<PAGE> 1
March 25, 1997
TO OUR SHAREHOLDERS:
I would like to invite you to attend the 1997 Annual Meeting of Shareholders of
CORUS BANKSHARES, INC., to be held on Wednesday, May 21, 1997 at 10:00 a.m. at
the CORUS BANK, N.A., 4800 N. Western Avenue, Chicago, Illinois.
The primary purpose of the Annual Meeting will be to elect seven directors and
ratify the appointment of Arthur Andersen LLP as independent auditors of CORUS
for 1997. We will also be sharing with you information about our performance
during 1996. Additionally, the Annual Meeting will give you an opportunity to
meet our Directors and our Senior Officers.
WHETHER YOU PLAN TO ATTEND THE ANNUAL MEETING OR NOT, PLEASE DATE AND SIGN THE
ENCLOSED PROXY AND RETURN IT IN THE ACCOMPANYING ENVELOPE. YOUR VOTE IS VERY
IMPORTANT REGARDLESS OF HOW MANY SHARES YOU OWN. If you do attend the Annual
Meeting and wish to vote in person, you may do so, even though you have
previously sent in a proxy.
I look forward to seeing you at the Meeting.
Very truly yours,
[Signature]
Robert J. Glickman
President and Chief Executive Officer
<PAGE> 2
CORUS BANKSHARES, INC.
3959 North Lincoln Avenue
Chicago, Illinois 60613
PROXY STATEMENT
The enclosed proxy is solicited on behalf of the Board of Directors of CORUS
BANKSHARES, INC. ("CORUS") for use at the Annual Meeting of Shareholders, to be
held on May 21, 1997, at 10:00 a.m., in the office of CORUS BANK, N.A., 4800 N.
Western Avenue, Chicago, Illinois, or at any adjournment of such meeting. Each
proxy received from shareholders will be voted at the meeting and, if
specified, as directed, by the shareholder. Unless contrary instructions are
given, the proxy will be voted at the meeting for the election of the nominees
for the office of Director, as set forth below, ratification of Arthur Andersen
LLP as independent auditors and, in accordance with the best judgment of the
holders thereof, any other business which may properly come before the meeting
and be submitted to a vote of the shareholders. Shares represented by proxies
which are marked "withholding authority" with respect to the election of one or
more nominees for election as directors, proxies which are marked "abstain" on
other proposals, and proxies which are marked deny discretionary authority on
other matters WILL NOT be counted in determining whether a majority vote was
obtained in such matters. With respect to brokers who are prohibited from
exercising discretionary authority for beneficial owners who have not returned
proxies to the brokers, those shares WILL NOT be included in the vote totals.
A proxy may be revoked at any time prior to its exercise by means of a written
revocation or a properly executed proxy bearing a later date. Shareholders
having executed and returned a proxy who attend the meeting and desire to vote
in person are requested to so notify the Secretary of CORUS prior to or at the
time of a vote taken at the meeting. The cost of soliciting proxies in the
accompanying form has been or will be borne by CORUS.
OUTSTANDING VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
CORUS has 14,820,242 shares of $0.05 par value Common Stock outstanding. Each
share is entitled to one vote. Shareholders of record as of the close of
business on February 28, 1997 are entitled to vote at the meeting. So far as
is known to CORUS, as of February 28, 1997, the following shareholders owned
beneficially or of record more than five percent (5%) of the Common Stock of
CORUS:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
SHAREHOLDER ADDRESS BENEFICIAL OWNERSHIP PERCENT
- ------------ ---------------------- -------------------- -------
<S> <C> <C> <C>
R. J. Glickman River Forest, Illinois 3,732,376 (1) 25.2%
J.C. and B.R. Glickman LaJolla, California 2,175,947 (2) 14.7%
E.W. Glickman Edina, Minnesota 953,166 (3) 6.4%
</TABLE>
(1) Includes 210,000 shares subject to employee stock options exercisable
currently. Also includes: 783,054 shares held as sole trustee of two trusts
for the benefit of his brother and sister, E.W.Glickman and E.G. Galinson,
respectively; 387,230 shares held as sole trustee of various trusts for the
benefit of his children; and 59,126 shares owned by the Robert and Caryn
Glickman Foundation of which Robert J. Glickman is a director and an officer.
1
<PAGE> 3
(2) Includes 2,175,797 shares held as co-trustee of the Glickman Family Trust,
dated April 21, 1983. Of the aforesaid shares, 1,031,721 shares are
attributable to B.R. Glickman, his wife, and 1,144,076 shares to J.C. Glickman.
