SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
CHECK THE APPROPRIATE BOX:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule
14a-12
ALLIANCE BANCORP
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NOT APPLICABLE
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE
REGISTRANT)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other identifying value of transaction
computed pursuant to Exchange Act Rule 0-11:
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 offset fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
<PAGE>
1) Amount Previously Paid:
----------------------------
2) Form, Schedule or Registration Number:
-----------------------------
3) Filing Party:
-----------------------------
4) Date Filed:
------------------------------
<PAGE>
ALLIANCE BANCORP
ONE GRANT SQUARE
HINSDALE, ILLINOIS 60521
(630) 323-1776
May 1, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of Alliance Bancorp (the "Company") to be held on
May 28, 1997, at the Chicago Marriott O'Hare, 8535 West Higgins
Road, Chicago, Illinois at 10:00 a.m. The Annual Meeting will
be the first meeting of stockholders since the completion of the
"merger of equals" of Hinsdale Financial Corporation and its
principal subsidiary, Hinsdale Federal Bank for Savings, with
Liberty Bancorp, Inc. and its principal subsidiary, Liberty
Federal Savings Bank. In connection with the merger transaction,
the holding company adopted the name "Alliance Bancorp" and the
subsidiary Bank adopted the name "Liberty Federal Bank."
As described in the enclosed Proxy Statement, matters
scheduled to be presented for stockholder action at the Annual
Meeting include the election of five directors, the approval of
the 1997 Long-Term Incentive Stock Benefit Plan and the
ratification of the appointment of independent auditors for the
fiscal year ending December 31, 1997. During this meeting, we
will also report on the operations of the Company and its
subsidiaries. Directors and officers of the Company, as well as
representatives of our independent auditors, will be present to
respond to any questions which stockholders may have. Also
enclosed is the Hinsdale Financial Corporation Annual Report on
Form 10-K for the fiscal year ended September 30, 1996, which
serves as the Annual Report to Stockholders for this meeting.
We hope you will be able to attend this meeting in person.
Whether or not you expect to attend, we urge you to sign, date
and return the enclosed Proxy Card so that your shares will be
represented.
On behalf of the Board of Directors and all of the employees
of the Company and the Bank, we wish to thank you for your
support and interest. We look forward to seeing you at the
Annual Meeting.
Sincerely,
/s/ Fredric G. Novy /s/ Kenne P. Bristol
- - ------------------------------ -------------------------
Fredric G. Novy Kenne P. Bristol
Chairman of the Board President and Chief
Executive Officer
<PAGE>
ALLIANCE BANCORP
One Grant Square
Hinsdale, Illinois 60521
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 28, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders ("Annual Meeting") of Alliance Bancorp (the
"Company") will be held at the Chicago Marriott O'Hare, 8535 West
Higgins Road, Chicago, Illinois on Wednesday, May 28, 1997, at
10:00 a.m., Chicago time.
A Proxy Statement and Proxy Card for this Annual Meeting are
enclosed herewith. The Annual Meeting is being held for the
purpose of considering and voting upon the following:
1. The election of five directors for a term of three
years each;
2. The approval of the 1997 Long-Term Incentive Stock
Benefit Plan;
3. The ratification of KPMG Peat Marwick LLP as
independent auditors of the Company for the fiscal year ending
December 31, 1997; and
4. Such other matters as may properly come before the
Annual Meeting or any adjournments thereof.
Pursuant to the Bylaws of the Company, the Board of
Directors has fixed April 30, 1997 as the voting record date for
the determination of stockholders entitled to notice of and to
vote at the Annual Meeting and any adjournments thereof. Only
holders of the Common Stock of the Company as of the close of
business on that date will be entitled to notice of and to vote
at the Annual Meeting or any adjournments thereof. A list of
stockholders entitled to vote at the Annual Meeting will be
available at One Grant Square, Hinsdale, Illinois for a period of
ten days prior to the Annual Meeting and will also be available
for inspection at the meeting itself.
By Order of the Board of Directors
/s/ Richard A. Hojnicki
------------------------------
Richard A. Hojnicki
Secretary
Hinsdale, Illinois
May 1, 1997
EACH STOCKHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE
ANNUAL MEETING, IS REQUESTED TO SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD WITHOUT DELAY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
<PAGE>
ALLIANCE BANCORP
One Grant Square
Hinsdale, Illinois 60521
(630) 323-1776
-------------------------
PROXY STATEMENT
-------------------------
ANNUAL MEETING OF STOCKHOLDERS
May 28, 1997
-------------------------
Solicitation and Voting of Proxies
This Proxy Statement is being furnished to stockholders of
Alliance Bancorp (the "Company") in connection with the
solicitation by the Board of Directors of proxies to be used at
the Annual Meeting of Stockholders ("Annual Meeting") to be held
on Wednesday, May 28, 1997 at 10:00 a.m., Chicago time, at the
Chicago Marriott O'Hare, 8535 West Higgins Road, Chicago,
Illinois and at any adjournments thereof. The Hinsdale Financial
Corporation Annual Report on Form 10-K for the fiscal year ended
September 30, 1996, which serves as the Annual Report to
Stockholders in connection with the Annual Meeting, accompanies
this Proxy Statement and Proxy Card, which are first being mailed
to stockholders on or about May 1, 1997. Please note that the
consolidated financial statements and other information included
in the Annual Report on Form 10-K are those of Hinsdale Financial
Corporation ("Hinsdale Financial"), as the merger of equals
transaction (the "Merger") between Hinsdale Financial and Liberty
Bancorp, Inc. ("Liberty Bancorp") was not consummated until
subsequent to fiscal year end.
Regardless of the number of shares of Common Stock owned, it
is important that stockholders be represented by proxy or be
present in person at the Annual Meeting. Stockholders are
requested to vote by completing the enclosed Proxy Card and
returning it, signed and dated, in the enclosed postage-paid
envelope. Stockholders are urged to indicate the way they wish to
vote in the spaces provided on the proxy card. Proxies solicited
by the Board of Directors of the Company will be voted in
accordance with the directions given therein. Where no
instructions are indicated, signed proxies will be voted FOR the
election of each of the nominees for director named in this Proxy
Statement, FOR the approval of the 1997 Long-Term Incentive Stock
Benefit Plan and FOR the ratification of KPMG Peat Marwick LLP as
independent auditors of the Company for the fiscal year ending
December 31, 1997.
A proxy may be revoked at any time prior to its exercise by
the filing of a written notice of revocation with the Secretary
of the Company, by delivering to the Company a duly executed
proxy bearing a later date, or by attending the Annual Meeting
and voting in person. However, if you are a stockholder whose
shares are not registered in your own name, you will need
appropriate documentation from your record holder to vote
personally at the Annual Meeting.
<PAGE>
Voting Securities
The securities which may be voted at this Annual Meeting
consist of shares of common stock of the Company, par value $.01
per share (the "Common Stock"), with each share entitling its
owner to one vote on all matters to be voted on at the Annual
Meeting, except as indicated below. The close of business on
April 30, 1997 has been fixed by the Board of Directors as the
record date (the "Record Date") for the determination of
stockholders entitled to notice of and to vote at this Annual
Meeting and any adjournments thereof. The total number of shares
of the Company's Common Stock outstanding on the Record Date
(exclusive of Treasury shares) was 5,328,938 shares.
The presence, in person or by proxy, of at least a majority
of the total number of shares of Common Stock outstanding and
entitled to vote (after giving effect to the limitation described
below, if applicable) is necessary to constitute a quorum at this
Annual Meeting. In the event there are not sufficient votes for a
quorum, or to approve or ratify any matter being presented, at
the time of this Annual Meeting, the Annual Meeting may be
adjourned in order to permit the further solicitation of proxies.
In accordance with the provisions of the Company's
Certificate of Incorporation, record holders of Common Stock who
beneficially own in excess of 10% of the outstanding shares of
Common Stock (the "Limit") are not entitled to any vote with
respect to the shares held in excess of the Limit. The Company's
Certificate of Incorporation authorizes the Board of Directors
(i) to make all determinations necessary to implement and apply
the Limit, including determining whether persons or entities are
acting in concert, and (ii) to demand that any person who is
reasonably believed to beneficially own stock in excess of the
Limit supply information to the Company to enable the Board to
implement and apply the Limit.
Voting Procedures and Method of Counting Votes
As to the election of Directors, the proxy card being
provided by the Board of Directors enables a stockholder to vote
FOR the election of the nominees proposed by the Board, or to
WITHHOLD AUTHORITY to vote for one or more of the nominees being
proposed. Under Delaware law and the Company's Certificate of
Incorporation and Bylaws, directors are elected by a plurality of
votes cast, without regard to either broker non-votes, or proxies
as to which authority to vote for one or more of the nominees
being proposed is withheld.
As to the matter being proposed for stockholder action as
set forth in Proposal 2, the proxy card being provided by the
Board of Directors enables a stockholder to check the appropriate
box on the proxy card to (i) vote FOR, (ii) vote AGAINST, or
(iii) vote to ABSTAIN from voting on, such matter. An
affirmative vote of the holders of a majority of the votes cast,
in person or by proxy, and entitled to vote is required to
constitute stockholder approval, without regard to broker non-
votes, or proxies marked ABSTAIN.
<PAGE>
As to the ratification of KPMG Peat Marwick LLP as
independent auditors of the Company, by checking the appropriate
box, a stockholder may: (i) vote FOR the item; (ii) vote AGAINST
the item; or (iii) ABSTAIN from voting on such item. Under the
Company's Certificate of Incorporation and Bylaws, the
ratification of this matter shall be determined by a majority of
the votes cast, without regard to broker non-votes, or proxies
marked ABSTAIN.
Any other matters that may be brought before the Annual
Meeting will be determined by majority of the votes cast, without
regard to broker non-votes, or any proxies as to which a
stockholder abstains.
Proxies solicited hereby will be returned to the Company,
and will be tabulated by an inspector of election designated by
the Board of Directors, who will not be employed by, or a
director of, the Company or any of its affiliates.
Security Ownership of Certain Beneficial Owners
Persons and groups owning in excess of 5% of the Company's
Common Stock are required to file certain reports regarding such
ownership with the Company and with the Securities and Exchange
Commission ("SEC"), in accordance with the Securities Exchange
Act of 1934 (the "Exchange Act"). The following table sets forth
information regarding persons known to be beneficial owners of
more than five percent of the Common Stock outstanding as of
April 30, 1997.
<TABLE>
<CAPTION>
Amount and Nature
Name and Address of of Beneficial Percent
Title of Class Beneficial Owners Ownership of Class
- - -----------------------------------------------------------------------
<S> <C> <C> <C>
Common stock Investors of America 289,793(1) 5.44%
Limited Partnership
(formerly known as Dierberg
Four, L.P.)
