<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
SUCCESS BANCSHARES, INC.
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(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[SUCCESS BANCSHARES, INC. LETTERHEAD]
100 TRI-STATE INTERNATIONAL - SUITE 300
P.O. BOX 1499
LINCOLNSHIRE, IL 60069-1499
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON WEDNESDAY, MAY 24, 2000
To the Stockholders of Success Bancshares, Inc.
The Annual Meeting of Stockholders of Success Bancshares, Inc. (the
"Company") will be held on Wednesday, May 24, 2000 at 1:00 p.m., local time, in
the auditorium at 200 Tri-State International, Lincolnshire, Illinois 60069, for
the following purposes, as more fully described in the accompanying Proxy
Statement.
1. To elect two directors to serve for a three-year term as Class III
Directors or until their successors are elected and qualified; and
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Stockholders of record at the close of business on April 17, 2000, the
record date fixed by the Board of Directors, are entitled to notice of, and to
vote at, the meeting and any adjournment thereof, also as more fully described
in the Proxy Statement.
For the Board of Directors,
/s/ WILBUR G. MEINEN, JR.
Wilbur G. Meinen, Jr.
Chairman of the Board
April 26, 2000
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. THOSE WHO CANNOT
ATTEND ARE URGED TO SIGN, DATE AND OTHERWISE COMPLETE THE ENCLOSED PROXY AND
RETURN IT IN THE ENVELOPE PROVIDED. PROXIES MAY BE REVOKED AT ANY TIME PRIOR TO
THE MEETING OR BY ATTENDING THE MEETING AND VOTING IN PERSON.
<PAGE> 3
[SUCCESS BANCSHARES, INC LETTERHEAD]
---------------
PROXY STATEMENT
---------------
The following information is provided in connection with the solicitation of
proxies for the Annual Meeting of Stockholders of Success Bancshares, Inc., a
Delaware corporation (the "Company"), and any adjournment thereof (the
"Meeting"), for the purposes stated in the attached Notice of Annual Meeting of
Stockholders. The Meeting is to be held on Wednesday, May 24, 2000 at 1:00 p.m.,
local time, in the auditorium at 200 Tri-State International, Lincolnshire, IL
60069. The Company anticipates mailing this Proxy Statement and the enclosed
proxy to stockholders on or about April 26, 2000.
GENERAL INFORMATION
SOLICITATION OF PROXIES
A form of proxy for use at the Meeting is being furnished herewith by the
Company to each stockholder and is solicited on behalf of the Board of Directors
of the Company. The Board of Directors has fixed April 17, 2000 as the record
date (the "Record Date") for the Meeting. Only stockholders of record on the
books of the Company at the close of business on the Record Date will be
entitled to notice of, and to vote at, the Meeting. At the close of business on
the Record Date, an aggregate of 2,620,806 shares of the Company's common stock,
par value $0.001 per share ("Common Stock"), were outstanding, each of which
entitles the holder thereof to one vote on all matters to be considered at the
Meeting.
The shares represented by proxies duly executed and returned by
stockholders and received by the Company before the Meeting will be voted as
directed in the proxies. In the absence of specific direction, the shares
represented by proxies will be voted "FOR" the election of all nominee directors
specified herein and "FOR" the other proposals described in this Proxy
Statement. As to the other matters, if any, to be voted upon at the Meeting, the
persons designated as proxies in the accompanying form of proxy (each of whom
was selected by the Board of Directors) will take such action as they, in their
discretion, may deem advisable.
Representation at the Meeting, in person or by proxy, by the holders of a
majority of the outstanding shares of Common Stock entitled to vote on the
Record Date will constitute a quorum. Votes for and against, abstentions by
shareholders who are present at the Meeting in person or by proxy and shares
held of record by a broker or nominee who has not received instructions from
his, her or its customers and lacks voting authority ("Broker Non-Votes"), will
each be counted as present for purposes of determining the presence of a quorum.
The affirmative vote of the holders of a plurality of the shares of Common Stock
present at the Meeting, in person or by proxy, and entitled to vote will be
required to act on the election of the two Class III Directors. Accordingly,
abstentions and Broker Non-Votes will not have any effect on the outcome of such
election.
The cost of soliciting proxies will be borne by the Company. Solicitation
will be made by mail, and may also be made personally or by telephone or
facsimile by directors, officers and regular employees of the Company, but these
persons will not be separately compensated for such solicitation services. The
Company will reimburse brokerage houses and other
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nominees and fiduciaries for their expenses in forwarding proxy solicitation
materials to beneficial owners of Common Stock.
REVOCABILITY OF PROXIES
Execution of the enclosed proxy will not affect your right as a stockholder
to attend the Meeting and to vote in person. Any proxy given pursuant to this
solicitation may be revoked by the stockholder at any time before it is
exercised by: (i) a later dated, duly executed and delivered proxy; (ii) a
written revocation sent to and received by the Secretary of the Company prior to
the Meeting; or (iii) attendance at the Meeting and voting in person. Attendance
by a stockholder at the Meeting does not alone serve to revoke his, her or its
proxy.
