<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
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
BANK OF THE OZARKS, INC.
(Name of Registrant as Specified in Its Charter)
BANK OF THE OZARKS, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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>
[LOGO OF BANK OF THE OZARKS APPEARS HERE]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 21, 1998
Dear Stockholder:
You are cordially invited to attend the 1998 Annual Meeting of Stockholders
of Bank of the Ozarks, Inc., an Arkansas Corporation (the "Company"), to be held
at Embassy Suites, 11301 Financial Center Parkway, Little Rock, Arkansas 72211,
on Tuesday, April 21, 1998 at 1:30 p.m., local time, for the following purposes:
1. To elect eleven (11) directors.
2. To consider and act upon such other business as may properly come
before the meeting and any adjournments or postponements thereof.
Only stockholders of record at the close of business on March 4, 1998 will
be entitled to vote at the 1998 Annual Meeting and any adjournments or
postponements thereof.
The Company's Proxy Statement is submitted herewith. The annual report for
the year ended December 31, 1997 is being mailed to stockholders together with
the mailing of this Notice and Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ GEORGE G. GLEASON
--------------------------------------
George G. Gleason
Chairman of the Board of Directors and
Chief Executive Officer
Little Rock, Arkansas
March 10, 1998
YOUR VOTE IS IMPORTANT. YOU ARE URGED TO DATE, SIGN AND PROMPTLY RETURN
THE ENCLOSED FORM OF PROXY SO THAT YOUR SHARES MAY BE VOTED IN ACCORDANCE WITH
YOUR WISHES AND IN ORDER THAT THE PRESENCE OF A QUORUM MAY BE ASSURED. THE
GIVING OF SUCH PROXY DOES NOT AFFECT YOUR RIGHT TO REVOKE IT LATER OR TO VOTE
YOUR SHARES IN PERSON IN THE EVENT YOU SHOULD ATTEND THE MEETING.
<PAGE>
[LOGO OF BANK OF THE OZARKS APPEARS HERE]
425 WEST CAPITOL AVENUE
SUITE 3100
LITTLE ROCK, ARKANSAS 72201
____________
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
APRIL 21, 1998
____________
SOLICITATION AND REVOCATION OF PROXY
The enclosed proxy, for use only at the 1998 Annual Meeting of Stockholders
to be held at Embassy Suites, 11301 Financial Center Parkway, Little Rock,
Arkansas 72211, on Tuesday, April 21, 1998 at 1:30 p.m., local time, and any
adjournments or postponements thereof, is solicited on behalf of the Board of
Directors of Bank of the Ozarks, Inc. (the "Company"). Such solicitation is
being made primarily by mail, but may also be made in person or by telephone or
telegraph by officers, directors, and regular employees of the Company. All
expenses incurred in the solicitation will be borne by the Company.
Any stockholder executing a proxy retains the right to revoke it at any
time prior to exercise at the 1998 Annual Meeting. A proxy may be revoked at
any time before it is used, upon delivery of written notice to the Secretary of
the Company, by execution and delivery of a later proxy, or by attending the
meeting and voting in person. If not revoked, all properly executed proxies
received will be voted at the meeting in accordance with the terms of the proxy.
The Company knows of no matter to be brought before the meeting other than
that referred to in the accompanying notice of annual meeting. If, however, any
other matters properly come before the meeting, the proxy solicited hereby
confers discretionary authority to the proxies named therein to vote in their
sole discretion with respect to such matters, as well as other matters incident
to the conduct of the meeting.
This proxy material is first being mailed to stockholders on or about March
10, 1998.
<PAGE>
OUTSTANDING STOCK AND VOTING RIGHTS
The Board of Directors has selected March 4, 1998 as the record date (the
"Record Date") for the 1998 Annual Meeting. Only those stockholders of record
as of the close of business on the Record Date are entitled to notice of and to
vote at the 1998 Annual Meeting. At the close of business on the Record Date,
there were 3,779,555 shares of common stock, $0.01 par value (the "Common
Stock") issued and outstanding. At the meeting, each stockholder will be
entitled to one vote, in person or by proxy, for each share of Common Stock
owned of record as of the close of business on the Record Date. Votes will be
tabulated by inspectors of election appointed by the Company's Board of
Directors. The stock transfer books of the Company will not be closed.
The enclosed form of proxy provides a method for stockholders to withhold
authority to vote for any one or more of the nominees for the Board of Directors
while still granting authority to the proxy to vote for the remaining nominees.
The names of all nominees are listed on the proxy card. If you wish to grant
the proxy authority to vote for all nominees, check the box marked "FOR ALL
NOMINEES". If you wish to withhold authority to vote for all nominees, check
the box marked "WITHHOLD". If you wish to withhold authority to vote for any
individual nominee(s), mark the "FOR ALL EXCEPT" box and strike a line through
that nominee(s)' name. By checking the box marked "WITHHOLD," your shares will
not be counted as votes cast, but will be counted as present at the meeting for
the purpose of calculating whether a quorum exists. IF NO INSTRUCTIONS ARE
INDICATED, SHARES OF COMMON STOCK WILL BE VOTED FOR THE ELECTION OF THE
NOMINEES. Broker "non-votes" are not relevant to the determination of a quorum
or whether the proposal to elect directors has been approved.
