<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO.)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to [240.14a-11(c) or [240.14a-12
RIVER FOREST BANCORP, INC.
--------------------------
(Name of Registrant as Specified in Its Charter)
Lawrence P. Wyrobek
-------------------
(Name of Person Filing Proxy Statement)
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(j)(2).
[ ] $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:
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] Check box if any part of the fee is offset as provided by the
Exchange 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 date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
(Added by Exch Act Rel No. 31905, eff 4/26/93.)
<PAGE> 2
RIVER FOREST BANCORP, INC.
Lincoln National Bank Building
3959 N. Lincoln Avenue
Chicago, Illinois 60613 (312) 868-3333
Fax # (312) 549-1603
ROBERT J. GLICKMAN
PRESIDENT
March 26, 1996
TO OUR SHAREHOLDERS:
I would like to invite you to attend the 1996 Annual Meeting of Shareholders of
River Forest Bancorp, Inc., to be held on Wednesday, May 22, 1996 at 10:00 a.m.
at the Commercial National Bank, 4800 N. Western Avenue, Chicago, Illinois.
The primary purpose of the Annual Meeting will be to elect seven directors and
ratification of the appointment of KPMG Peat Marwick LLP as independent auditors
of the Company for 1996. We will also be sharing with you information about our
performance during 1995 and provide you with our perspectives on 1996 and
beyond. Additionally, the Annual Meeting will give you an opportunity to meet
our Directors and our Senior Officers.
WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING OR NOT, PLEASE DATE AND SIGN THE
ENCLOSED PROXY AND RETURN IT IN THE ACCOMPANYING ENVELOPE. YOUR VOTE IS VERY
IMPORTANT REGARDLESS OF HOW MANY SHARES YOU OWN. If you do attend the Annual
Meeting and wish to vote in person, you may do so, even though you have
previously sent in a proxy.
I look forward to seeing you at the Meeting.
Very truly yours,
/s/ Robert J. Glickman
Robert J. Glickman
President and Chief Executive Officer
<PAGE> 3
RIVER FOREST BANCORP, INC.
Lincoln National Bank Building
3959 North Lincoln Avenue
Chicago, Illinois 60613
PROXY STATEMENT
The enclosed proxy is solicited on behalf of the Board of Directors of River
Forest Bancorp, Inc. ("the Company") for use at the Annual Meeting of
Shareholders, to be held on May 22, 1996, at 10:00 a.m., in the office of
Commercial National Bank, 4800 N. Western Avenue, Chicago, Illinois, or at any
adjournment of such meeting. Each proxy received from shareholders will be voted
at the meeting and, if specified, as directed, by the shareholder. Unless
contrary instructions are given, the proxy will be voted at the meeting for the
election of the nominees for the office of Director, as set forth below,
ratification of KPMG Peat Marwick LLP as independent auditors and, in accordance
with the best judgment of the holders thereof, any other business which may
properly come before the meeting and be submitted to a vote of the shareholders.
Shares represented by proxies which are marked "withholding authority" with
respect to the election of one or more nominees for election as directors,
proxies which are marked "abstain" on other proposals, and proxies which are
marked deny discretionary authority on other matters WILL NOT be counted in
determining whether a majority vote was obtained in such matters. With respect
to brokers who are prohibited from exercising discretionary authority for
beneficial owners who have not returned proxies to the brokers, those shares
WILL NOT be included in the vote totals. A proxy may be revoked at any time
prior to its exercise by means of a written revocation or a properly executed
proxy bearing a later date. Shareholders having executed and returned a proxy
who attend the meeting and desire to vote in person are requested to so notify
the Secretary of the Company prior to or at the time of a vote taken at the
meeting. The cost of soliciting proxies in the accompanying form has been or
will be borne by the Company.
OUTSTANDING VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
The Company has 14,825,242 shares of $0.05 par value Common Stock outstanding.
Each share is entitled to one vote. Shareholders of record as of the close of
business on March 1, 1996 are entitled to vote at the meeting. So far as is
known to the Company, as of March 1, 1996, the following shareholders owned
beneficially or of record more than five percent (5%) of the Common Stock of the
Company:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
SHAREHOLDER ADDRESS BENEFICIAL OWNERSHIP PERCENT
----------- ------- -------------------- -------
<S> <C> <C> <C>
R. J. Glickman River Forest, Illinois 3,700,686 (1) 25.0%
J.C. and B.R. Glickman LaJolla, California 2,210,718 (2) 14.9%
E.W. Glickman Edina, Minnesota 980,592 (3) 6.6%
</TABLE>
(1) Includes 200,000 shares subject to employee stock options exercisable
currently. Also includes: 783,054 shares held as sole trustee of two trusts for
the benefit of his brother and sister, E.W.Glickman and E.G. Galinson,
respectively; 378,510 shares held as sole trustee of various trusts for the
benefit of his children; and 41,126 shares owned by the Robert and Caryn
Glickman Foundation of which Robert J. Glickman is a director and an officer.