ANNUAL REPORT
A copy of the Company's Annual Report to Stockholders for the fiscal year
ended December 31, 1999, which contains audited financial statements,
accompanies this Proxy Statement.
SECURITY OWNERSHIP OF PRINCIPAL HOLDERS AND MANAGEMENT
The following table sets forth information with respect to the beneficial
ownership of the Company's Common Stock as of April 3, 2000 by (i) each person
or entity known by the Company to be the beneficial owner of more than 5% of its
outstanding Common Stock, (ii) each executive officer named in the Summary
Compensation Table below, (iii) each director and (iv) all the directors and
executive officers of the Company as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME AND ADDRESS OF BENEFICIAL OWNER(1) BENEFICIALLY OWNED PERCENT OF CLASS
----------------------------------------------------------- ------------------------ -------------------
<S> <C> <C>
Wilbur G. Meinen, Jr................................... 14,439 (2) *
Kurt C. Felde.......................................... 6,026 (3) *
Christa N. Calabrese................................... 3,932 (4) *
Craig J. Love.......................................... 1,250 (5) *
Avrom H. Goldfeder..................................... 6,000 (6) *
Sherwin Koopmans....................................... 6,000 (7) *
George M. Ohlhausen.................................... 253,886 (8) 9.7%
Norman D. Rich......................................... 23,699 (9) *
Glen Wherfel........................................... 17,294 (10) *
Joseph A. Cari, Jr..................................... - *
Jeffrey L. Gendell (11)................................ 139,300 (12) 5.3%
Financial Institution Partners II, L.P. (13)........... 185,450 (14) 7.1%
All directors and executive officers
as a group (11 persons)................................ 345,181 (15) 12.9%
</TABLE>
* Less than 1%
- ------------------------
(1) The address of each person listed above, unless noted otherwise in
the footnotes, is c/o Success Bancshares, Inc., 100 Tri-State
International, Suite 300, Lincolnshire, IL 60069-1499
(2) Includes 8,000 shares of restricted stock with respect to which Mr.
Meinen has full voting power but which are transferable by Mr. Meinen
in increments of 2,667 shares on each of December 31, 1999 and 2000,
and 2,666 shares on December 31, 2001, in the event that Mr. Meinen is
a full-time employee of the Company on each such date. Also includes
6,250 shares subject to options with an exercise price of $11.50 per
share.
(3) Includes 5,000 shares subject to options with an exercise price of
$14.00 per share and 750 shares subject to options with an exercise
price of $11.50 per share.
(4) Ms. Calabrese shares voting and investment power over 1,432 of such
shares with her spouse. Includes 2,500 shares subject to options with
an exercise price of $13.875 per share.
(5) Includes 1,250 shares subject to options with an exercise price of
$10.13 per share.
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<PAGE> 5
(6) Includes 5,000 shares subject to options with an exercise price
of $14.50 per share.
(7) Mr. Koopmans shares voting and investment power over 1,000 of such
shares with his spouse. Includes 5,000 shares subject to options with
an exercise price of $14.50 per share.
(8) Includes 108,485 shares held in trust with respect to which Mr.
Ohlhausen has sole voting and dispositive power, 44,387 shares held in
an individual retirement account with respect to which Mr. Ohlhausen
has sole voting and dispositive power and 68,000 shares held in trust
with respect to which Mr. Ohlhausen shares voting and dispositive
power with his spouse. Also includes 5,000 shares subject to options
with an exercise price of $14.50 per share.
(9) Includes 3,896 shares held in trust with respect to which Mr. Rich's
spouse has voting and dispositive power, and 2,210 shares beneficially
owned by Mr. Rich's spouse. Also includes 5,000 shares subject to
options with an exercise price of $14.50 per share.
(10) Includes 5,100 shares beneficially owned by Mr. Wherfel's spouse and
5,494 shares held by a pension plan with respect to which Mr. Wherfel
has sole voting and dispositive power. Also includes 5,000 shares
subject to options with an exercise price of $14.50.
(11) Mr. Gendell's address is 200 Park Avenue, Suite 3900, New York, New
York 10166.
(12) Includes 139,300 shares with respect to which Mr. Gendell shares
voting and dispositive power with Tontine Financial Partners, L.P.
("TFP") and Tontine Management, L.L.C. ("TM"). Mr. Gendell and each of
such entities are a "group," as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(13) The address of Financial Institution Partners, II, L.P. is 1824
Jefferson Place NW, Washington, DC 20036.
(14) Includes 173,450 shares with respect to which Financial Institution
Partners II, L.P. shares voting and dispositive power with Hovde
Capital, L.L.C., Eric D. Hovde as a managing member of Hovde Capital,
L.L.C. and Steven D. Hovde. Additionally, Eric D. Hovde owns 12,000
shares with sole voting and dispositive powers. Financial Institution
Partners and each of such individuals or entities are a "group" as
defined in Section 13(d)(3) of the Exchange Act.
