<PAGE>
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 Section 240.14a-11(c) or Section
240.14a-12
COVEST BANCSHARES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
March 24, 1998
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of CoVest Bancshares,
Inc., I cordially invite you to attend the sixth Annual Meeting of Stockholders
of CoVest Bancshares, Inc. to be held at 10:00 a.m. on Tuesday, April 28, 1998,
at the Casa Royale Banquets located at 783 Lee Street, Des Plaines, Illinois.
The accompanying Notice of Annual Meeting of Stockholders and Proxy Statement
discuss the business to be conducted at the meeting. A copy of the Company's
1997 Annual Report and Form 10-K are also in this booklet. At the meeting we
shall report on Company operations and the outlook for the year ahead.
Your Board of Directors has nominated three persons to serve as Class III
directors, each of whom are incumbent directors. The Company's management has
selected and recommends that you ratify the selection of Crowe, Chizek and
Company LLP to continue as the Company's independent public accountants for the
year ending December 31, 1998.
We recommend that you vote your shares for the director nominees and in
favor of the proposal.
I encourage you to attend the meeting in person. WHETHER OR NOT YOU PLAN TO
ATTEND, HOWEVER, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT
IN THE ACCOMPANYING POSTPAID RETURN ENVELOPE AS PROMPTLY AS POSSIBLE. This will
ensure that your shares are represented at the meeting.
If you have any questions concerning these matters, please do not hesitate
to contact me at (847) 294-6500. We look forward with pleasure to seeing and
visiting with you at the meeting.
Very truly yours,
COVEST BANCSHARES, INC.
Larry G. Gillie
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 28, 1998
------------------------
TO THE HOLDERS OF COMMON STOCK OF COVEST BANCSHARES, INC.
Notice is hereby given that the Annual Meeting of Stockholders of CoVest
Bancshares, Inc. (the "Company") will be held at the Casa Royale Banquets
located at 783 Lee Street, Des Plaines, Illinois, on Tuesday, April 28, 1998 at
10:00 a.m., for the purpose of considering and voting upon the following
matters:
1. the election of three (3) Class III directors of the Company.
2. the ratification of the appointment of Crowe, Chizek and Company LLP as
auditors for the Company for the fiscal year ending December 31, 1998.
3. the transaction of such other business as may properly come before the
meeting or any adjournments or postponements thereof.
The Board of Directors is not aware of any other business to come before the
meeting. Stockholders of record at the close of business on March 5, 1998, are
the stockholders entitled to vote at the meeting and any adjournments or
postponements thereof.
By Order of the Board of Directors
Larry G. Gillie
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Des Plaines, Illinois
March 24, 1998
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED
WITHIN THE UNITED STATES.
<PAGE>
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors of CoVest Bancshares, Inc. (the "Company") of
proxies to be used at the meeting which will be held at the Casa Royale
Banquets, located at 783 Lee Street, Des Plaines, Illinois, on Tuesday, April
28, 1998 at 10:00 a.m., and all adjournments or postponements of the meeting.
The Proxy Statement and the accompanying Notice of Meeting and Proxy are first
being mailed to holders of shares of common stock, par value $.01 per share, of
the Company (the "Common Stock") on or about March 24, 1998. Certain of the
information in the Proxy Statement relates to CoVest Banc, N.A., Des Plaines,
Illinois (the "Bank"), a wholly owned subsidiary of the Company.
VOTING RIGHTS AND PROXY INFORMATION
All shares of Common Stock represented at the meeting by properly executed
proxies received prior to or at the meeting, and not revoked, will be voted at
the meeting in accordance with the instructions thereon. If no instructions are
indicated, properly executed proxies will be voted for the nominees and for
adoption of the proposals set forth in this Proxy Statement. A majority of the
shares of the Common Stock, present in person or represented by proxy, shall
constitute a quorum for purposes of the meeting. Abstentions and broker
non-votes will be counted for purposes of determining a quorum.
Only holders of record of the Common Stock at the close of business on March
5, 1998 will be entitled to vote at the meeting and at all adjournments or
postponements of the meeting. On March 5, 1998, the Company had 4,358,893 shares
of Common Stock outstanding. Directors are elected by a plurality of the votes
cast in person or by proxy with a quorum present. For all other matters, the
affirmative vote of a majority of the votes cast in person or by proxy with a
quorum present shall constitute stockholder approval. Abstentions and broker
"non-votes" will be considered in determining the presence of a quorum but will
not affect the vote required for approval of the proposal or the election of
directors.
