<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
<TABLE>
<S> <C>
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
[x] Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Reliance Bancshares, Inc.
-----------------------------------------------
(Name of Registrant as Specified in Its Charter)
ALLAN T. BACH, PRESIDENT OF REGISTRANT
-----------------------------------------------------------------------
(Name of Person(s) filing Proxy Statement, if other than the Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1. Title of each class of securities to which transaction applies:
---------------------------------------------------------------
2. Aggregate number of securities to which transaction applies:
---------------------------------------------------------------
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
---------------------------------------------------------------
4. Proposed maximum aggregate value of transaction:
----------------------------------------------------------------
5. Total fee paid:
----------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1. Amount Previously Paid:
----------------------------------------------------------------
2. Form, Schedule or Registration Statement No.:
----------------------------------------------------------------
3. Filing Party:
----------------------------------------------------------------
4. Date Filed:
----------------------------------------------------------------
<PAGE> 2
RELIANCE BANCSHARES, INC.
3140 SOUTH 27TH STREET
MILWAUKEE, WISCONSIN 53215
(414) 671-2222
September 24, 1996
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders
(the "Annual Meeting") of Reliance Bancshares, Inc. (the "Company"), the
holding company for Reliance Savings Bank (the "Bank"), which will be held on
October 28, 1996, at 2:00 p.m., Milwaukee time, at The Quality Inn, 5311 South
Howell Avenue, Milwaukee, Wisconsin 53207.
The attached Notice of Annual Meeting of Shareholders and Proxy
Statement describe the formal business to be conducted at the Annual Meeting.
We also have enclosed a copy of the Company's Annual Report for the fiscal year
ended June 30, 1996. Directors and officers of the Company, as well as
representatives of Meier, Clancy, George & Co., the Company's independent
auditors, will be present at the Annual Meeting to respond to any questions
that our shareholders may have.
The vote of every shareholder is important to us. Please sign and
return the enclosed appointment of proxy form promptly in the postage-paid
envelope provided, regardless of whether you are able to attend the Annual
Meeting in person. If you attend the Annual Meeting, you may vote in person
even if you have already mailed your Proxy.
On behalf of the Board of Directors and all of the employees of the
Company and the Bank, I wish to thank you for your continued support.
Sincerely yours,
Allan T. Bach
President and Chief Executive Officer
<PAGE> 3
RELIANCE BANCSHARES, INC.
3140 South 27th Street
Milwaukee, Wisconsin 53215
(414) 671-2222
___________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 28, 1996
___________________
TO THE HOLDERS OF COMMON STOCK OF RELIANCE BANCSHARES, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Annual Meeting") of Reliance Bancshares, Inc. (the "Company") will be held on
Monday, October 28, 1996, at 2:00 p.m., Milwaukee time, at The Quality Inn,
5311 South Howell Avenue, Milwaukee, Wisconsin 53207.
The Annual Meeting is for the purpose of considering and voting upon
the following matters, all of which are set forth more completely in the
accompanying Proxy Statement:
1. The election of one director for a one-year term, two
directors for a two-year term and two directors for a
three-year term, and in each case until their successors are
elected;
2. The ratification of the appointment of Meier, Clancy, George &
Co. as independent auditors of the Company for the fiscal year
ending June 30, 1997; and
3. Such other matters as may properly come before the Annual
Meeting or any adjournments or postponements thereof. The
Board of Directors is not aware of any other such business.
The Board of Directors has established September 6, 1996 as the record
date for the determination of shareholders entitled to notice of and to vote at
the Annual Meeting and any adjournments or postponements thereof. Only
shareholders of record as of the close of business on that date will be
entitled to vote at the Annual Meeting or any adjournments or postponements
thereof. In the event there are not sufficient votes for a quorum or to
approve or ratify any of the foregoing proposals at the time of the Annual
Meeting, the Annual Meeting may be adjourned or postponed in order to permit
further solicitation of proxies by the Company.
BY ORDER OF THE BOARD OF DIRECTORS,
Milwaukee, Wisconsin Carol A. Barnharst
September 24, 1996 Vice President, Chief Financial Officer,
Secretary and Treasurer
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. YOUR VOTE IS
IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE
COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY FORM PROMPTLY IN THE
ENVELOPE PROVIDED.
<PAGE> 4
RELIANCE BANCSHARES, INC.
3140 South 27th Street
Milwaukee, Wisconsin 53215
(414) 671-2222
________________________________________________________
PROXY STATEMENT
_________________________________________________________
ANNUAL MEETING OF SHAREHOLDERS
To Be Held On October 28, 1996
__________________________________________________________
This Proxy Statement is being furnished to holders of common stock,
$1.00 par value per share (the "Common Stock") of Reliance Bancshares, Inc.
(the "Company") in connection with the solicitation on behalf of the Board of
Directors of the Company of proxies to be used at the Annual Meeting of
Shareholders (the "Annual Meeting") to be held on Monday, October 28, 1996, at
2:00 p.m., Milwaukee time, at The Quality Inn, 5311 South Howell Avenue,
Milwaukee, Wisconsin 53207, and at any adjournments or postponements thereof.