1
<PAGE> 4
(2) Includes 2,210,718 shares held as co- trustee of the Glickman Family Trust,
dated April 21, 1983. Of the aforesaid shares, 1,034,471 shares are attributable
to B.R. Glickman and 1,176,247 shares to J.C. Glickman. B.R. Glickman and J.C.
Glickman, under the terms of the Glickman Family Trust, share the voting and
investment control over the above described 2,210,718 shares.
(3) Includes 67,320 shares held as Trustee for the benefit of various relatives
of Joseph C. Glickman under Glickman Family Trusts dated September 21, 1987
and March 9, 1992, and 6,000 shares held as trustee for the benefit of his
children.
ELECTION OF DIRECTORS AND OWNERSHIP OF SHARES
The Bylaws of the Company provide that the "Board shall consist of not less than
five nor more than thirteen in number as may be determined at each Annual
Meeting of the Shareholders of the Company". The Bylaws also state that at the
Annual Meeting of Shareholders the concurrence of a majority of all the issued
and outstanding stock entitled to vote thereat shall be required for taking any
action by the shareholders including the election of directors. At the meeting,
it will be proposed to elect seven directors to hold office until the next
Annual Meeting of Shareholders and until their successors are elected and
qualify. Shareholders of the Company have no cumulative voting rights with
respect to the election of directors.
The following individuals are nominees for election. All of the nominees have
indicated a willingness to serve, but in case any of the nominees is not a
candidate at the Annual Meeting, it is the intention of the proxy holders to
vote in favor of the remainder of those named and to vote for substitute
nominees in their discretion. Information regarding these seven nominees and the
number of shares of Common Stock beneficially owned by them as of March 1, 1996,
is set forth below:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
DIRECTOR NOMINEES
- --------------------------------------------------------------------------------------------------------
NAME, AGE AND PERIOD OF PRINCIPAL OCCUPATION AND
SERVICE AS A DIRECTOR DIRECTORSHIPS FOR PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
<S> <C>
JOSEPH C. GLICKMAN (80) Chairman of Board of Directors of Company. Previously,
Director since 1958 Director of River Forest State Bank and Trust Company,
Lincoln National Bank, Commercial National Bank and First
State Bank of Calumet City.
- --------------------------------------------------------------------------------------------------------
ROBERT J. GLICKMAN (49) President, Chief Executive Officer and Director of Company.
Director since 1972 Director of all subsidiary banks of Company. Son of J.C.
Glickman.
- --------------------------------------------------------------------------------------------------------
KARL H. HORN (72) Consultant. Previously, President and Director, Systems and
Director since 1980 Computer Group, Zenith Electronics Corporation. Previously,
Executive Vice President, Zenith Electronics Corporation.
- --------------------------------------------------------------------------------------------------------
MICHAEL LEVITT (51) President, Consolidated Currency Exchanges.
Director since 1990
- --------------------------------------------------------------------------------------------------------
RODNEY D. LUBEZNIK (48) President and Director, Restaurant Management Corp.
Director since 1994
- --------------------------------------------------------------------------------------------------------
MICHAEL TANG (41) Chief Executive Officer, Midwest Metallics, L.P. Previously,
Director since 1995 Chief Executive Officer, National Material L.P.
- --------------------------------------------------------------------------------------------------------
WILLIAM H. WENDT, III (53) President and Director, Midwest Metal Products.
Director since 1980
- --------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
SECURITY OWNERSHIP OF MANAGEMENT
- ------------------------------------------------------------------------------------------------------------------------
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
OF COMMON SHARES
DIRECTOR NOMINEES ADDRESS AT MARCH 1, 1996 PERCENT
- ----------------- ------- ---------------- -------
<S> <C> <C> <C>
Robert J. Glickman River Forest, Illinois 3,700,686 (5) 25.0%
Joseph C. Glickman La Jolla, California 2,210,718 14.9%
Karl H. Horn Jackson, Tennessee 1,200 *
Michael Levitt Chicago, Illinois 9,000 0.1%
Rodney D. Lubeznik Michigan City, Indiana 300 *
Michael Tang Elk Grove Village, Illinois 1,000 *
William H. Wendt, III Long Beach, Indiana 10,000 0.1%
OTHER NAMED EXECUTIVE OFFICERS
- ------------------------------
David H. Johnson, III Hinsdale, Illinois 9,900 (6) 0.1%
Michael G. Stein Chicago, Illinois 1,000 (7) *
Christopher Glancy Oak Park, Illinois 11,200 (8) 0.1%
Directors and all Executive Officers
as a Group (19 in total) 5,988,604 40.4%
</TABLE>
* Represents less than 0.1% of total common shares outstanding
(5) Includes 200,000 vested stock options
(6) Includes 3,600 vested stock options
(7) Includes 800 vested stock options
(8) Includes 10,800 vested stock options
The Company's Board of Directors held four meetings in 1995. Each Director
attended at least 75% of the aggregate of the total number of meetings held by
the Board of Directors with the exception of Director Wendt who was absent twice
and Director Tang who has attended all meetings since becoming a director in May
of 1995. The entire Board of Directors are members of the Compensation
Committee. Directors J.C. Glickman, Horn and Levitt serve on the Stock Option
Committee which met twice in 1995. Directors J.C. Glickman, R.J. Glickman and
Levitt serve on the Nominating Committee which met once in 1995. The functions
of the Nominating Committee are to identify and recommend to the Board of
Directors candidates for director nomination.
