SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
HOME CORP 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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[_] Fee paid previously with preliminary materials.
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was paid previously. Identify the previous filing by registration statement
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(1) Amount Previously Paid:
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Notes:
[HOMECORP, INC. LOGO]
1107 East State Street
Rockford, Illinois 61104-2259
(815) 987-2200
March 19, 1997
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
HomeCorp, Inc. The meeting will be held at the Wallingford Center at the Best
Western Clock Tower Resort, located at 7801 East State Street, Rockford,
Illinois, on April 22, 1997, at 4:00 p.m. Rockford, Illinois time. This annual
meeting will include management's report to you on HomeCorp's 1996 financial and
operating performance.
An important aspect of the annual meeting process is the annual stockholder
vote on corporate business items. I urge you to exercise your rights as a
stockholder to vote and participate in this process. All the materials you need
to vote via the mail are enclosed in this package. Please look them over
carefully. Then MARK, DATE, SIGN AND PROMPTLY RETURN YOUR PROXY CARD in the
envelope provided so that your shares can be voted at the meeting in accordance
with your instructions.
Your Board of Directors and management are committed to the continued
success of HomeCorp and to the enhancement of your investment. As President and
Chief Executive Officer, I want to express my appreciation for your confidence
and support.
Sincerely,
/s/ C. Steven Sjogren
-------------------------------------
C. Steven Sjogren
President and Chief Executive Officer
[HOMECORP, INC. LOGO]
1107 East State Street
Rockford, Illinois 61104-2259
(815) 987-2200
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on April 22, 1997
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of HomeCorp, Inc. ("HomeCorp" or the "Company"), the holding company
for HomeBanc, a federal savings bank ("HomeBanc" or the "Bank"), will be held at
the Wallingford Center at the Best Western Clock Tower Resort, located at 7801
East State Street, Rockford, Illinois on April 22, 1997 at 4:00 p.m., Rockford,
Illinois time.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of three directors of the Company;
2. The ratification of the appointment of Ernst & Young LLP as
auditors for the Company for the fiscal year ending December 31,
1997; and
such other matters as may properly come before the Meeting or any adjournments
thereof. The Board of Directors is not aware of any other business to come
before the Meeting.
Any action may be taken on the foregoing proposal at the Meeting on
the date specified above, or on any date or dates to which the Meeting may be
adjourned. Stockholders of record at the close of business on March 7, 1997 are
the stockholders entitled to vote at the Meeting and any adjournments thereof.
A complete list of stockholders entitled to vote at the meeting is available for
the examination of any stockholder, for any purpose germane to the meeting,
between 9:00 a.m. and 4:00 p.m. (Central Time) at the executive office of the
Company located at 1107 East State Street, Rockford, Illinois for a period of
ten days prior to the Meeting as well as at the Meeting.
You are requested to fill in and sign the enclosed form of proxy which
is solicited on behalf of the Board of Directors and to mail it promptly in the
enclosed envelope. The proxy will not be used if you attend and vote at the
Meeting in person.
By Order of the Board of Directors
/s/ Karl H. Erickson
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KARL H. ERICKSON
Chairman of the Board
Rockford, Illinois
March 19, 1997
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A PRE-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED
WITHIN THE UNITED STATES.
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PROXY STATEMENT
HOMECORP, INC.
1107 East State Street
Rockford, Illinois 61104-2259
(815) 987-2200
ANNUAL MEETING OF STOCKHOLDERS
April 22, 1997
This Proxy Statement is furnished in connection with the solicitation
on behalf of the Board of Directors of HomeCorp, Inc. ("HomeCorp" or the
"Company") of proxies to be used at the Annual Meeting of Stockholders of the
Company (the "Meeting") which will be held at the Wallingford Center at the Best
Western Clock Tower Resort, located at 7801 East State Street, Rockford,
Illinois, on April 22, 1997, at 4:00 p.m., Rockford, Illinois time, and all
adjournments of the Meeting. The accompanying Notice of Annual Meeting of
Stockholders and this Proxy Statement and form of proxy are first being mailed
to stockholders on or about March 19, 1997.
At the Meeting, stockholders of the Corporation are being asked to
consider and vote upon (i) the election of three directors of HomeCorp and (ii)
the ratification of the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31, 1997.
VOTE REQUIRED FOR APPROVAL OF THE PROPOSALS AND PROXY INFORMATION
Directors shall be elected by a plurality of the votes present in
person or represented by proxy at the Meeting and entitled to vote on the
election of directors. With regard to election of directors, votes may be cast
in favor of or withheld from each nominee; votes that are withheld will be
excluded entirely from the vote and will have no effect on the vote. In all
matters other than the election of directors, the affirmative vote of the
majority of shares present in person or represented by proxy at the Meeting and
entitled to vote on the matter shall be the act of the stockholders. Proxies
returned by brokers as "non-votes" on behalf of shares held in street name will
not be counted as voting on any matter as to which a non-vote is indicated on
the broker's proxy. Abstentions and broker non-votes are counted for purposes of
determining a quorum.
