ALLIANCE BANCORP
DEF 14A, 1999-05-18
SAVINGS INSTITUTION, FEDERALLY CHARTERED
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                            SCHEDULE 14-A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrant [ ] 
Filed by a Party other than the Registrant [x] 
Check the  appropriate  box: 
[ ] Preliminary  Proxy  Statement 
[x] Definitive  Proxy Statement 
[ ] Definitive  Additional  Materials 
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12


                             Alliance Bancorp
                 ----------------------------------------------
                (Name of Registrant as Specified In Its Charter)


                    ----------------------------------------
                   (Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):
[x]  No fee required.
[ ] $125 per Exchange Act Rules  0-11(c)(1)(ii),14a-6(i)(1),or  14a-6(j)(2). 
[ ] $500 per  each  party  to the  controversy  pursuant  to  Exchange  Act Rule
    14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.

         1) Title of each class of securities to which transaction applies:
          ......................................................................

         2) Aggregate number of securities to which transaction applies:

         .......................................................................
         3) Per unit price or other  underlying  value of  transaction  computed
         pursuant to Exchange Act Rule 0-11:

         .......................................................................
         4) Proposed maximum aggregate value of transaction:

         .......................................................................

[ ] Check box if any part of the fee is offset as provided by Exchange  Act Rule
0-11(a)(2)  and  identify  the  filing  for  which the  offsetting  fee was paid
previously.  Identify the previous filing by registration  statement  number, or
the Form or Schedule and the date of its filing.

1) Amount Previously Paid:


2) Form, Schedule or Registration Statement No.:


3) Filing Party:


4) Date Filed:






<PAGE>



                                ALLIANCE BANCORP
                                One Grant Square
                            Hinsdale, Illinois 60521
                                 (630) 323-1776





May 14, 1999



Dear Stockholder:

         You are cordially  invited to attend the Annual Meeting of Stockholders
of Alliance Bancorp to be held on Wednesday, June 23, 1999, at Ashton Place, 341
W. 75th Street, Willowbrook,  Illinois, at 10:00 a.m., Chicago time (the "Annual
Meeting").  Notice of the Annual  Meeting,  a Proxy  Statement and a White Proxy
Card are enclosed.

         At the Annual Meeting,  you will be asked to consider and vote upon the
election of five  directors for a term of three years each and the  ratification
of KPMG LLP as independent auditors for the year ending December 31, 1999.

         We encourage you to attend the Annual Meeting in person. Whether or not
you do, we hope you will read the  Proxy  Statement  and sign and date the White
Proxy Card and return it in the enclosed postage-paid  envelope.  This will save
Alliance Bancorp  additional  expense in soliciting proxies and will ensure that
your  shares  are  represented.  Please  note that you may vote in person at the
Annual Meeting even if you have previously returned the White Proxy Card.

         On behalf of the Board of  Directors  and all of the  employees  of the
Company and Liberty  Federal Bank, we wish to thank you for your support and for
your attention to this important matter.

Sincerely,




Fredric G. Novy                       Kenne P. Bristol
Chairman of the Board                 President and Chief Executive Officer




<PAGE>



                                ALLIANCE BANCORP
                                One Grant Square
                            Hinsdale, Illinois 60521
                                 (630) 323-1776
                                -----------------

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                           To Be Held on June 23, 1999

         NOTICE IS HEREBY  GIVEN that the Annual  Meeting of  Stockholders  (the
"Annual Meeting") of Alliance Bancorp (the "Company") will be held on Wednesday,
June 23, 1999, at Ashton Place, 341 W. 75th Street,  Willowbrook,  Illinois,  at
10:00 a.m., Chicago time.

         A White  Proxy Card and a Proxy  Statement  for the Annual  Meeting are
enclosed.

         The Annual  Meeting is being held for the  purpose of  considering  and
voting upon the following matters:

         1.       The election of five directors for a term of three years each;

         2.       The  ratification  of KPMG LLP as independent  auditors of the
                  Company for the year ending December 31, 1999; and

to transact such other  business as may properly come before the Annual  Meeting
or any and all adjournments and postponements thereof.

         Pursuant to the Bylaws,  the Board of Directors  has fixed May 12, 1999
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 the Company's  executive office,  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



                                            Richard A. Hojnicki
                                            Secretary
Hinsdale, Illinois
May 14, 1999

IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT YOU
PLAN TO BE PRESENT AT THE ANNUAL  MEETING,  PLEASE  SIGN,  DATE AND COMPLETE THE
ENCLOSED WHITE PROXY CARD AND RETURN IT IN THE ENCLOSED  ENVELOPE WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES.




<PAGE>



                                 PROXY STATEMENT

                                ALLIANCE BANCORP
                                One Grant Square
                            Hinsdale, Illinois 60521
                                 (630) 323-1776
                            -------------------------

                         ANNUAL MEETING OF STOCKHOLDERS
                                  June 23, 1999

         This Proxy Statement is being furnished to the stockholders of Alliance
Bancorp (the  "Company") in connection  with the  solicitation of proxies by the
Board of Directors of the Company for use at the Annual Meeting of  Stockholders
(the "Annual  Meeting")  scheduled to be held on  Wednesday,  June 23, 1999,  at
Ashton Place, 341 W. 75th Street, Willowbrook,  Illinois, at 10:00 a.m., Chicago
time,  and at any and all  adjournments  or  postponements  thereof.  This Proxy
Statement and the White Proxy Card are first being mailed to  stockholders on or
about May 18, 1999.

- --------------------------------------------------------------------------------

                             REVOCATION OF PROXIES
- --------------------------------------------------------------------------------


         Stockholders  who execute  the White  Proxy Card in the form  solicited
hereby  retain  the right to revoke  the proxy in the  manner  described  below.
Unless so revoked,  the shares  represented by such proxies will be voted at the
Annual Meeting and all adjournments thereof.  Proxies solicited on behalf of the
Board  of  Directors  of the  Company  will be  voted  in  accordance  with  the
directions given thereon. Where no instructions are indicated,  validly executed
White  Proxy  Cards will be voted  "FOR" the  proposals  set forth in this Proxy
Statement for consideration at the Annual Meeting.