The Company does not know of any matters, other than as described in the
Notice of Meeting, that are to come before the meeting. If any other matters are
properly presented at the meeting for action, the persons named in the enclosed
form of proxy and acting thereunder will have the discretion to vote on such
matters in accordance with their best judgment.
The Board of Directors would like to have all stockholders represented at
the meeting. Whether or not you plan to attend, please complete, sign and date
the enclosed proxy and return it in the accompanying postpaid return envelope as
promptly as possible. A proxy given pursuant to this solicitation may be revoked
at any time before it is voted. Proxies may be revoked by: (i) duly executing
and delivering to the Secretary of the Company a later dated proxy relating to
the same shares prior to the exercise of such proxy, (ii) filing with the
Secretary of the Company at or before the meeting a written notice of revocation
bearing a later date than the proxy, or (iii) attending the meeting and voting
in person (although attendance at the meeting will not in and of itself
constitute revocation of a proxy). Any written notice revoking a proxy should be
delivered to Mr. Paul A. Larsen, Corporate Secretary, at 749 Lee Street, Des
Plaines, Illinois, 60016.
ELECTION OF DIRECTORS
At the Annual Meeting of the Stockholders to be held on Tuesday, April 28,
1998, the stockholders will be entitled to elect three (3) Class III directors
for a term expiring in 2001. The directors of the Company are divided into three
classes having staggered terms of three years. Each of the nominees for election
as Class III directors are incumbent directors. The Company has no knowledge
that any of the nominees will refuse or be unable to serve, but if any of the
nominees becomes unavailable for election, the holders of the proxies reserve
the right to substitute another person of their choice as a nominee when voting
at the meeting.
<PAGE>
Set forth below is information concerning the nominees for election and for
the other directors whose terms of office will continue after the meeting,
including the age, year first elected a director and business experience of each
during the previous five years. The nominees, if elected at the Annual Meeting
of Stockholders, will serve as Class III directors for three year terms expiring
in 2001. THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR EACH OF
THE NOMINEES FOR DIRECTOR.
NOMINEES
<TABLE>
<CAPTION>
DIRECTOR OF THE
PRESENT POSITION WITH THE COMPANY OR THE
NAME AND AGE COMPANY AND THE BANK BANK SINCE
- --------------------------- --------------------------------------- -----------------
<S> <C> <C>
CLASS III
(Term Expires 2001)
Gerald T. Niedert Vice Chairman and Director of the 1987
(Age 52) Company and of the Bank
Thomas TenHoeve Director of the Company and of the Bank 1987
(Age 62)
David B. Speer Director of the Company and of the Bank 1997
(Age 46)
CONTINUING DIRECTORS
CLASS I
(Term Expires 1999)
George T. Drost Director of the Company and of the Bank 1987
(Age 51)
David M. Miller Director of the Company and of the Bank 1996
(Age 48)
CLASS II
(Term Expires 2000)
John A. Flink Director of the Company and of the Bank 1984
(Age 70)
Larry G. Gillie President, Chief Executive Officer and 1994
(Age 57) Director of the Company and of the Bank
Frank A. Svoboda, Jr. Director of the Company and Chairman of 1973
(Age 64) the Board of the Bank
</TABLE>
Mr. Donald J. Cameron, who is currently a Class III director, is not
standing for re-election at the Annual Meeting. The Company has not selected a
replacement for Mr. Cameron. All of the Company's directors will hold office for
the terms indicated, or until their respective successors are duly elected and
qualified. There are no arrangements or understandings between the Company and
any other person pursuant to which any of the Company's directors have been
selected for their respective positions.
BIOGRAPHICAL DATA
The principal occupation of each director is set forth below. Each director
has held his present position for at least five years unless otherwise
indicated.
2
<PAGE>
DONALD J. CAMERON has been the Company's Chairman of the Board since its
formation in 1992. He also served as the Company's President and Chief Executive
Officer from its formation through February 28, 1994. He served as President of
the Bank from January 1984 through February 28, 1994, and previously served as
Vice President of the Bank from January 1974. Mr. Cameron is retiring from the
Board of Directors as of the date of the Annual Meeting.
GEORGE T. DROST is a partner in the law firm of Drost & Kivlahan, Ltd.,
Arlington Heights. Mr. Drost is also an Adjunct Professor at the John Marshall
Law School in Chicago, Illinois, and currently serves as a director of the
Advocate Charitable Foundation, which is an affiliate of Advocate Health Care,
Oak Brook, Illinois, Uhlich Children's Home, Chicago, Illinois, and the Lutheran
Foundation, an affiliate of the Lutheran Home and Services for the Aged,
Arlington Heights, Illinois.