The Audit Committee includes Directors Horn, Levitt and Lubeznik. In addition to
reviewing internal control reports and regulatory examination reports, the Audit
Committee recommends the independent auditors for appointment by the Board of
Directors and reviews the results of the audit engagement. There were four Audit
Committee meetings held in 1995 with all committee members present with the
exception of Director Lubeznik who was absent twice.
3
<PAGE> 6
EXECUTIVE COMPENSATION
The following table sets forth all cash compensation for services in all
capacities to the Company and its subsidiaries during the last three fiscal
years by the Company's Chairman of the Board and Chief Executive Officer and
includes the three highest-paid executive officers, who were serving as
executive officers at December 31, 1995, as measured by 1995 compensation
levels.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
----------------------------------
LONG TERM COMPENSATION
--------------------------------------------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
- ----------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
OTHER RESTRIC- SECURITIES ALL
NAME ANNUAL TED UNDER- OTHER
AND COMPEN- STOCK LYING LTIP COMPEN-
PRINCIPAL SALARY BONUS SATION (9) AWARDS OPTIONS/ PAYOUTS SATION(10)
POSITION YEAR ($) ($) ($) ($) SARS (#) ($) ($)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J.C. Glickman 1995 100,000 250,000 0 0 0 0 0
Chairman of the 1994 100,000 0 0 0 0 0 0
Board 1993 100,000 0 0 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
R.J. Glickman 1995 390,000 500,000 6,210 0 50,000 0 0
President and 1994 360,000 450,000 2,230 0 0 0 0
CEO 1993 360,000 450,000 2,194 0 0 0 0
- ----------------------------------------------------------------------------------------------------------------------------------
D.H. Johnson, III 1995 162,500 100,000 0 0 6,000 0 750
Executive Vice 1994 135,000 40,000 0 0 2,000 0 750
President 1993 130,000 20,000 0 0 0 0 750
- ----------------------------------------------------------------------------------------------------------------------------------
C. Glancy 1995 140,000 170,000 0 0 2,000 0 750
Senior Vice 1994 135,000 15,000 0 0 0 0 750
President 1993 130,000 5,000 0 0 0 0 750
- ----------------------------------------------------------------------------------------------------------------------------------
M.G. Stein 1995 100,000 658,147 0 0 0 0 750
Senior Vice 1994 80,000 50,000 0 0 4,000 0 750
President 1993 60,000 10,000 0 0 0 0 750
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(9) Represents compensation associated with use of company car.
(10) Represents 401(k) matching contributions.
STOCK OPTION PLAN
The River Forest Bancorp, Inc. 1990 Stock Option Plan ("the Plan") was approved
by the Company's shareholders in 1991. The purpose of the Plan is to promote the
long-term interests of the Company by providing an incentive for certain key
officers to maintain and enhance the performance and profitability of the
Company and to give key officers a proprietary interest in the success of the
Company. The Plan is administered by the Stock Option Committee of the Board of
Directors of the Company. The Stock Option Committee has, subject to the express
limitations of the Plan, the full power to (1) select which key employees will
receive Awards, (2) fix the number of shares in each Award, (3) establish the
time and conditions of vesting any Award, (4) establish the specific type of
Award granted: Incentive Stock Options, Non-Qualified Stock Options, Stock
Appreciation Rights ("SARs") or Restricted Stock, and (5) to interpret
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<PAGE> 7
and implement the Plan and make all determinations necessary and advisable in
administering the Plan. All awards (whether Stock Options or SARs) shall specify
an option price, which is payable upon the exercise of the Award. The option
price shall not be less than 100% of the fair market value of the underlying
common stock on the date of grant.
As of December 31, 1995, options to purchase 346,800 shares of Common Stock were
outstanding and a total of 103,200 shares of Common Stock were available for
grant under the Plan. All outstanding options are in the form of Non-Qualified
Stock Options and range in exercise price from $10.50 to $21.76. In general, the
stock options granted are exercisable on a schedule which vests one hundred
percent (100%) of the total shares granted over five years beginning with 20% of
the shares vesting one year from the date of grant and in equal proportions
annually thereafter. Certain grants, however, have allowed for immediate vesting
of partial shares as well as extended vesting schedules. The fair market value
of the common stock was equal to or less than the exercise price on the date of
grant.
