<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the registrant _________
Check the appropriate box:
___ Preliminary proxy statement
[X] Definitive proxy statement
___ Definitive additional materials
___ Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
First Oak Brook Bancshares, Inc.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate line):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
___ $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
___ 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:
Common And Class A Common
- - -------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
3,362,842
- - -------------------------------------------------------------------------
(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:
$125.00
- - -------------------------------------------------------------------------
___ Fee paid previously with preliminary materials.
___ Please check 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>
FIRST OAK BROOK BANCSHARES, INC.
1400 SIXTEENTH STREET
OAK BROOK, ILLINOIS 60521
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 7, 1996
April 1, 1996
To the Shareholders of First Oak Brook Bancshares, Inc:
You are cordially invited to attend the Annual Meeting of the Shareholders of
First Oak Brook Bancshares, Inc. to be held in the Conference Center located in
the Lower Level of the Oak Brook Bank Building, 1400 Sixteenth Street, Oak
Brook, Illinois 60521, on Tuesday, May 7, 1996 at 10:00 A.M. for the purposes
of considering and acting on the following:
(1) Election of seven (7) Directors to serve until the Annual Meeting of the
Shareholders in 1997;
(2) Consideration and approval of the amended and restated First Oak Brook
Bancshares, Inc. Performance Bonus Plan;
(3) Ratification of the selection of Ernst & Young LLP as independent auditors
for the Company; and
(4) Transaction of such other business that may properly come before the
Meeting or any adjournment thereof.
Only shareholders of record at the close of business on March 22, 1996 will
be entitled to notice of and to vote at the Meeting.
ALL PERSONS WHO FIND IT CONVENIENT TO DO SO ARE INVITED TO ATTEND THE MEETING
IN PERSON. HOWEVER, REGARDLESS OF WHETHER OR NOT YOU ATTEND THE MEETING, IT IS
IMPORTANT THAT YOUR SHARES ARE REPRESENTED AND VOTED. THEREFORE, PLEASE SIGN
AND RETURN THE ENCLOSED PROXY PROMPTLY. IF YOU ATTEND THE ANNUAL MEETING, YOU
MAY VOTE IN PERSON IF YOU WISH, EVEN THOUGH YOU PREVIOUSLY RETURNED YOUR PROXY.
By Order of the Board of Directors
William E. Navolio
Secretary
<PAGE>
PROXY STATEMENT
THIS PROXY STATEMENT IS FURNISHED IN CONNECTION WITH THE SOLICITATION BY THE
BOARD OF DIRECTORS OF FIRST OAK BROOK BANCSHARES, INC. (THE "COMPANY") OF
PROXIES FOR USE AT THE 1996 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD TUESDAY,
MAY 7, 1996 AND AT ANY ADJOURNMENT THEREOF. The Company will bear all costs in
connection with this solicitation. It is intended that proxies in the
accompanying form, when returned properly executed, will be voted at the
meeting. If a choice on any matter has been specified by the shareholder, the
shares will be voted accordingly. If no choices are specified, the shares will
be voted FOR the item in question. Proxies may be revoked by notice to the
Company in writing or in open meeting at any time before they are exercised.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the inspector of election appointed for the meeting who will determine whether
or not a quorum is present. The inspector of election will treat abstentions
as shares that are present and entitled to vote for purposes of determining
the presence of a quorum, but as unvoted for purposes of determining the
approval of any matter submitted to the shareholders for a vote. If a broker
indicates on the proxy that it does not have discretionary authority as to
certain shares to vote on a particular matter, such shares, or "non-votes",
will be considered as present for quorum purposes, but not entitled to vote
with respect to that matter.
Shareholders of record at the close of business on March 22, 1996 will be
entitled to vote. On that date, there were outstanding voting shares as
follows:
<TABLE>
<CAPTION>
NUMBER OF PAR OR
SHARES STATED VOTE PER
TITLE OF CLASS OUTSTANDING VALUE SHARE
- - -------------- ----------- ------ -----------
<S> <C> <C> <C>
Common.......................................... 1,524,056 $2.00 1
Class A Common.................................. 1,838,786 $2.00 1/20th of 1
</TABLE>
This Proxy Statement, Notice of Meeting and accompanying proxy card are
being mailed to shareholders on or about April 1, 1996.
ELECTION OF DIRECTORS
In accordance with the By-Laws of the Company, the Board of Directors has
fixed the number of directors to be elected at the Annual Meeting.
Unless directed otherwise, the persons named as proxies intend to vote for
the election of Eugene P. Heytow, Richard M. Rieser, Jr., Frank M. Paris, Dr.
Miriam Lutwak Fitzgerald, Alton M. Withers, Geoffrey R. Stone and Robert M.
Wrobel as directors, each to hold office until the Annual Meeting of
Shareholders in 1997 and until his or her successor is elected and qualified
or until his or her earlier death, removal or resignation. Each of the
nominees has consented to serve as director if elected.
Directors Heytow, Rieser, and Paris have served the Company as directors and
executive officers since its inception in 1983. Dr. Fitzgerald and Mr. Withers
have served as directors since 1988. Mr. Stone has served as a director since
November, 1992. Mr. Wrobel was appointed to the Board in January, 1996.
An affirmative vote of the holders of a plurality of the voting power of the
shares of Common Stock and Class A Common Stock, present and eligible to vote
at the meeting, will be required for a nominee to be elected as a director;
abstentions and shares for which authority to vote is not given will thus have
no effect on the election of directors. Shares cannot be voted for more than
seven nominees; there is no right to cumulative voting.
<PAGE>
INFORMATION CONCERNING SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth information concerning the beneficial
ownership of the Company's Class A Common and Common stock, as of March 22,
1996, by: (1) each person known to the Company to be the beneficial owner of
more than 5% of its Class A Common or Common stock; (2) each director and
named executive officer of the Company; and (3) all directors and executive
officers of the Company as a group. The address of all such persons unless
otherwise stated is c/o the Company, 1400 Sixteenth Street, Oak Brook,
Illinois 60521.