JOHN A. FLINK retired in 1990 as General Manager, Band Tools, of the DoALL
Company, an international machine tool distributor and industrial supplier
located in Des Plaines, Illinois, after serving in various marketing and
advertising capacities there since 1963.
LARRY G. GILLIE became the Company's President and Chief Executive Officer
on March 1, 1994, after serving as the Company's Executive Vice President since
its formation. Having served as President of the Northbrook Bank in Northbrook,
Illinois from 1979 to 1986, Mr. Gillie joined the Bank in 1987. He became
Executive Vice President on January 17, 1990 and then President, Chief Executive
Officer and a director of the Bank on March 1, 1994.
DAVID M. MILLER currently serves as Senior Vice President/Professional
Services for Comdisco, Inc., a provider of technology solutions with offices in
Rosemont, Illinois. Mr. Miller joined that company in 1988 and has served as,
Vice President, Marketing Business System Manager and Capital Equipment Group
Director. Prior to joining Comdisco, Inc., he was Regional Financial Services
Manager for Storage Tek Corporation in the midwest region and a former Vice
President/Sales for Sanwa Business Credit.
GERALD T. NIEDERT is currently Vice President/Business Development of
Dedicated Transportation, Inc., a truck transportation company located in Elk
Grove Village, Illinois. From 1986 to 1991, Mr. Niedert was Vice President/Sales
with Leaseway Transportation Corp., a truck transportation company headquartered
in Cleveland, Ohio. Prior to 1986, Mr. Niedert was the Executive Vice President
of Niedert Terminals, Inc.
DAVID B. SPEER is a 20 year veteran of Illinois Tool Works, Inc., a
multinational manufacturer of industrial systems. In October, 1995, Mr. Speer
was elected Executive Vice President of its worldwide construction products and
finishing systems segments. He is a member of the American Marketing Association
and American Management Association.
FRANK A. SVOBODA, JR. is the Chairman of the Board of the Bank. Mr. Svoboda
was the owner of Svoboda's Mens Wear, Inc., a retail mens clothier located in
Des Plaines, Illinois until 1995.
THOMAS TENHOEVE, PH.D. retired in 1995 after having served for the previous
eleven years as President of Oakton Community College, a community college with
over 24,000 students on two campuses and 62 other locations located in the north
and northwest suburbs of Chicago.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
During 1997, the Board of Directors held 12 meetings. No director attended
fewer than 75% of the total number of meetings of the Board of Directors of the
Company held during 1997 and the total number of meetings held by all committees
of the Board on which any such director served during 1997. The Board of
Directors of the Company has standing audit/compliance, compensation and
nominating committees.
The Audit/Compliance Committee consists of Messrs. TenHoeve (Chair),
Cameron, Neidert, Speer and Svoboda. The Audit/Compliance Committee reviews
audit reports and related matters to ensure effective compliance with
regulations and internal policies and procedures. This committee also approves
the accounting firm selected by management to perform the Company's and Bank's
annual audit and acts
3
<PAGE>
as the liaison between the auditors and the Board. Mr. Gillie serves EX OFFICIO
on this committee. During 1997, the Audit/Compliance Committee met three times.
The Compensation Committee consists of Messrs. Drost (Chair), Flink, Neidert
and Svoboda. The Compensation Committee meets to review the performance, salary
and other compensation of the Chief Executive Officer and recommends
adjustments. During 1997, the Compensation Committee met two times.
The Nominating Committee is chaired by Mr. Svoboda and consists of all
members of the Board of Directors of the Company. This committee recommends to
the Board of Directors of the Company nominees for election as directors and for
nominees to fill any vacancies. Pursuant to the Company's Bylaws, this committee
will consider nominees recommended by stockholders provided any such
recommendation is made in writing and delivered to the Secretary of the Company
no later than 30 days prior to the date of the annual meeting at which directors
are to be elected and otherwise complies with the bylaws. During 1997, the
Nominating Committee met one time.
COMPENSATION OF DIRECTORS
Directors of the Company are not paid a fee for serving on the Company's
Board or committees. During 1997 directors of the Bank received a fee of $3,600
per year, $1,100 for each Bank Board meeting and $700 for each Executive
committee meeting attended (except for the Chairman of the Board of the Bank,
who receives an additional $200 for each Board meeting attended). Directors may
elect to defer all of their fees. The Bank's non-employee directors also receive
a $250 fee for each committee meeting attended.
