-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Lm6LMMDK3jqgh3fl2nCncz/ana8meYP4nQlx7P1TD2uM3mDTgnK24bEvzN85k/f0 wH1zSIfhxijikdL+8ud3ww== 0000928385-98-000850.txt : 19980430 0000928385-98-000850.hdr.sgml : 19980430 ACCESSION NUMBER: 0000928385-98-000850 CONFORMED SUBMISSION TYPE: 10-K405/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980429 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIANCE BANCORP CENTRAL INDEX KEY: 0000885638 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 363811768 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405/A SEC ACT: SEC FILE NUMBER: 000-20082 FILM NUMBER: 98604251 BUSINESS ADDRESS: STREET 1: ONE GRANT SQUARE CITY: HINSDALE STATE: IL ZIP: 60521 BUSINESS PHONE: 7083231780 MAIL ADDRESS: STREET 1: ONE GRANT SQUARE CITY: HINSDALE STATE: IL ZIP: 60522 FORMER COMPANY: FORMER CONFORMED NAME: HINSDALE FINANCIAL CORPORATION DATE OF NAME CHANGE: 19930328 10-K405/A 1 AMENDMENT #2 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K/A (AMENDMENT NO. 2) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997 COMMISSION FILE NO.: 0-20082 ALLIANCE BANCORP (exact name of registrant as specified in its charter) DELAWARE 36-3811768 (State or other jurisdiction of (I.R.S. Employer I.D. No.) incorporation or organization) ONE GRANT SQUARE, HINSDALE, ILLINOIS 60521 (Address of principal executive offices) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (630) 323-1776 ------------------------ SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: COMMON STOCK PAR VALUE $0.01 PER SHARE (TITLE OF CLASS) ------------------------ INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES [X] NO [ ] INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE BEST OF THE REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THE FORM 10-K OR ANY AMENDMENT TO THIS FORM 10-K. [X] THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF THE REGISTRANT, I.E., PERSONS OTHER THAN DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT, IS $191,392,505 AND IS BASED UPON THE LAST SALES PRICE AS QUOTED ON NASDAQ FOR MARCH 13, 1998. THE REGISTRANT HAD 8,022,147 SHARES OF COMMON STOCK OUTSTANDING AS OF MARCH 13, 1998. DOCUMENTS INCORPORATED BY REFERENCE NONE ================================================================================ PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. The Board of Directors of Alliance Bancorp 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. The table below sets forth certain information regarding the members of the Board, including the four nominees for election to the Board at the 1998 Annual Meeting of Stockholders, as well as information regarding the executive officers of Alliance Bancorp.
AMOUNT AND NATURE OF YEAR FIRST TERM BENEFICIAL PERCENT NAME, AGE, PRINCIPAL OCCUPATION AND ELECTED TO OWNERSHIP OF OF BUSINESS EXPERIENCE FOR PAST 5 YEARS TO BOARD (1) EXPIRE STOCK (2) CLASS - ------------------------------------ ------------ ------- -------------- -------- NOMINEES AT THE 1998 ANNUAL MEETING OF STOCKHOLDERS Kenne P. Bristol, Age 55 (3)................. 1986 2001 146,676(4) 1.68% 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 50...................... 1995 2001 22,500(5) 0.26% President and Chief Executive Officer of Preferred Mortgage Associates, Ltd., a subsidiary of the Bank. H. Verne Loeppert, Age 76.................... 1964 2001 73,972(6) 0.85% 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 69 (3)(7)................. 1967 2001 128,057(8) 1.47% Dentist; Dr. Mill has owned his own general dental practice since 1957. CONTINUING DIRECTORS Edward J. Burns, Age 68 (3).................. 1963 1999 201,096(9) 2.31% 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.