B.R. Glickman and J.C. Glickman, under the terms of the Glickman Family Trust,
share the voting and investment control over the above described 2,175,797
shares.
(3) Includes 67,630 shares held as trustee for the benefit of various
relatives of Joseph C. Glickman under Glickman Family Trusts dated September
21, 1987 and March 9, 1992, and 6,000 shares held as trustee for the benefit of
his children.
ELECTION OF DIRECTORS AND OWNERSHIP OF SHARES
The Bylaws of CORUS provide that the "Board shall consist of not less than five
nor more than thirteen in number as may be determined at each Annual Meeting of
the Shareholders of the Company". The Bylaws also state that at the Annual
Meeting of Shareholders the concurrence of a majority of all the issued and
outstanding stock entitled to vote thereat shall be required for taking any
action by the shareholders including the election of directors. At the
meeting, it will be proposed to elect seven directors to hold office until the
next Annual Meeting of Shareholders and until their successors are elected and
qualify. Shareholders of CORUS have no cumulative voting rights with respect to
the election of directors.
The following individuals are nominees for election. All of the nominees have
indicated a willingness to serve, but in case any of the nominees is not a
candidate at the Annual Meeting, it is the intention of the proxy holders to
vote in favor of the remainder of those named and to vote for substitute
nominees in their discretion. Information regarding these seven nominees and
the number of shares of Common Stock beneficially owned by them as of February
28, 1997, is set forth below:
<TABLE>
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
DIRECTOR NOMINEES
- ----------------------------------------------------------------------------------------------------------------
NAME, AGE AND PERIOD OF PRINCIPAL OCCUPATION AND
SERVICE AS A DIRECTOR DIRECTORSHIPS FOR PAST FIVE YEARS
- ----------------------------------------------------------------------------------------------------------------
<S> <C>
JOSEPH C. GLICKMAN (81) Chairman of the Board of Directors of CORUS.
Director since 1958
- ----------------------------------------------------------------------------------------------------------------
ROBERT J. GLICKMAN (50) President, Chief Executive Officer and Director of CORUS.
Director since 1972 Director CORUS BANK, N.A. Son of J.C. Glickman.
- ----------------------------------------------------------------------------------------------------------------
KARL H. HORN (73) Consultant, Zenith Electronics Corporation.
Director since 1980
- ----------------------------------------------------------------------------------------------------------------
MICHAEL LEVITT (52) President, Consolidated Currency Exchanges, Inc.
Director since 1990
- ----------------------------------------------------------------------------------------------------------------
RODNEY D. LUBEZNIK (49) President and Director, Restaurant Management Corp.
Director since 1994
- ----------------------------------------------------------------------------------------------------------------
MICHAEL TANG (42) Chief Executive Officer, Midwest Metallics, L.P. Previously,
Director since 1995 Chief Executive Officer, National Material L.P.
- ----------------------------------------------------------------------------------------------------------------
WILLIAM H. WENDT, III (54) President and Director, Midwest Metal Products.
Director since 1980
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 4
SECURITY OWNERSHIP OF MANAGEMENT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
OF COMMON SHARES
DIRECTOR NOMINEES ADDRESS AT FEBRUARY 28, 1997 PERCENT
- ----------------- ------- --------------------------- -------
<S> <C> <C> <C>
Robert J. Glickman River Forest, Illinois 3,732,376 (5) 25.2%
Joseph C. Glickman La Jolla, California 2,175,947 14.7%
Karl H. Horn Jackson, Tennessee 1,200 *
Michael Levitt Chicago, Illinois 8,000 0.1%
Rodney D. Lubeznik Michigan City, Indiana 1,200 *
Michael Tang Elk Grove Village, Illinois 1,000 *
William H. Wendt, III Long Beach, Indiana 10,000 0.1%
OTHER NAMED EXECUTIVE OFFICERS
- ------------------------------
David H. Johnson, III Hinsdale, Illinois 12,700 (6) 0.1%
Michael G. Stein Skokie, Illinois 1,900 (7) *
Terence W. Keenan Northbrook, Illinois 22,000 (8) 0.1%
Directors and all Executive Officers as a Group (17 in total) 5,985,513 40.4%
</TABLE>
* Represents less than 0.1% of total common shares outstanding
(5) Includes 210,000 vested stock options
(6) Includes 6,000 vested stock options
(7) Includes 1,600 vested stock options
(8) Includes 20,000 vested stock options
All four Board of Directors meetings were attended by all of the directors in
1996, with the exception of Directors Levitt and Tang who both were absent
once. The entire Board of Directors are members of the Compensation Committee.