39 Glen Eagles Drive
St. Louis, MO 63124
- - -----------------
(1) Investors of America, Limited Partnership, is a Nevada limited partnership,
the general partner of which is First Securities America, Inc., a Missouri
corporation. James F. Dierberg is the controlling shareholder of First
Securities America, Inc.
</TABLE>
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL 1-- ELECTION OF DIRECTORS
The Board of Directors is comprised of 14 members divided
into three classes. Directors are elected for staggered terms of
three years each, with the term of office of only one class of
Directors expiring in each year. Directors serve until their
successors are elected and qualified.
The names of the five nominees for election to the Board of
Directors are set forth below, along with certain other
information concerning such individuals, and the other members of
the
<PAGE>
Board, as of April 30, 1997. Management believes that such
nominees will stand for election and will serve if elected as
Directors. However, if any person nominated by the Board of
Directors fails to stand for election or is unable to accept
election, the proxies will be voted for the election of such
other person as the Board of Directors may recommend. Each
director and nominee has served on the Board of Directors of
Alliance Bancorp since the consummation of the Merger in February
1997, except for Mr. Nusrala who was first appointed to the Board
in April 1997.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE
ELECTION OF THE NOMINEES WHOSE NAMES APPEAR BELOW.
<TABLE>
<CAPTION>
Years First Elected
to Hinsdale Amount and Nature
Financial or of Beneficial
Name, Agent, Principal Occupation and Liberty Bancorp Ownership of Percent of
Business Experience for Past 5 Years Board(1) Term to Expire Stock(2) Class
NOMINEES
<S> <C> <C> <C> <C>
Howard R. Jones, Age 61 1991 2000 40,363(3) 0.76%
President of Packaging Design Corporation,
a manufacturer of corrugated containers and
specialties.
Fredric G. Novy, Age 58 (4)(5) 1994 2000 171,336(6) 3.22%
Chairman of the Board of Directors of Alliance
Bancorp and Liberty Federal Bank; President
and Chief Executive Officer of Liberty Bancorp
and Liberty Federal Savings from 1994 to
February 1997. President of Cragin Financial
Corporation and Cragin Federal Bank for
Savings from 1990 through 1994.
William C. O'Donnell, Age 74 1979 2000 98,050(7) 1.84%
President of ODON Communication Group, a
radio broadcasting company.
Russell F. Stephens, Jr., Age 64 1971 2000 28,293(3) 0.53%
President of Insurance Concepts & Design Inc.,
an insurance agency.
Vernon B. Thomas, Jr., Age 63 (4) 1969 2000 102,251(7) 1.92%
Attorney whose practice concentrates in
corporate, banking, real estate and estate
planning.
CONTINUING DIRECTORS
Kenne P. Bristol, Age 54 (4)(5) 1986 1998 65,839(8) 1.24%
President and Chief Executive Officer of
Alliance Bancorp and Liberty Federal Bank;
previously President and Chief Executive
Officer of Hinsdale Financial and Hinsdale
Federal.
<PAGE>
Years First Elected
to Hinsdale Amout and Nature
Financial or of Beneficial
Name, Agent, Principal Occupation and Liberty Bancorp Ownership of Percent of
Business Experience for Past 5 Years Board(1) Term to Expire Stock(2) Class
Edward J. Burns, Age 67 (4)(5)(9) 1963 1999 145,557(10) 2.73%
Retired; Chairman of the Board of Liberty
Bancorp from 1991 and Liberty Federal Savings
from 1982 until February 1997. President and
Chief Executive Officer of Liberty Bancorp and
Liberty Federal Savings until 1994.
Howard A. Davis, Age 49 (11) 1995 1998 7,500(12) 0.14%
President and Chief Executive Officer of
Preferred Mortgage Associates, Ltd., a
subsidiary of the Bank.
Whit G. Hughes, Age 71 1982 1999 67,760(7) 1.27%
Chairman and former Chief Executive Officer of
Hughes Enterprises, Inc., a distributor of
appliances and parts and a developer and
operator of self-service laundry stores.
H. Verne Loeppert, Age 75 1964 1998 49,315(13) 0.93%
Retired; until December 31, 1996, President and
Chief Executive Officer of CDV Corporation, a
holding company whose subsidiaries are engaged
in metal working tool manufacturing.
David D. Mill, Age 68 (4)(9) 1967 1998 85,273(7) 1.60%
Dentist; Dr. Mill has owned his own general
dental practice since 1957.
Edward J. Nusrala, Age 57 (4) 1997 1999 11,000(14) 0.21%
Founder, owner and President of Famous Brand
Shoes, Inc., a retail shoe company.
William R. Rybak, Age 46 (4) 1986 1999 39,112(3) 0.73%
Chairman of the Board of Directors of Hinsdale
Federal from 1990 to February 1997, and
Chairman of the Board of Hinsdale Financial
from its formation in 1992 to February 1997.
Executive Vice President and Chief Financial
Officer of Van Kampen American Capital, Inc.,
a financial services company specializing in
money management and the distribution of
mutual funds.
Donald E. Sveen, Age 65 (4) 1971 1999 65,363(3) 1.23%
Retired; prior to July 1996, President, Chief
Operating Officer and Director of The John
Nuveen Company and Subsidiaries and
Chairman, Chief Executive Officer and Director
of the Nuveen Select Tax-Free Income Portfolio
Funds. Nuveen is a financial services company
specializing in tax-exempt investments and
money management.
(footnotes on next page)
<PAGE>
Years First Elected
to Hinsdale Amout and Nature
Financial or of Beneficial
Name, Agent, Principal Occupation and Liberty Bancorp Ownership of Percent of
Business Experience for Past 5 Years Board(1) Term to Expire Stock(2) Class
EXECUTIVE OFFICER WHO IS NOT A DIRECTOR
Richard A. Hojnicki, Age 47 -- -- 40,711(15) 0.76%
Mr. Hojnicki is Executive Vice President,
Secretary and Chief Financial Officer of
Alliance Bancorp and Liberty Federal Bank.
All directors and executive officers as a group -- -- 1,031,295(16)(17) 19.35%
(17 persons)
</TABLE>
(1) Includes service on the Board of Directors of Hinsdale
Federal Bank for Savings ("Hinsdale Federal") and Liberty
Federal Savings Bank ("Liberty Federal Savings").
(2) Unless otherwise indicated, each person effectively
exercises sole (or shared with spouse) voting and
dispositive power as to the shares reported.
(3) Includes 15,362 shares that may be acquired pursuant to the
exercise of options granted under the Hinsdale Financial
Corporation 1992 Stock Option Plan for Outside Directors
(the "Hinsdale Financial Directors' Option Plan").
(4) Also serves on the Board of Directors of Liberty Federal
Bank (the "Bank"), the wholly-owned subsidiary of the
Company.
(5) Mr. Burns, Mr. Bristol and Mr. Novy have employment
contracts with both the Bank and the Company.
(6) Includes 122,446 shares with respect to Mr. Novy which may
be acquired through the exercise of stock options under the
Liberty Bancorp, Inc. Amended and Restated 1991 Incentive
Stock Option Plan ("Liberty Bancorp Incentive Stock Option
Plan").
(7) Includes 33,105 shares subject to options which may be
acquired by each outside director indicated under the
Liberty Bancorp, Inc. 1991 Stock Option Plan for Outside
Directors (the "Liberty Bancorp Directors' Option Plan").
(8) Includes 36,294 shares that may be acquired pursuant to
presently exercisable stock options by Mr. Bristol.
(9) Dr. Mill is married to Mr. Burns' first cousin.
(10) Includes 76,579 shares with respect to Mr. Burns which may
be acquired through the exercise of stock options granted
under the Liberty Bancorp Incentive Stock Option Plan and
9,024 shares allocated to Mr. Burns under the Liberty
Federal Savings Bank ESOP.
(11) Mr. Davis has an employment contract with Preferred Mortgage
Associates, Ltd., a subsidiary of the Bank.
(12) Includes 5,000 shares that may be acquired pursuant to
presently exercisable stock options by Mr. Davis.
(13) Includes 30,997 shares subject to options which may be
acquired by Mr. Loeppert under the Liberty Bancorp
Directors' Option Plan.
(14) Includes 10,000 shares that may be acquired by Mr. Nusrala
pursuant to the exercise of options granted under the
Hinsdale Financial Directors' Option Plan.
(15) Includes 17,498 shares that may be acquired pursuant to
presently exercisable stock options by Mr. Hojnicki.
(16) Includes 186,935 shares that may be acquired pursuant to
presently exercisable stock options granted to executive
officers of the Company and its subsidiaries, and 311,444
shares that may be acquired pursuant to presently
exercisable stock options granted to directors who are not
executive officers.
(17) Includes 10,984 shares allocated to the accounts of
executive officers under the Hinsdale Federal Bank for
Savings and Liberty Federal Savings Bank ESOPs. Excludes
the remaining 345,488 shares of Common Stock owned by the
ESOPs. The ESOP Administrative committee administers the
ESOPs. Under the terms of the ESOPs, shares of Common Stock
allocated to the account of employees are voted in
accordance with the instructions of the respective
employees. Unallocated shares are voted by the ESOP Trustee
in a manner that reflects the directions received from
employees as to allocated shares.
Meetings of the Board of Directors and Committees of the Board
During fiscal 1996, the Board of Directors of the Company
met 14 times. The Board of Directors of the Bank meets monthly
and may have additional special meetings upon request of the
Chairman of the Board, the President, or one-third of the
Directors. During the fiscal year ended September 30, 1996, the
Board of Directors of the Bank met 12 times.
The Company and the Bank maintain an Executive Committee, an
Audit and Compliance Committee, and a Compensation and Personnel
Administration Committee. In addition to these committees, the
Bank maintains an Asset/Liability-Budget Committee, a Loan
Committee, a
<PAGE>
Marketing/Advertising Committee, and the Pension Trustees
Committee. No Director attended fewer than 75%, in the aggregate,
of the total number of Board meetings held during fiscal 1996 and
the total number of committee meetings on which he served during
the year, as to both the Company and the Bank.
The Executive Committee currently consists of Directors
Rybak (Chairman), Burns (Vice Chairman), Bristol, Loeppert, Novy,
O'Donnell, Stephens, Sveen and Jones. This Committee exercises
the authority of the Board when the Board is not in session,
subject to applicable law. Any activity is reported to the Board
on a monthly basis. The Executive Committee did not meet during
fiscal 1996.
