SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Commission Only (as permitted
by Rule 14a-6(e)(2))
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec 240.14a-11(c) or Sec 240.14a-12
ALLEGIANCE BANC CORPORATION
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
[ ] 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.
(logo here)
Allegiance
Banc Corporation
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
Annual Meeting of Shareholders
May 22, 1996
ALLEGIANCE BANC CORPORATION
4719 Hampden Lane
Bethesda, Maryland 20814
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 22, 1996
To the Shareholders:
Notice is hereby given that, pursuant to call of its directors, the Annual
Meeting of the shareholders of Allegiance Banc Corporation (the "Company")
will be held at the Residence Inn, 7335 Wisconsin Avenue, Bethesda, Maryland,
on May 22, 1996, at 10:00 a.m. (the "Annual Meeting") for the purpose of
considering and voting upon the following matters:
1. The election of the five persons listed in the accompanying Proxy
Statement as directors for a term of one year or until their successors have
been elected and qualified.
2. The ratification of the appointment of Stegman & Company, independent
certified public accountants, as auditors of the Company and its subsidiary for
the fiscal year ended December 31, 1996.
3. The transaction of such other business as may properly come before
the Annual Meeting or any adjournment or postponement thereof.
We recommend that you read the enclosed Annual Report and Proxy Statement,
and encourage your attendance at the Annual Meeting.
We urge you to sign and return the enclosed proxy in the enclosed, self-
addressed, postage paid envelope to American Stock Transfer & Trust Company,
as promptly as possible, regardless of whether or not you plan to attend the
Annual Meeting in person. If you attend the meeting and decide you wish to
vote in person, you have the right to revoke your proxy at any time prior to
its use.
The shareholders entitled to receive notice of and vote at the Annual
Meeting or any adjournment or postponement thereof shall be those of record
on the Company's books at the close of business on March 25, 1996.
By Order of the Board of Directors,
Mary C. McQuillen
Corporate Secretary
April 18, 1996
Please Note: The prompt return of proxies will save the Corporation the
expense of further requests for proxies in order to ensure
a quorum. Thank you.
Allegiance Banc Corporation
Annual Meeting of Shareholders
to be held on
May 22, 1996
PROXY STATEMENT
This Proxy Statement is being furnished to the shareholders of Allegiance
Banc Corporation a Delaware corporation (the "Company"), 4719 Hampden Lane,
Bethesda, Maryland 20814, in connection with the solicitation of proxies by the
Board of Directors of the Company for use at the Annual Meeting of Shareholders
on May 22, 1996 (the "Annual Meeting") and any adjournment or postponement
thereof.
The Annual Meeting will be held at the Residence Inn, 7335 Wisconsin
Avenue, Bethesda, Maryland on May 22, 1996 at 10:00 a.m. If you attend the
meeting, you may also withdraw your proxy at that time. This Proxy Statement
and the accompanying form of proxy are first being sent to shareholders on or
about April 18, 1996.
VOTING RIGHTS AND PROXIES
Only shareholders of record at the close of business on March 25, 1996
(the "Record Date") will be entitled to notice of and to vote at the Annual
Meeting. On that date, there were outstanding and entitled to vote 1,723,538
shares of common stock, par value $1.00 per share (the "Common Stock"), held by
approximately 761 stockholders of record. Each share of Common Stock is
entitled to one vote in the election of directors and upon all other matters
to be presented at the Annual Meeting.
All shares entitled to vote which are represented by a properly executed
and unrevoked proxy received in time for the Annual Meeting will be voted at
the Annual Meeting in accordance with the instructions given thereon. In the
absence of instructions to the contrary, such shares will be voted FOR the
election of the designated nominees for directors, and FOR the proposal to
ratify the appointment of Stegman & Company as the Company's independent
auditors for the fiscal year ending December 31, 1996. Persons appointed as
proxies will also be entitled to vote in their discretion on other matters
that may properly come before the Annual Meeting and any adjournment or
postponement thereof.
