<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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
[x] Definitive Proxy Statement Commission only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant
to Rule 14a-11(c) or Rule 14a-12
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] No fee required
[ ] 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:
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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.:
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3. Filing Party:
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4. Date Filed:
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<PAGE> 2
RELIANCE BANCSHARES, INC.
3140 SOUTH 27TH STREET
MILWAUKEE, WISCONSIN 53215
(414) 671-2222
April 3, 1997
Dear Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders (the
"Special Meeting") of Reliance Bancshares, Inc. (the "Company"), the holding
company for Reliance Savings Bank (the "Bank"), which will be held on Thursday,
May 15, 1997, at 2:00 p.m., Milwaukee time, at The Quality Inn, 5311 South
Howell Avenue, Milwaukee, Wisconsin 53207.
The purpose of the Special Meeting is to obtain shareholder approval of
two benefit plans: (i) the Reliance Savings Bank Recognition and Retention
Plan (the "Retention Plan"); and (ii) the Reliance Bancshares, Inc. 1997 Stock
Option Plan (the "Stock Option Plan"). Shareholder approval of the Retention
Plan and the Stock Option Plan is required by the Wisconsin Department of
Financial Institutions. If shareholder approval is not obtained, the Retention
Plan and the Stock Option Plan will not be effective and no awards will be made
thereunder. Shareholder approval of the Stock Option Plan will qualify the
Stock Option Plan for granting of Incentive Stock Options under Section 422 of
the Internal Revenue Code of 1986, as amended. The attached Notice of Special
Meeting of Shareholders and Proxy Statement describe in further detail these
matters to be considered by shareholders at the Special Meeting. Directors and
officers of the Company will be present at the Special Meeting to respond to
any questions that shareholders may have. The Board of Directors of the
Company unanimously recommends that shareholders vote FOR approval of the
Retention Plan and the Stock Option Plan.
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 Special Meeting in
person. If you attend the Special 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,
/s/Allan T. Bach
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 SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 15, 1997
----------------------------
TO THE HOLDERS OF COMMON STOCK OF RELIANCE BANCSHARES, INC.:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Special Meeting") of Reliance Bancshares, Inc. (the "Company") will be held on
Thursday, May 15, 1997, at 2:00 p.m., Milwaukee time, at The Quality Inn, 5311
South Howell Avenue, Milwaukee, Wisconsin 53207. The Special 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 approval of the Reliance Savings Bank Recognition and
Retention Plan;
2. The approval of the Reliance Bancshares, Inc. 1997 Stock
Option Plan; and
3. Such other matters as may properly come before the Special
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 March 28, 1997 as the record date
for the determination of shareholders entitled to notice of and to vote at the
Special Meeting and at 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 Special Meeting or any adjournments or postponements
thereof. In the event there are not sufficient votes for a quorum or to
approve either of the foregoing proposals at the time of the Special Meeting,
the Special Meeting may be adjourned or postponed in order to permit further
solicitation of proxies by the Company.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/Carol A. Barnharst
Milwaukee, Wisconsin Carol A. Barnharst
April 3, 1997 Vice President, Chief Financial
Officer, Secretary and Treasurer
- -------------------------------------------------------------------------------
YOU ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING. WHETHER OR NOT YOU
PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, SIGN, DATE AND RETURN THE
ENCLOSED PROXY PROMPTLY IN THE ENVELOPE PROVIDED.
- -------------------------------------------------------------------------------
<PAGE> 4
RELIANCE BANCSHARES, INC.
3140 SOUTH 27TH STREET
MILWAUKEE, WISCONSIN 53215
(414) 671-2222
--------------------------
PROXY STATEMENT
--------------------------
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 15, 1997
--------------------------
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 Special Meeting of
Shareholders (the "Special Meeting") to be held on Thursday, May 15, 1997, 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.
This Proxy Statement and the accompanying form of proxy (the "proxy") are first
being mailed to shareholders on or about April 3, 1997.
