<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
TCF FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
ANTHONY BRANCH
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
TCF-Registration Trademark-
TCF FINANCIAL CORPORATION
801 MARQUETTE AVENUE, SUITE 302
MINNEAPOLIS, MN 55402
(612) 661-6500
March 22, 1996
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders (the
"Annual Meeting") of TCF Financial Corporation ("TCF Financial" or "TCF") which
will be held at the Marriott City Center Hotel, 30 South Seventh Street,
Minneapolis, Minnesota, on Wednesday April 24, 1996, at 10:00 a.m. local time.
At the Annual Meeting you will be asked to elect five directors to the
Board; to ratify the Board's choice of independent public accountants; to
approve a directors stock grant program; and to approve a performance-based
incentive policy.
Your vote is important, regardless of the number of shares you own. On
behalf of the Board, I urge you to sign, date and return the enclosed proxy card
as soon as possible, even if you plan to attend the Annual Meeting. If you
receive more than one proxy card, because you have multiple accounts with TCF
Financial common stock, please complete, sign, date and return each proxy card
so that all your shares will be voted. This will not prevent you from voting in
person, but will assure that your vote is counted if you are unable to attend
the Annual Meeting.
Sincerely,
[SIGNATURE]
William A. Cooper
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
<PAGE>
TCF-Registration Trademark-
TCF FINANCIAL CORPORATION
801 MARQUETTE AVENUE, SUITE 302
MINNEAPOLIS, MN 55402
(612) 661-6500
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 24, 1996
------------------------
TO THE STOCKHOLDERS OF TCF FINANCIAL CORPORATION
The Annual Meeting of Stockholders (the "Annual Meeting") of TCF Financial
Corporation ("TCF Financial" or "TCF") will be held at the Marriott City Center
Hotel, 30 South Seventh Street, Minneapolis, Minnesota, on Wednesday, April 24,
1996, commencing at 10:00 a.m. local time for the following purposes:
1. To elect five directors;
2. To ratify the appointment of KPMG Peat Marwick LLP as independent public
accountants for the fiscal year ending December 31, 1996;
3. To approve a directors stock grant program; and,
4. To approve a performance-based incentive policy.
Only holders of record of TCF Financial's common stock at the close of
business on March 8, 1996, are entitled to notice of and to vote at the Annual
Meeting or any adjournment thereof.
Whether or not you plan to attend the Annual Meeting in person, please
complete, sign and date the enclosed proxy card and mail it promptly. Should you
attend the Annual Meeting, you may revoke your proxy and vote in person. A
return envelope, which requires no postage if mailed in the United States, is
enclosed for your convenience.
By Order of the Board of Directors
[SIGNATURE]
William A. Cooper
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
SIGN AND DATE THE PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE.
Minneapolis, Minnesota
March 22, 1996
2
<PAGE>
TCF-REGISTRATION TRADEMARK-
TCF FINANCIAL CORPORATION
801 MARQUETTE AVENUE, SUITE 302
MINNEAPOLIS, MN 55402
(612) 661-6500
The enclosed proxy is solicited by and on behalf of the Board of Directors
(the "Board") of TCF Financial Corporation ("TCF Financial" or "TCF"), a
Delaware corporation, for use at the Annual Meeting of Stockholders (the "Annual
Meeting") to be held on Wednesday, April 24, 1996, commencing at 10:00 a.m.,
Central Time, at the Marriott City Center Hotel, Minneapolis, Minnesota, and any
adjournment thereof. The principal executive offices of TCF are located at the
address set forth above.
PURPOSES OF MEETING. The purposes of the Annual Meeting are to consider and
vote upon: (a) election of five directors; (b) ratification of the appointment
of KPMG Peat Marwick LLP as independent public accountants for the fiscal year
ending December 31, 1996; (c) approval of a directors stock grant program; (d)
approval of a performance-based incentive policy; and (e) any other matters as
may properly come before the Annual Meeting.
SHARES OUTSTANDING AND ENTITLED TO VOTE; RECORD DATE. The close of business
on March 8, 1996 has been fixed by the Board as the record date (the "record
date") for the determination of holders of common stock of TCF Financial, par
value $.01 per share, ("TCF Common Stock") entitled to notice of and to vote at
the Annual Meeting and any adjournment or adjournments thereof. At the close of
business on the record date, there were 35,854,534 shares of TCF Common Stock
outstanding and entitled to vote, held by approximately 9,000 holders of record.
Each share of TCF Common Stock entitles the holder thereof to one vote on each
matter to be submitted to TCF stockholders at the Annual Meeting.
VOTE REQUIRED. A quorum, consisting of a majority of the voting power of
the issued and outstanding TCF Common Stock entitled to vote at the Annual
Meeting, must be present in person or by proxy before any action may be taken at
the Annual Meeting. Assuming a quorum is present, a plurality of the votes
present in person or represented by proxy at the Annual Meeting is necessary for
the election of directors and a majority of such votes is necessary for
ratification of KPMG Peat Marwick LLP as independent public accountants, to
approve the directors stock grant program, and to approve the performance-based
incentive policy. Abstentions are counted as shareholders present, for purposes
of the quorum requirement, but are not counted as voting in favor of the
proposal. As of December 31, 1995, the directors and executive officers of TCF
and their affiliates in the aggregate beneficially owned and are entitled to
vote 4,822,328 outstanding shares or 13.54% of the outstanding shares of TCF
Common Stock.
VOTING; SOLICITATION AND REVOCATION OF PROXIES. A proxy card for use at the
Annual Meeting accompanies this Proxy Statement and is solicited by the Board.
Any TCF stockholder executing a proxy card may revoke it at any time before it
is voted by filing with the Secretary of TCF, at the address of TCF set forth
above, written notice of such revocation; by executing a later-dated proxy; or
by attending the Annual Meeting and giving notice of such revocation in person.
Attendance at the Annual Meeting will not, in and of itself, constitute
revocation of a proxy card. Participants voting shares in the TCF Employees
Stock Ownership Plan-401(k) (which includes shares under the Great Lakes Bancorp
Amended Employee Stock Ownership Plan); and participants in the Great Lakes
Bancorp Amended 401(k) Savings and Investment Plan, will find voting and
revocation procedures described in the special proxy card sent to them.
Each proxy returned to TCF (and not revoked) will be voted in accordance
with the instructions indicated thereon. IF NO INSTRUCTIONS ARE INDICATED, THE
PROXY WILL BE VOTED: (1) FOR THE ELECTION OF THE NOMINEES FOR DIRECTORS NAMED IN
THIS PROXY STATEMENT; (2) IN FAVOR OF RATIFYING THE APPOINTMENT OF KPMG PEAT
MARWICK LLP AS INDEPENDENT PUBLIC ACCOUNTANTS OF TCF FINANCIAL; (3) IN FAVOR OF
APPROVING THE DIRECTORS STOCK GRANT PROGRAM; and (4) IN FAVOR OF APPROVING THE
PERFORMANCE-BASED INCENTIVE POLICY. While the Board knows of no other matters to
be
3
<PAGE>
presented at the Annual Meeting, if any other matter properly comes before the
meeting or any adjournment thereof, all proxies returned to TCF will be voted on
any such matter in accordance with the judgment of the proxy holders.
BENEFICIAL OWNERSHIP OF TCF COMMON STOCK. See "Election of TCF Directors --
Securities Ownership of TCF Directors, Executive Officers and Significant
Stockholders."
PROPOSAL 1
ELECTION OF TCF DIRECTORS
INFORMATION ON DIRECTORS AND NOMINEES
The Restated Certificate of Incorporation (the "Certificate") of TCF
Financial provides that the Board shall be divided into three classes, each to
be comprised of as nearly equal a number of directors as possible. The directors
of each class are to serve for terms of three years, with one class being
elected each year. TCF Financial's Certificate currently provides that the
number of directors shall be not fewer than seven or more than twenty-five, with
the exact number of directors fixed from time to time by a resolution duly
adopted by a majority of the Continuing Directors (as defined) of the Board. The
current number of directors on the Board of TCF Financial is fixed at fifteen.
Stockholders will be asked at the Annual Meeting to elect five directors to
serve for three-year terms expiring at the Annual Meeting in 1999, or until a
successor is elected. Unless authority is withheld, all proxies received in
response to this solicitation will be voted for the election of the nominees
listed on the following table. All nominees have indicated a willingness to
serve if elected. If any nominee becomes unable to serve prior to the Annual
Meeting, the proxies received in response to this solicitation will be voted for
a replacement nominee selected in accordance with the best judgment of the proxy
holders named therein.
Effective January 2, 1996, Mr. Joseph Clifford retired from service as Vice
Chairman. He retired as a director of TCF Financial effective December 15, 1995,
and Mr. Lynn Nagorske was elected to the Board to fill the remainder of Mr.
Clifford's term, which expires in 1998. Mr. Nagorske is currently President and
Chief Operating Officer of TCF Financial.
<TABLE>
<CAPTION>
DIRECTOR
NAME POSITION(S) WITH TCF FINANCIAL AGE SINCE*
- ------------------------------------------- ------------------------------------------- --- ---------
<S> <C> <C> <C>
NOMINEES FOR ELECTION AS DIRECTORS
CLASS III -- TERM EXPIRES 1999
Rudy Boschwitz............................. Director 65 1991
William A. Cooper.......................... Director, Chairman and Chief Executive 52 1987
Officer
Thomas A. Cusick........................... Director and Vice Chairman 51 1988
Thomas J. McGough.......................... Director 62 1989
Ronald A. Ward............................. Director 51 1993
DIRECTORS WHOSE TERMS DO NOT EXPIRE IN 1996
CLASS I -- TERM EXPIRES 1997
Bruce G. Allbright......................... Director 67 1987
Robert J. Delonis.......................... Director and Chairman of Great Lakes 44 1995
Bancorp
John M. Eggemeyer, III..................... Director 50 1994
Daniel F. May.............................. Director 66 1988
Roy E. Weber............................... Director 67 1995
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
NAME POSITION(S) WITH TCF FINANCIAL AGE SINCE*
- ------------------------------------------- ------------------------------------------- --- ---------
<S> <C> <C> <C>
CLASS II -- TERM EXPIRES 1998
Robert E. Evans............................ Director and Vice Chairman 60 1990
Luella G. Goldberg......................... Director 59 1988
Lynn A. Nagorske........................... Director, President and Chief Operating 39 1995
Officer
Mark K. Rosenfeld.......................... Director 50 1995
Ralph Strangis............................. Director 59 1991
</TABLE>
- ------------------------
*Does not include service at TCF Bank Minnesota fsb ("TCF Bank Minnesota"), a
wholly owned subsidiary of TCF Financial.
THE TCF BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT TCF STOCKHOLDERS VOTE
FOR THE NOMINEES FOR THE TCF BOARD OF DIRECTORS.
BACKGROUND OF DIRECTORS. The following discussion sets forth certain
information with respect to the persons who are nominees for directors of TCF
Financial at the Annual Meeting as well as similar information for the other
directors of TCF Financial whose terms do not expire this year. TCF Financial
knows of no arrangements or understandings between a director or nominee and any
other person pursuant to which he or she has been selected as a director or
nominee except that Directors Delonis, Weber and Rosenfeld were elected to the
Board in connection with TCF Financial's acquisition of Great Lakes Bancorp.
There is no family relationship between any of the nominees, directors or
executive officers of TCF Financial.
*RUDY BOSCHWITZ is Chairman of Home Valu, Inc., a company he founded. He
also served as a United States Senator from the State of Minnesota from 1978 to
1991. He is a director of the Chicago Mercantile Exchange in Chicago, Illinois,
and Sunbelt Nurseries, Ft. Worth, Texas. Mr. Boschwitz has been a director of
TCF Financial since 1991.
*WILLIAM A. COOPER has been Chairman of the Board of TCF Financial since its
formation in 1987. Mr. Cooper has also been Chief Executive Officer of TCF
Financial since 1987 and was Chief Executive Officer of TCF Bank Minnesota until
1993. Mr. Cooper serves on the Boards of Directors of the Minnesota Business
Partnership, Minnesota Meeting, RTW, Inc. and the Center for the American
Experiment. Mr. Cooper has been a director of TCF Financial since its formation
in 1987 and of TCF Bank Minnesota since 1985.
*THOMAS A. CUSICK was elected Vice Chairman of TCF Financial in 1993. Before
that he had been President and Chief Operating Officer of TCF Financial since
its formation in 1987. Mr. Cusick was elected Chief Executive Officer of TCF
Bank Minnesota in 1993. Mr. Cusick is a director of Damark International, Inc.,
is a past Chairman of the Savings League of Minnesota and is a past member of
the Board of Trustees of the College of St. Benedict. Mr. Cusick has been a
director of TCF Financial since 1988.
*THOMAS J. MCGOUGH is President of McGough Construction Company, Inc., a
Minnesota commercial contractor. Mr. McGough was one of the incorporators of
McGough Construction Company. Mr. McGough has been a director of TCF Financial
since 1989.
*RONALD A. WARD is certified by the American Board of Oral Surgery and is a
retired associate of Oral and Maxillofacial Surgery Associates of Waukesha, Ltd.
Dr. Ward had been a director of Republic Capital Group, Inc. ("RCG") from 1987
and of Republic Capital Bank, F.S.B. from 1981 until TCF's acquisition of RCG in
1993. Dr. Ward has been a director of TCF Financial since 1993, and has been a
director of TCF Bank Wisconsin fsb ("TCF Bank Wisconsin") since 1993.
- ------------------------
*Nominee for election at the Annual Meeting
5
<PAGE>
BRUCE G. ALLBRIGHT was President and a director of Dayton Hudson Corporation
from 1987 until his retirement in 1990. Before that, he was Chairman and Chief
Executive Officer of Dayton Hudson Corporation's largest division, Target
Stores, a major national retailer, since 1984 and was the President and Vice
Chairman of that division prior to that date. Mr. Allbright is also a director
of G&K Services, Inc., Hannaford Brothers Company, and Noma Industries. Mr.