SECURITY OWNERSHIP OF MANAGEMENT(/1/)
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF ACQUIRABLE
BENEFICIAL WITHIN 60 PERCENT OF
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(/2/) DAYS(/3/) CLASS(/4/)
-------------- ------------------------------------ -------------- ---------- ----------
<C> <S> <C> <C> <C>
Class A Common Eugene P. Heytow.............................. 460 -- *
Richard M. Rieser, Jr......................... 457(/6/) -- *
Frank M. Paris................................ 3,893(/7/) -- *
Miriam Lutwak Fitzgerald...................... 304(/8/) -- *
Alton M. Withers.............................. 1,125 -- *
Geoffrey R. Stone............................. -- -- --
Robert M. Wrobel.............................. -- -- --
George C. Clam................................ 3,040 -- *
William E. Navolio............................ 138(/9/) -- *
All Directors and Executive Officers as a
Group
(11 Persons).................................. 9,417 -- *
Common Eugene P. Heytow.............................. -- (/5/) 37,250 2.22
Richard M. Rieser, Jr......................... 166,393(/6/) 30,875 11.75
Frank M. Paris................................ 165,489 14,255 10.71
Miriam Lutwak Fitzgerald...................... 307,819(/8/) 1,000 18.40
Alton M. Withers.............................. -- 1,000 *
Geoffrey R. Stone............................. -- 1,000 *
Robert M. Wrobel.............................. 579 -- *
George C. Clam................................ -- 10,443 *
William E. Navolio............................ -- 10,443 *
All Directors and Executive Officers as a
Group
(11 Persons).................................. 640,280 119,789 45.27
</TABLE>
- - --------
* Denotes less than 1% ownership.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS(/1/)
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(/2/) CLASS(/4/)
-------------- ------------------------------------ -------------- ----------
<C> <S> <C> <C>
Class A Common Associated Banc-Corp.......................... 117,150 6.37
112 North Adams Street
Green Bay, Wisconsin 54301
Lieber & Company.............................. 92,248 5.02
2500 Westchester Avenue
Purchase, New York 10577
Basswood Partners, L.P........................ 142,250 7.74
52 Forrest Avenue
Paramus, New Jersey 07652
Common Mitzi Heytow.................................. 311,649 18.56
c/o Amalgamated Bank of Chicago
One West Monroe Street
Chicago, Illinois 60603
</TABLE>
2
<PAGE>
- - --------
(/1/Shares)of stock deemed beneficially owned at March 22, 1996.
(/2/The)nature of beneficial ownership for shares shown in an individual's name
is sole voting and investment power unless otherwise indicated.
(/3/Reflects)the number of shares that could be purchased by exercise of
options available as of March 22, 1996 or within 60 days thereafter under
the Company's 1987 Amended and Restated Stock Option Plan.
(/4/The)percentage for Common Stock Ownership was calculated with an
outstanding shares amount which included 154,658 shares which could be
acquired within 60 days under exercisable options.
(/5/Excludes)311,649 shares of Common stock held solely by Mitzi Heytow, Mr.
Heytow's spouse, in and over which he disclaims beneficial interest and
voting and investment power. Excludes 280 shares of Common stock held by
Mr. Heytow's son in and over which he disclaims beneficial interest and
voting and investment power.
(/6/Includes)6,187 shares of Common stock held in joint tenancy with Mr.
Rieser's spouse, which shares are deemed to be shared as to beneficial
interest and voting and investment power. Excludes 4,539 shares of Common
stock held solely by Mr. Rieser's spouse in and over which he disclaims
beneficial interest and voting and investment power. Excludes 4,113 shares
of Common stock held by Mr. Rieser as custodian for the benefit of his
minor children in which he disclaims beneficial interest but over which he
exercises voting and investment power. Excludes 1,600 shares of Common
stock held by Mr. Rieser's spouse as custodian for their minor children.
Excludes 3,600 shares of Common stock held by Mr. Rieser's adult child in
and over which he disclaims beneficial ownership and voting and investment
power. Excludes 4,359 shares of Class A Common stock held by Mr. Rieser's
mother's testamentary trust in and over which he disclaims any present
beneficial interest but over which he has shared voting and investment
power.
(/7/Excludes)1,406 shares of Class A Common stock held by Mr. Paris as
custodian for the benefit of his minor child in which he disclaims
beneficial interest but over which he exercises voting and investment
power. Excludes 4,218 shares of Class A Common stock held by Mr. Paris'
adult children in and over which he disclaims beneficial interest and
voting and investment power.
(/8/Excludes)10,200 shares of Class A Common stock held by Dr. Fitzgerald as
custodian for the benefit of her minor children in which she disclaims
beneficial interest but over which she exercises voting and investment
power. Includes 307,819 shares of Common stock of which 153,907 is held by
an irrevocable insurance trust and 153,912 is held by a revocable trust of
which Dr. Fitzgerald is the custodian for the benefit of her minor children
in which she disclaims beneficial interest but over which she exercises
voting and investment power.
(/9/Excludes)117 shares held by Mr. Navolio's spouse in and over which he
disclaims beneficial interest and voting and investment power.
3
<PAGE>
BOARD OF DIRECTORS
MEETINGS, FUNCTIONS AND COMPENSATION
During 1995 the Board of Directors met four (4) times. All directors
attended more than 75% of the meetings of the Board of Directors for which
they were duly qualified. The Company has the following committees: Executive,
Audit, Compensation, Stock Option Advisory and a Community Reinvestment Act
Committee.
The Executive Committee met four (4) times during 1995 and is comprised of
Directors Heytow, Rieser and Paris. The Executive Committee of the Company may
exercise the full authority of the Board of Directors in the management of the
business and affairs of the Company other than a power specifically prohibited
by Delaware Law. The Executive Committee also performs functions similar to a
nominating committee in that it nominates directors and officers.
The Audit Committee met four (4) times during 1995 and is comprised of
independent Directors Withers, Fitzgerald and Stone, Director Rieser and non-
director members Ms. Bouman, Vice President and CFO, and Ms. Griffith, the
Company's Auditor. The Audit Committee's functions include reviewing reports
and recommendations of the Company's inside and outside auditors and to
monitor the internal controls of the subsidiary bank.
The Compensation Committee met once during 1995 and is comprised of
Directors Heytow, Withers and Fitzgerald. The Compensation Committee's
functions include reviewing and approving compensation and benefits for
employees of the Company and its subsidiary earning $30,000 or more and the
Company-wide percentage compensation increase for all employees. With respect
to senior executive officers, the Committee also sets compensation and
benefits.
The Stock Option Advisory Committee meets as needed, and met five (5) times
in 1995 and is comprised of independent Directors Stone, Withers and
Fitzgerald. This Committee's primary function is to administer the Company's
1987 Amended and Restated Stock Option Plan, the Company's Performance Bonus
Plan and other compensation and bonus issues requiring a Committee consisting
solely of independent directors.