Only shareholders of record at the close of business on March 28, 1997
(the "Voting Record Date") will be entitled to vote at the Special Meeting. On
the Voting Record Date, there were 2,528,499 shares of Common Stock outstanding
and entitled to vote 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 Special Meeting. The affirmative vote of a majority
of the total votes cast in person or by proxy is necessary to approve each of
the Reliance Savings Bank Recognition and Retention Plan (the "Retention Plan")
and the Reliance Bancshares, Inc. 1997 Stock Option Plan (the "Stock Option
Plan"). 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 Special Meeting,
the Special Meeting may be adjourned or postponed in order to permit the
further solicitation of proxies.
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 whether 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, however, that such approval
shall be effective only if obtained at a meeting where a quorum of
disinterested directors is present.
<PAGE> 5
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 vote in the spaces provided on the
proxy. Proxies solicited by the Board of Directors of the Company will be
voted at the Special Meeting or any adjournments or postponements thereof in
accordance with the directions given therein. Where no instructions are
indicated, signed proxies will be voted FOR approval of the Retention Plan and
FOR approval of the Stock Option Plan. In the event other matters properly
come before the Special Meeting or any adjournments or postponements thereof,
including, without limitation, a motion to adjourn the Special Meeting in order
to permit further solicitation of proxies by the Company, the proxies will be
entitled to vote as they, in their discretion, deem appropriate. Returning
your completed proxy will not prevent you from voting in person at the Special
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 Special 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
Special Meeting; if you intend to vote personally at the Special Meeting, you
should contact your record holder to receive any required additional
documentation. Proxies solicited hereby may be exercised only at the Special
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. The Company has retained D.F. King &
Co., Inc., a professional proxy solicitation firm, to assist in the
solicitation of proxies. D.F. King & Co., Inc. will be paid a fee of $3,000,
plus $3.00 per shareholder contact and will be reimbursed for its out-of-pocket
expenses associated with any solicitations. 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 of February 28, 1997 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 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;
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) .................... 87,191 3.4%
Allan T. Bach (3) ........................ 25,817 1.0
Carol A. Barnharst (3) ................... 31,700 1.3
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 5.8
</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
MATTER 1.
APPROVAL OF THE
RELIANCE SAVINGS BANK
RECOGNITION AND RETENTION PLAN
The Board of Directors of the Company and the Bank propose for
consideration and approval by the Company's shareholders the Reliance Savings
Bank Recognition and Retention Plan (the "Retention Plan"). Shareholder
approval of the Retention Plan is required by the Wisconsin Department of
Financial Institutions. If shareholder approval is not obtained, the Retention
Plan will not be effective and no shares of Common Stock will be awarded under
the Retention Plan.
PURPOSE OF THE RETENTION PLAN
The purpose of the Retention Plan is to advance the interests of the
Company and the Bank by providing key officers of the Bank, upon whose
judgment, initiative and efforts the successful operations of the Company and
the Bank largely depend, with additional incentive to perform in a superior
manner and to encourage such persons to remain at the Bank. The Retention Plan
also will serve to more closely align the interests of management of the
Company with those of the Company's shareholders by providing management with a
proprietary interest in the Company.
ELIGIBILITY AND SHARES AVAILABLE FOR GRANT UNDER THE RETENTION PLAN
Under the proposed Retention Plan, all officers of the Bank and its
subsidiaries are eligible to participate. As of April 1, 1997, the Bank had
two officers eligible to participate in the Retention Plan. Under the
Retention Plan, it is anticipated that 102,494 shares of Common Stock, or 4% of
the number of shares of Common Stock issued by the Company in connection with
the Bank's conversion from a state-chartered mutual savings bank to a
state-chartered stock savings bank consummated in April 1996 (the
"Conversion"), initially will be available for grant under the Retention Plan.
Assuming the Retention Plan is approved by the Company's shareholders, the
Retention Plan will either acquire the shares to be granted: (i) through open
market purchases (subject to approval by the Wisconsin Department of Financial
Institutions); (ii) from previously authorized but unissued shares from the
Company at the then-current per share price; or (iii) through a combination of
(i) and (ii), above. In order to acquire the shares of Common Stock to be
awarded under the Retention Plan, the Bank will contribute funds to the
Retention Plan in an amount equal to the per share price at the time of
purchase multiplied by the number of shares to be awarded under the Retention
Plan. If additional authorized but unissued shares of Common Stock are
acquired by the Retention Plan, the interests of existing shareholders will be
diluted.