Allbright has been a director of TCF Financial since its formation in 1987.
ROBERT J. DELONIS is Chairman of the Board of Great Lakes Bancorp, A Federal
Savings Bank ("Great Lakes Bancorp"), a wholly owned subsidiary of TCF
Financial. Mr. Delonis has been a director of Great Lakes Bancorp since 1987 and
of TCF Financial since February 1995, and was Chief Executive Officer of Great
Lakes Bancorp from 1992 through December 1995. He is Treasurer of Artrain,
Chairman of the Michigan League of Savings Institutions, past Chairman of
Catholic Social Services of Washtenaw County, a past director of the Federal
Home Loan Bank of Indianapolis and past Chairman of the Thrift Industry
Accounting Committee. He has also served as an instructor in real estate finance
in the Graduate School of Business Administration at the University of Michigan.
Mr. Delonis is a Certified Public Accountant.
JOHN M. EGGEMEYER, III is President of Belle Plaine Partners, Inc. and has
held that position since 1990. In addition, he served as a managing director of
Mabon Securities Corp., Inc. from 1992 to 1994. He also serves as a director of
Rancho Santa Fe National Bank, The Enterprise Fund and The Combined Fund, Inc.
He has been a director of TCF Financial since 1994 and TCF Bank Illinois fsb
("TCF Bank Illinois") since 1993.
DANIEL F. MAY is retired from various executive positions with Republic
Airlines. Mr. May has been a director of TCF Financial since 1988. Mr. May is a
Certified Public Accountant.
ROY E. WEBER is the former Chairman of the Board of Great Lakes Bancorp. Mr.
Weber has been a director of Great Lakes Bancorp since 1967 and of TCF Financial
since February 1995. He is a past Chairman of the Michigan League of Savings
Institutions and past Vice Chairman and director of the Federal Home Loan Bank
of Indianapolis.
ROBERT E. EVANS has been a director of TCF Financial since 1990, and was
elected Vice Chairman of TCF Financial in 1993. Mr. Evans has been a director of
TCF Bank Minnesota since 1987 and was elected an Executive Vice President of TCF
Bank Minnesota in 1993. He was President and Chief Operating Officer of TCF Bank
Minnesota from 1987 to 1993. Mr. Evans also serves on the Board of Directors of
Minnesota Brewing Company.
LUELLA G. GOLDBERG has been a director of TCF Financial since 1988. She is
an active member of the Board of Directors of several Minnesota corporations and
associations. She served as a director of Northwestern National Life Insurance
Company from 1976 to 1995, and has been a director of its holding company,
Reliastar Financial Corp. (formerly The NWNL Companies, Inc.) since its
formation in 1989. She has also been a director of Piper Funds, Inc., Piper
Global Funds, Inc., and Piper Institutional Funds, Inc. since 1987, and of a
number of related closed-end investment companies since 1988. She has served as
a director of Hormel Foods Corporation since 1993. Ms. Goldberg served as Chair
of the Board of Trustees of Wellesley College from 1985 to 1993. From July 1993
to October 1993, Ms. Goldberg served as acting President of Wellesley College
and continues to serve as a trustee. Ms. Goldberg is also a past Chair of the
Minnesota Orchestral Association, and is currently Vice-Chair of the University
of Minnesota Foundation.
LYNN A. NAGORSKE was elected to the Board in December 1995. Mr. Nagorske has
been President and Chief Operating Officer of TCF Financial since 1993. He was
the Treasurer (Principal Financial Officer) of TCF Financial since its formation
in 1987 to December, 1995. Mr. Nagorske has been an Executive Vice President of
TCF Bank Minnesota since 1988. Mr. Nagorske also serves as a director for the
Science Museum of Minnesota and is Treasurer and director for the Mankato State
University Foundation. Mr. Nagorske is a Certified Public Accountant.
MARK K. ROSENFELD is Chairman, Chief Executive Officer and director of
Jacobson Stores Inc., a retail department store based in Jackson, Michigan. He
has been a director of Great Lakes Bancorp since 1987
6
<PAGE>
and was elected a director of TCF Financial in February 1995. He serves on the
Board of Trustees for Jackson Community College, is a trustee and a member of
the Board of Michigan Colleges Foundation, and is a director of the National
Retail Federation and the Michigan Retailers Association.
RALPH STRANGIS is a founding member of the Minneapolis law firm of Kaplan,
Strangis and Kaplan, P.A. Mr. Strangis is also a director of National Presto
Industries, Inc., Life USA Holding, Inc., Payless Cashways, Inc. and Damark
International, Inc. He has been a director of TCF Financial since 1991.
TCF BOARD ACTIONS AND COMMITTEES. The business, property and affairs of TCF
Financial are managed by or under the direction of the Board. The Board has
established Audit, Personnel/Affirmative Action, and Shareholder Relations
Committees. During 1995 these committees of the Board held three, five, and one
meetings, respectively. In 1995 the Board met six times. Each director attended
at least 75% of the total number of meetings of the Board and of committees on
which the director served.
The Audit Committee is responsible for relations with TCF Financial's
internal auditor and independent public accountants, for review of internal
auditing functions and controls, and for review of financial reporting policies
to assure full disclosure of financial condition and results of operations. The
members of the Audit Committee are Messrs. McGough, Boschwitz, Strangis and
Ward.
The Personnel/Affirmative Action Committee is responsible for approving and
reporting to the Board on those items delegated to it by the full Board, and to
recommend a course of action for those human resource issues requiring full
Board approval. This Committee approves affirmative action plans and reviews the
adequacy and effectiveness of benefit programs. The Personnel/Affirmative Action
Committee also serves as the independent committee which administers and makes
awards under the Stock Option and Incentive Plan of TCF Financial, the 1995
Incentive Stock Plan as well as certain other plans. Its members also serve as
the Advisory Committee of the TCF Employees Stock Ownership Plan-401(k), which
has authority to direct the voting of shares of TCF Common Stock held by the
plan to the extent participants in that plan do not furnish voting instructions.
The members of the Personnel/Affirmative Action Committee are Messrs. May,
Allbright, Strangis and Ms. Goldberg.
The Shareholder Relations Committee reviews merger and acquisition
activities and policies and evaluates alternatives available to TCF Financial to
enhance shareholder value. The members of the Shareholder Relations Committee
are Messrs. May, Allbright, Eggemeyer and Strangis.
NOMINATION OF TCF DIRECTORS. The Board acts as a nominating committee for
selecting the nominees of the Board for election as directors. The Bylaws of TCF
Financial (the "Bylaws") require that stockholder nominations for director be
made pursuant to timely notice in writing to the Secretary of TCF Financial. To
be timely, notice must be delivered to or mailed and received by the Secretary
of TCF Financial not less than 60 days nor more than 90 days prior to an annual
meeting; provided, however, that if less than 70 days' notice or prior public
disclosure of the date of the meeting is given or made to stockholders, notice,
to be timely, must be received by the Secretary not later than the close of
business on the tenth day following the earlier of the day on which notice of
the date of the meeting was mailed or on the day on which public disclosure of
the date of the meeting was made. A stockholders' notice of nomination must set
forth certain information specified in Article II, Section 13, of the Bylaws
concerning each person the stockholder proposes to nominate for election and the
stockholder giving such notice. The Bylaws provide that no person shall be
elected as a director unless nominated in accordance with the procedures set
forth in the Bylaws. Public disclosure of the date of the 1996 Annual Meeting
was made on February 14, 1996 by distribution of a news release. Under the
Bylaws, stockholder nominations of directors for the 1996 Annual Meeting were
required to have been received on or before February 24, 1996 in order to be
timely, and no such nominations were received by TCF Financial by that time.
7
<PAGE>
TCF EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS OF TCF FINANCIAL
The following table sets forth certain information with respect to the
executive officers of TCF Financial, or its principal wholly owned subsidiaries
TCF Bank Minnesota, TCF Bank Illinois, TCF Bank Wisconsin, and Great Lakes
Bancorp, who are not directors of TCF Financial.
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL POSITIONS HELD
- ------------------------ --- ------------------------------------------------------------------
<S> <C> <C>
Timothy P. Bailey....... 40 President and Chief Executive Officer of TCF Bank Wisconsin
Peter Bell.............. 44 Executive Vice President of TCF Financial
Joseph P. Clifford...... 52 Vice Chairman of TCF Financial
William E. Dove......... 59 Executive Vice President of TCF Bank Minnesota fsb and of Great
Lakes Bancorp
Michael B. Johnstone.... 48 President and Chief Executive Officer of TCF Bank Illinois
Mark R. Lund............ 45 Senior Vice President, Assistant Treasurer and Controller
(Principal Accounting Officer) of TCF Financial
Ronald J. Palmer........ 43 Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer) of TCF Financial and TCF Bank
Minnesota
Gregory J. Pulles....... 47 General Counsel, Vice Chairman and Secretary of TCF Financial
Mary E. Sipe............ 39 Executive Vice President of TCF Financial
Earl D. Stratton........ 48 Executive Vice President and Chief Information Officer of TCF
Financial
James E. Tuite.......... 60 Executive Vice President of TCF Financial; President and Chief
Operating Officer of TCF Bank Minnesota
Neil I. Whitehouse...... 56 Executive Vice President of TCF Bank Minnesota
Barry N. Winslow........ 48 President and Chief Executive Officer of Great Lakes Bancorp
</TABLE>
The business experience of each of these executive officers during the last
five years is as follows:
TIMOTHY P. BAILEY was named President and Chief Executive Officer of TCF
Bank Wisconsin in 1993. Prior to that Mr. Bailey had been Vice President of
Commercial Lending/Loan Workouts with TCF Bank Minnesota since 1988.
PETER BELL was named an Executive Vice President of TCF Financial in
December 1995, and has been an Executive Vice President of TCF Bank Minnesota
since 1994. Prior to that Mr. Bell was an independent consultant for more than
five years. Mr. Bell also serves on the Board of Directors of the Center for the
American Experiment, CommonBond, Citizens League, and the Johnson Institute. He
is also a director and President of TC Rise and the National Institute for
Traditional Black Leadership.
JOSEPH P. CLIFFORD was Vice Chairman and a director of TCF Financial until
his retirement from the Board in December 1995, and from the position of Vice
Chairman in January 1996.
WILLIAM E. DOVE was elected Executive Vice President and Chief Credit
Officer of Great Lakes Bancorp in December 1995. He has been an Executive Vice
President of TCF Bank Minnesota since 1985 was the director of Commercial
Lending of TCF Bank Minnesota until October 1995.
MICHAEL B. JOHNSTONE was elected President and Chief Executive Officer of
TCF Bank Illinois in February 1995. From 1987 to January 1995 he was employed by
TCF Bank Minnesota as Senior Vice President of Branch Operations.
8
<PAGE>
MARK R. LUND was elected a Senior Vice President of TCF Financial in 1994.
He has been Assistant Treasurer and Controller (Principal Accounting Officer) of
TCF Financial and Assistant Treasurer of TCF Bank Minnesota since 1991 and a
Senior Vice President and Controller of TCF Bank Minnesota since 1987. Mr. Lund
is a Certified Public Accountant.
RONALD J. PALMER was elected Executive Vice President, Chief Financial
Officer and Treasurer (Principal Financial Officer) of TCF Financial and TCF
Bank Minnesota in December 1995. He is also an Executive Vice President of TCF
Bank Minnesota. He was President and Chief Executive Officer of TCF Mortgage
Corporation since 1992. Prior to that he was Senior Vice President of Citicorp
Mortgage, Inc. in St. Louis, Missouri since 1986. Mr. Palmer is a Certified
Public Accountant.
GREGORY J. PULLES has been General Counsel of TCF Financial since its
formation in 1987 and Secretary of TCF Financial since 1989. He was elected a
Vice Chairman of TCF Financial in 1993. Mr. Pulles has been Executive Vice
President of TCF Bank Minnesota since 1989, and was Secretary of TCF Bank
Minnesota from October 1989 to June 1995. He was also General Counsel of TCF
Bank Minnesota from 1985 until 1993.
MARY E. SIPE has been an Executive Vice President of TCF Financial since
1993. Ms. Sipe has been President of TCF Financial Insurance Agency, Inc. and
TCF Financial Insurance Agency Illinois, Inc. since 1989, President of TCF
Financial Insurance Agency Wisconsin, Inc. since 1993 and President of TCF
Financial Insurance Agency Michigan, Inc. since January 1995.
EARL D. STRATTON was elected Executive Vice President and Chief Information
Officer of TCF Financial in December 1995. Prior to that he was a Senior Vice
President of TCF Financial. Mr. Stratton has been a Senior Vice President of TCF
Bank Minnesota since 1985.
JAMES E. TUITE was elected an Executive Vice President of TCF Financial in
1993. Prior to that he was a Vice President since 1992. He was elected President
and Chief Operating Officer of TCF Bank Minnesota in 1993. Prior to that he was
an Executive Vice President of TCF Bank Minnesota.
NEIL I. WHITEHOUSE is President of TCF Foundation and an Executive Vice
President of TCF Bank Minnesota. Mr. Whitehouse was Secretary of TCF Financial
until 1989.
BARRY N. WINSLOW was elected President and Chief Operating Officer of Great
Lakes Bancorp in February 1995 and was elected Chief Executive Officer of Great
Lakes Bancorp in January 1996. Prior to that he had been President and Chief
Executive Officer of TCF Bank Illinois since 1993. Prior to that he was
President of TCF Bank Minnesota -- Illinois Division and a Senior Vice President
of TCF Bank Minnesota since 1987.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
TCF's directors and executive officers and all persons who beneficially own more
than 10% of the outstanding shares of TCF Common Stock to file with the
Securities and Exchange Commission ("SEC") and the New York Stock Exchange
("NYSE") initial reports of ownership and reports of changes in ownership of TCF
Common Stock. Executive officers, directors and greater than 10% beneficial
owners are also required to furnish TCF with copies of all Section 16(a) forms
they file. To TCF's knowledge, based upon a review of the copies of such reports
furnished to TCF and written representations that no other reports were
required, during the fiscal year ended December 31, 1995, all Section 16(a)
filing requirements applicable to TCF's directors, executive officers and
greater than 10% beneficial owners were satisfied.