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AMOUNT AND NATURE OF YEAR FIRST TERM BENEFICIAL PERCENT NAME, AGE, PRINCIPAL OCCUPATION AND ELECTED TO OWNERSHIP OF OF BUSINESS EXPERIENCE FOR PAST 5 YEARS TO BOARD (1) EXPIRE STOCK (2) CLASS - ------------------------------------ ------------ ------- -------------- -------- Whit G. Hughes, Age 72....................... 1982 1999 101,639(8) 1.17% 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. Howard R. Jones, Age 62...................... 1991 2000 60,544(10) 0.69% President of Packaging Design Corporation, a manufacturer of corrugated containers and specialties. Fredric G. Novy, Age 59 (3).................. 1994 2000 261,787(11) 3.00% 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. Edward J. Nusrala, Age 58 (3)................ 1997 1999 16,500(12) 0.19% Founder, owner and President of Famous Brand Shoes, Inc., a retail shoe company. William C. O'Donnell, Age 75................. 1979 2000 147,074(8) 1.69% President of ODON Communications Group, a radio broadcasting company. William R. Rybak, Age 47 (3)................. 1986 1999 58,668(10) 0.67% 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. Russell F. Stephens, Jr., Age 65............. 1971 2000 44,939(10) 0.52% President of Insurance Concepts & Design Inc., an insurance agency.
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AMOUNT AND NATURE OF YEAR FIRST TERM BENEFICIAL PERCENT NAME, AGE, PRINCIPAL OCCUPATION AND ELECTED TO OWNERSHIP OF OF BUSINESS EXPERIENCE FOR PAST 5 YEARS TO BOARD (1) EXPIRE STOCK (2) CLASS - ------------------------------------ ------------ ------- -------------- -------- Donald E. Sveen, Age 66 (3).................. 1971 1999 98,044(10) 1.13% 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. Vernon B. Thomas, Jr., Age 64 (3)............ 1969 2000 150,587(10) 1.73% Attorney whose practice concentrates in corporate, banking, real estate and estate planning. EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS Richard A. Hojnicki, Age 48.................. -- -- 73,947(13) 0.85% Mr. Hojnicki is Executive Vice President, Secretary and Chief Financial Officer of Alliance Bancorp and Liberty Federal Bank Edward J. Munin, Age 44...................... -- -- 750 0.01% Mr. Munin is a Senior Vice President of Liberty Federal Bank All directors and executive officers as a -- -- 1,586,780(14)(15) 18.21% group (16 persons) - -------------------------------------------
(1) Includes service on the Board of Directors of Hinsdale Federal Bank for Savings and Liberty Federal Savings Bank. (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 Alliance Bancorp. (4) Includes 96,892 shares that may be acquired pursuant to presently exercisable stock options by Mr. Bristol. (5) Includes 18,750 shares that may be acquired pursuant to presently exercisable stock options by Mr. Davis. (6) Includes 46,495 shares subject to options which may be acquired by Mr. Loeppert under the Liberty Bancorp, Inc. 1991 Stock Option Plan for Outside Directors (the "Liberty Bancorp Directors' Option Plan"). (7) Dr. Mill is married to Mr. Burns' first cousin. (8) Includes 49,657 shares subject to options which may be acquired by each outside director indicated under the Liberty Bancorp Directors' Option Plan. (9) Includes 114,868 shares with respect to Mr. Burns which may be acquired through the exercise of stock options granted under the Liberty Bancorp, Inc. Amended and Restated 1991 Incentive Stock Option Plan (the "Liberty 4 Bancorp Incentive Stock Option Plan"), and 17,138 shares allocated to Mr. Burns under the Liberty Federal Savings Bank ESOP. (10)Includes 23,043 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"). (11)Includes 183,669 shares with respect to Mr. Novy which may be acquired through the exercise of stock options under the Liberty Bancorp Incentive Stock Option Plan, and 7,726 shares allocated to Mr. Novy under the Liberty Federal Savings Bank ESOP. (12)Includes 15,000 shares that may be acquired by Mr. Nusrala pursuant to the exercise of options granted under the Hinsdale Financial Directors' Option Plan. (13)Includes 37,167 shares that may be acquired pursuant to presently exercisable stock options by Mr. Hojnicki. (14)Includes 336,478 shares that may be acquired pursuant to presently exercisable stock options granted to executive officers of Alliance Bancorp and its subsidiaries, and 352,295 shares that may be acquired pursuant to presently exercisable stock options granted to directors who are not executive officers. (15)Includes 24,864 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. ITEM 11. EXECUTIVE COMPENSATION. DIRECTORS' COMPENSATION Fees. Outside directors of Alliance Bancorp receive a fee of $1,500 per meeting of the Board. Prior to the merger of equals transaction, directors of Alliance Bancorp did not receive any directors' fees. Outside Directors of Liberty Federal Bank ("Liberty Federal") receive a monthly fee of $1,500. Directors who are not officers also receive $300 for each committee meeting