<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:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 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/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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 , 1997
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 April 23, 1997, 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; and to
increase the number of authorized shares of Common Stock from 70,000,000 to
140,000,000.
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 23, 1997
------------------------
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 23,
1997, 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, 1997; and
3. To approve an increase in the number of authorized shares of Common
Stock (the "Common Stock") from 70,000,000 to 140,000,000.
Only holders of record of TCF Financial's common stock at the close of
business on March 7, 1997, 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 , 1997
<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", "TCF" or the
"Company"), a Delaware corporation, for use at the Annual Meeting of
Stockholders (the "Annual Meeting") to be held on Wednesday, April 23, 1997,
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, 1997; and (c) approval of an increase in the number of
authorized shares of Common Stock from 70,000,000 to 140,000,000; and (d) 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 7, 1997 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 shares of TCF Common Stock
outstanding and entitled to vote, held by approximately 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. A
majority of the voting power of the issued and outstanding TCF Common Stock is
necessary to approve the increase in the number of authorized shares of Common
Stock from 70,000,000 to 140,000,000. Abstentions are counted as shareholders
present, for purposes of the quorum requirement, but are not counted as voting
in favor of the proposals. As of December 31, 1996, the directors and executive
officers of TCF and their affiliates in the aggregate beneficially owned and are
entitled to vote 5,170,707 outstanding shares or 14.9% 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) 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; and (3) IN FAVOR
OF INCREASING THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM 70,000,000 TO
140,000,000. While the Board knows of no other matters to be 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.
3
<PAGE>
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 the year 2000, 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.
[THIS SECTION LEFT BLANK INTENTIONALLY]
4
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
NAME POSITION(S) WITH TCF FINANCIAL AGE SINCE*
- ------------------------------------------- ------------------------------------------- --- ---------
<S> <C> <C> <C>
NOMINEES FOR ELECTION AS DIRECTORS
CLASS I -- TERM EXPIRES 2000
Bruce G. Allbright......................... Director 68 1987
Robert J. Delonis.......................... Director and Chairman of Great Lakes 45 1995
Bancorp
John M. Eggemeyer, III..................... Director 51 1994
Daniel F. May.............................. Director 67 1988
William F. Bieber.......................... Director 54 1997
DIRECTORS WHOSE TERMS DO NOT EXPIRE IN 1997
CLASS II -- TERM EXPIRES 1998
Robert E. Evans............................ Director and Vice Chairman 61 1990
Luella G. Goldberg......................... Director 60 1988
Lynn A. Nagorske........................... Director, and President 40 1995
Mark K. Rosenfeld.......................... Director 51 1995
Ralph Strangis............................. Director 60 1991
CLASS III -- TERM EXPIRES 1999
Rudy Boschwitz............................. Director 66 1991
William A. Cooper.......................... Director, Chairman and Chief Executive 53 1987
Officer
Thomas A. Cusick........................... Director, Vice Chairman and Chief Operating 52 1988
Officer
Thomas J. McGough.......................... Director 63 1989
Ronald A. Ward............................. Director 52 1993
</TABLE>
- ------------------------
*Does not include service at TCF Bank Minnesota fsb ("TCF Bank Minnesota"),
Great Lakes Bancorp, A Federal Savings Bank ("Great Lakes Bancorp") (prior to
its acquisition by TCF in 1995), or TCF Bank Wisconsin fsb ("TCF Bank
Wisconsin"), previously Republic Capital Bank, F.S.B. (prior to its acquisition
by TCF in 1993), all wholly owned subsidiaries 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 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.
*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.
5
<PAGE>
*ROBERT J. DELONIS is Chairman of the Board of 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 1995, and was Chief
Executive Officer of Great Lakes Bancorp from 1992 through 1995. He is Treasurer
of Artrain, immediate past Chairman of the Michigan League of Savings
Institutions, and past Chairman of Catholic Social Services of Washtenaw County.
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 the founder and Chief Executive of Castle Creek
Capital, LLC and Belle Plaine Financial, LLC, two companies which together form
a merchant banking organization serving the banking industry exclusively. Mr.
Eggemeyer also serves as a director of Rancho Santa Fe National Bank and The
Enterprise Fund. 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.
*WILLIAM F. BIEBER has served as a director of TCF Bank Minnesota since
1995. Mr. Bieber is Chief Executive Officer and owner of Acrometal Companies,
Inc., a Minnesota based organization supplying various products to the
commercial and industrial marketplace. In addition, Mr. Bieber is the owner of
Cornerstone Fuels, Inc. Mr. Bieber is currently a member of the World
Presidents' Organizations, the Minnesota Executives' Organization and the
Minneapolis Club. In addition, he is a member of the Upper Midwest Industries
Board of Directors, a member of the Board of Trustees of Hammer Residences,
Inc., President of the Board of Trustees of Hammer Residences Fund, Inc., and
member of the Board of Directors of Fairview Physicians Association. Mr. Bieber
also has been a past President and member of the Board of Trustees of Washburn
Child Guidance Center and a former cabinet member to the Minneapolis United Way.
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 now serves as a Trustee Emerita. Ms. Goldberg is also a past Chair of the
Minnesota Orchestral Association, and is currently Chair of the University of
Minnesota Foundation.