(15) Includes an aggregate of 49,375 options with exercise prices ranging
from $10.125 to $14.50 per share.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
As a public company, the Company's directors, executive officers and
10% beneficial owners are subject to the reporting requirements under Section
16(a) of the Exchange Act. Under such Act, initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities of
the Company are required to be filed with the Securities and Exchange Commission
(the "SEC").
To the Company's knowledge, based solely upon a review of the copies of
such reports furnished to the Company, in fiscal 1999 Forms 5 reporting the
purchase pursuant to the Company's 1998 Employee Stock Purchase Plan by (i)
Wilbur G. Meinen of 189 shares of Common Stock, (ii) Kurt C. Felde of 276 shares
of Common Stock and (iii) Christa N. Calabrese of 632 shares of Common stock
have not been filed with the SEC but will be filed promptly following the date
of this Proxy Statement. In addition, a Form 5 reporting the Company's issuance
to Avrom H. Goldfeder of options to purchase 5,000 shares of Common Stock in
August 1998 was filed late with the SEC in March 1999 and a Form 3 reporting the
status of Craig J. Love as an executive officer of the Company in October 1999
has not been filed with the SEC but will be filed promptly following the date of
this Proxy Statement.
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I
ELECTION OF DIRECTORS
The Certificate of Incorporation and the By-Laws of the Company currently
provide that the Board of Directors shall consist of at least five and not more
than 11 directors divided into three classes of directors who are elected to
hold office for staggered three-year terms so that the term of office of one
class expires at each annual meeting of stockholders. The classes of directors
as of the date of this Proxy Statement are: Class I Director, consisting of one
person, who will hold office until the annual meeting of stockholders to be held
in 2001; Class II Directors, consisting of three persons, who will hold office
until the annual meeting of stockholders to be held in 2002; and Class III
Directors, consisting of three persons, who will hold office until the Meeting.
The terms of the Class III Directors expire this year. Director George M.
Ohlhausen, who is currently a Class III Director, will not stand for reelection
due to an age limitation. Therefore, the Board of Directors has nominated two
persons, who have consented to being named in this Proxy Statement and to
serving if elected, for election as Class III Directors to serve for a
three-year term until the annual meeting of stockholders to held in 2003 and
until their respective successors have been duly elected and qualified. Both
director nominees are currently members of the Company's Board of Directors.
Proxies will be voted FOR the election of the two nominees listed below,
unless authority to do so is withheld as to an individual nominee or all
nominees as a group. Proxies cannot be voted for a greater number of persons
than the number of nominees named. If for any reason one or more of the nominees
should be unable to serve or refuse to serve as a director (an event which is
not anticipated), proxies will be voted for another candidate or candidates
nominated by the Board of Directors, and discretionary authority to cast such
votes is included in the proxy. The nominees receiving the highest number of
votes at the Meeting, in person or by proxy, of shares of Common Stock, up to
the number of directors to be elected, shall be elected.
NOMINEES FOR DIRECTOR
The Board of Directors has nominated for election as a director at the
Meeting each of the following individuals:
CLASS III DIRECTORS - TERMS EXPIRING IN 2003
Joseph A. Cari, Jr., age 47, has been a director of the Company since
January 2000. Mr. Cari has been a partner with the law firm of Ungaretti &
Harris since 1984, providing general corporate, legislative and regulatory
counsel to a variety of clients. He has also been appointed by President Clinton
to serve as Chairman of the Board of Trustees of the Woodrow Wilson
International Center for Scholars and has served on such Board since 1995. In
addition, Mr. Cari currently serves as National Finance Chairman for the
Democratic National Committee for the 2000 elections. Mr. Cari is a member of
the Board of Directors of Basic Plastic Products, L.L.C. and of the Board of
Advisors of Mercor Trade Finance Ltd.
Norman D. Rich, age 65, has been a director of the Company since 1991. Mr.
Rich also has been a director of the Bank since 1991. Prior to his retirement in
1999, he was a partner with the accounting and consulting firm of Veatch, Rich &
Nadler, Chtd. for the last five years. Mr. Rich is a Certified Public
Accountant.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" THE
ELECTION OF THE TWO NOMINEES NAMED ABOVE AS DIRECTORS OF THE COMPANY.
DIRECTORS CONTINUING IN OFFICE
CLASS I DIRECTOR - TERM EXPIRING IN 2001
Glen Wherfel, age 50, has been a director of the Company since 1998. Mr.
Wherfel has been a director of the Bank since 1992. He is also a principal at
the accounting firm of Wherfel & Associates, and has served in such position
since 1994. Mr. Wherfel is a Certified Public Account and a director of Gemcor,
Inc., a privately held corporation.