The Community Reinvestment Act ("CRA") Committee meets in conjunction with
the Company-wide Regulatory Management Committee and met eleven (11) times
during 1995 and is comprised of Directors Paris and Rieser and non-director
members Messrs. Navolio and Clam. This Committee's primary function is to
monitor and direct the CRA efforts of the subsidiary bank.
The Company pays an $8,000 annual retainer to its directors in quarterly
payments of $2,000. The directors of the Company also received $2,000 for each
regular quarterly meeting of the Board of Directors and $200 for each
Executive, Audit, Compensation and Stock Option Advisory Committee meetings.
The members of the Community Reinvestment Act Committee do not receive
compensation.
4
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information concerning the current directors
and executive officers of the Company. Each of the current directors is
standing for re-election and each executive officer has been with the Company
since its inception in 1983 except Ms. Carnevale who became an executive
officer in 1991. Officer appointments are made annually for a one year term.
<TABLE>
<CAPTION>
EDUCATION, PRINCIPAL OCCUPATION DURING
NAME AND AGE LAST FIVE YEARS, OTHER
POSITION WITH COMPANY DIRECTORSHIPS AND POSITIONS
--------------------- --------------------------------------
<C> <S>
DIRECTORS AND OFFICERS
----------------------
Eugene P. Heytow, 61.... Harvard College, B.A. and University of Chicago Law
Chairman of the Board, School, J.D.
Chief Executive Oak Brook Bank*: Chairman of the Board, Chief
Officer, Chairman of Executive Officer and Chairman of the Executive
the Executive Committee Committee.
Amalgamated Investments Company, Chicago (holding
company of Amalgamated Bank of Chicago)**: Chairman
of the Board.
Amalgamated Bank of Chicago**: Chairman of the Board
and Chief Executive Officer. AmalgaTrust Company,
Inc., Chicago (a wholly owned subsidiary of
Amalgamated Bank of Chicago)**: Chairman of the
Board.
Richard M. Rieser, Jr., Brown University, B.A. and University of Chicago Law
52..................... School, J.D.
President and Director Oak Brook Bank*: President and Director.
Amalgamated Bank of Chicago**: Senior Vice President.
Family relationship: Mr. Rieser is married to Mr.
Heytow's niece.
Frank M. Paris, 57...... Northwestern University, B.S.
Vice Chairman of the Oak Brook Bank*: Vice Chairman of the Board.
Board
Miriam Lutwak Northwestern University, B.A. and Chicago Medical
Fitzgerald, 38......... School, M.D.
Director Mimi S. Lutwak M.D.S.C.: President.
Oak Brook Bank*: Director.
Amalgamated Bank of Chicago**: Director.
Alton M. Withers, 69.... Texas A&M, B.S.
Director Spiegel, Inc., Downers Grove, Illinois (catalog
retailer):
Executive Vice President, Chief Financial Officer
(Retired, February, 1994).
Oak Brook Bank*: Director.
Geoffrey R. Stone, 49... Wharton School of Finance and Commerce, University of
Director Pennsylvania, B.S. and University of Chicago Law
School, J.D.
The University of Chicago, Provost, 1994-Present, and
Dean, of its law school, 1987-1993.
Robert M. Wrobel, 46.... Northwestern University, B.A.
Director Oak Brook Bank*: Director.
Amalgamated Investments Company, Chicago (holding
company of Amalgamated Bank of Chicago)**: President.
Amalgamated Bank of Chicago**: President and Chief
Operating Officer.
AmalgaTrust Company, Inc., Chicago, (a wholly owned
subsidiary of Amalgamated Bank of Chicago)**:
President.
OTHER EXECUTIVE
OFFICERS:
---------------
Rosemarie Bouman, 39.... Indiana University, B.S., C.P.A.
Vice President, Chief Oak Brook Bank*: Executive Vice President and Chief
Financial Officer and Financial Officer.
Treasurer
George C. Clam, 46...... Ripon College, B.A. and Northwestern University,
Vice President and M.B.A.
Chief Banking Officer Oak Brook Bank*: Senior Executive Vice President.
William E. Navolio, 46.. University of Notre Dame, B.A. and Georgetown
Vice President, General University, J.D.
Counsel and Secretary Oak Brook Bank*: General Counsel, Secretary and
Compliance Officer.
Mary C. Carnevale, 38... Saint Mary's College of Notre Dame, B.B.A., C.P.A.
Vice President and Oak Brook Bank*: Executive Vice President and Chief
Chief Human Resources Human Resources Officer.
Officer
</TABLE>
- - --------
* Subsidiary of the Company
** Affiliate of the Company
5
<PAGE>
CERTAIN TRANSACTIONS
During 1995, directors and executive officers of the Company and their
associates were customers of and had transactions with the Company's
subsidiary bank and all transactions were in the ordinary course of business.
The subsidiary bank has made loans to certain of the directors and executive
officers of the Company. These loans were made in the ordinary course of
business and on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons and do not involve more than the normal risk of collectibility
or present other unfavorable features.
COMPENSATION COMMITTEE INTERLOCKS
AND
INSIDER PARTICIPATION
Mr. Heytow, the Company's Chief Executive Officer, is a member of the
Company's Compensation Committee. Mr. Heytow participated in the deliberations
with regard to the compensation of the other named executive officers, but did
not participate in the Committee's deliberations with respect to his own
compensation.
COMPENSATION COMMITTEE REPORT
ON
EXECUTIVE COMPENSATION
The Compensation Committee ("Committee") has furnished the following report
on Executive Compensation:
The Committee is responsible for reviewing and approving the recommendations
of Management regarding a) overall compensation and benefits for the Company
and its subsidiary and b) the specific compensation and benefits for each
employee earning $30,000 or more at the Company and its subsidiary. In
addition, the Committee is responsible for reviewing and setting the specific
compensation and benefits for each executive officer (as disclosed in the
Summary Compensation Table).
In so doing, the Committee reviews information provided by Management and
considers a wide variety of factors. With respect to overall compensation and
benefits, these include cost of living changes, competitive pay scales and
Company performance. With respect to individual salaries, the factors include
the level and complexity of the position, education and special training
necessary or helpful to the position, promotions and growth in responsibility,
relative pay within the Company, competitive pay (as determined by independent
compensation surveys targeting national and local peer groups of financial
institutions), cost of living changes, and individual, departmental and
Company performance. With respect to discretionary bonuses, these factors
emphasize individual performance (as determined in individual performance
reviews) and, for executive officers especially, departmental and overall
Company performance.