A proxy given pursuant to this solicitation may be revoked at any time
before it is voted. A stockholder may revoke a proxy at any time prior to its
exercise by filing with the Secretary a duly executed revocation or a proxy
bearing a later date, or attending the Meeting and voting in person (although
attendance at the Meeting will not in and of itself constitute revocation of a
proxy). Any written notice revoking a proxy should be delivered to the
Secretary of the Company at the above address.
All shares of Company common stock, par value $.01 per share (the
"Common Stock"), represented at the Meeting by properly executed proxies
received prior to or at the Meeting, and not revoked, will be voted at the
Meeting in accordance with the instructions thereon. If no instructions are
indicated, properly executed proxies will be voted FOR the nominees and the
adoption of the proposal set forth in this Proxy Statement. The Company does
not know of any matters other than as described in the Notice of Annual Meeting
of Stockholders that are to come before the Meeting. If any other matters are
properly presented at the Meeting for action, the persons named in the enclosed
form of proxy and acting thereunder will have the discretion to vote on such
matters in accordance with their best judgment.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Stockholders of record as of the close of business on March 7, 1997
(the "Voting Record Date") will be entitled to one vote for each share then
held. As of that date, the Company had 1,128,779 shares of Common Stock issued
and outstanding. The following table sets forth, as of the Voting Record Date,
information regarding share ownership of: (i) those persons or entities known by
management to beneficially own more than five percent of the Corporation's
Common Stock and (ii) all directors and officers as a group. See "Proposal I -
Election of Directors" for information regarding share ownership of the
Corporation's Directors and Chief Executive Officer.
Shares Percent
Beneficially of
Beneficial Owner Owned Class
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Mr. and Mrs. C. Steven Sjogren/(1)/ 89,405 7.67%
2853 Soland Drive
Rockford, IL 61114
Hausers, Inc./(2)/ 82,658 7.29
1902 Broadway
Rockford, IL 61108
Mr. and Mrs. John R. Perkins/(3)/ 67,677 5.86
2930 Hubbard Trail
Rockford, IL 61114
All directors and executive officers of the Company and the Bank as 522,072 41.21
a group (13 persons)/(4)/
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/(1)/ Mr. Sjogren has sole voting and dispositive power with respect to 14,593
shares held directly and shared voting and dispositive power with respect
to 32,069 shares held jointly with his wife and children. Also included in
shares beneficially owned by Mr. Sjogren is an option to purchase 37,250
shares of Common Stock granted to Mr. Sjogren and 4,080 shares allocated
to his account under the Employee Stock Ownership Plan ("ESOP"). Mrs.
Sjogren has sole voting and dispositive power with respect to the 1,413
shares she holds.
/(2)/ The above information regarding beneficial ownership of Hausers, Inc. is
as reported by it in a statement dated November 24, 1992 on Schedule 13D
under the Securities and Exchange Act of 1934, as amended (the "Exchange
Act") as adjusted for the 3 for 2 stock split declared in March 1993.
Hausers, Inc. reported sole voting and dispositive power as to 77,250
shares held by it. Also includes options to purchase 5,208 shares of the
Company Common Stock granted to Director Robert C. Hauser who is President
and Chief Executive Officer of Hausers, Inc. Mrs. Hauser has sole voting
and dispositive power with respect to the 200 shares she holds.
/(3)/ Mr. Perkins has sole voting and dispositive power with respect to 13,038
shares held directly and shared voting and dispositive power with respect
to 25,080 shares held jointly with his wife. Also included in shares
beneficially owned by Mr. Perkins is an option to purchase 25,650 shares
of Common Stock granted to Mr. Perkins and 2,659 shares allocated to his
account under the ESOP. Mrs. Perkins has sole voting and dispositive power
with respect to the 1,250 shares she holds.
/(4)/ Includes shares held directly, as well as shares held jointly with family
members, shares held in retirement accounts, held in a fiduciary capacity,
held by certain of the group members' families, or held by trusts of which
the group member is a trustee or substantial beneficiary, with respect to
which shares the group member may be deemed to have sole or shared voting
and/or investment powers. This amount also includes options to purchase
137,956 shares of Common Stock granted to directors and executive officers
and 10,570 shares allocated to executive officers pursuant to the ESOP.
2
PROPOSAL I -- ELECTION OF DIRECTORS
The Company's Board of Directors is currently composed of nine members
each of whom is also a director of the Bank. Directors are generally elected to
serve for three-year terms or until their respective successors are elected and
qualified. The directors are divided into three classes with one-third of the
directors being elected annually.