-4-
<PAGE> 8
SHARES OF COMMON STOCK TO BE AWARDED
If the Retention Plan is approved by the Company's shareholders, the
following awards of Common Stock under the Retention Plan will be made
following the Special Meeting (or if the Special Meeting is adjourned or
postponed, following the date the Special Meeting is adjourned or postponed
to):
<TABLE>
<CAPTION>
NUMBER OF SHARES DOLLAR VALUE OF
NAME AND PRINCIPAL POSITION TO BE AWARDED (1) SHARES TO BE AWARDED(2)
- --------------------------- ----------------- ----------------------
<S> <C> <C>
Allan T. Bach ...................... 49,180 $375,243
President, Chief Executive
Officer and Director of the
Company and the Bank
Total Executive Group .............. 81,980 625,507
Total Non-Executive
Director Group .................. -- --
Total Non-Executive Officer
Employee Group .................. -- --
Shares of Common Stock Reserved For
Future Grants ...................... 20,514 156,522
</TABLE>
________________
(1) Shares to be awarded will become vested at a rate of 33 1/3% on the date of
grant and 33 1/3% per year on the first and second anniversaries of the
date of grant.
(2) Based on the closing price per share of Common Stock of $7.63 on
March 27, 1997 on the NASDAQ Small Cap Market.
ADMINISTRATION
The Retention Plan will be administered by a committee of the Board of
Directors (the "Committee") consisting of two or more "non-employee" directors
as that term is defined under Rule 16b-3 promulgated by the SEC under the
Exchange Act. The members of the Committee will consist of Messrs. Held and
Lynch and Ms. Spicuzza.
TERMS AND CONDITIONS OF SHARE AWARDS
The shares to be awarded to officers of the Bank under the Retention Plan
as set forth above will become vested at a rate of 33 1/3% on the date of grant
(which is intended to be the date the Retention Plan is approved by the
Company's shareholders) and 33 1/3% per year on the first and second
anniversaries of the date of grant. The vesting schedule for future awards
under the Retention Plan will be determined by the Committee at the time of
the award.
All Retention Plan awards, whether or not vested at such time, shall
become immediately 100% vested upon termination of employment due to death,
disability or "retirement." Retirement includes any termination of employment
which constitutes normal retirement or early retirement under the Reliance
Savings Bank Employee Stock Ownership Plan or by reaching age 65, or such later
retirement as may be agreed upon between the Bank and such officer. If an
officer terminates employment with the Bank or the Company for reasons other
than due to death, disability, retirement or a Change in Control of the Bank or
the Company, unvested Retention Plan awards will be forfeited.
-5-
<PAGE> 9
In the event a recipient of Retention Plan awards is terminated following
a Change of Control of the Company, all Retention Plan awards, whether or not
vested at such time, shall become immediately 100% vested. "Change of Control"
is defined to mean a change of control of a nature that: (i) would be required
to be reported to the SEC by the Company in a current report on Form 8-K; or
(ii) results in a change in control of Reliance Savings Bank or the Company
within the meaning of the Home Owners Loan Act of 1933 and the rules and
regulations promulgated by the Office of Thrift Supervision (or its predecessor
agency) (the "OTS"). In addition, under the Retention Plan and Stock Option
Plan, a Change of Control shall be deemed to have occurred at such time as:
(i) any "person" (as the term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
or its subsidiaries representing 25% or more of such entities' outstanding
voting securities; (ii) individuals who constitute the current Board of
Directors of the Company (the "Incumbent Board") cease for any reason to
constitute at least a majority thereof, provided that any person becoming a
director subsequent to the effective date of the Retention Plan whose election
was approved by a vote of at least three-quarters of the directors comprising
the Incumbent Board, or whose nomination for election by the Company's
shareholders was approved by the same Nominating Committee serving under an
Incumbent Board, shall be considered a member of the Incumbent Board; or (iii)
a plan of reorganization, merger, consolidation, sale of all or substantially
all the assets of the Company or similar transaction in which the Company is
not the surviving institution; or (iv) any change of control of the Company
instituted by an entity or individual other than current management of the
Company.