The Audit and Compliance Committee currently consists of
Directors Loeppert (Chairman), Jones, Mill and Rybak. This
Committee receives reports as necessary to review the results of
the internal audit program, the independent audit, and other
matters that affect the Company or the Bank. The Audit and
Compliance Committee met one time in fiscal 1996. The Board, as
a whole, receives quarterly internal auditing reports from the
Bank's internal auditor.
The Company's Nominating Committee is not a standing
committee but is convened as needed with director members
appointed by the Chairman. While the Committee will consider
nominees recommended by stockholders, it has not actively
solicited recommendations from stockholders. Nominations by
stockholders must comply with certain procedural and
informational requirements set forth in the Company's Bylaws.
See "Advance Notice of Business to be Conducted at an Annual
Meeting."
The Compensation and Personnel Administration Committee
currently consists of Directors Sveen (Chairman), Burns, Hughes
and Stephens. The Committee reviews and administers
compensation, officer promotions, benefits and other matters of
personnel policy and practice. The Committee met one time during
fiscal 1996.
Directors' Compensation
Fees. Outside directors of the Company receive a fee of
$1,500 per meeting of the Board. Prior to the Merger, directors
of the Company did not receive any directors' fees. Outside
Directors of the Bank receive a monthly fee of $1,500. Directors
who are not officers also receive $300 for each committee meeting
attended. Outside directors of the Bank's subsidiaries receive
$300 per quarter for serving on one or all of these Boards.
Directors' Option Plans. Under the Hinsdale Financial
Directors' Option Plan, each outside Director of Hinsdale
Financial, at the time of Hinsdale Federal's conversion to stock
form, received non-statutory options to purchase 15,362 shares of
Common Stock at an exercise price of $8.00 per share, equal to
the fair market value of the stock at the time of grant. In
April 1997, Mr. Nusrala received a non-statutory option to
purchase 10,000 shares of Common Stock at an exercise price of
$27.75 per share, equal to the fair market value of the stock at
the time of grant.
<PAGE>
Under the Liberty Bancorp Directors' Option Plan, each outside
Director of Liberty Bancorp was granted options to purchase
33,105 shares of Common Stock (as adjusted to reflect the
exchange ratio in the Merger) at an exercise price which is, at
the discretion of the optionee, either $9.49 per share or $8.06
per share (each, as adjusted) in which latter case the stock
received upon exercise must be held for one year.
Executive Compensation
Compensation Committee Report. Under rules established by
the SEC, the Company is required to provide certain data and
information in regard to the compensation and benefits provided
to the Company's Chief Executive Officer and other executive
officers of the Company. The disclosure requirements for the
Chief Executive Officer and other executive officers include the
use of tables and a report explaining the rationale and
considerations that led to fundamental executive compensation
decisions affecting those individuals. In fulfillment of this
requirement, the Compensation and Personnel Administration
Committee (the "Compensation Committee"), at the direction of the
Board of Directors has prepared the following report for
inclusion in this proxy statement, which report relates to
Hinsdale Financial's fiscal year ended September 30, 1996, prior
to completion of the Merger.
The Compensation Committee is composed solely of independent
outside Directors. The Board has delegated to the committee the
responsibility of assuring that the compensation of the Chief
Executive Officer and other executive officers is consistent with
the compensation strategy, competitive practices, the performance
of the Company, and the requirements of appropriate regulatory
agencies. Non-employee directors who do not sit on the
Compensation Committee also participate in executive compensation
decision-making through the review, discussion and ratification
of Compensation Committee recommendations. All cash compensation
paid to executive officers is paid by the Bank. The Company does
not currently pay cash compensation to executive officers.
Executive Compensation Philosophy. Since the Company became
a public company in 1992, the Committee has had the following
goals for the compensation programs impacting the executives of
the Company and the Bank:
-- to provide motivation for the executives to enhance
shareholder value by linking a significant portion of
their compensation to the value of the Company's Common
Stock;
-- to retain the executive officers who are capable of
leading the Company to high performance levels and to
allow the Bank to attract high quality executives in
the future by providing total compensation
opportunities which are consistent with competitive
norms of the industry and the Company's level of
performance; and
<PAGE>
-- to maintain reasonable "fixed" compensation costs by
targeting base salaries at competitive average levels.
The Compensation Committee of the Board of Directors of the
Bank periodically reviews salaries, stock options and other
aspects of executive compensation. In general, the purpose of
this evaluation is to ensure that the Bank's overall executive
compensation programs remain competitive with savings
institutions and banks that are similar in both asset size and
geographical markets to the Bank and that total executive pay
represents both the individual's performance as well as the
current and past performance of the Bank.
For purposes of determining the competitive market for the
Bank's executives, the committee has retained KPMG Peat Marwick
LLP to review the comprehensive compensation paid to top
executives of thrifts and banks with total assets in the range of
the Bank's total asset size and performance results comparable to
those of the Bank.
KPMG Peat Marwick LLP reviewed the following published
compensation surveys to determine competitive compensation
levels:
The 1996 Financial Institution Peer Group Data -
Regional/$500M-$1B;
The 1996 Bank Cash Compensation Survey, Bank Administration
Institute;
The 1995 Financial Institutions Compensation Survey (Cole)
By Wyatt Data Services; and
The American Compensation Association's 1995-1996 Salary
Budget Survey.
The data collected were from midwest institutions with
assets ranging from $500 million to $999 million. All
compensation data has been updated to October 1, 1996.
The surveys provide data for both commercial banks and
thrifts. KPMG Peat Marwick LLP has been recommending to their
thrift clients for several years that for compensation purposes
they should compare themselves to commercial banks of comparable
size as well as other thrifts for the following reasons:
-- since deregulation, the differences in the balance
sheet structure and the complexity level between
operating a thrift and a bank have significantly
narrowed; and
-- thrifts are recruiting senior executives from
commercial banks more frequently, and to obtain top
talent, the thrifts are required to provide
compensation levels competitive with banks.
<PAGE>
In addition, the Compensation Committee reviewed the salary
history and performance levels for each of the executive officers
in determining appropriate compensation levels. It is expected
that the comparative salary data compiled by KPMG Peat Marwick
LLP on comprehensive executive compensation will continue to be
utilized as the primary source of information in subsequent years
in determining compensation levels for executive officers.
Executive officers' compensation consists principally of
salary, annual incentive payments, and stock options. The
salaries are generally in the average range compared to other
similar institutions. The incentive payments are based on
performance as well as position.
Compensation of Chief Executive Officer. The Compensation
Committee meets periodically to evaluate Mr. Bristol's
performance and reports on that evaluation to the Outside
Directors of the Board. The Chief Executive's compensation
consists principally of three components:
-- Salary
-- Annual Incentive Payment
-- Stock Option Grants
Under the leadership of the Compensation Committee,
subsequent to the determination of Mr. Bristol's fiscal 1996
compensation, the Board of Directors of the Bank, with Mr.
Bristol excused, determined his fiscal 1996 compensation giving
consideration to the size of the Bank, the duties and
responsibilities of his position and a comparison of the
compensation of chief executive officers of similarly situated
financial institutions. Mr. Bristol's total cash compensation was
based on his contribution to the overall long-term strategy and
financial strength and performance of the Company.
In 1993, the Bank adopted a discretionary Annual Incentive
Compensation Program based on achievement of profitability
performance goals while maintaining safety and soundness
standards. The program's objective is to build shareholder value
by providing an incentive to executives and staff to develop
those business strategies and take those actions that will impact
the Company's annual as well as long-term profitability. In order
to attract and retain high quality executives, the Bank's
executive compensation strategy is based on providing total
target compensation opportunities that are at, or above, the
competitive norms for companies competing in the Bank's
employment market. The Company's total compensation philosophy is
based on a combination of surveyed average base compensation plus
an average to above average incentive opportunity with the intent
of motivating management to continually meet or exceed the goals
of increasing shareholder value.
In addition to projected levels of profitability, the Chief
Executive's annual incentive is dependent on the Bank maintaining
certain levels of performance in the following areas:
-- the regulatory capital ratios;
<PAGE>
-- the interest rate risk as measured by the one year
interest rate sensitivity gap; and
-- the ratio of non-performing assets to total assets.
While these measures may change from year-to-year based on
the strategic focus of the Company, the objective of achieving
annual profitability goals and enhancing shareholder value while
maintaining long-term safety and soundness will continue.
The 1996 annual incentive award granted to the Chief
Executive Officer is based on 40% of base salary if the target
performance goals are achieved. If the performance goals are
exceeded, the percentage of base salary award can be up to a
maximum of 80%. Bank performance awards are based on pre-tax
income objectives in addition to safety and soundness
considerations. Based upon the criteria established by the
Board, Mr. Bristol received a bonus of $75,000, representing
approximately 36% of his salary. The Committee also determined
to grant Mr. Bristol options to purchase 18,750 shares of Common
Stock at an exercise price equal to the fair market value of the
shares at the time of grant.
Compensation Committee
Howard R. Jones, William R. Rybak
<PAGE>
Stock Performance Graph. The following table shows a
comparison of the cumulative total stockholder return */ on the
Company's Common Stock, based on the market price of the Common
Stock, with the cumulative total return of companies in the
Nasdaq National Market and Standard & Poor's Savings & Loan
Companies Index. The Common Stock began trading on July 7, 1992.
<TABLE>
7/7/92 9/92 9/93 9/94 9/95 9/96
------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Hinsdale Financial Corporation 100 99 175 202 229 242
NASDAQ Stock Marketet-US 100 104 136 137 190 225
S&P Savings & Loans Companies 100 84 113 114 146 169
*$100 invested on 7/7/92 in stock or on 6/30/92
in index - including reinvestment of dividends.
Fiscal year ending September 30.
<PAGE>
</TABLE>
Summary Compensation Table. The following table sets forth
the cash compensation paid by the Bank, for services rendered
during the fiscal years ended September 30, 1996, 1995 and 1994,
to the Chief Executive Officer and other executive officers of
the Bank and/or the Company, who received an amount in salary and
bonus in excess of $100,000 in the fiscal year ended September
30, 1996 ("Named Executive Officers"). Because the merger of
Hinsdale Financial and Liberty Bancorp was not consummated until
February 1997, the following table provides information only with
respect to those persons who served as executive officers of
Hinsdale Financial during the applicable period.<PAGE>
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
AWARDS PAYOUTS
Other Annual Restricted Options/
Name and Year Ended Salary Bonus Compensation Stock SARS LTIP All Other
Principal Position 9/30 (1) (2) (3) Awards (#) Payout Compensation(3)
- - -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Kenne P. Bristol 1996 $220,000 $ 75,000 $-- $-- 18,750 $-- $20,919
President, Chief 1995 212,700 65,000 -- -- -- -- 15,838
Executive Officer 1994 204,200 100,000 -- -- -- -- 17,051
and Director
Richard A. Hojnicki 1996 $ 99,000 $ 23,000 $-- $-- 5,625 $-- $13,388
Executive Vice 1995 95,000 23,000 -- -- -- -- 9,793
President, Chief 1994 92,000 36,000 -- -- -- -- 9,029
Financial Officer
and Corporate
Secretary
</TABLE<PAGE>
- - ---------------------
(1) Includes Directors' fees paid to Mr. Bristol. Effective
October 1, 1995, directors who are employees do not receive
director's fees.