For those reviewed by the Compensation Committee, performance is considered
both subjectively and objectively. For the lower pay group, bonuses generally
relate most closely to higher than expected personal effort and/or results.
For certain marketing officers, e.g., mortgage originators and investment
center representatives, bonuses are primarily incentives tied directly to new
business results. For the senior management group, bonuses generally relate
most closely to the achievement of goals and departmental business plans and
budgets and short- and medium-term Company growth and profitability.
6
<PAGE>
For the executive officers (non-director officers of the Company) and senior
executive officers (Messrs. Heytow, Rieser and Paris) subjective,
discretionary bonuses generally relate most closely to maintenance of safety
and soundness and to consistent medium-term and longer-term Company growth and
profitability. In setting executive officers and senior executive officers'
subjective discretionary bonuses, the Compensation Committee's policy of
emphasizing both safety and soundness and consistent medium-term and longer-
term growth and profitability is predicated on its cognizance that commercial
banking is a highly regulated industry in which management's ability to
maintain safety and soundness is a necessary condition to growth in assets and
earnings. Thus, to evaluate the executive officers' and senior executive
officers' performance for this purpose, the Compensation Committee reviews the
Company's overall safety and soundness, compliance with laws and regulations,
its current year's performance, in relation to historical performance,
departmental performance, and individual performance. Even though the
Committee considers the Company's performance in relation to net profits, the
Committee does not base salary and bonus increases on the year to year
increases in profits.
The Committee recognizes that the three senior executive officers have
significant ownership interest in the Company. Therefore, the Committee
concentrates on cash compensation to reward senior executive officers instead
of significant stock options and long-term benefits.
Payment of bonuses awarded to executive officers are partially deferred
based on the Committee's policy of rewarding attainment of annual performance
goals without significantly distorting income and providing incentives for
continued employment.
Mr. Heytow's salary and benefits were determined by the Committee based upon
the aforementioned considerations. The Compensation Committee granted Mr.
Heytow an increase in his salary and benefits, as set forth in the
Compensation Table. This compensation was in keeping with the Company's policy
of rewarding senior executive officers based on the safety and soundness of
the Company and subsidiary bank and medium- and long-term growth and
profitability. Mr. Heytow was also granted 8,000 stock options. No
discretionary bonus was awarded in 1995.
With regard to Mr. Rieser's salary and benefits, the Committee also used the
same considerations. The Compensation Committee granted Mr. Rieser an increase
in his salary and benefits, as set forth in the Compensation Table. This
compensation was based upon the Committee's determination of the importance of
Mr. Rieser's involvement in the day-to-day management and leadership of the
Company, as evidenced by the Company's overall safety and soundness and its
medium- and long-term growth and profitability. Mr. Rieser was also granted
8,000 stock options. No discretionary bonus was awarded in 1995.
In May 1995, the Company's Stockholders approved First Oak Brook Bancshares,
Inc., Performance Bonus Plan (the "Plan"). The Plan provides additional
incentive to the Company's three senior executive officers by augmenting the
Company's discretionary bonuses described above with an objective,
performance-based bonus payable only in the event that the Company's annual
performance meets certain levels, as measured by several criteria. The maximum
bonus under the Plan is two times annual salary and would be payable only if
the maximum performance level for all criteria is achieved. With the
establishment of this Plan, the Committee intends to limit the maximum
discretionary bonus award to one times the senior executive officer's annual
salary, providing a maximum overall bonus opportunity of three times annual
salary.
The Plan is administered by the Stock Option Advisory Committee consisting
of the three independent directors, two of whom also serve on the Compensation
Committee. Pursuant to the Plan, the Stock Option Advisory Committee
established a minimum and maximum range of targets (the "Targets") for the
calendar year 1995 based on the Company's return on equity, return on assets,
net income (exclusive of extraordinary items and security gains or losses),
market price of the Company's Class A common stock relative to book value,
market price of such common stock, in each case as
7
<PAGE>
measured against historical levels, and level of non-performing assets
relative to peer institutions, reflective of the Stock Option Advisory
Committee's emphasis on longer-term objectives. The Company's performance
relative to such targets resulted in bonuses of $172,343 for Eugene P. Heytow,
$214,124 for Richard M. Rieser, Jr. and $65,207 for Frank M. Paris.
For 1996, the Company is proposing changes to the Performance Bonus Plan as
detailed in this Proxy Statement to enable the Stock Option Advisory Committee
to establish Targets using peer group results and other standards as the Stock
Option Advisory Committee deems appropriate in light of the Company's
objectives. For 1996, the Stock Option Advisory Committee has established
Targets based on annual peer group performance standards in order to more
closely align bonuses under the Plan to the attainment of annual performance
objectives. No discretionary bonuses were awarded in 1995 because of the
achievement of the performance bonus targets. It is anticipated that
discretionary bonuses based on performance relative to the Company's longer-
term objectives may be granted in 1996 and future years.
The Company does not provide any qualified retirement plans other than a
401(k) program under which the Company's contribution is capped at 4% of
salary (not to exceed $6,000.00 based on a maximum salary of $150,000.00) and
an employees' Stock Bonus Plan (a form of profit sharing plan). As it has in
prior years, the Compensation Committee awarded a cash bonus to each of the
senior executive officers equal to the contribution that otherwise would have
been made to the Company's Stock Bonus Plan, but for tax law limitations which
require a reduction in the rate of contribution previously made under the
Stock Bonus Plan. The bonus set forth in the table for Messrs. Heytow, Rieser
and Paris includes such bonus amounts of $20,905, $28,383 and $1,939
respectively.
In addition to cash compensation, the Stock Option Advisory Committee
granted stock options to the senior executive officers, executive officers,
certain members of the senior management group and top performing middle
managers.
Section 162(m) of the Internal Revenue Code generally limits to $1 million
the Company's allowable Federal income tax deduction for compensation paid for
a calendar year to each of its Chief Executive Officer and four other most
highly compensated executive officers. The allowable deduction for certain
"performance-based" and other compensation is not, however, subject to the $1
million limitation. Based upon proposed regulations, compensation attributable
to the Company's Stock Option Plan should be exempt from the deduction
limitation. The Committee has not made any changes in its policies relating to
the cash compensation paid to the executive officers in response to the
$1,000,000 deduction limitation because the salary and discretionary bonuses
which have been or can be expected to be paid to the Company's executive
officers do not approach such level. The Committee and the Board of Directors
does, however, intend that any bonuses which may be paid under the Performance
Bonus Plan qualify as "performance-based" compensation not subject to the $1
million deduction limitation.