CLASS II DIRECTORS - TERMS EXPIRING IN 2002
Wilbur G. Meinen, Jr., age 50, has been a director of the Company since
1998 and has also been the Chairman, President and Chief Executive Officer of
the Company and the Bank since 1998. Prior to joining the Company, Mr. Meinen
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served in various capacities at Bank One Corporation since 1989. As Executive
Vice President - Credit Products Manager, his most recent position at Bank One,
Mr. Meinen was responsible for the credit functions for the middle market and
private banking lines of business in the Chicago market. His approval was
required for all commercial loans originated in the Chicago market, and he also
managed a staff which provided portfolio management, loan documentation and
closing and asset management services.
Avrom H. Goldfeder, age 40, has been a director of the Company since 1997.
Mr. Goldfeder has been a member-trader of the Chicago Board of Trade (CBOT)
since 1986. He is a member of the CBOT Business Conduct Committee and is Vice
Chairman of the CBOT Educational Research Foundation. Mr. Goldfeder was a
founding partner of the Financial Futures and Options Clearing Services in
October 1990 as Senior Vice President and Co-Head of Institutional Sales and
Marketing. Mr. Goldfeder is also a member of the Executive Committee of ING
Barings.
Sherwin Koopmans, age 58, has been a director of the Company since 1997.
Mr. Koopmans also served as Chairman of the Executive Committee of the Board of
Directors of the Company and the Bank from August 1998 to December 1998; Prior
to his retirement in January 1996, Mr. Koopmans was the Associate Director of
the Division of Depository and Asset Services for the Federal Deposit Insurance
Corporation (FDIC) from July 1994 to December 1995.
MEETINGS OF THE BOARD; COMMITTEES
The Board of Directors met 12 times during fiscal year 1999. All of the
directors, with the exception of George M. Ohlhausen, attended at least 75% of
the total number of meetings of the Board of Directors and the committees of the
Board on which they served during fiscal year 1999. The Board has two
established committees, the Audit Committee, comprised of Messrs. Rich (as
chairman), Koopmans and Wherfel, and the Compensation Committee, comprised of
Messrs. Goldfeder (as chairman), Cari and Koopmans.
The Audit Committee, which met 12 times during the fiscal year 1999,
recommends to the Board of Directors the engagement of the Company's independent
certified public accountants, reviews with such accountants the plan and results
of their audit of the Company's financial statements and determines the
independence of such accountant. The Compensation Committee, which met 2 times
during fiscal year 1999, makes recommendations to the Board of Directors with
respect to compensation of officers and key employees, including the grant of
options under the Success Bancshares, Inc. 1995 Stock Option Plan (the "1995
Stock Option Plan") and the 1999 Stock Option Plan.
The Board of Directors elects a Nominating Committee each year prior to the
election of directors. The Nominating Committee will consider director nominees
recommended by any stockholder who has given timely written notice to the
Secretary of the Company. To be timely, a stockholder's notice must be delivered
not less than 70, nor more than 90 days prior to the first anniversary of the
preceding year's annual meeting. Such notice must set forth, as to each person
whom the stockholder proposes to nominate for election as a director, all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors pursuant to Regulation 14A
under the Exchange Act, including such person's written consent to being named
in the proxy statement as a nominee and to serving as a director, if elected.
COMPENSATION OF DIRECTORS
Each member of the Company's Board of Directors, other than any member who
is also an executive officer, receives a fee of $1,300 a month. Each member of
the Audit Committee and the Compensation Committee also receives a fee of $300
per committee meeting attended. In addition, the Company reimburses all of its
directors for all travel-related expenses incurred in connection with their
activities as directors. Norman D. Rich receives an additional $10,000 annually
for serving as Chairman of the Audit Committee and Avrom H. Goldfeder receives
an additional $5,000 annually for serving as Chairman of the Compensation
Committee.
In addition, management awards options to purchase 5,000 shares to each new
Director of the Company, and options to purchase 3,000 shares of Common Stock
each year thereafter to each continuing Director of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors determined the
compensation of the Company's executive officers in 1999.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
From time to time, the Bank makes loans and extends credit to certain of
the Company's and/or the Bank's officers and directors and to certain companies
affiliated with such persons. In the opinion of the Company, all of such loans
and extensions of credit have been made in the ordinary course of business, on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other third parties, and
have not involved more than the normal risk of collectibility or presented other
favorable features. At December 31, 1999, an aggregate of $1.7 million of loans
and extensions of credit were outstanding to certain officers and directors of
the Company and/or the Bank and to certain companies affiliated with such
persons.
EXECUTIVE OFFICERS
Set forth below is certain information with respect to each of the
Company's and/or the Bank's executive officers who is not also a director of the
Company:
Kurt C. Felde, age 49, has been Executive Vice President and Chief
Financial Officer of the Company and Bank since April, 1999 and served as Senior
Vice President and Chief Financial Officer of the Company and the Bank since
June 1998. Prior to joining the Company, Mr. Felde served as Senior Vice
President and Chief Financial Officer of Regency Savings Bank beginning in 1989,
where he was responsible for accounting, management information systems,
operations and corporate administration.
