<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
CORUS BANKSHARES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
CORUS BANKSHARES, INC.
- --------------------------------------------------------------------------------
(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.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
March 17, 1998
TO OUR SHAREHOLDERS:
I would like to invite you to attend the 1998 Annual Meeting of Shareholders of
CORUS BANKSHARES, INC., to be held on Wednesday, May 20, 1998 at 10:00 a.m. at
the CORUS BANK, N.A. branch at 4800 N. Western Avenue, Chicago, Illinois.
The primary purpose of the Annual Meeting will be to elect eight directors,
ratify the appointment of Arthur Andersen LLP as independent public accountants
for 1998 and approve the CORUS BANK, N.A. bonus program for commercial loan
officers. We will also be sharing with you information about our performance
during 1997. 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,
ROBERT GLICKMAN
<PAGE> 3
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 20, 1998, at 10:00 a.m., in the branch 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 public accountants, approval of the CORUS BANK, N.A. bonus
program for commercial loan officers, 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 14,576,142 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 27, 1998 are entitled to vote at the meeting. So far as
is known to CORUS, as of February 27, 1998, 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 Winnetka, Illinois 2,959,222 (1) 19.9%
J.C. and B.R. Glickman LaJolla, California 2,158,717 (2) 14.5%
E.W. Glickman Edina, Minnesota 1,313,843 (3) 8.8%
M.L. and E.G. Galinson LaJolla, California 1,033,757 (4) 7.0%
</TABLE>
(1) Includes 220,000 shares subject to employee stock options exercisable
currently. Also includes: 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. R.J. Glickman is the son of J.C. and B.R. Glickman
(2) Includes 2,158,717 shares held as co-trustee of the Glickman Family Trust,
dated April 21, 1983. Of the aforesaid shares, 1,014,641 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 2,158,717
shares.
1
<PAGE> 4
(3) Includes 391,527 shares held in trust for the benefit of E.W. Glickman with
R. J. Glickman as trustee; 39,070 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. E.W. Glickman is the son of J.C. and B.R. Glickman.
(4) Includes 394,560 shares held as co-trustee of their family trust; 391,527
shares held for the benefit of E.G. Galinson with R.J. Glickman as trustee;
142,640 shares held as trustee for the benefit of their children or a family
partnership; and, 105,000 shares held as co-trustee for various charitable
trusts or foundations. E.G. Galinson is the daughter of J.C. and B.R.
Glickman.
PROPOSAL ONE : ELECTION OF DIRECTORS
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 eight 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 eight nominees and
the number of shares of Common Stock beneficially owned by them as of February
27, 1998, is set forth below:
DIRECTOR NOMINEES
<TABLE>
<CAPTION>
NAME, AGE AND PERIOD OF PRINCIPAL OCCUPATION AND
SERVICE AS A DIRECTOR DIRECTORSHIPS FOR PAST FIVE YEARS
- --------------------------- --------------------------------------------
<S> <C>
JOSEPH C. GLICKMAN (82) Chairman of the Board of Directors of CORUS.
Director since 1958
ROBERT J. GLICKMAN (51) President, Chief Executive Officer and Director of
Director since 1972 CORUS. Director CORUS BANK, N.A. Son of J.C.
Glickman.
STEVEN D. FIFIELD (50) President and Chief Executive Officer, Fifield
Director since 1997 Realty Corp.
KARL H. HORN (74) Consultant, Zenith Electronics Corporation.
Director since 1980
MICHAEL LEVITT (53) President, Consolidated Currency Exchanges, Inc.
Director since 1990
RODNEY D. LUBEZNIK (50) President and Director, Restaurant Management Corp.
Director since 1994
MICHAEL TANG (43) Vice Chairman, National Material L.P. Previously,
Director since 1995 Chief Executive Officer, Midwest Metallics L.P.
WILLIAM H. WENDT, III (55) President and Director, Midwest Metal Products.