If a participant's employment is terminated by reason of death, disability or
retirement, any outstanding stock options or SARs then exercisable may be
exercised at any time prior to expiration date of the stock options or SARs or
within one year after the such date of termination of employment, whichever is
shorter. If employment is terminated for any other reason, the stock option or
SAR will be exercisable for one month or for the remaining term of the stock
option or SAR, whichever is shorter. Employees terminated for "cause" will
forfeit immediately all rights to exercise stock options or SARs. Cause shall
mean: gross misconduct, conviction of a felony, or suspension due to the
direction of any bank regulatory agency. Stock options and SARs are not
transferable except by will or the laws of descent and distribution.
Under the current Federal income tax laws, Awards under the Plan will have the
following tax consequences: The grant of a Non-Qualified Stock Option creates no
taxable income to a participant and no tax-deduction to the Corporation. The
participant will recognize income to the extent that the fair market value of
the Common Stock at exercise exceeds the option price and will be obligated to
satisfy withholding taxes. When the Common Stock eventually is sold by the
participant, capital gain treatment (capital gains currently are taxed at the
same rates as ordinary income) will be applicable. To the extent the participant
recognizes ordinary income at the time of exercise, the Corporation will be
entitled to a corresponding tax deduction. The grant of SARs creates no taxable
income. Any amounts ultimately paid on exercise of SARs will be ordinary income
to the participant and the Company will receive a corresponding tax deduction.
The use of Common Stock as a payout medium does not change the tax treatment.
In the event of a change of control of the Company, all Awards under the Plan
will become fully exercisable or nonforfeitable, as appropriate. A change in
control is deemed to occur when any person or group of affiliated persons become
the beneficial owner of fifty percent (50%) or more of the outstanding voting
stock of the Company or upon approval by the Company's shareholders of certain
merger or sale transactions.
5
<PAGE> 8
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The table following provides stock options granted in 1995 to the
named executive officers.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
OPTION GRANTS IN LAST FISCAL YEAR
- ---------------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
- ---------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/
UNDERLYING SARS
OPTIONS/SARS GRANTED TO EXERCISE OR
GRANTED EMPLOYEES BASE PRICE EXPIRATION
NAME (#) IN 1995 ($/SH) DATE 5% ($) 10% ($)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
J.C. Glickman 0 N/A N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------
R.J. Glickman 50,000 67.8 19.25 5/31/2000 664,759 1,090,900
- ---------------------------------------------------------------------------------------------------------------------------
D.H. Johnson, III 6,000 8.1 19.25 5/31/2000 79,771 130,908
- ---------------------------------------------------------------------------------------------------------------------------
C. Glancy 2,000 2.7 19.25 5/31/2000 26,590 43,636
- ---------------------------------------------------------------------------------------------------------------------------
M.G. Stein 0 N/A N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
The options in the table above were granted June 5, 1995 and become exercisable
as to 20% of the options one year from the date of grant and annually thereafter
over a five year period.
AGGREGATED OPTION/SAR EXERCISES AND YEAR-END VALUES
The following table summarizes stock options that were exercised by each of the
named executives during 1995 and the number and value of stock options that were
unexercised at December 31, 1995.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
- ----------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
DECEMBER 31, 1995 (#) DECEMBER 31, 1995 ($)
SHARES
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
J.C. Glickman 0 0 0/0 0/0
- ----------------------------------------------------------------------------------------------------------------------------
R.J. Glickman 0 0 200,000/50,000 2,274,000/312,000
- ----------------------------------------------------------------------------------------------------------------------------
D.H. Johnson, III 0 0 3,600/8,400 29,460/55,140
- ----------------------------------------------------------------------------------------------------------------------------
C. Glancy 0 0 10,800/3,200 118,020/23,600
- ----------------------------------------------------------------------------------------------------------------------------
M.G. Stein 0 0 800/3,200 5,480/21,920
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 9
The numbers and amounts in the above table represent non-qualified stock
options. There have been no SARs or incentive stock options granted since the
inception of the Plan to date.
LONG-TERM INCENTIVE PLAN AWARDS TABLE
The Company made no long-term incentive plan awards in 1995 and has no such
awards outstanding.
BENEFIT PLANS
Upon attainment of normal retirement date, the participant is entitled to
receive a monthly benefit for life equal to 22.5% of final monthly average
compensation up to covered compensation, plus 37.5% of such participants final
monthly compensation in excess of covered compensation, decreased
proportionately for less than 30 years of credited service. The maximum level of
annual compensation for computing retirement benefits in 1995 and 1994 was
$150,000. Prior to 1994, the maximum level of annual compensation was $200,000
indexed each year for cost of living adjustments. An employee is vested in the
plan after five years of service.