LYNN A. NAGORSKE was elected President and Chief Executive Officer of TCF
Bank Minnesota effective January 1, 1997, and was elected to the Board of TCF
Financial in 1995. Before that Mr. Nagorske had been President and Chief
Operating Officer of TCF Financial since 1993 (he remains President of TCF
Financial). He was the Treasurer (Principal Financial Officer) of TCF Financial
since its formation in 1987 to 1995. Mr. Nagorske was an Executive Vice
President of TCF Bank Minnesota from 1988 until December 1996. 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 retired Chairman and Chief Executive Officer of
Jacobson Stores Inc., a retail specialty department store company based in
Jackson, Michigan. He is a director of Jacobson Stores Inc. and
- ------------------------
*Nominee for election at the Annual Meeting
6
<PAGE>
Ramco-Gershenson Properties Trust. He has been a director of Great Lakes Bancorp
since 1987 and was elected a director of TCF Financial in 1995. He is a former
Chairman and now a Trustee of the Michigan Colleges Foundation, and a director
and Chairman-elect of 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 Life USA Holding,
Inc., Payless Cashways, Inc. and Damark International, Inc. He has been a
director of TCF Financial since 1991.
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 Chief Operating Officer of TCF Financial
effective January 1, 1997, and was elected Vice Chairman of TCF Financial in
1993. Before 1993 he had been President of TCF Financial since its formation in
1987. Mr. Cusick was also elected Chairman of the Board and 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 since 1993.
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 1996 these committees of the Board held three, five, and one
meetings, respectively. In 1996 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.
7
<PAGE>
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 Annual Meeting was
made on February 12, 1997 by distribution of a news release. Under the Bylaws,
stockholder nominations of directors for the 1997 Annual Meeting were required
to have been received on or before February 22, 1997 in order to be timely, and
no such nominations were received by TCF Financial by that time.
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....... 41 President and Chief Executive Officer of TCF Bank Wisconsin
Peter Bell.............. 45 Executive Vice President of TCF Financial
William E. Dove......... 60 Executive Vice President of TCF Financial Corporation
Michael B. Johnstone.... 49 President and Chief Executive Officer of TCF Bank Illinois
Mark R. Lund............ 46 Senior Vice President, Assistant Treasurer and Controller
(Principal Accounting Officer) of TCF Financial and TCF Bank
Minnesota
Ronald J. Palmer........ 44 Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer) of TCF Financial and TCF Bank
Minnesota
Gregory J. Pulles....... 48 General Counsel, Vice Chairman and Secretary of TCF Financial
Mary E. Sipe............ 40 Executive Vice President of TCF Financial
Earl D. Stratton........ 49 Executive Vice President and Chief Information Officer of TCF
Financial
James E. Tuite.......... 61 Executive Vice President of TCF Financial; President and Chief
Operating Officer of TCF Bank Minnesota (Retired January 1, 1997)
Barry N. Winslow........ 49 President and Chief Executive Officer of Great Lakes Bancorp
</TABLE>
8
<PAGE>
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 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.
WILLIAM E. DOVE was elected Executive Vice President of TCF Financial in
1996. Before that he was an Executive Vice President and Chief Credit Officer of
Great Lakes Bancorp since 1995. He has been an Executive Vice President of TCF
Bank Minnesota since 1985 and 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 1995. From 1987 to 1995 he was employed by TCF Bank
Minnesota as Senior Vice President of Branch Operations.
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 1995. He was President and Chief Executive Officer of TCF
Mortgage Corporation ("TCF Mortgage") 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 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 1995.
EARL D. STRATTON was elected Executive Vice President and Chief Information
Officer of TCF Financial in 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 served as Executive Vice President of TCF Financial until his
retirement in January 1997.
BARRY N. WINSLOW was elected President and Chief Operating Officer of Great
Lakes Bancorp in 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
9
<PAGE>
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, 1996, 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, 1996 (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) 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, 1996, there were 34,757,105 shares
issued and outstanding on December 31, 1996.
[THIS SECTION LEFT BLANK INTENTIONALLY]
10
<PAGE>
<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.......................................... 74,456(4)(8) (3)
Rudy Boschwitz.............................................. 8,000 (3)
Robert J. Delonis........................................... 111,710(4)(6) (3)
John M. Eggemeyer, III...................................... 6,930 (3)
Luella G. Goldberg.......................................... 36,939(8) (3)
Daniel F. May............................................... 53,830(4)(8) (3)
Thomas J. McGough........................................... 34,958(4) (3)
Mark K. Rosenfeld........................................... 7,148(4) (3)
Ralph Strangis.............................................. 18,268(8) (3)
Ronald A. Ward.............................................. 124,417 (3)
Roy E. Weber................................................ 141,142(5) (3)
----------
617,798 1.8%
NAMED EXECUTIVES:
William A. Cooper........................................... 774,206(4)(6) 2.2%
Thomas A. Cusick............................................ 199,902(6) (3)
Robert E. Evans............................................. 241,397(4)(6) (3)
Lynn A. Nagorske............................................ 170,688(5)(6) (3)
James E. Tuite.............................................. 265,431(6) (3)
----------
1,651,624 4.8%
All Directors and Executive Officers combined (27 persons,
including those named above)................................. 2,729,992(4)(5)(6)(8) 7.9%
OTHER BENEFICIAL OWNERS:
Putnam Investments.......................................... (7) %
One Post Office Square
Boston, MA 02109
Advisory Committee of TCF Employees Stock Ownership
Plan-401(k)................................................ 2,466,648(8) 7.1%
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 12,800 options not exercisable
within 60 days of December 31, 1996 for an additional .04% 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) and the
TCF Cash Balance Pension Plan as of such date not otherwise included on this
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, 1996 was 15.0%.
(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, 1996.
(3) 1.0% or less.
11
<PAGE>
(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,
9,002 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, 71,558 shares.
(5) Includes shares which could be purchased upon exercise of existing options
within 60 days as follows: Mr. Weber, 238 shares; Mr. Nagorske, 8,800
shares; and all directors, nominees and executive officers combined, 53,678
shares.