The Company maintains a retirement plan for directors which provides
retirement benefits based upon the director's age at retirement, the director's
total number of years of service and average monthly fees received during the
last three years of service as a director. Retirement benefits are payable upon
retirement, as defined under the Plan, and are payable for fifteen years. In
addition to the monthly retirement benefit, upon attainment of age 65, each
director and his or her spouse is provided lifetime medical and dental coverage
as a supplement to Medicare. In November, 1997, the plan was amended to provide
that the full retirement benefit is payable upon attainment of age 65, and the
limit on the maximum benefit payable was eliminated.
4
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock at March 5, 1998, by each
person known by the Company to be the beneficial owner of more than five percent
of the outstanding Common Stock, by each director or nominee, by each executive
officer named in the Summary Compensation Table, and by all directors and
executive officers of the Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME OF INDIVIDUAL AND OF BENEFICIAL PERCENT
NUMBER OF PERSONS IN GROUP OWNERSHIP(1) OF CLASS
- -------------------------------------------------- ----------------- --------
<S> <C> <C>
5% STOCKHOLDERS
CoVest Bancshares, Inc.
Employee Stock Ownership Plan ("ESOP")
749 Lee Street
Des Plaines, IL 60016 444,087(2) 10.2%
Brandes Investment Partners, Inc. ("Brandes")
12750 High Bluff Drive, 4th Floor
San Diego, CA 92130 389,469(4) 8.9%
Michael and Frances Halikias
15750 S. Harlem Avenue
Orland Park, IL 60462 317,250(3) 7.3%
First Manhattan Co.
437 Madison Avenue
New York, NY 10022 241,125(5) 5.5%
DIRECTORS
Donald J. Cameron 147,721(6) 3.3%
George T. Drost 70,198(7) 1.6%
John A. Flink 39,064(8) *
Larry G. Gillie 123,081(9) 2.8%
David M. Miller 6,659(10) *
Gerald T. Niedert 56,463(11) 1.3%
David B. Speer 2,177 *
Frank A. Svoboda, Jr. 94,164(12) 2.1%
Thomas TenHoeve 33,669(13) *
OTHER NAMED EXECUTIVE OFFICERS
Paul A. Larsen 24,773(14) *
Lawrence J. Schmidt 19,500(15) *
Joseph H. Tillotson 44,060(15) 1.0%
All directors and executive officers
as a group (15 persons) 661,529(16) 14.2%
</TABLE>
- ------------------------
* Less than one percent.
(1) The information contained in this column is based upon information furnished
to the Company by the persons named above and the members of the designated
group, except as set forth in the footnotes below. The nature of beneficial
ownership for shares shown in this column is sole voting and investment
power, except as set forth in the footnotes below. Inclusion of shares shall
not constitute an admission of beneficial ownership or voting and investment
power over included shares. Includes shares held directly, shares allocated
to the respective individual under the ESOP, shares obtainable
5
<PAGE>
within the next 60 days pursuant to options granted under the Company's 1992
Stock Option and Incentive Plan and the 1996 Stock Option Plan
(collectively, the "Stock Option Plans"), shares held in retirement accounts
or in a fiduciary capacity and shares held by certain family members, with
respect to which shares the listed individuals or group members may be
deemed to have shared or sole voting or investment power.
(2) Larry G. Gillie and Paul A. Larsen serve as co-trustees of the ESOP, and are
deemed to have shared voting and investment power over shares held by the
ESOP. Includes 333,493 shares held in the ESOP but allocated to employees'
accounts.
(3) In a Schedule 13G filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), dated March 5, 1995. Mr. and Mrs. Halikias
reported shared voting and investment power over all such shares.
(4) In a Schedule 13G filed under the Exchange Act, dated February 10, 1998,
Brandes reported sole voting and investment power over all such shares in
the capacity of investment adviser.
(5) In a Schedule 13G filed under the Exchange Act, dated February 5, 1997,
First Manhattan Co. reported sole voting and dispositive power over 204,405
shares, shared voting and no dispositive power over 17,760 shares and no
voting but dispositive power over 36,720 shares. The Schedule 13G indicates
First Manhattan Co. holds such shares in its capacity as a registered
broker/dealer, investment adviser and partnership.
(6) Includes 64,500 shares subject to options granted under the Stock Option
Plan, over which shares Mr. Cameron has no voting and sole investment power,
and 39,024 shares held by Mr. Cameron's spouse, as trustee, over which
shares Mr. Cameron has no voting or investment power.