The following table has built in reasonable increases in compensation on the
existing salary ranges up to a maximum final average compensation level of
$200,000, indexed for the respective years and sets forth the estimated annual
benefits payable upon retirement at age 65 for the specified compensation and
years of service. The pension benefits are on the basis of a straight life
annuity and are not reduced for social security or other benefits received by
participants. Annual pension benefits remain fixed after 30 years of service.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
FINAL AVERAGE YEARS OF SERVICE
--------------------------------------------------------------------------------
COMPENSATION (11) 15 20 25 30 35
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$125,000 $19,590 $26,120 $32,650 $39,180 $39,180
- -----------------------------------------------------------------------------------------------------------
150,000 24,278 32,370 40,463 48,555 48,555
- -----------------------------------------------------------------------------------------------------------
175,000 28,965 38,620 48,275 57,930 57,930
- -----------------------------------------------------------------------------------------------------------
200,000 33,653 44,870 56,088 67,305 67,305
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(11) The average annual compensation includes the participant's salary and
bonus. R.J. Glickman had salary and bonus in excess of $200,000 indexed, and as
such, is covered only up to the maximum average compensation of $200,000
indexed. J.C. Glickman is not covered under the Company's retirement plan.
The years of credited service as of December 31, 1995 for the individuals in the
cash compensation table are as follows: R.J. Glickman, 26.0 years; D.H. Johnson,
III, 4.0 years; C. Glancy, 15.0 years; and, M.G. Stein, 5.0 years.
The River Forest Bancorp Employees' Savings Plan & Trust ("the 401(k) Plan") is
a defined contribution plan which is offered to employees who have completed one
year of service and who are at least 21 years in age. Under the plan an employee
may contribute up to 15% of compensation, not to exceed $9,240 in 1995, into a
retirement investment program. Employees are vested in the matching
contributions and the interest thereon after five years of credited service in
the Plan. Directors and officers who have participated in the Plan since its
inception on January 1, 1988 have vested as of January 1, 1993. In 1995, the
Company matched 20% of pre-tax contributions to a maximum contribution of $750
per person. Matching
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<PAGE> 10
contributions for D.H. Johnson, III, C. Glancy and M.G. Stein were $750 per
person in 1995. J.C Glickman and R.J. Glickman did not participate in the
Company's 401(k) Plan in 1995.
R.J. Glickman, D.H. Johnson, III, C. Glancy and M.G. Stein are covered under the
medical and dental insurance plans offered by the Company to all of its
full-time employees.
COMPENSATION OF DIRECTORS
No fees were paid to J.C. Glickman and R.J. Glickman for directors or committee
meetings in 1995. Directors Horn, Levitt, Lubeznik, Tang and Wendt were paid
$2,000 per Board of Directors meeting attended in the first three quarters of
1995 and $2,500 per Board of Directors meeting attended in the fourth quarter of
1995. Directors Horn, Levitt and Lubeznik were paid $1,000 per audit committee
meeting attended in 1995. No fees were paid in conjuction with the stock option
committee meetings attended in 1995. Director Levitt was paid $1,000 in
conjunction with the nominating committee meeting in 1995.
CHANGE-OF-CONTROL AGREEMENTS
The Company currently has Change-In-Control Employment Agreements ("Agreements")
with Messrs. D.H. Johnson III, C. Glancy and M.G. Stein and nine other executive
officers ("Covered Executives") not named in the Summary Compensation Table. The
purpose of the Agreements is to provide severance compensation to each covered
executive officer in the event of the voluntary or involuntary termination after
a change in control of the Company. "Change-in-control" generally occurs on the
date when an individual, corporation or partnership (with certain exceptions)
becomes a beneficial owner (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934), directly or indirectly, of the stock of the Company
representing 50% or more of the total voting power of the Company's then
outstanding stock.
Compensation provided to the Covered Executives would be in the form of a lump
sum payment equal to (1) 130%-333% of the Covered Executive's annual base salary
if that person resigns for good reason or if that person is terminated by the
Company (other than for cause), or (2) 65%-167% of the Covered Executive's
annual base salary if the executive initiates termination during the 30-day
period following the first anniversary of the change in control. "Good reason"
means (i) a material diminution of the executive's responsibilities or the
assignment of inappropriate duties; (ii) any failure by the Company to comply
with the provisions of the agreement relating to compensation and benefit, or
(iii) the Company's relocation of the executives principal job location to a
location, other than the Company's headquarters on the date of the
Change-in-Control, more than 35 miles from his principal job location on the
date of the Change-in-Control. However, no severance compensation is due the
Covered Executive if the employment is terminated for cause. Additionally, no
severance compensation would be due after the death of a Covered Executive. In
the event the Covered Executive obtains other employment prior to the first
anniversary of the date of his termination of employment with the Company, he
shall repay the Company an amount equal to 50% of any compensation received from
such employment received during the twelve month period following termination
from the Company but not more than the lump sum payment, if any, received by the
Covered Executive. Additionally, severance payments will be reduced and/or
eliminated if the payments are prohibited by any banking regulations.