(6) Includes whole shares of TCF Common Stock (vested and unvested) allocated to
accounts as of December 31, 1996 in the TCF Employees Stock Ownership
Plan-401(k), for which the named executives have shared voting power, as
follows: Mr. Cooper, 23,875 shares; Mr. Tuite, 15,799 shares; Mr. Cusick,
17,551 shares; Mr. Evans, 12,541 shares; Mr. Nagorske, 12,619 shares; and
all directors, nominees and executive officers combined, 172,255 shares.
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, 1996, are also included as
follows: Mr. Cooper, 329,359 shares; Mr. Tuite, 119,470 shares; Mr. Cusick,
93,709 shares; Mr. Evans, 108,271 shares; Mr. Nagorske, 51,110 shares; Mr.
Delonis, 57,810 shares; and all directors, nominees and executive officers
combined, 920,676 shares.
(7) Putnam Investments, Inc. has shared dispositive power with respect to all of
the shares and shared voting power with respect to shares.
Dispositive power is shared with Putnam Investment Management, Inc., an
investment adviser subsidiary of Putnam Investments, Inc. with respect to
shares, and is shared with The Putnam Advisory, Inc., another
investment adviser subsidiary, as to the remaining shares.
(8) The Advisory Committee for the TCF Employees Stock Ownership Plan-401(k) 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.
12
<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 1996 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, ................................. 1996 $600,000 $750,000 $ 0(b) 0 $ 0 $ (e)
Director, Chairman of 1995 600,000 615,000 0(b) 0 184,771 38,466
the Board and Chief Executive Officer 1994 500,006 362,504 1,290,000(b) 0 271,517 22,253
Thomas A. Cusick, .................................. 1996 360,000 450,000 0(b) 0 0 (e)
Director and Vice 1995 360,000 369,000 0(b) 0 56,644 15,338
Chairman; Director, Vice Chairman and Chief 1994 298,066 217,500 806,250(b) 0 79,992 10,573
Executive Officer of TCF Bank Minnesota
Robert E. Evans, ................................... 1996 264,000 330,000 0(b) 0 0 (e)
Director and Vice Chairman 1995 264,000 270,600 0(b) 0 46,176 11,942
1994 220,008 159,506 483,750(b) 0 73,513 8,029
Lynn A. Nagorske, .................................. 1996 264,000 330,000 0(b) 0 0 (e)
Director, President and 1995 264,000 270,600 0(b) 0 45,315 10,481
Chief Operating Officer 1994 220,008 159,506 483,750(b) 0 53,546 7,220
James E. Tuite, .................................... 1996 200,004 500,005 0(b) 0 0 (e)
President of TCF Bank Minnesota 1995 200,004 250,005 0(b) 0 45,315 7,200
1994 200,004 250,005 483,750(b) 0 54,687
</TABLE>
- ------------------------------
*At December 31, 1996.
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 1996 (paid in
1997) was paid entirely in cash and based on the ROA of TCF Financial or TCF
Minnesota (See "Incentive Compensation" in the "Report of TCF
Personnel/Affirmative Action Committee on Executive Compensation"). The
bonuses reported in 1995 and 1994 were also paid entirely in cash and based
on the achievement of ROA goals.
(b) There were no restricted stock grants made to the named executives in either
1996 or 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
Greater than or equal to 15.0% to Less than or equal to 16.5%... 20%
Greater than 16.5% to Less than or equal to 17.5%............... 25%
Greater than 17.5%.............................................. 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
remaining shares shall be forfeited and returned to TCF. The TCF Financial
Personnel/Affirmative Action Committee has approved additional stock grants
effective in January 1997. See "Report of TCF Personnel/Affirmative Action
Committee on Executive Compensation."
13
<PAGE>
(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.
(d) Summary of restricted (unvested) stock holdings at December 31, 1996 (these
shares are included in the Securities Ownership Table on page 14 and in the
Restricted Stock Awards column shown on the Summary Compensation Table):
<TABLE>
<CAPTION>
# OF RESTRICTED VALUE AT
NAME SHARES HELD DECEMBER 31, 1996*
- ------------------------------------------------------ --------------- ------------------
<S> <C> <C>
William A. Cooper..................................... 80,000 $3,480,000
Thomas A. Cusick...................................... 50,000 2,175,000
Robert E. Evans....................................... 30,000 1,305,000
Lynn A. Nagorske...................................... 30,000 1,305,000
James E. Tuite........................................ 30,000 1,305,000
</TABLE>
----------------------------
*Based on the closing market price of TCF Common Stock at December 31, 1996
of $43.50 per share.
The number of restricted shares held represents 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 1996 as follows:
Mr. Cooper, ; Mr. Cusick, ; Mr. Evans, ; Mr.
Nagorske, ; and Mr. Tuite, ; and insurance premiums paid for
Mr. Cooper in 1996 of .
GRANT OF OPTIONS AND STOCK APPRECIATION RIGHTS DURING 1996. There were no
stock option grants in 1996 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 1996 AND VALUE OF OUTSTANDING OPTIONS AT DECEMBER 31,
1996. The following table shows stock options that were exercised during 1996
by the five executives named on the Summary Compensation Table and the number
and value of options still held at December 31, 1996. 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 1996.
OPTION EXERCISES IN 1996 AND VALUE OF
OUTSTANDING OPTIONS AT DECEMBER 31, 1996
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING
UNEXERCISED OPTIONS VALUE OF UNEXERCISED
SHARES AT DECEMBER 31, IN-THE-MONEY OPTIONS AT
ACQUIRED ON 1996 (#) DECEMBER 31, 1996
EXERCISE VALUE --------------------- -----------------------
NAME (#) REALIZED VESTED/UNVESTED VESTED/UNVESTED
- ------------------ ------------- ----------- --------------------- -----------------------
<S> <C> <C> <C> <C>
William A. Cooper 43,756 $1,146,543 0/0 0/0
Thomas A. Cusick 0 0 0/0 0/0
Robert E. Evans 21,400 629,365 0/0 0/0
Lynn A. Nagorske 5,162 141,981 8,800/0 330,286/0
James E. Tuite 49,566 1,390,309 0/0 0/0
</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, 1996. There
were no long-term incentive plan awards in 1996.