attended. Outside directors of Liberty Federal'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 23,043 shares of Common Stock at an exercise price of $5.33 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 15,000 shares of Common Stock at an exercise price of $18.50 per share, equal to the fair market value of the stock at the time of grant. Under the Liberty Bancorp Directors' Option Plan, each outside Director of Liberty Bancorp was granted options to purchase 49,657 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 $6.33 per share or $5.37 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, Alliance Bancorp is required to provide certain data and information in regard to the compensation and benefits provided to Alliance Bancorp's Chief Executive Officer and other executive officers of Alliance Bancorp. 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 Alliance Bancorp's fiscal year ended December 31, 1997. 5 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 Alliance Bancorp, 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 Liberty Federal. Alliance Bancorp does not currently pay cash compensation to executive officers. Executive Compensation Philosophy. Since the predecessor of Alliance Bancorp became a public company in 1992, the committee has had the following goals for the compensation programs impacting the executives of Alliance Bancorp and Liberty Federal: . to provide motivation for the executives to enhance shareholder value by linking a significant portion of their compensation to earnings and the value of Alliance Bancorp's Common Stock; . to retain the executive officers who are capable of leading Alliance Bancorp to high performance levels and to allow Liberty Federal to attract high quality executives in the future by providing total compensation opportunities which are consistent with competitive norms of the industry and Alliance Bancorp's level of performance; and . to maintain reasonable "fixed" compensation costs by targeting base salaries at competitive average levels. The compensation committee of the Board of Directors of Liberty Federal periodically reviews salaries, stock options and other aspects of executive compensation. In general, the purpose of this evaluation is to ensure that Liberty Federal's overall executive compensation programs remain competitive with savings institutions and banks that are similar in both asset size and geographical markets to Liberty Federal and that total executive pay represents both the individual's performance as well as the current and past performance of Liberty Federal. For purposes of determining the competitive market for Liberty Federal'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 Liberty Federal's total asset size and performance results comparable to those of Liberty Federal. KPMG Peat Marwick LLP reviewed the following published compensation surveys to determine competitive compensation levels: The 1996 Bank Cash Compensation Survey, Bank Administration Institute; and The 1995 Financial Institutions Compensation Survey By Wyatt Data Services. In addition, KPMG Peat Marwick LLP conducted an independent review of the compensation practices of eleven midwest institutions with assets ranging from $768 million to $1.9 billion. All compensation data was updated to October 1, 1997. 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 6 . 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 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 1997 compensation, the Board of Directors of Liberty Federal, with Mr. Bristol excused, determined his fiscal 1997 compensation giving consideration to the size of Liberty Federal, 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 Alliance Bancorp. In 1993, Liberty Federal 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 Alliance Bancorp's annual as well as long-term profitability. In order to attract and retain high quality executives, Liberty Federal's executive compensation strategy is based on providing total target compensation opportunities that are at, or above, the competitive norms for companies competing in Liberty Federal's employment market. Alliance Bancorp'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 Liberty Federal maintaining certain levels of performance in the following areas: . the regulatory capital ratios; . 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 Alliance Bancorp, the objective of achieving annual profitability goals and enhancing shareholder value while maintaining long-term safety and soundness will continue. The 1997 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%. Liberty Federal 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 7 of $125,000, representing approximately 54% of his salary, for the fifteen month period ended December 31, 1997. Also during the fifteen months ended December 31, 1997, the committee also determined to grant Mr. Bristol options to purchase 65,430 shares of Common Stock at an exercise price equal to the fair market value of the shares at the time of grant. Compensation Committee Edward J. Burns, Whit G. Hughes, Russell F. Stephens, Jr., Edward J. Nusrala and Donald E. Sveen (Chairman) Stock Performance Graph. The following table shows a comparison of the cumulative total stockholder return /*/ on Alliance Bancorp'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. COMPARISON OF 63 MONTH CUMULATIVE TOTAL RETURN* AMONG ALLIANCE BANCORP, THE NASDAQ STOCK MARKET (U.S.) INDEX AND THE S&P SAVINGS & LOAN COMPANIES INDEX