Directors J.C. Glickman, Horn and Levitt serve on the Stock Option Committee
which met once in 1996. Directors J.C. Glickman, R.J. Glickman and Levitt
serve on the Nominating Committee which did not meet in 1996. The functions of
the Nominating Committee are to identify and recommend to the Board of
Directors candidates for director nomination.
The Audit Committee includes Directors Horn, Levitt and Lubeznik. In addition
to reviewing internal control reports and regulatory examination reports, the
Audit Committee recommends the independent auditors for appointment by the
Board of Directors and reviews the results of the audit engagement. There were
four Audit Committee meetings held in 1996 with all committee members present
with the exception of Director Levitt who was absent once.
3
<PAGE> 5
EXECUTIVE COMPENSATION
The following table sets forth all cash compensation for services in all
capacities to CORUS and its subsidiaries during the last three fiscal years by
CORUS' Chairman of the Board and Chief Executive Officer and includes the five
highest-paid executive officers, who were serving as executive officers at
December 31, 1996, as measured by 1996 compensation levels.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
- -----------------------------------------------------------------------------------------------------------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
OTHER RESTRIC- SECURITIES ALL
NAME ANNUAL TED UNDER- OTHER
AND COMPEN- STOCK LYING LTIP COMPEN-
PRINCIPAL SALARY BONUS SATION (9) AWARDS OPTIONS/ PAYOUTS SATION(10)
POSITION YEAR ($) ($) ($) ($) SARS (#) ($) ($)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J.C. Glickman 1996 150,000 250,000 0 0 0 0 0
Chairman of the 1995 100,000 250,000 0 0 0 0 0
Board 1994 100,000 0 0 0 0 0 0
R.J. Glickman 1996 450,000 500,000 0 0 0 0 0
President and 1995 390,000 500,000 6,210 0 50,000 0 0
CEO 1994 360,000 450,000 2,230 0 0 0 0
D.H. Johnson, III 1996 200,000 130,000 0 0 6,000 0 750
Executive Vice 1995 162,500 100,000 0 0 6,000 0 750
President 1994 135,000 40,000 0 0 2,000 0 750
M.G. Stein 1996 120,000 431,551 0 0 0 0 750
Executive Vice 1995 100,000 658,147 0 0 0 0 750
President,
CORUS BANK, N.A. 1994 80,000 50,000 0 0 4,000 0 750
T.W. Keenan 1996 175,000 127,056 0 0 0 0 750
Senior Vice 1995 175,000 50,000 456 0 0 0 750
President,
CORUS BANK, N.A. 1994 175,000 10,000 1,570 0 0 0 750
</TABLE>
(9) Represents compensation associated with use of company car.
(10) Represents 401(k) matching contributions.
STOCK OPTION PLAN
The CORUS BANKSHARES, INC. 1990 Stock Option Plan ("the Plan") was approved by
CORUS' shareholders in 1991. The purpose of the Plan is to promote the
long-term interests of CORUS by providing an incentive for certain key officers
to maintain and enhance the performance and profitability of CORUS and to give
key officers a proprietary interest in the success of CORUS. The Plan is
administered by the Stock Option Committee of the Board of Directors of CORUS.
The Stock Option Committee has, subject to the express limitations of the Plan,
the full power to (1) select which key
4
<PAGE> 6
employees will receive Awards, (2) fix the number of shares in each Award, (3)
establish the time and conditions of vesting any Award, (4) establish the
specific type of Award granted: Incentive Stock Options, Non-Qualified Stock
Options, Stock Appreciation Rights ("SARs") or Restricted Stock, and (5) to
interpret and implement the Plan and make all determinations necessary and
advisable in administering the Plan. All awards (whether Stock Options or SARs)
shall specify an option price, which is payable upon the exercise of the Award.
The option price shall not be less than 100% of the fair market value of the
underlying common stock on the date of grant.
As of December 31, 1996, options to purchase 359,250 shares of Common Stock
were outstanding and a total of 90,350 shares of Common Stock were available
for grant under the Plan. All outstanding options are in the form of
Non-Qualified Stock Options and range in exercise price from $10.50 to $30.00.
In general, the stock options granted are exercisable on a schedule which vests
one hundred percent (100%) of the total shares granted over five years
beginning with 20% of the shares vesting one year from the date of grant and in
equal proportions annually thereafter. Certain grants, however, have allowed
for immediate vesting of partial shares as well as extended vesting schedules.
The fair market value of the common stock was equal to or less than the
exercise price on the date of grant.