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 100% of their yearly salary, until termination
of employment. 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
14
<PAGE>
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. Distributions from the Executive Deferred Plan will
commence within 30 days after the employee's termination of employment, and are
paid over a period of 15 years or fewer after termination of employment.
Employees eligible for the Senior Officer Deferred Compensation Plan ("Senior
Officer Deferred Plan") are generally employees of TCF Financial or any of its
direct or indirect subsidiaries who are senior officers of TCF Financial 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, two of the executives named in
the table have individual supplemental pension agreements which provide 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, 1996
under the Pension Plan, the SERP, and the supplemental agreement for the
executives named in the Summary Compensation Table is as follows: Mr. Cooper,
; Mr. Cusick, ; Mr. Evans, ; Mr. Nagorske, and
Mr. Tuite, .
CHIEF EXECUTIVE OFFICER EMPLOYMENT AGREEMENT. TCF Financial entered into an
employment agreement with William A. Cooper effective July 1, 1996 through
December 31, 1999. This agreement supersedes a prior employment agreement which
expired on June 30, 1996. The agreement is for a period to and including
December 31, 1999, or until Mr. Cooper's earlier removal, death or permanent
disability. However, effective January 1, 1998 and each January 1 thereafter it
renews automatically for an additional year unless one party notifies the other
party of its intention not to renew. The agreement provides for a base salary of
not less than $700,000 annually. In the event of Mr. Cooper's removal "without
cause" or a termination effected by Mr. Cooper for "good reason" (as defined in
the agreement), and not due to death or disability, his salary and annual
incentives will be continued for three years and he will receive a lump sum
payment of the value of any options or stock grants forfeited as a result of the
termination. In the event of a termination by the Company for any reason other
than "without cause", or by Mr. Cooper for other than "good reason" (but not a
termination after a change in control), Mr. Cooper is subject to non-competition
15
<PAGE>
and non-solicitation restrictions for one year thereafter. Mr. Cooper's
employment agreement also includes certain severance arrangements in the event
of a termination of employment other than for "cause" (as defined) within 24
months after a change in control (as defined). See "Change in Control and
Termination Arrangements."
CHANGE IN CONTROL AND TERMINATION ARRANGEMENTS. The Personnel/Affirmative
Action Committee and the Board have adopted special severance agreements with
certain executive officers, including Mr. Cooper. The severance agreements for
executives other than Mr. Cooper 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). These 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. The agreement with Mr. Cooper provides that in the event
of any termination other than for "cause" within 24 months after a change in
control, including a voluntary termination by Mr. Cooper, the Company will pay
Mr. Cooper a lump sum cash payment equal to three times his base salary and
three times his average annual incentive payment for the preceding three
calendar years as well as the cash value of any options or stock grants which he
is precluded from receiving as a result of the termination. In addition, in the
event the payment of these amounts triggers an excise tax under Section 4999 of
the Code, the Company will pay Mr. Cooper a tax "gross up" intended to make him
whole after the payment of the excise tax and income taxes related to the tax
gross-up payment. If the employment of the executives named in the Summary
Compensation Table had been terminated on December 31, 1996 pursuant to a change
in control of TCF, the named executives would have been entitled to receive the
following amounts: Mr. Cooper, $7,044,509; Mr. Cusick, $3,554,919; Mr. Evans,
$2,320,617; Mr. Nagorske, $2,320,332 and Mr. Tuite, 2,381,365.
COMPENSATION OF TCF DIRECTORS
In 1996 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.
The foregoing cash fees for directors will be the same in 1997. 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 1997 because TCF's ROE exceeded the stated
percentage in 1996. In April 1996, TCF shareholders approved a new directors
stock grant program under which new directors of TCF Financial (and directors
whose prior award has fully vested) will receive an award of restricted stock
generally equal in value to three times the total amount of his or her annual
retainer fee. The number of shares is computed based on the stock price (average
of high and low) on the day of the meeting. Vesting will occur over a minimum of
three years, and is based on the attainment of a 15% ROE or other goal
established each year by TCF Financial. Any restricted shares outstanding will
vest upon occurrence of a change in control, which shall be deemed to have
occurred if (a) a "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 of securities
of TCF Financial representing thirty percent (30%) or more of the combined
voting power of TCF Financial's then outstanding securities; or (b) during any
period of two (2) consecutive years 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
16
<PAGE>
corporation, other than a merger or consolidation which would result in the
voting securities of TCF Financial outstanding immediately prior there to
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the 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.
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 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 1996 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 1996, 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.
During 1996, Capital City Travel, Inc. ("Capital") provided certain travel
related services to TCF (including its subsidiaries). The fees and commissions
received by Capital were approximately $77,000. Such charges did not exceed 5%
of Capital's gross revenues. Grace Stranges, the spouse of Ralph Stranges, is an
officer, director and stockholder of Capital.
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, proposals from the Chief Executive Officer, opinions of an
independent professional consultant (if requested), the TCF Philosophy of
Compensation 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. In 1997 TCF will expand its peer group to include all banks and thrifts
with between $5 billion and $10 billion in assets. 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.
17
<PAGE>
The peer group study the Committee used in setting 1996 executive
compensation indicated that TCF's performance ranked first in the peer group
while TCF's total executive compensation (salary, bonus and other compensation)
ranked second 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.