(7) Includes 22,500 shares subject to options granted under the Stock Option
Plans, over which shares Mr. Drost has no voting and sole investment power,
and 19,588 shares held by Mr. Drost's spouse, as trustee, over which shares
Mr. Drost has shared voting and no investment power. Includes 900 shares
held by the Drost & Kivlahan, Ltd. Profit Sharing Plan over which Mr. Drost
has shared voting and investment power.
(8) Includes 4,500 shares subject to options granted under the Stock Option
Plans, over which shares Mr. Flink has no voting and sole investment power,
and 472 shares held by Mr. Flink's spouse, over which Mr. Flink has no
voting or investment power.
(9) Excludes 444,087 shares over which Mr. Gillie is deemed to have voting
and/or investment power as a co-trustee of the ESOP. Includes 62,431 shares
subject to options granted under the Stock Option Plans, over which shares
Mr. Gillie has no voting and sole investment power and 2,089 shares held by
Mr. Gillie's spouse and 2,367 shares for which Mr. Gillie serves as trustee,
over which shares Mr. Gillie has shared voting and investment power.
(10) Includes 2,250 shares subject to options granted under the Stock Option
Plans, over which Mr. Miller has no voting and sole investment power.
(11) Includes 26,235 shares subject to options granted under the Stock Option
Plans, over which shares Mr. Niedert has no voting and sole investment
power.
(12) Includes 37,725 shares subject to options granted under the Stock Option
Plans, over which shares Mr. Svoboda has no voting and sole investment
power, and 4,500 shares for which Mr. Svoboda serves as co-trustee and 3,375
shares held by Mr. Svoboda's spouse, over which shares Mr. Svoboda has
shared voting and investment power.
(13) Includes 16,460 shares subject to options granted under the Stock Option
Plans, over which shares Dr. TenHoeve has no voting and sole investment
power, and 13,353 shares held in a trust for benefit of Dr. TenHoeve, over
which shares Dr. TenHoeve has no voting or investment power.
6
<PAGE>
(14) Excludes 444,087 shares over which Mr. Larsen is deemed to have voting
and/or investment power as a co-trustee of the ESOP. Includes 13,500 shares
subject to options granted under the Stock Option Plans, over which shares
Mr. Larsen has no voting and sole investment power.
(15) Includes 18,000 shares subject to options granted under the Stock Option
Plans to each of Messrs. Schmidt and Tillotson, over which the respective
executive officer has no voting and sole investment power.
(16) Excludes 444,087 shares over which Messrs. Gillie and Larsen are deemed to
have voting and/or investment power as co-trustees of the ESOP.
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors and persons who own more than 10% of the Common Stock to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and with the exchange on which the shares of Common Stock are traded.
Such persons are also required to furnish the Company with copies of all Section
16(a) forms they file. Based solely upon the Company's review of such forms and,
if appropriate, representations made to the Company by any such reporting person
concerning whether a Form 5 was required to be filed for the 1997 fiscal year,
the Company is not aware that any of its directors and executive officers or 10%
stockholders failed to comply with the filing requirements of Section 16(a)
during the period commencing January 1, 1997 through December 31, 1997.
VOTING AGREEMENTS
The trustees of the Company's ESOP are Messrs. Larry G. Gillie, the
Company's President and Chief Executive Officer, and Paul A. Larsen, its Senior
Vice President and Chief Financial Officer. As co-trustees, Messrs. Gillie and
Larsen are deemed to have shared voting power over shares held in the ESOP.
7
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation paid
or granted to the Company's Chief Executive Officer and to each of the other
executive officers of the Company and the Bank whose aggregate salary and bonus
exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION AWARDS
ANNUAL COMPENSATION
--------------------------------------------- --------------------------------
<S> <C> <C> <C> <C> <C> <C>
(A) (B) (C) (D) (E) (F) (G)
<CAPTION>
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($) COMPENSATION($) AWARD($) OPTIONS/SARS (#)
- --------------------------- --------- ----------- ----------- ------------------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Larry G. Gillie, President, 1997 $ 208,846 $ 300 $ -- $ -- --
Chief Executive Officer 1996 180,492 15,300 -- -- --
1995 140,529 6,300 -- -- 108,000
Paul A. Larsen, Senior Vice 1997 $ 108,885 $ 300 $ -- $ -- --
President and Chief
Financial 1996 92,170 11,300 -- -- --
Officer(2) 1995 59,637 300 -- -- 54,000
Lawrence J. Schmidt, 1997 $ 106,442 $ 300 $ -- $ -- $ --
Senior Vice President(3) 1996 87,500 11,300 -- -- --
1995 77,574 -- -- -- 54,000
Joseph H. Tillotson, 1997 $ 106,385 $ 300 $ -- $ -- --
Senior Vice President(4) 1996 85,709 11,496 -- -- --
1995 77,574 1,800 -- -- 54,000
<CAPTION>
<S> <C>
(A) (H)
ALL OTHER
NAME AND PRINCIPAL POSITION COMPENSATION($)
- --------------------------- -----------------
<S> <C>
Larry G. Gillie, President, $ 15,075
Chief Executive Officer 14,287
23,210
Paul A. Larsen, Senior Vice $ 10,203
President and Chief
Financial 8,673
Officer(2) 174
Lawrence J. Schmidt, $ 8,896
Senior Vice President(3) 170
--
Joseph H. Tillotson, $ 9,164
Senior Vice President(4) 8,739
12,864
</TABLE>
- ------------------------------
(1) Includes amounts deferred under the Bank's Profit Sharing Plan.