The 1996 Annual Report to Shareholders, including the consolidated
financial statements for the fiscal year ended June 30, 1996, accompanies this
Proxy Statement and appointment form of proxy (the "proxy") which are first
being mailed to shareholders on or about September 24, 1996.
Only shareholders of record as of the close of business on September
6, 1996 (the "Voting Record Date") will be entitled to vote at the Annual
Meeting. On the Voting Record Date, there were 2,562,344 shares of Common
Stock outstanding, and the Company had no other class of securities
outstanding.
The presence, in person or by proxy, of the holders of at least a
majority of the total number of shares of Common Stock entitled to vote is
necessary to constitute a quorum at the Annual Meeting. As to the election of
directors, the proxy being provided by the Board of Directors enables a
shareholder to vote for the election of the nominees proposed by the Board, or
to withhold authority to vote for one or more of the nominees proposed by the
Board. Article VI of the Company's Articles of Incorporation provides that
there will be no cumulative voting by shareholders for the election of the
Company's directors. Under the Wisconsin Business Corporation Law, directors
are elected by a plurality of the votes cast with a quorum present. The
affirmative vote of a majority of the total votes cast in person or by proxy is
necessary to ratify the appointment of Meier, Clancy, George & Co. as
independent auditors for the fiscal year ending June 30, 1997. Abstentions are
included in the determination of shares present and voting for purposes of
whether a quorum exists, while broker non-votes are not. Neither abstentions
nor broker non-votes are counted in determining whether a matter has been
approved. In the event there are not sufficient votes for a quorum or to
approve or ratify any proposal at the time of the Annual Meeting, the Annual
Meeting may be adjourned or postponed in order to permit the further
solicitation of proxies.
<PAGE> 5
As provided in the Company's Articles of Incorporation, record holders
of Common Stock who beneficially own in excess of 10% of the outstanding shares
of Common Stock (the "10% Limit") are not entitled to any vote in respect of
the shares held in excess of the 10% Limit. A person or entity is deemed to
beneficially own shares owned by an affiliate of, as well as such persons
acting in concert with, such person or entity. The Company's Articles of
Incorporation authorize the Board to make all determinations necessary to
implement and apply the 10% Limit, including determining whatever persons or
entities are acting in concert. The provisions of the Company's Articles of
Incorporation relating to the 10% limit do not apply to an acquisition of more
than 10% of the shares of Common Stock if such acquisition has been approved by
a majority of disinterested directors; provided such approval shall be
effective only if obtained at a meeting where a quorum of disinterested
directors is present.
Shareholders are requested to vote by completing the enclosed proxy
and returning it signed and dated in the enclosed postage-paid envelope.
Shareholders are urged to indicate their votes in the spaces provided on the
proxy. Proxies solicited by the Board of Directors of the Company will be
voted in accordance with the directions given therein. Where no instructions
are given, signed proxies will be voted FOR the election of the nominees for
director named in this Proxy Statement and FOR the ratification of the
appointment of Meier, Clancy, George & Co. as independent auditors of the
Company for the fiscal year ending June 30, 1997. Returning your completed
proxy will not prevent you from voting in person at the Annual Meeting should
you be present and wish to do so.
Any shareholder giving a proxy has the power to revoke it any time
before it is exercised by: (i) filing with the Secretary of the Company
written notice thereof (Carol A. Barnharst, Secretary, Reliance Bancshares,
Inc., 3140 South 27th Street, Milwaukee, Wisconsin 53215); (ii) submitting a
duly executed proxy bearing a later date; or (iii) appearing at the Annual
Meeting and giving the Secretary notice of his or her intention to vote in
person. If you are a shareholder whose shares are not registered in your own
name, you will need additional documentation from your record holder to vote
personally at the Annual Meeting. Proxies solicited hereby may be exercised
only at the Annual Meeting and any adjournments or postponements thereof and
will not be used for any other meeting.
The cost of solicitation of proxies by mail on behalf of the Board of
Directors will be borne by the Company. Proxies also may be solicited by
personal interview or by telephone, in addition to the use of the mails by
directors, officers and regular employees of the Company and Reliance Savings
Bank (the "Bank"), without additional compensation therefor. The Company also
has made arrangements with brokerage firms, banks, nominees and other
fiduciaries to forward proxy solicitation materials for shares of Common Stock
held of record by the beneficial owners of such shares. The Company will
reimburse such holders for their reasonable out-of-pocket expenses.
Proxies solicited hereby will be returned to the Board of Directors
and will be tabulated by inspectors of election designated by the Board of
Directors who will not be employed by, or a director of, the Company or any of
its affiliates.