Eugene P. Heytow
Alton Withers
Dr. Miriam Lutwak Fitzgerald
Geoffrey R. Stone
8
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth the indicated compensation with respect to
each of the last three fiscal years for the Company's Chief Executive Officer
and its four other most highly compensated executive officers:
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------------------------------------
NAME AND ALL OTHER
PRINCIPAL SALARY BONUS OTHER ANNUAL OPTION COMPENSATION
POSITION YEAR ($)(/1/) ($) COMPENSATION AWARDS (#) ($)(/2/)
---------- ---- -------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Eugene P. 1995 251,417 193,248 8,000 23,988
Heytow
CEO 1994 245,200 154,784 10,000 13,662
1993 243,900 138,892 3,750(/3/) 20,150
Richard M. 1995 307,600 242,507 8,000 20,799
Rieser,
Jr.
President 1994 296,800 216,083 10,000 17,820
1993 279,300 189,016 3,750(/3/) 24,642
Frank M. 1995 107,900 67,146 4,000 13,317
Paris
Vice 1994 105,000 46,538 5,000 10,633
Chairman
1993 97,775 41,341 14,175 1,500(/3/) 9,759
George C. 1995 111,650 58,384(/4/) 3,000 12,360
Clam
Vice Pres- 1994 107,800 54,808(/4/) 3,000 11,972
ident--
Chief
Banking
Officer
1993 97,800 49,961(/4/) 11,488
William E. 1995 113,850 45,818(/4/) 3,000 10,714
Navolio
General 1994 110,000 41,019(/4/) 3,000 10,258
Counsel,
Secretary
1993 100,000 36,711(/4/) 10,916
</TABLE>
- - --------
(/1/This)column includes annual base salary, director's fees and committee
fees.
(/2/This)column includes the Company's matching contributions to its 401(k)
Plan, insurance premiums paid by the Company with respect to insurance
policies covering the life of each Named Executive Officer and the
Company's Stock Bonus Plan contribution, as set forth in the table below:
<TABLE>
<CAPTION>
401(K) INSURANCE SBP
------ --------- ------
<S> <C> <C> <C>
Mr. Heytow........................................ $6,000 $13,212 $4,776
Mr. Rieser........................................ 6,000 10,023 4,776
Mr. Paris......................................... 5,934 2,673 4,710
Mr. Clam.......................................... 6,000 1,584 4,776
Mr. Navolio....................................... 5,166 1,606 3,942
</TABLE>
(/3/These)options reflect the Company's 50% stock dividend distributed on
September 8, 1994.
(/4/Includes)award of annual discretionary bonus to the executive officer,
however, at the election of the Company, payment of two-thirds of the
bonus is deferred and is payable in equal increments in the following two
years. The deferred amounts are subject to forfeiture upon the executive
leaving the Company prior to payment.
9
<PAGE>
TRANSITIONAL EMPLOYMENT AND OTHER AGREEMENTS WITH EXECUTIVE OFFICERS
In October 1994, the Company entered into Transitional Employment Agreements
with each of its executive officers. In the event of a change in control of
the Company, the Agreements provide for an employment term of three years from
the date of the change in control with compensation and benefits at the same
level as in effect immediately preceding the change in control. If the
executive officer's employment is involuntarily terminated by the Company, or
its successor, (other than for cause) during the three year employment term,
or in the event of the executive officer's resignation under circumstances
which constitute a constructive discharge, the executive officer is entitled
to continue to receive salary, directors fees and bonus payments, and to
continue other benefits, for a period of 36 months from the date of such
termination of employment. For Messrs. Heytow, Rieser and Paris (the "Senior
Executive Officers"), the amount of such continuing salary, director fees and
bonus payments will be based upon the level in effect at the time of the
change in control, or if greater, termination of employment. Salary and bonus
continuation payments for the other executive officers will be based on the
average of the annual salary and bonus payments received during the five year
period prior to the year in which the change in control occurs. The Agreements
also provide for payment of any accrued but unpaid bonuses, continuing access
to the Company's group and executive medical plans after expiration of the 36-
month compensation continuation period and continuing indemnification rights.
In the event of an executive officer's death during the 36-month continuation
period, the Agreements provide for a lump sum payment equal to the present
value of the remaining salary and directors fees, and continuation of bonus
payments and certain other benefits to the executive officer's designated
beneficiary.
"Cause" is generally defined in the Agreements as a felony conviction
involving an act or acts of dishonesty or breach of trust or the continued and
willful failure of the executive officer to substantially perform the
officer's duties under the Agreement. "Constructive discharge" is defined
generally to include a breach of the Company's obligations under the
Agreement, a material diminution of the executive officer's duties and
responsibilities, a change of the executive officer's primary employment
location by more than 35 miles from the primary location in effect at the time
of the change in control or a significant change in the executive officer's
regularly-scheduled work hours from those in effect at the time of the change
in control. In the case of Senior Executive Officers' voluntary resignations
at any time during the first year of the employment terms, or in the case of
the other executive officers', voluntary resignation at any time during the
first year of the employment term but after the termination or the
announcement of the termination of Mr. Rieser's employment will also
constitute resignation under circumstances which constitute a constructive
discharge. Salary and bonus continuation payments to those executive officers
who are not Senior Executive Officers are subject to reduction to the extent
necessary so that no portion of those amounts will be subject to the excise
tax imposed under the Internal Revenue Code on payments which may be deemed to
be "excess parachute payments". The compensation and benefits payable to the
Senior Executive Officers under the Transitional Employment Agreements will be
increased to the extent necessary to gross-up such compensation and benefits,
or the compensation and benefits payable under any other plan or program of
the Company, to the extent the Senior Executive Officer would be subject to
the excise tax upon the receipt thereof.
The Company also entered into Supplemental Pension Agreements with Messrs.