The following table sets forth certain information regarding the
composition of the Company's Board of Directors, including terms of office and
beneficial ownership as of the Voting Record Date. It is intended that the
proxies solicited on behalf of the Board of Directors (other than proxies in
which the vote is withheld as to the nominees) will be voted at this Meeting FOR
the election of the following nominees. If any nominee is unable to serve, the
shares represented by all valid proxies will be voted for the election of such
substitute as the Board of Directors may recommend. At this time, the Board of
Directors knows of no reason why any nominee might be unable to serve if
elected. Except as set forth herein, there are no arrangements or
understandings between any director or nominee and any other person pursuant to
which such director or nominee was selected.
Percent
Director Term to Beneficial of
Name Age Positions Held with the Company Since/(1)/ Expire Ownership/(2)/ Class
- --------------------- --- ---------------------------------- ---------- ------- -------------- --------
NOMINEES
Karl H. Erickson 68 Chairman of the Board 1981 2000 53,933/(3)/ 4.76%
Robert C. Hauser 60 Director 1995 2000 82,658/(4)/ 7.29
Larry U. Larson 66 Director 1983 2000 37,908/(5)/ 3.34
DIRECTORS REMAINING IN OFFICE
Adam A. Jahns 68 Director 1995 1998 28,208 2.49
Wesley E. Lindberg 62 Director and Secretary 1987 1998 36,708/(6)/ 3.24
John R. Perkins 52 Executive Vice President, Chief 1982 1998 67,677/(7)/ 5.86
Operating Officer and Director
Richard W. Malmgren 63 Director 1978 1999 14,208/(8)/ 1.25
David R. Rydell 56 Director 1978 1999 45,258/(9)/ 3.99
C. Steven Sjogren 51 President, Chief Executive 1978 1999 89,405/(10)/ 7.67
Officer and Director
- -------------------------
/(1)/ Includes service as a director of the Bank.
/(2)/ Includes shares held directly, shares allocated to such individuals
pursuant to the ESOP as well as 5,208 shares subject to options granted
to each non-employee director and shares held by controlled corporations,
and family members, with respect to which shares the listed individuals
or group members may be deemed to have sole or shared voting and
investment power.
/(3)/ Includes 48,725 shares owned by a trust of which Mr. Erickson is a
beneficiary.
/(4)/ See footnote 2 on page 2 of this proxy statement for information
regarding Mr. Hauser's share ownership.
/(5)/ Includes 16,200 shares held by Mr. Larson's spouse.
/(6)/ Includes 1,467 shares held by Mr. Lindberg's spouse and 2,640 shares held
in Mr. Lindberg's account under his firm's profit-sharing plan.
/(7)/ See footnote 3 on page 2 of this proxy statement for information
regarding Mr. Perkins' share ownership.
/(8)/ Includes 195 shares held by Mr. Malmgren's spouse.
/(9)/ Includes 16,950 shares held by Mr. Rydell's spouse, 4,650 shares held by
his children and 1,500 shares held by a benefit plan of Bergstrom Inc. of
which Mr. Rydell is the President.
/(10)/ See footnote 1 on page 2 of this Proxy Statement for information
regarding Mr. Sjogren's share ownership.
3
The principal occupation of each Director of the Company is set forth
below. All Directors have held their present position for at least five years
unless otherwise indicated.
KARL H. ERICKSON. Mr. Erickson retired as the President of Amerock
Corporation, Window Hardware Division, a manufacturer of custom window hardware.
Mr. Erickson had held this position with Amerock since 1988 and previously
served as Vice President of this division since 1976. Mr. Erickson became
Chairman of the Board of the Company in April 1992.
ROBERT C. HAUSER. Mr. Hauser is President and Chief Executive Officer of
Hausers Inc., a lumber and building materials supplier located in Rockford,
Illinois. Mr. Hauser has been a Director of HomeBanc since January 1995.
LARRY U. LARSON. Mr. Larson recently retired from Larson and Darby, Inc.,
an architectural, engineering, and planning firm located in Rockford, Illinois.
He was one of the five founding partners of the firm and currently serves as a
consultant to Larson and Darby, Inc. and to LAD Project Management.
ADAM A. JAHNS. Mr. Jahns retired in 1995 as Chairman of the Board of
Cragin Financial Corp., a large Chicago-based thrift holding company purchased
by LaSalle National Bank Group, and its subsidiary, Cragin Federal Bank. Mr.
Jahns held these positions from January 1993 until May 1995. Mr. Jahns was
Chairman and Chief Executive Officer of Cragin Federal Bank from 1975 to 1992.
In addition to his 38 years of service to Cragin Financial, Mr. Jahns served as
a Director or officer of both the state and national thrift industry trade
organizations, as well as, the Federal Home Loan Bank of Chicago and the Bank
for Financial Institutions. Mr. Jahns has been a Director of HomeBanc since
January 1995.