Recipients of awards will receive dividends paid on Common Stock awarded
to them prior to vesting and may direct voting of the shares of Common Stock
awarded to them prior to vesting. Unallocated shares will be voted by the
Committee in the same proportion as unvested awarded plan shares are voted.
Vested shares of Common Stock will be distributed to recipients as soon as
practicable.
FEDERAL INCOME TAX TREATMENT
Participants will recognize income equal to the fair market value of the
shares of Common Stock at the time they become vested or, at the election of
the recipient under Section 83(b) of the Internal Revenue Code of 1986, as
amended (the "Internal Revenue Code"), at the time of grant. Income recognized
by participants will be a deductible expense for tax purposes by the Bank.
Compensation expense in the amount of the fair market value of shares of Common
Stock on the date of the grant to a director, officer or employee generally
will be recognized over the period during which the shares are vested.
ADJUSTMENTS IN THE EVENT OF CAPITAL CHANGES
In the event the number of shares of Common Stock are increased or
decreased or changed into or exchanged for a different number or kind of shares
of stock or other securities of the Company by reason of any stock dividend or
split, recapitalization, merger, consolidation, spin-off, reorganization,
combination or exchange of shares, or other similar corporate change, or other
increase or decrease in such shares without receipt or payment of any
consideration by the Company, the number of shares of Common Stock awarded and
the number of shares of Common Stock available for future awards under the
Retention Plan will be adjusted to prevent dilution or enlargement of the
rights granted under the Retention Plan.
-6-
<PAGE> 10
DURATION AND AMENDMENT OF RETENTION PLAN
The Retention Plan shall remain in effect for 21 years from the date of
shareholder approval, unless terminated earlier by the Board of Directors of
the Bank. The Board of Directors of the Bank may amend the Retention Plan in
any manner and at any time. The Board of Directors of the Bank, in its sole
discretion, may determine that shareholder approval of any amendment to the
Retention Plan may be advisable or necessary for any reason, including, for the
purpose of obtaining or retaining any statutory or regulatory benefits under
tax, securities or other laws or satisfying applicable stock exchange listing
requirements.
THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF SHARES OF COMMON
STOCK REPRESENTED IN PERSON OR BY PROXY AND VOTED AT THE SPECIAL MEETING OR ANY
ADJOURNMENTS OR POSTPONEMENTS THEREOF IS REQUIRED FOR APPROVAL OF THE RETENTION
PLAN. UNLESS MARKED TO THE CONTRARY, THE SHARES OF COMMON STOCK REPRESENTED BY
THE ENCLOSED PROXY WILL BE VOTED FOR APPROVAL OF THE RETENTION PLAN. THE
BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE RETENTION PLAN.
MATTER 2.
APPROVAL OF THE
RELIANCE BANCSHARES, INC.
1997 STOCK OPTION PLAN
The Board of Directors of the Company proposes for consideration and
approval by the Company's shareholders the Reliance Bancshares, Inc. 1997 Stock
Option Plan (the "Stock Option Plan"). Shareholder approval of the Stock
Option Plan is required by the Wisconsin Department of Financial Institutions.
If shareholder approval is not obtained, the Stock Option Plan will not become
effective and no grants of options to purchase shares of Common Stock will be
made thereunder. Shareholder approval of the Stock Option Plan also will
qualify the Stock Option Plan for granting Incentive Stock Options under
Section 422 of the Internal Revenue Code.
PURPOSE OF THE STOCK OPTION PLAN
The purpose of the Stock Option Plan is to provide directors, officers and
employees of the Company and the Bank with a proprietary interest in the
Company, to recognize management, employees and the Board of Directors for
their contributions to the success of the Bank and the Company and to incite
their future performance, and to encourage such individuals to stay at the
Bank.
