ALLIANCE BANCORP
One Grant Square
Hinsdale, Illinois 60521
(630) 323-1776
April 19, 2000
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Alliance Bancorp to be held on Wednesday, May 24, 2000, at Ashton Place, 341 W.
75th Street, Willowbrook, Illinois, at 10:00 a.m., Chicago time (the "Annual
Meeting"). Notice of the Annual Meeting, a Proxy Statement and a Proxy Card are
enclosed.
At the Annual Meeting, you will be asked to consider and vote upon the
election of two directors for a term of three years each and the ratification of
KPMG LLP as independent auditors for the year ending December 31, 2000.
We encourage you to attend the Annual Meeting in person. Whether or not you
do, we hope you will read the Proxy Statement and sign and date the Proxy Card
and return it in the enclosed postage-paid envelope. This will save Alliance
Bancorp additional expense in soliciting proxies and will ensure that your
shares are represented. Please note that you may vote in person at the Annual
Meeting even if you have previously returned the Proxy Card.
On behalf of the Board of Directors and all of the employees of the Company
and Liberty Federal Bank, we wish to thank you for your support and for your
attention to this important matter.
Sincerely,
\s\ Fredric G. Novy \s\ Kenne P. Bristol
- --------------------- -------------------------------------
Fredric G. Novy Kenne P. Bristol
Chairman of the Board President and Chief Executive Officer
ALLIANCE BANCORP
One Grant Square
Hinsdale, Illinois 60521
(630) 323-1776
-----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 24, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of Alliance Bancorp (the "Company") will be held on Wednesday, May 24,
2000, at Ashton Place, 341 W. 75th Street, Willowbrook, Illinois, at 10:00 a.m.,
Chicago time.
A Proxy Card and a Proxy Statement for the Annual Meeting are enclosed. The
Annual Meeting is being held for the purpose of considering and voting upon the
following matters:
1. The election of two directors for a term of three years each;
2. The ratification of KPMG LLP as independent auditors of the
Company for the year ending December 31, 2000; and
to transact such other business as may properly come before the Annual Meeting
or any and all adjournments and postponements thereof.
Pursuant to the Bylaws, the Board of Directors has fixed April 7, 2000 as
the voting record date for the determination of stockholders entitled to notice
of and to vote at the Annual Meeting and any adjournments thereof. Only 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. A list of stockholders entitled to vote at the Annual Meeting will be
available at the Company's executive office, One Grant Square, Hinsdale,
Illinois for a period of ten days prior to the Annual Meeting and will also be
available for inspection at the meeting itself.
By Order of the Board of Directors
\s\ Richard A. Hojnicki
-------------------------
Richard A. Hojnicki
Secretary
Hinsdale, Illinois
April 19, 2000
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT YOU
PLAN TO BE PRESENT AT THE ANNUAL MEETING, PLEASE SIGN, DATE AND COMPLETE THE
ENCLOSED PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES.
PROXY STATEMENT
ALLIANCE BANCORP
One Grant Square
Hinsdale, Illinois 60521
(630) 323-1776
-------------------------
ANNUAL MEETING OF STOCKHOLDERS
May 24, 2000
This Proxy Statement is being furnished to the stockholders of Alliance
Bancorp (the "Company") in connection with the solicitation of proxies by the
Board of Directors of the Company for use at the Annual Meeting of Stockholders
(the "Annual Meeting") scheduled to be held on Wednesday, May 24, 2000, at
Ashton Place, 341 W. 75th Street, Willowbrook, Illinois, at 10:00 a.m., Chicago
time, and at any and all adjournments or postponements thereof. This Proxy
Statement and the Proxy Card are first being mailed to stockholders on or about
April 24, 2000.
- --------------------------------------------------------------------------------
REVOCATION OF PROXIES
- --------------------------------------------------------------------------------
Stockholders who execute the Proxy Card in the form solicited hereby retain
the right to revoke the proxy in the manner described below. Unless so revoked,
the shares represented by proxies will be voted at the Annual Meeting and all
adjournments thereof. Proxies solicited on behalf of the Board of Directors of
the Company will be voted in accordance with the directions given thereon. Where
no instructions are indicated, validly executed Proxy Cards will be voted "FOR"
the proposals set forth in this Proxy Statement for consideration at the Annual
Meeting.
Proxies may be revoked by sending written notice of revocation to the
Secretary of the Company, at the address shown above, 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. The presence at the
Annual Meeting of any stockholder who had returned a proxy shall not revoke such
proxy unless the stockholder delivers his or her ballot in person at the Annual
Meeting or delivers a written revocation to the Secretary of the Company prior
to the voting of such proxy.
- --------------------------------------------------------------------------------
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
- --------------------------------------------------------------------------------
Holders of record of the Company's common stock, par value $0.01 per share
(the "Common Stock") as of the close of business on April 7, 2000 (the "Record
Date") are entitled to one vote for each share then held. As of the Record Date,
the Company had 9,715,455 shares of Common Stock issued and outstanding
(excluding treasury shares). The presence in person or by proxy of a majority
1
of the outstanding shares of Common Stock entitled to vote is necessary to
constitute a quorum at the Annual Meeting.
Directors are elected by a plurality of votes cast, without regard to
either broker non-votes, or proxies as to which the authority to vote for the
nominees being proposed is withheld. The affirmative vote of holders of a
majority of the total votes cast at the Annual Meeting in person or by proxy is
required for the ratification of KPMG LLP as the Company's auditors for the year
ended December 31, 2000. Abstentions and broker non-votes will be counted for
purposes of determining that a quorum is present, but will not be counted as
votes cast for purposes of the ratification of the independent auditors.