Christa N. Calabrese, age 51, has been Executive Vice President of the Bank
since October 1997 and Chief Lending Officer of the Bank since 1992. She also
served as Senior Vice President of the Bank from 1992 to October 1997. Prior to
joining the Bank, Ms. Calabrese was an Asset Specialist with the Resolution
Trust Corporation from 1990 to 1992. From 1969 through 1990, Ms. Calabrese held
commercial lending positions with local community banks.
Laurie K. Breitenstein, age 38, joined the Company and the Bank as Senior
Vice President and General Counsel in May 1999. Prior to joining the Company,
Ms. Breitenstein was corporate counsel to Banc One Corporation from 1993 to
1997, GE Capital Corp. from 1997 to 1998 and Heller Financial, Inc. from 1998 to
1999.
Ronald W. Tragasz, age 53, joined the Bank in September 1991, and is
currently Senior Vice President and Cashier of the Bank and Assistant Secretary
of the Company. Prior to September 1991, Mr. Tragasz was employed by the Bank of
Ravenswood as Cashier and by First National Bank of Chicago as Assistant Vice
President, where he was responsible for bank operating functions and various
branch operations.
Marlene Sachs, age 68, has been Secretary of the Company since its
inception, and Vice President, Secretary and Assistant to the President of the
Bank since 1982.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning the
compensation during the fiscal years ended December 31, 1999, 1998 and 1997 paid
by the Company and its subsidiaries for services rendered in all capacities to
(i) the Company's Chief Executive Officer and (ii) the three additional
executive officers of the Company and/or the Bank who had total compensation
during the fiscal year ended December 31, 1999 which exceeded $100,000
(collectively, the "Named Executive Officers").
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<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
----------------------------------------- --------------------------------------------
RESTRICTED SECURITIES
STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) AWARDS (1) OPTIONS COMPENSATION
- ------------------------------------- ----------- ----------- --------------- ------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Wilbur G. Meinen, Jr.
Chairman, President &
Chief Executive Officer of
the Company and the Bank 1999 $ 187,250 $ 45,000 (2) - 12,500 (3) $ 2,792 (4)
1998 (5) 7,695 50,000 (6) 90,000 (7) 12,500 (8) -
Kurt C. Felde
Executive Vice President &
Chief Financial Officer of
the Company and Bank 1999 $ 115,154 $ 20,000 - - $ 2,585 (9)
1998 (10) 61,833 5,000 - 8,000 (11) 500
Christa N. Calabrese
Executive Vice President &
Chief Lending Officer of the Bank 1999 $ 125,000 $ 20,000 - - $ 2,930 (12)
1998 120,364 10,000 - 10,000 (13) 3,643 (14)
1997 78,077 - - - 2,316 (15)
Craig J. Love
Executive Vice President and
Chief Operating Officer of the 1999 (16) 106,269 $ 40,000 (17) - 10,000 (18) $ 2,606 (19)
Bank
</TABLE>
- ---------------------
(1) At December 31, 1999, there were 5,333 shares of restricted stock
outstanding with a value of $52,997, all of which were held by Mr. Meinen.
(2) Mr. Meinen elected to receive the 1999 bonus in January 2000.
(3) Such options vest in increments of 3,125 shares on January 27, 2000, 2001,
2002 and 2003.
(4) Includes $500 contributed by the Company for Mr. Meinen under the Company's
401(k) Plan (the "401(k) Plan"), $1,522 allocated to Mr. Meinen under the
Company's Employee Stock Ownership Plan (the "ESOP"), and $770 in term life
insurance premiums paid by the Company on behalf of Mr. Meinen.
(5) Mr. Meinen joined the Company on December 16, 1998.
(6) Such amount was paid to Mr. Meinen in January 1999 pursuant to the terms of
his Employment Agreement, dated December 16, 1998, with the Bank. See
"Employment Agreements."
(7) Such shares vest in increments of 2,667 shares on December 31, 2000 and
2,666 shares on December 31, 2001. Dividends will be paid on such shares
only to the extent that dividends are paid on the Common Stock. (8) Such
options vest in increments of 3,125 shares on December 16, 1999, 2000, 2001
and 2002.
(9) Includes $500 contributed by the Company for Mr. Felde under the 401(k)
Plan, $1,315 allocated to Mr. Felde under the ESOP, and $770 in term life
insurance premiums paid by the Company on behalf of Mr. Felde. (10) Mr.
Felde joined the Company on June 1, 1998.
(11) Options to purchase 3,000 of such shares vest in increments of 750 shares
on December 16, 1999, 2000, 2001 and 2002.
(12) Includes $500 contributed by the Company for Ms. Calabrese under the
Company's 401(k) Plan, $1,660 allocated to Ms. Calabrese under the ESOP,
and $770 in term life insurance premiums paid by the Company for the
benefit of Ms. Calabrese.
(13) Such options vest in increments of 2,500 shares on September 23, 1999,
2000, 2001 and 2002.