The term of the Agreements vary by Covered Executive, however, all go through
December 31, 1996; provided, however, that on such date and on each December
31st thereafter, the term of the agreements shall automatically be extended for
one additional year unless either party shall have given ninety days notice
prior to the expiration of the term that such party does not wish to extend the
term. Further, if a
8
<PAGE> 11
change of control shall have occurred during the original or any extended term
of the Agreement, the term of the Agreement shall continue for a period of
thirty-six calendar months beyond the calendar month in which such change of
control occurs. In no event will the term of the Agreement extend beyond the
Covered Executive's attainment of age 65.
REPORT ON REPRICING OF OPTIONS/SARS
At no time during the fiscal year ended December 31, 1995 did the Company adjust
or amend the exercise price of existing stock options or SARs.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's entire Board of Directors participates in determining executive
officer compensation and, therefore, has no compensation committee. J.C.
Glickman and R.J. Glickman abstain from votes of the Company's Board of
Directors regarding their own compensation as officers of the Company. The
Company's Board of Directors had no compensation committee interlocks with any
other entity.
BOARD REPORT ON EXECUTIVE COMPENSATION
OVERALL COMPENSATION PHILOSOPHY
The Company's executive compensation objective is to link compensation with
corporate and individual performance in a manner which, recognizing the
marketplace practices of other bank holding companies, will retain and attract
executives who can achieve the short and long term goals of the Company. The
policy is to provide for competitive base salaries which reflect individual
levels of responsibility and performance, annual bonuses based upon achievement
of annual corporate performance, and awarding of stock-based incentive
opportunities. The combined result is a strengthening of the mutuality of
interest in the Company's long-term performance between its executive officers
and the Company's shareholders.
TIMING OF THE BOARD OF DIRECTOR COMPENSATION REVIEW
The Board of Directors (the "Board") awarded 1995 bonuses at its November 15,
1995 meeting and set 1995 base salaries at its November 28, 1994 meeting. This
report is based upon the decisions made at those meetings. To the extent that
specific performance factors were discussed, the Board considered the Company's
actual performance for the nine months ended September 30, 1995 and projections
for the entire fiscal year.
The Company's entire Board participates in determining executive officer
compensation. The Company does not have a separate compensation committee.
PEER GROUP COMPARISONS
At various stages of this report, the members of the Board assess the Company's
performance relative to its peer publicly traded bank holding companies ranging
in size of $1-$5 billion in the current year and over time. This peer group is
the appropriate group to utilize when assessing comparative performance factors
and the peer group is a subset of the NASDAQ BANK STOCKS indices used in the
performance graph on page 14.
9
<PAGE> 12
BASE SALARIES
A base salary has been established for each executive officer. These base
salaries are established in relation to the external marketplace and internal
factors including but not limited to the following factors: (1) the compensation
history of the individual officer, (2) the individual's years of experience with
the Company and in the industry, (3) the performance and contribution of the
officer relative to their job responsibility, (4) the achievement of certain
financial performance ratios as they relate to the respective executive
officers' job responsibilities (see specific factors discussed in relation to
the CEO in the "CEO Compensation" section below), and (5) the current financial
condition of the Company. Additionally, the Board also considers various
qualitative factors including but not limited to knowledge of the banking
industry, the ability to recruit and build a management team, commitment and
dedication, and entrepreneurial spirit. As a matter of policy, the Board does
not assign weights to the factors above for any of its executive officers due to
the belief that the evaluation and awarding of compensation to the executive
officer group cannot be simplified to a mathematical computation. As such, the
compensation policy used by the Board to set base salaries is considered
subjective.
BONUSES
Executives may earn cash bonuses on an annual basis (the "Bonus Program"). The
Bonus Program is designed to promote a pay-for-performance philosophy by placing
a significant portion of total compensation "at risk" while rewarding
outstanding performance or achievement. The Board considers the achievements of
each executive officer for that year. The achievements may be quantitative or
qualitative. Qualitative factors include but are not limited to commitment,
dedication, or a demonstration of the entrepreneurial spirit. The Board is of
the opinion that River Forest Bancorp is still small enough of an organization
to know what contribution an executive officer has made in a given year.
As a matter of policy, the Board does not assign specific Company or individual
objectives for the awarding of bonuses due to the belief that the evaluation of
an executive officer's annual performance cannot be simplified to a mathematical
computation. As such, the compensation policy used by the Board to set cash
bonuses is considered subjective.
10
<PAGE> 13
STOCK OPTIONS
The Company may grant stock options pursuant to the 1990 Stock Option Plan,
which was approved by the shareholders in 1991. In 1995, R.J. Glickman, D.H.
Johnson, III, and C. Glancy were granted 50,000, 6,000 and 2,000 stock options,
respectively. No other named executives were granted options during 1995. All
named executive officers presently hold stock options, except for J.C. Glickman
who does not participate in the Company's Stock Option Plan. The Board felt that
the present level of options, after consideration of the 1995 grants, was
appropriate.
The Board does not assign specific Company or individual objectives when
evaluating the awarding of stock options for the CEO or its other executive
officers; and, as such, the compensation policies used by the Board when
determining stock option awards are considered subjective.