SECURITIES OWNERSHIP OF TCF DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT
STOCKHOLDERS
The following table sets forth information, as of December 31, 1995 (except
as otherwise indicated), regarding the beneficial ownership of TCF Common Stock,
which is the only class of voting equity securities outstanding, by each
director or nominee for director of TCF Financial and each of the executive
officers named on the Summary Compensation Table (the "named executives"), by
all such directors, nominees and executive officers of TCF Financial, and its
significant subsidiaries ("executive officers") as a group, and by each person
(including any "group" as defined in Section 13(d)(3) of the Securities Exchange
Act of 1934)
9
<PAGE>
who is known to TCF Financial to be the beneficial owner of more than 5% of the
outstanding common stock of TCF Financial. Including options exercisable within
60 days of December 31, 1995, there were 35,910,799 shares issued and
outstanding on December 31, 1995.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY % OF SHARES
NAME OF BENEFICIAL OWNER OWNED (1) OUTSTANDING (2)
- -------------------------------------------------------------- ---------------------- ------------------
<S> <C> <C>
DIRECTORS AND NOMINEES WHO ARE NOT NAMED EXECUTIVES:
Bruce G. Allbright.......................................... 75,429(4)(8) (3)
Rudy Boschwitz.............................................. 6,000 (3)
Robert J. Delonis........................................... 166,100(4)(5)(6) (3)
John M. Eggemeyer, III...................................... 6,094 (3)
Luella G. Goldberg.......................................... 33,639(8) (3)
Daniel F. May............................................... 54,439(4)(8) (3)
Thomas J. McGough........................................... 33,897(4) (3)
Mark K. Rosenfeld........................................... 6,941(4) (3)
Ralph Strangis.............................................. 17,442(8) (3)
Ronald A. Ward.............................................. 122,612 (3)
Roy E. Weber................................................ 144,457(5) (3)
----------
667,050 1.9%
NAMED EXECUTIVES:
William A. Cooper........................................... 785,634(4)(5)(6) 2.2%
Joseph P. Clifford.......................................... 196,966(5)(6) (3)
Thomas A. Cusick............................................ 206,682(6) (3)
Robert E. Evans............................................. 243,525(4)(5)(6) (3)
Lynn A. Nagorske............................................ 183,618(5)(6) (3)
----------
1,616,425 4.5%
All Directors and Executive Officers combined (28 persons,
including those named above)................................. 3,004,988(4)(5)(6)(8) 8.4%
OTHER BENEFICIAL OWNERS:
Great Lakes Bancorp:
401(k) Plan............................................... 403,231 1.1%
Employees Stock Ownership Plan............................ 728,872 2.0%
Putnam Investments.......................................... 2,015,604(7) 5.6%
One Post Office Square
Boston, MA 02109
Advisory Committee of TCF Employees Stock Ownership
Plan-401(k)................................................ 2,084,804(8) 5.8%
c/o General Counsel,
TCF Financial Corporation
801 Marquette Avenue, Suite 302
Minneapolis, MN 55402
</TABLE>
- ------------------------
(1) All shares are directly owned or exercisable in 60 days, and the person
indicated has sole or shared (joint account) voting and dispositive power,
except as indicated in the following footnotes. In addition to shares
beneficially owned, executive officers held 14,000 options not exercisable
within 60 days of December 31, 1995 for an additional .01% of the
outstanding common stock of TCF Financial. When added to shares of TCF
Common Stock held by the TCF Employees Stock Ownership Plan-401(k), the
Great Lakes Bancorp 401(k) Plan and the Great Lakes Bancorp Employee Stock
Ownership Plan (as of December 31, 1995) and TCF Cash Balance Pension Plan
as of such date not otherwise included on this
10
<PAGE>
table, and treating all shares issuable upon exercise of options held by
executives and employees as outstanding and owned, the total percentage of
shares owned by directors, executive officers and employee benefit plans at
December 31, 1995 was 17.39%.
(2) Each amount showing the percentage of outstanding shares owned beneficially
has been calculated by treating as outstanding and owned the shares which
could be purchased by the indicated person upon exercise of existing options
within 60 days after December 31, 1995.
(3) 1.0% or less.
(4) Includes shares beneficially owned by family members who share the person's
household, with respect to which shares the indicated person disclaims any
beneficial ownership, as follows: Mr. Allbright, 20,400 shares; Mr. Delonis,
8,846 shares; Mr. May, 900 shares; Mr. McGough, 20,000 shares; Mr.
Rosenfeld, 916 shares; Mr. Cooper, 2,120 shares; Mr. Evans, 1,330 shares;
and all directors, nominees and executive officers combined, 87,540 shares.
(5) Includes shares which could be purchased upon exercise of existing options
within 60 days as follows: Mr. Cooper, 43,756 shares; Mr. Evans, 21,400
shares; Mr. Weber, 238 shares; Mr. Clifford, 43,466 shares; Mr. Delonis,
2,470 shares; and Mr. Nagorske, 25,462 shares; and all directors, nominees
and executive officers combined, 296,428 shares.
(6) Includes whole shares of TCF Common Stock (vested and unvested) allocated to
accounts as of December 31, 1995 in the TCF Employees Stock Ownership
Plan-401(k), for which the named executives have shared voting power, as
follows: Mr. Cooper, 23,466 shares; Mr. Clifford, 15,776 shares; Mr. Cusick,
17,141 shares; Mr. Evans, 12,133 shares; Mr. Nagorske, 12,206 shares; and
all directors, nominees and executive officers combined, 175,196 shares.
Also includes the following shares of TCF Common Stock allocated to accounts
held by Mr. Delonis: 9,272 shares allocated to the Great Lakes Bancorp
401(k) Plan, and 7,830 shares allocated to the Great Lakes Bancorp Employee
Stock Ownership Plan. Mr. Delonis has shared voting power in each plan
account. Whole shares of TCF Common Stock in the trust for the TCF Financial
Executive Deferred Compensation Plan, for which the named executives have
shared dispositive power, as of December 31, 1995, are also included as
follows: Mr. Cooper, 324,610 shares; Mr. Clifford, 31,694 shares; Mr.
Cusick, 92,963 shares; Mr. Evans, 107,736 shares; Mr. Nagorske, 51,110
shares; Mr. Delonis, 68,192 shares; and all directors, nominees and
executive officers combined, 932,486 shares.
(7) Putnam Investments, Inc. has shared dispositive power with respect to all of
the shares and shared voting power with respect to 41,100 shares.
Dispositive power is shared with Putnam Investment Management, Inc., an
investment adviser subsidiary of Putnam Investments, Inc. with respect to
1,932,904 shares, and is shared with The Putnam Advisory, Inc., another
investment adviser subsidiary, as to the remaining 82,700 shares.
(8) The Advisory Committee for the TCF Employees Stock Ownership Plan-401(k)
(which also includes shares allocated to the Great Lakes Bancorp Employee
Stock Ownership Plan) has shared voting power with participants of all
allocated shares in the Plan. Advisory Committee members disclaim ownership
of these shares. Information on the table as to shares beneficially owned by
Ms. Goldberg, and Messrs. May, Allbright and Strangis does not include any
shares beneficially owned by the Advisory Committee.
11
<PAGE>
EXECUTIVE COMPENSATION
The following summary compensation table (the "Summary Compensation Table")
sets forth the cash and noncash compensation for each of the last three fiscal
years awarded to or earned by the Chief Executive Officer of TCF and the four
highest paid executives of TCF whose salary and bonus earned in 1995 exceeded
$100,000. The term "LTIP" refers to Long-Term Incentive Plans.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------------------------------
AWARDS
-------------------------- PAYOUTS
ANNUAL COMPENSATION RESTRICTED SECURITIES ----------------------
------------------------ STOCK UNDERLYING LTIP ALL OTHER
NAME AND SALARY BONUS AWARDS OPTIONS PAYOUTS COMPENSATION
PRINCIPAL POSITION* YEAR ($)(A) ($)(A) ($)(D) (#) ($)(C) ($)
- ---------------------------------------------------- ---- -------- -------- ------------ ----------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
William A. Cooper,.................................. 1995 $600,000 $615,000 $ 0(b) 0 $184,771 38,466(e)
Director, Chairman of 1994 500,006 362,504 1,290,000(b) 0 271,517 22,253
the Board and Chief Executive Officer 1993 500,006 0 85,383(b) 0 128,811 33,060
Thomas A. Cusick,................................... 1995 360,000 369,000 0(b) 0 56,644 15,338(e)
Director and Vice 1994 298,066 217,500 806,250(b) 0 79,992 10,573
Chairman; Director, Chairman and Chief Executive 1993 250,008 28,126 26,215(b) 0 36,808 14,363
Officer of TCF Bank Minnesota
Joseph P. Clifford,................................. 1995 264,000 270,600 0(b) 0 49,886 11,693(e)
Vice Chairman 1994 220,008 159,506 483,750(b) 0 75,795 7,961
1993 220,008 24,751 23,061(b) 0 36,808 11,973
Robert E. Evans,.................................... 1995 264,000 270,600 0(b) 0 46,176 11,942(e)
Director and Vice 1994 220,008 159,506 483,750(b) 0 73,513 8,029
Chairman 1993 220,008 22,919 21,346(b) 0 36,808 12,128
Lynn A. Nagorske,................................... 1995 264,000 270,600 0(b) 0 45,315 10,481(e)
Director, President 1994 220,008 159,506 483,750(b) 0 53,546 7,220
and Chief Operating Officer 1993 200,004 22,500 20,948(b) 0 20,948 11,968
</TABLE>
- ------------------------------
*At December 31, 1995.
NOTES TO SUMMARY COMPENSATION TABLE:
(a) Salary shown is for the year in which it was earned. Bonuses are shown for
the year in which they were earned. The bonus reported for 1995 (paid in
1996) was paid entirely in cash and based on the ROA of TCF Financial (See
"Incentive Compensation" in the "Report of TCF Personnel/Affirmative Action
Committee on Executive Compensation"). The bonus reported in 1994 was also
paid entirely in cash and based on the achievement of ROA goals. The Bonus
reported for 1993 involved a combination of cash and stock grants in lieu
of cash. Awards were based on the achievement of specified goals on credit
quality, capital and regulatory rating and upon performance relative to
individual, profit center and cost control goals or, for Mr. Cooper, a
pre-tax earnings goal. Bonus awards paid in TCF Common Stock for 1993 which
were not subject to future performance-based vesting requirements are
reported in the Restricted Stock Awards column.
(b) There were no restricted stock grants made to the named executives in 1995.
The 1994 restricted stock grants were awarded effective March 21, 1994, and
are to vest or be forfeited over a period of four to five years from the
effective date. Value shown for the shares is the fair market value on the
date of grant for the entire award. Vesting of shares is contingent upon TCF
meeting certain performance goals. The shares for which the restricted
period shall expire on January 1, 1998 are calculated on the basis of the
return on average common equity ("ROE") of TCF Financial for each of the
fiscal years ending on December 31, 1994, 1995, 1996, and 1997, and the
following chart:
<TABLE>
<CAPTION>
SHARES
TCF ROE VESTING FORFEITED
- ---------------------------------------------------------------- ------------- ---------------
<S> <C> <C>
Less than 15.0%................................................. 0% 20% of shares
15.0% to 16.5%.................................................. 20%
16.6% to 17.5%.................................................. 25%
17.6% or more................................................... 33%
</TABLE>
The percentage of shares for which the restricted period ends on January 1,
1999, (if the percentage for January 1, 1998 is less than 100%) shall be
calculated by determining the ROE of TCF for the fiscal year ending December
31, 1998 and determining the corresponding percentage for such year from the
foregoing chart. In the event that TCF's ROE is less than 15% in 1998, such
12
<PAGE>
remaining shares shall be forfeited and returned to TCF. For 1993, the
restricted stock reported is one-third of the bonus stock award made on
January 24, 1994, valued at the market value (average of high and low prices)
of TCF Common Stock on the date of grant.
(c) The 1995 amount represents one-third of the stock awards made in lieu of
cash bonuses in January 1994 which vested on January 1, 1996 valued at the
market value (average of high and low prices) of TCF Common Stock on
December 31, 1995. The 1994 amount represents one-third of the bonus stock
awards made in January 1993 and January 1994 which vested on January 1,
1995, valued in the same manner on December 31, 1994. The 1993 amount
represents one-third of the stock awards made in lieu of cash bonuses in
January 1993 which vested on January 1, 1994, valued in the same manner on
December 31, 1993.
(d) Summary of restricted (unvested) stock holdings at December 31, 1995 (these
shares are included in the Securities Ownership Table on page 10 and in the
Restricted Stock Awards column shown on the Summary Compensation Table):
<TABLE>
<CAPTION>
# OF RESTRICTED VALUE AT
NAME SHARES HELD DECEMBER 31, 1995*
- ------------------------------------------------------ --------------- ------------------
<S> <C> <C>
William A. Cooper..................................... 85,578 $2,834,771
Thomas A. Cusick...................................... 51,710 1,712,894
Joseph P. Clifford.................................... 31,506 1,043,636
Robert E. Evans....................................... 31,394 1,039,926
Lynn A. Nagorske...................................... 31,370 1,039,131
</TABLE>
----------------------------------
*Based on the closing market price of TCF Common Stock at December 31, 1995
of $33.125 per share.
The number of restricted shares held includes shares awarded under the 1994
restricted stock grants (footnote (b)). Dividends are paid, at the regular
rate for TCF Common Stock, on all shares of restricted stock outstanding.