WESLEY E. LINDBERG. Mr. Lindberg is a partner with the law firm of Reno,
Zahm, Folgate, Lindberg & Powell, Rockford, Illinois, which has rendered legal
services to HomeBanc. He has been a Director and Secretary of the Company since
1989 and a Director of HomeBanc since 1987 and its Secretary since 1989.
JOHN R. PERKINS. Mr. Perkins is Executive Vice President and Chief
Operating Officer of the Company and the Bank, positions he has held since 1989
and 1983, respectively. Mr. Perkins joined HomeBanc as Senior Vice President in
1982 and was elected Executive Vice President in 1983. Mr. Perkins was appointed
to the Board of Directors in 1982. He has also served as Secretary, Treasurer
and a Director of the subsidiaries of HomeBanc since 1985. Prior to joining
HomeBanc, Mr. Perkins had an executive position in the savings and loan industry
and worked as a Certified Public Accountant with an international accounting
firm. Mr. Perkins received his undergraduate degree in Accounting and Business
from Northern Illinois University.
RICHARD W. MALMGREN. Mr. Malmgren is a retired executive. Prior to his
retirement in 1993, Mr. Malmgren was a consultant for Clarcor, a products
packaging company located in Rockford, Illinois, with which he had been
associated for over 35 years and previously served as a Director and Group Vice
President. Mr. Malmgren served as Vice Chairman of the Board of the Bank from
1983 to 1985 and Chairman of the Board of the Bank from 1985 to 1992. Mr.
Malmgren served as Chairman of the Board of the Company from 1989 until 1992.
DAVID R. RYDELL. Mr. Rydell is the President of Bergstrom Inc., a
manufacturer of vehicle HVAC systems located in Rockford, Illinois. Mr. Rydell
has held this position since 1986. Prior to this time, Mr. Rydell held a
variety of positions with Bergstrom.
C. STEVEN SJOGREN. Mr. Sjogren is the President, Chief Executive Officer
and a Director of the Company and the Bank and the Chairman of the Board of the
Bank's subsidiaries. Mr. Sjogren was elected President and Chief Executive
Officer of the Company in 1989. Mr. Sjogren joined HomeBanc in 1972 and was
elected Vice President in 1974. Mr. Sjogren was elected Executive Vice President
of the Bank in 1976, and President and Chief Executive Officer of the Bank in
1981. Mr. Sjogren was appointed to the Board of Directors of the Bank in 1978.
Mr. Sjogren received his masters degree in Business Administration from Northern
Illinois University. Mr. Sjogren is also a graduate of the Advanced Management
Program of the University of Southern California Graduate School of Business
Administration and the Graduate School of Savings and Loans at Indiana
University. Mr. Sjogren was an Assistant Instructor/Lecturer in Finance and
Economics at Rockford College, Rockford, Illinois. He is a Director of the
Illinois League of Savings Institutions and a Director of the Swedish American
Health System and Foundation. He serves as a member of various civic
organizations.
4
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
Meetings of the Company's Board of Directors are generally held on a
quarterly basis. The Board of Directors met five times during the year ended
December 31, 1996. During 1996, no director attended fewer than 75% of the
aggregate of the total number of meeting of the Board of Directors and the total
number of meetings held by committees on which he served. The Company's Board
of Directors has standing Compensation, Stock Option and Audit Committees.
The Compensation Committee is composed of Directors Jahns, Larson, Lindberg
and Rydell. The Compensation Committee is responsible for making
recommendations of the salaries for all officers. The Compensation Committee
met three times during 1996.
The Audit Committee was established in December of 1990 and is composed of
outside Directors Malmgren, Hauser and Larson. The Audit Committee reviews
audit reports and related matters to ensure effective compliance with regulatory
and internal policies and procedures. The Audit Committee met five times during
1996.
The Stock Option Committee, comprised of Directors Jahns, Larson and
Rydell, administers the Company's 1990 Stock and Option Incentive Plan, as well
as the Company's 1996 Premium Price Stock Option and Incentive Plan. This
committee met three times during 1996.
The entire Board of Directors acts as a Nominating Committee for selecting
nominees for election as directors. Nominations of persons for election to the
Board of Directors may be made only by or at the direction of the Board of
Directors or by any stockholder entitled to vote for the election of directors
who complies with the notice procedures set forth in the Bylaws of the Company.
Meetings of the Bank's Board of Directors, the principal subsidiary of the
Company, are generally held on a monthly basis. The Bank's Board of Directors
met 12 times during the year ended December 31, 1996. No incumbent director of
the Bank attended fewer than 75% of the aggregate of the total number of
meetings held by the Board of Directors and the total number of meetings held by
the committees of the board on which he served during 1996. The Board of
Directors of the Bank has standing Audit, Compensation, Commercial Loan and
Nominating Committees.
