,108,920
|
Thomas
D. Panos
|
16,295
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4.82
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42.700
|
07/20/15
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437,583
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1,108,920
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Jill
E. York
|
13,688
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4.05
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42.700
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07/20/15
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367,575
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931,507
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Name
|
Shares
Acquired on
Exercise
(#)
|
Value
Realized ($)
|
Number
of Shares Underlying
Unexercised
Options
at December 31,
2005
|
Value
of Unexercised
“In-the-Money”
Options
at December 31, 2005
|
|||
Exercisable
|
Unexercisable
|
Exercisable
|
Unexercisable
|
||||
Mitchell
Feiger
|
63,626
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$1,928,695
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105,625
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227,951
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$2,607,756
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$1,705,060
|
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Burton
J. Field
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11,614
|
336,000
|
14,280
|
23,535
|
242,956
|
177,921
|
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Ronald
D. Santo
|
—
|
—
|
2,125
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32,117
|
39,135
|
145,570
|
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Thomas
D. Panos
|
—
|
—
|
24,975
|
49,549
|
580,792
|
286,874
|
|
Jill
E. York
|
—
|
—
|
33,975
|
45,317
|
810,115
|
282,623
|
(1) |
He
will receive, as agreed upon liquidated damages, monthly payments
equal to
the sum of one-twelfth of his then-current annual base salary and
one-twelfth of the average annual cash incentive bonuses received
by him
for the two full calendar years preceding the date of termination
These
payments will continue until the end of the agreement’s term unless the
involuntary termination is a Non-Extension Termination, in which
case the
payments will continue for one year after the date of
termination.
|
(2) |
Mr.
Feiger will, for himself, his spouse and his eligible dependents,
continue
to receive health benefit coverage at the Company’s sole cost, other than
co-payments and deductibles, and on terms as favorable to him as
to other
executive officers of the Company, until he becomes eligible for
Medicare
benefits (and for his spouse until the date that is seven months
after he
becomes eligible for Medicare benefits). In the event of Mr. Feiger’s
death prior to becoming eligible for Medicare benefits, his surviving
spouse and eligible dependents will receive the Company-provided
health
benefits described above until seven months after the date on which
Mr.
Feiger would have been eligible for Medicare benefits if he had survived.
After Mr. Feiger becomes eligible for Medicare benefits, he may elect
to continue receiving the health benefits described above at his
sole cost
for the remainder of his lifetime. This continuation of health benefit
coverage is referred to below as the “Post-Employment Health
Benefit.”
|
(3) |
Mr.
Feiger will receive all other accrued but unpaid amounts to which
he is
entitled under the agreement, including any unpaid salary, bonus
or
expense reimbursements. These amounts are referred to below as “Accrued
Compensation.”
|
(1) |
If
Mr. Feiger has offered to continue to provide the services contemplated
by
and on the terms provided in the agreement but the offer is rejected
by
the Company or its successor, he will receive as agreed upon damages
for
breach of contract, monthly payments equal to the sum of one-twelfth
of
his then-current annual base salary and one-twelfth of the average
annual
cash bonuses received by him for the two full calendar years preceding
the
date of termination. These payments will be made for the lesser of
the
remaining term of the agreement and 18 months after the date of
termination and are subject to reduction by the amount of any earned
income from providing services to another company by Mr. Feiger during
the
payment period. The agreement provides that these payments may not,
in the
aggregate, exceed $1,500,000.
|
(2) |
He
will receive any Accrued Compensation and the Post-Termination Health
Benefit; and
|
(3) |
If
the involuntary termination occurs in connection with or within 18
months
after a change in control, he will, in addition to any of the amounts
described in (1)-(2) above to which he may be entitled, receive a
lump sum
amount in cash equal to 299% of his “base amount” (as defined in Section
280G of the Internal Revenue Code) of compensation.
|
(1) |
he
will receive monthly until the end of the agreement's term 1/12th
of his
then current annual salary and 1/12th of the average annual amount
of cash
bonuses for the two full fiscal years preceding the date of termination,
subject to reduction by the amount of any cash income earned from
providing services to another company prior to the end of the agreement's
term;
|
(3)
|
the
Bank will continue to pay the premiums on specified life and disability
insurance policies for specified time periods;
|
(4)
|
there
will be full vesting of any unvested stock options that he holds,
which
will be exercisable for at least one year after the termination;
|
(5)
|
there
will generally be full vesting of any unvested amounts under any
other
benefit plan in which he is a participant;
and
|
(6)
|
if
the involuntary termination occurs within 18 months after a change
in
control, he also will receive a lump sum severance amount of 299%
of his
"base amount" (as defined in Section 280G of the Internal Revenue
Code),
reduced by the present value of the monthly payments to be made
pursuant
to the provision described in item (1) above.
|
(1)
|
he
will receive monthly until the end of the agreement’s term 1/12th of his
then current annual salary and 1/12th of the average annual amount
of cash
bonuses for the two full fiscal years preceding the date of termination
(provided that for these purposes, the actual cash bonuses earned
by Mr.