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. 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 to implement and
apply the Limit.
Security Ownership of Certain Beneficial Owners
Persons and groups owning in excess of 5% of the Common Stock are required
to file certain reports regarding such ownership with the Company and with the
Securities and Exchange Commission ("SEC"), in accordance with the Securities
Exchange Act of 1934 (the "Exchange Act"). The following table sets forth
information regarding persons who beneficially owned more than five percent of
the Common Stock outstanding as of April 7, 2000.
Amount and Nature
Name and Address of of Beneficial Percent
Title Beneficial Owner Ownership of Class
Common Stock Dimensional Fund Advisors, Inc. 605,727(1) 6.23%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
- ----------------------
(1) Based upon information filed in a Schedule 13D dated February 11, 2000.
Dimensional Fund Advisors, Inc. ("Dimensional"), an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940, furnishes
investment advice to four investment companies registered under the Investment
Company Act of 1940, and serves as investment manager to certain other
commingled group trusts and separate accounts. In its role as investment adviser
or manager, Dimensional possesses voting and/or investment power over the
securities of the Company.
2
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PROPOSAL I--ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------
Effective as of the April 2000 meeting of the Board of Directors, the size
of the Board was reduced from fourteen to nine persons. Directors are elected
for staggered terms of three years each, with the term of office of only one
class of Directors expiring in each year. Directors serve until their successors
are elected and qualified. The table below sets forth certain information
regarding the nominees for re-election and the Directors whose service on the
Board will continue after the Annual Meeting, as well as information regarding
the executive officers of the Company, as of April 7, 2000. Management believes
that the nominees will stand for election and will serve if elected as
Directors. However, if any person nominated by the Board of Directors fails to
stand for election or is unable to accept election, the proxies will be voted
for the election of such other person as the Board of Directors may recommend.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
ELECTION OF THE NOMINEES WHOSE NAMES APPEAR BELOW.
Amount and
Nature of
Year First Beneficial Percent
Name, Age, Principal Occupation and Elected Term to Ownership of of
Business Experience for Past 5 Years to Board (1) Expire Stock (2) Class
------------------------------------ -------------- ------ --------- ------
NOMINEES
Fredric G. Novy, Age 61 (3)................. 1994 2003 308,920(4) 3.11%
Chairman of the Board of Directors of
Alliance Bancorp and Liberty Federal
Bank. President and Chief Executive
Officer of Liberty Bancorp and Liberty
Federal Savings Bank from 1994 to
February 1997. President of Cragin
Financial Corporation and Cragin
Federal Bank for Savings from 1990 through 1994.
Vernon B. Thomas, Jr., Age 66 (3)........... 1969 2003 147,587(5) 1.51
Attorney whose practice concentrates
in corporate, banking, real estate and
estate planning.
(footnotes appear on page 5)
3
Amount and
CONTINUING DIRECTORS
Kenne P. Bristol, Age 57 (3)................ 1986 2001 225,403(6) 2.28%
President and Chief Executive Officer
of Alliance Bancorp and Liberty
Federal Bank.
David D. Mill, Age 71 (3)(7)................ 1967 2001 120,057(5) 1.23
Dentist. Dr. Mill has owned his own
general dental practice since 1957.
Richard E. Webber, Age 70................... 1959 2001 250,839(8) 2.58
Mr. Webber is the former President
and Chief Financial Officer of
Southwest Bancshares and President
and Chief Executive Officer of
Southwest Federal.
Edward J. Burns, Age 70 (3)(7).............. 1963 2002 204,628(9) 2.08
Retired. Chairman of the Board of
Liberty Bancorp from 1991, and of
Liberty Federal Savings from 1982,
until February 1997. President and
Chief Executive Officer of Liberty
Bancorp and Liberty Federal Savings
until 1994.
Edward J. Nusrala, Age 60 (3)............... 1997 2002 29,900(10) 0.31
Founder, owner and President of
Famous Brand Shoes, Inc., a retail shoe company.
William R. Rybak, Age 49 (3)................ 1986 2002 58,731(11) 0.60
Chairman of the Board of Directors of
Hinsdale Federal from 1990 to
February 1997, and Chairman of the
Board of Hinsdale Financial from its
formation in 1992 to February 1997. Executive Vice President and Chief
Financial Officer of Van Kampen American Capital, Inc., a financial services
company specializing in money management and the distribution of mutual
funds.
(footnotes appear on pages 5 and 6)
4
Amount and
Donald E. Sveen, Age 68 (3)................. 1971 2002 103,000(11) 1.06%
Retired. Prior to July 1996, President,
Chief Operating Officer and Director
of The John Nuveen Company and
Subsidiaries and Chairman, Chief
Executive Officer and Director of the
Nuveen Select Tax-Free Income
Portfolio Funds. Nuveen is a financial
services company specializing in tax-
exempt investments and money
management.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Donald A. Berg, Age 46...................... -- -- 13,508(12) 0.14
Mr. Berg is a Senior Vice President
and Chief Lending Officer of Liberty
Federal Bank.
Richard A. Hojnicki, Age 50................. -- -- 89,593(13) 0.84
Mr. Hojnicki is Executive Vice
President, Secretary and Chief
Financial Officer of Alliance Bancorp
and Liberty Federal Bank.
Edward J. Munin, Age 46..................... -- -- 5,000(14) 0.05
Mr. Munin is a Senior Vice President
of Liberty Federal Bank and President
and Chief Executive Officer of Liberty
Financial Services, Inc., a subsidiary of
the Bank.