Director since 1980
</TABLE>
2
<PAGE> 5
SECURITY OWNERSHIP OF MANAGEMENT
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
OF COMMON SHARES
DIRECTOR NOMINEES ADDRESS AT FEBRUARY 27, 1998 PERCENT
- ----------------- ------------ -------------------- -------
<S> <C> <C> <C>
Robert J. Glickman Winnetka, Illinois 2,959,222 (5) 19.9%
Joseph C. Glickman La Jolla, California 2,158,717 14.5%
Steven D. Fifield Chicago, Illinois 4,000 *
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 15,500 (6) 0.1%
Richard J. Koretz Highland Park, Illinois 4,600 (7) *
Michael G. Stein Skokie, Illinois 5,000 (8) *
Directors and all Executive Officers as a Group (17 in total) 5,198,659 35.0%
</TABLE>
* Represents less than 0.1% of total common shares outstanding
(5) Includes 220,000 vested stock options
(6) Includes 8,800 vested stock options
(7) Includes 3,600 vested stock options
(8) Includes 2,400 vested stock options
All five Board of Directors meetings were attended by all of the directors in
1997, with the exception of Director Tang who was absent twice and Directors
J.C. Glickman, Lubeznik and Wendt who were absent once. Director Fifield was
named to the Board of Directors at the last meeting in 1997. 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 did not
meet in 1997. Directors J.C. Glickman, R.J. Glickman and Levitt serve on the
Nominating Committee which did not meet in 1997. 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 1997 with all committee members present.
3
<PAGE> 6
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, 1997, as measured by 1997 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>
Joseph C. Glickman 1997 150,000 250,000 0 0 0 0 0
Chairman of the 1996 150,000 250,000 0 0 0 0 0
Board 1995 100,000 250,000 0 0 0 0 0
Robert J. Glickman 1997 500,000 500,000 0 0 0 0 0
President and 1996 450,000 500,000 0 0 0 0 0
CEO 1995 390,000 500,000 6,210 0 50,000 0 0
David H. Johnson III 1997 225,000 130,000 0 0 6,000 0 750
Executive Vice 1996 200,000 130,000 0 0 6,000 0 750
President 1995 162,500 100,000 0 0 6,000 0 750
Richard J. Koretz 1997 140,000 180,000 0 0 2,000 0 750
Senior Vice 1996 120,000 180,000 0 0 2,000 0 750
President - CORUS
BANK, N.A. 1995 100,000 120,000 0 0 2,000 0 750
Michael G. Stein 1997 150,000 791,263 0 0 0 0 750
Executive Vice 1996 120,000 431,551 0 0 0 0 750
President - CORUS
BANK, N.A. 1995 100,000 658,147 0 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> 7
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, 1997, options to purchase 397,865 shares of Common Stock
were outstanding and a total of 51,735 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 $34.65.
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> 8
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides stock options granted in 1997 to the named
executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
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 1997 ($/SH) DATE 5% ($) 10% ($)
- -------------------- ----------- --------- ----------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Joseph C. Glickman 0 N/A N/A N/A N/A N/A
Robert J. Glickman 0 N/A N/A N/A N/A N/A
David H. Johnson III 6,000 13.64 32.55 7/31/2007 122,823 311,258
Richard J. Koretz 2,000 4.55 32.55 7/31/2007 40,941 103,753
Michael G. Stein 0 N/A N/A N/A N/A N/A
</TABLE>
The options in the table above were granted August 13, 1997 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 1997 and the number and value of stock options that
were unexercised at December 31, 1997.
<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, 1997 (#) DECEMBER 31, 1997($)
SHARES
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- -------------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Joseph C. Glickman 0 0 0/0 0/0
Robert J. Glickman 0 0 220,000/30,000 5,493,750/609,375
David H. Johnson III 0 0 8,800/15,200 174,990/92,220
Richard J. Koretz 0 0 3,600/6,400 70,265/87,160
Michael G. Stein 0 0 1,600/2,400 50,190/33,460
</TABLE>
6
17
<PAGE> 9
The numbers and amounts in the preceding 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 1997 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 1997 and 1996 was
$160,000 and $150,000, respectively. 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 $12,850 $25,700 $32,125 $38,550 $38,550
150,000 15,975 31,950 39,938 47,925 47,925
175,000 17,225 34,450 43,063 51,675 51,675
200,000 17,225 34,450 43,063 51,675 51,675
</TABLE>
(11) The average annual compensation includes the participant's salary and
bonus. Robert J. Glickman, David H. Johnson III, Richard J. Koretz and Michael
G. Stein all had salary and bonus in excess of $160,000, and as such, are
covered only up to the maximum average compensation of $160,000. Joseph C.