ELIGIBILITY, TYPE OF OPTION GRANTS AND SHARES SUBJECT TO THE STOCK OPTION
PLAN
Under the proposed Stock Option Plan, all directors, officers and
employees of the Company and its subsidiaries are eligible to participate. As
of April 1, 1997, the Company had ten directors, officers and employees
eligible to participate in the Stock Option Plan. The Stock Option Plan
authorizes the grant of: (i) options to purchase shares of Common Stock
intended to qualify as incentive stock options under Section 422 of the
Internal Revenue Code ("Incentive Stock Options"); and (ii) options that do not
so qualify ("Non-Statutory Options"). Officers and employees may receive
Incentive Stock Options and Non-Statutory Stock Options. Directors of the
Company who are not employees of the Bank ("Non-Employee Directors") may
receive only Non-Statutory Options. Under the Stock Option Plan, options for a
total of 256,234 shares of Common Stock, or 10% of the number of shares of
Common Stock issued in connection with the Conversion, initially will be made
available for granting to eligible participants.
-7-
<PAGE> 11
Assuming the Stock Option Plan is approved by the Company's shareholders,
the shares of Common Stock to be issued by the Company upon the exercise of
options by optionees may be: (i) acquired either through open market purchases
by the Company (subject to approval by the Wisconsin Department of Financial
Institutions); or (ii) issued from authorized but unissued shares of Common
Stock. If additional authorized but unissued shares of Common Stock are issued
upon the exercise of options, the interests of existing shareholders will be
diluted.
OPTIONS TO BE GRANTED
If the Stock Option Plan is approved by the Company's shareholders, the
following option grants will be made following the Special Meeting (or if the
Special Meeting is adjourned or postponed, following the date the Special
Meeting is adjourned or postponed to):
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME AND PRINCIPAL POSITION SUBJECT TO OPTIONS
- --------------------------- ------------------
<S> <C>
Allan T. Bach ........................................... 39,857
President and Chief Executive Officer
and Director of the Company and the Bank
Total Executive Group ................................... 79,714
Total Non-Executive Director Group ...................... 119,576
Total Non-Executive Officer Employee Group .............. 21,781
Shares of Common Stock Subject to Options Reserved
For Future Grants ....................................... 35,168
</TABLE>
The dollar value of the proposed option awards in the table above will be
equal to the difference between the fair market value of the Common Stock
underlying the options and the exercise price. Under the proposed Stock Option
Plan, the Committee of the Company will determine the exercise price of the
options granted to eligible participants, which for purposes of the
above-mentioned option awards, shall be the closing price per share of Common
Stock on the NASDAQ Small Cap Market on the date of grant, which will be the
date the Stock Option Plan is approved by the Company's shareholders.
Therefore, the dollar value of the options to be awarded as of the date of this
Proxy Statement and at the date of grant will be zero, since the exercise price
will be equal to the fair market value of the Common Stock underlying the
options.
ADMINISTRATION
The proposed Stock Option Plan will be administered jointly by the Board
of Directors of the Company and the Committee. The Board of Directors shall
make the following determinations with respect to grants to non-employee
directors and the Committee shall make the following determinations with
respect to grants to eligible participants other than non-employee directors:
(i) the persons to whom options are granted; (ii) the terms at which options
are to be granted; (iii) the number of shares of Common Stock subject to an
individual grant; (iv) the vesting schedule applicable to individual grants;
and (v) the expiration date of the option (which shall not be later than ten
years from the date the option is granted). The exercise price may be paid in
cash or shares of Common Stock and shall be the fair market value (as defined
in the Stock Option Plan) of the Common Stock on the date of grant or such
greater amount as determined by the Committee with respect to grants to
eligible participants other than outside directors, and by the Board of
Directors with respect to grants to outside directors.
-8-
<PAGE> 12
PRINCIPAL TERMS AND CONDITIONS OF OPTION GRANTS
The options to be granted to directors, officers and employees under the
Stock Option Plan as set forth above will become vested at a rate of 33 1/3% on
the date of grant (which is intended to be the date the Stock Option Plan is
approved by the Company's shareholders) and 33 1/3% per year on the first and
second anniversaries of the date of grant. The vesting schedule for future
awards under the Stock Option Plan will be determined by the Committee.
