<PAGE> 1
SCHEDULE 14-A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. ____)
Filed by the Registrant [ ]
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 ss.240.14a-11(c) or ss.240.14a-12
Southwest Bancshares, Inc.
--------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Mary M. Sjoquist, Muldoon, Murphy & Faucette
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than 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:
................................................................
<PAGE> 2
[ ] 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> 3
SOUTHWEST BANCSHARES, INC.
4062 Southwest Highway
Hometown, Illinois 60456
(708) 636-2700
March 20, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
(the "Meeting") of Southwest Bancshares, Inc. (the "Company"), the holding
company for Southwest Federal Savings and Loan Association of Chicago (the
"Association"), which will be held on Tuesday, April 22, 1997, at 9:30 a.m., at
The Oak Lawn Hilton Hotel, 9333 South Cicero Avenue, Oak Lawn, Illinois.
The attached notice of the annual meeting and proxy statement describe the
formal business to be transacted at the meeting. Directors and officers of the
Company, as well as a representative of Cobitz, VandenBerg and Fennessy, the
Company's independent auditors, will be present at the Meeting to respond to any
questions that our stockholders may have.
The Board of Directors of the Company has determined that the matters to
be considered at the Meeting are in the best interests of the Company and its
stockholders. For the reasons set forth in the proxy statement, the Board
unanimously recommends a vote "FOR" the nominees listed under Proposal 1 and
"FOR" each of the other matters to be considered.
PLEASE SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY. YOUR COOPERATION IS
APPRECIATED SINCE A MAJORITY OF THE COMMON STOCK MUST BE REPRESENTED, EITHER IN
PERSON OR BY PROXY, TO CONSTITUTE A QUORUM FOR THE CONDUCT OF BUSINESS.
On behalf of the Board of Directors and all of the employees of the
Company and the Association, I wish to thank you for your continued support. We
appreciate your interest.
Sincerely yours,
/s/ Lawrence M. Cox
----------------------------
Lawrence M. Cox
Chairman of the Board of Directors
<PAGE> 4
SOUTHWEST BANCSHARES, INC.
4062 Southwest Highway
Hometown, Illinois 60456
(708) 636-2700
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 22, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Southwest Bancshares, Inc. will be held on Tuesday, April 22, 1997, at 9:30
a.m., at The Oak Lawn Hilton Hotel, 9333 South Cicero Avenue, Oak Lawn,
Illinois.
The annual meeting is for the purpose of considering and voting upon the
following matters:
1. The election of two directors for terms of three years each;
2. The ratification of Cobitz, VandenBerg and Fennessy as independent
auditors of the Company for the fiscal year ending December 31,
1997; and
3. Such other matters as may properly come before the meeting or any
adjournments thereof.
The Board of Directors has established March 4, 1997, as the record date
for the determination of stockholders entitled to notice of and to vote at the
annual meeting and at any adjournments thereof. Only recordholders of the common
stock of the Company as of the close of business on that date will be entitled
to vote at the annual meeting or any adjournments thereof. In the event there
are not sufficient votes for a quorum or to approve or ratify any of the
foregoing proposals at the time of the annual meeting, the annual meeting may be
adjourned in order to permit further solicitation of proxies by the Company. A
list of stockholders entitled to vote at the annual meeting will be available at
Southwest Federal Savings and Loan Association of Chicago, 4062 Southwest
Highway, Hometown, Illinois, for a period of ten days prior to the annual
meeting and will also be available for inspection at the annual meeting itself.
By Order of the Board of Directors
/s/ Mary A. McNally
------------------------------
Mary A. McNally
Secretary
Hometown, Illinois
March 20, 1997
<PAGE> 5
SOUTHWEST BANCSHARES, INC.
------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
------------------------
April 22, 1997
SOLICITATION AND VOTING OF PROXIES
This proxy statement is being furnished to stockholders of Southwest
Bancshares, Inc. (the "Company") in connection with the solicitation by the
Board of Directors of the Company (the "Board of Directors") of proxies to be
used at the Annual Meeting of Stockholders (the "Meeting") to be held on
Tuesday, April 22, 1997, at 9:30 a.m., at The Oak Lawn Hilton Hotel, 9333 South
Cicero Avenue, Oak Lawn, Illinois, and at any adjournments thereof. The 1996
Annual Report to Stockholders, including the consolidated financial statements
for the fiscal year ended December 31, 1996, accompanies this proxy statement,
which is first being mailed to stockholders on or about March 20, 1997.
Regardless of the number of shares of common stock owned, it is important
that recordholders of a majority of the shares be represented by proxy or
present in person at the Meeting. Stockholders are requested to vote by
completing the enclosed proxy and returning it signed and dated in the enclosed
postage-paid envelope. Stockholders are urged to indicate their vote in the
spaces provided on the proxy. PROXIES SOLICITED BY THE BOARD OF DIRECTORS OF THE
COMPANY WILL BE VOTED IN ACCORDANCE WITH THE DIRECTIONS GIVEN THEREIN. WHERE NO
INSTRUCTIONS ARE INDICATED, SIGNED PROXIES WILL BE VOTED "FOR" THE ELECTION OF
EACH OF THE NOMINEES FOR DIRECTORS NAMED IN THIS PROXY STATEMENT AND "FOR" THE
RATIFICATION OF COBITZ, VANDENBERG AND FENNESSY AS INDEPENDENT AUDITORS OF THE
COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 1997.
The Board of Directors knows of no additional matters that will be
presented for consideration at the Meeting. Execution of a proxy, however,
confers on the designated proxyholders discretionary authority to vote the
shares in accordance with their best judgment on such other business, if any,
that may properly come before the Meeting or any adjournments thereof.
A proxy may be revoked at any time prior to its exercise by the filing of
a written notice of revocation with the Secretary of the Company, by delivering
to the Company a duly executed proxy bearing a later date, or by attending the
Meeting and voting in person. However, if you are a stockholder whose shares are
not registered in your own name, you will need appropriate documentation from
your recordholder to vote personally at the Meeting.
The cost of solicitation of proxies on behalf of management will be borne
by the Company. In addition to the solicitation of proxies by mail, Morrow &
Co., a proxy solicitation firm, will assist the Company in soliciting proxies
for the Meeting and will be paid a fee of $3,500, plus out-of-pocket expenses.
Proxies may also be solicited personally or by telephone or telegraph by
directors, officers and regular employees of the Company and Southwest Federal
1
<PAGE> 6
Savings and Loan Association of Chicago (the "Association"), without additional
compensation therefor. The Company will also request persons, firms and
corporations holding shares in their names, or in the name of their nominees,
which are beneficially owned by others, to send proxy material to and obtain
proxies from such beneficial owners, and will reimburse such holders for their
reasonable expenses in doing so.