         Proxies may be revoked by sending  written  notice of revocation to the
Secretary of the Company, at the address shown above. The presence at the Annual
Meeting of any  stockholder who had returned a proxy shall not revoke such proxy
unless  the  stockholder  delivers  his or her  ballot in  person at the  Annual
Meeting or delivers a written  revocation  to the Secretary of the Company prior
to the voting of such proxy.

- --------------------------------------------------------------------------------

               VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
- --------------------------------------------------------------------------------


         Holders of record of the Company's  common  stock,  par value $0.01 per
share (the  "Common  Stock") as of the close of  business  on May 12,  1999 (the
"Record  Date") are  entitled  to one vote for each  share then held.  As of the
Record  Date,  the  Company had  11,030,320  shares of Common  Stock  issued and
outstanding. The presence in person or by proxy of a majority of the outstanding
shares of Common Stock  entitled to vote is necessary to  constitute a quorum at
the Annual Meeting.  Directors are elected by a plurality of votes cast, without
regard to either broker non-votes,  or proxies as to which the authority to vote
for the nominees being proposed is withheld.  The affirmative vote of holders of
a majority of the total  votes cast at the Annual  Meeting in person or by proxy
is required for the  ratification of KPMG LLP as the Company's  auditors for the
year ended December 31, 1999.  Abstentions and broker  non-votes will be counted
for purposes of determining that a quorum is present, but will not be counted as
votes cast for purposes of the ratification of the independent auditors.

         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.

                                                         1

<PAGE>



SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

         Persons  and  groups  owning in excess  of 5% of the  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").  Based on reports filed
with the SEC,  there  were no  persons  who  beneficially  owned  more than five
percent of the Common Stock outstanding as of May 12, 1999.


- --------------------------------------------------------------------------------

                      PROPOSAL I--ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------



         The Board of  Directors  of the  Company  is  comprised  of 15  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
table below sets forth certain  information  regarding the members of the Board,
including the five nominees for re-election to the Board, as well as information
regarding the executive officers of the Company, as of May 12, 1999.  Management
believes  that the 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.


         THE BOARD OF DIRECTORS  UNANIMOUSLY  RECOMMENDS THAT YOU VOTE "FOR" THE
ELECTION OF THE NOMINEES WHOSE NAMES APPEAR BELOW.


<TABLE>
<CAPTION>

                                                                                       Amount and                     
                                                                                        Nature of                     
                                                   Year First                          Beneficial          Percent
    Name, Age, Principal Occupation and             Elected            Term to        Ownership of           of
    Business Experience for Past 5 Years          to Board (1)          Expire          Stock (2)           Class
    ------------------------------------         --------------         ------          ---------          ------
NOMINEES AT THE 1999 ANNUAL MEETING OF STOCKHOLDERS
<S>                                                   <C>                <C>           <C>                  <C>  
Edward J. Burns, Age 69 (3).................          1963               2002          204,628(4)           1.72%
   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.
Whit G. Hughes, Age 73......................          1982               2002          102,639(5)            0.86
   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.

</TABLE>

                                                         2

<PAGE>



<TABLE>
<CAPTION>

                                                                                       Amount and                     
                                                                                        Nature of                     
                                                   Year First                          Beneficial          Percent
    Name, Age, Principal Occupation and             Elected            Term to        Ownership of           of
    Business Experience for Past 5 Years          to Board (1)          Expire          Stock (2)           Class
    ------------------------------------         --------------         ------          ---------          ------ 
<S>                                                   <C>                <C>            <C>                 <C>  
Edward J. Nusrala, Age 59 (3)...............          1997               2002           25,200(6)           0.21%
   Founder, owner and President of
   Famous Brand Shoes, Inc., a retail shoe company.
William R. Rybak, Age 48 (3)................          1986               2002           58,668(7)           0.49
   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 67 (3).................          1971               2002          103,000(7)           0.86
   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.
CONTINUING DIRECTORS
Howard R. Jones, Age 63.....................          1991               2000           60,544(7)           0.51
   President of Packaging Design
   Corporation, a manufacturer of
   corrugated containers and specialties.

</TABLE>

                                                         3

<PAGE>


<TABLE>
<CAPTION>

                                                                                       Amount and                     
                                                                                        Nature of                     
                                                   Year First                          Beneficial          Percent
    Name, Age, Principal Occupation and             Elected            Term to        Ownership of           of
    Business Experience for Past 5 Years          to Board (1)          Expire          Stock (2)           Class
    ------------------------------------         --------------         ------          ---------          ------

<S>                                                   <C>                <C>           <C>                  <C>  
Fredric G. Novy, Age 60 (3).................          1994               2000          286,157(8)           2.40%
   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 Bank 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 76................          1979               2000          136,574(5)           1.15
   President of ODON Communications
   Group, a radio broadcasting company.
Russell F. Stephens, Jr., Age 66............          1971               2000           46,198(7)           0.39
   President of Insurance Concepts &
   Design Inc., an insurance agency.
Vernon B. Thomas, Jr., Age 65 (3)...........          1969               2000          150,587(5)           1.26
   Attorney whose practice concentrates
   in corporate, banking, real estate and
   estate planning.
Kenne P. Bristol, Age 56 (3)................          1986               2001          183,193(9)           1.54
   President and Chief Executive Officer
   of Alliance Bancorp and Liberty
   Federal Bank; previously President and
   Chief Executive Officer of Hinsdale
   Financial and Hinsdale Federal.
Howard A. Davis, Age 51.....................          1995               2001          37,062(10)           0.31
   President and Chief Executive Officer
   of Preferred Mortgage Associates, Ltd.,
   a subsidiary of the Bank.
H. Verne Loeppert, Age 77...................          1964               2001          73,971(11)           0.62
   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.
</TABLE>