Any proxy given by a shareholder may be revoked by the holder at any time
before it is voted at the Annual Meeting by (I) attending the Annual Meeting
and voting in person, (ii) filing a written notice of revocation with the
Company prior to the Annual Meeting, or (iii) duly executing and delivering to
the Company a proxy bearing a later date prior to the exercise of the
proxy. Written notices of revocation of a proxy should be addressed to Leonard
L. Abel, Chairman of the Board, Allegiance Banc Corporation, 4719 Hampden Lane,
Bethesda, Maryland 20814.
The holders of a majority of the outstanding shares of the Company's
Common Stock present in person or by proxy will constitute a quorum for the
transaction of business at the Annual Meeting. In the event that less than
a majority of the outstanding shares are present at the Annual Meeting, either
in person or by proxy, a majority of the shares so represented may vote to
adjourn the Annual Meeting from time to time without further notice.
The election judges appointed for the meeting will tabulate the votes
cast by proxy or in person at the meeting and determine whether or not a
quorum is present. Where, as to any matter submitted to the shareholders
for a vote, proxies are marked as abstentions (or shareholders appear in
person but abstain from voting), such abstentions will be treated as shares
that are present and entitled to vote for purposes of determining the presence
of a quorum but as unvoted for purposes of determining the approval of any
matter voted upon. Broker non-votes will also be considered present for
purposes of determining a quorum but as unvoted for purposes of determining
the approval of any matter voted upon. Abstentions and broker non-votes will
have no effect on the vote of shareholders required for approval of any
matter submitted for the vote of shareholders.
A copy of the Company's Annual Report to Shareholders for the year ended
December 31, 1995 accompanies this Proxy Statement.
The cost of this solicitation of proxies is being borne by the Company.
In addition to the use of the mail, proxies may be solicited personally or by
telephone or telegram by officers, regular employees or directors of the
Company or its subsidiary, Allegiance Bank, N.A. ("Allegiance" or the "Bank"),
who will not be specially compensated for any such services. The Company also
will request brokers, custodians and other nominees or fiduciaries to send
proxy materials to and to obtain proxies from beneficial owners of Common
Stock, and will reimburse such parties for their reasonable expenses in doing
so. The Company also may determine to use paid solicitors to assist in the
solicitation of proxies, although the Company currently has no contracts or
arrangements with any such solicitors to do so.
VOTING SECURITIES
All voting rights are vested exclusively in the holding of the Common
Stock. The Company has no class of capital stock, other than the Common Stock,
outstanding. Each share is entitled to one non-cumulative vote on each matter
submitted to the vote of shareholders. As of the Record Date, there were
1,723,538 shares of Common Stock outstanding. The following are the only
persons known to the Company who beneficially own more than 5% of the
outstanding shares of Common Stock of the Company as of the Record Date.
Name and Address Amount and Nature Percentage of
Beneficial Owner Beneficial Ownership Common Stock
Leonard L. Abel 86,378 (1) 5.01%
11209 Potomac Crest Drive
Potomac, MD 20854
William A. Koier 108,270 (2) 6.24%
3A Regatta Point Villas
Rt. 7 Bolongo Bay
St. Thomas, U.S. Virgin
Islands 00802
Thomas L. Phillips 115,874 (3) 6.68%
8709 Crider Brook Way
Potomac, MD 20854
(1) Includes 3,000 shares held in a trust account of which Mr. Abel is the
trustee, 49,350 shares owned jointly by Mr. Abel and his wife, who shares
voting and investment power, and 4,186 shares owned individually by
Mr. Abel's wife.
(2) Includes 34,500 shares owned jointly by Mr. Koier and his wife, who share
voting and investment power. Includes 25,770 shares held by Mr. Koier as
Trustee for the Koier Family Trust No. One and 3,000 shares held by
Mr. Koier as Custodian for his step children. Includes presently
exercisable warrants to purchase 12,000 shares of Common Stock.
(3) Includes 84,600 shares owned jointly by Mr. Phillips and his wife, who
share voting and investment power and 450 shares owned individually by
Mr. Phillips' wife. Includes 18,674 shares held by Mr.. Phillips as
Trustee of the Thomas L. Phillips Revocable Trust. Includes presently
exercisable warrants to purchase 12,000 shares of Common Stock.