Santo in each of 2002, 2003 and 2004 will be increased by
$100,000);
|
(2)
|
he
will until age 65 or the current Medicare eligibility age be entitled
to
the same health and dental benefits for himself and his dependents
as he
and they would have been eligible for if he were still employed,
subject
to reduction to the extent he receives equivalent or better benefits
from
another employer and provided that Mr. Santo will bear the entire
cost of
these benefits after the end of the agreement’s term. If during the term
of the agreement or while receiving the aforementioned health benefits,
Mr. Santo dies, attains age 65 or the then current Medicare eligibility
age, Mr. Santo’s spouse will be entitled to continue such benefits until
she attains age 65 or the then current Medicare eligibility age,
provided
that she pays the same portion of premiums that Mr. Santo would
have paid
for single coverage had he continued such benefits. Additionally,
the Bank
will continue to pay the premiums on the long-term care insurance
policies
owned by Mr. Santo and his spouse, and, upon Mr. Santo’s attaining age 65
or the current Medicare eligibility age, he and his spouse will,
provided
he meets specified Medicare eligibility criteria, receive coverage
under a
Medicare Supplemental Insurance Plan, provided that the Bank’s obligations
to pay the premiums on the long-term care policies and the Medicare
Supplemental Insurance plan will not exceed an annual aggregate
cost of
$25,000 or, upon the death of either Mr. Santo or his spouse, $12,500
(the
“Continued Health Coverage”);
|
(3)
|
there
will be full vesting of any unvested stock options granted to him
under
the Company’s 1997 Omnibus Incentive Plan (or any successor plan), which
options will remain exercisable for at least one year (or until
the
expiration dates of such options, if
earlier);
|
(4)
|
there
will generally be full vesting of any other unvested amounts under
other
benefit plans in which he is a
participant;
|
(5)
|
he
will have the opportunity to purchase the key man life insurance
policy
maintained for him by the Bank for its then cash surrender value
and
transfer ownership to himself of the supplemental life insurance
policy
maintained for his benefit by the Bank at no cost to him (i.e.,
without
having to pay the cash surrender value);
and
|
(6)
|
the
Bank will continue to provide during the remaining term of the
agreement
the group term life insurance benefit maintained for Mr. Santo
at the same
premium cost to him, or, if the Bank is unable to provide such
group term
life insurance, Mr. Santo will be entitled to convert such coverage
to an
individual insurance policy.
|
(1)
|
a
lump sum amount in cash equal to his annual base salary, prorated
for
unpaid vacation taken in the prior calendar year, multiplied by
2.99;
|
(2)
|
a
lump sum amount equal to his average annual bonus over the prior
three
fiscal years, multiplied by 2.99 (provided that for these purposes,
the
bonuses earned by Mr. Santo in each of 2002, 2003 and 2004 will
be
increased by $100,000);
|
(3)
|
all
stock options awarded to him under the Company’s Omnibus Incentive Plan
will vest (except to the extent provided otherwise in his stock
option
agreements);
|
(4)
|
immediate
vesting and payment of his other benefits, to the extent allowed
under the
applicable plan, under all non-qualified retirement plans of the
Bank and
its affiliates in which he
participates;
|
(5)
|
the
continuation for three years of the group term life insurance benefit
maintained for Mr. Santo at the same premium cost to him, or, if
the Bank
is unable to provide such group term life insurance, Mr. Santo
will be
entitled to convert such coverage to an individual insurance policy,
without regard to the federal income tax consequences of that
continuation;
|
(6)
|
the
Continued Health Coverage; and
|
(7)
|
he
will have the opportunity to purchase the key man life insurance
policy
maintained for him by the Bank for its then cash surrender value
and
transfer ownership to himself of the supplemental life insurance
policy
maintained for his benefit by the Bank at no cost to him (i.e.,
without
having to pay the cash surrender
value).