COMPENSATION OF DIRECTORS
Directors of the Company are not paid a fee for serving on the Company's
Board or Committees. Directors of the Bank were paid fees in the amount of
$1,000 per month during 1996. The Chairman of the Board of the Bank was paid an
additional $208 per month. For 1997, directors' fees will be $1,000 per month.
5
Compensation of Executive Officer
The following table sets forth information concerning the compensation paid
or granted to the Company's Chief Executive Officer and Executive Vice President
(the "Named Officers"). No other officer made in excess of $100,000 during 1996.
SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------------------------------------------------
Long-Term
Compensation
Annual Compensation/(1)/ ------------
Awards
- ------------------------------------------------------------------------------------------------------------------
Restricted Securities
Stock Underlying All Other
Salary Bonus Award(s) Options Compensation
Name and Principal Position Year ($)/2/ ($) ($) (#) ($)
- ------------------------------------------------------------------------------------------------------------------
C. Steven Sjogren, President, Chief 1996 $ 209,500 $--- --- 8,250 $ 45,622/3/
Executive Officer and Director 1995 202,000 --- --- 8,108 6,243
1994 202,000 --- --- --- 5,785
John R. Perkins, Executive Vice 1996 $ 128,500 $--- --- 5,650 $ 4,828/4/
President, Chief Operating Officer and 1995 124,000 --- --- 5,643 4,633
Director 1994 124,000 --- --- --- 5,140
- ------------------------------------------------------------------------------------------------------------------
/1/ Pursuant to Securities and Exchange Commission ("SEC") rules,
prerequisites and other personal benefits are not required to be report if
such amounts do not exceed, in the aggregate, the lesser of $50,000 or 10%
percent of the salary and bonus for each named executive officer. The
Named Officers did not receive any additional benefits or perquisites
which, in the aggregate, exceeded the lesser of $50,000 or 10% percent of
their salary and bonus.
/2/ Includes salary and board fees paid. Board fees paid to the Named
Officers totaled $12,000 in each of the years ended December 31, 1996, 1995
and 1994. Also includes amounts deferred at the election of the named
executive officers under the 401(k) Plan of $9,500, $9,240 and $9,240 by
Mr. Sjogren during 1996, 1995 and 1994, respectively, and $6,040, $5,600
and $5,495 by Mr. Perkins during 1996, 1995 and 1994, respectively.
/3/ Includes $1,440 of life insurance premiums paid by the Company in 1996 on
behalf of Mr. Sjogren. Also includes the Bank's contributions to Mr.
Sjogren's account under the ESOP valued at $2,776 for 1996 based upon the
market price of the Common Stock at year end and the Bank's contribution of
$1,875 and accrual of $39,531 to Mr. Sjogren's accounts under the 401(K)
Plan and Restoration Benefit Plan, respectively, during 1996.
/4/ Includes $1,054 of life insurance premiums paid by the Company in 1996 on
behalf of Mr. Perkins. Also includes contributions to Mr. Perkins' account
under the ESOP valued at $2,284 for 1996 based upon the market price of
the Common Stock at year end and the Bank's contribution of $1,490 to Mr.
Perkins' account under the 401(K) Plan during 1996.
6
The following table sets forth information regarding options granted during
1996 to the Named Officers. No stock appreciation rights ("SARs") were granted
during 1996.
======================================================================================================================
OPTION GRANTS IN LAST FISCAL YEAR
- ----------------------------------------------------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants for Option Term/1/
- ----------------------------------------------------------------------------------------------------------------------
Number of % of Total
Securities Options Exercise
Underlying Granted To or Base
Options Employees Price Expiration
Name Granted (#) In Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- ----------------------------------------------------------------------------------------------------------------------
C. Steven Sjogren 8,250 34% $21.00 03/20/06 $108,983 $276,128
John R. Perkins 5,650 23% $21.00 03/20/06 $ 74,637 $189,106
======================================================================================================================
/1/ Represents the potential realizable value of the option grant assuming
that the market price of the underlying security appreciates in value from
the date of grant to the end of the option term (10 years) at the
annualized rates as set forth in the table.
The following table provides information as to stock options awarded
to the Named Officers and the value of the options held by such individuals on
December 31, 1996. No options were exercised by the Named Officers during the
year ended December 31, 1996. To date, no SARs have been granted by the
Company.
======================================================================================================================
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
- ----------------------------------------------------------------------------------------------------------------------
Number of Securities Underlying Value of Unexercised In-the-
Unexercised Options at Money Options at FY-End
FY-End (#) ($) /1/
- ----------------------------------------------------------------------------------------------------------------------
Shares
Acquired Value
on Exercise Realized
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------------------------------------------------------------------------------------------------
C. Steven Sjogren --- $--- 37,250 --- $296,410 $---
John R. Perkins --- $--- 25,650 --- $203,504 $---
======================================================================================================================
/1/ The value of options granted is based upon the price of the Company's
Common Stock of $19.125 per share as quoted on The Nasdaq Stock Market on
December 31, 1996, less the exercise price of $21.00 per share with respect
to 8,250 and 5,650 shares, $14.75 per share with respect to 8,018 and
5,643 shares and exercise price of $6.67 per share with respect to the
remaining shares for Messrs. Sjogren and Perkins, respectively.