CEO COMPENSATION
The factors discussed above in the "Base Salary" section are the basis for
determining the base salary level of the CEO, Mr. Robert J. Glickman.
Accordingly, R.J. Glickman's salary was increased 8.3% from 1994 to 1995.
The 1995 bonus amount to the CEO was based on his leadership in attaining, among
other criteria, the following:
(1) For the nine months ended September 30, 1995, our Company's
1995 return on average assets and return on average equity
were 1.94% and 20.90%, respectively. At the November, 1995
Board meeting, the members considered these actual
performance factors along with annual projections which
indicated similar ratios for the entire fiscal year. By
comparison, our peer group had performance ratios of
approximately 1.25% and 14.85%, respectively, for the first
nine months of 1995. These two performance measures
traditionally have placed the Company near the top of its
peer group.
(2) The Company's loan portfolio experienced net charge-offs of
only 0.03% of its outstanding loans for the nine months
ended September 30, 1995. Additionally, the Board discussed
the projection that the Company should not experience any
significant loan losses or recoveries for the remainder of
the fiscal year. By comparison, the Company's peer group has
experienced loan losses averaging 0.20% of outstanding loans
during the same time period. The Company's level of loan
losses has consistently outperformed its peer group for the
last several years. Additionally, the Company's
non-performing loans and assets as a percent of total loans
and total assets compare favorably to its peer group.
11
<PAGE> 14
(3) The Company's efficiency ratio for the first nine months of
1995 was approximately 44%, whereas our peer group
experienced an efficiency ratio of approximately 62%. The
efficiency ratio is a banking industry measure which is
calculated by dividing noninterest expenses by the sum of
noninterest income (net of security gains) and fully
tax-equivalent net interest income. A ratio of less than 60%
is generally considered very good in the banking industry.
As such, the Company's result in 1995 continues to be
considered outstanding by the Board.
(4) The Company's fully tax-equivalent net interest margin
increased from 4.72% for the year ended December 31, 1994 to
5.29% for the nine months ended September 30, 1995. This
increase is primarily due to the shifting of capital from
securities to loans during the year as the significant
amount of deposits attracted in 1994 were invested in more
profitable activities. Successful management and reduction
in non- performing loans and prudent asset/liability
management have enabled management to outperform its peers
over the last several years. This favorable net interest
margin significantly contributed to the superior performance
measures such as the returns on average assets and average
equity discussed in (1) above.
(5) During the first nine months of 1995, the Company's growth
in deposits and loans was approximately 20% and 36%,
respectively. This deposit growth was predominantly a result
of management's aggressive marketing of a competitive money
market product. The growth in loans can be attributed to
management's continuing efforts to originate competitive
products in the student loan, home equity and commercial
real estate loan areas.
(6) Over the past five years, the total return of the Company's
stock has not performed as well as the NASDAQ STOCK MARKET
index and the NASDAQ BANK STOCK index as reflected in the
performance graph on page 14. However, the related
appreciation of the Company's stock price over the past five
year period equates to a gain to its shareholders of
approximately $200,000,000, and the Board believes that the
Company is well positioned for future growth and stock price
appreciation.
(7) The members of the Board have determined that R.J. Glickman
is a person with extreme dedication to the success of the
Company and has exhibited such dedication through his
entrepreneurial spirit, hard work ethic, knowledge of the
banking industry and his ability to recruit a management
team with the same characteristics.
12
<PAGE> 15
CONCLUSION
The Board believes the executive officers' individual compensation programs
discussed in this report are designed in a manner which is consistent with the
Company's overall compensation philosophy. As such, the compensation provided to
the Company's CEO, Mr. R. J. Glickman, and to the other executive officers is
deemed appropriate.
JOSEPH C. GLICKMAN
ROBERT J. GLICKMAN
KARL H. HORN
MICHAEL LEVITT
RODNEY D. LUBEZNIK
MICHAEL TANG
WILLIAM H. WENDT, III
PERFORMANCE GRAPH
The performance graph on the following page compares the yearly percentage
change in the Company's cumulative shareholder return on common stock compared
with the cumulative total return on composites of 1) all NASDAQ stocks for
United States companies (broad market index) and 2) all NASDAQ bank stocks (peer
group index) over the last five years. Cumulative shareholder return is computed
by dividing the sum of the cumulative amount of dividends for the measurement
period and the difference between the registrant's share price at the end and
beginning of the measurement period by the share price at the beginning of the
measurement period. The NASDAQ Stock Market for United States Companies index
comprises all domestic common shares traded on the NASDAQ National Market and
the NASDAQ Small-Cap Market. The NASDAQ Bank Stocks index comprises all banks
traded on the NASDAQ National Market and NASDAQ Small-Cap Market.
13
<PAGE> 16
The following graph compares the five year cumulative total return of
the Company's common stock with the Nasdaq Stock Market (U.S.) and the Nasdaq
Bank Stocks indices. The return assumes a $100 investment made on December 31,
1990 and the reinvestment of all dividends.