(e) Represents defined contribution plan (401-(k) supplemental) employer
contributions, forfeitures and dividend allocations during 1995 as follows:
Mr. Cooper, $33,812; Mr. Cusick, $15,338; Mr. Clifford, $11,693; Mr. Evans,
$11,942; and Mr. Nagorske, $10,481; and insurance premiums paid for Mr.
Cooper in 1995 of $4,654.
GRANT OF OPTIONS AND STOCK APPRECIATION RIGHTS DURING 1995. There were no
stock option grants in 1995 to Mr. Cooper or the other executives named in the
Summary Compensation Table. TCF has not at any time awarded Stock Appreciation
Rights ("SARs"), therefore there are no SARs outstanding.
OPTION EXERCISES IN 1995 AND VALUE OF OUTSTANDING OPTIONS AT DECEMBER 31,
1995. The following table shows stock options that were exercised during 1995
by the five executives named on the Summary Compensation Table and the number
and value of options still held at December 31, 1995. The value of options
exercised during the year is determined as the difference between the market
value of TCF Common Stock and the exercise price of the option on the date of
exercise. The value of unexercised options is determined as the difference
between the market value of TCF Common Stock and the exercise price at the end
of 1995.
OPTION EXERCISES IN 1995 AND VALUE OF
OUTSTANDING OPTIONS AT DECEMBER 31, 1995
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING
UNEXERCISED OPTIONS VALUE OF UNEXERCISED
SHARES AT DECEMBER 31, IN-THE-MONEY OPTIONS AT
ACQUIRED ON VALUE 1995 (#) DECEMBER 31, 1995 ($)
EXERCISE REALIZED --------------------- -----------------------
NAME (#) ($) VESTED/UNVESTED VESTED/UNVESTED
- ------------------ ------------- ------------- --------------------- -----------------------
<S> <C> <C> <C> <C>
William A. Cooper 0 0 43,756/0 1,190,518/0
Thomas A. Cusick 3,200 74,912 0/0 0/0
Joseph P. Clifford 0 0 43,466/0 1,183,985/0
Robert E. Evans 12,000 301,140 21,400/0 591,808/0
Lynn A. Nagorske 0 0 25,462/0 709,225/0
</TABLE>
REPRICING OF OUTSTANDING STOCK OPTIONS. TCF has not at any time engaged in
the repricing of stock options.
LONG-TERM INCENTIVE PLAN AWARDS FOR THE YEAR ENDED DECEMBER 31, 1995. There
were no long-term incentive plan awards in 1995.
TCF FINANCIAL EXECUTIVE DEFERRED COMPENSATION PLAN AND SENIOR OFFICER
DEFERRED COMPENSATION PLAN. TCF has two plans which offer eligible executives an
opportunity to defer payment of all or a portion of their incentive
compensation, if any, and up to 30% of their yearly salary, until termination of
employment.
13
<PAGE>
Employees eligible to participate in the Executive Deferred Compensation Plan
(the "Executive Deferred Plan") are employees of TCF Financial and its
affiliates who are considered "executive officers" subject to reporting
requirements under Section 16(a) of the Securities Exchange Act of 1934,
including the five named executives. Deferrals of salary or incentive
compensation are credited to a separate deferred compensation account for each
participating employee maintained by each participating employer which is
credited with earnings or losses measured by the earnings or losses of
investments deemed to be selected by the employee. TCF Financial and the other
participating employers have also established a trust (commonly known as a
"rabbi" trust) to accumulate assets for payment of liabilities under the
Executive Deferred Plan when they come due and contributed to it amounts equal
to the amounts employees have deferred from their compensation. The trustee
invests the assets of the trust in the same manner as the deemed investments of
the Executive Deferred Plan in order to match the trust's assets as closely as
possible to the liabilities of the Executive Deferred Plan. The trustee is
authorized to borrow funds from TCF Financial in addition to unaffiliated
lending institutions. All loans undertaken by the trustee are required to be
adequately secured, to be approved in advance by the Personnel/Affirmative
Action Committee of the Board and do not exceed such amounts as may be
reasonably anticipated to be repaid out of deferrals of compensation by
participants of the Executive Deferred Plan. The Executive Deferred Plan and
trust provide that TCF Financial and the employers will in no event be liable
for repayment of any loans undertaken by the trustee. Distributions from the
Executive Deferred Plan will commence within 30 days after the employee's
termination of employment, and will generally be paid over a period of 15 years
after termination of employment, subject to acceleration by the
Personnel/Affirmative Action Committee of the Board. Employees eligible for the
Senior Officer Deferred Compensation Plan are generally employees of TCF
Financial or any of its direct or indirect subsidiaries who are senior officers
of TCF Financial or TCF Bank Minnesota or who hold the office of President or
Executive Vice President of a subsidiary bank or President of a direct or
indirect subsidiary of TCF Financial. The terms of the Senior Officer Plan are
the same as the Executive Deferred Plan, except that borrowing is not
permissible in the Senior Officer Deferred Plan.
THE TCF CASH BALANCE PENSION PLAN. The TCF Cash Balance Pension Plan (the
"Pension Plan") was adopted effective September 1, 1990, by the Board of
Directors of TCF Bank Minnesota as an amendment and restatement of a predecessor
plan, which had been in effect for the benefit of eligible employees since July
1, 1947. Benefits accrued before September 1, 1990 under various formulas, with
the last such formula providing a benefit at retirement equal to 50% of final
average pay reduced by 50% of Social Security benefits, pro-rated based on
service. Participants in the Pension Plan since its amendment in 1990 to a "cash
balance" formula receive monthly allocations to their accounts in the Pension
Plan equal to a percentage of covered pay that year determined on the basis of
each participant's age plus years of service. The allocation percentages range
from 2.5% to 7.5%. Accounts are credited with interest quarterly at a rate tied
to 30-year Treasury notes. The benefit for each participant is the sum of the
monthly accrued benefit (if any) at September 1, 1990 under the prior pension
plan formula (which was "frozen" at September 1, 1990 and does not increase
based on compensation or years of service after that date) and the monthly
benefit accrued thereafter under the cash balance formula. In addition to the
Pension Plan, the executives named in the Summary Compensation Table participate
in a Supplemental Employee Retirement Plan ("SERP") which remedies certain
specified limitations on benefits that can be provided through the Pension Plan
to executives. The benefits provided under the SERP are equal to the benefits
that would be provided under the Pension Plan in the absence of limitations
under Sections 401(k)(3), 401(m)(2), 414(s), 415, 402(g), 401(a)(5), and
401(a)(17) of the Internal Revenue Code (the "Code"), reduced by benefits
actually provided under the Pension Plan. Also, one of the executives named in
the table has an individual supplemental pension agreement which provides
benefits based on the prior pension plan formula. The annual annuity benefit
payable starting at normal retirement age (age 65) as accrued through December
31, 1995 under the Pension Plan, the SERP, and the supplemental agreement for
the executives named in the Summary Compensation Table is as follows: Mr.
Cooper, $74,403; Mr. Cusick, $34,537; Mr. Clifford, $30,952; Mr. Evans, $76,999
and Mr. Nagorske, $25,666.
CHIEF EXECUTIVE OFFICER EMPLOYMENT AGREEMENT. TCF Financial and TCF Bank
Minnesota entered into an employment agreement with William A. Cooper effective
July 1, 1993, for a term of three years. This agreement supersedes a prior
employment agreement between the companies and Mr. Cooper which
14
<PAGE>
expired on June 30, 1993. The agreement is for a period to and including June
30, 1996, or until Mr. Cooper's earlier removal, death or permanent disability.
The agreement provides for a base salary of not less than $500,000 annually. In
the event of Mr. Cooper's removal "without cause" (as defined in the agreement),
and not due to death or disability, his salary, incentive pay and benefits will
continue through the end of his term of employment under the agreement. If,
however, a termination without cause occurs within the last twelve months of the
contract, Mr. Cooper's salary and benefits will continue for an extended period
of twelve months from the date of such termination. If Mr. Cooper's employment
is not continued by TCF Financial after June 30, 1996, unless for "cause" (as
defined), a termination of employment without cause is deemed to occur,
resulting in continuation of his salary, incentive pay and benefits for twelve
months after June 30, 1996. Receipt of continued payments after such a
termination is contingent on compliance with certain noncompetition and
nonsolicitation provisions of the agreement. Mr. Cooper's employment agreement
also includes certain severance arrangements in the event of a termination of
employment without cause (as defined) within 24 months after a change in control
(as defined). It is expected that Mr. Cooper's employment contract will be
amended and extended prior to its expiration.
CHANGE IN CONTROL AND TERMINATION ARRANGEMENTS. The Personnel/Affirmative
Action Committee and the Board have adopted special severance agreements with
ten executive officers, including Mr. Cooper. In the case of Mr. Cooper, this
agreement is included in his employment contract (see "Chief Executive Officer
Employment Agreement"). The severance agreements for executives take effect in
the event of a change in control of TCF Financial and provide payments to the
executive in the event of a termination of employment within 18 months after the
change in control and other than on account of death, disability, cause (as
defined) or voluntary resignation (as defined). The agreements generally provide
for payment of a lump sum equal to two times the executive's annual compensation
plus the value of stock options and restricted stock forfeited as a result of
the termination of employment, as well as continuation of medical, group life
and group long-term disability plans for 24 months at the same cost to the
executive as for an active employee. In the event TCF Bank Minnesota is unable
to pay the amounts due as a result of regulatory restrictions, the amounts will
be paid by TCF Financial. If the employment of the executives named in the
Summary Compensation Table had been terminated on December 31, 1995 pursuant to
a change in control of TCF, the named executives would have been entitled to
receive the following amounts: Mr. Cooper, $5,943,120; Mr. Cusick, $2,790,287;
Mr. Clifford, $3,055,436; Mr. Evans, $2,454,663 and Mr. Nagorske, $2,525,165.
COMPENSATION OF TCF DIRECTORS
In 1995 each non-employee director ("outside director") who served on the
board of TCF Financial was entitled to a cash retainer fee of $20,000 per year
and a fee of $700 for each board meeting attended and $300 for each committee
meeting attended ($500 for committee chairpersons) of TCF Financial.
Non-employee directors who served on boards of both TCF Financial and a
subsidiary bank were not entitled to receive an additional retainer for service
on the bank board, but were entitled to receive regular per meeting fees
authorized by that bank for outside directors. If, however, the Audit Committees
of TCF Financial and TCF Bank Minnesota, or the Personnel/Affirmative Action
Committees of TCF Financial and TCF Bank Minnesota, met on the same day the
total fee due to a director for both committee meetings was only the fee for a
meeting of the TCF Financial committee.
The foregoing cash fees for directors will be the same in 1996, except that
for those directors who serve as director of a subsidiary bank additional
meeting fees at the rate paid by the bank will be received. In addition, in
October 1991 a program was approved (and renewed in 1994) under which 1,000
shares of TCF Common Stock are distributed to each outside director of TCF
Financial after each fiscal year in which TCF Financial's ROE exceeds a stated
percentage determined from time to time by the Board. Pursuant to this program,
shares were distributed in January 1996 because TCF's ROE exceeded the stated
percentage in 1995. A revised version of this program, in which shares awarded
are based on the director's annual retainer rather than a fixed number of
shares, is being submitted for shareholder approval at this meeting.
Directors are allowed to defer payment of any or all cash fees until
retirement from the Board. A plan has been adopted which provides that deferred
fees will be invested in TCF Common Stock. A retirement benefit is provided for
outside directors with five or more years of service on the Board (including
service
15
<PAGE>
with TCF Bank Minnesota). For five through nine years of service, the retirement
benefit is 10% per year of service of the base fee paid in the last year of
service as a director, and it is paid for a period equal to the director's years
of service. For directors with ten or more years of service, the retirement
benefit is equal to the full amount paid as a base fee in the director's last
year on the Board and it is paid for a period equal to the director's years of
service. The plan includes vesting in the event of a change in control.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Personnel/Affirmative Action Committee in 1995 were
Daniel F. May, Bruce G. Allbright, Luella G. Goldberg and Ralph Strangis. None
of these individuals is an executive officer, employee or former employee of
TCF. The law firm of Kaplan, Strangis and Kaplan, P.A. of which Mr. Strangis is
a member, was retained by and rendered service to TCF Financial in 1995, for an
amount which was not greater than 5% of TCF Financial's or the firm's annual
gross revenues. TCF believes that the terms and conditions of its relationship
with Kaplan, Strangis and Kaplan, P.A. are as favorable as those that could be
obtained from arm's length negotiations with unassociated third parties.
REPORT OF TCF PERSONNEL/AFFIRMATIVE ACTION COMMITTEE ON EXECUTIVE COMPENSATION
The Personnel/Affirmative Action Committee of the Board (the "Committee") is
comprised entirely of directors who are not and have not at any time in the past
been executive officers of TCF or any subsidiary of TCF. The Committee is
responsible for ensuring that compensation for executives is consistent with the
stated compensation philosophy of TCF, for recommending executive compensation
proposals to the Board for approval and for awarding stock options and
restricted stock grants.
The general process by which the Committee makes executive compensation
decisions is as follows: The Committee annually evaluates the performance of
TCF's Chief Executive Officer, William A. Cooper, and the other four executives
named in the Summary Compensation Table. The Committee considers and approves
salary, incentive programs and stock awards for a given year in December of the
preceding year and in January of that year. The final deliberations prior to
setting annual salaries and awarding incentives are made without the presence of
Mr. Cooper or any other affected executives, and may or may not include
consultation with an independent professional consultant, according to what the
Committee determines is appropriate. In determining what to approve, the
Committee takes into account results of a peer group study provided to the
Committee in June of each year, proposals from the Chief Executive Officer,
opinions of an independent professional consultant (if requested), the TCF
Compensation Philosophy set forth later in this Report and any other pertinent
information which is brought before it. The peer group used in this study is the
same as the peer group in the TCF Comparative Stock Performance chart that
follows this report. The Committee does not assign specific weights to or
otherwise specifically use measures of corporate performance when designing or
approving executive compensation arrangements, but it does consider the overall
level of executive compensation and performance of TCF relative to its peer
group.