ELECTION OF DIRECTORS
The number of directors of the Company is currently set at five. The
Company's Certificate of Incorporation and Bylaws provide that each director
shall serve a one-year term, defined by annual meeting dates, or until their
successors are elected and qualified. In the absence of a contrary designation
on the enclosed form of proxy, proxies will be voted FOR the election of the
following five nominees to serve as director of the Company until the 1997
Annual Meeting of Shareholders or until their successors are elected and
qualified: Leonard L. Abel, Dudley C. Dworken, William A. Koier,
Ronald D. Paul and Thomas L. Phillips. Each of the nominees currently serves
as a director of the Company and the Bank. In the event that any of the
nominees for election as director shall be unable to serve as a director,
it is intended that the proxies solicited hereby will be voted for such other
person or persons as may be nominated by the Board of Directors. The Board
of Directors has no reason to believe that any of the nominees will be unable
to serve.
The affirmative vote of a plurality of the votes cast at the meeting is
required for the election of directors. Each shareholder has the right to
cast as many votes for each director as equals the number of shares held, but
is not entitled to cumulate such votes in order to cast more votes for any one
director than the number of shares held.
Directors and Executive Officers
The following table sets forth as of the Record Date, the directors,
nominees for director and executive officers of the Company, the number of
shares of Common Stock beneficially owned by each of such persons, and the
number of shares of Common Stock beneficially owned by all current directors
and executive officers of the Company as a group. The amount and nature of
beneficial ownership, except as otherwise noted in the table, represents
shares over which a director, nominee or executive officer has sole voting
and sole investment power.
Shares
Name and Principal Occupation Beneficially Percent of
Address of Owner Age for the Last Five Years Owned Common Stock
Leonard L. Abel 69 Retired Partner of 86,378(1) 5.01%
Kershenbaum, Abel, Kernus
and Wychulis (Accounting Firm);
Chairman of the Board
of the Company and Chairman
of the Bank.
Dudley C. Dworken 46 President of Curtis 41,200(2) 2.36%
Chevrolet since
May, 1989
William A. Koier 76 Investor; President, 108,270(3) 6.24%
Haven Construction Company
Ronald D. Paul 40 President, Ronald D. 67,222(4) 3.83%
Paul Companies
(Real Estate Investment
and Management)
Thomas L. Phillips 54 President, Phillips 115,874(5) 6.68%
Publishing International,
Inc. (Publishing)
H.L. Ward 49 President and 11,070(6) *
Chief Executive Officer
of the Bank since January 1996;
Executive Vice President of
Allegiance Bank since September 1994;
Senior Vice President of Allegiance Bank
since August 1992; Bank consultant
prior thereto.
Charles V. Joyce, III 54 Chief Financial Officer 1,000(7) *
of the Company and the Bank
since October 1995.
Self-employed as CPA/Consultant
since January 1992.
Vice President of American Security
Bank, N.A. prior thereto.
Total Directors and
Executive Officers as a Group
(7 persons) 431,014(8) 23.77%
* Less than 1% of shares of Common Stock.
(1) Includes 3,000 shares held in a trust account of which Mr. Abel is the
trustee, 49,350 shares owned jointly by Mr. Abel and his wife, who shares
voting and investment power, and 4,186 shares owned individually by
Mr. Abel's wife. Mr. Abel has been a director and Chairman of the
Board of Directors of the Company since 1987.
(2) Includes 11,700 shares held in trust accounts of which Mr. Dworken has
voting authority. Includes presently exercisable warrants to purchase
22,000 shares of Common Stock. Mr. Dworken has been a director of the
Company since 1987.
(3) Includes 34,500 shares owned jointly by Mr. Koier and his wife, who share
voting and investment power. Includes 25,770 shares held by Mr. Koier
as Trustee for the Koier Family Trust No. One and 3,000 shares held by
Mr. Koier as custodian for his step children. Includes presently
exercisable warrants to purchase 12,000 shares of Common Stock.
Mr. Koier has been a director of the Company since 1988.
(4) Includes 5,400 shares held in trust for Mr. Paul's daughters.
Includes 2,802 shares of which Mr. Paul has voting authority. Includes
presently exercisable warrants to purchase 32,000 shares of Common Stock
of the Company. Mr. Paul has been a director of the Company since 1991
and President of the Company since May 1994.