|
(1)
|
a
lump sum amount in cash equal to the executive’s annual base salary
multiplied by two;
|
(2)
|
a
lump sum amount in cash equal to the executive’s average annual bonus over
the last two complete fiscal years multiplied by
two;
|
(3)
|
immediate
vesting of all of the executive’s benefits under all non-qualified
retirement plans of the Bank and its affiliates in which the executive
participates, subject, in the case of stock options, to the terms
of the
plan under which they were granted;
and
|
(4)
|
continuation
of health, dental, long-term disability and group term life insurance
coverage at the same premium cost to the executive until the second
anniversary of the executive’s termination date, subject to earlier
discontinuation if the executive receives substantially similar
benefits
from a subsequent employer.
|
2000
|
2001
|
2002
|
2003
|
2004
|
2005
|
||
MB
FINANCIAL, INC.
|
100.00
|
203.29
|
265.21
|
422.91
|
496.36
|
422.93
|
|
NASDAQ
BANK INDEX
|
100.00
|
109.09
|
111.02
|
142.25
|
157.60
|
155.38
|
|
PEER
GROUP INDEX
|
100.00
|
126.46
|
140.35
|
183.90
|
215.18
|
213.69
|
1.
|
Review
and discuss the form of presentation and type of information to
be
contained in earnings press releases. The Committee need not discuss
in
advance each earnings release or each instance in which the Corporation
may provide earnings guidance.
|
2.
|
Prior
to the filing of quarterly and annual reports on Forms 10-Q and
10-K,
review and discuss with management and the independent auditors:
(i) the
Corporation’s quarterly and annual consolidated financial statements; (ii)
matters that affect the Corporation’s consolidated financial statements,
including disclosures under “Management’s Discussion and Analysis of
Financial Condition and Results of Operations;” (iii) the results of the
independent auditors’ reviews of the quarterly financial statements, the
audit of the annual financial statements and the independent auditors’
report, and any other matters required to be communicated to the
Committee
by the independent auditors, as well as discussions regarding qualitative
judgments of the independent auditors about the appropriateness,
not just
the acceptability, of the Corporation’s accounting principles, and the
clarity of the financial statements; (iv) all critical accounting
policies
and practices to be used; (v) any matters required to be communicated
to
the Committee by the independent auditors in accordance with SAS
Nos. 61
and 71 or any other SAS; and (vi) other material written communications
between the independent auditors and management. Prior to the filing
of
the Corporation’s Annual Report on Form 10-K, recommend to the Board
whether the audited financial statements should be included in
the Form
10-K.
|
3.
|
Regularly
review with the independent auditors any problems or difficulties
encountered in the course of the audit work and management’s response,
including any restrictions on the scope of activities or access
to
requested information and any significant disagreements with
management.
|
4.
|
Review:
(i) any major issues regarding accounting principles and financial
statement presentations, including any significant changes in the
Company’s selection or application of accounting principles, and any major
issues as to the adequacy of the Company’s internal controls and any
special audit steps adopted in light of any material control deficiencies;
(ii) analyses prepared by management and/or the independent auditors
setting forth significant financial reporting issues and judgments
made in
connection with the preparation of the financial statements, including
analyses of the effects of alternative GAAP methods on the financial
statements; and (iii) the effect of regulatory and accounting initiatives,
as well as off-balance sheet structures, on the Company’s financial
statements. In consultation with management, the independent auditors
and
the Internal Audit Department, monitor the integrity and effectiveness
of
the Corporation’s financial reporting processes and systems of internal
controls, including reviewing and discussing major financial risk
exposures and the steps management has taken to monitor, control
and
report such exposures; and review significant findings relating
to the
foregoing prepared by the independent auditors or the internal
auditors,
together with management’s responses and follow-up to these reports.
|
5.
|
Establish
procedures for the receipt, retention and treatment of complaints
received
by the Corporation regarding accounting, internal accounting controls
or
auditing matters and for the confidential, anonymous submission
by
employees of concerns regarding questionable accounting or auditing
matters. Such procedures have been established by the Committee
and are
set forth in the Corporation’s code of business conduct and
ethics.
|
6.
|
The
Committee is directly responsible for the appointment, compensation,
retention and oversight of the work of the independent auditors,
including
resolution of disagreements between management and the independent
auditors regarding financial reporting. The independent auditors
shall
report directly to the Committee.
|
7.