The peer group study the Committee reviewed in June 1994, which was taken
into account in setting 1995 executive compensation, indicated that TCF's
performance ranked fifth highest in the peer group while TCF's total executive
compensation (salary, bonus and other compensation) ranked seventh highest in
the peer group. The Committee incorporates specific measures of corporate
performance in the incentive arrangements and stock awards for executives, as
described later in this Report.
The Committee and Board have adopted a Philosophy of Compensation and have
designed the compensation system around this philosophy. The Philosophy of
Compensation is as follows:
1. TCF believes that the compensation system should attract and retain
experienced, highly qualified bankers.
2. TCF believes in pay for performance based on specific written
financial goals and objectives. Total executive compensation should have a
large component of incentive compensation based on performance. Incentive
compensation should be at risk, i.e., payment should be based on
performance.
3. TCF believes that executive compensation should have both a
short-term (annual) and a long-term orientation, both as to the amount and
form of payment.
16
<PAGE>
4. TCF believes that executive compensation levels should be measured
by a comparison to peers as well as other factors such as specific
individual contributions.
5. TCF believes that the overall compensation level of TCF Executive
Management should parallel the overall performance of TCF as compared to its
peers, i.e., top performance results in top levels of compensation, lower
performance results in lower levels of compensation.
6. TCF believes that executive compensation should result in TCF
Executive Management having a significant investment in TCF Common Stock.
7. TCF believes that the incentive compensation system should be
designed to encourage TCF Executive Management to defer and invest incentive
compensation.
SALARIES. Mr. Cooper's salary is determined under the terms of an
employment contract which allows (but does not require) base salary to be
increased annually. Salaries of the other named executives are reviewed
annually. The Committee does not use any specific business or performance
factors in making annual salary determinations. In determining salaries the
Committee takes into account the results of the peer group study received in
June of the preceding year. The study the Committee reviewed in determining 1995
salaries indicated TCF's performance ranked fifth in the peer group while TCF's
executive salaries ranked sixth in the peer group. In 1995 TCF completed a
combination with Great Lakes effective on or about February 8, 1995. This
combination increased TCF's asset size by over 50% or approximately $2.5 billion
in assets, expanded its geographic area of operations and substantially
increased management's responsibilities. Accordingly, for 1995 the Committee
determined to adjust 1995 salaries upward to take into account the combination
with Great Lakes. Salaries were not increased in 1996 for any of the named
executives.
INCENTIVE COMPENSATION. The Committee and the Board approved in 1994 a
three-year program under which the incentive compensation of Mr. Cooper and the
other four named executives (as well as certain other executives) is determined
in a range from 0% to 125% of base salary depending in each case on the Return
on Average Assets ("ROA") achieved by TCF. ROA is computed based on after-tax
earnings, excluding extraordinary gains and losses and other nonrecurring items,
and adjusted to reflect charges related to mergers and acquisitions, at the
discretion of the Committee, divided by average total assets. The following
chart summarizes the ROA ranges and corresponding bonuses (ROA achievement
between stated goals results in prorated bonuses):
<TABLE>
<CAPTION>
TCF ROA 1.0% 1.1% 1.2% 1.3% 1.4%
- ---------------------------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Corresponding Bonus (% of base
salary)................................ 35% 50% 75% 100% 125%
</TABLE>
TCF's ROA for purposes of calculating incentives under the program for 1995
was 1.31%. The incentives awarded to Mr. Cooper and the other named executives
for 1995 performance under the 1994-96 ROA-based incentive plan, expressed as a
percentage of salary, totaled 102.5% each. No targets, goals or requirements
were waived by the Committee in determining the incentive compensation to be
paid. ROA targets are also established as the basis for incentive compensation
at TCF subsidiary banks in Minnesota, Illinois and Wisconsin, and for Great
Lakes.
The Committee has decided to qualify the ROA-based annual incentive payable
to Mr. Cooper, and to any other executive officer whose compensation might
exceed the Code Section 162(m) limitation in a calendar year, as
"performance-based" within the meaning of Section 162(m) of the Code, starting
with incentives earned in the 1996 calendar year. As a result, the determination
of ROA for Mr. Cooper's bonus will be based on the definition of ROA set forth
in the performance-based incentive policy, subject to modification by the
Committee as provided in the Policy. Mr. Cooper is the only executive subject to
the performance-based incentive policy for 1996. A complete description of the
terms of the performance-based incentive policy is included in the discussion
under Proposal 4 in this Proxy Statement.
STOCK OPTIONS. TCF has not awarded stock options to Mr. Cooper or any of
the named executives since 1991. The Committee also does not plan to award any
stock options to any of the named executives in the future, as long as the stock
grant program described in the following paragraphs is in effect.
17
<PAGE>
RESTRICTED STOCK GRANTS. Awards of restricted stock grants were made to Mr.
Cooper and the four other named executives effective March 21, 1994 in amounts
approximately equal in value to three times their then-current salary. The
Committee considered, among other factors, the amount and terms of other
restricted stock grants before making these awards. Specifically, the Committee
reviewed the number of shares granted to the executives under a stock grant
program in 1991 and decided to award somewhat fewer shares in 1994 because the
market value of TCF Common Stock had increased since 1991. At March 1994 values
of TCF Common Stock, this number of shares approximated three times salary for
each executive. The awards were made in consideration of services in 1993 as
well as future services and performance. Vesting of these stock awards will
occur in January 1998, subject in general to continuing employment through that
date, in a percentage determined on the basis of the Return on Average Common
Equity ("ROE") of TCF for each of the fiscal years 1994-97, under the following
schedule:
<TABLE>
<CAPTION>
TCF ROE VESTING SHARES FORFEITED
- --------------------------------------------------------- ------------- ----------------
<S> <C> <C>
Less than 15.0%.......................................... 0% 20% of shares
15.0% to 16.5%........................................... 20%
16.6% to 17.5%........................................... 25%
17.6% or more............................................ 33%
</TABLE>
If a vesting percentage has been achieved for any period, such shares are
not subject to forfeiture. For example, if ROE results for 1994 and 1995 were
16%, the ROE results for 1996 and 1997 were 17%, and the ROE for 1998 was 14.5%,
the forfeiture on January 1, 1999 would be limited to the 10% shares remaining.
In the event that any part of the stock award is not vested, and has not been
forfeited, by January 1998, the remainder will vest or be forfeited on January
1, 1999 under the schedule above, subject in general to continuing employment
through that date. ROE will be computed on the basis of after-tax earnings,
excluding preferred stock dividends, extraordinary gains and losses and other
non-recurring items and adjusted to reflect charges related to mergers and
acquisitions, at the discretion of the Committee, and divided by average total
common equity. For 1995, TCF's ROE for purposes of calculating the vesting
percentage of these stock awards was 20.31%, therefore the vesting percentage
achieved for that year under the chart set forth above was 33%. The vesting
percentage achieved for 1994 was 33% also, resulting in a cumulative vesting
percentage through the end of 1995 of 66% (although actual vesting will not
occur until January 1, 1998, subject in general to continuing employment with
TCF through that date.) Mr. Clifford retired from service with TCF Financial
effective January 2, 1996. In consideration for his agreement not to seek
employment in a field which would compete directly with TCF Financial, the
Committee determined he was entitled to vesting of 19,800 shares of his 1994
stock award of 30,000 shares, with the remaining shares being forfeited.
SARS/REPRICING OF OPTIONS. The Committee has not awarded any stock
appreciation rights ("SARs") to date and has no intention to do so. TCF has also
not engaged in any repricing of options.
COMPENSATION OF MR. COOPER. Mr. Cooper's salary remains the same in 1996 as
it was in 1995 (see SALARIES, earlier in this report). The Committee has
approved an ROA-based incentive program to be in effect throughout 1994-96.
Under this incentive program Mr. Cooper may receive annual cash bonuses of 0% to
125% of base pay, depending on TCF's ROA for each of the years 1994-96. (See
INCENTIVE COMPENSATION earlier in this report). Mr. Cooper's bonus for 1995 was
102.5% of base pay. The amount of his bonus was determined on the basis of TCF's
1995 ROA performance. No targets, goals or requirements were waived by the
Committee in determining the amount of Mr. Cooper's bonus for 1995. Mr. Cooper
was awarded a grant of 40,000 shares (adjusted to 80,000 shares to give effect
to the November 30, 1995 2-for-1 stock split, which was effected in the form of
a 100% stock dividend) of restricted stock effective as of March 21, 1994, under
the 1994 Restricted Stock Grant program described earlier in this Report. These
shares will vest no earlier than January 1, 1998, subject to performance-related
and continuing employment vesting requirements. We encourage shareholders to
refer to the earlier sections of this report for details on these programs, and
in particular the performance-related and other requirements that they
incorporate.
$1 MILLION COMPENSATION CAP. There is a $1 million limit on the
deductibility of certain compensation for federal income tax purposes
established by the Omnibus Budget Reconciliation Act of 1993 (the "Budget
18
<PAGE>
Act"). The Committee has decided to qualify the ROA-based annual incentive
program of Mr. Cooper for 1996 as "performance-based" for purposes of that Act
pursuant to the performance-based incentive policy that is being submitted to
stockholders for approval at this Annual Meeting. A complete description of the
performance-based plan is found in the discussion under Proposal 4 of this Proxy
Statement. The Committee intends that in the event superior performance results
in compensation exceeding the limitation, the Committee will have the option of
requiring mandatory deferral of amounts in excess of the limit.
The Committee believes that its current compensation philosophy has served
TCF stockholders fairly, as demonstrated by the linkage of executive pay to
performance-related goals and the return to TCF stockholders relative to that of
the S&P 500 Index, the SNL Thrift Index and a TCF-selected group of industry
peers (see "TCF Comparative Stock Performance Graph").
The Committee plans to continue the same compensation philosophy for the
foreseeable future. By the Personnel/Affirmative Action Committee:
Daniel F. May, Chairman
Bruce G. Allbright
Luella G. Goldberg
Ralph Strangis
[This space has been left blank intentionally.]
19
<PAGE>
TCF COMPARATIVE STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on TCF
Common Stock over the last five fiscal years with the cumulative total return of
the Standard and Poor's 500 Stock Index, the SNL Thrift Index and a TCF-selected
group of peer institutions over the same period (assuming the investment of $100
in each vehicle on December 31, 1990 and reinvestment of all dividends). The SNL
Thrift Index includes every publicly traded thrift institution in the U.S., a
total of 406 companies as of December 31, 1995, and provides a context for
comparing the TCF-selected peer group to the rest of TCF's industry. The TCF-
selected group of peers consists of eleven financial institutions, five of which
are thrift institutions and the other six of which are banking institutions. The
institutions consist of the following: Charter One Financial, Inc.; Commerce
Bancshares, Inc.; FirstMerit Corporation (formerly known as First Bancorporation
of Ohio); FirstFed Financial Corp.; First Financial Corporation (WI); First
Virginia Banks, Inc.; Provident Bancorp, Inc.; Standard Federal Bancorporation,
Inc.; Star Banc Corporation; St. Paul Bancorp, Inc.; and UMB Financial
Corporation (formerly known as United Missouri Bancshares, Inc.). For 1994, the
peer group included West One Bancorp and Fourth Financial Corporation, which in
1995 were removed from the peer group as a result of mergers which made them no
longer comparable. All thrift institutions in the peer group are publicly held
and, except for one, are among the top 25 nationally in terms of market
capitalization, ranging in size from $4 billion to $14 billion in total assets.
The banks in the peer group are publicly held and have total assets ranging from
$5 billion to $10 billion. With two exceptions, all peer group members are
located in the Midwest.
TCF STOCK PRICE PERFORMANCE
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
<S> <C> <C> <C> <C> <C> <C>
S&P 500 Total Return 100.00 130.48 140.41 154.57 156.29 210.57
TCFFinancial 100.00 261.05 398.45 477.27 596.08 981.40
1995 TCF Peer Group 100.00 168.57 235.21 253.24 246.07 369.88
1994 TCF Peer Group 100.00 162.51 229.58 247.77 242.97 374.62
SNL Thrift Index 100.00 156.52 218.05 278.20 275.89 431.34
</TABLE>
<TABLE>
<CAPTION>
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
<S> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------
S&P 500 Total Return 100.00 130.48 140.41 154.57 156.29 210.57
TCF Financial 100.00 261.05 398.45 477.27 596.08 981.40
1995 TCF Peer Group 100.00 168.57 235.21 253.24 246.07 369.88
1994 TCF Peer Group 100.00 162.51 229.58 247.77 242.97 374.62
SNL Thrift Index 100.00 156.52 218.05 278.20 275.89 431.34
</TABLE>
20
<PAGE>
CERTAIN TRANSACTIONS OF TCF DIRECTORS AND OFFICERS
During 1995, TCF Financial and its "significant subsidiaries" (TCF Bank
Minnesota, TCF Bank Illinois, TCF Bank Wisconsin, Great Lakes Bancorp, and TCF
Mortgage) did not have any material transactions with directors or executive
officers. Great Lakes Bancorp had a loan transaction with one director in which
the outstanding aggregate indebtedness exceeded $60,000 in 1995, which is set
forth below. Loans were, however, made to certain family members of directors
and executive officers. All loans to these individuals were made in the ordinary
course of business and on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions with
the general public, and did not involve more than the normal risk of
collectability or present other unfavorable features.