All directors and executive officers as a -- -- 1,953,617(15) 18.39%
group (12 persons)
(1) Includes service on the Board of Directors of Hinsdale Federal Bank for
Savings, Liberty Federal Savings Bank, or Southwest Federal Savings and
Loan Association of Chicago.
(2) Unless otherwise indicated, each person effectively exercises sole (or
shared with spouse) voting and dispositive power as to the shares
reported.
(3) Also serves on the Board of Directors of Liberty Federal Bank,
the wholly-owned subsidiary of the Company.
(4) Includes 212,003 shares that may be acquired by Mr. Novy through presently
exercisable stock options.
(5) Includes 49,657 shares that may be acquired through presently exercisable
stock options.
(6) Includes 168,221 shares that may be acquired by Mr. Bristol pursuant to
presently exercisable stock options.
(7) Dr. Mill is married to Mr. Burns' first cousin.
(footnotes continued on next page)
5
(8) Includes 10,000 shares that may be acquired by Mr. Webber pursuant to
presently exercisable stock options.
(9) Includes 114,868 shares that may be acquired by Mr. Burns pursuant to
presently exercisable stock options.
(10) Includes 15,000 shares that may be acquired by Mr. Nusrala pursuant to
presently exercisable stock options.
(11) Includes 23,043 shares that may be acquired pursuant to presently
exercisable stock options.
(12) Includes 10,000 shares that may be acquired by Mr. Berg pursuant to
presently exercisable stock options.
(13) Includes 52,812 shares that may be acquired by Mr. Hojnicki pursuant to
presently exercisable stock options.
(14) Includes 5,000 shares that may be acquired by Mr. Munin pursuant to
presently exercisable stock options.
(15) Includes 562,904 shares that may be acquired pursuant to presently
exercisable stock options granted to executive
officers of the Company and its subsidiaries, and 170,400 shares that may
be acquired pursuant to presently exercisable stock options granted to
directors who are not executive officers, and 396,451 shares beneficially
owned by directors emeritus.
Section 16(a) Beneficial Ownership Reporting Compliance
The Common Stock is registered pursuant to Section 12(g) of the Exchange
Act. The officers and directors of the Company and beneficial owners of greater
than 10% of the outstanding shares of Common Stock ("10% beneficial owners") are
required to file reports on Forms 3, 4 and 5 with the SEC disclosing beneficial
ownership and changes in beneficial ownership of the Common Stock. SEC rules
require disclosure in the Proxy Statement and Annual Report on Form 10-K of the
failure of an officer, director or 10% beneficial owner to file a Form 3, 4 or 5
on a timely basis. Based on the Company's review of ownership reports, no
officer, director or 10% beneficial owner of the Company failed to file
ownership reports on a timely basis for the year ended December 31, 1999.
Meetings of the Board of Directors and Committees of the Board
During 1999, the Board of Directors of the Company met five times.
The Company and Liberty Federal Bank (the "Bank") maintain an Executive
Committee, an Audit and Compliance Committee, and a Compensation and Personnel
Administration Committee. In addition to these committees the Bank maintains an
Asset/Liability-Budget Committee. No Director attended fewer than 75%, in the
aggregate, of the total number of Board meetings held during 1999 and the total
number of committee meetings on which he served during the year, as to both the
Company and the Bank.
The Executive Committee consists of Directors Rybak (Chairman), Burns (Vice
Chairman), Bristol, Novy and Sveen. This Committee exercises the authority of
the Board when the Board is not in session, subject to applicable law. Any
activity is reported to the Board on a monthly basis. The Executive Committee
did not meet during 1999.
The Audit and Compliance Committee consists of Directors Mill, Nusrala and
Rybak. This Committee receives reports as necessary to review the results of the
internal audit program, the independent audit, and other matters that affect the
Company or the Bank. The Audit and Compliance Committee met one time in 1999.
6
The Compensation and Personnel Administration Committee consists of
Directors Sveen (Chairman), Burns and Nusrala. This Committee reviews and
administers compensation, officer promotions, benefits and other matters of
personnel policy and practice. The Compensation and Personnel Administration
Committee met four times during 1999.
The Company's Nominating Committee is not a standing committee but is
convened as needed with director members appointed by the Chairman. While the
Committee will consider nominees recommended by stockholders, it has not
actively solicited recommendations from stockholders. Nominations by
stockholders must comply with certain procedural and informational requirements
set forth in the Company's Bylaws.
Directors' Compensation
Fees. Outside Directors of the Company receive a fee of $1,500 per meeting
of the Board. Outside Directors of the Bank receive a fee of $1,500 per meeting
of the Board. Directors who are not officers also receive $300 for each
committee meeting attended. Outside Directors of the Bank's subsidiaries receive
$300 per meeting for serving on any of these Boards.
Stock Benefit Plans for Directors. Directors have received options to
purchase common stock under stock option plans adopted in connection with the
initial public offering of the Common Stock. Currently, directors are eligible
to receive stock options and restricted stock awards under the 1997 Long-Term
Incentive Stock Benefit Plan.
Executive Compensation
Compensation Committee Report. Under rules established by the SEC, the
Company is required to provide certain data and information in regard to the
compensation and benefits provided to the Company's Chief Executive Officer and
other executive officers of the Company. The disclosure requirements for the
Chief Executive Officer and other executive officers include the use of tables
and a report explaining the rationale and considerations that led to fundamental
executive compensation decisions affecting those individuals. In fulfillment of
this requirement, the Compensation and Personnel Administration Committee, at
the direction of the Board of Directors, has prepared the following report,
which report relates to the Company's year ended December 31, 1999.