(2) Includes bonuses granted pursuant to the Bank's incentive
bonus plan, which bases bonuses upon a percentage of
officers' salaries if the Bank meets certain performance
goals.
(3) Unless otherwise indicated, perquisites for the fiscal years
ended September 30, 1996, 1995 and 1994 did not exceed the
lesser of $50,000 or 10% of the total of the salary and
bonus as reported for the Named Executive Officers.
(4) Represents the value of shares of Common Stock allocated to
the account of the Named Executive Officer under the ESOP
during the fiscal year in question, based on the market
price of the Common Stock as of December 31, 1995, 1994 and
1993.
Employment Agreements. The Bank has entered into an
employment agreement with Mr. Bristol, which provides for a term
of thirty-six months. On each anniversary date, the agreement
may be extended for an additional twelve months, so that the
remaining term shall be thirty-six months. If the agreement is
not renewed, the agreement with Mr. Bristol will expire thirty-
six months following the anniversary date. The current Base
Salary for Mr. Bristol is $230,000. The base salary may be
increased but not decreased. In addition to the Base Salary, the
agreement provides for, among other things, disability pay,
participation in stock benefit plans and other fringe benefits
applicable to executive personnel. The agreement provides for
termination by the Bank for cause at any time. In the event the
Bank terminates the executive's employment for reasons other than
for cause, or in the event of the executive's resignation from
the Bank upon (i) failure to re-elect the executive to his
current offices, (ii) a material change in the executive's
functions, duties or responsibilities, or relocation of his
principal place of employment, (iii) liquidation or dissolution
of the Bank, or (iv) a breach of the agreement by the Bank, the
executive, or in the event of death, his beneficiary would be
entitled to severance pay in an amount equal to 2.99 times the
annual rate of Base Salary at the time of termination. The Bank
would also continue the executive's life, health, dental and
disability coverage for the remaining unexpired term of the
agreement.
If termination, voluntary or involuntary, follows a change
in control of the Bank or the Company, the executive or, in the
event of death, his beneficiary, would be entitled to a severance
payment equal to 2.99 times the annual rate of Base Salary at the
time of termination, which currently would be approximately
$688,000. The Bank would also continue the executive's life,
health, dental and disability coverage for thirty-six months. A
change in control is generally defined to mean the acquisition by
a person or group of persons having beneficial ownership of 20%
or more
<PAGE>
of the Bank's or the Company's Common Stock during the term of
the agreement, or a merger or other form of business combination,
sale of assets, or contested election of directors which results
in a change of a majority of the Board of Directors. The Company
has agreed to reimburse the executive for any excise taxes that
may be imposed under the federal income tax code in connection
with any payments made following a change in control.
As a result of the merger of Liberty Bancorp and Hinsdale
Financial, the Company and the Bank are parties to employment
agreements with Messrs. Burns and Novy. The employment agreements
provide for three-year terms. Commencing on the first
anniversary date and continuing each anniversary date thereafter,
the agreements may be extended by the Board of Directors for an
additional year so that the remaining terms shall remain three
years. Base salaries will be reviewed annually. In 1996, the
base salaries of Messrs. Burns and Novy provided for by the
employment agreements were $135,000, and $200,000, respectively.
In addition to the base salary, the agreements provide for,
among other things, disability pay, participation in stock
benefit plans and other fringe benefits applicable to executive
personnel. The agreements provide for termination by the Bank or
the Company for cause at any time. In the event the Bank or the
Company choose to terminate the executive's employment for
reasons other than for cause; or in the event of the executive's
resignation from the Bank and the Company upon (i) failure to re-
elect the executive to his current offices or nominate for board
membership, (ii) a material change in the executive's functions,
duties or responsibilities, or relocation of his principal place
of employment, (iii) liquidation or dissolution of the Bank or
the Company, or (iv) a breach of the agreement by the Bank or the
Company; the executive, or in the event of death, his beneficiary
would be entitled to severance pay. Pursuant to his agreements,
in the event of such termination, Mr. Burns would receive a sum
equal to: (i) the amount of remaining salary payments under the
agreement; (ii) the annual weighted average of the amount of
bonus and other compensation paid to or accrued on behalf of Mr.
Burns during the term of the agreement times the remaining number
of years, and any fraction thereof, under the agreement; and
(iii) an amount equal to the average of the annual contributions
that were made on his behalf to any employee benefit plans during
the term of the agreement times the remaining number of years,
and any fraction thereof, under the agreement. Under the terms
of their agreements, in the event of such termination, Mr. Novy
would receive the greater of (i) the payments due for the
remaining term of his agreement, or (ii) one times his average
annual compensation for the three preceding taxable years and the
amount of any benefits received pursuant to any employee benefit
plans on his behalf during the term of his agreement.
If termination, voluntary or involuntary, follows a change
in control of the Bank or the Company, the executive or, in the
event of death, his beneficiary, would be entitled to a severance
payment equal to three times his average annual compensation over
the past three years of employment with the Bank or Company. The
Bank and the Company would also continue the executive's life,
medical, dental and disability coverage for the remaining term of
the agreement. A change in control is generally defined to mean
the acquisition by a person or group of persons having beneficial
ownership of 20% or more of the Bank's or the Company's Common
Stock or a merger or other form of business combination, sale of
assets, or contested election of directors which
<PAGE>
results in a change of a majority of the Board of Directors
during the term of the agreement. Payments to the executive
under the Bank's agreements will be guaranteed by the Company in
the event that payments or benefits are to paid by the Bank.
In the event of a change of control, based upon the past
fiscal year's salary, bonus and fees, Mr. Burns would receive
approximately $430,000, and Mr. Novy would receive approximately
$669,000 in severance payments. In addition, the agreements
provide for continued life, medical, dental and disability
coverage for a period of 36 months. Any outstanding options vest
upon a change in control.
Severance Agreements. The Bank has entered into a severance
agreement with Mr. Hojnicki. The Severance Agreement provides
for a term of twelve months; on the first anniversary date and
continuing on each anniversary thereafter, the agreement may be
extended so that the remaining term shall be twelve months. If
not renewed, the agreement expires twelve months thereafter. The
agreement provides that at any time following a change in control
of the Company or the Bank, if the Company or the Bank terminates
the officer's employment for any reason other than cause, or if
the officer terminates his employment following his demotion,
loss of title, office or significant authority, a reduction in
his compensation, or relocation of his principal place of
employment, the officer or, in the event of death, his
beneficiary, would be entitled to receive a severance payment
equal to an amount equal to one and one half times the base
salary. The Bank would also continue the officer's life, health,
dental and disability coverage for the remaining unexpired term
of the agreement. Payment to the officer under the agreement
will be provided by the Company in the event that payment or
benefits are not paid by the Bank. The Bank has entered into
similar severance agreements with seven other officers of the
Bank.
Stock Option Plans. The Board of Directors of the Company
established stock option plans which provide discretionary awards
to its officers and key employees. The grant of awards to
employees under the option plans is determined by a committee of
the Board of Directors consisting of "Non-Employee" directors.
<PAGE>
Set forth below is information relating to options granted
under the Hinsdale Financial Stock Option Plans to the Named
Executive Officers during fiscal 1996.
</TABLE>
<TABLE>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term
Percent of Total
Options Granted
to Employees in Exercise or Expiration
Name Options Granted FY 1996 Base Price Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Kenne P. Bristol 18,750(1) 30% $21.20 10/8/05 $62,625 $125,250
Richard A. Hojnicki 5,625(1) 9% $21.20 10/8/05 $18,788 $ 37,575
- - ----------------
(1) These options become exercisable in three equal installments commencing October 8, 1996.
</TABLE>
The following table provides certain information with
respect to the number of shares of Common Stock represented by
stock options held by the Named Executive Officers as of
September 30, 1996. Also reported are the values for "in-the-
money" options which represent the positive spread between the
exercise price of any such existing stock options and the fiscal
year-end price of the Common Stock. No options were exercised
during fiscal 1996.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised In-
Options at The-Money Options at
Fiscal Year-End Fiscal Year-End(1)
Shares Acquired Value
Name Upon Exercise Realized Exercisable/Unexercisable(#) Exercisable/Unexercisable($)
<S> <C> <C> <C> <C>
Kenne P. Bristol -- $ -- 30,044/26,261 $465,682/159,545
Richard A. Hojnicki -- -- 15,623/9,530 242,157/73,465
(1) Equals the difference between the aggregate exercise price of such options and the aggregate
fair market value of the shares of Common Stock that would be received upon exercise,
assuming such exercise occurred on September 30, 1996, at which date the last sales price of
the Common Stock, as quoted on the Nasdaq National Market, was $23.50.
</TABLE>
Retirement Plan. The Bank maintains the Hinsdale Federal
Bank for Savings Pension Plan ("Retirement Plan"), for the
benefit of the employees of the Bank. The Retirement Plan is a
noncontributory defined benefit pension plan. All employees who
have worked at the Bank for a twelve month period and within that
period have been credited with 1,000 or more hours of employment
with the Bank and have attained age 21 are eligible to
participate in the Retirement Plan. Each year the Bank
contributes such amount, if any, to the Retirement Plan necessary
to satisfy
<PAGE>
the actuarially determined minimum funding requirements in
accordance with the Employee Retirement Income Security Act of
1974, as amended ("ERISA").
The following table sets forth the estimated annual benefits
payable upon retirement at age 65 in calendar year 1996,
expressed in the form of a single life annuity, for the final
average salary and benefit service classifications specified.
<TABLE>
<CAPTION>
Years of Benefit Service
at Retirement
Final Salary 15 Years 20 Years 25 Years 30 Years 35 Years
<S> <C> <C> <C> <C> <C>
$ 25,000 $ 5,588 $ 7,450 $ 9,313 $11,175 $13,038
50,000 12,150 16,200 20,250 24,300 28,350
75,000 18,713 24,950 31,188 37,425 43,663
100,000 25,275 33,700 42,125 50,550 58,975
125,000 31,838 42,450 53,063 63,675 74,288
150,000(1) 38,400 51,200 64,000 76,800 89,600
- - -------------------------
(1) The maximum annual salary under the Internal Revenue Code of 1986.