<TABLE>
<CAPTION>
LARGEST AMOUNT OF AMOUNT
INDEBTEDNESS OUTSTANDING AT
YEAR OUTSTANDING IN JANUARY 1, INTEREST
ORIGINATED 1995 1996 RATE
------------- ------------------ -------------- ---------
<S> <C> <C> <C> <C>
Mark K. Rosenfeld................ 1993(1) $ 157,218 $ 152,957 7.375%
</TABLE>
- ------------------------
(1) Residential Loan
PROPOSAL 2
RATIFICATION OF TCF'S APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board has appointed the firm of KPMG Peat Marwick LLP, independent
public accountants, to audit the financial statements of TCF Financial and its
subsidiaries for the fiscal year ending December 31, 1996.
A proposal to ratify the appointment of KPMG Peat Marwick LLP will be
presented to the stockholders at the Annual Meeting. Representatives of KPMG
Peat Marwick LLP are expected to be present at the Annual Meeting and to be
available to respond to appropriate questions. The representatives will also be
provided an opportunity to make a statement, if they so desire.
THE TCF BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT TCF STOCKHOLDERS VOTE
FOR THE RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP.
PROPOSAL 3
APPROVE A DIRECTORS
STOCK GRANT PROGRAM
Since 1991 TCF Financial has had in place a stock grant program for
directors of TCF Financial. A revised version of the program was approved by the
Board in April 1995 and is now being submitted for stockholder approval. Under
the new program (the "Program"), nonemployee directors of TCF Financial
(currently there are ten) can each earn shares of TCF Common Stock equal to the
amount of their annual retainer fee for each fiscal year in which TCF
Financial's ROE exceeds a stated goal (currently 15%) determined by the Board
from time to time. The purpose of the Program is to attract and retain qualified
individuals to serve as directors of TCF Financial and to encourage and enhance
ownership of TCF Common Stock by these individuals. Approval of the Program by
stockholders is being sought so that the Program qualifies for exemption from
short-swing profit liability pursuant to Rule 16b-3 under the Securities
Exchange Act of 1934. If stockholders do not approve the Program, the Board will
continue the Program without application of Rule 16b-3 or may seek a ruling that
the Rule 16b-3 exemption is not required. The following summary description of
the Program to be approved by stockholders is qualified in its entirety by
reference to the full text of the Program, a copy of which may be obtained by
the stockholders of TCF Financial upon request directed to TCF Financial's
Corporate Secretary at 801 Marquette Avenue, Suite 302, Minneapolis, Minnesota
55402-2807.
Full power to construe, interpret and administer the Program is vested with
a committee consisting of the employee directors of the Board (the "Committee").
Under the Program, each director of TCF
21
<PAGE>
Financial will initially receive an award of restricted shares equal in value to
three times the total amount of his or her annual retainer fee. Vesting will
occur over a minimum of three years, and is based on the attainment of the ROE
goal (currently 15%) established each year by TCF Financial. If the goal is not
achieved, no vesting occurs for that year. There is not, however, a forfeiture
in years (if any) when the goal is not achieved, so that the grant is
effectively extended for an additional year in such circumstances. If some or
all of the restricted shares are not vested on the basis of attainment of ROE
goals by ten years after the grant date, and if the director is still with TCF
Financial on that date, then any remaining restricted shares will become vested
on that date. Dividends are paid, at the regular rate for TCF Common Stock, on
all shares of stock outstanding. This Program will take effect after the shares
awarded under the prior directors' stock program vest. New directors are subject
to the new Program.
Had the Program been in effect in 1995 (assuming prior grants had fully
vested) each director would have been awarded restricted shares of TCF Common
Stock in early 1995 equal to three times the annual retainer of $20,000 divided
by the then-prevailing market price of approximately $40 per share, or 1,500
shares ($60,000 divided by $40). The grant would have been doubled to 3,000 by
the stock split, effective November 30, 1995. One third of the grant, or 1,000
shares, would have vested in early 1996 based on TCF Financial's achievement of
greater than 15% ROE in 1995. Based on the current number of outside directors
(ten), and the December 31, 1995 market price for TCF Common Stock of $33.125,
the aggregate value of shares vested to all directors under the Program for 1995
would have been $331,250. An additional 1,000 shares would vest for each
director for each of the years 1996 and 1997 if the ROE goal was met for those
years. Thereafter, a new award of restricted stock would be made in 1998,
subject to vesting in the same manner as just described.
If a nonemployee director of TCF Financial ceases to be a member of the
Board for any reason (including, but not limited to, death, total or partial
disability, or normal or early retirement), all shares which at the time of the
director's departure are not vested are forfeited and returned to TCF Financial
unless the Committee, pursuant to its discretion, determines to remove any or
all the restrictions on the shares. In the event the director's departure
qualifies as a retirement from service on the Board of TCF Financial, however,
pursuant to the board policy on director retirement in effect at that time, all
shares become fully vested. The Program also provides for vesting of all shares
in the event of a change in control (as defined) not approved in advance by a
majority of the Board.
Last year TCF Financial shareholders approved the TCF Directors Deferred
Compensation Plan and Trust Agreement (the "Plan"), which allows the
non-employee directors to elect to defer, by written notice, all or a portion of
their awards of stock and to defer all or part of their fees for Board service,
with such fees being invested in TCF Common Stock. Providing directors with this
deferral opportunity on stock awards enhances their retention of shares awarded
under the Program by avoiding the forced sale of shares to cover income tax
liability that would be due on non-deferred shares at the time the shares become
vested. Deferred shares are held in trust for the director in an account, with
dividends reinvested in TCF Common Stock, until such time as the director's
service on the Board shall terminate, at which time the deferred shares that are
vested shall be distributed to the director in accordance with instructions
provided at the time the shares were awarded. TCF also maintains a stock grant
program for nonemployee directors of insured institution subsidiaries of TCF
Financial which is similar to the Program described herein. Stockholder approval
is not being sought for the stock award program that applies to subsidiary
directors because subsidiary directors are not subject to Rule 16b-3. Shares
awarded to directors of insured institution subsidiaries are subject to deferral
in the same manner as shares under the Program. As of December 31, 1995,
directors of TCF Financial and subsidiaries had deferred stock awards and fees
invested in stock equaling a combined total of 81,563 shares of TCF Common
Stock, with a market value of $2,701,774 as of that date.
THE TCF BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT TCF STOCKHOLDERS VOTE
FOR THE APPROVAL OF THE DIRECTORS STOCK GRANT PROGRAM.
22
<PAGE>
PROPOSAL 4
APPROVAL OF A
PERFORMANCE-BASED INCENTIVE POLICY
On January 22, 1996, a committee of the Board qualifying as "independent"
for purposes of Code Section 162(m) approved the TCF Performance-Based
Compensation Policy for Covered Executive Officers (the "Policy"). The Policy is
intended, among other things, to allow the continuation of the ROA-based annual
incentive plan adopted by the Board and approved by TCF stockholders in 1994 for
the years 1994-96 while maintaining full deductibility of compensation under
Code Section 162(m). Under the ROA-based annual incentive plan (see "Report of
TCF Personnel/Affirmative Action Committee on Executive Compensation --
Incentive Compensation"), executives have the opportunity to earn annual
incentives ranging from 0% to 125% of base salary, depending on the ROA achieved
by TCF Financial. When the ROA-based incentive plan was approved by stockholders
in 1994, TCF did not seek to qualify it as a performance-based plan for purposes
of Code Section 162(m). As a result of superior performance by TCF Financial in
the intervening years, however, and corresponding increases in the incentives
which may be earned, the Committee has decided to submit an ROA
performance-based incentive plan for stockholder approval. In addition, the
Committee has included in the Policy performance measures other than ROA which
the Committee may use in making other performance-based awards in the future.
The Policy is effective as of January 1, 1996, subject to its approval by
stockholders and is expected to remain in effect until terminated or suspended
by the Committee, or until another such policy is submitted for stockholder
approval.
TCF Financial currently intends that the incentive compensation awarded to
each Covered Executive Officer (as defined below) pursuant to the Policy for the
taxable year commencing January 1, 1996 and each taxable year thereafter will be
deductible by TCF Financial for federal income tax purposes in accordance with
Code Section 162(m) and regulations published relating thereto (the
"Regulations"). Since one of the requirements is stockholder approval of certain
terms of a plan, TCF Financial is submitting the Policy for stockholder approval
in order to be able to take advantage of the exemption provided in Code Section
162(m) for performance-based compensation. If the stockholders do not approve
the Policy, TCF Financial expects to continue the ROA-based annual incentive
plan and to make other awards of compensation from time to time. In the event of
continued superior performance by TCF Financial resulting in compensation that
might otherwise exceed the limitation of Code Section 162(m), the Committee
would have the option of requiring mandatory deferral of any amounts that might
otherwise not be deductible as a result of Code Section 162(m).
SUMMARY OF THE PERFORMANCE-BASED POLICY
The following summary description of the Policy is qualified in its entirety
by reference to the full text of the Policy, a copy of which may be obtained by
the stockholders of TCF Financial upon request directed to TCF Financial's
Corporate Secretary at 801 Marquette Avenue, Suite 302, Minneapolis, Minnesota
55402-2807.
The Policy applies to the Chief Executive Officer of TCF Financial, Mr.
Cooper. In addition, the Policy allows the Committee to identify each year as
many as four other executive officers who will also be subject to the Policy for
that year. Mr. Cooper and any other such individuals identified by the Committee
are hereinafter referred to as "Covered Executive Officers." Each year, on or
before the latest date permitted under Section 162(m) of the Code, the
Regulations, or in ruling or advisory opinions published by the Internal Revenue
Service (the "IRS"), the Committee may establish performance-based goals for the
Covered Executive Officers for that year. Awards may be made in the form of
cash, stock, restricted stock, or any combination thereof. Performance goals can
be based on any one or more of the following business criteria as the Committee
may select:
(i) NET INCOME -- TCF's or Business Unit's (subsidiary or division of
TCF) after-tax net income for the applicable calendar year as reported in
TCF's or Business Unit's consolidated financial statements, adjusted to
eliminate the effect of the following: (1) restatements of financial results
as a result of an acquisition (for the part of the calendar year preceding
the acquisition) accounted for as a pooling of interests; (2) the effect of
an acquisition completed in the calendar year on operations for the
23
<PAGE>
remainder of that calendar year, regardless of the accounting method used
for the acquisition; (3) losses resulting from discontinued operations; (4)
extraordinary gains or losses; (5) the cumulative effect of changes in
generally accepted accounting principles ("GAAP"); and (6) any other
unusual, non-recurring gain or loss which is separately identified and
quantified in TCF's or a Business Unit's financial statements in accordance
with GAAP.
(ii) ROE -- Net Income of TCF, less dividends on preferred stock held by
an unaffiliated third party, on an annualized basis, divided by TCF's
Average Total Common Equity (adjusted to eliminate net unrealized gains or
losses on assets available for sale resulting from Statement of Financial
Accounting Standards ("SFAS") 115) for the applicable calendar year.
(iii) ROA -- Net Income of TCF Financial on an annualized basis, divided
by TCF's average total assets (adjusted to eliminate unrealized gains or
losses on assets available for sale resulting from SFAS 115) for the
applicable calendar year.
(iv) BUSINESS UNIT ROA -- Net Income of a Business Unit or subsidiary
managed by a Covered Executive Officer on an annualized basis, divided by
the Business Unit's or subsidiary's average total assets (adjusted to
eliminate unrealized gains or losses on assets available for sale resulting
from SFAS 115) for the applicable calendar year.
(v) BUSINESS UNIT ROE -- Net Income of a Business Unit or subsidiary
managed by a Covered Executive Officer, less dividends on preferred stock
held by an unaffiliated third party, on an annualized basis, divided by the
business unit's or subsidiary's Average Total Common Equity including
preferred stock held by an affiliated entity (adjusted to eliminate net
unrealized gains or losses on assets available for sale resulting from SFAS
115) for the applicable calendar year.
(vi) ROTE -- Net Income of TCF Financial plus amortization of goodwill,
both on an annualized basis, tax effected at TCF's statutory state and
federal corporate tax rate, less dividends on preferred stock held by an
unaffiliated third party on an annualized basis, divided by beginning of the
year tangible common equity (adjusted to eliminate net unrealized gains or
losses on assets available for sale resulting from SFAS 115) for the
applicable calendar year.
(vii) BUSINESS UNIT ROTE -- Net Income of a Business Unit or subsidiary
managed by a Covered Executive Officer, plus amortization of goodwill of the
business unit or subsidiary, both on an annualized rate, tax effected at
TCF's statutory state and federal corporate tax rate, less dividends on
preferred stock held by an unaffiliated third party on an annualized basis,
divided by the business unit's or subsidiary's beginning of the year
tangible common equity including preferred stock held by an affiliated
entity (adjusted to eliminate net unrealized gains or losses on assets
available for sale resulting from SFAS 115) for the applicable calendar
year.
(viii) EARNINGS PER SHARE -- Net Income of TCF divided by TCF's weighted
average common and common equivalent shares outstanding, as determined for
purposes of calculating the Corporation's primary or basic earnings per
share under GAAP, for the applicable calendar year, adjusted to eliminate
the effect of mergers or acquisitions completed during the calendar year
where those mergers or acquisitions resulted in adjustments to Net Income.
(ix) AVERAGE TOTAL COMMON EQUITY -- Average total common equity of TCF
Financial or a Business Unit, for the applicable calendar year, adjusted to
eliminate the effect of mergers or acquisitions completed during the
calendar year where those mergers or acquisitions resulted in adjustments to
Net Income.
The maximum award that may be made under the Policy for a calendar year to
the Chief Executive Officer is 2% of Net Income. The maximum award that may be
made under the Policy for a calendar year for other Covered Executive Officers
is 1% of Net Income per person. Calculations made pursuant to the Policy will be
made in accordance with procedures reasonably designed to implement its terms.