The aggregate fair market value of shares of Common Stock with respect to
which Incentive Stock Options may be granted to an eligible participant which
are exercisable for the first time in any calendar year may not exceed
$100,000. Any option granted in excess of such amount shall be treated as a
Non-Statutory Option. Incentive Stock Options granted to any person who is the
beneficial owner of more than 10% of the outstanding shares of Common Stock may
be exercised only for a period of five years following the date of grant and
the exercise price at the time of grant must be equal to at least 110% of the
fair market value of the Common Stock on the date of the grant.
No option granted under the Stock Option Plan will be exercisable after
three months after the date on which the optionee ceases to perform services
for the Company or the Bank, except that in the event of death, retirement or
disability, all options, whether or not exercisable at such time, may be
exercisable for up to one year thereafter or such longer period as determined
by the Committee. Options held by employees terminated for cause will
terminate on the date of termination. Termination "for cause" includes
termination due to personal dishonesty, incompetence, willful misconduct, the
intentional failure to perform stated duties, breach of fiduciary duty
involving personal dishonesty, willful violations of law, the entry of a final
cease and desist order or the material breach of any provisions of an
employee's employment contract.
In the event of a Change of Control of the Company, all Incentive Stock
Options and Non-Statutory Options, whether or not exercisable at such time,
shall become immediately exercisable. If a participant is terminated due to
such Change of Control, all options shall be exercisable for a period of one
year following such Change of Control, or such longer period as determined by
the Committee; provided that in no event shall the period extend beyond the
option term and in the case of Incentive Stock Options, such options shall not
be eligible for treatment as Incentive Stock Options if exercised more than
three months following the date of a participant's cessation of employment.
In the event of a participant's termination of employment, the Company, if
requested by the participant, may elect to pay the participant, or beneficiary
in the event of death, in exchange for cancellation of the option, the amount
by which the fair market value of the Common Stock exceeds the exercise price
of the option on the date of the participant's termination of employment.
Incentive Stock Options may be transferred only by will or the laws of
descent and distribution. Non-Statutory Options may be transferred by
participants pursuant to the laws of descent and distribution and during a
participant's lifetime by participants to members of their "immediate family"
(as defined in the Stock Option Plan), trusts for the benefit of members of
their immediate family and charitable institutions to the extent permitted
under Section 16 of the Exchange Act and subject to federal and state
securities laws.
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<PAGE> 13
FEDERAL INCOME TAX TREATMENT
An optionee will not be deemed to have received taxable income upon the
grant or exercise of any Incentive Stock Option, provided that such shares of
Common Stock are held for at least one year after the date of exercise and two
years after the date of grant. No gain or loss will be recognized by the
Company as a result of the grant or exercise of Incentive Stock Options. An
optionee will be deemed to receive ordinary income upon exercise of
Non-Statutory Options in an amount equal to the amount by which the fair market
value of the Common Stock on the exercise date exceeds the exercise price. The
amount of any ordinary income deemed to be received by an optionee due to a
premature disposition of the shares of Common Stock acquired upon the exercise
of an Incentive Stock Option or upon the exercise of a Non-Statutory Option
will be deductible expense for tax purposes for the Company. At this time,
generally accepted accounting principles do not require compensation expense to
be recorded for any options granted for which the exercise price equals the
market value on the date of grant. When options are exercised, the net
proceeds received by the Company will be recorded as an increase in Common
Stock and paid-in capital.
ADJUSTMENTS IN THE EVENT OF CAPITAL CHANGES
In the event the number of shares of Common Stock are increased or
decreased or changed into or exchanged for a different number or kind of shares
of stock or other securities of the Company by reason of any stock dividend or
split, recapitalization, merger, consolidation, spin-off, reorganization,
combination or exchange of shares, or other similar corporate change, or other
increase or decrease in such shares without receipt or payment of consideration
by the Company, the following appropriate adjustments may be made to prevent
dilution or enlargement of the rights of participants, including any or all of
the following: (i) adjustments in the aggregate number or kind of shares of
Common Stock which may be awarded; (ii) adjustments in the aggregate number or
kind of shares of Common Stock covered by outstanding option grants; and (iii)
adjustments in the purchase price of outstanding option grants. No such
adjustments may, however, materially change the value of benefits available to
participants under a previously granted award.