                                                         4

<PAGE>


<TABLE>
<CAPTION>

                                                                                       Amount and                     
                                                                                        Nature of                     
                                                   Year First                          Beneficial          Percent
    Name, Age, Principal Occupation and             Elected            Term to        Ownership of           of
    Business Experience for Past 5 Years          to Board (1)          Expire          Stock (2)           Class
    ------------------------------------         --------------         ------          ---------          ------
                                                                                                   
<S>                                                   <C>                <C>            <C>                 <C>  
David D. Mill, Age 70 (3)(12)...............          1967               2001           123,057(5)          1.03%
   Dentist; Dr. Mill has owned his own
   general dental practice since 1957.
Richard E. Webber, Age 69...................          1959               2001            298,476            2.50
   Mr. Webber is the former President
   and Chief Financial Officer of
   Southwest Bancshares and President
   and Chief Executive Officer of
   Southwest Federal. Previously, he had
   been President of Southwest Federal
   since 1970 and Chief Executive Officer
   of Southwest Federal since 1959.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Richard A. Hojnicki, Age 49.................          --                 --             81,510(13)          0.68
   Mr. Hojnicki is Executive Vice
   President, Secretary and Chief
   Financial Officer of Alliance Bancorp
   and Liberty Federal Bank.
Edward J. Munin, Age 45.....................          --                 --             3,167(14)           0.03
   Mr. Munin is a Senior Vice President
   of Liberty Federal Bank and President
   and Chief Executive Officer of Liberty
   Financial Services, Inc., a subsidiary of
   the Bank.
All directors and executive officers as a             --                 --           1,974,631(15)        16.60%
group (17 persons)
</TABLE>



(1)  Includes  service on the Board of Directors  of Hinsdale  Federal Bank for
     Savings,  Liberty Federal  Savings Bank, or Southwest  Federal Savings and
     Loan Association of Chicago.
(2)  Unless otherwise  indicated,  each person  effectively  exercises sole (or
     shared  with  spouse)  voting  and  dispositive  power  as to  the  shares
     reported.
(3)  Also  serves  on the  Board of  Directors  of  Liberty  Federal  Bank,  the
     wholly-owned subsidiary of the Company.
(4)  Includes  114,868  shares  with  respect to Mr.  Burns that may be acquired
     through presently exercisable stock options.
(5)  Includes 49,657 shares that may be acquired through  presently  exercisable
     stock options.
(6)  Includes  15,000  shares that may be acquired  by Mr.  Nusrala  pursuant to
     presently exercisable stock options.
(7)  Includes  23,043  shares  that  may  be  acquired   pursuant  to  presently
     exercisable stock options.
(8)  Includes 192,003 shares that may be acquired by Mr. Novy through  presently
     exercisable stock options.
(9)  Includes  126,411  shares that may be acquired by Mr.  Bristol  pursuant to
     presently exercisable stock options.
(10) Includes  32,500  shares  that may be  acquired  by Mr.  Davis  pursuant to
     presently exercisable stock options.
    
                       (footnotes continued on next page)

                                        5

<PAGE>



(11) Includes  45,495  shares that may be acquired by Mr.  Loeppert  pursuant to
     presently exercisable stock options.
(12) Dr. Mill is married to Mr. Burns' first cousin.
(13) Includes  44,729  shares that may be acquired by Mr.  Hojnicki  pursuant to
     presently exercisable stock options.
(14) Includes  1,667  shares  that may be  acquired  by Mr.  Munin  pursuant  to
     presently exercisable stock options.
(15) Includes  512,178  shares  that  may  be  acquired  pursuant  to  presently
     exercisable stock options granted to executive  officers of the Company and
     its  subsidiaries,  and 351,295  shares  that may be  acquired  pursuant to
     presently  exercisable  stock  options  granted  to  directors  who are not
     executive officers.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         The  Common  Stock  is  registered  pursuant  to  Section  12(g) of the
Exchange Act. The officers and directors of the Company and beneficial owners of
greater  than 10% of the  outstanding  shares of Common  Stock ("10%  beneficial
owners")  are  required  to  file  reports  on  Forms  3, 4 and 5 with  the  SEC
disclosing  beneficial  ownership  and changes in  beneficial  ownership  of the
Common  Stock.  SEC rules require  disclosure in the Proxy  Statement and Annual
Report on Form 10-K of the  failure of an officer,  director  or 10%  beneficial
owner of the Common Stock to file a Form 3, 4 or 5 on a timely basis.  President
and Chief  Executive  Officer  Bristol  filed a Form 4 in  October to report one
transaction  that should have been reported in September,  and filed a Form 4 in
September to report one  transaction  that should have been  reported in August.
Director Burns filed a Form 5 to report one  transaction  which should have been
reported on Form 4.  Director  Hughes  filed a Form 5 to report one  transaction
which should have been reported on Form 4. Senior Vice  President  Munin filed a
Form 4 in May to report one  transaction  which  should  have been  reported  in
February.  Based on the Company's review of ownership reports, no other officer,
director or 10% beneficial owner of the Company failed to file ownership reports
on a timely basis for the year ended December 31, 1998.

MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD

         During 1998, the Board of Directors of the Company met six times.

         The Company and Liberty Federal Bank (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.  No Director  attended fewer than 75%, in the
aggregate,  of the total number of Board meetings held during 1998 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 1998.

         The Audit and  Compliance  Committee  currently  consists of  Directors
Loeppert  (Chairman),  Jones,  Mill,  Nusrala 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 1998.

         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.

         The Compensation and Personnel  Administration Committee currently 
consists of  Directors  Sveen  (Chairman),  Burns, Hughes, Nusrala and Stephens.
This Committee reviews and administers compensation, officer

                                       6

<PAGE>



promotions,  benefits and other matters of personnel  policy and  practice.  The
Compensation and Personnel Administration Committee met four times during 1998.

DIRECTORS' COMPENSATION

         Fees.  Outside  Directors  of the  Company  receive a fee of $1,500 per
meeting of the Board.  Outside Directors of the Bank receive a fee of $1,500 per
meeting of the Board.  Directors who are not officers also receive $300 for each
committee meeting attended. Outside Directors of the Bank's subsidiaries receive
$300 per meeting for serving on any of these Boards.