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<PAGE> 10
(14) Includes $500 contributed by the Company for Ms. Calabrese under the 401(k)
Plan, $2,033 allocated to Ms. Calabrese under the ESOP, and $1,110 in term
life insurance premiums paid by the Company for the benefit of Ms.
Calabrese.
(15) Includes $150 contributed by the Company for Ms. Calabrese under the 401(k)
Plan, $1,056 allocated to Ms. Calabrese under the ESOP and $1,110 in term
life insurance premiums paid by the Company on behalf of Ms. Calabrese.
(16) Mr. Love joined the Company in February 1999.
(17) Includes a $10,000 signing bonus, a $10,000 promotion bonus and a $20,000
performance bonus for 1999 which Mr. Love elected to defer until January
2000.
(18) Such options vest in increments of 1,250 shares on April 28 and November 17
of the years 2000, 2001, 2002 and 2003.
(19) Includes $500 contributed by the Company for Mr. Love under the 401(k),
$1,521 allocated to Mr. Love under the ESOP, and $585 in term life
insurance premiums paid by the Company on behalf of Mr. Love.
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on grants of options to the Named
Executive Officers in 1999.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK
INDIVIDUAL GRANTS PRICE APPRECIATION FOR OPTION TERM
- ------------------------------------------------------------------------------------ -----------------------------------
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION
NAME GRANTED FISCAL YEAR PRICE DATE 5% 10%
- ----------------------- -------------- ------------ ---------- ----------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Wilbur G. Meinen, Jr. 12,500 (1) 37.3% $11.50 1/27/09 $ 90,404 $ 229,100
Craig J. Love 5,000 (2) 14.9% $10.13 4/28/09 $ 31,838 $ 80,683
5,000 (3) 14.9% $11.94 11/17/09 $ 37,537 $ 95,126
</TABLE>
(1) These options were granted on January 27, 1999 and vest to the extent of
3,125 shares each year over a four-year period commencing on January 27,
2000.
(2) These options were granted on April 28, 1999 and vest to the extent of
1,250 shares each year over a four-year period commencing on April 28,
2000.
(3) These options were granted on November 17, 1999 and vest to the extent of
1,250 shares each year over a four-year period commencing on November 17,
2000.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table provides information on the value of any options
held by the Named Executive Officers at December 31, 1999. No Named Executive
Officer exercised any options in 1999.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN THE MONEY
SHARES OPTIONS AT DECEMBER 31, 1999 OPTIONS AT DECEMBER 31, 1999
NAME ACQUIRED ON ----------------------------- ---------------------------------
EXERCISE VALUE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------- -------------- -------------- ------------- ------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Wilbur G. Meinen - - 3,125 (1) 21,875 (1) - -
Kurt C. Felde - - 5,750 (2) 2,250 (3) - -
Christa N. Calabrese - - 2,500 (4) 7,500 (4) - -
Craig J. Love - - - 10,000 (5) - -
</TABLE>
(1) The Company granted options to purchase 12,500 shares of Common Stock to
Mr. Meinen on December 16, 1998. Such options vest to the extent of 3,125
shares on each of December 16, 1999, 2000, 2001 and 2002.
(2) Includes 5,000 options granted June 25, 1998 which vested in their entirety
on June 25, 1999. In addition, 3,000 options were granted on December 16,
1998 and vest in increments of 750 shares over a four-year period
commending December 16, 1999.
9
<PAGE> 11
(3) The Company granted options to purchase 3,000 shares of Common Stock to Mr.
Felde on December 16, 1998. Such options vest to the extent of 750 shares
on each of December 16, 1999, 2000, 2001 and 2002.
(4) The Company granted options to purchase 10,000 shares of Common Stock to
Ms. Calabrese on September 23, 1998. Such options vest to the extent of
2,500 shares on each of September 23, 1999, 2000, 2001 and 2002.
(5) Includes 5,000 options granted on April 28, 1999 and 5,000 options granted
on November 17, 1999. The options vest in increments of 1,250 on April 28
and November 17 in the years of 2000, 2001, 2002 and 2003.
EMPLOYMENT AGREEMENTS
The Bank has entered into Employment Agreements ("Agreements") with
Messrs. Meinen, Felde and Love and with Ms. Calabrese. The Agreements provide
for an annual base salary in an amount not less than the employee's then current
salary and a term of three years with respect to Messrs. Meinen and Love and Ms.
Calabrese, and two years with respect to Mr. Felde. In addition to base salary,
all are entitled to receive an annual bonus in an amount determined by the Board
of Directors of the Bank and are also entitled to participate in and receive
benefits under any employee insurance and fringe benefits programs that may have
been established by the Bank for its employees or senior executive officers, to
reimbursement for reasonable expenses incurred by them in the performance of
their duties and to the use of a Bank automobile. Mr. Meinen's Agreement also
provided for his receipt of 8,000 restricted shares and options to purchase
25,000 shares, the terms of which are described in the Summary Compensation
Table above.