VOTING SECURITIES
The securities which may be voted at the Meeting consist of shares of
common stock of the Company (the "Common Stock"), with each share entitling its
owner to one vote on all matters to be voted on at the Meeting except as
described below. There is no cumulative voting for the election of directors.
The close of business on March 4, 1997, has been fixed by the Board of
Directors as the record date (the "Record Date") for the determination of
stockholders of record entitled to notice of and to vote at the Meeting and any
adjournments thereof. The total number of shares of Common Stock outstanding on
the Record Date was 2,639,116 shares. All per share amounts referenced in the
proxy statement have been adjusted for the 3 for 2 stock split distributed on
November 13, 1996.
As provided in the Company's Certificate of Incorporation, recordholders
of Common Stock who beneficially own in excess of 10% of the outstanding shares
of Common Stock (the "Limit") are not entitled to any vote in respect of the
shares held in excess of the Limit. A person or entity is deemed to beneficially
own shares owned by an affiliate of, as well as persons acting in concert with,
such person or entity. The Company's Certificate of Incorporation authorizes the
Board of Directors (i) to make all determinations necessary to implement and
apply the Limit, including determining whether persons or entities are acting in
concert, and (ii) to demand that any person who is reasonably believed to
beneficially own stock in excess of the Limit to supply information to the
Company to enable the Board of Directors to implement and apply the Limit.
The presence, in person or by proxy, of the holders of at least a majority
of the total number of shares of Common Stock entitled to vote (after
subtracting any shares in excess of the Limit pursuant to the Company's
Certificate of Incorporation) is necessary to constitute a quorum at the
Meeting. In the event there are not sufficient votes for a quorum or to approve
or ratify any proposal at the time of the Meeting, the Meeting may be adjourned
in order to permit the further solicitation of proxies.
As to the election of directors, the proxy card being provided by the
Board of Directors enables a shareholder to vote "FOR" the election of the
nominees proposed by the Board, or to "WITHHOLD AUTHORITY" to vote for one or
more of the nominees being proposed. Under Delaware law and the Company's
Certificate of Incorporation and Bylaws, directors are elected by a plurality of
the votes cast, without regard to either (i) broker non-votes, or (ii) proxies
as to which authority to vote for one or more of the nominees being proposed is
withheld.
As to the ratification of Cobitz, VandenBerg and Fennessy and all other
matters that may properly come before the Meeting, by checking the appropriate
box, a shareholder may: (i) vote
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<PAGE> 7
"FOR" the item; (ii) vote "AGAINST" the item; or (iii) "ABSTAIN" from voting on
such item. Under the Company's Certificate of Incorporation and Bylaws, unless
otherwise required by law, all other matters shall be determined by a majority
of the votes cast, without regard to either (a) broker non-votes, or (b) proxies
marked "ABSTAIN" as to that matter.
Proxies solicited hereby will be returned to the Company, and will be
tabulated by inspectors of election designated by the Board of Directors, who
will not be employed by, or a director of, the Company or any of its affiliates.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as to those persons
believed by management to be beneficial owners of more than 5% of the
outstanding shares of Common Stock on the Record Date, as disclosed in certain
reports regarding such ownership filed with the Company and with the Securities
and Exchange Commission (the "SEC"), in accordance with Sections 13(d) or 13(g)
of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") by such
persons and groups. Other than those persons listed below, the Company is not
aware of any person or group, as such term is defined in the Exchange Act, that
owns more than 5% of the Common Stock as of the Record Date.
<TABLE>
<CAPTION>
Name and Address of Number Percent
Title of Class Beneficial Owner of Shares of Class
- --------------- --------------------------------- ----------- ---------
<S> <C> <C> <C>
Common Stock Southwest Federal Savings and Loan 336,369(1) 12.75%
Employee Stock Ownership Plan and
Trust ("ESOP")
4062 Southwest Highway
Hometown, Illinois 60456
Common Stock Richard E. Webber 298,612(2) 11.15%
4062 Southwest Highway
Hometown, IL 60456
</TABLE>
- --------------------------------
(1) The ESOP Committee of the Board of Directors administers the ESOP. The ESOP
Committee may instruct the ESOP Trustee regarding investment of funds
contributed to the ESOP. The ESOP Trustee subject to its fiduciary duty must
vote all allocated shares held in the ESOP in accordance with the
instructions of the participating employees. As of the Record Date, 240,369
shares have been allocated to participants' accounts. Under the ESOP,
unallocated shares held in the suspense account will be voted by the ESOP
Trustee in a manner calculated to most accurately reflect the instructions
it has received from participants regarding the allocated stock so long as
such vote is in accordance with the provisions of Employee Retirement Income
Security Act of 1974, as amended (the "ERISA").
(2) Based upon information filed in Amendment No. 4 to Schedule 13D filed by
Richard E. Webber on June 24, 1996 and subsequent purchases through the
Record Date. See "Proposal 1. Election of Directors - Information with
Respect to Nominees, Continuing Directors and Certain Executive Officers".
3
<PAGE> 8
PROPOSALS TO BE VOTED ON AT THE MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
Pursuant to its Bylaws, the number of directors of the Company is set at
seven (7) unless otherwise designated by the Board of Directors. Each of the
seven members of the Board of Directors of the Company also presently serves as
a director of the Association. Directors are elected for staggered terms of
three years each, with a term of office of only one of the three classes of
directors expiring each year. Directors serve until their successors are elected
and qualified.
The two nominees proposed for election at the Meeting are Messrs. Cox and
Lawler. All nominees named are presently directors of the Company and the
Association. No person being nominated as a director is being proposed for
election pursuant to any agreement or understanding between any person and the
Company.
In the event that any nominee is unable to serve or declines to serve for
any reason, it is intended that proxies will be voted for the election of the
balance of those nominees named and for such other persons as may be designated
by the present Board of Directors. The Board of Directors has no reason to
believe that any of the persons named will be unable or unwilling to serve.
UNLESS AUTHORITY TO VOTE FOR THE DIRECTORS IS WITHHELD, IT IS INTENDED THAT THE
SHARES REPRESENTED BY THE ENCLOSED PROXY, IF EXECUTED AND RETURNED, WILL BE
VOTED "FOR" THE ELECTION OF ALL NOMINEES PROPOSED BY THE BOARD OF DIRECTORS.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL NOMINEES
NAMED IN THIS PROXY STATEMENT.