Provided a quorum is present, the affirmative vote of a plurality of
the shares of Common Stock represented at the meeting and entitled to vote is
required for election of each nominee to the board of directors. Stockholders
may not cumulate their votes.
-2-
<PAGE>
ELECTION OF DIRECTORS
GENERAL
The Company's Board of Directors is comprised of one class of directors,
elected annually. Each director serves a term of one year or until his or her
successor is duly elected or qualified. The number of directors is currently
set at eleven (11), and the Board of Directors has the power to fix or change
the number of directors by resolution and without any further action of the
stockholders in accordance with the Company's bylaws. The Board of Directors,
however, may only increase or decrease by thirty percent (30%) the number of
directors last approved by stockholders in accordance with the Arkansas Business
Corporation Act. The Company's Amended and Restated Certificate of
Incorporation contains a provision that allows the Board of Directors, by
resolution and without any further action by the stockholders, to classify or
stagger the board into two or three groups, as equal in number as possible, with
the terms of office of such directors contained in each group expiring one, two
or three years after their election to the Board, as applicable. The existence
of such provision could result in the nominees described below being elected for
terms greater than one year.
The following slate of nominees has been chosen by the Board of Directors
and each nominee has consented to being named in this Proxy Statement and to
serve if elected. If a Nominee should for any reason become unavailable for
election, proxies may be voted with discretionary authority by the proxy holder
for a substitute designated by the Board.
Certain information for each nominee is set forth below.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF EACH
NOMINEE. PROXIES SOLICITED BY THE BOARD WILL BE SO VOTED UNLESS STOCKHOLDERS
SPECIFY A CONTRARY CHOICE IN THEIR PROXIES.
NOMINEES FOR ELECTION AS DIRECTORS
George Gleason, age 44; Chairman and Chief Executive Officer of the Company
and its bank subsidiaries. Mr. Gleason has served the Company or one of its
bank subsidiaries as director since 1979. Mr. Gleason holds a B.A. in Business
and Economics from Hendrix College and a J.D. from the University of Arkansas.
Mark Ross, age 42; President of the Company and its bank subsidiaries. Mr.
Ross was elected as a director of the Company in 1992. Mr. Ross holds a B.A. in
Business Administration from Hendrix College.
Linda Gleason, age 43; Director of the Company and various subsidiaries
since 1987. From 1992 to 1996, Ms. Gleason served as the Company's Deputy Chief
Executive Officer and
-3-
<PAGE>
Assistant Secretary. Ms. Gleason has attended Arkansas State University and the
University of Arkansas at Little Rock.
Roger Collins, age 49; Executive Vice President, Chief Financial Officer
and a director of Harp's Food Stores, Inc., a regional grocery chain
headquartered in Springdale, Arkansas with 38 stores located in Arkansas and
Oklahoma. Mr. Collins has served as a director of the Company and its bank
subsidiaries since July 1997. Mr. Collins holds a B.A. from Rice University and
a M.B.A. from the University of Texas at Austin and is a C.P.A.
C. E. Dougan, age 51; Co-owner of Mooney-Dougan, Inc., which is engaged in
residential real estate development, construction and investments. Mr. Dougan
has served as a director of the Company since July 1997 and of one of its bank
subsidiaries since February 1997.
Robert East, age 50; Chairman and President of Robert East Company, an
investment company, Chairman and Chief Executive Officer of East-Harding, Inc.,
a general contracting firm, and Partner and Treasurer of AMO Electrical Company,
a distributor of electrical supplies. Mr. East is also a partner or owner of
numerous real estate projects and other investments. He has served as a
director of the Company and its bank subsidiaries since July 1997. Mr. East
holds a B.A. in Finance and Administration from the University of Arkansas.
Porter Hillard, age 66; Retired owner and operator of various agricultural
businesses since 1957. Mr. Hillard has owned, operated or managed various
purebred and commercial cattle operations, a turkey hatchery, feed mills, turkey
grow-out operations and other businesses. Mr. Hillard has served as a director
of the Company since July 1997 and of one of its bank subsidiaries since 1967.
Mr. Hillard holds a B.S. in Agriculture from the University of Arkansas.
Henry Mariani, age 59; Chairman and Chief Executive Officer of Nite Lite
Company, a manufacturing, wholesale and retail mail order operation which
specializes in hunting equipment and supplies. Mr. Mariani has served as a
director of the Company and its bank subsidiaries since July 1997. Mr. Mariani
holds a B.S. in Finance from Penn State University and is a C.P.A.
James Patridge, age 47; Vice Chairman of the Company. From 1985 to 1997,
Mr. Patridge served as Executive Vice President with NationsBank, N.A. (formerly
Boatmen's Arkansas, Inc. and Worthen Banking Corporation). Mr. Patridge has
served as a director of the Company and its bank subsidiaries since December
1997. Mr. Patridge holds a B.S.B.A. from the University of Arkansas, an M.S. in
Finance from Memphis State University and a J.D. from Oklahoma City University.