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 provided to the
Committee. The study the Committee reviewed in determining 1996 salaries
indicated TCF's performance ranked first in the peer group while TCF's executive
salaries ranked second in the peer group.
INCENTIVE COMPENSATION 1994-96 PLAN. 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
solely on the attainment of the Return on Average Assets ("ROA") achieved by
TCF. ROA is computed under the TCF performance-based policy. 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>
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 for the 1996 calendar year. As a result, the
determination of ROA for Mr. Cooper's bonus was based on the definition of ROA
set forth in the performance-based incentive policy. During the quarter ended
September 30, 1996, federal legislation was enacted which mandated that all
institutions insured by the Savings Association Insurance Fund ("SAIF") would be
charged a specified portion of the one-time special assessment necessary to
recapitalize the insurance fund. The amount of the one-time assessment for TCF
Financial was $21.7 million (after tax). This assessment was excluded from the
calculation of ROA for TCF Financial pursuant to the performance-based policy's
definition of "net income" and not by Committee discretion. Mr. Cooper was the
only executive subject to the performance-based incentive policy for 1996.
18
<PAGE>
TCF's ROA (excluding the SAIF assessment referred to above) for 1996 was
1.56%, which exceeds the 1.4% ROA goal set by the Committee. The incentives
awarded to Mr. Cooper and the other named executives for 1996 performance under
the 1994-96 ROA-based incentive plan, expressed as a percentage of salary,
totaled 125% 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's subsidiary
banks.
INCENTIVE COMPENSATION 1997 PLAN. In January 1996, a committee of the Board
qualifying as "independent" for purposes of Section 162(m) of the Code approved
the TCF Performance-Based Compensation Policy for Covered Executive Officers
(the Policy). The Policy was approved by shareholders at the annual meeting of
shareholders in April 1996. Under the policy, the committee of independent
directors can establish performance goals for payment of incentive compensation
to certain executive officers. The Policy applies to the Chief Executive
Officer, Mr. Cooper. In addition, the Policy allows the Committee to identify
each year as many as four other executive officers, who were on the last day of
the previous taxable year among the four highest compensated executive officers.
The Chief Executive Officer and any other individuals selected for participation
under the Policy shall be considered "Covered Executive Officers." The maximum
award that may be made under the Policy for a calendar year to the Chief
Executive Officer is 2% of TCF Financial's "Net Income", as defined by the
Policy. The maximum award that may be made under the Policy for a calendar year
for other Covered Executive Officers (per person) is 1% of TCF Financial's Net
Income. All incentive compensation awarded to each Covered Executive Officer
pursuant to the Policy will be deductible by TCF Financial for federal income
tax purposes in accordance with Code Section 162(m).
Pursuant to its authority under the Policy, in 1996 the Committee and the
Board approved another incentive compensation program which is similar to the
program approved in 1994. The new program will be based on ROA targets reached
at year end 1997, and the bonus will be paid in 1998. Under this program the
incentive compensation of Mr. Cooper and the other four named executives will
continue to be based on ROA goals. The amount of the incentive ranges from 0% to
200% of base salary depending in each case on the ROA achieved by TCF, as
follows:
<TABLE>
<CAPTION>
GREATER
THAN
OR
LESS EQUAL
THAN TO
TCF ROA 1.25% 1.25% 1.30% 1.40% 1.50% 1.60% 1.70% 1.80%
- ---------------------------------------- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Corresponding Bonus (% of base
salary)................................ 0% 25% 50% 75% 100% 125% 150% 200%
</TABLE>
These ranges were established by the Committee based on the ROA data for
1996 for banks and thrifts between $5 billion and $10 billion in assets, with
the floor ROA of 1.25% (below which no incentive is earned) being set at the
level roughly equivalent or slightly above the average ROA for this group, as
adjusted for extraordinary and other one time items. The bonus percentage will
be calculated, in the case of ROA achievement which falls between goals, by
interpolation as follows: The amount by which the ROA achievement exceeds the
goal shall be divided by the amount between the ROA goal exceeded and the next
ROA goal. The result will be stated in the form of a percentage which shall be
multiplied by the total percentage points between ROA goals. The result will be
added to the bonus percentage corresponding to the ROA goal that was exceeded.
TCF's ROA is computed based on the definition in TCF's performance-based policy
approved by shareholders in 1996.
The Committee intends that TCF's incentive plan for 1997 will be a
"performance-based" plan within the meaning of Section 162(m) of the Code.
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.
19
<PAGE>
1994 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. 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 ("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>
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 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
1996, TCF's adjusted ROE was 20.22%, therefore the vesting percentages achieved
for that year under the chart set forth above was 33%. The vesting percentageS
achieved for 1995 and 1994 were 33% also, resulting in a cumulative vesting
percentage through the end of 1996 of 99% (although actual vesting will not
occur until January 1, 1998, subject in general to continuing employment with
TCF through that date).
1997 RESTRICTED STOCK GRANTS. Awards of restricted stock grants were made
to Mr. Cooper and the four other named executives effective January 1, 1997 in
amounts approximately equal in value to five times their current salary. These
awards were made in consideration of services in 1996 as well as future services
and performance. Vesting of a percentage of these stock awards will occur on
January 1, 2002 provided in general that the award recipient remains employed by
TCF Financial (or an affiliated company) through that date. Such percentage
shall be the sum of the percentages determined from the following table for each
of TCF Financial's fiscal years ending on December 31, 1997, 1998, 1999, 2000
and 2001 based on the (ROE) of TCF Financial for each of such fiscal years:
<TABLE>
<CAPTION>
THEN THE
PERCENTAGE
EARNED
FOR SUCH
IF TCF'S ROE FOR A FISCAL YEAR FISCAL YEAR IS FORFEITURE
- --------------------------------------------------------- ---------------- ----------------
<S> <C> <C>
Less than 15.00%......................................... non-applicable 20%
Greater than or equal to 15.00%, Less than or equal to
17.50%.................................................. 20%
Greater than 17.50%, Less than or equal to 20.00%........ 25%
Greater than 20.00%...................................... 33 1/3%
</TABLE>
All stock not vested as of January 1, 2002 shall not vest and the shares
will be forfeited. Once a percentage is earned or lost, it may not thereafter be
lost or re-earned. Percentages shown are calculated against the total grant. The
total of the vesting percentages may not exceed 100%. ROE will be computed
pursuant to TCF's performance-based policy.