Heytow and Rieser. Under these agreements, the Company is obligated to provide
at a prescribed retirement date, a supplemental pension in the form of a life
and 15-year certain annuity based upon a percentage of the executive officer's
final base salary. Mr. Heytow's retirement date is January 1, 2007 and the
percentage of final base salary to be used in determining his benefit is 25%;
Mr. Rieser's retirement date is January 1, 2015 and the percentage of final
base salary is 50%. In the event of termination of employment prior to the
applicable retirement date, the supplemental pension payable at the retirement
date will be prorated based on years of service from October 1994 to the date
of his termination of employment. No proration of the amount of the
supplemental pension payable is required, however, if the termination of the
executive officer's employment was involuntary (other than for cause) or
voluntary following an
10
<PAGE>
event that would constitute a constructive discharge as defined in the
Transitional Employment Agreements (without regard to whether or not a change
in control has occurred). An actuarially reduced supplemental pension may be
paid prior to the applicable retirement date to the executive officer in the
event of termination of employment prior to such date.
The Company has entered into Agreements Regarding Post-Employment
Restrictive Covenants with Messrs. Heytow, Rieser and Paris, under which the
executive officers agree that following termination of employment for any
reason other than death, the executive officer will not, for a period of
twenty-four months, directly or indirectly solicit any customer of the Company
or its affiliates not to do business with the Company or such affiliates or to
solicit or encourage any employee of the Company or its affiliates to
terminate his or her employment. In addition, the Agreements impose
confidentiality obligations on the executive officer. As consideration for the
restrictive covenants, the Company is obligated to pay 12 annual payments of
$80,000 each to Messrs. Heytow and Rieser and of $25,000 to Mr. Paris. Such
payments, in the aggregate, approximate two times the respective executive
officer's current annual cash compensation.
OPTION GRANTS TABLE
The following table sets forth certain information concerning grants of
stock options during the year ended December 31, 1995 to each of the executive
officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
RATES OF STOCK
PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
- - ----------------------------------------------------------------------- -----------------
PERCENT OF
TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE OF
OPTIONS IN FISCAL BASE PRICE EXPIRATION
NAME GRANTED(/1/) YEAR(/2/) ($/SH)(/3/) DATE 5% 10%
---- ------------ ---------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Eugene P. Heytow........ 8,000 12.70% $20.50 12/21/05 $103,120 $261,360
Richard M. Rieser, Jr... 8,000 12.70% $20.50 12/21/05 $103,120 $261,360
Frank M. Paris.......... 4,000 6.35% $20.50 12/21/05 $ 51,560 $130,680
George C. Clam.......... 3,000 4.76% $20.50 12/21/05 $ 38,670 $ 98,010
William E. Navolio...... 3,000 4.76% $20.50 12/21/05 $ 38,670 $ 98,010
</TABLE>
- - --------
(/1/Represents)stock options issued under the Company's Amended and Restated
1987 Stock Option Plan. The options were granted for a term of 10 years
subject to earlier termination because of death or permanent disability.
The options become 20% vested on the first anniversary date of grant and
vest an additional 20% on each subsequent anniversary; however, in the
event of a change in control, the options immediately become 100% vested.
(/2/The)percentages shown in the table are based on total options granted to
employees in 1995 of 63,000 shares of the Company's Common Stock.
(/3/The)exercise price of each stock option was the closing market price of
Class A Common Stock on the day preceeding the date of grant.
11
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND
YEAR-END OPTION VALUES
The following table sets forth the indicated year-end 1995 value and number
of unexercised options for each of the executive officers named in the Summary
Compensation Table.
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
NUMBER OF IN-THE-MONEY
UNEXERCISED OPTIONS AT 12-
OPTIONS AT 12-31-95 31-95(/1/)
SHARES ACQUIRED ------------------- ----------------
ON EXERCISE EXERCISABLE/ EXERCISABLE/
NAME (#) UNEXERCISABLE UNEXERCISABLE
- - ---- --------------- ------------------- ----------------
<S> <C> <C> <C>
Eugene P. Heytow........... 37,250/18,250 $528,442/$46,814
Richard M. Rieser, Jr...... 30,875/18,250 $432,084/$46,814
Frank M. Paris............. 14,255/ 8,900 $200,341/$22,125
George C. Clam............. 10,443/ 5,400 $152,771/$10,275
William E. Navolio......... 10,443/ 5,400 $152,771/$10,275
</TABLE>
- - --------
(/1/) Based on Company's Class A Common stock price on December 31, 1995 of
$20.625 per share.
FIVE YEAR PERFORMANCE COMPARISON
The graph below provides an indicator of cumulative total shareholder returns
for the Company's Class A Common Stock as compared with the Center for Research
in Security Prices (CRSP) Index for NASDAQ Stock Market (U.S. Companies) and a
Peer Group, the CRSP Index for NASDAQ Bank Stocks.
<TABLE>
[GRAPH APPEARS HERE]
<CAPTION> CRSP INDEX CRSP INDEX
Measurement Period FIRST FOR NASDAQ FOR NASDAQ
(Fiscal Year Covered) OAKBROOK STOCK MARKET BANK STOCKS
- - ------------------- -------- ------------ -----------
<S> <C> <C> <C>
Measurement Pt-
12/31/90 $100 $100 $100
FYE 12/31/91 $158.488 $160.564 $164.092
FYE 12/31/92 $185.516 $186.866 $238.854
FYE 12/31/93 $253.916 $214.511 $272.395
FYE 12/31/94 $310.45 $209.686 $271.41
FYE 12/31/95 $379.845 $296.204 $404.353
</TABLE>
--------
Notes:
The index level for all series was set to $100.00 on 12/31/90.
12
<PAGE>
CONSIDERATION AND APPROVAL OF THE
AMENDED AND RESTATED
FIRST OAK BROOK BANCSHARES, INC. PERFORMANCE BONUS PLAN
At the Annual Meeting, the Company will submit to the shareholders a
proposal to approve the amended and restated First Oak Brook Bancshares, Inc.
Performance Bonus Plan (the "Plan"). As described in the Compensation
Committee Report on Executive Compensation, the Company established the Plan
in 1995 to augment its present discretionary bonus policy. The Company
proposes to amend and restate the Plan to permit the use of peer group results
and other standards in establishing performance targets under the Plan. The
Plan was adopted effective as of January 1, 1995 and approved by the Company's
shareholders at the 1995 Annual Meeting. The amended and restated Plan is
subject to approval by the Company's shareholders at the Annual Meeting.
Shareholder approval is sought to continue to qualify the Plan under Section
162(m) of the Code and thereby permit the Company to deduct for Federal income
tax purposes all compensation paid to the eligible executive officers under
the Plan. The affirmative vote of a majority of the voting power of the votes
cast by the shareholders on this matter, in person or by proxy, at the Annual
Meeting is necessary in order for the shareholders to approve the Plan in
accordance with Section 162(m).