</TABLE>
Compensation covered by the Retirement Plan is total
compensation received from the Bank except bonuses, overtime,
commissions, director's fees or other forms of special
compensation, before reducing such compensation pursuant to a
deferral election of the employee under any plan of the Bank
established in accordance with the provisions of Section 401(k)
or Section 125 of the Internal Revenue Code of 1986, as amended
(the "Code").
The following table sets forth the years of credited service
(i.e., benefit service) as of September 30, 1996 for each Named
Executive Officer.
<TABLE>
Credited Service
Years
<S> <C>
Kenne P. Bristol 18
Richard A. Hojnicki 20
</TABLE>
In March 1997, the Bank adopted resolutions terminating the
Retirement Plan. No participant will accrue additional benefits
under the Retirement Plan after its termination.
Transactions With Certain Related Persons
The Bank does not make loans to its directors and executive
officers except for overdraft lines of credit on checking
accounts issued by the Bank, which are made in the ordinary
course of business, and on substantially the same terms,
including interest rates, as those prevailing at the time for
comparable transactions with other persons and do not involve
more than the normal risk of collectibility or present other
unfavorable features. In addition, Liberty Federal Savings had
<PAGE>
a policy which required that all loans or extensions of credit to
executive officers and directors must be made on substantially
the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with the
general public and must not involve more than the normal risk of
repayment or present other unfavorable features. The loans made
by Liberty Federal Savings to its executive officers and
directors were assumed by the Bank in connection with the merger.
PROPOSAL 2 - APPROVAL OF THE ALLIANCE BANCORP
1997 LONG-TERM INCENTIVE STOCK BENEFIT PLAN
The Board of Directors of the Company has adopted the 1997
Long-Term Incentive Stock Benefit Plan (the "1997 Stock Benefit
Plan"). The Board of Directors adopted this plan in order to
provide the Company the flexibility and advantages needed to
attract, retain and motivate key employees and directors. The
purpose of the 1997 Stock Benefit Plan is to advance the
interests of the Company and to increase shareholder value by
providing officers, employees and directors of the Company with a
proprietary interest in the growth and performance of the Company
and with incentives for continued service to the Company. The
following is a summary of the material features of the 1997 Stock
Benefit Plan, which is qualified in its entirety by reference to
the provisions of the Plan attached hereto as Exhibit A.
General
The 1997 Stock Benefit Plan shall become effective on May
28, 1997, upon approval by shareholders of the Company at the
Annual Meeting, and will remain in effect for a period of ten
years. The 1997 Stock Benefit Plan authorizes the issuance of up
to 400,000 shares of Common Stock of the Company pursuant to the
grants of stock options, stock appreciation rights, or stock
awards.
The 1997 Stock Benefit Plan will be administered by a
committee (the "Committee") appointed by the Board of Directors,
or by the Board of Directors itself (references to the Committee
shall include the Board to the extent it administers the Plan).
The Committee will be comprised of two or more "Non-employee
Directors" of the Board of Directors, as such term is defined in
Rule 16b-3 of the Exchange Act. The Committee has full and
exclusive power within the limitations set forth in the 1997
Stock Benefit Plan to make all decisions and determinations
regarding the selection of participants and the granting of
awards; establishing the terms and conditions relating to each
award; adopting rules, regulations and guidelines for carrying
out the Plan's purposes; and interpreting and otherwise
construing the 1997 Stock Benefit Plan. The 1997 Stock Benefit
Plan may be amended by the Board or the Committee, without the
approval of shareholders, but no such amendments may adversely
affect any outstanding awards under the 1997 Stock Benefit Plan
without the consent of the holders thereof. The 1997 Stock
Benefit Plan provides that the Committee may not amend any
outstanding option award to reduce the option price or cancel and
replace option awards with awards having a lower option price
without further approval of shareholders. This amendment only
prohibits the re-pricing of "underwater" options
<PAGE>
and does not preclude adjustment of the option price under the
anti-dilution provisions of the 1997 Stock Benefit Plan.
Eligibility
Any employee or director of the Company or of any of its
subsidiaries shall be eligible to receive an award under the 1997
Stock Benefit Plan.
Types of Awards
The Committee shall determine the type or types of awards to
be made to each participant under the Plan and shall approve the
terms and conditions governing these awards. Awards may be
granted singly, in combination or in tandem so that the
settlement or payment of one automatically reduces or cancels the
other. The 1997 Stock Benefit Plan provides flexibility in
structuring long-term incentive agreements for various groups and
levels of executives, directors and other participants. The
flexibility will permit the Company to grant one form of award or
combination of awards to certain participants while using another
award type or mix for others. Awards may include, but are not
limited to, the following:
Stock Options. Stock options will constitute rights
entitling their holders to purchase shares of the Company's
Common Stock during a specified period. The purchase price of
each option may not be less than 100% of fair market value on the
date of grant. Fair market value for purposes of the 1997 Stock
Benefit Plan means the reported closing price of the Common Stock
on the day of grant or if the Common Stock is not traded on such
date, on the next preceding day on which the Common Stock was
traded.
Any stock option granted in the form of any incentive stock
option will be intended to comply with the requirements of
Section 422 of the Internal Revenue Code of 1986, as amended.
Only options granted to employees qualify for incentive stock
option treatment. A stock option may be exercised in whole or in
installments, which may be cumulative. Shares of Common Stock
purchased upon the exercise of a stock option must be paid for in
full at the time of the exercise in cash or such other method as
provided by the Committee. Such payment may include tendering
shares of Common Stock or surrendering of a stock award, or a
combination of methods. Accelerated ownership stock option rights
may be granted simultaneously with, or subsequent to, the grant
of any option. If an option grant contains an accelerated
ownership stock option right, and if a participant pays all or
part of the exercise price of the option with previously owned
shares of Common Stock, then upon exercise of the option the
participant will be granted an accelerated ownership stock option
to purchase at the fair market value as of the date of grant of
the accelerated ownership stock option, a number of shares of
Common Stock equal to the number of whole shares used by the
participant to pay for the exercise of the initial option and the
number of whole shares, if any, withheld by the Company in
payment for withholding tax in connection with the exercise of
the initial option. Accordingly, the accelerated ownership stock
option rights do not increase the total number of shares owned by
a participant, or the aggregate shares
<PAGE>
outstanding, but permit the participant to use previously owned
shares of Common Stock to exercise stock options without
decreasing his or her proprietary interest in the Company. An
accelerated ownership option may not be exercised prior to the
expiration of six months from the date of the grant of the
accelerated ownership option.
Stock Appreciation Rights. Stock appreciation rights
("SARs") entitle their recipients to receive payments in cash,
shares of Common Stock, or a combination thereof, as determined
by the Committee. Any such payments shall represent the
appreciation in market value of a specified number of shares from
the date of grant until the date of exercise. Such appreciation
will be measured by the excess of the fair market value on the
date of exercise over the fair market value of the Company's
Common Stock on the date of grant of the SAR or the grant of an
award which the SAR replaced.
Stock Awards. Stock awards may constitute actual shares of
Common Stock or may be denominated in stock units which entitle
the recipient to receive future payments in either shares, cash,
or a combination thereof. Stock awards may be subject to
conditions established by the Committee and set forth in the
award agreement, and which may include, but are not limited to,
continuous service with the Company, achievement of specific
business objectives, and other measurements of performance.
Stock awards may be subject to restrictions and contingencies
regarding vesting and eventual payment as the Committee may
determine.
Any awards made under the 1997 Stock Benefit Plan may be
subject to vesting and other contingencies as determined by the
Committee. Awards will be evidenced by agreements approved by
the Committee which set forth the terms and conditions of each
award. The Committee in its discretion may accelerate or extend
the period for the exercise or vesting of awards.
The Committee may provide that awards under the 1997 Stock
Benefit Plan earn dividend equivalents, to be paid currently or
at a later date or dates, subject to such conditions as the
Committee may establish. Award payments may also be deferred as
determined by the Committee. Such deferral settlements may
include the crediting of dividend equivalents if denominated in
stock awards, or interest if denominated in cash. Shares of
Common Stock underlying stock awards may be voted by the
participant prior to vesting.
Generally, all awards, except nonincentive stock options,
granted under the 1997 Stock Benefit Plan shall be
nontransferable except by will or in accordance with the laws of
descent and distribution or pursuant to a domestic relations
order. During the life of the participant, awards can be
exercised only by him or her. The Committee may permit a
participant to designate a beneficiary to exercise or receive any
rights that may exist under the 1997 Stock Benefit Plan upon the
participant's death.
<PAGE>
Change in Control
Upon the occurrence of an event constituting a change in
control of the Company, all awards outstanding will become
immediately vested, and stock awards will be distributed.
A change in control is defined, generally, to mean (i) a
change in control of the nature that would be required to be
reported in response to Item 1(a) of the Current Report on Form
8-K, or as defined under the Change in Bank Control Act and the
Rules and Regulations thereunder ; (ii) the acquisition of 25% or
more of the Common Stock; (iii) a tender offer, a merger, sale of
assets, or change of a majority of the current Board of Directors
(generally disregarding any change approved by such Board); or
(iv) a solicitation of proxies by someone other than the
management of the Company, seeking shareholder approval of a
business combination.
Tax Consequences
The following are the federal tax consequences generally
arising with respect to awards granted under the 1997 Stock
Benefit Plan. The grant of an option or SAR will create no tax
consequences for an optionee or the Company. The optionee will
have no taxable income upon exercising an incentive stock option
(except that the alternative minimum tax may apply), and the
Company will receive no deduction when an incentive stock option
is exercised. Upon exercising an option other than an incentive
stock option, the optionee must recognize ordinary income equal
to the difference between the exercise price and the fair market
value of the stock on the date of exercise; the Company will be
entitled to a deduction for the same amount. The tax treatment
for an optionee on a disposition of shares acquired through the
exercise of an option depends on how long the shares have been
held and whether such shares were acquired by exercising an
incentive stock option or by exercising an option other than an
incentive stock option. Generally, there will be no tax
consequences to the Company in connection with the disposition of
shares acquired under an option except that the Company may be
entitled to a deduction in the case of a disposition of shares
acquired under the incentive stock option before the applicable
incentive stock option holding periods have been satisfied.
With respect to other awards granted under the 1997 Stock
Benefit Plan that are settled either in cash or in stock or other
property that is either transferable or not subject to
substantial risk of forfeiture, the participant must recognize
ordinary income equal to the cash or the fair market value of
shares or other property received; the Company will be entitled
to a deduction for the same amount. With respect to awards that
are settled in stock or other property that is restricted as to
transferability or subject to substantial risk of forfeiture, the
participant must recognize ordinary income equal to the fair
market value of the shares or other property received at the time
the shares or other property became transferable or not subject
to substantial risk of forfeiture, whichever occurs earlier; the
Company will be entitled to a deduction for the same amount.