         Stock Benefit Plans for Directors.  Directors have received  options to
purchase  common stock under stock option plans adopted in  connection  with the
initial public offering of the Common Stock.  Currently,  directors are eligible
to receive stock options and  restricted  stock awards under the 1997  Long-Term
Incentive  Stock  Benefit  Plan.  Effective  June  30,  1998,  the  date  of the
acquisition  of  Southwest  Bancshares,  Inc.,  Richard E. Webber was granted an
option to purchase  30,000 shares of Common  Stock,  which option vests in three
equal annual installments.  The exercise price for these options was $24.25, the
fair market value of the Common Stock at the date of grant.

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, at
the  direction of the Board of  Directors,  has prepared the  following  report,
which report relates to the Company's year ended December 31, 1998.

         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  performance  of the  Company,  the
compensation   strategy,   competitive   practices,   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 predecessor of 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:

     o    to provide motivation for the executives to enhance  shareholder value
          by linking a significant portion of their compensation to earnings and
          the value of the Common Stock;

     o    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

     o    to maintain  reasonable  "fixed"  compensation costs by targeting base
          salaries at competitive average levels.


                                        7

<PAGE>



         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 consulted with Crowe, Chizek and Company LLP, the
nation's  ninth  largest  CPA/Consulting  firm ("Crowe  Chizek"),  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.

         Crowe Chizek reviewed the following published  compensation  surveys to
determine competitive compensation levels:

               1998 Crowe Chizek Bank Compensation Survey;

               1998 Midwest Bank Holding Company Executive Compensation Report;

               1998/1999  Watson  Wyatt  Financial   Institutions   Compensation
               Report;

               1998 BAI Bank Cash Compensation Survey; and

               1997 BAI Key Executive Compensation Survey.

         In  addition,  Crowe  Chizek  conducted  an  independent  review of the
compensation  practices  of eight  midwest  financial  institutions  with assets
ranging  from $768  million  to $1.9  billion.  All  compensation  data from the
surveys is updated by a factor of 4% per year,  which is consistent  with trends
in wage increases.

         The surveys provide data for both thrifts and commercial  banks.  Crowe
Chizek has been  recommending  to their  thrift  clients  that for  compensation
purposes they should compare  themselves to commercial  banks of comparable size
as well as other thrifts for the following reasons:

     o    the similarity in the balance sheet structure and the complexity level
          between operating a thrift and a bank have significantly narrowed; and

     o    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.

         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 comparative  salary data on executive
compensation  will continue to be utilized as the one of the primary  sources 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 against established objectives.

         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:


                                        8

<PAGE>



                           o        Salary;
                           o        Annual Incentive Payment; and
                           o        Stock Option Grants.

         Under the leadership and recommendations of the compensation committee,
the Board of  Directors  of the Bank,  with Mr.  Bristol  excused,  approved his
compensation  for 1998 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,  the
Bank and its subsidiaries.

         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
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:

          o    the interest  rate risk as measured by the one year interest rate
               sensitivity gap;

          o    the ratio of non-performing assets to total assets; and
    
          o    the regulatory capital ratios.

         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 1998 annual incentive award granted to the Chief Executive  Officer
is based on 40% of base salary if 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%.  The  Bank's  performance  awards are based on pre-tax  income
objectives  in addition to safety and soundness  considerations.  Based upon the
criteria established by the Board of Directors,  Mr. Bristol received a bonus of
$100,000,  representing  approximately  40% of his base  salary,  for the period
ended  December 31, 1998.  Also,  during the period ended December 31, 1998, the
committee  granted Mr. Bristol options to purchase 25,000 shares of Common Stock
at an exercise price equal to the fair market value of the shares at the time of
grant.

         In light of the termination of the Bank's defined benefit pension plan,
during 1998 the Bank implemented a supplemental  executive  retirement plan that
is intended to provide Mr. Bristol with a benefit at retirement  equal to 70% of
the highest  average  annual salary  payable to him for five  consecutive  years
during  the ten years  prior to  retirement,  less any  amounts  payable  to him
pursuant to other  qualified  benefit  plans.  This plan was adopted in order to
provide  Mr.  Bristol  with a level of  retirement  benefit  comparable  to that
provided to chief executive officers of other financial  institutions of similar
size.

                             Compensation Committee
           Edward J. Burns, Whit G. Hughes, Russell F. Stephens, Jr.,
                Edward J. Nusrala and Donald E. Sveen (Chairman)

                                        9

<PAGE>



         Stock Performance  Graph. The following table shows a comparison of the
cumulative  total  stockholder  return on the 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, for
the five fiscal years ended December 31, 1998.


                                [GRAPHIC OMITTED]


*    $100  INVESTED  ON 9/30/93  IN STOCK OR INDEX  -INCLUDING  REINVESTMENT  OF
     DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.

<TABLE>
<CAPTION>

                                                   9/93     9/94     9/95     9/96    12/97    12/98
                                                   ----     ----     ----     ----    -----    -----
<S>                                                <C>      <C>      <C>      <C>     <C>      <C>
Alliance Bancorp...............................    100      115      131      138     238      179
Nasdaq Stock Market (U.S.).....................    100      101      139      165     213      299
S&P Savings & Loan Companies...................    100      101      129      150     296      276
</TABLE>



                                                        10

<PAGE>



         Summary  Compensation  Table.  The following  table sets forth the cash
compensation  paid by the Bank,  for  services  rendered  during the years ended
December 31, 1998,  1997 and the fiscal year ended  September  30, 1996,  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 December 31, 1998 ("Named Executive Officers").