[PERFORMANCE CHART APPEARS HERE] 9/92 9/93 9/94 9/95 9/96 12/97 ----- ---- ---- ---- ---- ----- Alliance Bancorp.............. 100.0 177 204 231 245 421 Nasdaq Stock Market (U.S.).... 100.0 131 132 182 216 279 S&P Savings & Loan Companies.. 100.0 134 135 173 200 395
*$100 INVESTED ON 9/30/92 IN STOCK OR INDEX - INCLUDING REINVESTMENT OF DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31. 8 Summary Compensation Table. The following table sets forth the cash compensation paid by Liberty Federal, for services rendered during the fiscal years ended December 31, 1997, and September 30, 1996 and 1995, to the Chief Executive Officer and other executive officers of Liberty Federal and/or Alliance Bancorp, who received an amount in salary and bonus in excess of $100,000 in the fiscal year ended December 31, 1997 ("Named Executive Officers").
================================================================================================================================= ANNUAL COMPENSATION LONG-TERM COMPENSATION ----------------------------------------- ------------------------------------ (1) YEARS AWARDS PAYOUT ENDED OTHER ------------------------- ---------- ALL 12/31/97 ANNUAL RESTRICTED OTHER NAME AND 9/30/96 SALARY COMPENSATION STOCK OPTIONS/ LTIP COMPENSATION PRINCIPAL POSITION 9/30/95 (2) BONUS (4) AWARDS SARS (#) PAYOUT (5) - ----------------------- ---------- ------------ --------------- ------------ ------------ ------------ ---------- --------------- Kenne P. Bristol 1997 $230,000 $125,000 (3) -- $ -- 65,430 $ -- $158,470 President, Chief 1996 220,000 75,000 -- -- 28,125 -- 20,919 Executive Officer 1995 212,700 65,000 -- -- -- -- 15,838 and Director - --------------------------------------------------------------------------------------------------------------------------------- Richard A. Hojnicki 1997 $103,000 $ 41,000 (3) $ -- $ -- 6,750 $ -- $ 70,695 Executive Vice 1996 99,000 23,000 -- -- 8,437 -- 13,388 President, Chief 1995 95,000 23,000 -- -- -- -- 9,793 Financial Officer and Corporate Secretary - --------------------------------------------------------------------------------------------------------------------------------- Fredric G. Novy 1997 $177,534 (6) $100,000 $ -- $ -- -- $ -- $ -- Chairman of the Board of Directors - --------------------------------------------------------------------------------------------------------------------------------- Edward J. Munin 1997 $188,333 (7) $ 45,000 $ -- $ -- -- $ -- $ -- Senior Vice President - --------------------------------------------------------------------------------------------------------------------------------- Howard A. Davis 1997 $200,000 $ 5,000 $ -- $ -- 11,250 $ -- $ -- President and Chief 1996 200,000 -- -- -- 22,500 -- -- Executive Officer of 1995 66,667 (8) -- -- -- -- -- -- Preferred Mortgage Associates, Ltd. and Director =================================================================================================================================
____________________________________ (1) In 1996 Alliance Bancorp 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) Includes Directors' fees paid to Mr. Bristol. Effective October 1, 1995, directors who are employees do not receive director's fees. (3) Bonuses relating to the 15 months ended December 31, 1997 are included in the 1997 amount. (4) Perquisites for the fiscal years ended December 31, 1997, September 30, 1996 and 1995 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. (5) Represents the value of shares of Common Stock allocated to the account of the Named Executive Officer under the ESOP. Allocations as of December 31, 1994 and 1995, valued at the market price of the Common Stock as of those dates are included in the fiscal years ended September 30, 1995 and 1996 respectively. In accordance with the Merger with Liberty Bancorp, Inc., the Hinsdale Federal Bank for Savings 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. (6) Includes Mr. Novy's salary from February 10, 1997, the date of the merger of Liberty Bancorp, Inc. with Alliance Bancorp. (7) Includes Mr. Munin's salary from the date of his employment in February 1997. (8) Includes Mr. Davis' 1995 salary from May 31, 1995, the date Preferred Mortgage Associates, Ltd. was acquired, through the fiscal year end of September 30, 1995. 9 Employment Agreements. Liberty Federal 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 $260,000. 