-2-
<PAGE> 6
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the beneficial ownership of shares of
Common Stock as the Voting Record Date by: (i) each shareholder known to the
Company to beneficially own more than 5% of the shares of Common Stock
outstanding, as disclosed in certain reports regarding such ownership filed
with the Company and with the Securities and Exchange Commission (the "SEC") in
accordance with Sections 13(d) or 13(g) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"); (ii) each director of the Company; (iii) the
executive officer of the Company appearing in the Summary Compensation Table
below; and (iv) all directors and executive officers as a group. Members of
the Board of Directors of the Company also serve as directors of the Bank.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY
NAME OWNED (1) PERCENT OF CLASS
---- -------------------- ----------------
<S> <C> <C>
Reliance Savings Bank Employee Stock
Ownership Trust (2) . . . . . . . . . . . . . . . . . 89,125 3.5%
Allan T. Bach (3) . . . . . . . . . . . . . . . . . . . . 25,817 1.0
Carol A. Barnharst (3) . . . . . . . . . . . . . . . . . 31,700 1.2
O. William Held . . . . . . . . . . . . . . . . . . . . . 27,119 1.1
John T. Lynch . . . . . . . . . . . . . . . . . . . . . . 31,250 1.2
Marjorie A. Spicuzza (4) . . . . . . . . . . . . . . . . 31,250 1.2
All directors and executive officers
as a group (5 persons) . . . . . . . . . . . . . . . 147,136 5.7%
- --------------------
</TABLE>
(1) Unless otherwise indicated, includes shares of Common Stock held
directly by the individuals as well as by members of such individuals'
immediate family who share the same household, shares held in trust and
other indirect forms of ownership over which shares the individuals
exercise sole or shared voting power and/or investment power.
Fractional shares of Common Stock held by certain executive officers
under the Reliance Savings Bank Employee Stock Ownership Plan (the
"ESOP") have been rounded to the nearest whole share.
(2) Emjay Corporation (the "Trustee") is the trustee for the Reliance
Savings Bank Employee Stock Ownership Trust. The Trustee's address is
725 West Glendale Avenue, Glendale, Wisconsin 53209.
(3) Includes 1,267 shares of Common Stock allocated to certain executive
officers under the ESOP, for which such individuals possess shared
voting power, of which approximately 817 shares and 450 shares have
been allocated to the accounts of Mr. Bach and Ms. Barnharst,
respectively.
(4) Of the 31,250 shares indicated as beneficially owned by Ms. Spicuzza,
10,000 are owned by her sister who has sole voting and investment power
over such shares, and as to which Ms. Spicuzza disclaims beneficial
ownership.
-3-
<PAGE> 7
MATTERS TO BE VOTED ON AT THE ANNUAL MEETING
MATTER 1.
ELECTION OF DIRECTORS
The Articles of Incorporation of the Company provide that at the first
annual meeting of shareholders, directors of the Company will be divided into
three classes which are as equal in number as possible, and directors of the
first class will be elected to hold office for a term expiring at the first
succeeding annual meeting, directors of the second class will be elected to
hold office for a term expiring at the second succeeding annual meeting, and
directors of the third class will be elected to hold office for a term expiring
at the third succeeding annual meeting, and in each case until their successors
are elected and qualified. At each subsequent annual meeting of shareholders,
one class of directors, or approximately one-third of the total number of
directors, will be elected for a term of three years. There are no family
relationships among the directors and/or executive officers of the Company. No
person being nominated as a director is being proposed for election pursuant to
any agreement or understanding between any person and the Company.
Unless otherwise directed, each proxy executed and returned by a
shareholder will be voted FOR the election of the nominees for director listed
below. If any person named as a nominee should be unable or unwilling to stand
for election at the time of the Annual Meeting, the proxies will nominate and
vote for any replacement nominee or nominees recommended by the Board of
Directors. At this time, the Board of Directors knows of no reason why any of
the nominees listed below may not be able to serve as a director if elected.
The following tables present information concerning the nominees for
director, including tenure as a director of the Bank. All of the following
nominees have served as a director of the Company since the Company's formation
in November 1995.
<TABLE>
<CAPTION>
POSITION WITH THE COMPANY DIRECTOR
AND PRINCIPAL OCCUPATION OF THE BANK
NAME AGE DURING THE PAST FIVE YEARS SINCE
---- --- -------------------------- -------------
NOMINEE FOR DIRECTOR FOR ONE-YEAR TERM EXPIRING IN 1997
<S> <C> <C>
John T. Lynch 63 Director of the Company and the 1988
Bank; From 1984 to 1995, partner
in the law firm of Duggan Lynch &
Fons in Milwaukee, Wisconsin;
currently a solo practitioner.
NOMINEES FOR DIRECTOR FOR TWO-YEAR TERM EXPIRING IN 1998
Allan T. Bach 63 Chairman of the Board of Directors 1991
of the Company and President, Chief
Executive Officer and Director of the
Company and the Bank.
O. William Held 67 Chairman of the Board of Directors 1985
of the Bank and Director of the
Company and the Bank; Prior to his
retirement in 1991, Mr. Held served
as the President and Chief Executive
Officer of the Bank from 1985 to 1991.
</TABLE>
-4-
<PAGE> 8
<TABLE>
<CAPTION>
POSITION WITH THE COMPANY DIRECTOR
AND PRINCIPAL OCCUPATION OF THE BANK
NAME AGE DURING THE PAST FIVE YEARS SINCE
---- --- -------------------------- -------------
<S> <C> <C>
NOMINEES FOR DIRECTOR FOR THREE-YEAR TERM EXPIRING IN 1999
Carol A. Barnharst 53 Vice President, Chief Financial Officer, 1993
Secretary, Treasurer and Director of
the Company; Vice President, Chief
Financial Officer and Director of the
Bank; Ms. Barnharst has served as
Vice President of the Bank since 1981
and as Chief Financial Officer of the
Bank since 1994.