Each of the Agreements state that the Bank will continue to pay to each
of the Named Executive Officers his/her salary, bonus (if any has been earned
and is due) and benefits for the duration for the term of the Agreement after
the termination of employment by reason of the Bank's breach of the Agreement or
otherwise, except for a termination by reason of the respective employee's
negligence or misconduct or death or disability. Each such Agreement further
provides that upon a change of control of the Bank or the Company (as defined in
the Agreement to include certain sales, transfers or dispositions of shares of
stock or assets of the Bank), the employee will receive a lump sum payment in an
amount not to exceed two times base salary with respect to Mr. Meinen and Ms.
Calabrese and one times base salary with respect to Messrs. Felde and Love.
Finally, the Meinen Agreement restricts Mr. Meinen from competing with, or
soliciting employees or customers of, the Bank and the Company for a period of
12 months following the termination or expiration of his employment and the
Love, Felde and Calabrese Agreements similarly restrict these officers for a
period of six months following the termination or expiration of their
employment.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors, which is
comprised of three non-employee directors (the "Committee"), established the
general compensation policies of the Company, determined specific compensation
levels for the Company's executive officers and administered the Company's
compensation plans in 1999. The Committee has issued its report, presented
below, documenting the various components of the Company's executive officer
compensation programs and describing the basis for 1999 compensation levels.
1999 COMPENSATION PHILOSOPHY
It is the philosophy of the Company to link executive compensation to
achievement, initiative, performance and teamwork. Compensation determined in
accordance with these characteristics is essentially merit-based and is not
significantly impacted by the length of time an officer has served the Company.
By focusing on merit, the Committee members are confident that the Company will
be able to attract, develop, reward and retain highly qualified and productive
executive officers and to motivate its executive officers to achieve the goals
of the Company's corporate strategic plan. The Committee believes that its
compensation philosophy is aligned with and supports the long-term interest of
the Company: to improve corporate financial performance and to increase
stockholder value.
The Committee considered numerous factors, both qualitative and
quantitative, in determining the level and composition of compensation for the
Chief Executive Officer and other executive officers for 1999. The Committee did
not, however, apply specific quantitative formulas or guidelines in reviewing
and approving compensation, although the Committee did follow the dictates of
all employment agreements between the Bank and the executive officers. Such
employment agreements were specifically designed and adopted to assist the Bank
and the Company in maintaining a stable
10
<PAGE> 12
and competent management base. In analyzing compensation, the Committee instead
recognized the importance of achievements that may be difficult to quantify,
such as successful supervision and assistance with major projects.
In addition, in order to determine appropriate compensation levels for
both incumbent and newly hired executive officers, the Committee utilized
independently prepared financial institution compensation surveys.
COMPENSATION PROGRAM COMPONENTS
The Committee reviews each executive officer's base salary annually.
Executive officers received salary increases in 1999 which were principally
intended to reflect individual performance in 1998, including increases in
responsibilities, but also, to a lesser extent, the Company's performance both
as compared to the preceding fiscal year and within its industry. The Committee
also evaluates other factors, such as background, experience and scope of
accountability in determining the appropriate salary level for each executive
officer. The Committee, by design, strives to pay executive officers salaries in
line with competitive market levels in the financial institution industry. Cash
bonuses were awarded to executive officers, at the end of 1999 based upon 1999
performance.
The Company's executive officers are also eligible for stock option
grants as determined by the Committee in accordance with the 1995 Stock Option
Plan and the 1999 Stock Option Plan. Each of these Plans provides for option
awards based on both overall performance of the Company and individual
performance by executive officers in order to align the interests of the
Company's stockholders and such executive officers. During 1999, no options were
granted to executive officers of the Company (with the exception of options to
purchase 12,500 shares issued to Mr. Meinen pursuant to his Employment
Agreement).
CHIEF EXECUTIVE OFFICER COMPENSATION
In December 1998 the Company hired Mr. Meinen as President and Chief
Executive Officer. In July 1999 Mr. Meinen was also named as Chairman of the
Board of Directors of the Company. Compensation for Mr. Meinen was determined in
accordance with the terms of his Employment Agreement with the Bank and included
base salary, stock options and a year-end bonus. Mr. Meinen's compensation
package has been designed to encourage overall company performance and increase
shareholder value.
On an annual basis, the Committee reviews an independent survey
analysis which compares Mr. Meinen's compensation to an industry peer group. In
the review process, the Committee also considers the overall performance of the
Company and Mr. Meinen's management practices. As a result of such review, the
annual incentive bonus approved for Mr. Meinen for fiscal 1999 was $45,000,
approximately 24.03% of his 1999 salary.
COMPENSATION COMMITTEE
Avrom H. Goldfeder
Sherwin Koopmans
Joseph A. Cari, Jr.