The Committee has the right to exercise discretion in a manner that would
decrease (but not increase) the amount of an award otherwise payable under the
Policy. The Committee may at any time terminate or suspend this Policy, or
24
<PAGE>
amend or modify this Policy to include any provision that, in the opinion of
counsel, would be required by Section 162(m) of the Code, the Regulations, or
rulings or advisory opinions published by the IRS, except that any amendment for
which stockholder approval is required under Code Section 162(m) will be subject
to receipt of such approval. The Committee may disregard the Policy if it
determines it is in the Company's best interests to do so. In such event, if
compensation no longer qualifying as "performance-based" under Code section
162(m) might otherwise exceed the deductibility limit of Code Section 162(m) the
Committee expects to have the option of requiring mandatory deferral of amounts
that would exceed the limit.
If the Policy had been in effect in 1995 and each named executive had been
designated by the Committee to participate in the Policy, the Board expects
payments would have been consistent with those under TCF Financial's existing
bonus plan. Thus, if the Policy had been in effect in 1995, the persons named in
the Summary Compensation Table would have been awarded bonuses in the amounts
set forth opposite their names in such table. Other executive officers as a
group would not have been awarded any benefits for 1995 under the Policy had it
been in effect in 1995, because the policy only applies, at most, to five
executives. (However, the other executives as a group would have received the
same bonuses as they actually did receive in 1995.) An incentive compensation
award paid in stock or restricted stock pursuant to this Policy may also be
governed by the provisions of the TCF Financial 1995 Incentive Stock Program.
Voluntary deferral of an incentive compensation award paid in cash, stock or
restricted stock under this Policy may be made pursuant to the provisions of TCF
Financial's Executive or Senior Officer Deferred Compensation Plan.
The Committee has approved the ROA-based incentive plan for 1996 for Mr.
Cooper and for eleven other executives, including three of the named executives
other than Mr. Cooper. (See "Report of TCF Personnel/Affirmative Action
Committee on Executive Compensation -- Incentive Compensation" for a description
of the ROA-based incentive plan.) However, Mr. Cooper is the only Covered
Executive Officer under the Policy for 1996 (i.e., the Committee has not
designated any other executives as such for 1996). As required by Code Section
162(m), the Committee has no authority under the Policy to exercise discretion
in a manner that would increase the ROA-based annual incentive payable to Mr.
Cooper under the Policy for 1996. However, such discretion has been retained
with respect to ROA-based annual incentives that may become payable to the other
named executives, since they are not covered by this Policy in 1996.
THE TCF BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT TCF STOCKHOLDERS VOTE
FOR THE APPROVAL OF A PERFORMANCE-BASED INCENTIVE POLICY.
STOCKHOLDER PROPOSALS
Any stockholder wishing to have a proposal considered for inclusion in TCF
Financial's 1997 proxy solicitation materials must set forth such proposal in
writing and file it with the Secretary of TCF Financial no later than November
23, 1996. The Board will review any stockholder proposals which it receives by
this date and will determine whether any such proposal should be included in its
1997 proxy solicitation materials. Matters and proposals so presented may be
excluded from the 1997 proxy solicitation materials if they fail to meet certain
criteria. Stockholders are urged to submit any such proposal by certified mail,
return receipt requested. Nothing in this paragraph shall be deemed to require
TCF Financial to include in its proxy statement and proxy relating to the 1997
annual meeting of stockholders any stockholder proposal which does not meet all
of the requirements for inclusion established by the SEC in effect at the time
such proposal is received.
Any stockholder proposals for the annual meeting which are not presented to
TCF Financial for inclusion in its proxy solicitation materials, as described
above, must comply with TCF Financial's Bylaws. They require that a stockholder
provide notice of any proposal to be submitted at any annual meeting to be
delivered to the Secretary of TCF Financial not less than 60 days nor more than
90 days prior to the date of an annual meeting, unless notice or public
disclosure of the date of the meeting occurs not less than 70 days prior to the
date of the meeting, in which event stockholders must deliver such notice not
later than the tenth day following the earlier of the day on which notice of the
annual meeting was mailed or public disclosure of the meeting date was made.
Public disclosure of the date of the Annual Meeting for 1996 was made on
February 14, 1996 by distribution of a news release. Notice was also published
in the legal notice section of
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newspapers in Minnesota, Michigan and Wisconsin on February 13, 1996, and on
February 14, 1996 in Illinois. TCF Financial did not receive any notice of any
proposal within the requisite period. The Bylaws also provide procedures for
stockholders to nominate directors for election at an annual meeting of
stockholders. These procedures were discussed earlier in this Proxy Statement.
See "Election of TCF Directors -- Information on Directors and Nominees."
The discussion of the Bylaws in this Proxy Statement concerning a
stockholder proposal or a stockholder director nomination for consideration at
an annual meeting of stockholders is intended to summarize the relevant Bylaws.
These summaries are qualified in their entirety by reference to those Bylaws.
ANNUAL REPORT
TCF FINANCIAL WILL PROVIDE WITHOUT CHARGE TO ANY STOCKHOLDER SOLICITED
HEREBY A COPY OF ITS 1995 ANNUAL REPORT ON FORM 10-K FILED WITH THE SEC UPON THE
WRITTEN REQUEST OF SUCH STOCKHOLDER. REQUESTS SHOULD BE DIRECTED TO THE OFFICE
OF CORPORATE SECRETARY, TCF FINANCIAL.
[LOGO]
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SUMMARY OF
DIRECTORS STOCK PROGRAM
1. PURPOSE.
The purpose of the Directors Stock Program (the "Program") is to
attract and retain qualified individuals to serve as directors of TCF Financial
Corporation (the "TCF Financial") and its subsidiaries, and to encourage and
enhance ownership of TCF Common Stock by these individuals.
2. ADMINISTRATION.
Full power to construe, interpret and administer the program is
vested with a committee consisting of the employee directors of the Board of
TCF Financial (the "Committee"). In the event such directors at some time do
not qualify as disinterested administrators for purposes of Rule 16b-3 of the
Securities and Exchange Commission (the "SEC"), if disinterested
administration is then required in order for the shares of TCF Stock awarded
under the Program to be exempt under Rule 16b-3, then the Board of Directors
will appoint a new Committee which qualifies under the provisions of Rule 16b-3
as then in effect. The Committee shall interpret the Program, prescribe, amend
and rescind rules and regulations relating thereto, and make all other
determinations necessary or advisable for the administration of the Program.
A majority of the members of the Committee shall constitute a quorum, and all
determinations of the Committee shall be made by a majority of its members.
Any determination of the Committee under the Program may be made without
notice of meeting of the Committee by a writing signed by a majority of the
Committee members.
3. PARTICIPANTS.
Participants in the Program will consist of the outside directors of
TCF Financial and its subsidiaries from time to time.
4. BENEFITS.
Director restricted stock awards will consist of common shares
transferred to Directors without other payment as additional compensation for
their services to TCF Financial or one of its subsidiaries.
Each director of TCF Financial or its subsidiaries will initially
receive an award of restricted shares equal in value to three (3) times the
total amount of his or her annual retainer fee. Value will be determined on
the basis of the Fair Market Value of TCF Stock on the day the award is made,
based on the annual retainer in effect on that day. During the time the
shares are restricted, they will not be transferable by the directors and a
legend will be placed on the stock certificates to that effect. Vesting will
occur over a minimum of three years, and is based on the attainment of the
ROE goal (currently 15%) set for the award by the Committee. If the goal is
not achieved, no vesting occurs for that year. There is not, however, a
forfeiture in years (if any) when the goal is not achieved, so that the grant
is effectively extended for an additional year in such circumstances. The
director must be on the board on December 31 of the year in order to receive
shares vesting based on that year's performance. If the goal is achieved,
one-third of the shares will vest effective as of January 1 following the
fiscal year in which the goal is achieved. For directors of TCF Financial,
if some
<PAGE>
or all of the restricted shares are not vested on the basis of ROE goals by ten
(10) years after the grant date, and if the director is still with the company
on that date, then any remaining restricted shares will become vested on that
date. If a director retires from service on the board of TCF Financial pursuant
to board policy on director retirement in effect at that time, the restricted
period will lapse and all shares will become fully vested. There is no vesting
in the event of full or partial disability. For subsidiary board director
grants, there is no vesting based on retirement, disability or ten years of
board service. Except as noted earlier for retirements from TCF Financial,
all shares not vested upon a director's departure from the board above
thereupon be forfeited. The Committee may from time to time make subsequent
awards under the Program once awards made under any prior directors stock
program, or awards made under the Program, become vested.
5. DEFINITIONS.
FAIR MARKET VALUE. The term "Fair Market Value" of TCF Financial's
Common Shares at any time shall be the average of the high and low sales prices
for TCF Financial's Common Shares for the date, as reported on the New York
Stock Exchange.
SUBSIDIARY. The term "subsidiary" shall mean any corporation,
partnership, joint venture or business trust, fifty percent (50%) or more of the
control of which is owned, directly or indirectly, by TCF Financial.
CHANGE IN CONTROL. A "Change in Control" shall be deemed to have
occurred if:
(a) any "person" as defined in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (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 TCF Financial representing thirty percent (30%) or
more of the combined voting power of TCF Financial's then outstanding
securities. For purposes of this clause (a), the term "beneficial owner" does
not include any employee benefit plan maintained by TCF Financial that invests
in TCF Financial's voting securities; or
(b) during any period of two (2) consecutive years (not including any
period prior to April 1995) there shall cease to be a majority of the Board
comprised as follows: individuals who at the beginning of such period
constitute the Board or as new directors whose nomination for election by TCF
Financial's shareholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved; or
(c) the shareholders of TCF Financial approve a merger or
consolidation of TCF Financial with any other corporation, other than a merger
or consolidation which would result in the voting securities of TCF Financial
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
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<PAGE>
surviving entity) at least 70% of the combined voting power of the voting
securities of TCF Financial or such surviving entity outstanding immediately
after such merger or consolidation, or the shareholders of TCF Financial approve
a plan of complete liquidation of TCF Financial or an agreement for the sale or
disposition by TCF Financial of all or substantially all TCF Financial's assets;
provided, however, that no change in control will be deemed to have occurred if
such merger, consolidation, sale or disposition of assets, or liquidation is not
subsequently consummated.
DISABILITY. The term "disability" for all purposes of this Program
shall be determined by the Committee in such manner as the Committee deems
equitable or required by the applicable laws or regulations.
RETIREMENT. The term "retirement" means a retirement under the
policies of the Board of Directors of TCF Financial in effect at the time of a
director's departure from the Board.
6. ADJUSTMENT PROVISIONS.
If TCF Financial shall at any time change the number of issued Common
Shares without new consideration to TCF Financial (such as by stock dividends or
stock splits), the total number of shares reserved for issuance under this
Program, the number of shares covered by each outstanding Benefit shall be
adjusted so that the limitations, the aggregate consideration payable to TCF
Financial, and the value of each such Benefit shall not be changed. The
Committee shall also have the right to provide for the continuation of Benefits
or for other equitable adjustments after changes in the Common Shares resulting
from reorganization, sale, merger, consolidation or similar occurrence.
Notwithstanding any other provision of this Program, and without
affecting the number of shares otherwise reserved or available hereunder, the
Committee may authorize the issuance or assumption of the grants in connection
with any merger, consolidation, acquisition of property or stock, or
reorganization upon such terms and conditions as it may deem appropriate.
All terms and conditions of all restricted stock awards outstanding
shall be deemed satisfied and all such awards shall vest as of the date of a
Change in Control.
7. AMENDMENT AND TERMINATION OF PROGRAM.
The Board of Directors of TCF Financial may amend this Program from
time to time, but not more often than once every six months, other than to
comply with requirements of the Internal Revenue Code, or may terminate this
Program at any time, but no action shall reduce the then existing amount of
any participant's benefit or adversely change the terms and conditions
thereof without the participant's consent. No amendment of this Program
shall result in any Committee member losing his or her status as a
"disinterested person" as defined in Rule 16b-3 of the Securities and
3
<PAGE>
Exchange Commission with respect to any employee benefit plan of TCF Financial
or result in the program losing its status as a protected plan under said Rule
16b-3.
8. SHAREHOLDER APPROVAL.
Approval of the program by shareholder is being sought for purposes
of Rule 16b-3 of the SEC. If shareholder approval is not obtained the
program will be otherwise operated in accordance with the Rule, as applicable.
4
<PAGE>
TCF PERFORMANCE-BASED COMPENSATION POLICY FOR
COVERED EXECUTIVE OFFICERS
1. PURPOSE. The purpose of the TCF Performance-Based Compensation Policy for
Covered Executive Officers (the "Policy") is to establish one or more
performance goals for payment of incentive compensation other than stock
options and the maximum amount of such incentive compensation that may be
paid to certain executive officers. It is the intention of TCF Financial
Corporation (the "Corporation") that incentive compensation awarded to each
covered Executive Officer (as defined below) pursuant to the Policy for the
taxable year commencing January 1, 1996 and each taxable year thereafter be
deductible by the Corporation for federal income tax purposes in accordance
with Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), and regulations published relating thereto (the "Regulations").
2. COVERED EXECUTIVE OFFICERS. This Policy shall apply to the Chief Executive
Officer of the Corporation. In addition, a committee (the "Committee")
consisting solely of independent directors, as defined in section 162(m) of
the Code and in the Regulations, may select each year additional
individuals to be covered by the Policy in that year. Any individual so
selected must be an individual who, on the last day of the previous taxable
year, commencing with the taxable year beginning January 1, 1995, was among
the four highest compensated executive officers (other than the Chief
Executive Officer) of the Corporation. Whether an individual is among the
four highest compensated executive officers shall be determined pursuant to
the executive compensation disclosure rules under the Securities Exchange
Act of 1934. The Chief Executive Officer and any other individual selected
for participation in this Policy shall be considered the "Covered Executive
Officers" and are the only individuals subject to this Policy.