Marjorie A. Spicuzza 72 Director of the Company and the Bank; 1980
Prior to her retirement in 1985, Ms. Spicuzza
served as the President and Chief Executive
Officer of the Bank from 1980 to 1985.
</TABLE>
THE AFFIRMATIVE VOTE OF A PLURALITY OF THE VOTES CAST IS REQUIRED FOR
THE ELECTION OF DIRECTORS. UNLESS OTHERWISE SPECIFIED, THE SHARES OF COMMON
STOCK REPRESENTED BY THE PROXIES SOLICITED HEREBY WILL BE VOTED IN FAVOR OF THE
ELECTION OF THE ABOVE-DESCRIBED NOMINEES. THE BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE FOR ELECTION OF THE NOMINEES FOR DIRECTOR.
MATTER 2.
RATIFICATION OF APPOINTMENT OF AUDITORS
The Company's independent auditors for the fiscal year ended June 30,
1996 were Meier, Clancy, George & Co. The Board of Directors of the Company
has reappointed Meier, Clancy, George & Co. to perform the audit of the
Company's financial statements for the fiscal year ending June 30, 1997.
Representatives of Meier, Clancy, George & Co. will be present at the Annual
Meeting and 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 the
Company's shareholders.
UNLESS MARKED TO THE CONTRARY, THE SHARES OF COMMON STOCK REPRESENTED
BY THE ENCLOSED PROXY WILL BE VOTED FOR RATIFICATION OF THE APPOINTMENT OF
MEIER, CLANCY, GEORGE & CO. AS THE INDEPENDENT AUDITORS OF THE COMPANY. THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF
MEIER, CLANCY, GEORGE & CO. AS THE INDEPENDENT AUDITORS OF THE COMPANY.
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Company was organized on November 10, 1995. Regular meetings of
the Board of Directors of the Company generally are held on a monthly basis.
During the fiscal year ended June 30, 1996, the Board of Directors of the
Company held one regular meeting. No incumbent director attended fewer than
75% of the aggregate total number of meetings of the Board of Directors held
and the total number of committee meetings on which such director served during
the fiscal year ended June 30, 1996.
-5-
<PAGE> 9
The Board of Directors of the Company has a standing Audit Committee
and Compensation Committee. The Audit Committee consists of Messrs. O. William
Held, John T. Lynch and Ms. Marjorie A. Spicuzza. The Audit Committee reviews
the scope and timing of the audit of the Company's financial statements by the
Company's independent public accountants and will review with the independent
public accountants the Company's management policies and procedures with
respect to auditing and accounting controls. The Audit Committee also will
review and evaluate the independence of the Company's accountants, and
recommend to the Board the engagement, continuation or discharge the Company's
accountants. In addition, the Audit Committee will direct the activities of
the Bank's internal audit. The Company's Audit Committee met once during the
fiscal year ended June 30, 1996.
The Board of Directors of the Bank has established a Compensation
Committee consisting of Messrs. O. William Held, John T. Lynch and Ms. Marjorie
A. Spicuzza who are neither officers nor employees of the Company or the Bank
("Outside Directors"). The Compensation Committee of the Bank met once during
the fiscal year ended June 30, 1996. During the fiscal year ended June 30,
1996, all executive officer compensation was paid by the Bank and the
compensation policies were determined by the Compensation Committee of the
Bank, and the Company did not pay separate compensation to its executive
officers. As the Company currently does not anticipate paying separate
compensation to its officers during the upcoming fiscal year, compensation
policies will continue to be determined by the Compensation Committee of the
Bank.
The entire Board of Directors of the Company acted as a Nominating
Committee for the selection of the nominees for directors to stand for election
at the Annual Meeting. The Board, acting as the Nominating Committee, did not
meet during the fiscal year ended June 30, 1996. The Company's By-laws allow
for shareholder nominations of the directors and require such nominations be
made pursuant to timely notice in writing to the Secretary of the Company. See
"Shareholder Proposals for the 1997 Annual Meeting."
-6-
<PAGE> 10
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
EXECUTIVE COMPENSATION
During the fiscal year ended June 30, 1996, the Company did not pay
separate compensation to its officers. Separate compensation will not be paid
to officers of the Company until such time as the officers of the Company
devote significant time to separate management of Company affairs, which is not
expected to occur until the Company becomes actively involved in additional
significant business beyond the Bank.
The following table summarizes the total compensation paid by the Bank
to its Chief Executive Officer during the Bank's fiscal years ended June 30,
1995 and 1996. The Bank's next highest paid executive officers' compensation
(salary and bonus) did not exceed $100,000 for either of the Bank's fiscal
years ended June 30, 1995 and 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1)
----------------------
ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY COMPENSATION(2)
- --------------------------- ---- ------ ---------------
<S> <C> <C> <C>
Allan T. Bach . . . . . . . . . . . . 1996 $102,156 $6,539
President & Chief Executive 1995 76,193 --
Officer and Director of
the Company and the Bank
- --------------------
</TABLE>
(1) Perquisites provided to Mr. Bach by the Bank did not exceed the lesser
of $50,000 or 10% of Mr. Bach's total annual salary and bonus during
the fiscal years ended June 30, 1995 and 1996, and accordingly, are
not included.