INFORMATION WITH RESPECT TO NOMINEES, CONTINUING DIRECTORS AND CERTAIN EXECUTIVE
OFFICERS
The following table sets forth, as of the Record Date, the names of the
nominees, continuing directors and the Named Executive Officers, as defined
below, as well as their ages, a brief description of their recent business
experience, including present occupations and employment, certain directorships
held by each, the year in which each became a director of the Association, and
the year in which their terms (or in the case of nominees, their proposed terms)
as director of the Company expire. This table also sets forth the amount of
Common Stock and the percent thereof beneficially owned by each director and
Named Executive Officer and all directors and executive officers as a group as
of the Record Date.
4
<PAGE> 9
<TABLE>
<CAPTION>
NAME AND PRINCIPAL EXPIRATION SHARES OF COMMON OWNERSHIP
OCCUPATION AT PRESENT DIRECTOR OF TERM AS STOCK BENEFICIALLY AS A PERCENT
AND FOR THE PAST FIVE YEARS AGE SINCE(1) DIRECTOR OWNED(2) OF CLASS
--------------------------- --- -------- ---------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
NOMINEES:
Lawrence M. Cox........................ 66 1963 2000 106,131(3) 4.01%
Dr. Cox is Chairman of the
Board of Directors of the
Company and the Association.
Dr. Cox has served as a director
since 1963 and as Chairman of
the Board of the Association
since 1990. Dr. Cox is a
physician in the private practice
of medicine.
Robert E. Lawler....................... 65 1990 2000 31,201(4)(5) 1.18%
Dr. Lawler has his own dental
practice and is the president of a
dental corporation.
CONTINUING DIRECTORS:
Richard E. Webber...................... 67 1959 1999 298,612(6)(7) 11.15%
Mr. Webber is the President and
Chief Financial Officer of the
Company and President and Chief
Executive Officer of the Association.
He has been President of the
Association since 1970 and Chief
Executive Officer of the Association
since 1959. Mr. Webber also serves
as President, and as a Director of
Southwest Service Corporation and
Southwest Bancshares Development
Corporation.
James W. Gee, Sr....................... 79 1953 1999 40,856(4)(5) 1.54%
Retired, Mr. Gee was the owner of a
lumber and hardware store.
Joseph A. Herbert...................... 72 1977 1999 50,701(4)(5) 1.91%
Mr. Herbert is the owner of a
photographic and electronic supply
business.
(footnotes on page 7)
</TABLE>
5
<PAGE> 10
<TABLE>
<CAPTION>
NAME AND PRINCIPAL EXPIRATION SHARES OF COMMON OWNERSHIP
OCCUPATION AT PRESENT DIRECTOR OF TERM AS STOCK BENEFICIALLY AS A PERCENT
AND FOR THE PAST FIVE YEARS AGE SINCE(1) DIRECTOR OWNED(2) OF CLASS
- --------------------------- --- -------- ---------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
Frank J. Muriello...................... 68 1988 1998 43,276(5) 1.64%
Mr. Muriello owns his own real
estate consulting and appraisal firm
and is Executive Director of the
Housing Authority of the Village of
Oak Park. Mr. Muriello also
performs real estate consulting and
quality control appraisal services for
the Association.
Albert Rodrigues................... .... 68 1969 1998 101,920(8) 3.83%
Mr. Rodrigues retired as Executive
Vice President of the Association on
December 31, 1993 and remains as
consultant to the Association, a
Director of the Company and the
Association, Executive Vice Presi-
dent and Director of Southwest
Service Corporation and Vice
President and Director of Southwest
Bancshares Development Corpora-
tion.
NAMED EXECUTIVE OFFICERS:
(WHO ARE NOT ALSO DIRECTORS)
Ronald D. Phares...................... 62 -- -- 40,366(7)(9)(10) 1.53%
Mr. Phares has been Senior Vice
President and Chief Operations
Officer of the Association since
September 1988. Mr. Phares is also
Vice President and Investor Relations
Officer of the Company.
Mary A. McNally........................ 39 -- -- 40,903(7)(9)(10) 1.55%
Ms. McNally is the Corporate
Secretary of the Company, Vice
President, Secretary and Chief
Lending Officer of the Association,
and Secretary of Southwest Service
Corporation and Southwest Banc-
shares Development Corporation.
(footnotes on following page)
</TABLE>
6
<PAGE> 11
<TABLE>
<CAPTION>
NAME AND PRINCIPAL EXPIRATION SHARES OF COMMON OWNERSHIP
OCCUPATION AT PRESENT DIRECTOR OF TERM AS STOCK BENEFICIALLY AS A PERCENT
AND FOR THE PAST FIVE YEARS AGE SINCE(1) DIRECTOR OWNED(2) OF CLASS
--------------------------- --- -------- ---------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
Michael J. Gembara..................... 37 -- -- 75,777(7)(9) 2.87%
Mr. Gembara is Vice President of
the Company, Vice President of
Subsidiary Operations of the
Association and Vice President,
Treasurer and Director of Southwest
Bancshares Development Corporation
and Vice President and Director of
Southwest Service Corporation.
Stock ownership of all directors and -- -- -- 976,864(11)(12) 35.75%
executive officers of the Company as a
group (14 persons).
</TABLE>
- -----------------------------------------------
(1) Includes years of service as a director of the Company's predecessor, the
Association.
(2) Each person or relative of such person whose shares are included herein
exercises sole (or shared with spouse, relative or affiliate) voting or
dispositive power as to the shares reported.
(3) Includes 6,500 shares subject to options which may be acquired by Dr. Cox
under the Directors' Option Plan which are currently exercisable. Also
includes 3,240 shares awarded to Dr. Cox under the RRP as to which voting
may be directed by Dr. Cox which commenced vesting on June 23, 1993 at a
rate of 20% of the original amount awarded per year.
(4) Includes 8,100, 6,600 and 12,600 shares subject to options awarded to
outside directors, Messrs. Lawler, Gee and Herbert, respectively, which are
currently exercisable under the Southwest Bancshares, Inc. 1992 Stock
Option Plan for Outside Directors (the "Directors' Option Plan").
(5) Includes 1,620 shares awarded to each outside director under the RRP.
(6) Includes 8,748 shares with respect to Mr. Webber awarded under the
Southwest Federal Savings and Loan Association of Chicago Recognition and
Retention Plan and Trust (the "RRP") as to which voting may be directed by
Mr. Webber. Such shares commenced vesting on June 23, 1993 at a rate of 20%
of the original amount awarded per year. Includes 38,460 shares with
respect to Mr. Webber which may be acquired through the exercise of stock
options granted under the Southwest Bancshares, Inc. 1992 Incentive Stock
Option Plan ("Incentive Option Plan") and excludes 30,240 shares subject to
options which commenced vesting on June 23, 1993 at a rate of 20% of the
original amount awarded per year.