(5) Includes 84,600 shares owned jointly by Mr. Phillips and his wife, who
shares voting and investment power, 450 shares owned individually by
Mr. Phillips' wife and 18,674 shares held by Mr. Phillips as Trustee
of the Thomas L. Phillips Revocable Trust. Includes presently exercisable
warrants to purchase 12,000 shares of Common Stock of the Company.
Mr. Phillips has been a director of the Company since 1987.
(6) Includes presently exercisable options to purchase 10,970 shares of
Common Stock.
(7) Represents presently exercisable options to purchase 1,000 shares of
Common Stock.
(8) Assumes the exercise of all presently exercisable options and warrants
to purchase shares of common stock held by directors and executive
officers.
Under the Securities Exchange Act of 1934 and the regulations promulgated
thereunder, the Company's officers, directors and greater than ten percent
shareholders are required to file on a timely basis certain reports of their
ownership of or transactions relating to the Common Stock.
Meetings and Committees of the Board of Directors of the Company
The Board of Directors of the Company held 13 meetings during fiscal 1995;
all of the directors were present at 75% or more of such meetings. There are
no committees of the Board of the Company. The Board of Directors of
Allegiance Bank, N.A. held monthly board meetings, and all directors were
present at 75% or more of such meetings. Each member of the Bank Board of
Directors attended 75% of the meetings of committees of which they are
members, with the exception of Mr. Koier, who attended committee meetings
75% of the time except for the Credit Review Committee.
Allegiance Bank, N.A. has the following committees:
Loan Committee - This Committee met 22 times during 1995 to review and approve
loan requests over the expressed loan authority of the Bank's loan officers.
The Committee also grants loan authority to officers, approves charge-offs,
reviews delinquent loans and provisions for loan losses.
Members of this Committee are William A. Koier, Chairman, Dudley C. Dworken,
John R. Fernstrom, Ronald D. Paul, Linda Greer Spooner, and H.L. Ward.
Audit Committee - This Committee met 5 times during 1995 to review all Call
Reports and other regulatory reporting, external and internal audit reports,
consumer compliance audits and external credit reviews of the Bank.
Members of this Committee are Ronald A. Willoner, Chairman, Steven L.
Fanaroff, John R. Fernstrom, Linda Greer Spooner, and William E. Knight.
Asset/Liability Committee - This Committee met 10 times during 1995 to review
the previous quarter's performance in relationship to asset and liability mix,
investment strategy, liquidity and funds management. The Committee reviews
future strategies and monitors management compliance with policy.
Members of this Committee are Ronald D. Paul, Chairman, William A. Koier,
Dudley C. Dworken, Ronald A. Willoner, and H.L. Ward.
Compensation Committee - This Committee met 4 times during 1995 to review
the performance of the Bank's executive officers. It also reviews the Bank's
total compensation and benefits package, including director fees, insurance,
vacation, 401(K) plan contributions, stock options and all other benefits.
Members of this Committee are Dudley C. Dworken, Chairman, Ronald D. Paul,
and William A. Koier.
Community Reinvestment Act Committee - This Committee met 4 times during 1995
to monitor the Bank's progress under its CRA program. It reviews community
ascertainment procedures and the resulting decisions that affect current and
potential customers and services.
Members of this Committee are Linda Greer Spooner, Chairperson,
Dudley C. Dworken and H.L. Ward.
Credit Review Committee - This Committee met 6 times during 1995 to review
delinquent, criticized and classified loans. It develops workout strategies
to include forbearance agreements, new loan advances and re-negotiation of all
terms and conditions and foreclosures. It also monitors the Allowance for
Credit Losses and overall asset quality.
Members of this Committee are Ronald D. Paul, Chairman, John R. Fernstrom,
H.L. Ward and William A. Koier.
Director Compensation
Directors of the Company and Bank receive $200 for each Board or Committee
meeting attended and $250 for each meeting chaired. Directors of the Company
and the Bank that are also full-time officers receive no additional
compensation for attendance at such meetings. Mr. Abel received a fee of
$42,996 for fiscal year 1995 as Chairman of the Company and the Bank. Mr. Paul
was appointed President of the Company in May, 1994 and received an additional
fee as President of $8,400 for fiscal year 1995. During 1995, the Company and
the Bank paid fees of $117,546 in the aggregate to all directors.