The compensation committee is composed solely of independent outside
Directors. The Board has delegated to the committee the responsibility of
assuring that the compensation of the Chief Executive Officer and other
executive officers is consistent with the performance of the Company, the
compensation strategy, competitive practices, and the requirements of
appropriate regulatory agencies. Non-employee Directors who do not sit on the
compensation committee also participate in executive compensation
decision-making through the review, discussion and ratification of compensation
committee recommendations. All cash compensation paid to executive
7
officers is paid by the Bank. The Company does not currently pay cash
compensation to executive
officers.
Executive Compensation Philosophy. Since the predecessor of the Company
became a public company in 1992, the committee has had the following goals for
the compensation programs impacting the executives of the Company and the Bank:
o to provide motivation for the executives to enhance shareholder value by
linking a significant portion of their compensation to earnings and the
value of the Common Stock;
o to retain the executive officers who are capable of leading the Company
to high performance levels and to allow the Bank to attract high quality
executives in the future by providing total compensation opportunities
which are consistent with competitive norms of the industry and the
Company's level of performance; and
o to maintain reasonable "fixed" compensation costs by targeting base
salaries at competitive average levels.
The compensation committee of the Board of Directors of the Bank
periodically reviews salaries, stock options and other aspects of executive
compensation. In general, the purpose of this evaluation is to ensure that the
Bank's overall executive compensation programs remain competitive with savings
institutions and banks that are relatively similar in both asset size and
geographical markets to the Bank and that total executive pay represents both
the individual's performance as well as the current and past performance of the
Bank.
For purposes of determining the competitive market for the Bank's
executives, the committee has consulted with Crowe, Chizek and Company LLP, the
nation's ninth largest CPA/Consulting firm ("Crowe Chizek"), to review the
comprehensive compensation paid to top executives of thrifts and banks with
total assets in the range of the Bank's total asset size and performance results
comparable to those of the Bank.
Crowe Chizek reviewed the following published compensation surveys to
determine competitive compensation levels:
1999 Crowe Chizek Bank Compensation Survey;
1999 America's Community Bankers Compensation Survey;
1999 Watson Wyatt Financial Institutions Benchmark Compensation Report;
1999 BAI Bank Cash Compensation Survey;
1999 ERI Economic Research Institute Salary Assessor; Finance,
Insurance, and Real Estate Industry Sector; and
1999 BAI Key Executive Compensation Survey Report.
8
In addition, Crowe Chizek conducted an independent review of the
compensation practices of fifteen midwest financial institutions with assets
ranging from $1.5 billion to $4 billion. All compensation data from the surveys
is updated by a factor of 4% per year, which is consistent with trends in wage
increases.
The surveys provide data for both thrifts and commercial banks. Crowe
Chizek has been recommending to their thrift clients that for compensation
purposes they should compare themselves to commercial banks of comparable size
as well as other thrifts for the following reasons:
o the similarity in the balance sheet structure and the complexity level
between operating a thrift and a bank has significantly increased; and
o thrifts are recruiting senior executives from commercial banks more
frequently, and to obtain top talent, the thrifts are required to
provide compensation levels competitive with banks.
In addition, the compensation committee reviewed the salary history and
performance levels for each of the executive officers in determining appropriate
compensation levels. It is expected that comparative salary data on executive
compensation will continue to be utilized as one of the primary sources of
information in subsequent years in determining compensation levels for executive
officers.
Executive officers' compensation consists principally of salary, annual
incentive payments, and stock options. The salaries are generally in the average
range compared to other similar institutions. The incentive payments are based
on performance against established objectives.
Compensation of Chief Executive Officer. The compensation committee meets
periodically to evaluate Mr. Bristol's performance and reports on that
evaluation to the outside Directors of the Board. The Chief Executive's
compensation consists principally of three components:
o Salary;
o Annual Incentive Payment; and
o Stock Option Grants.
Under the leadership and recommendations of the compensation committee, the
Board of Directors of the Bank, with Mr. Bristol excused, approved his
compensation for 1999 giving consideration to the size of the Bank, the duties
and responsibilities of his position and a comparison of the compensation of
chief executive officers of similarly situated financial institutions. Mr.
Bristol's total cash compensation was based on his contribution to the overall
long-term strategy and financial strength and performance of the Company, the
Bank and its subsidiaries.
In 1993, the Bank adopted a discretionary Annual Incentive Compensation
Program based on achievement of profitability performance goals while
maintaining safety and soundness standards.
9
The program's objective is to build shareholder value by providing an
incentive to executives and staff to develop those business strategies and take
those actions that will impact the Company's annual as well as long-term
profitability. In order to attract and retain high quality executives, the
Bank's executive compensation strategy is based on providing total target
compensation opportunities that are at, or above, the competitive norms for
companies competing in the Bank's employment market. The total compensation
philosophy is based on a combination of surveyed average base compensation plus
an average to above average incentive opportunity with the intent of motivating
management to continually meet or exceed the goals of increasing shareholder
value.
In addition to projected levels of profitability, the Chief Executive's
annual incentive is dependent on the Bank maintaining certain levels of
performance in the following areas:
o interest rate risk as measured by the one year interest rate
sensitivity gap;
o the ratio of non-performing assets to total assets; and
o regulatory capital ratios.
While these measures may change from year-to-year based on the strategic
focus of the Company, the objective of achieving annual profitability goals and
enhancing shareholder value while maintaining long-term safety and soundness
will continue.
The 1999 annual incentive award granted to the Chief Executive Officer is
based on 40% of base salary if target performance goals are achieved. If the
performance goals are exceeded, the percentage of base salary award can be up to
a maximum of 80%. The Bank's performance awards are based on pre-tax income
objectives in addition to safety and soundness considerations. Based upon the
criteria established by the Board of Directors, Mr. Bristol received a bonus of
$90,000, representing approximately 33% of his base salary, for the period ended
December 31, 1999. Also, during the period ended December 31, 1999, the
committee granted Mr. Bristol options to purchase 35,000 shares of Common Stock
at an exercise price equal to the fair market value of the shares at the time of
grant.