Glickman is not covered under CORUS' retirement plan.
The years of credited service as of December 31, 1997 for the individuals in
the cash compensation table are as follows: Robert J. Glickman, 28.0 years;
David H. Johnson III, 6.0 years; Richard J. Koretz, 6.0 years; and, Michael G.
Stein, 6.5 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
1997, 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 1997, CORUS matched 20% of pretax contributions to a
maximum contribution of $750 per person. Matching contributions for D.H.
Johnson III, R.J. Koretz and M.G. Stein $750 per person in 1997. J.C. Glickman
and R.J. Glickman did not participate in CORUS' 401(k) Plan in 1997.
7
<PAGE> 10
R.J. Glickman, D.H. Johnson III, R.J. Koretz and M.G. Stein 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 1997. All other directors were paid $3,000 per Board of Directors
meeting attended for the first three meetings of 1997 and $3,500 per Board of
Directors meeting attended for the last two meetings of 1997. Directors Horn,
Levitt and Lubeznik were paid $1,000 per audit committee meeting attended in
1997.
CHANGE-OF-CONTROL AGREEMENTS
CORUS currently has Change-In-Control Employment Agreements ("Agreements") with
Messrs. D.H. Johnson III, R.J. Koretz, M.G. Stein and five 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) 150%-300% 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) plus a proration of any prior year's bonus
paid for the amount of time employed in the year of termination, or (2)
75%-150% 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) any failure by CORUS to
comply with the provisions of the agreement relating to compensation and
benefit, or (ii) 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 all of the Agreements expire on January 31, 1999; provided,
however, that on such date and on each January 31st thereafter, the term of the
agreements shall automatically be extended for one additional year unless, not
later than thirty days prior to the expiration of the term, either party shall
have given notice 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 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.
8
<PAGE> 11
REPORT ON REPRICING OF OPTIONS/SARS
At no time during the fiscal year ended December 31, 1997 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 1997 bonuses at its November 19,
1997 meeting and set 1997 base salaries at its November 13, 1996 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, 1997 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 to $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> 12
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 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 1997, D.H. Johnson III and R.J.
Koretz were granted 6,000 and 2,000 stock options, respectively. No other named
executives were granted options during 1997. 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 1997 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.
10
<PAGE> 13
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 11.1% from 1996 to 1997.
The 1997 bonus amount to the CEO was based on his leadership in attaining,
among other criteria, the following:
(1) For the nine months ended September 30, 1997, CORUS'
1997 return on average assets and return on average equity were
1.81% and 15.74%, respectively. At the November, 1997 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 1.30% and 13.90%,
respectively, for the same period in 1997. 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 1997 was
approximately 38%, 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 less goodwill amortization by the sum of noninterest
income (net of security gains) and fully tax-equivalent net
interest income. A ratio of less than 50% is generally considered
excellent in the banking industry. As such, CORUS' ratio in 1997
continues to be considered outstanding by the Board.
(3) The unrealized gains on the bank stock portfolio
increased by over $30 million during the first nine months of
1997. While these gains are not included in net income until the
securities are sold, they represent an economic gain to
shareholders. In addition, these gains had the effect of
lowering the performance ratios mentioned in item (1) above. The
gains are excluded from net income, but are included in
shareholders' equity, net of tax. Successful management and
prudent deployment of capital enabled management to generate an
outstanding return on this portfolio.
(4) 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 in excess of $330 million and the
Board believes that CORUS is well positioned for future growth
and stock price appreciation.
(5) 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.
11
<PAGE> 14
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
STEVEN D. FIFIELD
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> 15
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, 1992 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
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Nasdaq Stock Market (US) $100 $115 $112 $159 $195 $240
Nasdaq Bank Stocks 100 114 114 169 223 377
CORUS BANKSHARES, Inc. 100 94 83 132 170 211
</TABLE>
13
<PAGE> 16
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 1997 all required filings were timely
submitted.
PROPOSAL TWO: APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
On February 11, 1998, the Audit Committee and Board of Directors of CORUS
recommended that the shareholders ratify Arthur Andersen LLP at the 1998 Annual
Meeting as independent public accountants of CORUS for the year ending December
31, 1998.