R. L. Qualls, age 64; Vice Chairman of Baldor Electric Company ("Baldor"),
a marketer, designer and manufacturer of electric motors based in Fort Smith,
Arkansas. From 1993 to 1998 Dr. Qualls served as Chief Executive Officer of
Baldor, and he has served as a director of the Company and its bank subsidiaries
since July 1997. Dr. Qualls holds a B.A. and M.A. in Economics from Mississippi
State University and completed his doctoral work at Louisiana State University.
-4-
<PAGE>
Kennith Smith, age 66; Retired. Mr. Smith served as the owner and operator
of Smith Cattle Farm from 1984 until his retirement in 1993. Prior to that
time he was the co-owner of Mulberry Lumber Company. Mr. Smith has served as a
director of the Company since July 1997 and of one of its bank subsidiaries
since 1977.
Linda Gleason is the wife of George Gleason. Except for the foregoing, no
family relationships exist among any of the persons named above.
COMMITTEES
During the past fiscal year, the Board of Directors met on twelve (12)
occasions. Each of the nominees for the Board other than Messrs. Gleason and
Ross and Ms. Gleason were elected to the Board in July 1997 concurrently with
the commencement of the Company's initial public offering (the "IPO"). Each
Director attended at least 75% or more of the total of meetings of the Board and
committees of the Board during the period in which he or she served. The
Company presently does not have a standing nominating committee, and the Board
of Directors nominates persons for director. The Board will consider
suggestions by stockholders for names of nominees to the Board of Directors for
the 1999 Annual Meeting, provided that such suggestions are made in writing and
delivered to the Secretary of the Company on or before December 31, 1998. The
following is a brief description of the functions of the Company's committees.
Audit Committee. The Audit Committee met five (5) times in 1997 since its
formation concurrently with the commencement of the IPO. The Audit Committee
makes recommendations concerning the engagement of the Company's independent
public accountants, reviews the terms of their engagement, reviews the
accountant's report and all related reports and matters, coordinates appropriate
action in response thereto and reviews the adequacy of the Company's internal
accounting controls. The Audit Committee also receives and reviews the monthly
reports and presentations of the loan review and compliance officers and the
internal auditor, provides general oversight and direction for their work, and
coordinates corrective action as appropriate. Roger Collins, as Chairman, C.E.
Dougan and Robert East serve on the Audit Committee.
Compensation and Personnel Committee. The Compensation and Personnel
Committee met six (6) times in 1997 since its formation concurrently with the
commencement of the IPO. The Compensation and Personnel Committee considers,
approves and reviews all salaries and bonuses for officers and employees,
recommends to the Board of Directors the election of officers, reviews additions
and terminations of personnel, oversees administration of the employee benefit
plans and programs, including the Company's stock option plans, and oversees
staff training and educational programs. Henry Mariani, as Chairman, Porter
Hillard, and Kennith Smith serve on the Compensation and Personnel Committee.
None of these individuals was employed during or prior to 1997 as officers or
employees of the Company or its subsidiaries.
-5-
<PAGE>
Trust Committee. The Trust Committee met five (5) times in 1997 since its
formation concurrently with the commencement of the IPO. The operation of the
trust department of Bank of the Ozarks, wca, a bank subsidiary of the Company,
and the administration of its trust accounts are overseen by the Trust
Committee. R. L. Qualls, as Chairman, James Patridge and Linda Gleason
currently serve on the Trust Committee.
Loan Committees. The Loan Committees met seven (7) times in 1997. Loan
Committees have been established for each of the three divisions of the Company
and consist of both board members and executive officers. Such Loan Committees
have responsibility for reviewing and approving all loans and aggregate loan
relationships in excess of $1,000,000 and for administering all other aspects of
the lending function within each division. The following persons currently
serve on the Company's Loan Committees:
<TABLE>
<CAPTION>
Western Central Northern
- ------- ------- --------
<S> <C> <C>
C. E. Dougan, Chairman Robert East, Chairman James Patridge, Chairman
R. L. Qualls Henry Mariani George Gleason
Porter Hillard Linda Gleason Danny Criner
James Patridge James Patridge George Landrum
George Gleason George Gleason Louis Melton
Bill Witty
Joe Willis
</TABLE>
ALCO and Investment Committee. The ALCO and Investment Committee met four
(4) times in 1997 since its formation concurrently with the commencement of the
IPO. Management of the asset/liability (interest rate risk) position, liquidity
and investment portfolio is overseen by the ALCO and Investment Committee. Paul
Moore, as Chairman, Mark Ross, Danny Criner, Randy Oates and Dan Rolett serve on
the ALCO and Investment Committee.