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 Liberty Federal for cause at any time. In the event Liberty Federal terminates the executive's employment for reasons other than for cause, or in the event of the executive's resignation from Liberty Federal 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 Liberty Federal, or (iv) a breach of the agreement by Liberty Federal, 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. Liberty Federal 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 Liberty Federal or Alliance Bancorp, 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 $778,000. Liberty Federal 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 of Liberty Federal's or Alliance Bancorp'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. Alliance Bancorp 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, Alliance Bancorp and Liberty Federal 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 1997, the base salaries of Messrs. Burns and Novy provided for by the employment agreements were $125,000, 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 Liberty Federal or Alliance Bancorp for cause at any time. In the event Liberty Federal or Alliance Bancorp choose to terminate the executive's employment for reasons other than for cause; or in the event of the executive's resignation from Liberty Federal and Alliance Bancorp 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 Liberty Federal or Alliance Bancorp, or (iv) a breach of the agreement by Liberty Federal or Alliance Bancorp; 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. 10 If termination, voluntary or involuntary, follows a change in control of Liberty Federal or Alliance Bancorp, 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 Liberty Federal or Alliance Bancorp. Liberty Federal and Alliance Bancorp 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 Liberty Federal's or Alliance Bancorp's 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 Liberty Federal's agreements will be guaranteed by Alliance Bancorp in the event that payments or benefits are to paid by Liberty Federal. In the event of a change of control, based upon the past fiscal year's salary, bonus and fees, Mr. Burns would receive approximately $373,000, and Mr. Novy would receive approximately $600,000 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. Liberty Federal 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 Alliance Bancorp or Liberty Federal, if Alliance Bancorp or Liberty Federal 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 Severance Agreement. Payment to the officer under the Severance Agreement will be provided by Alliance Bancorp in the event that payment or benefits are not paid by Liberty Federal. Liberty Federal has entered into similar severance agreements with twelve other officers of Liberty Federal paying one times salary. Stock Option Plans. The Board of Directors of Alliance Bancorp 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. Set forth below is information relating to options granted under the Alliance Bancorp Stock Option Plans to the Named Executive Officers during fiscal 1997.
=================================================================================================== OPTION GRANTS IN LAST FISCAL YEAR (1) =================================================================================================== POTENTIAL REALIZABLE VALUE AT ASSUMED INDIVIDUAL GRANTS ANNUAL RATES OF STOCK PRICE APPRECIATION FOR OPTION TERM - ----------------------------------------------------------------------------- --------------------- PERCENT OF TOTAL OPTIONS OPTIONS GRANTED GRANTED TO EMPLOYEES IN EXERCISE OR EXPIRATION NAME (1) FY 1997 BASE PRICE DATE 5% 10% - -------------------- ------------- ----------------- ------------- ---------- ---------- ---------- Kenne P. Bristol 18,000(2) 17 $15.58 10/23/1999 $ 44,204 $ 92,825 - --------------------------------------------------------------------------------------------------- Kenne P. Bristol 47,430(3) 44 $19.08 02/10/2000 $142,645 $299,543 - --------------------------------------------------------------------------------------------------- Richard A. Hojnicki 6,750(2) 6 $15.58 10/23/1999 $ 16,576 $ 34,810 - --------------------------------------------------------------------------------------------------- Howard A. Davis 11,250(2) 10 $15.58 10/23/1999 $ 27,628 $ 58,016 - ---------------------------------------------------------------------------------------------------
11 - ------------------------- (1) Due to the change of fiscal year end in 1996 from September 30 to December 31, all options granted in the fifteen months ended December 31, 1997 are included. (2) These option become exercisable in three equal installments commencing October 23, 1997. (3) These options become exercisable in three equal installments commencing February 10, 1998. The following table provides certain information with respect to the number of shares of Alliance Bancorp Common Stock represented by stock options held by the Named Executive Officers as of December 31, 1997. 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 1997.