In February 1994, the Board of Directors approved the grant of warrants
to purchase 6,000 shares as adjusted for the stock split of Common Stock to
each director of the Company and the Bank other than Messrs. Abel and Beery.
These warrants to purchase an aggregate of 102,000 shares of Common Stock are
presently exercisable and provide for an exercise price of $5.00 per share and
an expiration date of February 8, 1999. In May 1995, the Board of Directors
approved additional grants of warrants to purchase 5,000, 10,000 and 20,000
shares of Common Stock to Messrs. Beery, Dworken and Paul, respectively.
These warrants have an exercise price of $6.50 per share, and an expiration
date of June 27, 2000. Shares of Common Stock received upon exercise of the
warrants are required to be held by the recipient thereof for a minimum of one
year.
EXECUTIVE OFFICERS' COMPENSATION AND CERTAIN TRANSACTIONS
Compensation - Overview
In accordance with regulations enacted by the U.S. Securities and Exchange
Commission, the Company is providing summarized tables of all compensation
awarded to, earned by, or paid to certain executive officers for the fiscal
years ended December 31, 1995, 1994, and 1993. During 1995, no salaries or
other compensation were paid to any officers or employees of the Company in
their capacity as such; except Mr. Ronald D. Paul, President of the Company
since May 1995. As a director of the Company, Mr. Paul received directors fees
and warrants to purchase Common Stock as noted elsewhere herein; however, he
has received no salary, bonus, or other compensation in his capacity as
President of the Company.
The following table sets forth a comprehensive overview of the
compensation for Mr. Thomas E. Beery, the Bank's President and Chief Executive
Officer until December 31, 1995. No other executive officer received
compensation in excess of $100,000 during 1995.
Summary Compensation Table
Name and Fiscal Options and Other
Principal Position Year Salary Bonus Warrants (1) Compensation
Thomas E. Beery 1995 $132,500 $4,000 9,000 $ 5,127 (2)
Director, 1994 $125,000 $5,000 3,600 $12,252 (3)
CEO and President 1993 $115,000 $3,000 5,000 $ 8,414 (4)
of the Bank (5)
(1) During 1995, Mr. Beery received 4,000 employee stock options to purchase
Common Stock at $6.50 expiring in 2000, and also received 5,000 director
warrants to purchase Common Stock at $6.50 expiring in 2000.
(2) Includes $1,152 for the taxable portion of the premium for term group life
insurance, and $3,975 for the 401(K) matching contribution in 1995.
(3) Includes $1,152 for the taxable portion of the premium for term group life
insurance, $3,900 for the 401(K) matching contribution, and $7,200 for
car allowance in 1994.
(4) Includes $1,046 for the taxable portion of the premium for term group life
insurance, $2,568 for the 401(K) matching contribution, and $4,800 for
car allowance in 1993.
(5) Mr. Beery resigned as an executive officer and director of the Company and
the Bank on December 31, 1995. During 1996, Mr. Beery will serve as a
consultant to the Bank; for such services he will receive fees in the
aggregate amount of $137,138.
Option Grants In Last Fiscal Year
Potential Realizable
Number of Value at Assumed
Securities Percentage Exercise Annual Rate of
Underlying of Total or Base Stock Appreciation
Options Options Price Expiration for Option Term (2)
Name Granted Granted Per Share Date 5% 10%
Thomas E.
Beery(1) 4,000 17.02% $6.50 2000 $8,051 $16,968
(1) Represents options granted pursuant to the Employee Stock Option Plan.
Mr. Beery also received 5,000 director warrants exercisable at $6.50
per share in 1995.
(2) The assumed annual rates of appreciation in the table are shown for
illustrative purposes only pursuant to applicable SEC requirements.
Actual values realized on stock options are dependent on actual future
performance of the Company's stock, among other factors. Accordingly,
the amounts shown may not necessarily be realized.
Aggregated Options Exercised in Last Fiscal Year,
and Fiscal Year End Option Values
Number of
Securities
Underlying Value of
Unexercise Unexercised
Options In-the-Money
at Fiscal Options at
Shares Year End Fiscal Year End
Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Uexercisable
Thomas E.
Beery (1) -0- -0- 23,700/0 $84,720/0
(1) Does not include unexercised warrants owned by Mr. Beery.