-6-
<PAGE>
PRINCIPAL STOCKHOLDERS
As of March 4, 1998, the only stockholders known by the Company to own,
directly or indirectly, more than five percent of the Company's Common Stock,
the only class of the Company's capital stock presently outstanding, are
reflected in the following table.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
NAME AND ADDRESS OF COMMON STOCK BENEFICIALLY PERCENTAGE OF
TITLE OF CLASS BENEFICIAL OWNER OWNED OUTSTANDING SHARES %
- -------------- ----------------------------- ------------------------- --------------------
<S> <C> <C> <C>
Common Stock George Gleason 1,299,083/(1)/ 34.4%
425 West Capitol Avenue
Suite 3100
Little Rock, Arkansas 72201
Common Stock Bank of the Ozarks, Inc./(2)/ 372,100 9.85%
Stock Ownership Plan and
Trust (the "ESOP")
425 West Capitol Avenue
Suite 3100
Little Rock, Arkansas 72201
</TABLE>
___________________
/(1)/ For information regarding form of ownership, see the footnotes to the
table regarding Security Ownership of Management.
/(2)/ The ESOP is an employee stock ownership plan and trust established for the
benefit of the Company's officers and employees. Paul Moore, Melvin
Edwards and Luann Melton, each an officer of the Company, currently serve
as the trustees of the ESOP. Participants in the ESOP are entitled to vote
shares of Common Stock allocated to their respective accounts on all
matters submitted to the Company's stockholders for approval, and the
failure by a participant to provide instructions on the manner in which to
vote his or her shares is treated as an abstention.
-7-
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information as of March 4, 1998 with
respect to beneficial ownership of the Company's Common Stock by each director,
each executive officer of the Company named under the table captioned "Executive
Compensation and Other Information" and the directors and executive officers of
the Company as a group.
<TABLE>
<CAPTION>
NAME SHARES OWNED/(1)/ PERCENTAGE OF CLASS
- -------------------------------------- ----------------- -------------------
<S> <C> <C>
George Gleason........................ 1,299,083/(2)/ 34.4%
Mark Ross............................. 119,883/(3)/ 3.2%
Linda Gleason......................... 45,852/(4,5)/ 1.2%
Roger Collins......................... 2,750/(5,6)/ *
C.E. Dougan........................... 1,830/(5)/ *
Robert East........................... 9,900/(5,7)/ *
Porter Hillard........................ 1,000/(5)/ *
Henry Mariani......................... 13,450/(5)/ *
James Patridge........................ 0 *
R. L. Qualls.......................... 1,000/(5)/ *
Kennith Smith......................... 36,315/(5,8)/ *
Jean Arehart.......................... 5,555 *
All directors and executive officers
(19 persons).......................... 1,561,446 41.3%
</TABLE>
________________________
* Less than one percent.
/(1)/ Includes beneficial ownership of shares with respect to which voting or
investment power may be deemed to be directly or indirectly controlled.
Accordingly, the shares in the foregoing table include shares owned
directly, shares held in such person's accounts under the ESOP, shares
underlying presently exercisable options granted pursuant to Company's
stock option plans, shares owned by certain of the individual's family
members and shares held by the individual as a trustee or other similar
capacity, unless otherwise described below.
/(2)/ The amount includes (i) 210,700 shares owned of record by a trust of which
Mr. Gleason is sole trustee and has a 25% life income interest, (ii)
35,000 shares owned of record by a charitable trust for which Mr. Gleason
is a co-trustee with Ms. Gleason and (iii) 400 shares owned by the minor
children of Mr. Gleason.
/(3)/ Includes (i) 36,300 shares owned of record by a trust for the benefit of
Mr. Ross and his children and for which Mr. Ross maintains a life interest
only and (ii) 25,000 shares owned by Mr. Ross' spouse.
/(4)/ Includes 35,000 shares owned of record by a charitable trust for which Ms.
Gleason is a co-trustee with Mr. Gleason.
/(5)/ Includes exercisable options for 1,000 shares granted under the Company's
Non-Employee Director Stock Option Plan.
/(6)/ Includes 500 shares held by spouse.
/(7)/ Includes 600 shares held by children of Mr. East.
/(8)/ Includes 692 shares held by spouse.
-8-
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
The following table shows for the years indicated all cash and certain
other compensation paid or to be paid by the Company to the Chief Executive
Officer and its other executive officers whose aggregate salary and bonus
exceeded $100,000.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
--------------------------------- ----------------------
SECURITIES UNDERLYING ALL OTHER
NAME & PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS/SARS (#) COMPENSATION/(1)/
- ------------------------- ------ -------- -------- --------------------- -----------------
<S> <C> <C> <C> <C> <C>
George Gleason/(2)/ 1997 $372,556 $ 45,297 12,200/(3)/ $5,899
1996 $405,900 $200,000 - $4,636
1995 $395,000 $ 95,832 - $6,100
Mark Ross 1997 $ 97,847 $ 19,569 4,200/(3)/ $3,526
1996 $ 92,782 $ 22,042 - $4,047
1995 $ 90,876 $ 21,683 - $5,029
Jean Arehart/(4)/ 1997 $ 73,274 $ 55,988 3,600/(3)/ $2,117
1996 $ 37,917 $ 2,275 - -
</TABLE>
_________________________
/(1)/ Includes the following amounts for Messrs. Gleason and Ross and Ms.