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE IN FAVOR OF
APPROVAL OF THE PLAN.
The following is a brief summary of certain features of the Plan and is
qualified in its entirety by reference to the full text of the Plan, which is
set forth as Appendix A to this Proxy Statement.
In accordance with the requirements of Section 162(m), the Plan is
administered by the Stock Option Advisory Committee of the Board of Directors
(the "Committee"), which is comprised solely of non-employee directors. Only
those executive officers of the Company selected by the Committee are eligible
to participate in the Plan. For 1996, only the Company's Chairman (Mr.
Heytow), Vice Chairman (Mr. Paris) and President (Mr. Rieser) have been
selected for participation in the Plan.
Under the Plan, each year, as soon as practicable following the Company's
development of its operating plan for that year, but prior to March 31 of the
year, the Committee reviews the operating plan and establishes in writing a
formula for establishing a number of objective performance goals for that year
("Targets") while the outcome is substantially uncertain. The Targets then
become the basis on which the eligibility and amount of the bonus payable
under the Plan will be determined.
The Targets are formulated using a minimum, maximum and range of numeric
standards for each of the performance measures, and each performance measure
is then assigned a relative percentage weighting by the Committee. The
performance measures for the Targets must be one, all or a combination of the
following: return on assets (ROA), return on equity (ROE), net income, market
price of the Company's Class A Common Stock relative to the book value of such
shares, the market price of the Company's Class A Common Stock, and the level
of nonperforming assets. As established in 1995, the numeric standards used
for setting the Targets were limited to standards based on historical levels,
except for the level of non-performing assets which was tied to peer
standards. Under the proposed amended and restated Plan, the numeric standards
for the Targets may be based on peer group results, the Company's historical
levels or such other standards as the Committee deems appropriate in light of
the Company's objectives.
For 1996, the Committee has established Targets for all six of the
performance measures as compared to peer group results. If, as can be expected
to be the case, there are different levels of achievement of the applicable
Targets, the bonus earned will be based on a weighted blend of achievement
levels. The Committee has determined it to be to the Company's competitive
disadvantage to disclose in this Proxy Statement the specific Targets and
relative weightings established, as such are confidential and their disclosure
could adversely affect the Company.
13
<PAGE>
The Committee may, in future years, change the Targets and relative
weightings as it deems appropriate and consistent with the Company's strategic
priorities. In order to preserve the compliance of the Plan with the
performance-based compensation requirements of Section 162(m), the Committee
will not utilize a performance measure that differs from those specifically
stated in the Plan without submitting such measure to the shareholders for
approval.
No bonuses shall be earned under the Plan unless minimum performance under
at least three of the six Targets has been met. In addition, no bonuses shall
be earned if, at the end of the calendar year, there is an adverse change in
the regulatory status or capital position of the Company relative to standards
established by the Committee. The Committee will certify in writing the
Targets achieved and compute the amount of any bonuses earned promptly after
the close of the calendar year; provided that the Committee may, based upon
performance through November 30 of the year, authorize the advance payment on
or before December 31 of such year of a substantial portion of the bonus
expected to be earned for the year, in which case such payments shall reduce
the amount of the bonus payable following the final certification by the
Committee. The Committee may in its sole discretion decrease, but not
increase, any bonus otherwise earned under the Plan.
The maximum annual bonus which is payable to any individual under the Plan
will be limited to two times such individual's annual base salary as of the
first day of the year. Accordingly, the maximum bonus which may be earned
under the Plan in 1996 for Messrs. Heytow, Paris and Rieser will be $462,000,
$574,000, and $174,800, respectively. There is no present intention to award
this level of bonus, however.
Bonuses earned under the Plan are paid in cash. In the event of an executive
officer's death, disability or retirement, or termination of the executive
officer's employment by the Company without cause, the executive officer, or
his beneficiary or representative, shall receive a prorated payout which shall
be determined by the Committee. Termination of employment for any other reason
results in the forfeiture of any right to a bonus for the year in which
termination occurs.
The Plan may be amended by the Board of Directors, provided that any
amendment which would affect the Plan's compliance with Section 162(m) shall
not be effective unless approved by the Company's shareholders. As amended,
the Plan will terminate on December 31, 2000.
The benefits to be received by the participating executive officers are not
currently determinable. The following table sets forth the maximum benefit
that would have been received with respect to 1995 if the Plan and the Targets
established by the Committee for 1996 had been in effect during 1995.
NEW PLAN BENEFITS
FIRST OAK BROOK BANCSHARES, INC. PERFORMANCE BONUS PLAN
<TABLE>
<CAPTION>
DOLLAR
NAME AND POSITION VALUE
- - ----------------- --------
<S> <C>
Eugene P. Heytow...................................................... $264,229
Richard M. Rieser, Jr................................................. $328,285
Frank M. Paris........................................................ $ 99,973
George C. Clam........................................................ *
William E. Navolio.................................................... *
Executive Officer Group............................................... $692,487
Non-Executive Officer Director Group.................................. *
Non-Executive Employee Group.......................................... *
</TABLE>
- - --------
* Not Applicable
14
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 and regulations
thereunder require directors and certain officers of the Company and persons
who beneficially own more than 10% of the Company's stock to file initial
reports of ownership and reports of changes in ownership of the Company's
stock with the Securities and Exchange Commission and to furnish the Company
with copies of such reports. Based solely upon the review of copies of such
reports furnished to the Company and representations of reporting persons, all
such persons filed on a timely basis reports required by Section 16(a) during
the most recent fiscal year.
SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP as independent
auditors for the Company for the year ending December 31, 1996. The Board
recommends ratification of this action.
Representatives of Ernst & Young LLP are expected to be present at the
meeting and will be given the opportunity to make a statement if they desire
to do so. It is also expected that they will be available to respond to
appropriate questions from shareholders at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS RATIFICATION OF THE SELECTION OF ERNST &
YOUNG LLP AS INDEPENDENT AUDITORS.
1996 SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1997 Annual
Meeting must be received by the Company no later than December 4, 1996, to be
considered for inclusion in the Proxy materials relating to that meeting. Such
proposals should be addressed to William E. Navolio, Secretary, First Oak
Brook Bancshares, Inc., 1400 Sixteenth Street, Oak Brook, Illinois 60521.