(2) The amount shown in this column for the year ended June 30, 1996
represents the Bank's contribution on behalf of the named executive
officer under the ESOP.
EMPLOYMENT AGREEMENTS
In connection with the conversion of the Bank from a state-chartered
mutual savings bank to a state-chartered stock savings bank which was
consummated on April 18, 1996 (the "Conversion"), the Bank entered into
three-year employment agreements with Mr. Allan T. Bach and Ms. Carol A.
Barnharst. The employment agreements are intended to ensure that the Bank
maintains stable and competent management.
Under the employment agreements, which became effective upon
consummation of the Conversion, the base salaries for Mr. Bach and Ms.
Barnharst are $100,056 and $54,500, respectively. The base salaries may be
increased by the Bank's Board of Directors, but may not be reduced except as
part of a general pro rata reduction in compensation for all executive
officers. In addition to base salaries, the agreements provide for payments
from other Bank incentive compensation plans, and provide for other benefits,
including participation in any group health,
-7-
<PAGE> 11
life, disability or similar insurance program and in any pension,
profit-sharing, employee stock ownership plan, deferred compensation, 401(k) or
other retirement plans maintained by the Bank. The agreements also provide for
participation in any stock-based incentive programs made available to executive
officers of the Bank. The agreements may be terminated by the Bank upon death,
disability or retirement; for cause at any time; or in certain events specified
by the regulations issued by the Wisconsin Department of Financial
Institutions, Division of Savings and Loan. If the Bank terminates the
agreements other than for death, disability, retirement or cause, the executive
is entitled to severance pay in the amount of two years' base salary (based on
the highest compensation in effect within the three years preceding the date of
termination) together with other compensation and benefits in which the
executive was vested at the termination date.
The agreements provide for severance payments if the executive's
employment terminates following a change in control. Under the agreements, a
"Change in Control" generally is defined to include any change in control
required to be reported under the federal securities laws as well as: (i) the
acquisition by any person of 25% or more of the Company's outstanding voting
securities; or (ii) a change in a majority of the directors of the Company
during any consecutive two-year period without the approval of at least
two-thirds of the persons who were directors at the beginning of such period.
In the event of a Change in Control, the executive may terminate employment
for "good reason," which includes: (i) a material change in the executive's
duties, responsibilities or titles; (ii) a reduction in base salary; (iii) a
geographic change in principal office location; or (iv) a reduction in
incentives or other benefits available to the executive. In the event of such
termination, the executive may receive severance pay for the longer of the
unexpired term of the agreement or 36 months, based upon the executive's
highest base salary within the three years preceding termination plus bonus and
incentive compensation based on the last calendar year. In addition, the
executive is entitled to all qualified retirement and other benefits in which
such executive was vested, and additional retirement benefits under all
qualified plans to which the executive would have been entitled had such
executive continued employment through the then-remaining employment term. If
the severance payments following a Change in Control would constitute
"parachute payments" within the meaning of Section 280G(b)(2) of the Internal
Revenue Code of 1986, as amended ("Internal Revenue Code"), and the present
value of such "parachute payments" equals or exceeds three times the
executive's average annualized includable income for the five calendar years
preceding the year in which a Change in Control occurred, the severance
payments shall be reduced to an amount equal to the present value of 2.99 times
the average annual compensation paid to the executive during the five calendar
years immediately preceding such Change in Control.
BENEFITS
INSURANCE PLANS
All full-time employees of the Bank are eligible for comprehensive
health insurance commencing upon the completion of three full months of
employment with the Bank. After three full months of employment, full-time
employees also are covered as a group for life insurance. The Bank pays 100%
of the cost of health insurance for single coverage and 100% of the cost of
health insurance for family coverage for executive officers of the Bank and
members of the Board of Directors of the Bank. The Bank pays the entire cost
of life insurance for all employees.
DEFINED BENEFIT PLAN
The Bank participates in the Financial Institutions Retirement Fund
("FIRF"), a multiple employer, defined benefit plan qualified within the
meaning of Section 401(a) of the Internal Revenue Code. FIRF participation
generally is limited to employers who are engaged in the financial services
industry. FIRF is administered by a board of directors comprised of the
President of FIRF, the Presidents of the twelve Federal Home Loan Banks and
twelve other persons who are representatives of employers participating in
FIRF. Executive officers and directors
-8-
<PAGE> 12
of the Bank are not employed by FIRF. In order to be eligible to participate
in the FIRF, an employee must not be compensated on an hourly basis, have
attained the age of 21 and completed 1,000 hours of service in a twelve
consecutive month period. Eligible employees become vested after completion of
five years of service. No participant contributions are permitted.
Under the Bank's adoption agreement pursuant to which it participates
in FIRF, benefits for eligible employees are determined under the following
formula: 1.5% multiplied by the average annual compensation for the highest
five consecutive years of service multiplied by years of service. Benefits are
payable by FIRF: (i) upon separation from service with the Bank provided
applicable vesting and certain other conditions are met; and (ii) with respect
to a vested participant upon retirement, death, disability or other separation
from service. In the event separation from service is for reasons other than
retirement, death or disability, benefit commencement will be deferred.