<PAGE>
No options have been granted under the 1997 Stock Benefit
Plan as of the date of this Proxy Statement. As of such date,
there were 11 outside directors and 345 employees eligible to
participate in the 1997 Stock Benefit Plan.
As of April 25, 1997, the last sale price of the Common
Stock, as reported on the Nasdaq National Market, was $27.75. The
affirmative vote of the holders of a majority of the votes cast
at the Annual Meeting is required for approval of the 1997 Stock
Benefit Plan. The purpose of obtaining shareholder approval of
the 1997 Stock Benefit Plan is to qualify the Plan for the
granting of incentive stock options and to satisfy the
requirement for the listing of the Company's Common Stock on the
NASDAQ National Market.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF
THE ALLIANCE BANCORP 1997 LONG-TERM INCENTIVE STOCK BENEFIT
PLAN.
PROPOSAL 3 - RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Company's independent auditors for the fiscal year ended
September 30, 1996 were KPMG Peat Marwick LLP. The Company has
determined to change its fiscal year end to December 31. The
Company's Board of Directors has reappointed KPMG Peat Marwick
LLP to continue as independent auditors for the Company for the
fiscal year ending December 31, 1997, subject to ratification of
such appointment by the stockholders. Representatives of KPMG
Peat Marwick LLP are expected to attend the Annual Meeting. They
will be given the opportunity to make a statement if they desire
to do so and will be available to respond to appropriate
questions from stockholders present at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE
INDEPENDENT AUDITORS OF THE COMPANY FOR THE FISCAL YEAR ENDING
DECEMBER 31, 1997.
STOCKHOLDER PROPOSALS
To be considered for inclusion in the Company's proxy
statement in connection with the annual meeting of stockholders
to be held following fiscal year ending December 31, 1997, a
stockholder proposal must be received by the Secretary of the
Company, at the address set forth on the first page of this Proxy
Statement, no later than December 31, 1997. Any shareholder
proposal submitted to the Company will be subject to SEC Rule
14a-8 under the Securities Exchange Act of 1934.
<PAGE>
ADVANCE NOTICE OF BUSINESS TO BE CONDUCTED
AT AN ANNUAL MEETING
The Bylaws of the Company provide an advance notice
procedure for certain business, or nominations to the Board of
Directors, to be brought before an annual meeting. In order for a
stockholder to properly bring business before an annual meeting,
or to propose a nominee to the Board, the stockholder must give
written notice to the Secretary of the Company not less than
ninety (90) days before the date fixed for such meeting;
provided, however, that in the event that less than one hundred
(100) days notice or prior public disclosure of the date of the
meeting is given or made, notice by the stockholder to be timely
must be received not later than the close of business on the
tenth day following the day on which such notice of the date of
the Annual Meeting was mailed or such public disclosure was made.
The notice must include the stockholder's name, record address,
and number of shares owned by the stockholder, and describe
briefly the proposed business, the reasons for bringing the
business before the Annual Meeting, and any material interest of
the stockholder in the proposed business. In the case of
nominations to the Board, certain information regarding the
nominee must be provided. Nothing in this paragraph shall be
deemed to require the Company to include in its proxy statement
and proxy relating to an annual meeting 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.
OTHER MATTERS WHICH MAY PROPERLY
COME BEFORE THE MEETING
The Board of Directors knows of no business which will be
presented for consideration at the Annual Meeting other than as
stated in the Notice of Annual Meeting of Stockholders. If,
however, other matters are properly brought before the Annual
Meeting, it is the intention of the persons named in the
accompanying proxy card to vote the shares represented thereby on
such matters in accordance with their best judgment.
By Order of the Board of Directors
/s/ Richard A. Hojnicki
------------------------------
Richard A. Hojnicki
Secretary
Hinsdale, Illinois
May 1, 1997
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE
REQUESTED TO SIGN AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
EXHIBIT A
ALLIANCE BANCORP
1997 LONG-TERM INCENTIVE STOCK BENEFIT PLAN
1. PURPOSE. The purpose of the Alliance Bancorp 1997 Long-
Term Incentive Stock Benefit Plan (the "Plan") is to advance the
interest of Alliance Bancorp (the "Company") and to increase
shareholder value by providing outside directors and key
employees of the Company and its affiliates, including Liberty
Federal Bank (the "Bank"), upon whose judgment, initiative and
efforts the successful conduct of the business of the Company and
its affiliates largely depends, with additional incentive in the
form of a proprietary interest in the growth and performance of
the Company and to encourage their continued service with the
Company and its affiliates. A purpose of the Plan is also to
attract people of experience and ability to the Company and its
affiliates.
2 TERM. The Plan shall be effective as of May 28, 1997
(the date of shareholder approval) (the "Effective Date") and
shall remain in effect until May 28, 2007 (ten years from such
date) unless sooner terminated by the Company's Board of
Directors (the "Board"). The effectiveness of the Plan is
contingent upon stockholder approval, and any awards granted
prior to such stockholder approval shall be null and void if such
approval is not obtained, and any such award may not be exercised
or vested prior to the receipt of stockholder approval. After
termination of the Plan, no future awards may be granted but
previously made awards shall remain outstanding in accordance
with their applicable terms and conditions and the terms and
conditions of the Plan.
3. PLAN ADMINISTRATION. A committee (the "Committee")
appointed by the Board shall be responsible for administering the
Plan. The Committee shall be comprised of either (i) at least two
"Non-Employee Directors" of the Company, or (ii) the entire Board
of the Company. A "Non-Employee Director" means, for purposes of
the Plan, a director who (a) is not employed by the Company or an
affiliate; (b) does not receive compensation directly or
indirectly as a consultant (or in any other capacity than as a
director) greater than $60,000; (c) does not have an interest in
a transaction requiring disclosure under Item 404(a) of
Regulation S-K; or (d) is not engaged in a business relationship
for which disclosure would be required pursuant to Item 404(b) of
Regulation S-K. Actions and decisions of the Committee shall be
approved by a majority of the members of the Committee. The
Committee shall have full and exclusive power to interpret,
construe and implement the Plan and any rules, regulations,
guidelines or agreements adopted hereunder and to adopt such
rules, regulations and guidelines for carrying out the Plan as it
may deem necessary or proper. These powers shall include, but not
be limited to, (i) determination of the type or types of awards
to be granted under the Plan; (ii) determination of the terms and
conditions of any awards under the Plan; (iii) determination of
whether, to what extent and under what circumstances awards may
be settled, paid or exercised in cash, shares, other securities,
or other awards, or other property, or accelerated, canceled,
extended, forfeited or suspended; (iv) adoption of modifications,
amendments, procedures, subplans and the like as are necessary;
(v) subject to the rights of participants, modification, change,
amendment or cancellation of any award to correct an
administrative error; and (vi) taking any other action the
Committee deems necessary or desirable for the administration of
the Plan. All determinations, interpretations, and other
decisions under or with respect to the Plan or any award by the
Committee shall be final, conclusive and binding upon the
Company, any participant, any holder or beneficiary of any award
under the Plan and any employee of the Company.
4. ELIGIBILITY. Any employee of the Company shall be
eligible to receive Incentive Stock Options, Non-Statutory Stock
Options, Stock Appreciation Rights, Stock Awards, Dividends, and
Dividend Equivalents under the Plan. Outside directors shall be
eligible to receive Non-Statutory Stock Options, Stock Awards,
Dividends, and Dividend Equivalents under the Plan, provided that
the term "Company" includes any entity that is directly or
indirectly controlled by the Company or any entity in which the
Company has a significant equity interest, as determined by the
Committee. An "outside director" means a director of the Company
or an Affiliate who is not an employee of the Company or an
Affiliate.
5. SHARES OF STOCK SUBJECT TO THE PLAN. There shall be
400,000 shares of Common Stock in the aggregate reserved for
issuance under the Plan, which shares shall be available for
issuance (subject to
<PAGE>
adjustment as provided in Section 6) pursuant to the exercise of
stock options and stock awards, granted under Sections 7(a) and
(c) of the Plan. The maximum number of shares that may be subject
to all awards granted to any one employee of the Company is
100,000.
In instances where a stock appreciation right ("SAR") or
other award is settled in cash or any form other than shares,
then the shares covered by these settlements shall not be deemed
issued and shall remain available for issuance under the Plan.
Further, the payment in shares of dividends and dividend
equivalents in conjunction with outstanding awards shall not be
counted against the shares available for issuance. Any shares
that are issued by the Company, and any awards that are granted
by, or become obligations of, the Company, and any awards that
are granted by, or become obligations of, the Company, through
the assumption by the Company or an affiliate of, or in
substitution for, outstanding awards previously granted by an
acquired company shall not be counted against the shares
available for issuance under the Plan. In addition, any shares
that are used for the full or partial payment of the exercise
price of any option in connection with an Accelerated Ownership
Option Right will be available for future grants under the Plan.
Any shares issued under the Plan may consist in whole or in
part, of authorized and unissued shares or of treasury shares,
and no fractional shares shall be issued under the Plan. Cash may
be paid in lieu of any fractional shares in settlements of awards
under the Plan.
6. ADJUSTMENTS AND REORGANIZATIONS.
(a) Changes in Stock. If the number of outstanding shares
of Common Stock is increased or decreased or the shares
of Common Stock are changed into or exchanged for a
different number of kind of shares or other securities
of the Company on account of any recapitalization,
reclassification, stock split, reverse split,
combination of shares, exchange of shares, stock
dividend or other distribution payable in capital
stock, or other increase or decrease in such shares
effected without receipt of consideration by the
Company occurring after the Effective Date, the number
and kinds of shares for which grants of Stock Options
and Stock Awards may be made under the Plan shall be
adjusted proportionately and accordingly by the
Company. In addition, the number and kind of shares for
which grants are outstanding shall be adjusted
proportionately and accordingly so that the
proportionate interest of the grantee immediately
following such event shall, to the extent practicable,
be the same as immediately before such event. Any such
adjustment in outstanding Stock Options shall not
change the aggregate Stock Option purchase price
payable with respect to shares that are subject to the
unexercised portion of the Stock Option outstanding but
shall include a corresponding proportionate adjustment
in the Stock Option purchase price per share.
(b) Reorganization in Which the Company Is the Surviving
Entity and in Which No Change of Control Occurs.