Arehart for 1997: employer contributions to the Company's ESOP in the
respective amounts of $2,894, $2,124 and $1,325, and employer matching
contributions to the Company's 401(k) Plan in the respective amounts
$3,005, $1,402 and $792. For 1996 and 1995, amounts represent
contributions to the Company's ESOP only.
/(2)/ Mr. Gleason's salary and bonus is determined pursuant to a written
employment contract which became effective on July 17, 1997, was amended
on September 16, 1997, and continues through December 31, 2000. The
agreement provides Mr. Gleason with an annual base salary of $318,000
subject to an annual cost of living adjustment and an annual bonus not to
exceed 1% of the Company's net income for each fiscal year. Mr. Gleason's
base salary for the period from July 17 to December 31, 1997 and his 1997
bonus were determined pursuant to this agreement. Under the employment
agreement, Mr. Gleason's annual base salary for 1998 is expected to be
$324,614.
/(3)/ Represents option grants under the Company's employee Stock Option Plan.
See "Option/SAR Grants in Last Fiscal Year."
/(4)/ Ms. Arehart commenced employment with the Company in June 1996.
-9-
<PAGE>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth information with respect to the named
executive officers concerning options granted in the last fiscal year and their
potential realizable value.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR OPTION
INDIVIDUAL GRANTS TERM/(1)/
---------------------------------------- -----------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING GRANTED TO OR
OPTIONS SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED FISCAL YR(%) ($/SH) DATE 5% 10%
- -------------- ------------ ------------ ----------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
George Gleason 12,200 12.14% $16.00 (2) $93,526 $224,843
Mark Ross 4,200 4.18% $16.00 (2) $32,158 $ 77,294
Jean Arehart 3,600 3.58% $16.00 (2) $27,564 $ 66,252
</TABLE>
________________________
/(1)/ As required by the Securities Exchange Commission rules and regulations,
potential realizable values are based on the assumption that the Common
Stock price appreciates at the Annual Rates shown compounded annually from
the date of the grant until the end of nine year option term and is not
intended to forecast appreciation in stock price. Based upon the exercise
price of $16.00 per share, the Company's stock price at the end of seven,
eight and nine year terms would be (A) $22.51, $23.64 and $24.82,
respectively, based upon 5% appreciation and (B) $31.18, $34.30 and
$37.73, respectively, based upon 10% appreciation.
/(2)/ Mr. Gleason's options expire in amount of 4,000, 4,100 and 4,100 shares on
each of July 17, 2004, 2005 and 2006, respectively; Mr. Ross' options
expire in equal installments of 1,400 shares on each of July 17, 2004,
2005 and 2006; and Ms. Arehart's options expire in equal installments of
1,200 shares on each of July 17, 2004, 2005 and 2006.
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table sets forth information with respect to the named
executives concerning exercise of options during the last fiscal year,
unexercised options and SARs held as of the end of the fiscal year.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-THE-
UNDERLYING UNEXERCISED MONEY OPTIONS/SARS AT
OPTIONS/SAR AT FY-END FY-END(1)
--------------------------- -------------------------------
SHARES
ACQUIRED
NAME ON EXERCISE VALUE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------ ---------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
George Gleason - - - 12,200 - $109,800
Mark Ross - - - 4,200 - $ 37,800
Jean Arehart - - - 3,600 - $ 32,400
</TABLE>
________________________
/(1)/ The dollar amounts shown represent the product of the number of shares
purchasable upon exercise of the related options times the difference of
the average of the high and low sales prices reported on December 31, 1997
($25.00) and the purchase price per share payable upon such exercise
($16.00).
-10-
<PAGE>
DIRECTOR COMPENSATION
Non-employee directors are paid a monthly retainer fee of $500 and a fee of
$500 for attending each regular and special board meetings. In addition, non-
employee directors are paid a fee of $100 for attendance at each meeting of a
committee of the Board of Directors. Additionally, under the Company's Non-
Employee Director Stock Option Plan, each non-employee director is automatically
granted, on the date a director's term of office commences, and each year
thereafter on the day following the annual meeting of stockholders as long as
such director's term as a director is continuing for the ensuing year, an option
to acquire 1,000 shares of Common Stock at an exercise price equal to the fair
market value of the Common Stock on the date of grant. All options granted to
non-employee directors become exercisable upon grant. Effective July 17, 1997
the Company granted options to non-employee directors to purchase a total of
1,000 shares each of Common Stock at an exercise price of $16.00 per share. The
Company's officers are not compensated for their service as directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Prior to the IPO, the Company's principal banking subsidiary, Bank of the
Ozarks, wca maintained a Compensation Committee comprised of Linda Gleason,
Porter Hillard, and Kennith Smith. This committee was principally responsible
for establishing salary, bonus and other aspects of compensation for the
employees of the Company. Ms. Gleason abstained from voting in regard to all
matters relating to the salary and bonus of George Gleason. However, as
Chairman and Chief Executive Officer of the Company, George Gleason participated
in deliberations concerning executive compensation, including the allocation of
his salary among the Company and its two bank subsidiaries.