If a participant's employment is terminated by reason of death, disability or
retirement, any outstanding stock options or SARs then exercisable may be
exercised at any time prior to expiration date of the stock options or SARs or
within one year after the such date of termination of employment, whichever is
shorter. If employment is terminated for any other reason, the stock option or
SAR will be exercisable for one month or for the remaining term of the stock
option or SAR, whichever is shorter. Employees terminated for "cause" will
forfeit immediately all rights to exercise stock options or SARs. Cause shall
mean: gross misconduct, conviction of a felony, or suspension due to the
direction of any bank regulatory agency. Stock options and SARs are not
transferable except by will or the laws of descent and distribution.
Under the current Federal income tax laws, Awards under the Plan will have the
following tax consequences: The grant of a Non-Qualified Stock Option creates
no taxable income to a participant and no tax-deduction to CORUS. The
participant will recognize income to the extent that the fair market value of
the Common Stock at exercise exceeds the option price and will be obligated to
satisfy withholding taxes. When the Common Stock eventually is sold by the
participant, capital gain treatment will be applicable. To the extent the
participant recognizes ordinary income at the time of exercise, CORUS will be
entitled to a corresponding tax deduction. The grant of SARs creates no
taxable income. Any amounts ultimately paid on exercise of SARs will be
ordinary income to the participant and CORUS will receive a corresponding tax
deduction. The use of Common Stock as a payout medium does not change the tax
treatment.
In the event of a change of control of CORUS, all Awards under the Plan will
become fully exercisable or nonforfeitable, as appropriate. A change in
control is deemed to occur when any person or group of affiliated persons
become the beneficial owner of fifty percent (50%) or more of the outstanding
voting stock of CORUS or upon approval by CORUS' shareholders of certain
merger or sale transactions.
5
<PAGE> 7
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides stock options granted in 1996 to the named
executive officers.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
- --------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
- --------------------------------------------------------------------------------------------
(A) (B) (C) (D) (E) (F) (G)
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/
UNDERLYING SARS
OPTIONS/SARS GRANTED TO EXERCISE OR
GRANTED EMPLOYEES BASE PRICE EXPIRATION
NAME (#) IN 1996 ($/SH) DATE 5% ($) 10% ($)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
J.C. Glickman 0 N/A N/A N/A N/A N/A
R.J. Glickman 0 N/A N/A N/A N/A N/A
D.H. Johnson, III 6,000 20.7 30.00 7/31/2006 66,960 131,634
M.G. Stein 0 N/A N/A N/A N/A N/A
T.W. Keenan 0 N/A N/A N/A N/A N/A
</TABLE>
The options in the table above were granted July 23, 1996 and become
exercisable as to 20% of the options one year from the date of grant and
annually thereafter over a five year period.
AGGREGATED OPTION/SAR EXERCISES AND YEAR-END VALUES
The following table summarizes stock options that were exercised by each of the
named executives during 1996 and the number and value of stock options that
were unexercised at December 31, 1996.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
- -------------------------------------------------------------------------------------------------------
(A) (B) (C) (D) (E)
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED IN-THE MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
DECEMBER 31, 1996 (#) DECEMBER 31, 1996 ($)
SHARES
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
J.C. Glickman 0 0 0/0 0/0
R.J. Glickman 0 0 210,000/40,000 3,754,000/520,000
D.H. Johnson, III 0 0 6,000/12,000 86,880/92,220
M.G. Stein 0 0 1,600/2,400 21,760/32,640
T.W. Keenan 0 0 20,000/0 377,500/0
</TABLE>
6
<PAGE> 8
The numbers and amounts in the above table represent non-qualified stock
options. There have been no SARs or incentive stock options granted since the
inception of the Plan to date.
LONG-TERM INCENTIVE PLAN AWARDS TABLE
CORUS made no long-term incentive plan awards in 1996 and has no such awards
outstanding.
BENEFIT PLANS
Upon attainment of normal retirement date, the participant is entitled to
receive a monthly benefit for life equal to 22.5% of final monthly average
compensation up to covered compensation, plus 37.5% of such participants final
monthly compensation in excess of covered compensation, decreased
proportionately for less than 30 years of credited service. The maximum level
of annual compensation for computing retirement benefits in 1996 and 1995 was
$150,000. An employee is vested in the plan after five years of service.
The following table has built in reasonable increases in compensation on the
existing salary ranges up to a maximum final average compensation level of
$200,000, indexed for the respective years and sets forth the estimated annual
benefits payable upon retirement at age 65 for the specified compensation and
years of service. The pension benefits are on the basis of a straight life
annuity and are not reduced for social security or other benefits received by
participants. Annual pension benefits remain fixed after 30 years of service.