Pursuant to FIRF regulations, normal retirement age is 65. However, a vested
participant may retire as early as age 45 but his or her benefit will be
reduced by 3% for each year his or her retirement age precedes age 65. If a
participant continues working after age 65, the benefit otherwise payable at
actual retirement is increased by 2% for each year of service after age 65.
The plan provides for pre-retirement survivor benefits as required by the
Internal Revenue Code. Further, in the event of death, the plan provides for
death benefits in an amount equal to the last annual salary plus 10% of such
salary for each year of service up to a maximum amount of three times such
salary, and in the event of death after retirement, the difference, if any,
between twelve times annual pension payments less the amount of pension
payments made prior to such death. In the event of disability, a vested
participant shall receive the greater of the then accrued benefit payable in
annuity form or 30% of the average annual compensation for the highest five
consecutive years of service. Benefits are payable in annuity form and there
is no lump sum settlement option. The forms of annuities available are the
joint and survivor annuity form required by the Internal Revenue Code and,
assuming appropriate spousal waivers, a single life annuity, a ten-year certain
annuity, with or without survivor option, and a survivor annuity with a
contingent annuitant other than a spouse.
The following table sets forth the estimated annual benefits payable
under FIRF on retirement at normal retirement age for the compensation levels
and number of years of service noted (assuming the limitation under Section 415
of the Internal Revenue Code is adjusted from time to time by the United States
Secretary of the Treasury to be greater than the $120,000 limitation in effect
for 1996):
<TABLE>
<CAPTION>
FINAL AVERAGE PAY 5 YEARS 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ----------------- ------- -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 50,000 $ 3,750 $ 7,500 $11,250 $15,000 $18,750 $22,500 $26,250
75,000 5,625 11,250 16,875 22,500 28,125 33,750 39,375
100,000 7,500 15,000 22,500 30,000 37,500 45,000 52,500
125,000 9,375 18,750 28,125 37,500 46,875 56,250 65,625
</TABLE>
Maximum annual pension benefits are limited under Section 415 of the Internal
Revenue Code to the lesser of: (i) $120,000 currently (subject to future
adjustment by the United States Secretary of the Treasury based on cost of
living factors); or (ii) 100% of the participant's average annual compensation
for the three most recent consecutive Plan Years, each reduced by 10% per year
for each year of service less than ten. These benefits are not integrated with
social security or other benefits.
FIRF assets are held in a single trust funded through the aggregate
contributions of all participating employers. All assets of FIRF are available
to pay the benefits of any retiree. Under funding rules established by FIRF,
the Bank has been credited with future employer contribution offsets ("FECO").
The Bank's obligation
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<PAGE> 13
to make periodic contributions to fund benefits accrued under FIRF for such
period for its employees has been met for the last several years by applying
such FECO against the amounts otherwise due as a contribution. It is
anticipated that the Bank will continue to cause its contribution obligations
to be met, in whole or in part, through the use of such FECO for as long as
FECO credits are available to the Bank.
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
The Bank has established the Reliance Savings Bank Employee Stock
Ownership Plan (the "ESOP") for eligible employees of the Bank. As part of the
Conversion, the ESOP borrowed funds from the Company to purchase approximately
3.5% of the Common Stock issued in the Conversion, or 89,125 shares of Common
Stock. Collateral for the loan is the Common Stock purchased by the ESOP. The
Bank will make scheduled discretionary cash contributions to the ESOP
sufficient to amortize the principal and pay interest on the loan. The loan
will be repaid from the Bank's contributions to the ESOP over a period of 15
years. Shares purchased by the ESOP will be held in a suspense account for
allocation among participants as the loan is repaid. Contributions to the ESOP
and shares released from the suspense account in an amount proportionate to the
repayment of principal and interest on the ESOP loan will be allocated among
participants on the basis of compensation in the year of allocation. Shares
awarded under the ESOP will not become vested until the participants have
completed five years of service, at such time the shares will then become 100%
vested. Participants also become 100% vested on death, disability or attainment
of age 65. Forfeitures will be reallocated among the remaining participating
employees in the same proportion as contributions. Benefits may be payable
upon death, retirement, early retirement, disability or separation from
service. Benefits may be paid either in shares of Common Stock or in cash.
Emjay Corporation is the trustee for the ESOP (the "Trustee"). The Bank's
Benefits Committee, consisting of Messrs. O. William Held, John T. Lynch and
Ms. Marjorie A. Spicuzza, will instruct the Trustee regarding investment of
funds contributed to the ESOP. The Trustee will vote all allocated shares held
in the ESOP in accordance with the instructions of participating employees. The
Trustee will vote unallocated shares as directed by the Bank's Board of
Directors.