Subject to Section 23 hereof, if the Company shall be
the surviving entity in any reorganization, merger, or
consolidation of the Company with one or more other
entities, any Stock Option theretofore granted pursuant
to the Plan shall pertain to and apply to the
securities to which a holder of the number of shares of
stock subject to such Stock Option would have been
entitled immediately following such reorganization,
merger or consolidation, with a corresponding
proportionate adjustment of the Stock Option purchase
price per share so that the aggregate Stock Option
purchase price thereafter shall be the same as the
aggregate Stock Option purchase price of the shares
remaining subject to the Stock Option immediately prior
to such reorganization, merger, or consolidation.
Subject to any contrary language in an Award Agreement
evidencing a Stock Award Grant, any restrictions
applicable to such Stock Award shall apply as well to
any replacement shares received by the Grantee as a
result of the reorganization, merger or consolidation.
<PAGE>
Adjustments under this Section 6 related to shares of Stock or
securities of the Company shall be made by the Committee, whose
determination in that respect shall be final, binding and
conclusive. No fractional shares or other securities shall be
issued pursuant to any such adjustment, and any fractions
resulting from any such adjustment shall be eliminated in each
case by rounding downward to the nearest whole share. The
granting of awards pursuant to the Plan shall not affect or limit
in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations, or changes of its capital or
business structure or to merge, consolidate, dissolve, or
liquidate, or to sell or transfer all or any part of its business
or assets.
7. AWARDS. The Committee shall determine the type or types
of award(s) to be made to each participant under the Plan and
shall approve the terms and conditions governing these awards in
accordance with Section 12. Awards may be granted singly, in
combination or in tandem so that the settlement or payment of one
automatically reduces or cancels the other. Awards may also be
made in combination or in tandem with, in replacement of, as
alternatives to, or as the payment form for, grants or rights
under any other employee or compensation plan of the Company,
including the plan of any acquired entity.
(a) Stock Option - is a grant of a right to purchase a
specified number of shares of Common Stock during a
specified period. The purchase price of each option
shall be the Fair Market Value of a share on the date
such other award was granted. However, if a key
employee owns stock possessing more than 10% of the
total combined voting power of all classes of stock of
the Company or its affiliates (or under Section 424(d)
of the Internal Revenue Code of 1986, as amended (the
"Code") is deemed to own stock representing more than
10% of the total combined voting power of all classes
of stock of the Company or its affiliates by reason of
the ownership of such classes of stock, directly or
indirectly, by or for any brother, sister, spouse,
ancestor or lineal descendent of such key employee, or
by or for any corporation, partnership, estate or trust
of which such key employee is a shareholder, partner or
beneficiary), the purchase price per share of Common
Stock deliverable upon the exercise of each Incentive
Stock Option shall not be less than 110% of the Fair
Market Value of the Company's Common Stock on the date
the Incentive Stock Option is granted. A stock option
may be exercised in whole or in installments, which may
be cumulative. A stock option may be in the form of an
Incentive Stock Option which complies with Section 422
of the Code, as amended, and the regulations thereunder
at the time of grant, or a Non-Statutory Stock Option.
A Non-Statutory Stock Option means an option granted by
the Committee to (i) an outside director or (ii) to any
other participant, and such option is either (A) not
designated by the Committee as an Incentive Stock
Option, or (B) fails to satisfy the requirements of an
Incentive Stock Option as set forth in Section 422 of
the Code and the regulations thereunder. The price at
which shares of Common Stock may be purchased under a
stock option shall be paid in full at the time of the
exercise, in either cash or such other methods as
provided by the Committee at the time of grant or as
provided in the form of agreement approved in
accordance herewith, including tendering (either
actually or by attestation) Common Stock at Fair Market
Value, surrendering a stock award valued at Fair Market
Value on the date of surrender, or any combination
thereof.
(b) Stock Appreciation Right - is a right to receive a
payment, in cash and/or Common Stock, as determined by
the Committee, equal to the excess of the Fair Market
Value of a specified number of shares of Common Stock
on the date the SAR is exercised over the Fair Market
Value on the date of grant of the SAR as set forth in
the applicable award agreement, except that, in the
case of an SAR granted retroactively in tandem with or
as a substitution for another award, the exercise or
designated price may be no lower than the Fair Market
Value of a share on the date such other award was
granted.
(c) Stock Award - is an award made in stock or denominated
in units of stock. All or part of any stock award may
be subject to conditions established by the Committee,
and set forth in the award agreement, which may
include, but are not limited to, continuous service
with the Company,
<PAGE>
achievement of specific business objectives, and other
measurements of individual, business unit or Company
performance.
8. DIVIDENDS AND DIVIDEND EQUIVALENTS. The Committee may
provide that stock awards earn dividends or dividend equivalents.
Such dividend equivalents may be paid currently or may be
credited to an account established by the Committee under the
plan in the name of the participant. In addition, dividends or
dividend equivalents paid on outstanding awards or issued shares
may be credited in such account rather than paid currently. Any
crediting of dividends or dividend equivalents may be subject to
such restrictions and conditions as the Committee may establish,
including reinvestment in additional shares or share equivalents.
9. DEFERRALS AND SETTLEMENTS. Payment of awards may be in
the form of cash, stock, other awards, or in combinations thereof
as the Committee shall determine at the time of grant, and with
such restrictions as it may impose. The Committee may also
require or permit participants to elect or defer the issuance of
shares or the settlement of awards in cash under such rules and
procedures as it may establish under the Plan. It may also
provide that deferred settlements include the payment or
crediting of interest on the deferral amounts or the payment or
crediting of dividend equivalents on deferred settlements
denominated in shares.
10. FAIR MARKET VALUE. Fair Market Value for all purposes
under the Plan shall mean the reported closing price of Common
Stock as reported by the National Association of Securities
Dealers Automatic Quotation System ("NASDAQ") (as published in
The Wall Street Journal) on such date or if the Common Stock was
not traded on such date, on the next preceding day on which
Common Stock was traded thereon. Under no circumstances shall
Fair Market Value be less than the par value of the Common Stock.
11. TRANSFERABILITY AND EXERCISABILITY. All awards other
than Non-Statutory Stock Options under the Plan will be
nontransferable and shall not be assignable, alienable, saleable
or otherwise transferable by the participant other than by will
or the laws of descent and distribution, except pursuant to a
domestic relations order entered by a court of competent
jurisdiction or as otherwise determined by the Committee. In the
event that a participant terminates employment with Company to
assume a position with a governmental, charitable, educational or
similar non-profit institution, the Committee may authorize a
third party, including but not limited to a "blind" trust, to act
on behalf of and for the benefit of the representative
participant with respect to any outstanding awards.
If so permitted by the Committee, a participant may
designate a beneficiary or beneficiaries to exercise the rights
of the participant and receive any distributions under the Plan
upon the death of the Participant. However, in the case of
participants covered by Section 16 of the 1934 Act, any contrary
requirements of Rule 16b-3 under the 1934 Act, or any successor
rule, shall prevail over the provisions of this Section.
Awards granted pursuant to the Plan may be exercisable
pursuant to a vesting schedule as determined by the Committee.
The Committee may, in its sole discretion, accelerate or extend
the time at which any Stock Option may be exercised in whole or
in part, or the vesting of any Stock Award, provided, however,
that with respect to an Incentive Stock Option, it must be
consistent with the terms of Section 422 of the Code in order to
continue to qualify as an Incentive Stock Option. The Committee
may also, in its sole discretion, extend the time period within
which a stock option must be exercised before it expires.
Notwithstanding the above, in the event of Retirement (as herein
defined), death or Disability, all awards shall immediately vest.
"Retirement" means retirement at the normal retirement date as
set forth in the Bank's pension plan or as determined by the
Board of Directors in the event there is no such plan.
"Disability" means the permanent and total inability by reason of
mental or physical infirmity, or both, of an employee to perform
the work customarily assigned to him, or of a director to serve
as such. Additionally, in the case of an employee, a medical
doctor selected or approved by the Board must advise the
Committee that it is either not possible to determine when such
Disability will terminate or that it appears probable that such
Disability will be permanent during the remainder of paid
employee's lifetime.
<PAGE>
12. AWARD AGREEMENTS. Awards under the Plan shall be
evidenced by an agreement as shall be approved by the Committee
that sets forth the terms, conditions and limitations to an award
and the provisions applicable in the event the participant's
employment terminates, provided however, in no event shall the
term of any Incentive Stock Option exceed a period of ten years
from the date of its grant. However, if any key employee, at the
time an Incentive Stock Option is granted to him, owns stock
representing more than 10% of the total combined voting power of
all classes of stock of the Company or its affiliate (or, under
Section 424(d) of the Code, is deemed to own stock representing
more than 10% of the total combined voting power of all classes
of stock, by reason of the ownership of such classes of stock,
directly or indirectly, by or for any brother, sister, spouse,
ancestor or lineal descendent of such key employee, or by or for
any corporation, partnership, estate or trust of which such key
employee is a shareholder, partner or beneficiary), the Incentive
Stock Option granted to him shall not be exercisable after the
expiration of five years from the date of grant.
In addition, to the extent required by Section 422 of the
Code, the aggregate Fair Market Value (determined at the time the
option is granted) of the Common Stock for which Incentive Stock
Options are exercisable for the first time by a Participant
during any calendar year (under all plans of the Company and its
affiliates) shall not exceed $100,000. In the event the amount
exercisable shall exceed $100,000, the first $100,000 of
Incentive Stock Options (determined as of the date of grant)
shall be exercisable as Incentive Stock Options and any excess
shall be exercisable as Non-Statutory Stock Options.
13. ACCELERATED OWNERSHIP STOCK OPTION RIGHTS. The
Committee may grant the right to receive an Accelerated Ownership
Option simultaneously with, or subsequent to, the grant of any
stock option, with respect to all or some of the shares covered
by such stock option. In the event an Accelerated Ownership
Option Right has been granted, upon the exercise of the related
Stock Option, the participant will be granted an Accelerated
Ownership Stock Option (which may be an Incentive or Non-
Incentive Stock Option) to purchase a number of shares of Common
Stock equal to the sum of the number of whole shares of Common
Stock used by the participant in payment of the purchase price of
the Stock Option. The exercise price of the Accelerated Ownership
Option shall be the Fair Market Value of the Common Stock on the
date of grant of the Accelerated Ownership Option. The term
during which the Accelerated Ownership Option may be exercised
(and the other terms and conditions) shall be determined by the
Committee, but in no event shall an Accelerated Ownership Option
be exercisable in whole or in part before the expiration of six
months from the date of the grant of the Accelerated Ownership
Option.
14. PLAN OR AWARD AMENDMENT, MODIFICATION OR CANCELLATION.
The Board or the Committee may modify or amend the Plan as it
deems necessary or appropriate or modify or amend an award
received by key employees and/or outside directors. No such
amendment shall adversely affect any outstanding awards under the
Plan without the consent of the holders thereof. The Board or
the Committee shall not, however, without the further approval of
the shareholders of the Company, authorize the amendment of any
outstanding option award to reduce the option price.