(7) Includes 19,940, 12,654, 10,800 and 11,437 shares allocated to Messrs.
Webber and Phares, Ms. McNally and Mr. Gembara, respectively, under the
Association's ESOP.
(8) Includes 19,500 shares which may be acquired through the exercise of stock
options granted under the Incentive Option Plan which became exercisable
upon Mr. Rodrigues' retirement.
(9) Includes 1,236, 1,620 and 1,620 shares awarded to Mr. Phares, Ms. McNally
and Mr. Gembara, respectively, under the RRP as to which voting may be
directed by Mr. Phares, Ms. McNally and Mr. Gembara, respectively, which
commenced vesting on June 23, 1993 at a rate of 20% of the original amount
awarded per year.
(10) Includes 1,680 shares subject to options awarded to Mr. Gembara under the
Incentive Option Plan which are currently exercisable and excludes 1,680
shares awarded to Mr. Phares, Ms. McNally and Mr. Gembara which commenced
vesting on June 23, 1993 at a rate of 20% of the original amount awarded
per year.
(11) Includes 37,527 shares held by the Association's Retirement Plan over which
Messrs. Gembara, Eckert and Olson, employees of the Company, as
co-trustees, have shared voting or dispositive power as to the shares
reported.
(12) Includes 53,300 shares subject to options under the Directors'
Option Plan, 27,672 shares allocated to executive officers and
directors under the RRP, and 87,899 shares allocated to executive
officers under the ESOP. Includes 40,140 shares with respect to all
executive officers which may be acquired through the exercise of
stock options granted under the Incentive Option Plan and excludes
40,740 shares subject to options which commenced vesting on June 23,
1993 at a rate of 20% of the original amount awarded per year.
7
<PAGE> 12
MEETINGS OF THE BOARD AND COMMITTEES OF THE BOARD
The Board of Directors conducts its business through meetings of the Board and
through activities of its committees. The Board of Directors meets monthly and
may have additional meetings as needed. During fiscal 1996, the Board of
Directors of the Company held twelve regular meetings. All of the directors of
the Company attended at least 75% in the aggregate of the total number of the
Company's board meetings held and committee meetings on which such directors
served during 1996. The Board of Directors of the Company maintains committees,
the nature and composition of which are described below:
Audit Committee. The Audit Committee of the Company and Association
consists of all outside directors: Messrs. Cox, Gee, Herbert, Lawler, Muriello
and Rodrigues. The purpose of the Audit Committee is to review the
Association's budgets and audit performance and evaluate policies and procedure
relating to the auditing functions and controls. This committee also selects
the independent auditors. The committee met two times in 1996.
Nominating Committee. The Company's Nominating Committee for the 1997
Annual Meeting consisted of the Board of Directors. The Nominating Committee
considers and recommends the nominees for director to stand for election at the
Company's Annual Meeting of Stockholders. The Company's Bylaws provide for
stockholder nominations of directors. These provisions require such nominations
to be made pursuant to timely written notice to the Secretary of the Company.
The stockholders' notice of nominations must contain all information relating to
the nominee which is required to be disclosed by the Company's Bylaws and by the
Exchange Act. See "Additional Information - Notice of Business to be Conducted
at an Annual Meeting". The Nominating Committee met once in fiscal 1996.
DIRECTORS' COMPENSATION
Directors' Fees and Real Estate Consulting Fees. The directors of the
Association receive a retainer of $1,100 per month and $600 for each Association
meeting attended and directors of the Company receive $100 for each Company
meeting attended. The Chairman of the Board receives an additional $300 for each
Association meeting conducted and $50 for each Company meeting conducted.
Directors of Southwest Bancshares Development Corporation ("SBDC") receive $100
for each meeting attended and the directors of Southwest Service Corporation
("SSC") receive $350 per month. Mr. Muriello received $6,550 for real estate
appraisal reviews and consulting services performed during 1996. Mr. Rodrigues
received $24,000 for real estate consulting services for the year ended December
31, 1996.
Directors' Option Plan. Under the Directors' Option Plan, each outside
director was granted, effective June 23, 1992, not accounting for the stock
split, options to purchase 8,400 shares of Common Stock at an exercise price of
$10.00 per share. The Chairman of the Board received, not accounting for the
stock split, options to purchase 28,000 shares of Common Stock. Each person who
is first elected as an outside director subsequent to June 23, 1992 (referred to
herein as a subsequent outside director) will be granted options to purchase
1,500 shares of
8
<PAGE> 13
Common Stock at the fair market value on the date of the grant, if available.
Options granted to outside directors are exercisable immediately.
Association Recognition And Retention Plan And Trust. Under the RRP, each
outside director was awarded, effective June 23, 1992, not accounting for the
stock split, 5,400 shares of Common Stock, except for the Chairman who was
granted 10,800 shares of Common Stock. Each subsequent outside director will be
granted 1,500 shares of Common Stock as of the effective date of such election.
Outside directors will earn shares awarded to them at a rate of 20% per year
commencing one year from the effective date of the grant. In accordance with the
RRP, dividends are paid on shares awarded or held in the RRP.
EXECUTIVE COMPENSATION
THE REPORT OF THE COMPENSATION COMMITTEE AND THE STOCK PERFORMANCE GRAPH
SHALL NOT BE DEEMED INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT
INCORPORATING BY REFERENCE THIS PROXY STATEMENT INTO ANY FILING UNDER THE
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR THE EXCHANGE ACT, EXCEPT AS TO
THE EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY
REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION. Under rules
established by the SEC, the Company is required to provide certain data and
information in regard to the compensation and benefits provided to the Company's
chief executive officer and the other executive officers of the Company. The
disclosure requirements for these executive officers include the use of tables
and a report explaining the rationale and considerations that led to fundamental
compensation decisions affecting those individuals. In fulfillment of this
requirement, the Compensation Committee, at the direction of the Board of
Directors, has prepared the following report for inclusion in this proxy
statement.
General. The Company does not pay any cash compensation to the executive
-------
officers of the Company and, therefore, the Company does not maintain a
compensation committee. The compensation committee of the Board of Directors of
the Association (the "Compensation Committee") is responsible for establishing
the compensation levels and benefits for the executive officers of the
Association, who also serve as executive officers of the Company, and for
reviewing the recommendations of management for compensation and benefits for
other officers and employees of the Association. The Compensation Committee is
composed of all the outside directors of the Association, including Mr. Albert
Rodrigues who was a former Executive Vice President of the Association.