11
<PAGE> 13
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total return on the
Company's Common Stock with the cumulative total return on the NASDAQ-Total US
Market Index and the SNL Midwest Bank Index for the period from October 21,
1997, the date of the initial public offering of the Company's Common Stock, to
December 31, 1997, the end of the first fiscal year following such initial
public offering and the semi-annual periods from June 30, 1998 to December 31,
1999. The graph assumes $100.00 was invested on October 21, 1997. Cumulative
total return assumes that dividends, if any, were reinvested.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
PERIOD ENDING
----------------------------------------------------------------------------------
INDEX 10/21/97 12/31/97 6/30/98 12/31/98 6/30/99 12/31/99
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Success Bancshares, Inc. 100.00 90.91 90.91 74.38 71.07 66.12
NASDAQ - Total US* 100.00 92.97 110.59 1290.57 158.61 235.53
SNL Midwest Bank Index 100.00 110.54 117.07 117.07 122.01 92.38
</TABLE>
Although the graph would normally be provided for a five-year period
under the rules promulgated by the SEC, the Company's Common Stock has only been
publicly traded since October 21, 1997. The Company does not believe that the
comparative performance of its Common Stock over such a short period of time is
necessarily a meaningful measure of the Company's total performance and
indicative of the Company's future stockholder return.
12
<PAGE> 14
INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has appointed McGladrey & Pullen,
LLP to act as independent public accountants for the Company for 2000.
Representatives of McGladrey & Pullen, LLP will be present at the Meeting, will
have the opportunity to make a statement, if they so desire, and will be
available to respond to stockholders' questions.
OTHER MATTERS
No other matters have been presented in accordance with the Company's
By-laws for presentation in this Proxy Statement to be considered at the Meeting
or any adjournment thereof. If any other matters are properly brought before the
Meeting, it is the intention of the persons named as proxies in the accompanying
form of proxy to vote the shares represented thereby in accordance with their
best judgement.
STOCKHOLDER PROPOSALS
Stockholder proposals submitted for evaluation as to inclusion in the
proxy materials for the Company's annual meeting of stockholders to be held in
2001 must be received by the Company not later than December 27, 2000, at the
Company's principal executive offices at 100 Tri-State International, Suite 300,
P.O. Box 1499, Lincolnshire, Illinois 60069-1499. In addition, proxies appointed
by management will use their discretionary authority to vote the shares they
represent as the Board of Directors may recommend when a stockholder raises any
proposal which was not included in the Company's proxy materials for
consideration at the annual meeting of stockholders to be held in 2001 if the
Company did not receive proper notice of such proposal at its principal
executive offices by December 27, 2000. Under the Company's by-laws, in order
for any stockholder proposal that is not included in the Company's proxy
materials to be brought before the annual meeting of stockholders to be held in
2001, such proposal must be received at the Company's principal executive
offices between February 23, 2001 and March 15, 2001.
For the Board of Directors,
/s/ WILBUR G. MEINEN, JR.
Wilbur G. Meinen, Jr.
Chairman of the Board of Directors
April 26, 2000
13
<PAGE> 15
SUCCESS BANCSHARES, INC.
101 TRI STATE INTERNATIONAL, SUITE 300
LINCOLNSHIRE, ILLINOIS 60069
PROXY
THIS PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS ON MAY 24, 2000
The undersigned hereby appoints Glen Wherfel and Avrom H. Goldfeder,
and each them, as proxies of the undersigned, with full power of substitution,
to vote, as specified herein, all shares of Common Stock of Success Bancshares,
Inc. (the "Company") owned on the record date by the undersigned at the Annual
Meeting of Stockholders to be held on May 24, 2000 and at any postponements or
adjournments thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTIONS ARE GIVEN, THIS
PROXY WILL BE VOTED FOR THE ELECTION AS DIRECTOR OF ALL THE NOMINEES NAMED ON
THE REVERSE SIDE IN PROPOSAL 1.
(Continued and to be signed and dated on reverse side.)
- --------------------------------------------------------------------------------
<PAGE> 16
<TABLE>
<S><C>
SUCCESS BANCSHARES, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK IN ONLY. [ ]
[ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSALS.
1. ELECTION OF DIRECTORS: For Withhold For All 2. In their discretion the proxies are authorized
NOMINEES: 01-NORMAN D. RICH AND All All Except to vote upon such other matters as may properly
02-JOSEPH A. CARL, JR. [ ] [ ] [ ] come before the meeting and at any postponements
or adjournments thereof.
(INSTRUCTION: to withhold authority to Please send an admission ticket for the Annual
vote for any individual nominee, write Meeting. [ ]
nominee's name in the space provided
below.)
Dated: , 2000
-------------------------------------- -------------------------------------
Signature:
---------------------------------------
Signature:
---------------------------------------
IMPORTANT: Please sign exactly as name appears
herein. Each joint owner should sign. Executors,
administrators, trustees and officials signing
in a representative capacity should give full
title. If a corporation, please sign in full
corporate name by authorized officer. If a
partnership, please sign in partnership name by
authorized person.
- ------------------------------------------------------------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
YOUR VOTE IS IMPORTANT.
PLEASE MARK, DATE, SIGN AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
</TABLE>