10
Compensation Committee
Edward J. Burns, Edward J. Nusrala and Donald E. Sveen
Stock Performance Graph. The following table shows a comparison of the
cumulative total stockholder return on the Common Stock, based on the market
price of the Common Stock, with the cumulative total return of companies in the
Nasdaq National Market Index and Standard & Poor's Savings & Loan Companies
Index, for the five fiscal years ended December 31, 1999.
[Chart Appears Here]
Cumulative Total Return
9/94 9/95 9/96 12/97 12/98 12/99
ALLIANCE BANCORP 100.00 113.27 119.90 206.04 155.44 151.18
NASDAQ NATIONAL MARKET 100.00 138.07 163.85 210.68 296.88 441.16
S & P SAVINGS & LOAN COMPANIES 100.00 128.30 147.28 293.08 273.44 221.51
11
Summary Compensation Table. The following table sets forth the cash
compensation paid by the Bank, for services rendered during the years ended
December 31, 1999, 1998 and 1997, to the Chief Executive Officer and other
executive officers of the Bank and/or the Company, who received an amount in
salary and bonus in excess of $100,000 in the fiscal year ended December 31,
1999 ("Named Executive Officers").
Annual Compensation Long-Term Compensation
Years
Name and Ended
Principal Position 12/31 Salary Bonus (2) Awards Payout
======================== ======= ========== ========= ========= ------------------ --------
Other Restricted All
Annual Stock Options/ LTIP Other
Compensation Awards SARS (#) Payout Compensation
============ ====== ======= ======== ===========
Kenne P. Bristol 1999 $275,000 $ 90,000 $-- $-- 35,000 $-- $ 4,500(7)
President, Chief 1998 260,000 100,000 -- -- 25,000 -- 46,160(6)(8)
Executive Officer 1997 230,000 125,000(1) -- -- 65,430 -- 158,470(3)
and Director
Fredric G. Novy 1999 $240,000 $ 90,000 $-- $-- 35,000 $-- $ 4,800(7)
Chairman of the 1998 225,000 100,000 -- -- 25,000 -- --
Board of Directors 1997 177,534(4) 100,000 -- -- -- -- --
Richard A. Hojnicki 1999 $126,000 $ 45,500 $-- $-- 10,000 $-- $ 3,600(7)
Executive Vice 1998 120,000 35,000 -- -- 7,500 -- 773(6)
President, Chief 1997 103,000 41,000(1) -- -- 6,750 -- 70,695(3)
Financial Officer
and Corporate
Secretary
Edward J. Munin 1999 $150,000 $122,619 $-- $-- 5,000 $-- $ 2,625(7)
Senior Vice 1998 200,000 57,000 -- -- 5,000 -- --
President of Bank, 1997 188,333(5) 45,000 -- -- -- -- --
President and Chief
Executive Officer
of Liberty Financial
Services, Inc.
Donald A. Berg 1999 $150,000 $ 70,000 $-- $-- 17,500 $-- $ 3,600(7)
Senior Vice 1998 125,000 75,000 -- -- 15,000 -- 1,125(6)
President/ Chief 1997 65,000(4) 70,529 -- -- -- -- --
Lending Officer
======================== ============== ============== ============= =============== ============ ============ ===========
- -----------------------------------
(1) Bonuses relating to the 15 months ended December 31, 1997 are included in
the 1997 amount.
(2) Perquisites for the fiscal years ended December 31, 1999, 1998 and 1997
did not exceed the lesser of $50,000 or 10% of the
total of the salary and bonus as reported for the Named Executive Officers.
(3) Represents the value of shares of Common Stock allocated to the account of
the Named Executive Officer under the Hinsdale Federal Bank for Savings
ESOP. In accordance with the merger with Liberty Bancorp, Inc., the ESOP
was terminated in 1997; therefore, the 1997 amount includes the December
31, 1996 allocation, valued at the market price on that date and the final
termination allocation valued at the market price of Common Stock as of
December 31, 1997.
(4) Includes salary from February 10, 1997, the date of the merger of Liberty
Bancorp, Inc. with the Company, for Mr. Novy and Mr. Berg.
(5) Includes Mr. Hunin's salary from the date of his employment in February
1997.
(6) Includes a contribution by the Company in 1998 to match 25% of the Named
Executive Officer's 1997 401(k) contribution: Bristol $2,250, Hojnicki $773
and $1,125 for Berg.
(7) Represents a contribution by the Company in 1999 to match 50% of the Named
Executive Officer's 1998 401(k) contribution.
(8) Includes the value of stock and accumulated dividends representing
recovery of benefits that would have been included in the 1997 termination
of the ESOP if not limited by the Internal Revenue Code.
12
Compensation Committee Interlocks. During the year ended December 31, 1999,
the Company had no"interlocking" relationships in which (1) any executive
officer is a member of the board of directors of another entity, one of whose
executive officers is a member of the Company's Board of Directors, or (2) any
executive officer is a member of the compensation committee of another entity,
one of whose executive officers is a member of the Company's Board of Directors.
Employment Agreements. The Bank has entered into an employment agreement
with Mr. Bristol, which provides for a term of thirty-six months. On each
anniversary date, the agreement extends for an additional twelve months, so that
the remaining term shall be thirty-six months, unless notice of non-renewal is
given. If the agreement is not renewed, the agreement with Mr. Bristol will
expire thirty-six months following the anniversary date.The current base salary
for Mr. Bristol is $290,000. The base salary may be increased but not decreased.