<TABLE>
<CAPTION>
FINAL AVERAGE YEARS OF SERVICE
-------------------------------------------
COMPENSATION (11) 10 20 25 30 35
- --------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$125,000 $12,955 $25,910 $32,388 $38,865 $38,865
150,000 16,080 32,160 40,200 48,240 48,240
175,000 16,080 32,160 40,200 48,240 48,240
200,000 16,080 32,160 40,200 48,240 48,240
</TABLE>
(11) The average annual compensation includes the participant's salary and
bonus. R.J. Glickman, D.H. Johnson, III, M.G. Stein and T.W. Keenan all had
salary and bonus in excess of $150,000, and as such, are covered only up to the
maximum average compensation of $150,000. J.C. Glickman is not covered under
CORUS' retirement plan.
The years of credited service as of December 31, 1996 for the individuals in
the cash compensation table are as follows: R.J. Glickman, 27.0 years; D.H.
Johnson, III, 5.0 years; M.G. Stein, 5.5 years; and, T.W. Keenan, 6.0 years.
The CORUS BANKSHARES Employees' Savings Plan & Trust ("the 401(k) Plan") is a
defined contribution plan which is offered to employees who have completed one
year of service and who are at least 21 years in age. Under the plan an
employee may contribute up to 15% of compensation, not to exceed $9,500 in
1996, into a retirement investment program. Employees are vested in the
matching contributions and the interest thereon after five years of credited
service in the Plan. In 1996, CORUS matched 20% of pretax contributions to a
maximum contribution of $750 per person. Matching contributions for D.H.
Johnson, III, M.G. Stein and T.W. Keenan were $750 per person in 1996. J.C
Glickman and R.J. Glickman did not participate in CORUS' 401(k) Plan in 1996.
7
<PAGE> 9
R.J. Glickman, D.H. Johnson, III, M.G. Stein and T.W. Keenan are covered under
the medical and dental insurance plans offered by CORUS to all of its full-time
employees.
COMPENSATION OF DIRECTORS
No fees were paid to J.C. Glickman and R.J. Glickman for directors or committee
meetings in 1996. Directors Horn, Levitt, Lubeznik, Tang and Wendt were paid
$2,500 per Board of Directors meeting attended in the first two quarters of
1996 and $3,000 per Board of Directors meeting attended in the third and fourth
quarters of 1996. Directors Horn, Levitt and Lubeznik were paid $1,000 per
audit committee meeting attended in 1996. Directors Horn and Levitt were paid
$500 in conjunction with the stock option committee meeting attended in 1996.
CHANGE-OF-CONTROL AGREEMENTS
CORUS currently has Change-In-Control Employment Agreements ("Agreements") with
Messrs. D.H. Johnson III, M.G. Stein and T.W. Keenan and seven other executive
officers ("Covered Executives") not named in the Summary Compensation Table.
The purpose of the Agreements is to provide severance compensation to each
covered executive officer in the event of the voluntary or involuntary
termination after a change in control of CORUS. "Change-in-control" generally
occurs on the date when an individual, corporation or partnership (with certain
exceptions) becomes a beneficial owner (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934), directly or indirectly, of the stock of CORUS
representing 50% or more of the total voting power of CORUS' then outstanding
stock.
Compensation provided to the Covered Executives would be in the form of a lump
sum payment equal to (1) 115%-267% of the Covered Executive's annual base
salary if that person resigns for good reason or if that person is terminated
by CORUS (other than for cause), or (2) 58%-133% of the Covered Executive's
annual base salary if the executive initiates termination during the 30-day
period following the first anniversary of the change in control. "Good reason"
means (i) a material diminution of the executive's responsibilities or the
assignment of inappropriate duties; (ii) any failure by CORUS to comply with
the provisions of the agreement relating to compensation and benefit, or (iii)
CORUS' relocation of the executive's principal job location to a location,
other than CORUS' headquarters on the date of the Change-in-Control, more than
35 miles from his principal job location on the date of the Change-in-Control.
However, no severance compensation is due the Covered Executive if employment
is terminated for cause. Additionally, no severance compensation would be due
after the death of a Covered Executive. In the event the Covered Executive
obtains other employment prior to the first anniversary of the date of his
termination of employment with CORUS, he shall repay CORUS an amount equal to
50% of any compensation received from such employment received during the
twelve month period following termination from CORUS but not more than the lump
sum payment, if any, received by the Covered Executive. Additionally,
severance payments will be reduced and/or eliminated if the payments are
prohibited by any banking regulations.