=================================================================================== AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES =================================================================================== NUMBER OF VALUE OF UNEXERCISED UNEXERCISED IN-THE-MONEY OPTIONS AT OPTIONS AT YEAR-END FISCAL YEAR-END (1) SHARES ---------------- --------------------- ACQUIRED UEXERCISABLE/ EXERCISABLE/ UPON VALUE NEXERCISABLE UNEXERCISABLE NAME EXERCISE REALIZED (#) ($) - -------------------- ------------ ---------- ---------------- --------------------- Kenne P. Bristol -- -- 81,082/68,805 $1,489,739/$598,712 - ---------------------------------------------------------------------------------- Richard A. Hojnicki -- -- 37,167/7,312 $ 714,141/$83,900 - ---------------------------------------------------------------------------------- Howard A. Davis -- -- 18,750/15,000 $ 226,438/$280,625 - ---------------------------------------------------------------------------------- Frederic G. Novy -- -- 183,669/-- $ 1,790,475/-- - ----------------------------------------------------------------------------------
____________________________________ (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 December 31, 1997, at which date the last sales price of the Common Stock, as quoted on the Nasdaq National Market, was $26.50. Retirement Plan. Until November 1997, Liberty Federal maintained the Pension Plan ("Retirement Plan"), for the benefit of certain employees of Liberty Federal (i.e., those persons who formerly had been employed by Hinsdale Federal Bank for Savings). In March 1997, Liberty Federal adopted resolutions terminating the Retirement Plan. Subsequent to the Retirement Plan's termination, no additional benefits were accrued by any participants. Liberty Federal 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. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS Persons and groups owning in excess of 5% of Alliance Bancorp's Common Stock are required to file certain reports regarding such ownership with Alliance Bancorp 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 March 31, 1998. 12
AMOUNT AND NATURE NAME AND ADDRESS OF OF BENEFICIAL PERCENT TITLE OF CLASS BENEFICIAL OWNERS OWNERSHIP OF CLASS - --------------------- ----------------------- ----------- --------- Common stock Investors of America, 434,690 (1) 5.4% Limited Partnership (formerly known as Dierberg Four, L.P.) 39 Glen Eagles Drive St. Louis, MO 63124 Common stock Jeffrey L. Gendell (2) 533,360 (2) 6.6% 200 Park Avenue Suite 3900 New York, NY 10166
- ---------------------- (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. (2) According to an Amended Schedule 13D, dated as of September 9, 1997, filed by Mr. Gendell and certain related persons, Mr. Gendell beneficially owns 533,360 shares of Alliance Bancorp Common Stock, held in the name of Tontine Financial Partners, L.P., Tontine Management, L.L.C. and Tontine Oversees Associates, L.L.C. For information regarding the security ownership of management, reference is made to Item 10 of this Form 10K/A, which information is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS. Liberty Federal does not make loans to its directors and executive officers except for overdraft lines of credit on checking accounts issued by Liberty Federal, 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. 13 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ALLIANCE BANCORP ------------------------------------- Registrant By: /s/ Kenne P. Bristol -------------------------------- Kenne P. Bristol President, Chief Executive Officer and Director 14 -----END PRIVACY-ENHANCED MESSAGE-----