Compensation Policies. It is the Compensation Committee's policy to develop
---------------------
an executive compensation program which will attract, motivate, retain and
reward senior executives and provide appropriate incentives to provide long term
financial results which will benefit the Association. In order to align the
interests and performance of its executives with the long term interests of its
stockholders, the Company and the Association adopted a program which rewards
the executives for delivering long term value to the Company and the Association
through stock ownership.
9
<PAGE> 14
The compensation package available to executive officers is composed of the
following components: base salary, bonus awards and long term incentive
compensation, including options and stock awards. Mr. Webber has an employment
agreement which specifies a minimum base salary and requires periodic review of
such salary. In addition, executive officers participate in other benefit plans
available to all employees including the Employee Stock Ownership Plan.
Base Salaries. In determining salary levels, the Compensation Committee
-------------
considers the entire compensation package, including the equity compensation
provided under the Company's stock plans, of the executive officers. The salary
levels are intended to be consistent with competitive practices of other
comparable financial institutions and each executive's level of responsibility.
The Compensation Committee consulted a survey of compensation paid to executive
officers performing similar duties for depository institutions and their holding
companies, with particular focus on the level of compensation paid by comparable
institutions in the Association's market area. The peer group utilized for
comparison of compensation includes some, but not all, of the companies included
in the peer group used for the Stock Performance Graph.
Although the Compensation Committee's decisions are discretionary and no
specific formula is used for decision making, salary increases are aimed at
reflecting the overall financial performance of the Company and the performance
of the individual executive officer. Specifically, the Compensation Committee
considered the Company's asset growth, asset quality, return on average assets,
profit on joint ventures and the ratio of compensation expense to total assets.
Each of these factors are weighted equally in determining compensation. In
fiscal 1995, the Company's assets grew from $350.4 million in 1994 to $359.5
million in 1995. Although return on assets declined from 1.80% for 1994 to 1.26%
in 1995, the Compensation Committee reflected on the declining net income
pressure experienced throughout the thrift industry. A modest increase of .02%
in the non-performing assets to .23% for 1995 from .21% was deemed very
acceptable. The Compensation Committee also noted the increase in joint venture
income to $477,000 in 1995 from $455,000 in 1994 and the slight increase in
compensation and benefits expense to $3.9 million in 1995 from $3.8 million in
1994.
Bonus Awards. In determining bonus awards, the Compensation Committee
------------
considers the entire compensation package, including equity compensation under
the Company's stock plans, of the executive officers. As discussed under base
salaries, the bonus awards are intended to be consistent with competitive
practices of other comparable financial institutions and each executive's level
of responsibility. The Compensation Committee consulted a survey of compensation
paid to executive officers focusing on the level of compensation paid by
comparable institutions in the Association's market area. Although the
Compensation Committee's decisions are discretionary and no specific formula is
used for decision making, bonus awards are aimed at reflecting the overall
financial performance of the Company and the performance of the individual
executive officer.
Long Term Incentive Compensation. The Company and the Association maintain
--------------------------------
the Incentive Option Plan and the Recognition and Retention Plan under which
executive officers
10
<PAGE> 15
may receive grants and awards. The Compensation Committee believes that stock
ownership is a significant incentive in building stockholders' wealth and
aligning the interests of employees and stockholders. In connection with the
Company's initial public offering, all the executive officers received grants
and awards which had vesting periods of 20% per year beginning on June 23, 1993.
Therefore, such grants and awards are currently four-fifths vested. Although the
Compensation Committee did not make any awards during 1996, the Compensation
Committee does consider prior grants and awards when determining the total
annual compensation package. The value of this component of compensation grows
as the stock of the Company appreciates in value. The Company experienced a 3.3%
increase in market price in its Common Stock in 1996. The specific grants and
awards for certain executive officers are reflected in the Summary Compensation
Table.
Compensation of the Chief Executive Officer. After taking into
---------------------------------------------------
consideration the factors discussed above including the overall compensation
package, survey consulted and the specified performance factors, the
Compensation Committee determined to maintain Mr. Webber's salary at the same
level for 1996 which was within the range of compensation paid by comparable
institutions in the Association's market area. In addition, the Compensation
Committee determined that Mr. Webber's bonus would be $110,417 based on the
Company's performance levels as discussed above. This bonus amount was
comparable to the amounts provided for executive officers of the surveyed
institutions. In addition, the Compensation Committee considered the outstanding
grants and awards to Mr. Webber as well as the appreciation of such awards.
Compensation Committee
Lawrence M. Cox Robert E. Lawler
James W. Gee, Sr. Frank J. Muriello
Joseph A. Herbert Albert Rodrigues
11
<PAGE> 16
STOCK PERFORMANCE GRAPH. The following graph shows a comparison of
stockholder return on the Company's Common Stock based on the market price of
Common Stock assuming the reinvestment of dividends, with the cumulative total
returns for the companies on the Nasdaq Stock Market (U.S.) Index and Nasdaq
Financial Stocks Index for the period beginning on June 23, 1992, the day the
Company's Common Stock began trading, through December 31, 1996. The data used
to prepare the graph was prepared by the Center for Research in Security Prices
("CRSP") at the University of Chicago Graduate School of Business.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, NASDAQ STOCK MARKET (U.S.)
INDEX AND NASDAQ FINANCIAL STOCKS INDEX
[GRAPH GOES HERE]
<TABLE>
<CAPTION>
Summary
06/23/92 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Southwest Bancshares, Inc. 100.00 161.602 206.735 224.164 294.690 310.529
CRSP Index--Nasdaq Stock Market Index 100.00 124.061 142.414 139.207 196.865 242.160
CRSP Index--Nasdaq Financial Stock Index 100.00 125.361 145.702 146.048 212.657 272.657
Notes:
A. The lines represent yearly index levels derived from compounded daily returns that include all dividends.
B. The indexes are reweighed daily, using the market capitalization on the previous trading day.
C. If the yearly interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used.
D. The index level for all series was set to $100.00 on 06/23/92.
</TABLE>
12
<PAGE> 17
SUMMARY COMPENSATION TABLE. The following table shows, for the fiscal years
ending December 31, 1996, 1995 and 1994, the cash compensation as well as
certain other compensation paid or accrued for those years, paid by the
Association, to the President and those executive officers of the Company who
received an amount in salary and bonus in excess of $100,000 in 1996 (the "Named
Executive Officers"). The Company does not pay any cash compensation.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------- ---------------------------
Awards Payouts
--------------- -------
Securities
Other Restricted Underlying All
Anual Stock Options/ LTIP Other
Name and Salary Bonus Compen- Awards SARs Payouts Compen-
Principal Position Year ($)(1) ($) sation($)(2) ($)(3) (#)(4) ($)(5) sation($)
- ---------------------- ---- ------- -------- ----------- ---------- ----------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard E. Webber 1996 $277,000 $110,417 -- -- -- None $67,123(6)
President, Chief 1995 277,000 104,417 -- -- -- None 70,097
Financial Officer 1994 277,000 110,417 -- -- -- None 52,374
and Director
Ronald D. Phares 1996 100,000 16,167 -- -- -- None 49,168(6)
Senior Vice President 1995 90,500 19,771 -- -- -- None 48,682
1994 90,500 23,771 -- -- -- None 38,375
Mary A. McNally 1996 81,000 22,875 -- -- -- None 43,679(6)
Vice President and 1995 72,000 29,000 -- -- -- None 43,971
Secretary 1994 72,000 33,000 -- -- -- None 38,766
Michael J. Gembara 1996 83,400 33,050 -- -- -- None 46,599(6)
Vice President 1995 71,400 40,750 -- -- -- None 46,462
1994 71,400 45,750 -- -- -- None 37,460
</TABLE>
- ------------------------------------------
(1) Includes directors' fees for Mr. Webber for serving as director of the
Company, Association, SBDC and SSC and for Mr. Gembara for serving as
director of SBDC and SSC.
(2) For 1996, 1995 and 1994, there were no:(a) perquisites over the lesser of
$50,000 or 10% of the individual's total salary and bonus for the year; (b)
payments of above-market or preferential earnings on deferred compensation;
(c) payments of earnings with respect to long-term incentive plans
prior to settlement or maturation; (d) tax payment reimbursements; or (e)
preferential discounts on stock.
(3) At December 31, 1996, Messrs. Webber and Phares, Ms. McNally and
Mr. Gembara had 8,748, 1,236, 1,620 and 1,620 shares with a dollar value of
$159,651, $22,557, $29,565 and $29,565, respectively, pursuant to the RRP.
Such awards commenced vesting on June 23, 1993 at a rate of 20% of the
original amount awarded per year. Awards will be 100% vested upon
termination of employment due to death, disability or normal retirement or
following a change in control.
(4) The Company maintains an Incentive Option Plan. See "--Incentive Stock
Option Plan".
(5) For 1996, 1995 and 1994, the Company did not maintain a long-term incentive
plan and, therefore, there were no payments or awards under any long-term
incentive plan.
(6) Includes $65,809, $48,983, $43,435 and $46,355 contributed by the
Association pursuant to the ESOP and allocated respectively for the benefit
of Messrs. Webber and Phares, Ms. McNally, and Mr. Gembara for fiscal 1996
including dividends credited to their accounts. Includes $1,314, $185,
$244 and $244 attributable to payment of dividends and interest earned on
plan shares under the RRP to Messrs. Webber and Phares, Ms. McNally and
Mr. Gembara, respectively.
13
<PAGE> 18
EMPLOYMENT AGREEMENT. The Association entered into an employment
agreement with Mr. Webber in 1988, which was amended in 1993. Mr. Webber's
employment agreement with the Association provides for a three-year term. The
Board of Directors reviews the agreement annually and may extend the remaining
term of the agreement for an additional one-year period. The agreement provides
that the base salary for Mr. Webber will be reviewed annually. In 1996,
Mr. Webber's base salary was $250,000 (the "Base Salary").
In addition to the Base Salary, the agreement provides for, among other
things, disability pay and other fringe benefits. The agreement provides for
termination by the Association for cause at any time. In the event the
Association chooses to terminate Mr. Webber's employment for reasons other
than for cause, or in the event of Mr. Webber's resignation from the
Association upon: (i) a material change in Mr. Webber's functions, duties or
responsibilities, or relocation of his principal place of employment; (ii)
liquidation, dissolution, consolidation, reorganization or merger in which the
Association or the Company is not the resulting entity; (iii) failure to
reelect Mr. Webber to his current office or Board duties; or (iv) a breach of
the agreement by the Association or the Company, Mr. Webber, or in the event
of death, his beneficiary, would be entitled to severance pay in an amount
equal to the greater of his remaining salary payments under the agreement or
the highest annual Base Salary, including other cash compensation and bonuses
received by Mr. Webber during the term of the agreement and the amount of any
benefits received pursuant to any employee benefit plans, on behalf of
Mr. Webber, maintained by the Association during the term of the agreement;
provided, however, that if the Association is not in compliance with its
minimum capital requirements or if such payments would cause the Association's
capital to be reduced below its minimum capital requirements, such payments
shall be deferred until such time as the Association is in capital compliance.
The Association would also cause to be continued life, health and disability
coverage substantially identical to the coverage maintained by the Association
for Mr. Webber prior to his termination. Such coverage shall cease upon the
expiration of the remaining term of the agreement. The agreement also provides
for certain benefits to be paid upon disability or retirement, including a
severance payment equal to one-half of Mr. Webber's base salary, bonuses
and any other cash compensation in the event of retirement.
If termination, voluntary or involuntary, follows a change in control of
the Association or the Company, Mr. Webber or, in the event of his subsequent
death, his beneficiary, would be entitled to a severance payment in an amount
equal to the immediately preceding year's base salary plus the compensation that
the executive would have received during the remaining term of the agreement
subject to the limitation discussed below. The Association and the Company would
also continue Mr. Webber's life, medical and disability coverage substantially
identical to the coverage maintained by the Association for Mr. Webber prior to
his termination. Such coverage shall cease upon the expiration of thirty-six
(36) months. A change in control is generally defined to mean the acquisition by
a person or group of persons having beneficial ownership of 20% or more of the
Association's or the Company's Common Stock during the term of the agreement or
a plan of reorganization, merger, consolidation, sale of all or substantially
all of the assets of the Association or the Company or similar transaction in
which
14
<PAGE> 19
the Association or the Company is not the resulting entity, or contested
election of directors which results in a change of a majority of the Board of
Directors.
The agreement contains a provision to the effect that in the event of a
change in control the aggregate payments under the agreement shall not
constitute an excess parachute payment under Section 280G of the Internal
Revenue Code of 1986, as amended, (the "Code") (which imposes an excise tax on
the recipient and denial of the deduction for such excess amount to the
employer). Such provision provides that the payments under the agreement shall
be reduced to one dollar below the amount which would trigger an excise tax
under Section 280G.