|
Pre-approve
the engagement of and the fees to be paid to the independent auditors
for
all audit and permissible non-audit services to be provided by
the
independent auditors and consider the possible effect that any
non-audit
services could have on the independence of the auditors. The Committee
may
establish pre-approval policies and procedures, as permitted by
applicable
law and SEC regulations and consistent with this Charter, for the
engagement of the independent auditors to render permissible non-audit
services to the Corporation, including but not limited to policies
that
would allow the delegation of pre-approval authority to one or
more
members of the Committee, provided that any pre-approvals delegated
to one
or more members of the Committee are reported to the Committee
at its next
scheduled meeting.
|
8.
|
Evaluate
the qualifications, independence and performance of the independent
auditors annually. This evaluation shall include a review and discussion
of the annual communication as to independence delivered by the
independent auditors required by Independence Standards Board Standard
No.
1. Ensure the rotation of the lead (or coordinating) audit partner
having
primary responsibility for the audit and the audit partner responsible
for
reviewing the audit as required by law and the rotation of any
other audit
partner whose rotation is required by the regulations of the
SEC.
|
9.
|
Review
the audit plan of the independent auditors -- discuss scope, staffing,
timing, estimated and actual fees, reliance upon management and
internal
auditors and general audit approach. At
the conclusion of the audit, review and discuss with the independent
auditors any significant changes from the original audit
plan.
|
11.
|
Review
the budget, program, changes in program, activities, strategies,
organizational structure and qualifications of the Internal Audit
Department, as needed, it being understood that the Internal Audit
Department functionally reports directly to the Committee.
Evaluate whether the Internal Audit Department operation and structure
permits unrestricted access by internal auditors to records, personnel
and
physical properties relevant to the performance of its responsibilities
and to top management, the Committee and the Board. Assess the
appropriateness of the resources allocated to internal auditing.
Evaluate
the effectiveness of the internal audit
function.
|
12.
|
Review
the appointment, performance and replacement of the chief internal
auditor. Decisions regarding hiring or termination of the chief
internal
auditor require endorsement by the Committee. The
chairperson of the Committee will also be involved in performance
evaluation and compensation decisions related to the chief internal
auditor.
|
13.
|
Review
significant issues presented by the Internal Audit Department together
with management’s response and follow-up to these
reports.
|
14.
|
Review
and reassess the adequacy of this Charter at least annually, and
recommend
any proposed changes to the Board for its approval. Ensure the
publication
of this Charter in accordance with SEC regulations.
|
15.
|
Maintain
minutes of meetings and report regularly to the Board on the Committee’s
activities. Review with the Board any issues that arise with respect
to
the quality or integrity of the Corporation’s financial statements, the
Corporation’s compliance with legal or regulatory requirements, the
performance and independence of the independent auditors, or the
performance of the internal audit
function.
|
16.
|
Conduct
an appropriate review of and approve all related party transactions
on an
ongoing basis, as required by Nasdaq rules. For these purposes,
the term
“related party transactions” shall refer to transactions required to be
disclosed pursuant to SEC Regulation S-K, Item 404.
|
17.
|
Review
with the Corporation’s chief corporate counsel: (i) any significant legal
matter that could have a material impact on the Corporation’s financial
statements; (ii) legal compliance matters, including corporate
securities
trading policies and material notices to or inquiries received
from
governmental agencies; and (iii) reports of evidence of a material
violation of securities laws or breaches of fiduciary
duty.
|
18.
|
Review
disclosures made to the Committee by the Corporation’s CEO and CFO during
their certification process for the Forms 10-K and 10-Q with respect
to
the financial statements and about any significant deficiencies
and
material weaknesses in the design or operation of internal control
over
financial reporting and any fraud, whether or not material, involving
management or other employees who have a significant role in the
Corporation’s internal control over financial
reporting.
|
19.
|
Ensure
required certifications are made to Nasdaq: (i) that a formal written
charter has been adopted for the Committee and that the Committee
has
reviewed and reassessed the adequacy of the charter on an annual
basis;
and (ii) as to the independence of the members of the
Committee.
|
20.
|
Monitoring:
(i) the Corporation’s compliance program and loan review processes and
receiving reports thereon; (ii) the Corporation’s Disaster
Recovery/Contingency Plan, including continuous testing thereof;
(iii) the
Corporation’s senior officer expense reimbursement policies (including the
use of Corporate assets by senior officers), and considering the
results
of any review of such expense reimbursements by the Internal Audit
Department or independent auditors; (iv) compliance with the Corporation’s
code of business conduct and ethics by senior officers and directors;
(v)
compliance by the Corporation’s subsidiary banks with all policies
applicable to them and reporting thereon to the Board.