<TABLE>
<CAPTION>

                                                 Annual Compensation                   Long-Term Compensation

                          (1)                                                                                        
                         Years                                                                                    
                         Ended                                 Other                     Awards        Payout            All
                       12/31/98                                Annual           Restricted  Options/    LTIP            Other
      Name and         12/31/97                             Compensation           Stock    SARS (#)   Payout       Compensation
  Principal Position    9/30/96   Salary         Bonus             (3)            Awards                                (4)
===================== ========= ==========    ===========  ================   ===========  ==========  ==========   ==============
<S>                      <C>     <C>            <C>                  <C>          <C>           <C>         <C>     <C>          
Kenne P. Bristol         1998    $260,000     $  100,000             $  --        $   --        25,000      $  --   $   46,160(7)(8)
  President, Chief       1997     230,000         25,000  (2)           --            --        65,430         --      158,470
  Executive Officer      1996     220,000         75,000                --            --        28,125         --       20,919
  and Director                                                                             
Fredric G. Novy          1998    $225,000     $  100,000             $  --        $   --        25,000      $  --   $       --
  Chairman of the        1997     177,534 (5)    100,000                --            --            --         --           --
  Board of Directors
Richard A. Hojnicki      1998    $120,000     $   35,000             $  --        $   --         7,500      $  --   $      773(7)
 Executive Vice          1997     103,000         41,000  (2)           --            --         6,750         --       70,695
 President, Chief        1996      99,000         23,000                --            --         8,437         --       13,388
 Financial Officer 
 and  Corporate 
 Secretary 
Edward J. Munin          1998    $200,000      $  57,000             $  --        $   --         5,000      $  --   $       --
 Senior Vice             1997     188,333 (6)     45,000                --            --            --         --           --
 President of Bank,
 President and Chief
 Executive Officer
 of Liberty Financial
 Services, Inc.
Howard A. Davis          1998    $200,000             --             $  --        $   --         7,500      $  --   $  2,375(7)
 President and Chief     1997     200,000     $    5,000                --            --        11,250         --           --
 Executive Officer of    1996     200,000             --                --            --        22,500         --           --
 Preferred Mortgage                                                                                    
 Associates,  Ltd.
 and Director

===================== ========   ======== ==============  ================  ============  ============ ========== =================
</TABLE>

- ---------------------------------
(1)  In 1996,  the  Company  changed its fiscal  year end from  September  30 to
     December  31.  Changes  in salary for Mr.  Bristol  and Mr.  Hojnicki  were
     effective October 1, 1996.
(2)  Bonuses  relating to the 15 months ended  December 31, 1997 are included in
     the 1997 amount.
(3)  Perquisites  for the  fiscal  years  ended  December  31,  1998,  1997  and
     September 30, 1996 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 Hinsdale  Federal Bank for Savings
     ESOP.  Allocations  as of December 31, 1995,  valued at the market price of
     the  Common  Stock as of that date is  included  in the  fiscal  year ended
     September  30, 1996. In  accordance  with the merger with Liberty  Bancorp,
     Inc., the ESOP was terminated in 1997; therefore,  the 1997 amount includes
     the December 31, 1996  allocation,  valued at the market price on that date
     and the final  termination  allocation valued at the market price of Common
     Stock as of December 31, 1997.
(5)  Includes Mr. Novy's  salary from February 10, 1997,  the date of the merger
     of Liberty Bancorp, Inc. with the Company.
(6)  Includes Mr.  Munin's  salary from the date of his  employment  in February
     1997.
(7)  Includes a  contribution  by the  Company in 1998 to match 25% of the Named
     Executive Officer's 1997 401(k) contribution: Bristol $2,250, Hojnicki $773
     and Davis $2,375.
(8)  Includes the value of stock and accumulated dividends representing recovery
     of benefits  that would have been included in the 1997  termination  of the
     ESOP if not limited by the Internal Revenue Code.

                                       11

<PAGE>



         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
$275,000. 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 annual  compensation at the time of termination,  which currently
would be approximately  $1,125,000.  The Bank would also continue, as available,
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 of the
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,  Inc.  and  Hinsdale
Financial  Corporation,  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 1998, the base salaries of
Messrs. Burns and Novy provided for by the employment  agreements were $125,000,
and $225,000, 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 chooses 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 his 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.


                                       12

<PAGE>



         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 the Company. The Bank and the Company would also continue, as available,
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 Common  Stock 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 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 year's salary,
bonus and fees,  Mr. Burns would receive  approximately  $375,000,  and Mr. Novy
would receive  approximately  $975,000 in severance payments.  In addition,  the
agreements provide for continued life,  medical,  dental and disability coverage
for a period of thirty-six 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 severance  agreement  expires  twelve months  thereafter.  The
severance  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,  as  available,  the
officer's  life,  health,  dental  and  disability  coverage  for the  remaining
unexpired  term of the  severance  agreement.  Payment to the officer  under the
severance 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 fifteen other  officers of the Bank paying one times salary and
one officer at one-half times salary.

         Stock  Option  Plans.  The  Board  of  Directors  of  the  Company  has
established  stock option plans which provide  discretionary  awards to officers
and key employees. The granting of awards to employees under the option plans is
determined by a committee of the Board of Directors consisting of "Non-Employee"
directors.



















                                       13

<PAGE>




         Set forth below is  information  relating to options  granted under the
Company's stock option plans to the Named Executive Officers during 1998.

<TABLE>
<CAPTION>

                                              OPTION GRANTS IN LAST FISCAL YEAR
==============================================================================================================================
                                                                                                      Potential Realizable
                                                                                                        Value at Assumed
                                        Individual Grants                                            Annual Rates of Stock
                                                                                                     Price Appreciation for
                                                                                                          Option Term
                                          Percent of Total Options                                                             
          Name               Options       Granted to Employees in    Exercise or    Expiration        5%           10%        
                            Granted(1)              1998              Base Price        Date
<S>                           <C>                    <C>                <C>          <C>  <C>       <C>           <C>     
Kenne P. Bristol              25,000                 14                 $25.65       1/15/2008      $101,000      $212,250
- ------------------------ ---------------- -------------------------  ------------- -------------- ------------  ------------ -
Fredric G. Novy               25,000                 14                 $25.65       1/15/2008      $101,000      $212,250
- ------------------------ ---------------- -------------------------  ------------- -------------- ------------  ------------ -
Richard A. Hojnicki           7,500                   4                 $25.65       1/15/2008      $30,300       $63,675
- ------------------------ ---------------- -------------------------  ------------- -------------- ------------  ------------ -
Howard A. Davis               7,500                   4                 $25.65       1/15/2008      $30,300       $63,675
- ------------------------ ---------------- -------------------------  ------------- -------------- ------------  ------------ -
Edward J. Munin               5,000                   3                 $25.65       1/15/2008      $20,200       $42,450
- ------------------------ ---------------- -------------------------  ------------- -------------- ------------  ------------ -
</TABLE>


- ------------------------------------
(1) These options  become  exercisable  in three equal  installments  commencing
January 15, 1999.