[GRAPH]
<TABLE>
<CAPTION>
Dollar Value of Investment at December 31
------------------------------------------------
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Nasdaq Stock Market (US) $100 $161 $187 $215 $210 $296
Nasdaq Bank Stocks 100 164 239 272 271 404
River Forest Bancorp, Inc. 100 140 169 159 141 223
</TABLE>
14
<PAGE> 17
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Certain Directors and Executive Officers are, at present, customers of the
Company's subsidiary banks and have transactions with such banks in the ordinary
course of business. Such transactions have been and will continue to be on the
same terms, including interest rates and collateral on loans, as those
prevailing at the time for comparable transactions with other persons. Such
transactions did not, and will not, involve more than the normal risk of
collectability or present other unfavorable features.
SECTION 16 FILINGS
Section 16 of the Securities Exchange Act requires directors, certain officers
and certain other owners to periodically file notices of changes in beneficial
ownership of Common Stock with the Securities and Exchange Commission. To the
best of the Company's knowledge, during 1995 all required filings were timely
submitted, except for a Form 3 filing by Christopher Glancy, Senior Vice
President, that was filed in January 1996 and should have been filed in December
1995.
INDEPENDENT AUDITORS
The accounting services supplied by KPMG Peat Marwick LLP during the year were
reviewed and approved by the Company's audit committee before these services
were performed. The committee believes that none of the services supplied by
KPMG Peat Marwick LLP compromised that firm's independence. Fees paid in 1995 to
KPMG Peat Marwick LLP for the audits of the Company's consolidated financial
statements, employee benefit plans and other agreed upon procedures were
$282,650. Audit fees in 1996 are expected to be approximately $290,000 unless
there are additional acquisitions by the Company. Existing policy requires that
all services furnished to the Company by its independent auditors be furnished
at customary rates and terms. One or more representatives of KPMG Peat Marwick
LLP will be present at the meeting and will have the opportunity to make a
statement if they desire to do so. KPMG Peat Marwick LLP representatives will be
available to respond to appropriate questions that shareholders may have.
FUTURE PROPOSALS
Shareholders' proposals intended to be presented at the Company's 1997 Annual
Meeting, including nominees for director to be considered by the Nominating
Committee, must be received in writing by the Secretary of the Company no later
than January 10, 1997, in order to be considered for inclusion in the proxy
material for that meeting.
OTHER BUSINESS
The Company is unaware of any other matter to be acted upon at the meeting for
shareholder vote. In case of any matter properly coming before the meeting for
shareholder vote, the proxy holders named in the proxy accompanying this
statement shall vote them in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Lawrence P. Wyrobek
Lawrence P. Wyrobek
Corporate Secretary
<PAGE> 18
RIVER FOREST BANCORP, INC.
Lincoln National Bank Building
3959 North Lincoln Avenue
Chicago, Illinois 60613
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE UNDERSIGNED, revoking previous proxies for such stock, hereby appoints J.C.
Glickman and R.J. Glickman and each of them the proxy of the undersigned with
full power of substitution, to vote all stock of River Forest Bancorp, Inc.
which the undersigned is entitled to vote at the Annual Meeting of Shareholders
of said Corporation TO BE HELD IN THE OFFICE OF COMMERCIAL NATIONAL BANK, 4800
N. WESTERN AVENUE, CHICAGO, ILLINOIS 60625, at 10:00 a.m. on May 22, 1996, and
at any adjournment thereof:
1. ELECTION OF DIRECTORS
FOR all nominees listed below
(except as marked to the contrary below) ____
WITHHOLDING AUTHORITY to
vote for all nominees listed below ____
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE STRIKE
A LINE THROUGH THE NOMINEE'S NAME ON THE LIST BELOW)
Joseph C. Glickman
Robert J. Glickman
Karl H. Horn
Michael Levitt
Rodney D. Lubeznik
Michael Tang
William H. Wendt, III
2. PROPOSAL TO APPROVE THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE
INDEPENDENT AUDITORS OF THE COMPANY.
FOR _____ AGAINST _____ ABSTAIN _____
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting. THIS PROXY WILL BE VOTED AS
DIRECTED. UNLESS OTHERWISE MARKED, PROXIES WILL BE VOTED FOR THE ELECTION OF
DIRECTORS AND RATIFICATION OF AUDITORS, AND IN ACCORDANCE WITH THEIR BEST
JUDGMENT UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE SAID MEETING OR
ANY ADJOURNMENT THEREOF.
The undersigned, may, at any time prior to the Annual Meeting of Shareholders,
revoke this Proxy.
Dated:___________________, 1996 _______________________________
Signature
_______________________________
Signature, if held jointly
(The shareholder's signature should be exactly as it appears on stock
certificate. In case stock is held jointly, all parties should sign. If you
sign as an attorney, trustee, administrator, executor or guardian, please give
full title as such. Corporations should sign by duly authorized officer and
affix seal.)