Simultaneously with the commencement of the IPO, the above committee was
replaced with the Company's existing Compensation and Personnel Committee and
three non-employee directors (Messrs. Mariani, Smith and Hillard) were
appointed to serve as the members thereof.
REPORT OF THE COMPENSATION AND PERSONNEL COMMITTEE ON
EXECUTIVE COMPENSATION
The Compensation and Personnel Committee (hereinafter the "Compensation
Committee") is responsible for recommending to the Board of Directors
compensation levels for the Company's executive officers and for determining the
policies that govern the Company's compensation and benefit plans. This Report
describes the basis upon which the Compensation Committee has made
recommendations concerning 1997 compensation payable to the executive officers
of the Company.
-11-
<PAGE>
COMPENSATION PHILOSOPHY AND POLICIES
The policy of the Personnel and Compensation Committee is to make
compensation decisions on the basis of the long-term growth and performance
objectives of the Company. For 1997, as in recent prior years, the Company's
compensation program for executive officers was based upon the following
principles and policies:
. The Company is committed to providing a competitive pay program that
helps attract and retain quality executives while motivating such
persons to perform their jobs in the most effective manner. In order
to achieve this purpose, the Company's compensation policies must,
among other things, (i) be internally equitable and externally
competitive (ii) reward individuals based upon productivity and
performance, (iii) contain an appropriate mix of cash and long-term or
equity-based compensation, (iv) be administratively efficient and
within budgetary parameters; and (v) be flexible in response to
changing conditions.
. To ensure that pay is competitive, the Company has regularly compared
its pay practices with those of other financial institutions,
particularly banks and bank holding companies in the markets served by
the Company, and from time to time modifies pay parameters based on
this review.
. Executive officers and other key management personnel rewards are
based upon a combination of company-wide performance, performance of
the profit center for which they are responsible and individual
performance and level and scope of responsibility. Among the
performance standards reviewed are sustained growth objectives and an
ability to maximize profitability of individual profit centers. For
individuals for whom community relationships are significant,
compensation decisions have also been considered in light of the
activities undertaken by those individuals to cultivate and solidify
such relationships. Executives are also evaluated in part on their
ability to effectively interact with and manage their staff. In each
case, the forgoing performance criteria are subjectively applied and
therefore are not based upon the application of objective standards or
mathematical criteria.
The Company maintains an ongoing program of evaluation of officers and
employees, in which senior officers set objectives and goals for junior officers
and other employees reporting to them, evaluate the employees and officers on
performance, and compare the results to the performance. Senior management,
including the Chief Executive Officer, reviews the performance of the Company's
executive officers and makes final recommendations on their compensation levels
to the Compensation Committee. The Compensation Committee evaluates senior
management's recommendations and then submits its final recommendations to the
full Board for review and approval. During 1997, all recommendations of the
Personnel and Compensation Committee were accepted by the Company's Board of
Directors.
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<PAGE>
EXECUTIVE COMPENSATION COMPONENTS FOR 1997
The Compensation Committee regularly reviews the Company's compensation
program to ensure that the components of such program will allow the Company to
achieve the objectives described above. In 1997, the Company's compensation
program consisted of the following:
Base Salary. As noted above, base salary levels are reviewed periodically
to determine whether such salaries fall within the range of comparable salaries
paid by other similarly sized and similarly situated financial institutions.
Actual salaries are based upon individual performance contributions in
accordance with the compensation philosophy of the Company. During 1997, base
salaries for executive officers increased an average of approximately 1.0% over
the prior year. The Compensation Committee believes that the Company's
executive base salaries are within the range of salaries paid by comparable
financial institutions.
Bonuses. Executive officers were granted performance-based bonuses in 1997
as a component of their overall compensation. Bonuses were based on overall
profitability of the Company as well as the profit center or department for
which the particular officers were responsible. Among the specific factors
considered in awarding performance bonuses were deposit and loan growth, net
income and other various financial performance ratios. The aggregate bonuses
granted to all executive officers decreased to $170,000 in 1997 from $261,000 in
1996. This decrease was attributable to a new Employment Agreement entered into
in 1997 with the Chief Executive Officer that reduced his bonus. Excluding the
Chief Executive Officer, aggregate bonuses paid to executive officers increased
from 18.6% of base salary in 1996 to 23.5% of base salary in 1997.
Employee Stock Ownership Plan. The Compensation Committee believes that
participation in the Company's ESOP encourages executive officers and other
employees to work toward the long-term goals and objectives of the Company by
aligning their interests directly with those of other stockholders. Decisions
relative to contributions to the ESOP are made annually, with the aggregate
amount based on a formula. Any participant in the Plan who was employed by the
Company as of December 31, 1996 and December 31, 1997 and credited with at least
1000 hours of service in 1997 was eligible to participate in the Plan for 1997.
During 1997, $12,342 was contributed to the ESOP on behalf of executive officers
as a group.