         The following table provides  certain  information  with respect to the
number of shares of the Company  Common Stock  represented by stock options held
by the Named  Executive  Officers as of December 31, 1998. 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 1998.

<TABLE>
<CAPTION>

                                   AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
                                              FISCAL YEAR-END OPTION VALUES
=========================================================================================================================

                                                                     Number of Unexercised      Value of Unexercised In-
                                                                           Options at             The-Money Options at
                              Shares Acquired         Value             Fiscal Year-End               Year-End (1)
           Name                Upon Exercise        Realized
                                                                          Exercisable/                Exercisable/
                                                                         Unexercisable               Unexercisable
                                                                              (#)                         ($)
<S>                                 <C>                <C>              <C>       <C>             <C>          <C>    
Kenne P. Bristol                    --                 --               112,267 / 62,620          $1,009,582 / $39,027
- ---------------------------  -----------------  -----------------  --------------------------  --------------------------
Fredric G. Novy                      --                 --               183,669 / 25,000             $516,271 / $--
- ---------------------------  -----------------  -----------------  --------------------------  --------------------------
Richard  A. Hojnicki                --                 --                42,229 / 9,750            $480,514 / $8,954
- ---------------------------  -----------------  -----------------  --------------------------  --------------------------
Howard A. Davis                     --                 --               30,000 / 11,250            $152,001 / $14,922
- ---------------------------  -----------------  -----------------  --------------------------  --------------------------
Edward J. Munin                     --                 --                 -- / 5,000                    -- /--
- ---------------------------  -----------------  -----------------  --------------------------  --------------------------
</TABLE>

- ------------------------------------
(1)  Equals the difference  between the aggregate exercise price of such options
     and the aggregate  fair market value of the shares of the Common Stock that
     would be  received  upon  exercise,  assuming  such  exercise  occurred  on
     December 31, 1998,  at which date the last sales price of the Common Stock,
     as quoted on the Nasdaq National Market, was $19.5625.


                                       14

<PAGE>



         Retirement  Plan.  Until November 1997, the Bank maintained the Pension
Plan  ("Retirement  Plan"),  for the  benefit of certain  employees  of the Bank
(i.e., those persons who formerly had been employed by Hinsdale Federal Bank for
Savings). In March 1997, the Bank adopted resolutions terminating the Retirement
Plan.  Subsequent to the Retirement Plan's  termination,  no additional benefits
were accrued by any  participants.  The Bank  requested and received a favorable
determination  letter on the  termination  of the  Retirement  Plan. In November
1997, the  participants'  accrued  benefits were  distributed  and the trust was
dissolved.

         The Bank  adopted an  Executive  Supplemental  Retirement  Income  Plan
("SERP") which is a non-qualified  deferred compensation plan for the benefit of
Messrs. Novy and Bristol. Under the SERP, if the executive is employed until age
65 he is entitled to a benefit  commencing  on his  termination  of  employment,
payable  monthly for 180 months.  The benefit is based on a  percentage  of base
salary plus bonus,  calculated  actuarially to be equal to 70% of the average of
the executive's highest annual salary and cash bonus (combined) paid in any five
consecutive  calendar  years in the last ten calendar years prior to termination
of employment on or after the executive's  "Benefit Eligibility Date," i.e., the
first day of the month following the later of his attainment of age 65 or actual
retirement,   reduced  by  the   annuitized   value  of  the   employer-provided
tax-qualified  plan  benefits  available to the  executive  for the twelve month
period immediately following attainment of age 65.

         The Bank  has  established  a rabbi  trust  which  has  purchased  life
insurance  policies to partially fund the Bank's obligations under the SERP. The
Bank makes annual  contributions in an amount equal to the expense accrual under
the SERP, into the rabbi trust for the benefit of the  executives.  In the event
of the executive's  termination of employment following a change of control, the
Bank is required to make  contributions to the rabbi trust which,  when added to
the remaining assets in the rabbi trust, are sufficient to fund the supplemental
retirement income benefit.  Contributions with respect to the SERP for 1998 were
$191,975.

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.

- --------------------------------------------------------------------------------

      PROPOSAL II--RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------


         The Company's independent auditors for the year ended December 31, 1998
were KPMG LLP. The  Company's  Board of Directors  has  reappointed  KPMG LLP to
continue as  independent  auditors for the Company for the year ending  December
31, 1999,  subject to  ratification  of such  appointment  by the  stockholders.
Representatives of KPMG LLP are expected to attend the Company's 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 Company's Annual Meeting.

         THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE INDEPENDENT AUDITORS OF
THE COMPANY FOR THE YEAR ENDING DECEMBER 31, 1999.

- --------------------------------------------------------------------------------

                            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 the year
ending  December  31,  1999,  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  January 14,  2000.  Any  stockholder  proposal
submitted to the Company will be subject to Rule 14a-8 under the Exchange Act.


                                       15

<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  of  Directors,  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
- --------------------------------------------------------------------------------


         The Board of Directors knows of no business which will be presented for
consideration at the Company's 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.