In addition to the base salary, the agreement provides for, among other things,
disability pay, participation in stock benefit plans and other fringe benefits
applicable to executive personnel. The agreement provides for termination by the
Bank for cause at any time. In the event the Bank terminates the executive's
employment for reasons other than for cause, or in the event of the executive's
resignation from the Bank upon (i) a failure to re-elect the executive to his
current offices, (ii) a material change in the executive's functions, duties or
responsibilities, or relocation of his principal place of employment, (iii)
liquidation or dissolution of the Bank, or (iv) a breach of the agreement by
the Bank, the executive, or in the event of death, his beneficiary would be
entitled o severance pay in an amount equal to 2.99 times the annual rate of
base salary at the time of termination. The Bank would also continue the
executive's life, health, dental and disability coverage for the remaining
unexpired term of the agreement.
If termination, voluntary or involuntary, follows a change in control of
the Bank or the Company, the executive or, in the event of death, his
beneficiary, would be entitled to a severance payment equal to 2.99 times the
annual rate of annual compensation at the time of termination, which currently
would be approximately $1,140,000. The Bank would also continue, as available,
the executive's life, health, dental and disability coverage for thirty-six
months. A change in control is generally defined to mean the acquisition by a
person or group of persons having beneficial ownership of 20% or more of the
Common Stock during the term of the agreement, or a merger or other form of
business combination, sale of assets, or contested election of directors which
results in a change of a majority of the Board of Directors. The Company has
agreed to reimburse the executive for any excise taxes that may be imposed under
the federal income tax code in connection with any payments made following a
change in control.
As a result of the merger of Liberty Bancorp, Inc. and Hinsdale Financial
Corporation, the Company and the Bank are parties to an employment agreement
with Mr. Novy and a consulting agreement with Mr. Burns. The agreements provide
for three-year terms. Commencing on the first anniversary date and continuing
each anniversary date thereafter, the agreements are extended for an additional
year so that the remaining terms shall be three years, unless notice is
otherwise provided. Base salaries will be reviewed annually. In 1999, the base
salaries of Messrs. Burns and Novy provided for by the agreements were $125,000
and $255,000, respectively.
In addition to the base salary, the agreements provide for, among other
things, disability pay, participation in stock benefit plans and other fringe
benefits applicable to executive personnel. The agreements provide for
13
termination by the Bank or the Company for cause 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) a failure to re-elect the executive to
his current offices or nominate for board membership, (ii) a material change in
the executive's functions, duties or responsibilities, or relocation of his
principal place of employment, (iii) liquidation or dissolution of the Bank or
the Company, or (iv) a breach of the agreement by the Bank or the Company; the
executive, or in the event of death, his beneficiary would be entitled to
severance pay. Pursuant to his agreements, in the event of such termination, Mr.
Burns would receive a sum equal to: (i) the amount of remaining salary payments
under the agreement; (ii) the annual weighted average of the amount of bonus and
other compensation paid to or accrued on behalf of Mr. Burns during the term of
the agreement times the remaining number of years, and any fraction thereof,
under the agreement; and (iii) an amount equal to the average of the annual
contributions that were made on his behalf to any employee benefit plans during
the term of the agreement times the remaining number of years, and any fraction
thereof, under the agreement. Under the terms of his agreements, in the event of
such termination, Mr. Novy would receive the greater of (i) the payments due for
the remaining term of his agreement, or (ii) one times his average annual
compensation for the three preceding taxable years and the amount of any
benefits received pursuant to any employee benefit plans on his behalf during
the term of his agreement.
If termination, voluntary or involuntary, follows a change in control of
the Bank or the Company, the executive or, in the event of death, his
beneficiary, would be entitled to a severance payment equal to three times his
average annual compensation over the past three years of employment with the
Bank or the Company. The Bank and the Company would also continue, as available,
the executive's life, medical, dental and disability coverage for the remaining
term of the agreement. A change in control is generally defined to mean the
acquisition by a person or group of persons having beneficial ownership of 20%
or more of the Common Stock or a merger or other form of business combination,
sale of assets, or contested election of directors which results in a change of
a majority of the Board of Directors during the term of the agreement. Payments
to the executive under the Bank's agreements will be guaranteed by the Company
in the event that payments or benefits are to paid by the Bank.
In the event of a change of control, based upon the past year's salary,
bonus and fees, Mr. Burns would receive approximately $375,000, and Mr. Novy
would receive approximately $1,035,000 in severance payments. In addition, the
agreements provide for continued life, medical, dental and disability coverage
for a period of thirty-six months. Any outstanding options vest upon a change in
control.
Severance Agreements. The Bank has entered into a severance agreement with
Mr. Hojnicki. The severance agreement provides for a term of twelve months; on
the first anniversary date and continuing on each anniversary thereafter, the
agreement may be extended so that the remaining term shall be twelve months. If
not renewed, the severance agreement expires twelve months thereafter. The
severance agreement provides that at any time following a change
14
in control of the Company or the Bank, if the Company or the Bank terminates the
officer's employment for any reason other than cause, or if the officer
terminates his employment following his demotion, loss of title, office or
significant authority, a reduction in his compensation, or relocation of his
principal place of employment, the officer or, in the event of death, his
beneficiary, would be entitled to receive a severance payment equal to an amount
equal to one and one half times the base salary. The Bank would also continue,
as available, the officer's life, health, dental and disability coverage for the
remaining unexpired term of the severance agreement. Payment to the officer
under the severance agreement will be provided by the Company in the event that
payment or benefits are not paid by the Bank. The Bank has entered into similar
severance agreements with fourteen other officers of the Bank paying one times
salary and one officer at one-half times salary.