DIRECTORS' COMPENSATION
DIRECTORS' FEES
The Board of Directors of the Company meets monthly and did not
receive directors' fees for meetings attended during the fiscal year ended
June 30, 1996. For the fiscal year ended June 30, 1996, each member of the
Board of Directors of the Bank received a $1,250 directors' meeting fee per
meeting attended. The Chairman of the Board, Mr. O. William Held, received an
additional $200 for each Board of Directors meeting attended. In addition,
directors who are not also employees of the Bank received $250 for attending a
special meeting of the Board of Directors.
NON-QUALIFIED DEFERRED RETIREMENT PLAN FOR DIRECTORS
The Bank maintains the Reliance Savings Bank Non-qualified Deferred
Retirement Plan for Directors (the "Deferred Retirement Plan"), which became
effective June 30, 1994, whereby directors of the Bank can elect to defer
receipt of all or any portion of their directors' fees payable in each calendar
year (the "Deferred Benefit"). In addition, each director also is eligible to
receive a "Service Credit Benefit" upon retirement from active service on the
Board of Directors. Each director receives one service credit for each full
year of service on the Board of Directors, with a maximum of five service
credits. The "Service Credit Benefit" for each director equals $10,000 for
each service credit received. Directors Bach, Held, Lynch and Barnharst each
have accumulated two years of service under the Deferred Retirement Plan.
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<PAGE> 14
The Deferred Benefit and Service Credit Benefit are payable upon the
director's termination of service to the Bank. Distributions of the Deferred
Benefit and Service Credit Benefit under the Deferred Retirement Plan are made
in equal monthly installments over a five-year period commencing the first
month after such termination of service; provided, however, that if a director
is terminated for cause, all rights such director may have to the Service
Credit Benefit will be forfeited. Distributions pursuant to the Deferred
Retirement Plan will be made in a lump sum upon termination of service due to
death or if such director dies prior to receipt of the entire Deferred Benefit
and/or Service Credit Benefit. The distributions also may be accelerated in
cases of medical emergency or a showing of good cause.
The Deferred Retirement Plan is administered by Northwestern Mutual
Life Insurance Company. The Bank has acquired permanent life insurance
policies on the lives of participants in the Deferred Retirement Plan to fund
such plan. The cash value of the policies totalled $194,000 at June 30, 1996.
The directors have no rights, title or interest in the insurance policies.
INDEBTEDNESS OF MANAGEMENT AND CERTAIN TRANSACTIONS
Current federal law requires that all loans or extensions of credit to
executive officers and directors must be made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with the general public and must not involve more than
the normal risk of repayment or present other unfavorable features. In
addition, loans made to a director or executive officer in excess of the
greater of $25,000 or 5% of the Bank's capital and surplus (up to a maximum of
$500,000) must be approved in advance by a majority of the disinterested
members of the Board of Directors.
The Bank's policy provides that all loans or extensions of credit to
executive officers and directors are to be made in the ordinary course of
business, on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons, and do not involve more than the normal risk of collectability
or present other unfavorable features. All loans to executive officers and
directors have been made by the Bank in the ordinary course of business and
were not made with favorable terms nor involved more than the normal risk of
collectability or presented unfavorable features. All loans or extensions of
credit to executive officers and directors were current as of June 30, 1996.
The Company and the Bank intend that all transactions in the future
between the Company and the Bank and executive officers, directors, holders of
10% or more of the shares of any class of common stock of the Company and
affiliates thereof, will contain terms no less favorable to the Company or the
Bank than could have been obtained by them in arms' length negotiations with
unaffiliated persons and will be approved by a majority of independent outside
directors of the Company or the Bank, as applicable, not having any interest in
the transaction.
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<PAGE> 15
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent of the shares of Common
Stock outstanding, to file reports of ownership and changes in ownership with
the SEC and the National Association of Securities Dealers, Inc. Officers,
directors and greater than ten percent shareholders are required by regulation
to furnish the Company with copies of all Section 16(a) forms they file. Based
upon review of the information provided to the Company, the Company believes
that during the fiscal year ended June 30, 1996, officers, directors and
greater than ten percent shareholders complied with all Section 16(a) filing
requirements.
SHAREHOLDER PROPOSALS FOR THE 1997 ANNUAL MEETING
Any proposal which a shareholder wishes to have included in the proxy
materials of the Company relating to the second annual meeting of the
shareholders of the Company, which is scheduled to be held in October 1997,
must be received at the principal executive offices of the Company, 3140 South
27th Street, Milwaukee, Wisconsin 53215, Attention: Carol A. Barnharst,
Secretary, no later than May 28, 1997. If such proposal is timely submitted
and is in compliance with all of the requirements of Rule 14a-8 under the
Exchange Act, it will be included in the proxy statement and set forth on the
form of proxy issued for such annual meeting of shareholders. It is urged that
any such proposals be sent certified mail, return receipt requested.
Shareholder proposals which are not submitted for inclusion in the
Company's proxy materials pursuant to Rule 14a-8 under the Exchange Act may be
brought before an annual meeting pursuant to Article VII of the Company's
Articles of Incorporation, which provides that: (i) with respect to proposals
to be brought before an annual meeting, such proposal must be received by the
Company not less than 60 days nor more than 90 days prior to the date of the
previous year's annual meeting of shareholders, or in the event no annual
meeting was held in the previous year, no later than ten days following the
date notice of the annual meeting is mailed to shareholders; and (ii) with
respect to proposals to be brought before a special meeting, not later than the
close of business on the tenth day following the date notice of such special
meeting is mailed to shareholders.