3. INCENTIVE COMPENSATION AWARD/ESTABLISHMENT OF PERFORMANCE GOALS. An
incentive compensation award to a Covered Executive Officer pursuant to
this Policy may be paid in the form of cash, stock, or restricted stock, or
any combination thereof. Payment of incentive compensation awards to a
Covered Executive Officer under this Policy will be contingent upon the
attainment of the performance goal or goals in the Performance Period
established for such Covered Executive Officer by the Committee as
provided. The Committee shall approve such awards and shall retain the
discretion to reduce, defer or eliminate the incentive compensation award
payable to a Covered Executive Officer, notwithstanding attainment of any
performance goal.
Each year the Committee shall select the individuals, if any, to be Covered
Executive Officers for that year in addition to the Chief Executive Officer
and shall establish in writing one or more performance goals to be attained
(which performance goals may be stated as alternative performance goals)
for a Performance Period for each Covered Executive Officer on or before
the latest date permitted under Section 162(m) of the Code (currently the
last day of the first quarter of the calendar year), the Regulations or in
ruling or advisory opinions published by the Internal Revenue Service (the
"IRS").
1
<PAGE>
Performance goals may be based on any one or more of the following business
criteria (as defined in paragraph 4 below) as the Committee may select:
- Net Income
- Return on Average Assets ("ROA")
- Business Unit ROA
- Return on Average Equity ("ROE")
- Business Unit ROE
- Return on Tangible Equity ("ROTE")
- Business Unit ROTE
- Earnings Per Share ("EPS")
The maximum amount or value of an incentive compensation award for any
Performance Period to the Chief Executive Officer shall not exceed two
percent (2%) of the Corporation's Net Income. The maximum amount or value
of an incentive compensation award for any Performance Period to any other
Covered Executive Officer shall not exceed one percent (1%) of the
Corporation's Net Income.
4. DEFINITIONS. For purposes of this Policy and for determining whether a
particular goal was attained, the following terms shall have the meanings
given them below:
(a) The term "Net Income" shall mean the Corporation's or Business
Unit's after-tax net income for the applicable Performance Period as
reported in the Corporation's or Business Unit's consolidated
financial statements, adjusted to eliminate the effect of the
following: (1) in the event an acquisition is made effective during
the Performance Period and is accounted for as a pooling of interests,
restatements of financial results for the portion of the Performance
Period preceding the effective date of such acquisition; (2) in the
event an acquisition is made effective during the Performance Period,
regardless of the method of accounting used, the effect on operations
attributable to such acquisition with respect to the portion of the
Performance Period following the effective date of such acquisition;
(3) losses resulting from discontinued operations; (4) extraordinary
gains or losses; (5) the cumulative effect of changes in generally
accepted accounting principles; and (6) any other unusual, non-
recurring gain or loss which is separately identified and quantified
in the Corporation's or Business Unit's financial statements in
accordance with Generally Accepted Accounting Principles ("GAAP") (any
reference herein to the
2
<PAGE>
Corporation's financial statements shall be deemed to include any
footnotes thereto as well as management's discussion and analysis).
Notwithstanding the foregoing, in determining the Corporation's Net
Income for a Performance Period the Committee may from time to time in
its discretion disregard any one or more, or all, of the foregoing
adjustments (1) - (6) provided that the effect of doing so would be to
reduce the amount of incentive payable to a Covered Executive Officer
for such Performance Period.
(b) The term "Performance Period" shall mean a calendar year,
commencing January 1 and ending December 31.
(c) The term "Return on Average Equity" shall mean the Net Income of
the Corporation, less dividends on preferred stock held by an
unaffiliated third party, on an annualized basis, divided by the
Corporation's Average Total Common Equity (adjusted to eliminate net
unrealized gains or losses on assets available for sale resulting from
SFAS 115) for the Performance Period.
(d) The term "Return on Average Assets" shall mean the Net Income of
the Corporation on an annualized basis, divided by the Corporation's
average total assets (adjusted to eliminate unrealized gains or losses
on assets available for sale resulting from SFAS 115) for the
Performance Period.
(e) The term "Business Unit ROA" means the Net Income of a business
unit or subsidiary managed by a Covered Executive Officer on an
annualized basis, divided by the business unit's or subsidiary's
average total assets (adjusted to eliminate unrealized gains or losses
on assets available for sale resulting from SFAS 115) for the
Performance Period. In determining the Business Unit ROA of TCF Bank
Minnesota there shall be subtracted the assets, equity and income of
any insured institution subsidiary thereof.
(f) The term "Business Unit ROE" means the Net Income of a business
unit or subsidiary managed by a Covered Executive Officer, less
dividends on preferred stock held by an unaffiliated third party, on
an annualized basis, divided by the business unit's or subsidiary's
Average Total Common Equity including preferred stock held by an
affiliated entity (adjusted to eliminate net unrealized gains or
losses on assets available for sale resulting from SFAS 115) for the
Performance Period. In determining the Business Unit ROE of TCF Bank
Minnesota there shall be subtracted the assets, equity and income of
any insured institution subsidiary thereof.
(g) The term "Return on Tangible Equity" shall mean the Net Income of
the Corporation plus amortization of goodwill, both on an annualized
3
<PAGE>
basis, tax effected at the Corporation's statutory state and federal
corporate tax rate, less dividends on preferred stock held by an
unaffiliated third party on an annualized basis, divided by beginning
of the year tangible common equity (adjusted to eliminate net
unrealized gains or losses on assets available for sale resulting from
SFAS 115) for the Performance Period.
(h) The term "Business Unit Return on Tangible Equity" means the Net
Income of a business unit or subsidiary managed by a Covered Executive
Officer, plus amortization of goodwill of the business unit or
subsidiary, both on an annualized basis, tax effected at the
Corporation's statutory state and federal corporate tax rate, and less
dividends on preferred stock held by an unaffiliated third party,
divided by the business unit's or subsidiary's beginning of the year
tangible common equity including preferred stock held by an affiliated
entity (adjusted to eliminate net unrealized gains or losses on assets
available for sale resulting from SFAS 115) for the Performance
Period. In determining the Business Unit ROTE of TCF Bank Minnesota
there shall be subtracted the assets, equity and income of any insured
institution subsidiary thereof.
(i) The term "Earnings Per Share" shall mean the Net Income of the
Corporation divided by the Corporation's weighted average common and
common equivalent shares outstanding, as determined for purposes of
calculating the Corporation's primary or basic earnings per share
under GAAP (as adjusted to eliminate the effect of shares issued for
mergers or acquisitions identified in Sections 4.(a)(1) and (2) above
where those Sections also resulted in adjustments to Net Income) for
the Performance Period.
(j) The term "Average Total Common Equity" shall mean the common
equity of the Corporation or Business Unit, adjusted to eliminate the
effect of mergers or acquisitions completed during the Performance
Period where those mergers or acquisitions resulted in adjustments to
Net Income under Sections 4.(a)(1), (2) or (3) above.
5. CALCULATIONS. Calculations made pursuant to this Policy shall be made in
accordance with procedures reasonably designed to implement its terms.
6. APPLICABILITY OF CERTAIN PROVISIONS OF OTHER PLANS. An incentive
compensation award paid in stock or restricted stock pursuant to this
Policy shall be governed by the provisions (other than provisions with
respect to the computation of such award) of the plan under which the award
was made. Deferral of an incentive compensation award paid in cash under
this Policy may be made pursuant to the provisions of the Corporation's
Executive or Senior Officer Deferred Compensation Plan.
7. EFFECTIVE DATE; AMENDMENT AND TERMINATION. This Policy shall be effective
as of January 1, 1996; provided, however, that no incentive compensation
award shall be paid pursuant to this Policy unless this Policy has been
approved by the stockholders of the Corporation. The Committee may at any
time terminate or suspend this Policy, or
4
<PAGE>
amend or modify this Policy to include any provision that, in the opinion
of counsel, would be required by Section 162(m) of the Code, the
Regulations, or any other regulations promulgated under the Code, or
rulings or advisory opinions published by the IRS.
4
<PAGE>
PROXY
TCF
April 24, 1996
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints William A. Cooper and Gregory J.
Pulles, or either of them, as proxies with full power of substitution, to vote
all shares of Common Stock of TCF Financial Corporation of record in the name
of the undersigned at the close of business on March 8, 1996, at the Annual
Meeting of Stockholders of TCF Financial Corporation to be held on April 24,
1996, or any adjournment thereof, hereby revoking all former proxies, on the
items set forth on the reverse side hereof, as described in the accompanying
Proxy Statement and upon such other business as may properly come before the
Meeting including: any matters which the Board of Directors did not know, a
reasonable time before mailing this solicitation, would be presented at the
Meeting; approval of minutes of the prior annual stockholders meeting;
election of any person as director in place of a nominee who is unable to
serve or who for good cause will not serve; and matters incident to the conduct
of the Meeting.
SEE REVERSE SIDE
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE>
/x/ Please mark votes as in this example.
Unless otherwise indicated, all signed proxy cards received will be voted "FOR"
all proposals referred to herein. The Board of Directors recommends that you
vote "FOR" all proposals.
1. Election of Directors
Nominees: Rudy Boschwitz, William A. Cooper,
Thomas A. Cusick, Thomas J. McGough,
Ronald A. Ward
________ ________
FOR WITHHELD
/ /____________________________________
For all nominees except as noted above
2. Appointment of KPMG Peat ________ ________ ________
Marwick LLP as independent FOR AGAINST ABSTAIN
public accountants for 1996
3. Approve the TCF Directors ________ ________ ________
Stock Grant Program FOR AGAINST ABSTAIN
4. Approve the Performance-Based________ ________ ________
Incentive Policy FOR AGAINST ABSTAIN
NOTE: Please sign as name appears hereon.
In case of joint owners, each owner should sign. When signing in a fiduciary or
representative capacity, please give full title as such. Proxies executed by a
corporation should be signed in full corporate name by a duly authorized
officer. For partnerships, please sign in partnership name by authorized
person.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT. / /
Signature:_______________________________ Date:__________________
Signature:_______________________________ Date:__________________
<PAGE>
PROXY
TCF
April 24, 1996
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
To: First Trust National Association as Trustee under the Trust Agreement
for the TCF Employees Stock Ownership Plan - 401(k) (Includes shares under the
Great Lakes Bancorp Amended Employee Stock Ownership Plan, which was merged
into the TCF Employees Stock Ownership Plan - 401(k) on January 1, 1996.); and
as Trustee under the Great Lakes Bancorp Amended 401(k) Savings and Investment
Plan and Trust Agreement.
The Trustee named above is hereby instructed to vote (by proxy, in the
form solicited by the Board of Directors, or in person) all the shares or
fractional shares of Common Stock of TCF Financial Corporation which are
credited to the undersigned's account(s) as of the latest available processing
date on or before March 8, 1996, at the Annual Meeting of Stockholders of TCF
Financial Corporation to be held on April 24, 1996, or any adjournment
thereof, on the items set forth on the reverse hereof, as described in the
accompanying Proxy Statement and upon such other business as may properly come
before the Meeting including: any matters which the Board of Directors did
not know, a reasonable time before mailing this solicitation, would be
presented at the Meeting; approval of minutes of the prior annual stockholders
meeting; election of any person as director in place of a nominee who is
unable to serve or who for good cause will not serve; and matters incident to
the conduct of the Meeting. Voting rights will be exercised by the Trustee as
directed, provided instructions are received by the Trustee by April 19, 1996.
This proxy may be revoked only by a written revocation or a new proxy card
received by the Trustee on or before April 19, 1996. Under the TCF Employees
Stock Ownership Plan - 401(k) (which includes shares under the Great Lakes
Bancorp Amended Employee Stock Ownership Plan), the Advisory Committee,
consisting of the Personnel/Affirmative Action Committee of the Board of TCF
Financial Corporation, has authority to direct the Trustee as to voting of
shares as to which no instructions are received by April 19, 1996. Under the
Great Lakes Bancorp Amended 401(k) Savings and Investment Plan, the shares for
which no signed proxy card is returned by April 19, 1996 are voted by the
Trustee in the same proportions on each proposal as the shares were voted for
which instructions were received.
PLEASE MARK, SIGN AND DATE ON REVERSE SIDE AND RETURN THIS VOTING INSTRUCTION
CARD PROMPTLY USING THE ENCLOSED ENVELOPE. BY LAW, YOUR VOTE IS CONFIDENTIAL.
SEE REVERSE SIDE
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE>
/X/ Please mark votes as in this example.
The shares represented by this voting instruction card will be voted on a
confidential basis as directed by the participant. If no signed proxy card is
received by April 19, 1996, however, the shares under the TCF Employees Stock
Ownership Plan - 401(k) (which includes shares under the Great Lakes Bancorp
Amended Stock Ownership Plan) will be voted as directed by the Advisory
Committee of the Plan. If no signed proxy card is received by April 19, 1996
for shares held under the Great Lakes Bancorp Amended 401(k) Savings and
Investment Plan, the Trustee will vote these shares in the same proportions on
each proposal as the shares were voted for which instructions were received.
This proxy may be revoked only by a written revocation or a new proxy card
received by the Trustee on or before April 19, 1996.
Unless otherwise indicated, all signed proxy cards received by the Trustee will
be voted "FOR" all nominees for election as directors and "FOR" all proposals
referred to herein. The Board of Directors recommends that you vote "FOR" all
proposals.
1. Election of Directors
Nominees: Rudy Boschwitz, William A. Cooper,
Thomas A. Cusick, Thomas J. McGough,
Ronald A. Ward
________ _________
FOR WITHHELD
/ /____________________________________________________
For all nominees except as written on the line above.
2. Appointment of KPMG Peat ________ ________ ________
Marwick LLP as independent FOR AGAINST ABSTAIN
public accountants for 1996
3. Approve the TCF Directors ________ ________ ________
Stock Grant Program FOR AGAINST ABSTAIN
4. Approve the Performance-Based ________ ________ ________
Incentive Policy FOR AGAINST ABSTAIN
NOTE: Please sign as name appears hereon.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
Signature:__________________________________ Date_______________