Furthermore, no option award shall be cancelled and replaced with
awards having a lower option price without further approval of
the shareholders of the Company. The foregoing is intended to
prohibit the repricing of "underwater" option awards and shall
not be construed to prohibit the adjustments provided for in
Section 6 of this Plan.
15. TAX WITHHOLDING. The Company may deduct from any
settlement of an award made under the Plan, including the
delivery or vesting of shares, an amount sufficient to cover
withholding required by law for any federal, state or local taxes
or to take such other action as may be necessary to satisfy any
such withholding obligations. The Committee may permit shares to
be used to satisfy required tax withholding and such shares shall
be valued at the Fair Market Value as of the settlement date of
the applicable award.
16. OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS. Unless
otherwise determined by the Committee, settlements of awards
received by participants under the Plan shall not be deemed a
part of a participant's regular, recurring compensation for
purposes of calculating payments or benefits from any Company
benefit plan, severance program or severance pay law of any
country.
<PAGE>
17. UNFUNDED PLAN. Unless otherwise determined by the
Committee, the Plan shall be unfunded and shall not create (or be
construed to create) a trust or a separate fund or funds. The
Plan shall not establish any fiduciary relationship between the
Company and any participant or other person. To the extent any
person holds any rights by virtue of a grant awarded under the
Plan, such right (unless otherwise determined by the Committee)
shall be no greater than the right of an unsecured general
creditor of the Company.
18. FUTURE RIGHTS. No person shall have any claim or rights
to be granted an award under the Plan, and no participant shall
have any rights by reason of the grant of any award under the
Plan to continued employment by the Company or any subsidiary of
the Company.
19. GENERAL RESTRICTION. Each award shall be subject to the
requirement that, if at any time the Committee shall determine,
in its sole discretion, that the listing, registration or
qualification of any award under the Plan upon any securities
exchange or under any sate or federal law, or the consent or
approval of any government regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting
of such award or the grant or settlement thereof, such award may
not be exercised or settled in whole or in part unless such
listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not
acceptable to the Committee.
20. GOVERNING LAW. The validity, construction and effect of
the Plan and any actions taken or relating to the Plan shall be
determined in accordance with the laws of the State of Delaware.
21. SUCCESSORS AND ASSIGNS. The Plan shall be binding on
all successors and permitted assigns of a participant, including,
without limitation, the guardian or estate of such participant
and the executor, administrator or trustee of such estate, or any
receiver or trustee in bankruptcy or representative of the
participant's creditors.
22. RIGHTS AS A SHAREHOLDER. A participant shall have no
rights as a shareholder with respect to awards under the Plan
until he or she becomes the holder of record of shares granted
under the Plan.
23. CHANGE IN CONTROL. Notwithstanding anything to the
contrary in the Plan, the following shall apply to all
outstanding awards granted under the Plan:
(a) Definitions. The following definitions shall apply to
this Section:
"Change in Control" of the Bank or the Company means a
Change in Control of a nature that: (i) would be required to
be reported in response to Item l(a) of the current report
on Form 8-K, as in effect on the date hereof pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934
(the "Exchange Act"); or (ii) results in a Change in Control
of the Bank or the Company within the meaning of the Change
in Bank Control Act, as administered by the Office of Thrift
Supervision ("OTS"), as in effect on the effective date of
this Plan. In addition to the above, a Change in Control
shall be deemed to have occurred at such time and payments
and benefits under this Section shall be made as (iii) any
"person" (as the term is used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Bank or the Company
representing 25% or more of the Bank's or the Company's
outstanding securities ordinarily having the right to vote
at the election of directors except for any securities of
the Bank purchased by the Company in connection with the
conversion of the Bank to the stock form and any securities
purchased by the Bank's employee stock ownership plan and
trust; or (iv) individuals who constituted the Board on the
Effective Date (the "Incumbent Board") cease for any reason
to constitute at least a majority thereof, provided that any
person becoming a director subsequent to the Effective Date
whose election was approved by a vote of at least three-
quarters of the directors comprising the Incumbent Board, or
whose nomination for election by the Company's shareholders
was approved by the same nominating board serving under an
Incumbent Board, shall be, for purposes of this clause (iv),
considered as though he were a member of the Incumbent
Board; or (v) a
<PAGE>
merger, consolidation or sale of all or substantially all
the assets of the Bank or the Company in which the Bank or
Company is not the surviving institution occurs; or (vi) a
proxy statement, whether or not supported by management or
the Board of Directors, soliciting proxies from stockholders
of the Company, by someone other than the current management
of the Company, seeking stockholder approval of a plan of
reorganization, merger or consolidation of the Company or
Bank or similar transaction with one or more corporations as
a result of which the outstanding shares of the class of
securities then subject to the plan or reorganization are
exchanged for or converted into cash or property or
securities not issued by the Bank or the Company shall be
distributed; or (vii) a tender offer is made for 25% or more
of the voting securities of the Bank or the Company.
Notwithstanding the above, the Board of Directors shall have
the right to determine that a Change in Control has
occurred.
(b) Acceleration of Vesting and Payment of SARs, Stock
Awards, and Dividends and Dividend Equivalents.
(1) Upon the occurrence of an event constituting a
Change in Control, all SARs, stock awards, stock
options, dividends and dividend equivalents or any
other award granted pursuant to this Plan
outstanding on such date shall become 100% vested.
All awards other than options shall be distributed
as soon as may be practicable. Upon such
distribution, such awards shall be cancelled.
(2) Upon the occurrence of an event constituting a
Change in Control involving an exchange of stock,
all stock options shall become options to purchase
the exchanged stock at the applicable exchange
ratio (with no change in the aggregate exercise
price)
24. COMPLIANCE WITH SECTION 16. With respect to persons
subject to Section 16 of the 1934 Act, transactions under this
Plan are intended to comply with all applicable conditions of
Rule 16b-3 or its successors under the 1934 Act. To the extent
any provisions of the Plan or actions of the Committee fail to so
comply, it shall be deemed null and void, to the extent permitted
by law and deemed advisable by the Committee administrators.
25. TERMINATION OF EMPLOYMENT. Upon the termination of an
employee's service for any reason other than Disability,
Retirement, Change in Control, death or Termination for Cause,
the employee's Stock Options shall be exercisable, and awards
shall vest, only as to those shares that were immediately
purchasable by, or vested in, such employee at the date of
termination, and options may be exercised only for a period of
three months following termination. In the event of termination
of employment for cause (as defined herein) all rights and awards
granted to an employee under the Plan not exercised or vested
shall expire upon termination of employee.
"Termination for Cause" means the termination upon an
intentional failure to perform stated duties, or a breach of a
fiduciary duty involving personal dishonesty, or a willful
violation of any law, rule, regulation (other than traffic
violations or similar offenses) or a final cease-and-desist order
- - -- any of which results in material loss to the Company or one of
its affiliates.
No option shall be eligible for treatment as an Incentive Stock
Option in the event such option is exercised more than three
months following the date of his Retirement or termination of
employment following a Change in Control; and provided further,
that no option shall be eligible for treatment as an Incentive
Stock Option in the event such option is exercised more than one
year following termination of employment due to death or
Disability and provided further, in order to obtain Incentive
Stock Option treatment for options exercised by heirs or devisees
of an optionee, the optionee's death must have occurred while
employed or within three (3) months of termination of employment.
Upon the termination of an employee's service for reason of
Disability, Retirement, Change in Control or death, the
employee's Stock Options shall be exercisable, and Stock Awards
shall vest, as to all shares subject to an outstanding award,
whether or not otherwise immediately purchasable by, or vested
in, such employee at the date of termination
<PAGE>
and options may be exercised for a period of one year following
termination. In no event shall the exercise period extend beyond
the expiration of the Stock Option term.
Upon the termination of a director's service for any reason
other than Disability, Retirement, Change in Control, death or
Termination for Cause, the director's Stock Options shall be
exercisable, and Stock Awards shall vest, only as to those shares
that were immediately purchasable by, or vested in, such director
at the date of termination, and options may be exercised for a
period of one year following termination of service. In the event
of termination of service for cause (as defined above) all rights
and awards granted to the director under the Plan not exercised
by or vested in such director shall expire upon termination of
service. Upon the termination of a director's service for reason
of Disability, Retirement, Change in Control or death, Stock
Options shall be exercisable, and Stock Awards shall vest, as to
all shares subject to an outstanding award, whether or not
otherwise immediately purchasable by, or vested in, such director
at the date of termination and options may be exercised for a
period of one year following termination.
<PAGE>
ALLIANCE BANCORP
ANNUAL MEETING OF STOCKHOLDERS MAY 28, 1997, 10:00 A.M.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints the proxy committee of the Board
of Directors, with full power of substitution, to act as attorney
and proxy for the undersigned, and to vote all shares of Common
Stock of Alliance Bancorp (the "Company"), which the undersigned
is entitled to vote at the Annual Meeting of Stockholders (the
"Annual Meeting"), to be held at the Chicago Marriott O'Hare,
8535 West Higgins Road, Chicago, Illinois on Wednesday, May 28,
1997, at 10:00 a.m. and at any and all adjournments thereof, as
indicated on the reverse side.
PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY USING THE
ENCLOSED POSTAGE-PAID ENVELOPE.
This proxy is revocable and will be voted as directed, but if no
instructions are specified, this proxy will be voted FOR each of
the proposals listed. If any other business is presented at the
meeting, this proxy will be voted by those named in this proxy in
their best judgment.
<PAGE>
The Board of Directors Recommends a Vote "FOR" Each of the Listed
Proposals.
For For All
All Withhold Except
1. Election of Directors
Nominees: Howard R. Jones, Fredric / / / / / /
G. Novy, William C. O'Donnell,
Russell F. Stephens, Jr. and
Vernon B. Thomas, Jr.
- - ----------------------------------
(Except nominee(s) written above.)
For Against Abstain
2. The approval of the 1997 Long-Term / / / / / /
Incentive Stock Benefit Plan.
For Against Abstain
3. The ratification of KPMG Peat / / / / / /
Marwick LLP as independent
auditors of the Company for the
fiscal year ending December 31,
1997.
The undersigned acknowledges receipt from Alliance Bancorp prior
to the execution of this proxy of a Notice of Annual Meeting of
Stockholders and of a Proxy Statement, each dated May 1, 1997.
Dated: -------------------, 1997
Signatures(s): -------------------------
----------------------------------------
Please sign exactly as your name appears on this card. When
signing as attorney, executor, administrator, trustee or
guardian, please given your full title. If shares are held
jointly, each holder may sign but only one signature is required.