Stock Options. The Compensation Committee believes that stock options
provide an appropriate incentive to encourage management, particularly senior
management, to maximize stockholder returns since the value of an option bears a
direct correlation to appreciation in the Company's stock price. As with the
ESOP, grants under the Company's employee Stock Option Plan have the effect of
more closely aligning the interests of stockholders with the interests of
management, while at the same time providing a valuable tool for attracting,
rewarding and retaining key employees. The determination of whether to grant
stock options is vested in the Compensation Committee and is based upon the
subjective analysis of a number of factors including, but not limited to, the
Company's performance as measured by the price of its stock, the overall mix of
equity-based or long-term compensation to cash compensation, the number and
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<PAGE>
frequency of prior option grants and the potential for an individual's
contribution and performance to positively impact the Company's performance.
Based upon the foregoing factors, the Compensation Committee during
1997 granted options to purchase a total of 42,200 shares of the Company's
Common Stock to executive officers at exercise prices per share of $16.00 and
$21.50, with a weighted average price per share of $16.39. The Compensation
Committee will consider recommending the award of stock options to existing
employees or to prospective employees in the future as circumstances warrant.
401(k) Plan and Other Benefits. In May 1997, the Company established a
qualified retirement plan (the "401(k) Plan"), which was implemented on July 1,
1997, with a salary deferral feature designed to qualify under Section 401 of
the Internal Revenue Code of 1986. The 401(k) Plan permits all employees of the
Company to defer a portion of their eligible compensation on a pre-tax basis
subject to certain maximum amounts. Matching contributions are made on a
discretionary basis by the Company up to a maximum of two percent of the
participant's salary per year. Since implementation on July 1, 1997, total
matching contributions on behalf of executive officers were $9,546, which
represented an average of 1.7% of such officers' covered compensation since the
plan's implementation. In addition to the 401(k) Plan, executives and other
employees receive life and health insurance coverages in amounts the Company
believes to be competitive with comparably sized financial institutions.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER COMPENSATION.
As described in the notes to the Summary Compensation Table contained
elsewhere in this Proxy Statement under the caption "Executive Compensation and
Other Information," the annual cash compensation payable to George Gleason, the
Company's Chairman and Chief Executive Officer, is determined pursuant to a
written employment contract which became effective July 17, 1997 simultaneously
with the commencement of the Company's IPO, as amended on September 16, 1997,
and continues through December 31, 2000. In addition to cash compensation,
Mr. Gleason received during 1997 (i) contributions under the Company's 401(k)
Plan and ESOP, which contributions were determined on a basis consistent with
all other participating employees, and (ii) option grants to purchase 12,200
shares of the Company's Common Stock pursuant to the Company's Employee Stock
Option Plan, which grants were based upon the Compensation Committee's
evaluation of the various factors considered for all employees, as enumerated
above.
The Committee has reviewed Mr. Gleason's entire Compensation package in the
context of compensation packages available for executives of similar-sized
financial institutions and in light of the significant dependence of the
organization on Mr. Gleason's continued services and significant
responsibilities. Based upon this review, the Compensation Committee believes
that the level of Mr. Gleason's compensation is appropriate.
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<PAGE>
SECTION 162(M).
In 1993, Congress enacted the Omnibus Budget Reconciliation Act of 1993
("OBRA"), which, among other things, limits the deductibility for federal income
tax purposes of annual compensation paid to certain covered executive officers
(including the Chief Executive Officer) to $1 million, subject to certain
exceptions. OBRA is not expected to have an impact or result in the loss of a
deduction with respect to compensation paid to any of the Company's executives
during the last year or in the foreseeable future. In this regard, it should be
noted that all option grants effected under the Company's Employee Stock Option
Plan are intended to qualify for an exemption from OBRA.
COMPENSATION AND PERSONNEL COMMITTEE OF THE
BOARD OF DIRECTORS
Henry Mariani, Chairman
Porter Hillard
Kennith Smith
CERTAIN TRANSACTIONS
Each of the Company's bank subsidiaries has had, in the ordinary course of
business, banking transactions with certain of its officers and directors and
with certain officers and directors of the Company. All loan transactions with
officers and directors of the Company, its bank subsidiaries, and their related
and affiliated parties, have been in the ordinary course of business, on
substantially the same terms, including interest rates and collateral as those
prevailing for comparable transactions with other loan customers of the Company,
and have not included more than the normal risk of collectibility associated
with the Company's other banking transactions or other unfavorable features.
Mr. and Ms. Gleason have each received guaranty fees in consideration of
their personal guarantees of the Company's loans from third party lenders. For
the period commencing January 1 through May 16, 1997, Mr. and Ms. Gleason each
received $38,000 in guarantee fees with respect to such loans. As of May 16,
1997, the Company refinanced such loans without personal guarantees and
accordingly, no such guarantee fees are payable in connection with the Company's
current indebtedness.
The Company has entered into contracts with East-Harding, Inc., of which
Robert East is co-owner, Chairman and Chief Executive Officer, for the
construction of the Company's proposed offices in Little Rock and Fort Smith,
Arkansas. In 1997, the Company paid East-Harding, Inc. $1,222,766 pursuant to
these contracts.