(2) 1995 information reflects a March 30, 1995 employment date. Amount shown as
bonus for 1996 includes the market value of non-restricted shares granted to
Mr. Larsen.
(3) 1995 information reflects a November 13, 1995 employment date. Amount shown
as bonus for 1996 includes the market value of non-restricted shares granted
to Mr. Schmidt.
(4) Amount shown as bonus for 1996 includes the market value of non-restricted
shares granted to Mr. Tillotson.
The following table sets forth certain information concerning the number and
value of stock options at December 31, 1997, held by the named executive
officer.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FY-END (#) FY-END ($)
SHARES ACQUIRED VALUE REALIZED (D) (E)
NAME ON EXERCISE (#) ($) -------------------------------- --------------------------
(A) (B) (C) EXERCISABLE UNEXERCISABLE(1) EXERCISABLE UNEXERCISABLE
- ---------------------------- ----------------- ----------------- ------------- ----------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Larry G. Gillie............. 43,958 $ 540,947 62,431 72,000 $ 604,957 $ 572,400
Paul A. Larsen.............. 4,500 36,630 13,500 36,000 107,325 286,200
Lawrence J. Schmidt......... -- -- 18,000 36,000 143,100 286,200
Joseph H. Tillotson......... -- -- 18,000 36,000 143,100 286,200
</TABLE>
- ------------------------------
(1) Remaining options become exercisable one-half each on January 1, 1999 and
2001.
8
<PAGE>
EMPLOYMENT AGREEMENTS
The Company has entered into a one-year employment agreement with Larry G.
Gillie. The agreement provides for an annual salary of $180,000, subject to
annual increases as determined by the Board of Directors. The employment
agreement provides for an automatic extension of one year on each anniversary
date, provided there is a satisfactory review of Mr. Gillie's performance.
Either the Company or Mr. Gillie may elect not to renew the agreement upon
written notice provided at least 90 days prior to the anniversary date.
The agreement further provides for the continued payment of Mr. Gillie's
salary and health benefit coverage for one year in the event employment is
terminated without cause. In addition, the agreement provides for an additional
payment to Mr. Gillie of approximately three times his annual salary in the
event there is a change in control of the Company or the Bank and his employment
terminates voluntarily within one year after such change in control or
involuntarily within three years after such change in control. Mr. Gillie and
his spouse also would receive lifetime health insurance. The agreement further
provides that for a period of one year after termination of his employment for
any reason, Mr. Gillie will not manage, operate or control any financial
institution having an office within 35 miles of any office of the Bank as of the
effective date of the agreement.
CHANGE OF CONTROL AGREEMENTS
In addition to the change of control provisions set forth in Larry Gillie's
employment agreement, the Company has entered into a one-year change of control
agreement with Messrs. Larsen, Schmidt and Tillotson. The agreements provide for
an automatic extension of one year on each anniversary date, provided there is a
satisfactory review of the respective officer's performance. The agreements
provide for a payment to the respective officer of one year's annual salary in
the event there is a change in control of the Company or the Bank and his
employment terminates voluntarily or involuntarily within one year after such
change in control. In such event, the officer would also be entitled to receive
health insurance for one year following his termination date.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1997, the members of the Compensation Committee were George T. Drost,
John A. Flink, Gerald T. Niedert and Frank A. Svoboda. None of these individuals
was an officer or employee of the Company or any of its subsidiaries during
1997, and none of these individuals is a former officer or employee of the
Company or any of its subsidiaries.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
THE COMPENSATION COMMITTEE HAS FURNISHED THE FOLLOWING REPORT ON EXECUTIVE
COMPENSATION. THE INCORPORATION BY REFERENCE OF THIS PROXY STATEMENT INTO ANY
DOCUMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BY THE COMPANY SHALL
NOT BE DEEMED TO INCLUDE THE REPORT UNLESS SUCH REPORT IS SPECIFICALLY STATED TO
BE INCORPORATED BY REFERENCE INTO SUCH DOCUMENT.