The term of the Agreements vary by Covered Executive, however, all go through
December 31, 1997; provided, however, that on such date and on each December
31st thereafter, the term of the agreements shall automatically be extended for
one additional year unless either party shall have given ninety days notice
prior to the expiration of the term that such party does not wish to extend the
term. Further, if a change of control shall have occurred during the original
or any extended term of the Agreement, the term of the Agreement shall continue
for a period of thirty-six calendar months beyond the calendar month in
8
<PAGE> 10
which such change of control occurs. In no event will the term of the Agreement
extend beyond the Covered Executive's attainment of age 65.
REPORT ON REPRICING OF OPTIONS/SARS
At no time during the fiscal year ended December 31, 1996 did CORUS adjust or
amend the exercise price of existing stock options or SARs.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
CORUS' entire Board of Directors participates in determining executive officer
compensation and, therefore, has no compensation committee. J.C. Glickman and
R.J. Glickman abstain from votes of the CORUS' Board of Directors regarding
their own compensation as officers of CORUS. CORUS' Board of Directors had no
compensation committee interlocks with any other entity.
BOARD REPORT ON EXECUTIVE COMPENSATION
OVERALL COMPENSATION PHILOSOPHY
CORUS' executive compensation objective is to link compensation with corporate
and individual performance in a manner which, recognizing the marketplace
practices of other bank holding companies, will retain and attract executives
who can achieve the short and long term goals of CORUS. The policy is to
provide for competitive base salaries which reflect individual levels of
responsibility and performance, annual bonuses based upon achievement of annual
corporate performance, and awarding of stock-based incentive opportunities.
The combined result is a strengthening of the mutuality of interest in CORUS'
long-term performance between its executive officers and CORUS' shareholders.
TIMING OF THE BOARD OF DIRECTOR COMPENSATION REVIEW
The Board of Directors (the "Board") awarded 1996 bonuses at its November 13,
1996 meeting and set 1996 base salaries at its November 15, 1995 meeting. This
report is based upon the decisions made at those meetings. To the extent that
specific performance factors were discussed, the Board considered CORUS'
actual performance for the nine months ended September 30, 1996 and projections
for the entire fiscal year.
CORUS' entire Board participates in determining executive officer compensation.
CORUS does not have a separate compensation committee.
PEER GROUP COMPARISONS
At various stages of this report, the members of the Board assess CORUS'
performance relative to its peer publicly traded bank holding companies ranging
in size of $2-$5 billion in the current year and over time. This peer group is
the appropriate group to utilize when assessing comparative performance factors
and the peer group is a subset of the NASDAQ BANK STOCKS indices used in the
performance graph on page 13.
9
<PAGE> 11
BASE SALARIES
A base salary has been established for each executive officer. These base
salaries are established in relation to the external marketplace and internal
factors including but not limited to the following factors: (1) the
compensation history of the individual officer, (2) the individual's years of
experience with CORUS and in the industry, (3) the performance and contribution
of the officer relative to their job responsibility, (4) the achievement of
certain financial performance ratios as they relate to the respective executive
officers' job responsibilities (see specific factors discussed in relation to
the CEO in the "CEO Compensation" section below), and (5) the current financial
condition of CORUS. Additionally, the Board also considers various
qualitative factors including but not limited to knowledge of the banking
industry, the ability to recruit and build a management team, commitment and
dedication, and entrepreneurial spirit. As a matter of policy, the Board does
not assign weights to the factors above for any of its executive officers due
to the belief that the evaluation and awarding of compensation to the executive
officer group cannot be simplified to a mathematical computation. As such, the
compensation policy used by the Board to set base salaries is considered
subjective.
BONUSES
Executives may earn cash bonuses on an annual basis (the "Bonus Program"). The
Bonus Program is designed to promote a pay-for-performance philosophy by
placing a significant portion of total compensation "at risk" while rewarding
outstanding performance or achievement. The Board considers the achievements
of each executive officer for that year. The achievements may be quantitative
or qualitative. Qualitative factors include but are not limited to commitment,
dedication, or a demonstration of the entrepreneurial spirit. The Board is of
the opinion that CORUS is still small enough of an organization to know what
contribution an executive officer has made in a given year.
STOCK OPTIONS
CORUS may grant stock options pursuant to the 1990 Stock Option Plan, which was
approved by the shareholders in 1991. In 1996, D.H. Johnson, III was granted
6,000 stock options. No other named executives were granted options during
1996. All named executive officers presently hold stock options, except for
J.C. Glickman who does not participate in CORUS' Stock Option Plan. The Board
felt that the present level of options, after consideration of the 1996 grants,
was appropriate.
The Board does not assign specific company or individual objectives when
evaluating the awarding of stock options for the CEO or its other executive
officers; and, as such, the compensation policies used by the Board when
determining stock option awards are considered subjective.