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.
20
<PAGE>
COMPENSATION OF MR. COOPER. Mr. Cooper's salary has been increased
effective January 1, 1997 to $700,000 (see SALARIES, earlier in this report).
The Committee has approved an ROA-based incentive program to be in effect in
1997. Under this incentive program Mr. Cooper may receive annual cash bonuses of
0% to 200% of base pay, depending on TCF's ROA for 1997. (See INCENTIVE
COMPENSATION 1997 PLAN earlier in this report). Mr. Cooper's bonus for 1996 was
125% of base pay. The amount of his bonus was determined on the basis of TCF's
1996 ROA performance, determined pursuant to TCF's performance-based policy. No
targets, goals or requirements were waived by the Committee in determining the
amount of Mr. Cooper's bonus paid in 1997. Mr. Cooper was awarded a grant of
40,000 shares (doubled to 80,000 shares by TCF's stock split in November 1995)
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, in general,
continuing employment vesting requirements. Mr. Cooper was also awarded a grant
of 101,000 shares of restricted stock effective as of January 1, 1997, under the
1997 Restricted Stock Grant program described earlier in this report. A
percentage of these shares will vest January 1, 2002, subject to
performance-related and, in general, 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 Act").
The Committee qualified the ROA-based annual incentive program and the 1994
Restricted Stock Award program as "performance-based" plans for purposes of the
Budget Act, and TCF stockholders approved this designation at last years annual
meeting. The Committee intends that in the event superior performance results in
compensation exceeding the limitation, even after the performance-based
incentives are excluded, that any amounts over the limitation will be deferred.
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.
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 LEFT BLANK INTENTIONALLY.]
21
<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, 1991 and reinvestment of all dividends). The SNL
Thrift Index includes every publicly traded thrift institution in the U.S., a
total of 428 companies as of December 31, 1996, 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; 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. All thrift institutions in the peer group
are publicly held and, except for two, are among the top 25 nationally in terms
of market capitalization, ranging in size from $4 billion to $16 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 FINANCIAL CORP.
[GRAPH]
<TABLE>
<CAPTION>
PERIOD ENDING
----------------------------------------------------------------------------
INDEX 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
- ------------------------------------------------------ ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
TCF Financial Corp. 100.00 152.64 182.83 226.34 375.95 503.66
S&P 500 100.00 107.62 118.47 120.03 165.13 202.89
Thrifts (All) 100.00 140.80 176.71 174.63 271.96 354.35
TCF Peer Group 100.00 139.61 150.53 146.21 218.62 303.50
</TABLE>
22
<PAGE>
CERTAIN TRANSACTIONS OF TCF DIRECTORS AND OFFICERS
During 1996, 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 1996, 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 1996 1997 RATE
------------- ------------------ -------------- ---------
<S> <C> <C> <C> <C>
Mark K. Rosenfeld................ 1993(1) $ 152,957 $ 145,880 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, 1997.
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
INCREASE IN THE NUMBER
OF AUTHORIZED SHARES OF COMMON STOCK
Article 4 of the Certificate of TCF Financial currently provides that the
Corporation is authorized to issue a total of 100,000,000 shares, comprised of
70,000,000 shares of Common Stock and 30,000,000 shares of Preferred Stock. The
Board recommends that this Article be amended to increase the number of
authorized shares which the corporation can issue to 170,000,000 shares, and
increase the number of shares of Common Stock to 140,000,000. The number of
authorized shares of Preferred Stock will continue to be 30,000,000 shares. It
is proposed to amend Article 4.A. of the Certificate as follows, effective
, 1997 (strikeout shows deletion; underline shows addition):
A. Authorized Shares
The total number of shares of all classes of stock which the Corporation
shall have the authority to issue is one hundred seventy million
(170,000,000) (100,000,000 has been struck out) shares, $.01 par value,
divided into two classes of which one hundred and forty million
(140,000,000) (70,000,000 has been struck out) shares shall be Common Stock
(hereinafter the "Common Stock") and thirty million (30,000,000) shares
shall be Preferred Stock (hereinafter the "Preferred Stock"). The number of
authorized shares of Preferred Stock may be increased or decreased (but not
below the number of shares thereof then outstanding ) by the affirmative
vote of the holders of a majority of the stock of the Corporation entitled
to vote without a separate vote of the holders of Preferred Stock as a
class.
23
<PAGE>
The Board is seeking stockholder approval for this change because Delaware
General Corporate Law ("DGCL") provides that approval by a majority of shares
entitled to vote is necessary to approve authorization of additional stock. If
the stockholders do not approve the proposal it will not become effective.
REASONS FOR THE PROPOSAL. The Board believes that the number of shares of
Common Stock presently available for issuance is not sufficient for possible
future corporate activities, including stock dividends and acquisitions. An
increase in the number of authorized shares is in the best interests of TCF, to
insure there are sufficient shares available for possible future acquisitions,
possible stock dividends, stock splits, issuances under employee benefit plans
and other general corporate purposes relating to the development and expansion
of TCF.