Employee Stock Option Plan
The Board of Directors of the Company approved a five year Employee
Stock Option Plan ("ESOP Plan") in January 1994, which was adopted at the
1994 Annual Meeting of Stockholders.
The purpose of the ESOP Plan was to provide a means whereby certain officers
and employees of the Company, the Bank, or any other wholly-owned subsidiary
of the Company, could be given an opportunity to purchase Common Stock of the
Company under options which qualified as "qualified stock options" under the
Internal Revenue Code. The ESOP Plan reserved 78,000 shares of the Company's
Common Stock for issuance upon the exercise of options granted thereunder.
The ESOP Plan will terminate in May 1999, five years after the date of
adoption. The number of options granted to employees in fiscal 1995 was
recommended by the Compensation Committee and such options were issued at no
less than the average of the bid and ask price at the close of business on the
day on which the option was granted. As of the Record Date, there were
outstanding options to purchase 79,005 shares of Common Stock which had been
granted under the ESOP Plan. No options currently remain available for grant
under the ESOP Plan, although options which are terminated or canceled without
exercise may be reissued.
401(K) Plan
The Bank currently maintains a 401(K) Profit Sharing Plan
(the "Plan"). Employees who are eligible to participate in the Plan are
those who have been employed by the Bank or the Company for a least one year
and work at least 1,000 hours during any Plan (calendar) year.At the beginning
of each Plan year, the Compensation Committee determines the percentage that it
will match of each eligible employee's contribution, which contribution is
allocated among Plan participants with 1,000 hours of service during such year
according to the following formula:
Matching Formula
Employee % of Salary Bank matching %
1% .50%
2% 1.00%
3% 1.50%
4% 2.00%
5% 2.50%
6% 3.00%
Vesting Schedule for Matching Contribution
Years of Service Annual Vesting Percentage
Two Years 20%
Three Years 50%
Four Years 100%
During the 1995 fiscal year, the Company and its subsidiaries
contributed $39,382 to the Plan for all participants, including $3,975
contributed for Mr. Beery.
Related Party Transactions
In the ordinary course of business, loans are made to officers and
directors of the Company and the Bank and to entities with which they are
affiliated. These loan are made on substantially the same terms and conditions
as those prevailing at the time for comparable transactions with outsiders,
and are not considered to involve more than the normal risk of collectability.
For the years ended December 31, 1995, 1994 and 1993 an analysis of
such loans, in the aggregate, is as follows:
1995 1994 1993
Balance at January 1 $3,329,604 $2,990,545 $3,209,821
New loans 3,781,542 2,895,727 1,567,758
Repayments/Adjustments (3,535,928) (2,556,668) (1,787,034)
Balance at December 31 $3,575,218 $3,329,604 $2,990,545
Compensation Committee Report
The Compensation Committee of the Board of Directors of the Bank
was established in fiscal 1987. Through this committee, the Company and the
Bank have established and implemented an executive compensation policy that
has been approved by the Board of Directors of the Company and covers the
Executive Officer of the Bank named in the Summary Compensation Table.
Compensation Philosophy
The Company's compensation philosophy is to provide executive
officers with salaries that are competitive with those paid by institutions of
similar size, performance and circumstances and with incentive compensation
for the accomplishment of certain pre-established goals. The policy seeks to
achieve a balance between base salary and incentives, with incentives
reflecting both long and short-term goals and normally being intended to
comprise less than 10% of the officer's total annual compensation. Annual
increases to an executive officer's base salary are based, in part, on
the officer's responsibilities, performance of those responsibilities and
achievement of pre-established goals. Incentive compensation, generally in
the form of salary increases, stock options, and bonuses is closely tied to
individual performance, provided that certain overall corporate goals are met,
in a manner that is intended to encourage continuous focus on enhancing
shareholder value, continued profitability and teamwork.
The Compensation Committee developed the fiscal 1995 compensation
package for each Executive Officer, including salary and any incentive
compensation, based on its review of selected local institutions and national
and regional industry peer group data from the Sheshunoff Bank Executive and
Director Compensation Survey, and 1995 evaluations of the performance of each
executive officer. The factors considered by the Compensation Committee in
evaluating the performance of an executive officer include the achievement of
pre-established quantitative goals that are specific to the executive officer's
responsibilities.