Stock Option Plans. The Board of Directors of the Company has established
stock option plans which provide discretionary awards to officers and key
employees. The granting of awards to employees under the option plans is
determined by a committee of the Board of Directors consisting of "Non-Employee"
directors.
Set forth below is information relating to options granted under the
Company's stock option plans to the Named Executive Officers during 1999.
OPTION GRANTS IN LAST FISCAL YEAR
==============================================================================================================================
Potential Realizable
Value at Assumed
Individual Grants Annual Rates of Stock
Price Appreciation for
Option Term
Percent of Total Options
Options Granted to Employees in Exercise Expiration
Name Granted 1999 Price Date 5% 10%
- ------------------------ ---------------- ------------------------- ------------- -------------- ------------ -----------
Kenne P. Bristol 35,000(1) 15% $19.75 1/21/2009 $108,958 $228,804
- ------------------------ ---------------- ------------------------- ------------- -------------- ------------ -----------
Fredric G. Novy 35,000(1) 15 $19.75 1/21/2009 $108,958 $228,804
- ------------------------ ---------------- ------------------------- ------------- -------------- ------------ ------------
Richard A. Hojnicki 10,000(1) 4 $19.75 1/21/2009 $31,131 $65,373
- ------------------------ ---------------- ------------------------- ------------- -------------- ------------ ------------
Edward J. Munin 5,000(1) 2 $19.75 1/21/2009 $15,565 $32,686
- ------------------------ ---------------- ------------------------- ------------- -------------- ------------ ------------
Donald A. Berg 10,000(1) 4 $19.75 1/21/2009 $31,131 $65,373
======================== ---------------- ------------------------- ------------- -------------- ------------ ------------
7,500(2) 3 $21.25 8/20/2009 $25,121 $52,753
- ------------------------ ================ ========================= ============= ============== ============ ============
- ------------------------------------
(1) These options become exercisable in three equal installments commencing
January 21, 2000. (2) These options become exercisable in three equal
installments commencing August 20, 2000.
The following table provides certain information with respect to options
exercised in 1999, and the number of shares of the Common Stock represented by
stock options held by the Named Executive Officers as of December 31, 1999.
15
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
=========================================================================================================================
Number of Unexercised Value of Unexercised In-
Options at The-Money Options at
Shares Acquired Value Fiscal Year-End Year-End (2)
Name Upon Exercise Realized Exercisable/ Exercisable/
Unexercisable Unexercisable
(#) ($)
- --------------------------- ----------------- ----------------- -------------------------- --------------------------
Kenne P. Bristol 10,000 $ 167,950 (1) 132,410 / 67,477 ) $785,373 / $0
- --------------------------- ----------------- ----------------- -------------------------- --------------------------
Fredric G. Novy -- $-- 192,002 / 51,667 $354,776 / $0
- --------------------------- ----------------- ----------------- -------------------------- --------------------------
Richard A. Hojnicki -- $-- 43,979 / 15,000 $442,219 / $0
- --------------------------- ----------------- ----------------- -------------------------- --------------------------
Donald A. Berg -- $-- 5,000 / 27,500 $1,667 / $3,333
- --------------------------- ----------------- ----------------- -------------------------- --------------------------
Edward J. Munin -- $-- 1,667 / 8,333 $0 / $0
- --------------------------- ----------------- ----------------- -------------------------- --------------------------
- ------------------------------------
(1) Equals the difference between the aggregate exercise price of the stock options exercised and the fair market value of the
Common Stock on the date of exercise.
(2) Equals the difference between the aggregate exercise price of the stock options and the aggregate fair market value of
the shares of the Common Stock that would be received upon exercise, assuming such exercise occurred on December 31, 1999,
at which date the last sales price of the Common Stock, as quoted on the Nasdaq National Market, was $18.50.
The Bank has adopted an Executive Supplemental Retirement Income Plan
("SERP") which is a non-qualified deferred compensation plan for the benefit of
Messrs. Novy and Bristol. Under the SERP, if the executive is employed until age
65 he is entitled to a benefit commencing on his termination of employment,
payable monthly for 180 months. The benefit is based on a percentage of base
salary plus bonus, calculated actuarially to be equal to 70% of the average of
the executive's highest annual salary and cash bonus (combined) paid in any five
consecutive calendar years in the last ten calendar years prior to termination
of employment on or after the executive's "Benefit Eligibility Date," i.e., the
first day of the month following the later of his attainment of age 65 or actual
retirement, reduced by the annuitized value of the employer-provided
tax-qualified plan benefits available to the executive for the twelve month
period immediately following attainment of age 65.
The Bank has established a rabbi trust which has purchased life insurance
policies to partially fund the Bank's obligations under the SERP. The Bank makes
annual contributions in an amount equal to the expense accrual under the SERP,
into the rabbi trust for the benefit of the executives. In the event of the
executive's termination of employment following a change of control, the Bank is
required to make contributions to the rabbi trust which, when added to the
remaining assets in the rabbi trust, are sufficient to fund the supplemental
retirement income benefit. Contributions with respect to the SERP for 1999 were
$367,000.
Transactions With Certain Related Persons
The Bank does not make loans to its directors and executive officers except
for overdraft lines of credit on checking accounts issued by the Bank, which are
made in the ordinary course of
16
business, and on substantially the same terms, including interest rates, 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.