Employment Agreements
In 1990, the Bank entered into employment agreements with Messrs.
Sjogren and Perkins, and four other executive officers, which provided for
initial annual base salaries in amounts not less than the salaries in effect
immediately prior to the date of completion of the stock conversion. Messrs.
Sjogren and Perkins employment agreements were for a term of three years and the
four other executive officers employment agreements were for a term of one
year. Each of the agreements is automatically extended each July for an
additional one-year term unless either the Bank or the employee gives contrary
written notice. The current employment agreements for Messrs. Sjogren and
Perkins expire in July 1999; the agreements with the four other executive
officers expire in July 1997.
7
The employment agreements provide for termination upon the employee's
death, for cause or in certain events specified by Office of Thrift Supervision
("OTS") regulations. The employment agreements are terminable by the employee
upon 90 days' written notice to the Bank. The employment agreements for Messrs.
Sjogren and Perkins provide for payment to the employee of up to three years'
salary in the event there is a change in control of the Bank, where employment
terminates involuntarily in connection with such change in control or within
twelve months thereafter. Such termination payments are provided on a similar
basis in connection with the voluntary termination of employment, where the
change in control was at any time opposed by the Bank's Board of Directors. At
December 31, 1996, in the event of a change in control, the amounts payable to
Messrs. Sjogren and Perkins will be approximately $591,000 and $349,000,
respectively. The agreements also provide, among other things, for participation
in an equitable manner in employee benefits applicable to all other executive
personnel.
Defined Benefit Pension Plan
The Bank sponsors a defined benefit pension plan (the "Pension Plan"). The
Pension Plan provides that employees are eligible to participate in the Pension
Plan on the first January 1 or July 1 following the attainment of age 20 1/2,
and completion of six months of service.
A participant's normal retirement benefit under the Pension Plan is a
monthly benefit equal to 1.25% of his highest five-year average monthly earnings
multiplied by years of service (not to exceed 25 years). For participants whose
highest five-year average monthly earnings are in excess of their covered
compensation ($2,298 per month for a participant retiring in 1997 at age 65),
the normal retirement benefit described above is increased by an amount equal to
.65% of such excess multiplied by years of service (not to exceed 25 years). The
Pension Plan also provides that the monthly normal retirement benefit under this
formula may not be less than the benefit accrued under the prior plan benefit
formula.
Early retirement may be requested by a participant after attaining at least
age 55 and completing at least 10 years of service. The benefit payable at early
retirement is his accrued normal retirement benefit, reduced by 1/144th for each
of the first five years and 1/288th for each additional year his early
retirement date precedes his normal retirement date.
In the event of total and permanent disability, a participant becomes fully
vested with respect to his accrued normal retirement benefit. The participant
may receive an actuarially reduced benefit at the time of his disability
retirement. In the event of termination of employment for any reason other than
death, disability or early or normal retirement, a participant is entitled to
100% of his accrued normal retirement benefit, provided that he has completed
five years of service.
The normal form of benefit is monthly income payable for life. A
participant may elect, at the time of his retirement, an optional form of
benefit which is the actuarial equivalent of the normal form of benefit, subject
to the joint and survivor benefit requirements for married participants.
Participants make no contributions to the Pension Plan. The employer pays the
entire cost of the Pension Plan.
The following table illustrates annual pension benefits payable upon
retirement to employees based on various levels of earnings and years of service
and assuming payment in the form of a straight life annuity. For purposes of the
Pension Plan, the participants covered compensation includes all cash
compensation (excluding board fees). Such payments are not subject to offset for
social security benefits payable. At December 31, 1996, Messrs. Sjogren and
Perkins had 25 and 16 years, respectively, of credited service under the Pension
Plan.
Average Annual Years of Service
---------------------------------------------------------
Compensation/1/ 15 20 25 30 35
- -------------------- ------- ------- ------- ------- -------
40,000 $ 8,873 $11,830 $14,788 $14,788 $14,788
80,000 20,273 27,030 33,788 33,788 33,788
120,000 31,673 42,230 52,788 52,788 52,788
160,000 40,223 53,630 67,038 67,038 67,038
200,000 40,223 53,630 67,038 67,038 67,038
240,000 40,223 53,630 67,038 67,038 67,038
- -------------------------
/1/ 1996 annual earnings limited to $150,000 by IRS regulations.