CEO Compensation
As with other Executive Officers, the compensation paid to the CEO
is a combination of salary, auto allowance, 401(K) contribution, health, life
and disability insurance and stock options. To determine salary and other
benefits, the Compensation Committee considered information regarding salaries
paid to CEO's of banks with assets of $100 to $200 million within the area of
Washington, D.C., Maryland and Virginia. Other factors considered by the
Compensation Committee are achievement on reaching pre-determined goals
including earnings, asset quality and growth.
This report has been prepared by the Compensation Committee of the
Board of Directors consisting of Mr. Dudley C. Dworken, Ronald D. Paul and
William A. Koier.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee presently include three
outside Directors: Mr. Dudley C. Dworken, as Chairman, and Messrs.
Ronald D. Paul and William A. Koier. Until January 1996, Mr. Ronald E. Parr,
a former director of the Company and the Bank, was a member of the Compensation
Committee. Mr. Parr participated in determining 1995 compensation levels
of the executive officers. None of these individuals, other than Mr. Paul,
are or have been employed as an officer or employee of the Company or the Bank.
Performance Graph
Set forth below is a line graph comparing the yearly percentage
change in cumulative total shareholder return on the Company's Common Stock
from January 1, 1991 through December 31, 1995. The Company's yearly
percentage change in cumulative total shareholder return as shown is compared
to the NASDAQ Market Index and a selected peer group index consisting of one
hundred fifty-five Middle Atlantic banks published by Media General Financial
Services. The return shown is based upon an investment of $100 on January 1,
1991 in the Company Common Stock, and indexed for the NASDAQ Stock Market
(U.S. Companies) and the Bank's peer group, respectively.
The total return also assumes reinvestment of all dividends.
For the electronic filing to the Securities and Exchange Commission on
the EDGAR sytem, the data used to develop the peer group comparison in
the performance graph (which was included in the printed copy of the proxy
statement) is provided the following table:
Allegiance NASDAQ Media General
Banc Stock Financial Services
Year Corporation Market Peer Group
1990 100.00 100.00 100.00
1991 69.23 128.38 133.08
1992 76.92 129.64 166.65
1993 92.31 155.50 207.03
1994 138.46 163.26 196.56
1995 170.77 211.77 298.47
RATIFICATION OF
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Upon the recommendation of the Audit Committee, the Board of
Directors has reappointed the firm of Stegman & Company as independent
auditors of the Company and the Bank for the year ending December 31, 1996 and
recommends that shareholders ratify the appointment. The Company has been
advised by Stegman & Company that neither the firm nor any of its associates
has any relationship with the Company or the Bank other than the usual
relationship that exists between independent certified public accountants and
clients. Representatives of Stegman & Company are expected to be present at the
Annual Meeting where they will have the opportunity to make a statement,
if they desire to do so, and will be available to respond to appropriate
questions.
OTHER MATTERS
Proposals by Shareholders
Shareholders may send proposals for inclusion in the proxy materials
for the 1997 Annual Meeting of Shareholders of the Company to:
Mary C. McQuillen
Corporate Secretary
Allegiance Banc Corporation
4719 Hampden Lane
Bethesda, Maryland 20814
All of such proposals must be received by the Company in writing not
later than December 3, 1996 for inclusion in the Company's proxy statement and
form of proxy relating to the meeting.
Other Business
The Board of Directors of the Company is not aware of any matters
which may be presented for action at the Annual Meeting other than those set
forth above. However, with respect to any other business which may come
before the meeting, the persons designated in the enclosed proxy will vote
in accordance with their best judgment.
Form 10-K
Upon receipt of a written request, the Company will deliver, without
charge, to any shareholder of record entitled to vote at the Annual Meeting or
to any beneficial owner of Common Stock, a copy of the Company's annual report
on Form 10-K for the fiscal year ended December 31, 1995, required to be
filed with the SEC under the Exchange Act. Such written requests should be
directed to Mary C. McQuillen, Corporate Secretary, Allegiance Banc
Corporation, 4719 Hampden Lane, Bethesda, Maryland, 20814.
By Order of the Board of Directors
Mary C. McQuillen
Corporate Secretary
April 18, 1996