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<PAGE> 12
CEO COMPENSATION
The factors discussed above in the "Base Salary" section are the basis for
determining the base salary level of the CEO, Mr. Robert J. Glickman.
Accordingly, Mr. Glickman's salary was increased 15.4% from 1995 to 1996.
The 1996 bonus amount to the CEO was based on his leadership in attaining,
among other criteria, the following:
(1) For the three months ended September 30, 1996, CORUS'
1996 return on average assets and return on average equity were
2.02% and 20.47%, respectively. At the November, 1996 Board
meeting, the members considered these actual performance factors
along with annual projections which indicated similar ratios for
the entire fiscal year. By comparison, our peer group had
performance ratios of approximately 1.19% and 13.67%,
respectively, for the same period in 1996. These two performance
measures traditionally have placed CORUS near the top of its
peer group.
(2) CORUS' efficiency ratio for the first nine months of
1996 was approximately 36%, whereas our peer group experienced
an efficiency ratio of approximately 60%. The efficiency ratio is
a banking industry measure which is calculated by dividing
noninterest expenses by the sum of noninterest income (net of
security gains) and fully tax-equivalent net interest income. A
ratio of less than 60% is generally considered very good in the
banking industry. As such, CORUS' result in 1996 continues to be
considered outstanding by the Board.
(3) CORUS' fully tax-equivalent net interest margin
increased from 5.41% for the year ended December 31, 1995 to
5.51% for the nine months ended September 30, 1996. The increase
in 1996 net interest income was primarily due to a $223.5
million, or 12.1%, increase in average earning assets. Successful
management and prudent asset/liability management have enabled
management to outperform its peers over the last several years.
This favorable net interest margin significantly contributed to
the superior performance measures such as the returns on average
assets and average equity discussed in (1) above.
(4) During the first nine months of 1996, CORUS' average
growth in loans was approximately $281.9 million or 21.4%. This
growth in loans can be attributed to management's continuing
efforts to originate competitive products in the student loan,
home equity and commercial real estate loan areas.
(5) Over the past five years, the total return of CORUS'
stock has not performed as well as the NASDAQ STOCK MARKET index
and the NASDAQ BANK STOCK index as reflected in the performance
graph on page 13. However, the related appreciation of CORUS'
stock price over the past five year period equates to a gain to
its shareholders of approximately $211,000,000, and the Board
believes that CORUS is well positioned for future growth and
stock price appreciation.
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<PAGE> 13
(6) The members of the Board have determined that R.J.
Glickman is a person with extreme dedication to the success of
CORUS and has exhibited such dedication through his
entrepreneurial spirit, hard work ethic, knowledge of the banking
industry and his ability to recruit a management team with the
same characteristics.
CONCLUSION
The Board believes the executive officers' individual compensation programs
discussed in this report are designed in a manner which is consistent with
CORUS' overall compensation philosophy. As such, the compensation provided to
CORUS' CEO, Mr. R. J. Glickman, and to the other executive officers is deemed
appropriate.
JOSEPH C. GLICKMAN
ROBERT J. GLICKMAN
KARL H. HORN
MICHAEL LEVITT
RODNEY D. LUBEZNIK
MICHAEL TANG
WILLIAM H. WENDT, III
PERFORMANCE GRAPH
The performance graph on the following page compares the yearly percentage
change in CORUS' cumulative shareholder return on common stock compared with
the cumulative total return on composites of 1) all NASDAQ stocks for United
States companies (broad market index) and 2) all NASDAQ bank stocks (peer group
index) over the last five years. Cumulative shareholder return is computed by
dividing the sum of the cumulative amount of dividends for the measurement
period and the difference between the registrant's share price at the end and
beginning of the measurement period by the share price at the beginning of the
measurement period. The NASDAQ Stock Market for United States Companies index
comprises all domestic common shares traded on the NASDAQ National Market and
the NASDAQ Small-Cap Market. The NASDAQ Bank Stocks index comprises all banks
traded on the NASDAQ National Market and NASDAQ Small-Cap Market.
12
<PAGE> 14
The following graph compares the five year cumulative total return of
CORUS' common stock with the Nasdaq Stock Market (U.S.) and the Nasdaq Bank
Stocks indices. The return assumes a $100 investment made on December 31, 1991
and the reinvestment of all dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
CORUS BANKSHARES, INC., NASDAQ STOCK MARKET (U.S.), AND
NASDAQ BANK STOCKS
[GRAPH]
<TABLE>
<CAPTION>
Dollar Value of Investment at December 31
-----------------------------------------
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Nasdaq Stock Market (US) $100 $116 $134 $131 $185 $227
Nasdaq Bank Stocks 100 146 166 165 246 326
CORUS Bankshares, Inc. 100 121 114 101 159 205
</TABLE>
13
<PAGE> 15
TRANSACTIONS WITH MANAGEMENT AND OTHERS
Certain Directors and Executive Officers are, at present, customers of CORUS'
subsidiary bank and have transactions with the bank in the ordinary course of
business. Such transactions have been and will continue to be on the same
terms, including interest rates and collateral on loans, as those prevailing at
the time for comparable transactions with other persons. Such transactions did
not, and will not, involve more than the normal risk of collectability or
present other unfavorable features.