8
Report of Compensation Committee
The Compensation Committee (the "Committee") of the Board of Directors for
1996 was comprised of four outside directors: Larry Larson, Adam Jahns, Wesley
Lindberg and David Rydell. The Committee reviews all salary and benefit related
compensation for all executive officers. The Committee recommendations are
reviewed by the full Board; however, the recommendations for the Chief Executive
Officer and Executive Vice President are reviewed by only the outside directors.
In accordance with SEC rules designed to enhance disclosure of public companies'
policies regarding executive compensation, the following is a report submitted
by the above-listed committee members in their capacity as the Board's
compensation committee, addressing the Company's compensation policy as it
related to the named executive officers for 1996.
Compensation Policy. The goal of the Company's executive compensation
policy is to ensure that an appropriate relationship exists between executive
compensation and the creation of stockholder value, while at the same time
motivating and retaining key employees. To achieve this goal, the Company's
executive compensation policies integrate annual base compensation with bonuses
based upon corporate performance and individual initiatives and performance.
Measurement of corporate performance is based on Company goals that have been
established by the Board and reviewed with all executive officers. When the
performance goals are achieved, or exceeded, bonus compensation is awarded based
upon an established schedule. Annual cash compensation, together with the
payment of performance incentive and deferred compensation is designed to
attract and retain qualified executives and to ensure that such executives have
a continuing stake in the long-term success of the Company.
Performance Based Compensation. In evaluating performance based bonus
compensation under the Management Incentive Compensation Plan, the Committee
examines the Company's capital ratios, return on average assets, return on
average equity, ratio of non-performing assets to total assets, loan volume and
net income along with other performance goals more closely aligned with specific
responsibilities of each executive. Under the Company's policy, all of the
performance goals must be met before bonus compensation is granted. Bonus
compensation is exclusively tied to performance goals.
Base Compensation. With respect to base salary compensation for executives
of the Company, comparisons are utilized to establish base salaries that are
within the range of those persons holding comparable responsible positions at
other companies, both regionally and nationally. These comparisons are made with
institutions of similar asset size and also with local financial institutions.
In addition, other factors are taken into consideration, such as cost of living
increases, competitors' performance, as well as the individual's past
performance and potential with the Company.
The Committee believes that linking executive compensation to corporate
performance results in a better alignment of compensation with corporate goals
and stockholders interest. As performance goals are met or exceeded, resulting
in increased value to stockholders, executives are rewarded commensurately. The
Committee believes that compensation levels during 1996 adequately reflect the
Company's compensation goals and policies.
9
Fiscal 1996 Compensation. For 1996, the Company's executive compensation
program consisted of only base salary, adjusted from the prior year, for all
executives, excluding the Chief Executive Officer for whom base salary remained
identical to his 1995 salary. No bonus compensation was awarded for 1996 as all
of the performance goals were not met.
In 1993, Section 162(m) was added to the Internal Revenue Code, the effect
of which is to eliminate the deductibility of compensation over $1 million, with
certain exclusions, paid to each of certain highly compensated executive
officers of publicly held corporations, such as the Company. Section 162(m)
applies to remuneration (both cash and non-cash) that would otherwise be
deductible for tax years beginning on or after January 1, 1996 unless expressly
excluded. Regulations implementing Section 162(m) were adopted by the Internal
Revenue Service in 1996 Although the current compensation of each of the
Company's executive officers is below the $1 million threshold, the Company
intends to consider the new provision in establishing future compensation
policies.
Larry Larson Adam Jahns Wesley Lindberg David Rydell
Stock Performance Graph
The following graph shows the performance of HomeCorp's Common Stock in
comparison to the Standard & Poor's Financial Index ("S&P Index") and selected
publicly traded thrift institutions as a group ("Selected Thrift Index"), based
on an assumed $100 investment on December 31, 1991 and reinvestment of dividends
with respect to companies in the two comparative groups.
[Performance Graph Appears Here]
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
---------- ---------- ---------- ---------- ---------- ----------
HomeCorp, Inc. $100.00 $175.00 $224.89 $179.08 $276.94 $318.59
Selected Thrift Index 100.00 132.44 161.07 152.57 239.38 306.10
S&P Index 100.00 123.37 137.06 132.22 215.77 291.65
10
Certain Transactions
The Bank, like many financial institutions, has followed a policy of
granting loans to eligible officers, directors and employees for the financing
of their personal residences. The Bank's policy does not include the granting of
unsecured personal loans. Under the Bank's current loan policy, loans to such
individuals are made in the ordinary course of business and on the same terms
and conditions as those of comparable transactions with non-affiliated parties
prevailing at the time the loan is made, in accordance with the Bank's
underwriting guidelines, and do not involve more than the normal risk of
collectibility or present other unfavorable features. Loans to executive
officers and directors must be approved by a majority of the disinterested
directors and loans to other officers and employees must be approved by the
Bank's loan committee. No loans were made by the Bank at preferential rates or
terms to any individual director, executive officer or their immediate family.