- --------------------------------------------------------------------------------

                           ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------


         LaSalle Financial  Partners,  Limited  Partnership,  a Delaware limited
partnership that is located in Kalamazoo,  Michigan (the "LaSalle  Group"),  has
filed proxy material with the SEC indicating its intention to solicit proxies in
opposition to the nominees proposed by your Board of Directors. As a result, and
pursuant to SEC rules and regulations,  the following additional  information is
required to be provided  with  respect to the Company and each of the  Directors
and Named Executive  Officers of the Company,  all of whom will be participating
in the  solicitation  of proxies on behalf of the Company in connection with the
Annual Meeting (the "Participants").

         If the LaSalle Group does solicit proxies in opposition to the nominees
of the Board of Directors,  the Company's total costs and  expenditures  for, in
furtherance of, or in connection with the  solicitation of proxies (which cannot
be precisely  determined  at this time) are expected to amount to  approximately
$160,000  (of which  approximately  $5,000  has been  paid as of May 14,  1999),
excluding  such  costs  represented  by  the  amount  normally  expended  for  a
solicitation  of proxies in  connection  with an  election of  directors  in the
absence of a contest  and costs  represented  by  salaries  and wages of regular
officers and employees.

         The cost of  solicitation of the white proxy cards will be borne by the
Company.  The  Company has  retained  Kissel-Blake,  a division  of  Shareholder
Communications Corp.("Kissel-Blake"), a professional proxy solicitation firm, to
assist in the  solicitation of proxies.  Such firm will receive a fee of $40,000
for such services and will be reimbursed for reasonable  out-of-pocket expenses.
Approximately  40 employees of Kissel-Blake  will be engaged in proxy soliciting
activities on behalf of the Company if there is an election contest. In addition
to solicitations  by mail, the directors,  and certain officers and employees of
the Company (17 persons) may solicit proxies  personally or by telephone without
additional  compensation.  The Company will reimburse  brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses incurred by them in
sending the Company's  proxy  materials to the  beneficial  owners of the Common
Stock.



                                     16

<PAGE>



        The business of address of Messrs. Kenne P. Bristol, Fredric G. Novy, H.
Verne Loeppert, Richard A. Hojnicki and Edward J. Munin is Alliance Bancorp, One
Grant  Square,  Hinsdale,  Illinois  60521.  The  business  address of the other
directors  of the  Company  are as follows:  Edward J.  Burns,  5700 N.  Lincoln
Avenue, Chicago, Illinois 60659, Howard A. Davis, Preferred Mortgage Associates,
Ltd.,  3030 Finley Road,  Suite 104,  Downers  Grove,  Illinois  60515,  Whit G.
Hughes, 34 W 033 Army Trail Road, St. Charles,  Illinois 60174, Howard R. Jones,
Packaging Design Corporation, 101 Shore Drive, Burr Ridge, Illinois 60521, David
D. Mill, 64 Old Orchard Court,  Suite 517,  Skokie,  Illinois  60076,  Edward J.
Nusrala, Famous Brand Shoes, Inc., 8620 Olive Street, St. Louis, Missouri 63132,
William C. O'Donnell,  O'Donnell Enterprises, 1030 Arbor Lane, #103, Northfield,
Illinois  60093,  William R.  Rybak,  Van Kampen  American  Capital,  Inc.,  One
Parkview Plaza,  Oak Brook Terrace,  Illinois 60181,  Russell F. Stephens,  Jr.,
Insurance  Concepts & Design,  Inc., P.O. Box 958, St. Charles,  Illinois 60175,
Donald E. Sveen,  1749 S. Naperville Road, Suite 206,  Wheaton,  Illinois 60187,
Vernon B. Thomas,  Jr., 53 W. Jackson  Boulevard,  Suite 618, Chicago,  Illinois
60604,  Richard  E.  Webber,  Liberty  Federal  Bank,  4062  Southwest  Highway,
Hometown, Illinois 60456.

         None of the  foregoing  Participants  has been  convicted in a criminal
proceeding  (excluding  traffic violations or similar  misdemeanors)  during the
past 10 years.

         Except as disclosed in this Proxy  Statement,  none of the Participants
is or has been within the past year,  a party to any  contract,  arrangement  or
understanding with any person with respect to the Common Stock,  including,  but
not limited to,  joint  ventures,  loan or option  arrangements,  puts or calls,
guarantees  against  losses  or  guarantees  of  profit,  division  of losses or
profits, or the giving or withholding of proxies.

         None of the  Participants own any shares of securities of any parent or
subsidiary of the Company.

         The amount of Common Stock which is beneficially owned by the foregoing
Participants  at May  12,  1999  is set  forth  under  Proposal  I--Election  of
Directors.  None of the  Participants  own Common  Stock of record  which is not
owned beneficially.


























                                       17

<PAGE>




         The following table sets forth  Participants who have purchased or sold
shares of Common Stock during the past two years.
<TABLE>
<CAPTION>


        Name               Date        Number of Shares               Name                Date         Number of Shares
                                       Purchased (Sold)                                                Purchased (Sold)
- ---------------------  ------------ ----------------------  ------------------------- ------------- ----------------------
<S>                       <C>                <C>            <C>                          <C>                 <C>
Kenne P. Bristol          2/2/98             500            Edward J. Nusrala            3/16/98             500
                         7/31/98             500                                         3/16/98             500
                          8/6/98             500                                         8/20/98             500
                         8/25/98             500                                        10/27/98             200
                         8/26/98             500                                        11/17/98            1,000
                         8/31/98           (1,000)                                      11/17/98            1,000
                          9/1/98           (1,000)                                      12/22/98            1,000
                          9/3/98           (1,000)                                      12/24/98            1,000
                          9/4/98            (700)                                        2/4/99             1,000
                          9/8/98            (300)                                        3/4/99             1,000
                         10/27/98          (1,000)                                       5/10/99            1,000
                         10/30/98          (1,000)          Russell F. Stephens, Jr.    10/22/97            2,500
                         11/19/98            500                                        11/11/98             750
                         12/21/98           1,000                                       12/10/98             100
                          5/7/99            10,000                                      12/10/98             100
Edward J. Burns           5/5/97           (7,193)                                      12/10/98             200
                         7/24/97           (3,750)                                      12/10/98             100
                         7/25/97           (2,792)          Donald E. Sveen              8/27/98             300
                         7/29/97           (7,107)                                       8/27/98            1,656
Howard A Davis           12/14/98           1,000                                        9/1/98             2,000
Whit G. Hughes            9/1/98            1,000                                        9/23/98            1,000
H. Verne Loeppert        3/11/99            1,000           Vernon B. Thomas, Jr.        5/14/97           (2,789)
David D. Mill            12/21/98          (5,000)