DURATION AND AMENDMENT OF STOCK OPTION PLAN
No options will be awarded under the Stock Option Plan following the tenth
anniversary of approval of the Stock Option Plan by shareholders of the
Company. The Board of Directors of the Company may amend the Stock Option Plan
in any respect; provided, however, that certain provisions governing the terms
of Incentive Stock Option and Non-Statutory Option grants may not be amended
more than once every six months to comport with the Internal Revenue Code or
the Employee Retirement Income Security Act of 1974, as amended, if applicable.
In addition, the Board of Directors may determine that shareholder approval of
any amendment to the Stock Option Plan may be advisable for any reason,
including for the purpose of obtaining or retaining any statutory or regulatory
benefits under tax, securities or other laws or satisfying applicable stock
exchange listing requirements.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES OF COMMON STOCK
REPRESENTED IN PERSON OR BY PROXY AND VOTED AT THE SPECIAL MEETING IS REQUIRED
FOR APPROVAL OF THE STOCK OPTION PLAN. UNLESS MARKED TO THE CONTRARY, THE
SHARES OF COMMON STOCK REPRESENTED BY THE ENCLOSED PROXY WILL BE VOTED FOR
APPROVAL OF THE STOCK OPTION PLAN. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE FOR APPROVAL OF THE STOCK OPTION PLAN.
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<PAGE> 14
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, 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
$108,656 and $61,100, 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, 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
-11-
<PAGE> 15
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, 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 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.
-12-
<PAGE> 16
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 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.
-13-
<PAGE> 17
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
The Bank has established 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.
-14-
<PAGE> 18
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> 19
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.
-16-
<PAGE> 20
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING
The Board of Directors knows of no business which will be presented for
consideration at the Special Meeting other than as stated in the Notice of
Special Meeting of Shareholders. If, however, other matters are properly
brought before the Special Meeting, it is the intention of the persons named in
the accompanying proxy to vote the shares represented thereby on such matters
in accordance with their best judgment.
A COPY OF THE FORM 10-KSB (WITHOUT EXHIBITS) FOR THE YEAR ENDED JUNE 30,
1996 AS FILED WITH THE SEC 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,
/s/Carol A. Barnharst
Carol A. Barnharst
Vice President , Chief Financial Officer,
Milwaukee, Wisconsin Secretary and Treasurer
April 3, 1997
- -----------------------------------------------------------------------------
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.
- -----------------------------------------------------------------------------
-17-
<PAGE> 21
RELIANCE BANCSHARES, INC.
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 15, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby acknowledges receipt of the Notice of Special
Meeting of Shareholders (the "Special Meeting") and the Proxy Statement and,
revoking any proxy heretofore given, hereby constitutes and appoints Messrs.
Allan T. Bach and John T. Lynch, and any of the other 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 March 28, 1997, at
the Special Meeting which will be held on May 15, 1997, at 2:00 p.m., Milwaukee
time, at The Quality Inn, 5311 South Howell Avenue, Milwaukee, Wisconsin
53207, or any adjustments or postponements thereof.
THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED BELOW, BUT IF NO
INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR EACH OF THE MATTERS
LISTED BELOW. If any other business is presented at the Special 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 Special Meeting.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE
RELIANCE BANCSHARES, INC. SPECIAL MEETING OF SHAREHOLDERS
Please mark your votes as in this example: [x]
1. THE APPROVAL OF THE RELIANCE SAVINGS BANK RECOGNITION AND RETENTION PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. THE APPROVAL OF THE RELIANCE BANCSHARES, INC. 1997 STOCK OPTION PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE SPECIAL MEETING OR ANY
ADJOURNMENTS OR POSTPONEMENTS THEREOF.
Dated: _____________________________, 1997
____________________________________________
____________________________________________
Signatures
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.