COMPENSATION POLICIES. This report describes the Company's compensation
policies as endorsed by the Board of Directors and the Compensation Committee
and the resulting actions taken by the Company for 1997. Essentially, the
executive compensation program of the Company has been designed to:
- Support a pay-for-performance policy that differentiates compensation
amounts based on Company and individual performance;
- Provide compensation opportunities that are comparable to those offered by
other leading companies in the financial services industry, thus allowing
the Company to compete for and retain talented executives who are critical
to the Company's long-term success; and
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- Align the interests of executives with the long-term interests of
stockholders through award opportunities that can result in ownership of
Common Stock.
At present, the executive compensation program is comprised of salary and
long-term incentive opportunities in the form of stock options, restricted stock
and benefits typically offered to executives by major corporations.
SALARY AND DEFERRED COMPENSATION. The Board of Directors, acting on the
recommendation of the Compensation Committee, determines the salary paid to the
Chief Executive Officer (the "CEO"). The CEO determines the salaries paid to the
other executive officers. In each case, salary increases reflect both individual
performance as well as the Bank's financial performance, as measured by its
return on assets and profitability. In the case of executive officers, salary
increases were granted in amounts ranging from 4.0% to 19.0% based on individual
performance, position, tenure, comparative data and the Bank's operating
results.
Mr. Gillie's 1997 salary was based upon an analysis of: (i) the compensation
of the chief executive officers of six comparable financial institutions with
publicly traded common stock; (ii) financial institutions in the Chicago
metropolitan area with similar net asset amounts; and (iii) a commercially
available financial institution survey. Mr. Gillie's salary was set at an amount
slightly below the middle of the salary range established by this analysis. Fees
received for membership on the Board of Directors of the Bank were also
considered.
STOCK AWARDS. The Company's Stock Option Plans and Bank Incentive Plan
("BIP") are designed to align a significant portion of the executive
compensation program with stockholder interests. The Stock Option Plans and BIP,
each approved by stockholders, permit the granting of stock-based awards. To
date, two types of awards have been granted to executive officers and other key
employees:
Stock Options--Rights to purchase shares of Common Stock at the fair market
value per share as of the date the option is granted; and
Restricted Stock--Shares of Common Stock that the recipient cannot sell or
otherwise dispose of until the applicable restriction period lapses and that are
forfeited if the recipient terminates employment for any reason other than
retirement, disability, or death prior to the lapsing of the restriction period
(or applicable portion of such period). Vesting periods are established
primarily by reference to a recipient's position, tenure and age.
In granting stock options and restricted stock to executive officers, the
Committee takes into account the practices of other financial services companies
as verified by external surveys, as well as the executive's level of
responsibility and past contributions to the Company.
George T. Drost
John A. Flink
Gerald T. Niedert
Frank A. Svoboda
PERFORMANCE GRAPH
THE INCORPORATION BY REFERENCE OF THIS PROXY STATEMENT INTO ANY DOCUMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BY THE COMPANY SHALL NOT BE
DEEMED TO INCLUDE THE FOLLOWING PERFORMANCE GRAPH AND RELATED INFORMATION UNLESS
THE GRAPH AND THE RELATED INFORMATION ARE SPECIFICALLY STATED TO BE INCORPORATED
BY REFERENCE INTO SUCH DOCUMENT.
The line graph below shows a five year comparison of cumulative total
stockholder return on a $100 investment in the Company's Common Stock to the
cumulative total return of a broad index of stocks traded on the Nasdaq Stock
Market, the Nasdaq Bank Stock Index. The graph also shows the Dow Jones Savings
and Loan Industry Index. In 1997 the Bank was converted to a national bank from
a federally
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chartered savings & loan. The Dow Jones Savings and Loan Industry Index has been
included for comparative purposes. The graph has been prepared at the Company's
request by Research Holdings Limited, San Francisco, California.