In the event of a change in control, based upon the past fiscal year's
salary and fees, Mr. Webber would receive approximately $1.3 million in
severance payments in addition to other non-cash benefits provided for under the
agreement. In addition, any outstanding options under the Incentive Option Plan
and any awards under the RRP will vest immediately upon a change in control.
The Association has entered into a Supplemental Stock Bonus Retirement
Agreement with Mr. Webber to provide him with stock benefits in the event that
he retires prior to the expiration of the ESOP's term loan. The purpose of the
Agreement is to compensate him for his experience and expertise by providing him
with benefits he would have received under the ESOP had he remained with the
Association until all vested shares held in the ESOP suspense account for his
benefit were fully allocated.
INCENTIVE STOCK OPTION PLAN. The Company maintains the Incentive Stock
Option Plan which provides discretionary awards to officers and key employees as
determined by a committee. The following table shows options exercised by the
Named Executive Officers during 1996, including the aggregate value of gains on
the date of exercise. In addition, the table provides information with respect
to the number of shares of Common Stock represented by outstanding stock options
held by the Named Executive Officers as of December 31, 1996. Also reported are
the values for "in-the-money" options which represent the positive spread
between the exercise price of any such existing stock options and the year-end
price of the Common Stock.
15
<PAGE> 20
<TABLE>
<CAPTION>
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUE(1)(2)(3)(4)
VALUE OF
NUMBER UNEXERCISED
OF SECURITIES IN-THE-MONEY
SHARES UNDERLYING UNEXERCISED OPTIONS/SARS
ACQUIRED ON VALUE OPTIONS/SARS AT FISCAL YEAR-
NAME EXERCISE (#) REALIZED ($)(5) AT FISCAL YEAR-END(#)(6) END($)(7)
- ---------------------- --------------- --------------- --------------------------- ----------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Richard E. Webber 10,000 $167,500 38,460 30,240 $445,367 $350,179
Ronald D. Phares 3,360 54,880 -- 1,680 -- 19,454
Mary A. McNally 2,240 38,360 -- 1,680 -- 19,454
Michael J. Gembara 1,000 16,750 1,680 1,680 19,454 19,454
</TABLE>
- ------------------------------------
(1) Options granted pursuant to the Incentive Option Plan are exercisable in
equal installments commencing on June 23, 1993 at a rate of 20% of the
original amount awarded per year. The options become exercisable upon a
change in control as defined under the "Employment Agreement". In addition,
vesting of non-statutory options may be accelerated by the committee.
(2) The purchase price may be made in whole or in part through the surrender of
previously held shares of Common Stock at the fair market value of such
shares on the date of surrender.
(3) Under limited circumstances, such as death, disability or normal retirement
of an employee, the employee (or his beneficiary) may request that the
Company, in exchange for the employee's surrender of an option, pay to the
employee (or beneficiary), the amount by which the fair market value of the
common stock exceeds the exercise price of the option on the date of the
employee's termination of employment. It is within the Company's discretion
to accept or reject such a request.
(4) Options are subject to limited (SAR) rights pursuant to which the options
may be exercised in the event of a change in control of the Company. Upon
the exercise of a limited right, the optionee would receive a cash payment
equal to the difference between the exercise price of the related option on
the date of grant and the fair market value of the underlying shares of
Common Stock on the date the limited right is exercised.
(5) Based on the market value of the Common Stock as of the date of exercise,
minus the exercise price.
(6) The options in this table have an exercise price of $6.67.
(7) The price of the Common Stock on December 31, 1996 was $18.25.
DEFINED BENEFIT PLAN. The Association maintains the Southwest Federal
Savings and Loan Association of Chicago Retirement Plan (the "Retirement Plan"),
for the benefit of eligible employees of the Association. The Retirement Plan is
a noncontributory defined benefit pension plan. The following table sets forth
the estimated annual benefits payable upon retirement at age 65 in calendar year
1996, expressed in the form of a single life annuity, for the final average
salary and benefit service classifications specified.
16
<PAGE> 21
<TABLE>
<CAPTION>
YEARS OF BENEFIT SERVICE AT RETIREMENT (1)(2)
--------------------------------------------------------------
AVERAGE SALARY 15 20 25 30 35
- ------------------ ---------- ---------- ---------- ------------ ------------
<C> <C> <C> <C> <C> <C>
$ 25,000 $ 6,743 $ 8,990 $11,238 $13,485 $15,733
50,000 13,485 17,980 22,475 26,970 31,465
75,000 20,228 26,970 33,713 40,455 47,198
100,000 26,970 35,960 44,950 53,940 62,930
150,000(3) 40,455 53,940 67,425 80,910 94,395
</TABLE>
- --------------------------
(1) The compensation utilized for formula purposes includes the salary reported
in the "Summary Compensation Table".
(2) The benefit amounts shown in the preceding table are on a life only basis
and are not subject to any deductions for social security benefits or other
offset amounts.
(3) Maximum allowable salary in 1996.
The following table sets forth the years of credited service (i.e., benefit
service) as of December 31, 1996 for each of the individuals named in the
Summary Compensation Table.
<TABLE>
<CAPTION>
Credited Service
----------------
Years Months
----- ------
<S> <C> <C>
Richard E. Webber 37 6
Ronald D. Phares 8 4
Mary A. McNally 18 8
Michael J. Gembara 12 9
</TABLE>
In 1988, the Association entered into a Supplemental Executive Retirement
Plan (the "SERP") with Mr. Webber. The officer becomes vested at a rate equal to
10% for each year of service but becomes fully vested upon death, disability or
attainment of normal retirement age. The SERP is an unfunded plan; however, the
Association intends to use a portion of the cash surrender value of the key
employee life insurance policy purchased by the Association to provide payment
to Mr. Webber with retirement or death benefits payable beginning at his
retirement or death with fixed payments for fifteen years. In the event Mr.
Webber terminates employment prior to retirement, limited benefits will be paid
to him. In 1994, the Association contributed $486,938 for the payment of the
premiums on the policy and no further payments are required. The Association is
both the owner and the beneficiary of such policy.
17
<PAGE> 22
INDEBTEDNESS OF MANAGEMENT AND TRANSACTIONS WITH CERTAIN RELATED PERSONS
All loans made by the Association to its executive officers and directors
were made in the ordinary course of business, were made 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.