Director Lindberg is a partner in the firm of Reno, Zahm, Folgate, Lindburg
& Powell which has from time to time rendered legal services to the Bank. Fees
paid by the Bank during 1996 to Reno, Zahm, Folgate, Lindberg & Powell did not
exceed five percent of such firm's gross revenues for its last fiscal year.
PROPOSAL II -- RATIFICATION OF APPOINTMENT OF AUDITORS
On February 21, 1995, the Company dismissed KPMG Peat Marwick LLP as their
independent auditors. The change of independent auditors was recommended by the
Audit Committee and subsequently approved by the Board of Directors. There were
no disagreements between the Company and KPMG Peat Marwick LLP on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope of procedure in connection with the audit of the consolidated financial
statements of the Company for two years ended December 31, 1994 and subsequent
interim periods through February 21, 1995 which, if not resolved to the
satisfaction of KPMG Peat Marwick LLP, would have caused them to make reference
to the subject matter of such disagreements in connection with their report. The
reports of KPMG Peat Marwick llp on the consolidated financial statements of the
Company for the two years ended December 31, 1994 did not contain an adverse
opinion or a disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles.
Effective March 1, 1995, the Board of Directors engaged Ernst & Young llp
to be its auditors. The Board of Directors has approved the appointment of Ernst
& Young llp as the Company's auditors for the year ending December 31, 1997,
subject to the ratification of the appointment by the Company's stockholders. A
representative of Ernst & Young llp is expected to attend the Meeting to respond
to appropriate questions and will have an opportunity to make a statement if he
or she so desires.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S AUDITORS
FOR THE YEAR ENDING DECEMBER 31, 1997
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials for
next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's office, 1107 East State
Street, Rockford, Illinois no later than November 19, 1997. Any such proposal
shall be subject to the requirements of the proxy rules adopted under the
Securities Exchange Act of 1934, as amended.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matter should properly come before the Meeting, it is
intended that holders of the proxies will act in accordance with their best
judgment.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitation by mail,
directors, officers and regular employees of the Company may solicit proxies
personally or by facsimile, telegraph or telephone without additional
compensation.
11
REVOCABLE PROXY
HOMECORP, INC.
ANNUAL MEETING OF STOCKHOLDERS
APRIL 22, 1997
The undersigned hereby appoints the Board of Directors of HomeCorp, Inc.
(the "Company"), and the survivor of them, 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 (the "Meeting"), to be held on April 22, 1997 in the
Wallingford Center at the Best Western Clock Tower Resort located at 7801 East
State Street, Rockford, Illinois at 4:00 p.m., Rockford, Illinois time, and at
any and all adjournments thereof, as set forth below.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE PROPOSALS STATED. IF ANY OTHER BUSINESS IS PRESENTED
AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN THEIR
BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE MEETING.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned may revoke this proxy any time before it is voted. The
undersigned may revoke this proxy at any time prior to its exercise by filing
with the Secretary a duly executed revocation or a proxy bearing a later date,
or attending the Meeting and voting in person (although attendance at the
Meeting will not in and of itself constitute revocation of a proxy). Any
written notice revoking a proxy should be delivered to the Secretary of the
Company at 1107 E. State Street, Rockford, Illinois 61104.
The undersigned acknowledges receipt from the Company, prior to the
execution of this Proxy, of Notice of the Annual Meeting, a Proxy Statement
dated March 19, 1997, and an Annual Report for the year ended December 31, 1996.
PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS PROXY.
. DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED .
- --------------------------------------------------------------------------------
- ---- ----
HOMECORP, INC.
ANNUAL MEETING - April 22, 1997
1. ELECTION OF DIRECTORS
1 - Karl H. Erickson, 2 - Robert C. Hauser, 3 - Larry U. Larson
[_] FOR ALL [_] WITHHOLD ALL [_] FOR ALL EXCEPT
(Instructions: To withhold authority to
vote for any indicated nominee, mark
"FOR ALL EXCEPT" and write the number(s) _____________________________________
you wish to withhold authority to vote
for in the box provided to the right.) _____________________________________
2. The ratification of the appointment of Ernst & Young LLP as auditors for the
Company for the fiscal year ending December 31, 1997.
[_] FOR [_] AGAINST [_] ABSTAIN
In their discretion, the proxies are authorized to vote on any other business
that may properly come before the Meeting or any adjournment thereof.
The Board of Directors recommends a vote "FOR" the listed proposals.
Address Change?
Mark Box [_]
Indicate changes below:
Date _________________________
NO. OF SHARES
______________________________
______________________________
Signature(s) in Box
Please sign exactly as your name appears hereon. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title.
If shares are held jointly, each holder should sign.
- ---- ----