In accordance with Article VII of the Company's Articles of
Incorporation, the advance notice of a proposal described above must set forth
certain information, including the shareholder's name and address, as they
appear on the Company's record of shareholders, the class and number of shares
of the Company Common Stock beneficially owned by such shareholder, a brief
description of the proposed business, the reason for considering the business
at the shareholder meeting and any material interest of the shareholder in the
proposed business. In addition, with respect to nominations for election to
the Board of Directors made by a shareholder, in accordance with Article VII of
the Company's Articles of Incorporation and Article III of the Company's
By-laws, the following information must be provided: (i) the name and address
of the shareholder who intends to make the nomination and of the person(s) to
be nominated; (ii) a representation that the shareholder is a holder of record
of the stock of the Company entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting and to nominate the person(s)
specified in the notice; (iii) a description of all arrangements or
understandings between the shareholder and each nominee and any other person(s)
(naming such person(s)) pursuant to which the nomination(s) are to be made by
the shareholder; (iv) such other information regarding each nominee proposed by
such shareholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the SEC; and (v) written consent of each nominee
to serve as a director of the Company if so elected.
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<PAGE> 16
OTHER MATTERS WHICH MAY PROPERLY
COME BEFORE THE ANNUAL MEETING
The Board of Directors knows of no business which will be presented
for consideration at the Annual Meeting other than as stated in the Notice of
Annual Meeting of Shareholders. If, however, other matters are properly
brought before the Annual Meeting or any adjournments or postponements thereof,
it is the intention of the persons named in the accompanying proxy to vote the
shares represented thereby on such matters in accordance with their best
judgment.
A COPY OF THE FORM 10-KSB (WITHOUT EXHIBITS) FOR THE FISCAL YEAR ENDED
JUNE 30, 1996 IS FILED WITH THE SEC AND WILL BE FURNISHED WITHOUT CHARGE TO
SHAREHOLDERS OF RECORD UPON WRITTEN REQUEST TO RELIANCE BANCSHARES, INC., CAROL
A. BARNHARST, SECRETARY, 3140 SOUTH 27TH STREET, MILWAUKEE, WISCONSIN 53215.
BY ORDER OF THE BOARD OF DIRECTORS,
Milwaukee, Wisconsin Carol A. Barnharst
September 24, 1996 Vice President, Chief Financial Officer,
Secretary and Treasurer
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN
AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
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<PAGE> 17
RELIANCE BANCSHARES, INC. REVOCABLE PROXY
3140 South 27th Street
Milwaukee, Wisconsin 53215
RELIANCE BANCSHARES, INC.
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 28, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders (the "Annual Meeting") and the Proxy Statement and,
revoking any proxy heretofore given, hereby constitutes and appoints Messrs.
Allan T. Bach and John T. Lynch, directors of Reliance Bancshares, Inc. (the
"Company"), to represent and to vote, as designated below, all the shares of
common stock, $1.00 par value per share ("Common Stock"), of the Company held of
record by the undersigned on September 6, 1996, at the Annual Meeting which will
be held on October 28, 1996, at 2:00 p.m., Milwaukee time, at The Quality Inn,
5311 South Howell Avenue, Milwaukee, Wisconsin 53207, or any adjournments or
postponements thereof.
THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED, BUT IF NO
INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE MATTERS
LISTED. If any other business is presented at the Annual Meeting or any
adjournments or postponements thereof, this proxy will be voted by the Board of
Directors of the Company in their best judgment. At the present time, the
Board of Directors of the Company knows of no other business to be presented at
the Annual Meeting.
Please mark your votes as in this example: \X\
1. ELECTION OF DIRECTORS
ALLAN T. BACH, CAROL A. BARNHARST, O. WILLIAM HELD, JOHN T. LYNCH,
MAJORIE A. SPICUZZA
\ \ FOR all nominees listed above \ \ WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees
above
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
the nominee's name in the space provided below).
----------------------------------------------------------------
IMPORTANT: PLEASE SIGN AND DATE THE PROXY ON THE REVERSE SIDE
(continued on reverse side)
PROXY NO. NO. OF SHARES
2. RATIFICATION OF THE APPOINTMENT OF MEIER, CLANCY, GEORGE & CO. AS
INDEPENDENT AUDITORS OF THE COMPANY FOR THE FISCAL YEAR ENDING JUNE 30, 1997.
\ \ FOR \ \ AGAINST \ \ ABSTAIN
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENTS
OR POSTPONEMENTS THEREOF.
The shares of Common Stock represented by this proxy will be voted as
directed. If no direction is specified, the shares of Common Stock will be
voted FOR each of the matters listed.
Date: , 1996
-----------------------
Signature:
------------------------
Signature:
------------------------
IMPORTANT: Please sign your name exactly
as it appears hereon. When signing as an
attorney, administrator, agent,
corporation, officer, executor, trustee,
guardian or similar position, please add
your full title to your signature. If
shares of common stock are held jointly,
each holder may sign but only one
signature is required.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE
001001