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<PAGE>
COMPANY PERFORMANCE
The graph below shows a comparison for the period commencing July 17, 1997
(the date of commencement of the Company's IPO) through December 31, 1997 of the
cumulative total stockholder returns (assuming reinvestment of dividends), for
the Common Stock, the S&P SmallCap Index, and the Nasdaq Financial Index,
assuming a $100 investment on July 17, 1997.
CUMULATIVE RETURN COMPARSION
[CHART APPEARS HERE]
<TABLE>
<CAPTION>
- ----------------------------------------------------------------
7/17/97 12/31/97
- ----------------------------------------------------------------
<S> <C> <C>
OZRK (Bank of the Ozarks, Inc.) $ 100 $ 139
- ----------------------------------------------------------------
SML (S&P Smallcap Index) $ 100 $ 108
- ----------------------------------------------------------------
NDF (NASDAQ Financial Index) $ 100 $ 124
- ----------------------------------------------------------------
</TABLE>
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<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the Securities Exchange Act of 1934, the Company's executive officers
and directors are required to file reports of ownership and subsequent changes
of ownership with the Securities and Exchange Commission. Specific due dates
have been established for these reports, and the Company is required to disclose
in this proxy statement any failure to file by these dates during the preceding
year. Based solely upon information provided to the Company by individual
directors and executive officers, the Company believes that all filing
requirements applicable to directors and executive officers have been complied
with, except as follows: Ms. Margaret Oldner filed a Form 3 Initial Statement
of Beneficial Ownership on December 31, 1997, which was due on November 3, 1997.
AUDITORS TO BE PRESENT
A representative of Moore Stephens Frost, P.A., the Company's auditors for
1997, is expected to attend the 1998 Annual Meeting and will be afforded the
opportunity to make a statement. The representative will also be available to
respond to appropriate questions.
STOCKHOLDER PROPOSALS
Any stockholder proposal to be presented at the 1999 Annual Meeting should
be directed to the Secretary of the Company, and must be received by the Company
on or before November 10, 1998. Any such proposal must comply with the
requirements of Rule 14a-8 of the Securities Exchange Act of 1934.
ADDITIONAL INFORMATION AVAILABLE
Upon written request, the Company will furnish, without charge, a copy of
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1997, as filed with the United States Securities and Exchange Commission,
including the financial statements and schedules thereto. The written request
should be sent to the Secretary of the Company, Bank of the Ozarks, Inc., 425
West Capitol Avenue, Suite 3100, Little Rock, Arkansas 72201.
OTHER MATTERS
So far as now known, there is no business other than that described above
to be presented to the stockholders for action at the meeting. Should other
business come before the meeting, votes may be cast pursuant to proxies in
respect to any such business in the best judgment of the persons acting under
the proxies.
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<PAGE>
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE URGED TO SIGN,
DATE AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED, WHICH
REQUIRES NO ADDITIONAL POSTAGE IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors
/s/ GEORGE GLEASON
--------------------------------------
George Gleason
Chairman of the Board of Directors and
Chief Executive Officer
March 10, 1998
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<PAGE>
[LOGO OF BANK OF THE OZARKS, INC. APPEARS HERE]
<PAGE>
BANK OF THE OZARKS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF STOCKHOLDERS APRIL 21, 1998
The undersigned stockholder(s) of Bank of the Ozarks, Inc. (the "Company")
hereby appoint George Gleason and Mark Ross, and each or either of them, the
true and lawful agents and attorneys-in-fact for the undersigned, with power of
substitution, to attend the meeting and to vote the stock owned by or
registered in the name of the undersigned, as instructed below, at the 1998
Annual Meeting of Stockholders to be held at Embassy Suites, 11301 Financial
Center Parkway, Little Rock, Arkansas 72211, on Tuesday, April 21, 1998 at 1:30
p.m., local time, and at any adjournments thereof, for the transaction of the
following business:
[X]PLEASE MARK VOTES
AS IN THE EXAMPLE
1. TO ELECT ELEVEN DIRECTORS: George Gleason, Mark Ross, Linda Gleason, Roger
Collins, C.E. Dougan, Robert East, Porter Hillard, Henry Mariani, James
Patridge, R.L. Qualls, Kennith Smith
[_] FOR ALL NOMINEES [_] WITHHOLD[_] FOR ALL EXCEPT
INSTRUCTION: To withhold authority to vote for any individual nominee(s),
mark the "FOR ALL EXCEPT" box and strike a line through the name(s) of such
nominee(s) in the list above.
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
(Continued On Other Side)
The Proxy when properly executed will be voted in the manner directed herein
by the undersigned. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSAL 1.
Please sign exactly as name(s) appears below. If stock is in the name of two
or more persons, each should sign. Persons signing as attorney, executor,
administrator, trustee, guardian or other fiduciary, please give full title as
such. If a corporation, signature should be by president or other authorized
officer. If a partnership, please sign in partnership name by authorized
person.
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
Please mark any name or address changes below.
1998
-----------------------------------
SIGNATURE DATE
1998
-----------------------------------
SIGNATURE DATE