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
$152,500 unless there are additional acquisitions by CORUS. Existing policy
requires that all services furnished to CORUS by its independent public
accountants be furnished at customary rates and terms.
PROPOSAL THREE: APPROVAL OF CORUS BANK, N.A. BONUS PROGRAM FOR COMMERCIAL LOAN
OFFICERS
INTRODUCTION
Subject to prior approval and adoption by the Board of Directors at the board
meeting immediately preceding the Annual Meeting, there will be submitted to
shareholders a proposal to approve the "Corus Bank Bonus Program for Commercial
Loan Officers" (the "Bonus Program" or the "Plan"). The Bonus Program proposed
to be submitted for approval at the Annual Meeting is identical to the existing
program except that certain payments, which would previously have been made in
cash to the officer, will be deferred for a period of at least three (3) years.
The new Plan provides for deferred payment of a portion of annual bonuses, which
are calculated in accordance with the formula set forth in the Plan, and permits
Plan participants to elect to receive deferral payments in either cash or shares
of CORUS' Common Stock. The deferred bonus amounts generally become payable at
the end of a three-year deferral period and are subject to reduction during such
period in the event of certain circumstances relating to loan losses and
non-performing loans. Subject to Board and shareholder approval, there will be
reserved for possible issuance under the terms of the Plan a maximum 100,000
shares of CORUS' Common Stock.
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<PAGE> 17
PURPOSE
The purpose of the Bonus Program is to reward commercial loan officers for new
business development on the basis of each officer's loan volume generation, the
potential profitability and assessed credit risk of the loans generated, and
the loan loss experience of such officer's loan portfolio, thereby more closely
aligning the goals of the loan officers with the interests of CORUS and its
shareholders. The Plan is also intended to help attract and retain qualified
loan officers.
The bonus calculation formula provided for in the Plan is intended to allow
compensation to the covered officers to qualify as "performance based" and
therefore be deductible to CORUS under Section 162(m) of the Internal Revenue
Code of 1986, as amended (the "Code"), and the related regulations.
ELIGIBILITY
All commercial loan officers of Corus Bank will be eligible to participate in
the Bonus Program. Currently there are approximately 16 employees of CORUS
eligible to participate in the Plan, including M.G. Stein.
BONUS CALCULATIONS AND ELECTIONS RELATING TO DEFERRED BONUS AMOUNTS
Bonuses under the Plan are calculated on an annual basis with respect to each
participant's loan generation activity over the prior 12-month period and the
performance of loans originated in prior years. The bonus calculation formula
takes into account a number of factors including, among other criteria: (i)
volume of new, renewed and existing loan business; (ii) loan yields and fees;
(iii) type and riskiness of the loans; (iv) loan loss reserve allocations; and
(v) loan losses related to business generated by such officer during that year
and prior years. The specific formulas used to calculate bonus amounts is
confidential business information, the disclosure of which management believes
would have an adverse effect on CORUS.
For each calendar year, 100% of up to the first $25,000 of bonus amount,
calculated in accordance with the Plan will be paid to the loan officer in cash
that year. For each participant whose bonus amount attributable to that
particular calendar year exceeds $25,000, a portion (at least half) of the
additional bonus amount will be deferred for at least a three-year period. The
deferred amounts will generally become payable at the end of the deferral
period, subject to reduction or additional deferral in the event that the loan
officer experiences loan losses or problems in any year with respect to his
portfolio which are not commensurate with his assigned loan loss reserve
amount. All accrued but unpaid deferred bonus amounts would be payable
immediately in the event of a change in control of CORUS.
Participants may elect to receive payment of deferred bonus amounts in either
stock or cash, which election shall be made by the loan officer prior to the
end of the year for which the deferred bonus amount was calculated. Deferred
amounts elected to be received in cash shall bear interest until paid at a rate
equal to the three-year Treasury rate plus one percent as of December 15 in the
year of bonus calculation. For deferred amounts elected to be received in
stock, the number of shares issuable shall be computed using the closing sales
price of CORUS' shares as of December 15 in the year the deferred bonus amount
was calculated. In addition, those electing to receive shares would be
entitled to receive a cash payment at the end of the deferral period equal to
the amount of dividends that would have been paid during the deferral period on
that number of shares actually received. The deferred bonus amounts, in
whichever form the officer elects to receive, would be subject to potential
loss prior to expiration of the deferral period under certain circumstances as
described above.