- -------------------------------------------------------------------------------
PROPOSAL II--RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
- -------------------------------------------------------------------------------
The Company's independent auditors for the year ended December 31, 1999
were KPMG LLP. The Company's Board of Directors has reappointed KPMG LLP to
continue as independent auditors for the Company for the year ending December
31, 2000, subject to ratification of such appointment by the stockholders.
Representatives of KPMG LLP are expected to attend the Company's Annual Meeting.
They will be given the opportunity to make a statement if they desire to do so
and will be available to respond to appropriate questions from stockholders
present at the Company's Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE RATIFICATION
OF THE APPOINTMENT OF KPMG LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY FOR
THE YEAR ENDING DECEMBER 31, 2000.
- -------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
- -------------------------------------------------------------------------------
To be considered for inclusion in the Company's proxy statement in
connection with the annual meeting of stockholders to be held following the year
ending December 31, 2000, 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, no later than December 20, 2000. Any stockholder proposal
submitted to the Company will be subject to Rule 14a-8 under the Exchange Act.
- -------------------------------------------------------------------------------
ADVANCE NOTICE OF BUSINESS TO BE CONDUCTED AT AN ANNUAL MEETING
- -------------------------------------------------------------------------------
The Bylaws of the Company provide an advance notice procedure for certain
business, or nominations to the Board of Directors, to be brought before an
annual meeting. In order for a stockholder to properly bring business before an
annual meeting, or to propose a nominee to the Board, the stockholder must give
written notice to the Secretary of the Company not less than ninety (90) days
before the date 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, notice by the stockholder to be timely
must be received not later than the close of business on the tenth day following
the day on which such notice of the date of the Annual Meeting was mailed or
such public disclosure was made. The notice must include the stockholder's name,
record address, and number of shares owned by the stockholder, and describe
briefly the proposed business, the reasons for bringing the business before the
Annual Meeting, and any material interest of the stockholder in the proposed
business. In the case of nominations to the Board of Directors, certain
17
information regarding the nominee must be provided. Nothing in this paragraph
shall be deemed to require the Company to include in its proxy statement and
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.
The date on which next year's annual meeting of stockholders is expected to
be held is May 23, 2001. Accordingly, advance written notice for certain
business, or nominations to the Board of Directors, to be brought before the
next annual meeting must be given to the Company by February 22, 2001. If notice
is received after February 22, 2001, it will be considered untimely, and the
Company will not be required to present the matter at the annual meeting.
- -------------------------------------------------------------------------------
OTHER MATTERS
- -------------------------------------------------------------------------------
The Board of Directors knows of no business which will be presented for
consideration at the Company's Annual 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 card to vote the shares represented thereby on such
matters in accordance with their best judgment.
- -------------------------------------------------------------------------------
ANNUAL REPORT ON FORM 10-K
- -------------------------------------------------------------------------------
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1999, WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE
RECORD DATE UPON WRITTEN OR TELEPHONIC REQUEST TO KENNE P. BRISTOL, PRESIDENT
AND CHIEF EXECUTIVE OFFICER, ALLIANCE BANCORP, ONE GRANT SQUARE, HINSDALE,
ILLINOIS 60521, (630) 323- 1776.
BY ORDER OF THE BOARD OF DIRECTORS
\s\ Richard A. Hojnicki
-----------------------------
Richard A. Hojnicki
Secretary
Hinsdale, Illinois
April 19, 2000
18
PROXY
ALLIANCE BANCORP
ANNUAL MEETING OF STOCKHOLDERS
May 24, 2000
The undersigned hereby appoints the proxy committee consisting of the Board
of Directors with full powers of substitution to act as attorneys and proxies
for the undersigned to vote all shares of common stock of the Company which the
undersigned is entitled to vote at the Annual Meeting of Stockholders ("Annual
Meeting") to be held at Ashton Place, 341 W. 75th Street, Willowbrook, Illinois
on May 24, 2000 at 10:00 a.m., Chicago Time. The proxy committee is authorized
to cast all votes to which the undersigned is entitled as follows:
FOR VOTE
(except as WITHHELD
marked to
the contrary
below)
1. The election as Directors of all nominees listed
below each to serve for a three-year term
Fredric G. Novy
Vernon B. Thomas, Jr.
INSTRUCTION: To withhold your vote for one or
more nominees, write the name of the nominee(s) on
the line(s) below.
- ------------------------------
FOR AGAINST ABSTAIN
2. The ratification of KPMG LLP
as the Company's independent
auditor for the fiscal year
ended December 31, 2000.
The Board of Directors recommends a vote "FOR" each of the listed proposals.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED ABOVE. IF ANY OTHER
BUSINESS IS PRESENTED AT SUCH ANNUAL MEETING, THIS PROXY WILL BE VOTED AS
DIRECTED BY THE PROXY COMMITTEE. AT THE PRESENT TIME, THE BOARD OF DIRECTORS
KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING.
- -------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Annual Meeting
or at any adjournment thereof and after notification to the Secretary of the
Company at the Annual Meeting of the stockholder's decision to terminate this
proxy, then the power of said attorneys and proxies shall be deemed terminated
and of no further force and effect. This proxy may also be revoked by sending
written notice to the Secretary of the Company at the address set forth on the
Notice of Annual Meeting of Stockholders, or by the filing of a later dated
proxy prior to a vote being taken on a particular proposal at the Annual
Meeting.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of the Annual Meeting and a Proxy Statement,
each dated April 19, 2000.
Dated: _________________, 2000 --- Check Box if You Plan
--- to Attend Annual Meeting
- ------------------------------- -----------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- ------------------------------- -----------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title.
- -------------------------------------------------------------------------------
Please complete and date this proxy and return it promptly in the enclosed
postage-prepaid envelope.
- -------------------------------------------------------------------------------