|
21.
|
Perform
any other activities consistent with this Charter, the Corporation’s
bylaws or governing law as the Committee or the Board deems necessary
or
appropriate.
|
1.
|
Recommend
to the Board the appropriate size of the Board and assist in identifying,
interviewing and recruiting candidates for the Board.
|
2.
|
Recommend
candidates (including incumbents) for election and appointment
to the
Board of Directors, subject to the provisions set forth in the
Corporation’s Charter and Bylaws relating to the nomination or appointment
of directors, based on the following criteria: business experience,
education, integrity and reputation, independence, conflicts of
interest,
diversity, age, number of other directorships and commitments (including
charitable obligations), tenure on the Board, attendance at Board
and
committee meetings, stock ownership, specialized knowledge (such
as an
understanding of banking, accounting, marketing, finance, regulation
and
public policy) and a commitment to the Corporation’s communities and
shared values, as well as overall experience in the context of
the needs
of the Board as a whole.
|
3.
|
Review
nominations submitted by stockholders, which have been addressed
to the
corporate secretary, and which comply with the requirements of
the
Corporation’s Charter and Bylaws. Nominations from stockholders will be
considered and evaluated using the same criteria as all other
nominations.
|
4.
|
Annually
recommend to the Board committee assignments and committee chairs
on all
committees of the Board, and recommend committee members to fill
vacancies
on committees as necessary.
|
5.
|
Consider
and make recommendations to the Board regarding matters related
to the
Corporation’s director retirement policy.
|
6.
|
Periodically
evaluate emerging best practices and make appropriate recommendations
for
Board approval, with respect to corporate governance policies or
guidelines relating to, among other
things:
|
(a)
|
the
structure of various committees of the Board, the composition and
individual members of such committees and the functions of the
Board and
the committees thereof;
|
7.
|
Conduct,
at least annually, a performance assessment of the Board and report
its
findings to the Board, and at least annually conduct a self-evaluation
of
the Committee.
|
8.
|
Review,
at least annually, the Corporation’s Code of Ethics and Conduct policy and
if appropriate, make recommendations for Board approval with respect
to
modifications or enhancements thereto, and consider requested waivers
thereof, if any, for directors and executive
officers.
|
9.
|
Review
and approve annually the required proxy statement disclosures regarding
the board nomination process.
|
10.
|
Review,
at least annually, the Committee charter and recommend changes
to the
Board for approval as appropriate.
|
11.
|
Establish
procedures for the regular ongoing reporting by board members of
any
developments that may affect his or her qualifications or independence
as
a director and make recommendations as deemed
appropriate.
|
12.
|
Recommend
to the Board a set of corporate governance principles applicable
to the
Corporation, and perform a review of those principles at least
annually.
|
1.
|
The
election of the following nominees as directors of the Company;
David P.
Bolger, Robert S. Engelman, Jr., Alfred Feiger, Richard I. Gilford,
Thomas
H. Harvey, and Ronald D. Santo.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ONE OR MORE NOMINEES
BUT
NOT ALL NOMINEES, WRITE THE NAME(S) OF THE NOMINEE(S) WITH RESPECT
TO WHOM
YOU WISH TO WITHHOLD AUTHORITY TO VOTE IN THE SPACE PROVIDED
AND MARK THE
OVAL “FOR ALL EXCEPT”)
|
The
Board of Directors recommends a vote “FOR” the election of all of the
nominees named herein.
The
undersigned acknowledges receipt from the Company, prior to the
execution
of this proxy, of notice of the Meeting, a Proxy Statement and
the
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2005.
In
their discretion, the proxies are authorized to vote on any other
business
that may come before the Meeting or any adjournment or postponement
thereof.
|
|||
For
All
|
Withhold
All
|
For
All Except
|
|||
/ /
|
/ /
|
/ /
|
Dated: __________________, 2006
|
||
(Nominee Exception) |
Signature
of Stockholder
|
||||
|
|||||
Signature
if held jointly
|
|||||
Please
sign exactly as your name(s) appear(s) on this card. When signing
as
attorney, executor, administrator, trustee or guardian, please
give your
full title. If shares are held jointly, each holder should
sign.
|