SECTION 16 FILINGS
Section 16 of the Securities Exchange Act requires directors, certain officers
and certain other owners to periodically file notices of changes in beneficial
ownership of Common Stock with the Securities and Exchange Commission. To the
best of CORUS' knowledge, during 1996 all required filings were timely
submitted, except for a Form 4 filing by Christopher Glancy, Senior Vice
President, CORUS BANK, N.A.
INDEPENDENT AUDITORS
On February 12, 1997, the Audit Committee and Board of Directors of CORUS
recommended that the shareholders ratify Arthur Andersen LLP at the 1997 Annual
Meeting as independent auditors of CORUS for the year ending December 31,
1997. This recommendation caused the dismissal of KPMG Peat Marwick LLP as the
independent auditors of CORUS.
One or more representatives of Arthur Andersen LLP will be present at the
meeting and will have the opportunity to make a statement if they desire to do
so. Arthur Andersen LLP representatives will be available to respond to
appropriate questions that shareholders may have.
Audit fees for the current fiscal year are expected to be approximately
$150,000 unless there are additional acquisitions by CORUS. Existing policy
requires that all services furnished to CORUS by its independent auditors be
furnished at customary rates and terms.
FUTURE PROPOSALS
Shareholders' proposals intended to be presented at CORUS' 1998 Annual Meeting,
including nominees for director to be considered by the Nominating Committee,
must be received in writing by the Secretary of CORUS no later than December
1, 1997, in order to be considered for inclusion in the proxy material for that
meeting.
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<PAGE> 16
OTHER BUSINESS
CORUS is unaware of any other matter to be acted upon at the meeting for
shareholder vote. In case of any matter properly coming before the meeting for
shareholder vote, the proxy holders named in the proxy accompanying this
statement shall vote them in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
Lawrence P. Wyrobek
Corporate Secretary
15
<PAGE> 17
CORUS BANKSHARES, INC.
3959 North Lincoln Avenue
Chicago, Illinois 60613
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE UNDERSIGNED, revoking previous proxies for such stock, hereby appoints J.C.
Glickman and R.J. Glickman and each of them the proxy of the undersigned with
full power of substitution, to vote all stock of CORUS BANKSHARES, Inc. which
the undersigned is entitled to vote at the Annual Meeting of Shareholders of
said Corporation TO BE HELD IN THE OFFICE OF CORUS BANK, N.A., 4800 N. WESTERN
AVENUE, CHICAGO, ILLINOIS 60625, at 10:00 a.m. on May 21, 1997, and at any
adjournment thereof:
<TABLE>
<CAPTION>
<S> <C>
1. ELECTION OF DIRECTORS
FOR all nominees listed below WITHHOLDING AUTHORITY to
(except as marked to the contrary below) vote for all nominees listed below
---------- ----------
</TABLE>
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE STRIKE
A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW)
Joseph C. Glickman Michael Levitt William H. Wendt, III
Robert J. Glickman Rodney D. Lubeznik
Karl H. Horn Michael Tang
2. PROPOSAL TO APPROVE THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE
INDEPENDENT AUDITORS OF THE COMPANY.
FOR AGAINST ABSTAIN
----------- ------------ ------------
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting. THIS PROXY WILL BE VOTED AS
DIRECTED. UNLESS OTHERWISE MARKED, PROXIES WILL BE VOTED FOR THE ELECTION OF
DIRECTORS AND RATIFICATION OF AUDITORS, AND IN ACCORDANCE WITH THEIR BEST
JUDGMENT UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE SAID MEETING OR
ANY ADJOURNMENT THEREOF.
The undersigned, may, at any time prior to the Annual Meeting of Shareholders,
revoke this Proxy.
Dated: ,1997
-------------------- --------------------------
Signature
--------------------------
Signature, if held jointly
(The shareholder's signature should be exactly as it appears on stock
certificate. In case stock is held jointly, all parties should sign. If you
sign as an attorney, trustee, administrator, executor or guardian, please
give full title as such. Corporations should sign by duly authorized officer
and affix seal.)