If additional stock is authorized, the Board would, without further action
by the stockholders unless otherwise required by law, regulation or stock
exchange rule be able to authorize issuance of the stock at such times, for such
purposes and for such consideration as it may deem desirable. The issuance of
additional authorized shares could result in the dilution of each existing
shareholder's voting power, and could, depending upon a variety of factors, have
the effect of diluting the earnings per share or book value per share of
outstanding shares of TCF Common Stock. Stockholders of the Company presently
have no preemptive rights to acquire authorized but unissued shares of TCF and
the proposed Amendment to the Certificate will not create any preemptive rights.
ANTI-TAKEOVER PROVISIONS. The issuance of additional shares of Common Stock
might have anti-takeover effects by diluting the voting power of a person
seeking to acquire TCF, but this is not the purpose of the increased
authorization and the Board has no present intention of issuing Common Stock for
such purpose. The Articles and Bylaws of TCF presently contain the following
provisions which could be considered to have an anti-takeover effect: (i)
change-in-control provisions; and (ii) limitations on acquisition of control.
These provisions are explained below.
CHANGE-IN-CONTROL PROVISIONS. On April 19, 1995, the shareholders of TCF
approved the TCF Financial 1995 Incentive Stock Program (the "Program"). The
purpose of the Program is to attract and motivate outstanding officers and
employees capable of ensuring the future success of TCF and its subsidiaries, by
providing them with an opportunity to acquire TCF Common Stock. The Program
provides that, upon the occurrence of certain events that would constitute a
"change in control," all outstanding awards will either become fully exercisable
or fully vested. Under the Program, a "change in control" occurs when any
"person" as defined in Sections 13(d) and 14 (d) of the Exchange Act is or
becomes the "beneficial owner," as defined in Rule 13d-3 under the Exchange Act,
of securities of TCF Financial representing 30% or more of the combined voting
power of TCF Financial's then outstanding securities. A change in control is
also defined as any two consecutive year periods in which there ceases to be a
majority of the Board 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.
Lastly, a change in control would occur if the shareholders 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
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 of all or substantially all of
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.
Shareholders of TCF also approved a new directors stock grant program in
1996, under which directors of TCF Financial are eligible to receive awards of
restricted stock equal in value to three times the total amount of his or her
annual retainer. The directors stock program has a change in control provision
which is identical to the provision in the Program, and it provides for full
vesting of unvested shares upon the occurrence of a change of control (see
"Compensation of TCF Directors"). The awards of restricted stock
24
<PAGE>
made on January 1, 1997 to Mr. Cooper and the other four named executive
officers also have a similar change in control provision, which provides for
vesting of the restricted shares upon a change in control (see "REPORT OF TCF
PERSONNEL/AFFIRMATIVE ACTION COMMITTEE ON EXECUTIVE COMPENSATION -- 1997
RESTRICTED STOCK GRANTS").
Mr. Cooper has a severance agreement which provides that in the event of a
termination of employment (other than for "cause") within 24 months after a
change in control, he is entitled to receive the cash value of options or stock
he is precluded from receiving as a result of the termination. Certain executive
officers also have severance agreements which provide that in the event of a
termination of employment due to a change in control, they are entitled to
receive the value of stock options and restricted stock forfeited as a result of
the termination. (see "EXECUTIVE COMPENSATION -- CHANGE IN CONTROL AND
TERMINATION ARRANGEMENTS").
In the event of a change in control of TCF Financial, the foregoing
provisions of the Program, the directors stock grant program, and severance
agreements for Mr. Cooper and the other executive officers could result in the
vesting of restricted stock or stock options, or vesting of other awards under
the Program at a time when they would not otherwise vest or be exercisable. Such
vesting or exercisability, together with other anti-takeover provisions included
in TCF Financial's Certificate and the accumulation of shares of TCF Common
Stock in the 401-(k) Plan and the Executive and Senior Officer Deferred
Compensation Plans may have the effect of discouraging a merger, tender offer,
or acquisition of stock that would constitute a "change in control." However,
the change in control provisions are not intended to increase the amounts
payable to participants in the aforementioned stock award provisions, but are
designed to ensure that a participant will not, as the result of a change in
control, be denied benefits under these stock award programs to which the
participant would otherwise have been entitled to receive.
The Program provides that there will not be any special change-in control
vesting for two years after the Program's approval by stockholders unless it is
approved in advance by the Committee.
EXISTING LIMITATIONS ON ACQUISITION OF CONTROL OF TCF FINANCIAL. In
addition to approvals from regulatory agencies, there are certain existing
provisions of the Certificate of TCF Financial which may make it more difficult
to acquire control of TCF Financial. The principal provisions are summarized
below.
TCF Financial's Certificate includes a "Minimum Price" provision which
generally requires a business combination with a significant stock holder to
meet certain procedural and price conditions, unless it is approved by the
Continuing Directors (as defined) or by an 80% vote of the stockholders of TCF
Financial who are unaffiliated with the significant stockholder. This could have
the effect of discouraging or defeating any two-step takeover attempt not deemed
appropriate by the Board.
TCF Financial's Certificate currently authorizes the issuance of up to
70,000,000 shares of common stock and 30,000,000 shares of preferred stock
without further stockholder approval, and authorizes issuance of the preferred
shares with less than one vote, one vote, or more than one vote per share. These
provisions could be used by the Board to deter a takeover attempt which the
Board does not approve by authorizing the issuance of preferred stock with
rights and preferences which could impede the completion of such a transaction,
or through negotiated sale of such shares to parties friendly to TCF Financial.
TCF Financial's Certificate requires approval of 80% of the shares eligible
to vote at a meeting in order to amend provisions of the Certificate or to amend
the Bylaws related to takeover matters.