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<PAGE> 18
FEDERAL INCOME TAX CONSEQUENCES
Under current law, the following are U.S. federal income tax consequences
generally arising with respect to payments under the Bonus Program.
Amounts payable by CORUS under the Plan will be deductible compensation expense
to CORUS in the year actually paid to participants, whether paid in cash or
stock. Participants will recognize ordinary income in the year bonuses are
actually paid or payable under the Plan, and will not be taxed on deferred
bonus amounts until expiration of the deferral period. For federal income tax
purposes, the income realized by a participant with respect to deferred bonus
amounts paid in shares of CORUS' Common Stock will be equal to the fair market
value of the shares on the date they become payable to the employee. CORUS
will be entitled to a compensation deduction at the time the participant
realizes income in an amount equal to the amount taken into income by the
participant to the extent that the amount constitutes reasonable compensation
to the participant.
The Bonus Program is part of an unfunded deferred compensation arrangement
intended to comply with principles set forth in Section 451 of the Code and
regulations thereunder. CORUS is not directly or indirectly required to set
aside funds for the payment of bonuses under the Plan.
ADMINISTRATION
The Bonus Program is administered by R. J. Glickman, who is an executive
officer and director of CORUS, who is authorized, subject to the provisions of
the Plan, to establish such rules and regulations as he deems necessary for the
proper administration of the Plan and to make such determinations and
interpretations as he deems necessary and advisable. R.J. Glickman will not
participate in the Bonus Program.
NEW PLAN BENEFITS
The following table sets forth, for illustrative purposes only, the approximate
amounts that would have accrued or been payable under the terms of the Bonus
Program with respect to the fiscal year ended December 31, 1997.
NEW PLAN BENEFITS
CORUS BANK, N.A. BONUS PROGRAM FOR COMMERCIAL LOAN OFFICERS
<TABLE>
<CAPTION>
NAME DOLLAR VALUE ($) (1) UNITS (2)
- ------------------ ------------------- ---------
<S> <C> <C>
J.C. Glickman $ - -
R.J. Glickman - -
D.H. Johnson III - -
R.J. Koretz - -
M.G. Stein 791,263 21,980
Executives (11 persons) 896,926 24,915
Non-Executive Directors - -
Non-Executive Officer
Employees 1,471,485 40,875
</TABLE>
(1) Includes value of current deferral portions of bonus calculations and
assumes no reduction in deferral amounts prior to expiration of the
three-year deferral period under the Plan.
16
<PAGE> 19
(2) Assuming all participants in the Plan elect to receive deferral payments
in shares of CORUS' Common Stock and based on the closing sales price of
CORUS' common shares on December 15, 1997, as reported by NASDAQ. Such
deferred payments are subject to possible reduction, in whole or in part,
prior to becoming payable under the Plan.
AMENDMENTS AND TERMINATION
CORUS reserves the right to amend, modify or cancel the Bonus Program at any
time, provided, however, that any such amendments or modifications may not
increase the maximum number of shares issuable under the Plan unless approved
by CORUS' shareholders.
FUTURE PROPOSALS
Shareholders' proposals intended to be presented at CORUS' 1999 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, 1998, in order to be considered for inclusion in the proxy material for that
meeting.
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
Michael J. McClure
Corporate Secretary
17
<PAGE> 20
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 20, 1998, 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 Karl H. Horn Michael Tang
Robert J. Glickman Michael Levitt William H. Wendt, III
Steven D. Fifield Rodney D. Lubeznik
2. PROPOSAL TO APPROVE THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE INDEPENDENT
PUBLIC ACCOUNTANTS OF THE COMPANY.
FOR AGAINST ABSTAIN
---------- ---------- ----------
3. PROPOSAL TO APPROVE THE CORUS BANK, N.A. BONUS PROGRAM FOR COMMERCIAL LOAN
OFFICERS.
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: , 1998 --------------------------
---------------------- Signature
--------------------------
Signature, if held jointly