PROPOSAL 2. RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Company's independent auditors for the fiscal year ended December 31,
1996 were Cobitz, VandenBerg and Fennessy. The Company's Board of Directors has
reappointed Cobitz, VandenBerg and Fennessy to continue as independent auditors
for the Association and the Company for the fiscal year ending December 31,
1997, subject to ratification of such appointment by the stockholders.
Representatives of Cobitz, VandenBerg and Fennessy will be present at the
Meeting. They will be given an opportunity to make a statement if they desire to
do so and will be available to respond to appropriate questions from
stockholders present at the Meeting.
UNLESS MARKED TO THE CONTRARY, THE SHARES REPRESENTED BY THE ENCLOSED PROXY
WILL BE VOTED "FOR" RATIFICATION OF THE APPOINTMENT OF COBITZ, VANDENBERG AND
FENNESSY AS THE INDEPENDENT AUDITORS OF THE COMPANY.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION
OF THE APPOINTMENT OF COBITZ, VANDENBERG AND FENNESSY AS THE
INDEPENDENT AUDITORS OF THE COMPANY.
ADDITIONAL INFORMATION
STOCKHOLDER PROPOSALS
To be considered for inclusion in the proxy statement and proxy relating to
the Annual Meeting of Stockholders to be held in 1998, a stockholder proposal
must be received by the Secretary of the Company at the address set forth in the
Notice of Annual Meeting of Stockholders, not later than November 20, 1997. Any
such proposal will be subject to Rule 14a-8 of the Rules and Regulations under
the Exchange Act.
NOTICE OF BUSINESS TO BE CONDUCTED AT AN ANNUAL MEETING
The Bylaws of the Company provide an advance notice procedure for certain
business to be brought before an annual meeting. In order for a stockholder to
properly bring business before an annual meeting, the stockholder must give
written notice to the Secretary of the Company not less than ninety (90) days
before the time originally fixed for such meeting; provided, however, that in
the event that less than one hundred (100) days notice or prior public
disclosure of the
18
<PAGE> 23
date of the meeting is given or made to stockholders, notice by the stockholder
to be timely must be received not later than the close of business on the tenth
day following the day on which such notice of the date of the annual meeting was
mailed or such public disclosure was made. The notice must include the
stockholder's name and address, as it appears on the Company's record of
stockholders, a brief description of the proposed business, the reason for
conducting such business at the annual meeting, the class and number of shares
of the Company's capital stock that are beneficially owned by such stockholder
and any material interest of such stockholder in the proposed business. In the
case of nominations to the Board, certain information regarding the nominee must
be provided. Nothing in this paragraph shall be deemed to require the Company to
include in its proxy statement and proxy relating to the 1997 Annual Meeting any
stockholder proposal which does not meet all of the requirements for inclusion
established by the SEC in effect at the time such proposal is received.
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING
The Board of Directors knows of no business which will be presented for
consideration at the Meeting other than as stated in the Notice of Annual
Meeting of Stockholders. If, however, other matters are properly brought before
the Meeting, it is the intention of the persons named in the accompanying proxy
to vote the shares represented thereby on such matters in accordance with their
best judgment.
Whether or not you intend to be present at the Meeting, you are urged to
return your proxy promptly. If you are present at the Meeting and wish to vote
your shares in person, your proxy may be revoked by voting at the Meeting.
A COPY OF THE FORM 10-K (WITHOUT EXHIBITS) FOR THE YEAR ENDED DECEMBER 31,
1996, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE FURNISHED
WITHOUT CHARGE TO STOCKHOLDERS OF RECORD UPON WRITTEN REQUEST TO SOUTHWEST
BANCSHARES, INC., RONALD D. PHARES, VICE PRESIDENT, 4062 SOUTHWEST HIGHWAY,
HOMETOWN, ILLINOIS 60456.
By Order of the Board of Directors
/s/ Mary A McNally
----------------------------
Mary A. McNally
Secretary
Hometown, Illinois
March 20, 1997
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE
REQUESTED TO SIGN AND PROMPTLY RETURN THE ACCOMPANYING PROXY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
19
<PAGE> 24
[FRONT SIDE]
REVOCABLE PROXY
SOUTHWEST BANCSHARES, INC.
ANNUAL MEETING OF STOCKHOLDERS
April 22, 1997
9:30 a.m.
-------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints the official proxy committee (the
"Committee") of the Board of Directors of Southwest Bancshares, Inc. (the
"Company"), each with full power of substitution, to act as attorneys and
proxies for the undersigned, and to vote all shares of Common Stock of the
Company which the undersigned is entitled to vote only at the Annual Meeting of
Stockholders, to be held on April 22, 1997, at 9:30 a.m., at The Oak Lawn Hilton
Hotel, 9333 South Cicero Avenue, Oak Lawn, Illinois, and at any and all
adjournments thereof, as follows:
THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED, BUT IF NO
INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED "FOR" THE NOMINEES LISTED
UNDER PROPOSAL 1 AND "FOR" PROPOSAL 2. IF ANY OTHER BUSINESS IS PRESENTED AT THE
ANNUAL MEETING, THIS PROXY WILL BE VOTED BY THE COMMITTEE IN ITS BEST JUDGMENT.
AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE
PRESENTED AT THE ANNUAL MEETING.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE> 25
[BACK SIDE]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE
LISTED PROPOSALS.
<TABLE>
<CAPTION>
FOR ALL
FOR WITHHELD EXCEPT
<S> <C> <C> <C>
1. The election as directors of all nominees __ __ __
listed (except as marked to the contrary /__/ /__/ /__/
below)
Lawrence M. Cox and Robert E. Lawler -------------------------
Nominee Exception
INSTRUCTION: To withhold your vote for any
individual nominee, write that nominee's
name on the line provided to the side.
FOR AGAINST ABSTAIN
__ __ __
2. The ratification of Cobitz, VandenBerg and /__/ /__/ /__/
Fennessy, as independent auditors of
Southwest Bancshares, Inc. for the fiscal
year ending December 31, 1997.
</TABLE>
The undersigned acknowledges receipt from the
Company prior to the execution of this proxy of a
Notice of Annual Meeting of Stockholders and of a
Proxy Statement dated March 20, 1997 and of the
Annual Report to Stockholders.
Please sign exactly as your name appears on this
card. When signing as attorney, executor, adminis-
trator, trustee or guardian, please give your full
title. If shares are held jointly, each holder
may sign but only one signature is required.
Dated:---------------------------------------------
- ---------------------------------------------------
SIGNATURE OF STOCKHOLDER
- ---------------------------------------------------
SIGNATURE OF STOCKHOLDER