TCF Financial has a classified Board, with each class of directors holding
office for staggered three-year terms. Cumulative voting is not authorized in
the election of directors. These provisions, singly or in combination, could
preclude a potential acquirer from changing the membership of the Board over
less than a three-year period, or electing one or more directors of its choosing
without the cooperation of other significant stockholders.
TCF Financial's Bylaws set forth procedures concerning a stockholder
proposal or a stockholder director nomination for consideration at any annual
meeting. See "STOCKHOLDER PROPOSALS" and "INFORMATION ON DIRECTORS AND NOMINEES
- -- NOMINATION OF TCF DIRECTORS," respectively, for a discussion of these Bylaws.
The advance notice requirement for stockholder proposals, by regulating the
introduction of new business at
25
<PAGE>
an annual meeting of stockholders, affords the Board the opportunity to consider
stockholder proposals and, to the extent deemed necessary or desirable by the
Board, respond accordingly. Although the Bylaws do not give the Board any power
to approve or disapprove of stockholder proposals, it may have the effect of
precluding such proposals if the procedures established by it are not followed
and may discourage or deter a third party from conducting a solicitation of
proxies in furtherance of such proposals. The advance notice requirement for
stockholder director nominations, by regulating such nominations at an annual
meeting of stockholders, affords the Board the opportunity to consider the
qualifications of the proposed nominees and, to the extent deemed necessary or
desirable by the Board, inform stockholders about such qualifications. Although
the Bylaws do not give the Board any power to approve or disapprove of
stockholder nominations for election of directors, it may have the effect of
precluding contests for the election of directors if the procedures established
by it are not followed, and may discourage or deter a third party from
conducting a solicitation of proxies to elect its own slate of directors.
TCF Financial's Certificate also provides that a special meeting of
stockholders may only be called by a majority of the Continuing Directors. This
provision is designed to safeguard provisions of the Certificate and the Bylaws
relating to control of TCF Financial by making it more difficult for a stock
accumulator to call a special meeting for such purposes as amending the Bylaws
or electing new directors. As a result, stockholders may be forced to wait until
the next annual meeting to propose matters for stockholder consideration.
In addition to the measures in TCF Financial's Certificate and Bylaws, as
described earlier, the Program contains certain provisions which provide or
accelerate benefits to participants in the event of a change in control. These
provisions would allow certain management employees of TCF Financial to obtain
additional shares of stock, making it more difficult for a potential acquirer to
obtain the 80% stockholder approval required for certain business combinations
and for amending certain provisions of the Certificate and Bylaws. See
"CHANGE-IN-CONTROL PROVISIONS" earlier in the discussion of this proposal. Also,
there is a potential anti-takeover impact from accumulation or potential
accumulation of TCF Common Stock in the Executive and Senior Officer Deferred
Compensation Plans and the TCF Employees Stock Ownership Plan-401(k), ("401-K
Plan"). See "SECURITIES OWNERSHIP OF TCF DIRECTORS, EXECUTIVE OFFICERS AND
SIGNIFICANT STOCKHOLDERS." These plans could have the effect of placing a
significant number of shares of TCF Common Stock under the control or influence
of employees or directors of TCF Financial or its affiliates. The 401-K Plan
owns approximately 7.1% of the stock of TCF Financial as of December 31, 1996.
Any concentration of voting power in these plans might be viewed as making it
more difficult for an acquirer to effect a change in control.
The "DGCL" prohibits a stockholder owning 15% or more of the voting shares
of a corporation under Delaware law from engaging in any of a number of
transactions with the corporation for three years after the 15% stock ownership
is attained, unless the transaction is approved in advance by the board of
directors of the corporation or comes within one of the exceptions in the
statute. This section of DGCL applies to TCF Financial.
On May 23, 1989, the Board adopted a Shareholder Rights Plan under which a
dividend of one preferred share purchase right for each share of common stock
was declared, payable on June 9, 1989, to holders of record on that date. Such
rights also attach to shares issued subsequent to June 9, 1989. The rights will
become exercisable only if a person or group acquires or announces an offer to
acquire 15% or more of TCF's Common Stock. This triggering percentage may be
reduced to no less than 10% by the Board under certain circumstances. When
exercisable, each right will entitle the holder to buy one one-hundredth of a
share of a new series of junior participating preferred stock at a price of $180
per share. In addition, upon the occurrence of certain events, holders of the
rights will be entitled to purchase either TCF Common Stock or shares in an
"acquiring entity" at half of the market value. The Board is generally entitled
to redeem the rights at 1 cent per right at any time before they become
exercisable. The rights will expire on June 9, 1999, if not previously redeemed
or exercised.
As a result of the foregoing measures, TCF Common Stock may not attract
institutional investors or certain other members of the investment community and
this could result in a depressed market price and
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liquidity for TCF Common Stock and/or discourage non-negotiated takeover offers
that might have been deemed by stockholders to be in their interests and might
have involved offers to purchase TCF Common Stock at a premium over the market
price prevailing at the time.
THE TCF BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT TCF STOCKHOLDERS VOTE
FOR AN INCREASE IN THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM
70,000,000 TO 140,000,000.
STOCKHOLDER PROPOSALS
Any stockholder wishing to have a proposal considered for inclusion in TCF
Financial's 1998 proxy solicitation materials must set forth such proposal in
writing and file it with the Secretary of TCF Financial no later than November
23, 1997. 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
1998 proxy solicitation materials. Matters and proposals so presented may be
excluded from the 1998 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 1998
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 12, 1997 by distribution of a news release. Notice was also published
in the legal notice section of newspapers in Minnesota, Michigan, Wisconsin and
Illinois on February 12, 1997. 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 --
NOMINATION OF TCF DIRECTORS."
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 1996 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.
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