=====================  ============ ======================  ========================= ============= ======================
</TABLE>


                                                        18

<PAGE>



<TABLE>
<CAPTION>


        Name               Date        Number of Shares               Name                Date         Number of Shares
                                       Purchased (Sold)                                                Purchased (Sold)
- ---------------------  ------------ ----------------------  ------------------------- ------------- ----------------------
<S>                       <C>                <C>            <C>                         <C>                <C>     
Fredric G. Novy           2/6/98             500            Richard E. Webber           11/11/98           (13,998)
                         7/31/98             500                                        11/12/98           (3,990)
                         8/11/98            2,000                                       11/17/98           (3,000)
                         8/18/98            1,000                                        12/8/98           (1,000)
                         8/18/98             500                                         12/9/98           (14,792)
                         8/18/98             500            Edward J. Munin              1/26/98            1,000
                         8/28/98            1,000                                        4/29/98            1,500
                         10/27/98           2,000                                       11/30/98           (1,000)
                         10/28/98            500
                         10/28/98            500
                         12/21/98           1,000
=====================  ============ ======================  ========================= ============= ======================
</TABLE>



- --------------------------------------------------------------------------------

                         ANNUAL REPORT ON FORM 10-K
- --------------------------------------------------------------------------------


         A COPY OF THE  COMPANY'S  ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1998,  WILL BE FURNISHED  WITHOUT CHARGE TO  STOCKHOLDERS AS OF THE
RECORD DATE UPON WRITTEN OR TELEPHONIC  REQUEST TO KENNE P.  BRISTOL,  PRESIDENT
AND CHIEF  EXECUTIVE  OFFICER,  ALLIANCE  BANCORP,  ONE GRANT SQUARE,  HINSDALE,
ILLINOIS 60521, OR CALL (630) 323-1776.

                               BY ORDER OF THE BOARD OF DIRECTORS



                               Richard A. Hojnicki
                               Secretary
Hinsdale, Illinois
May 14, 1999


                                       19

<PAGE>



PROXY
                                ALLIANCE BANCORP
                         ANNUAL MEETING OF STOCKHOLDERS
                                  June 23, 1999

         The undersigned  hereby appoints the proxy committee  consisting of the
Board of Directors  with full powers of  substitution  to act as  attorneys  and
proxies for the  undersigned  to vote all shares of common  stock of the Company
which the  undersigned is entitled to vote at the Annual Meeting of Stockholders
("Annual Meeting") to be held at Ashton Place, 341 W. 75th Street,  Willowbrook,
Illinois at 10:00 a.m.,  Chicago Time. The proxy committee is authorized to cast
all votes to which the undersigned is entitled as follows:





                                                      FOR
                                                   --------- 
                                                  (except as
                                                    marked to
                                                  the contrary        VOTE
                                                    below)          WITHHELD
                                                                    -------- 
1.   The election as Directors of all nominees 
     listed below each to serve for a three-year term [  ]            [  ]

            Edward J. Burns
            Whit G. Hughes
            Edward J. Nusrala
            William R. Rybak
            Donald E. Sveen

INSTRUCTION:  To withhold your vote for one or more
nominees, write the name of the nominee(s) on the line(s)
below.

- ------------------------------


                                                          FOR   AGAINST  ABSTAIN
 
2.   The ratification of KPMG LLP as the Company's        [  ]    [  ]    [  ]
     independent  auditor for the fiscal year 
     ended December 31, 1999.



The Board of Directors recommends a vote "FOR" each of the listed proposals.

THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY  WILL BE VOTED FOR EACH OF THE  PROPOSITIONS  STATED  ABOVE.  IF ANY OTHER
BUSINESS  IS  PRESENTED  AT SUCH  ANNUAL  MEETING,  THIS  PROXY WILL BE VOTED AS
DIRECTED BY THE PROXY  COMMITTEE.  AT THE PRESENT  TIME,  THE BOARD OF DIRECTORS
KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING.



- --------------------------------------------------------------------------------



<PAGE>




THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS


Should the  undersigned be present and elect to vote at the Annual Meeting or at
any adjournment  thereof and after  notification to the Secretary of the Company
at the Annual  Meeting of the  stockholder's  decision to terminate  this proxy,
then the power of said  attorneys and proxies shall be deemed  terminated and of
no further force and effect.  This proxy may also be revoked by sending  written
notice to the Secretary of the Company at the address set forth on the Notice of
Annual Meeting of Stockholders, or by the filing of a later dated proxy prior to
a vote being taken on a particular proposal at the Annual Meeting.

The undersigned  acknowledges receipt from the Company prior to the execution of
this proxy of a Notice of the Annual Meeting and a Proxy  Statement,  each dated
May 14, 1999.


Dated: _________________________             [  ] Check Box if You Plan
                                                  to Attend Annual Meeting


- -------------------------------              -----------------------------------
PRINT NAME OF STOCKHOLDER                    PRINT NAME OF STOCKHOLDER


- -------------------------------              -----------------------------------
SIGNATURE OF STOCKHOLDER                     SIGNATURE OF STOCKHOLDER


Please sign exactly as your name appears on this card. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title.



- --------------------------------------------------------------------------------


                  PLEASE COMPLETE AND DATE THIS WHITE PROXY AND 
                       RETURN IT PROMPTLY IN THE ENCLOSED 
                            POSTAGE-PREPAID ENVELOPE.

- --------------------------------------------------------------------------------








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