COMPARISON OF CUMULATIVE TOTAL RETURN*
ASSUMES $100 INVESTED ON DECEMBER 31, 1992
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COVEST BANCSHARES, INC. NASDAQ MARKET NASDAQ BANK STOCK DOW JONES S&L INDUSTRY
<S> <C> <C> <C> <C>
12/31/92 $100 $100 $100 $100
12/31/93 $125 $115 $114 $104
12/31/94 $115 $112 $114 $91
12/31/95 $143 $159 $169 $151
12/31/96 $178 $195 $223 $188
12/31/97 $261 $240 $377 $329
</TABLE>
* Total return assumes reinvestment of dividends
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
----------------------------------------------------------------------------
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
CoVest Bancshares, Inc. .............................. $ 100 $ 125 $ 115 $ 143 $ 178 $ 261
Nasdaq Market......................................... $ 100 $ 115 $ 112 $ 159 $ 195 $ 240
Nasdaq Bank Stock..................................... $ 100 $ 114 $ 114 $ 169 $ 223 $ 377
Dow Jones S&L Industry................................ $ 100 $ 104 $ 91 $ 151 $ 188 $ 329
</TABLE>
TRANSACTIONS WITH MANAGEMENT
Directors and officers of the Company and the Bank, and their associates,
were customers of and had transactions with the Company and the Bank during
1997. Additional transactions may be expected to take place in the future. All
outstanding loans, commitments to loan, transactions in repurchase agreements
and certificates of deposit and depository relationships, in the opinion of
management, were made in the ordinary course of business, on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons and did not involve more
than the normal risk of collectibility or present other unfavorable features.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed Crowe, Chizek and
Company LLP, independent accountants, to be the Company's auditors for the
fiscal year ending December 31, 1998, and recommends that the stockholders
ratify the appointment. A representative of Crowe, Chizek and Company LLP is
expected to attend the Annual Meeting and will be available to respond to
appropriate
11
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questions and to make a statement if he or she so desires. If the appointment of
the auditors is not ratified, the matter of the appointment of auditors will be
considered by the Board of Directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF CROWE, CHIZEK AND COMPANY LLP.
STOCKHOLDER PROPOSALS
Any proposals of stockholders intended to be presented at the 1999 Annual
Meeting of Stockholders must be received by the Secretary of the Company at its
principal executive offices at 749 Lee Street, Des Plaines, Illinois 60016 on or
before November 24, 1998, to be considered for inclusion in the Company's Proxy
Statement and proxy relating to such meeting.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
meeting other than those matters described above in this Proxy Statement.
However, if any other matter should properly come before the meeting, holders of
the proxies will act in accordance with their best judgment.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitation by mail,
directors, officers and regular employees of the Company and/or the Bank may
solicit proxies personally or by telegraph or telephone without additional
compensation.
BY ORDER OF THE BOARD OF DIRECTORS
Larry G. Gillie
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Des Plaines, Illinois
March 24, 1998
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PROXY COVEST BANCSHARES, INC. PROXY
PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS--APRIL 28, 1998
The undersigned hereby appoints Larry G. Gillie and John A. Flink or either
of them acting in the absence of the other, with power of substitution,
attorneys and proxies, for and in the name and place of the undersigned, to vote
the number of shares of Common Stock that the undersigned would be entitled to
vote if then personally present at the Annual Meeting of the Stockholders of
CoVest Bancshares, Inc., to be held at the Casa Royale Banquets located at 783
Lee Street, Des Plaines, Illinois, on Tuesday, April 28, 1998, at 10:00 a.m.,
local time, or any adjournments or postponements thereof, upon the matters set
forth in the Notice of Annual Meeting and Proxy Statement (receipt of which is
hereby acknowledged) as designated on the reverse side, and in their discretion,
the proxies are authorized to vote upon such other business as may come before
the meeting:
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<C> <S> <C> <C>
/ / Check here for address change. / / Check here if you plan to attend the
meeting.
New Address: -------------------------
---------------------------------------
---------------------------------------
(Continued and to be signed on reverse side.)
</TABLE>
<PAGE>
COVEST BANCSHARES, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY
<TABLE>
<C> <S> <C> <C>
1. Election of Directors 2. To ratify the selection of Crowe,
Gerald T. Niedert, Thomas TenHoeve Chizek & Company LLP as independent
and David B. Speer auditors for the Company for 1998.
The Board of Directors recommends a vote FOR all proposals.
THIS PROXY WILL BE VOTED IN ACCORDANCE
WITH SPECIFICATION MADE. IF NO CHOICES
ARE INDICATED, THIS PROXY WILL BE VOTED
FOR ALL PROPOSALS.
Dated: -------------------------, 1998
NOTE: Please sign exactly as your
name(s) appears. For joint accounts,
each owner should sign. When signing as
executor, administrator, attorney,
trustee or guardian, etc., please give
your full title. Signature(s) --------------------------
--------------------------------------
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