OTHER BUSINESS
At this date, management knows of no business to be presented at the meeting
which has not been described above. If, however, some other matter should be
presented, it is intended that the enclosed proxy will be voted in accordance
with the judgment of the person or persons voting the proxy.
By Order of the Board of Directors
William E. Navolio
Secretary
Oak Brook, Illinois
April 1, 1996
15
<PAGE>
APPENDIX A
FIRST OAK BROOK BANCSHARES, INC.
PERFORMANCE BONUS PLAN
(AMENDED AND RESTATED)
ARTICLE 1. ESTABLISHMENT, PURPOSE AND DURATION
The First Oak Brook Bancshares, Inc. Bonus Plan (the "Plan") is hereby
established by First Oak Brook Bancshares, Inc. (the "Company"). The purpose
of the Plan is to promote the success and enhance the value of the Company by
providing the Executive Officers with the opportunity to earn additional bonus
compensation based upon superior Company performance. The Plan and the grant
of awards hereunder are expressly conditioned upon the Plan's approval by the
stockholders of the Company. The Plan is adopted, subject to stockholder
approval, effective as of January 1, 1996, and shall remain in effect, subject
to the right of the Board of Directors to amend or terminate the Plan at any
time, until December 31, 2000.
ARTICLE 2. ADMINISTRATOR
The Plan shall be administered by the Stock Option Advisory Committee of the
Board of Directors of the Company, or such other committee designated by the
Board comprised solely of two or more members who are "outside directors" with
the meaning of Section 162(m) of the Code (the "Committee").
ARTICLE 3. ELIGIBILITY
Only those executive officers selected by the Committee shall be eligible to
participate in the Plan. References herein to an "executive officer" shall
refer to only those executive officers who have been selected for
participation in the Plan.
ARTICLE 4. AWARDS
No later than March 31 of each calendar year, the Committee shall establish
a minimum, maximum and range of targets (the "Targets") for the calendar year
based on the Company's return on equity, return on assets, net income, market
price of Company's Class A Common Stock relative to book value, market price
of such Common Stock, and level of non-performing assets, in each case
relative to peer institution performance, historical levels and/or other
standards deemed appropriate by the Committee in light of the Company's
objectives. The Committee shall also determine the bonus compensation awards
which may be earned by the executive officers upon the Company's attainment of
various levels of performance with respect to such Targets ("Award
Opportunities"); provided, that no bonus shall be earned unless minimum
performance with respect to at least three Targets is met for the calendar
year. All Award Opportunities shall be a direct function of the Targets.
No bonus shall be paid with respect to any calendar year, if, as of December
31 of such year, there has been an adverse change in the Company's regulatory
status or capital position as determined by reference to standards relating to
regulatory status and capital position established by the Committee at the
time it established the Targets for such year.
Promptly after each calendar year, the Committee shall certify as to whether
any, all or a combination of the Targets for such year have been achieved;
provided, that the Committee may, in its absolute discretion and based upon
performance levels achieved through November 30 of a calendar year, certify
achievement of all or any combination of the Targets and authorize payment of
a portion of the bonus then expected to be earned. Following the post-year end
certification, a final award shall
A-1
<PAGE>
be computed for each executive officer based upon the Award Opportunities for
such year; provided, however, that any amount paid to the executive officer
during such year pursuant to the first sentence of this paragraph shall be
deducted from the final full-year award otherwise payable. In addition, the
Committee may, in its sole discretion, decrease, but not increase, the amount
of any award payable under the Plan.
Notwithstanding the foregoing, no executive officer may receive, with
respect to any calendar year, payments under the Plan aggregating more than
two times such executive officer's base annual salary as in effect on the
first day of such calendar year.
ARTICLE 5. PAYOUTS
All awards shall be paid in cash.
ARTICLE 6. TERMINATION
In the event an executive officer's employment is terminated by reason of
death, disability or retirement or by the Company without cause, he shall
receive a prorated payment, which shall be determined by the Committee, in its
sole discretion, based upon the length of time he was included in the Plan
during the calendar quarter and year then in progress. In the event the
executive officer's employment is terminated for any other reason, all his
rights to an award for the year then in progress shall be forfeited.
ARTICLE 7. AMENDMENT
The Plan may be amended, modified or terminated by the Board of Directors of
the Company, subject to the approval of the stockholders of the Company if
required for compliance with Section 162(m) of the Internal Revenue Code of
1986, as amended.
ARTICLE 8. WITHHOLDING
The Company shall have the power and the right to deduct or withhold, or
require the executive officer to remit to the Company, an amount sufficient to
satisfy Federal, state and local taxes (including the executive officer's FICA
obligations) required by law to be withheld with respect to any taxable event
arising as a result of the Plan.
ARTICLE 9. BENEFICIARIES
The Committee shall establish such procedures as it deems appropriate for
the executive officer to designate a beneficiary or beneficiaries to whom any
amounts payable in the event of the executive officer's death are to be paid.
ARTICLE 10. MISCELLANEOUS
The headings contained in the Plan are for reference purposes only and shall
not affect the meaning or interpretation of the Plan.
If any provision of the Plan shall for any reason be held to be invalid or
unenforceable, such invalidity or unenforceability shall not effect any
provision hereby, and the Plan shall be construed as if such invalid or
unenforceable provision were omitted.
The Plan shall inure to the benefit of and be binding upon each successor
and assign of the Company. All obligations imposed upon the executive
officers, and all rights granted to the Company hereunder, shall be binding
upon the executive officer's heirs, legal representatives and successors.
The Plan and all awards made and actions taken hereunder shall be governed
by and construed in accordance with the laws of the State of Illinois (other
than its law respecting choice of law).
A-2
<PAGE>
PROXY FIRST OAK BROOK BANCSHARES, INC.
1400 SIXTEENTH STREET, OAK BROOK, ILLINOIS 60521
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Eugene P. Heytow, Frank M. Paris and Richard
M. Rieser, Jr., or any one or more of them, as Proxies, each with the power to
appoint his substitute, and hereby authorizes them to represent and to vote as
designated below, all the shares of Class A Common Stock of First Oak Brook
Bancshares, Inc. held of record by the undersigned on March 22, 1996 at the
Annual Meeting of Shareholders to be held on May 7, 1996 or any adjournment
thereof. A majority (or if only one, then that one) of the above Proxies or
their substitutes who shall be present at the meeting shall have all of the
powers conferred hereby.
1. Election of Directors.
[_] FOR nominees [_] WITHHOLD
listed below AUTHORITY to vote
(except as marked for the nominees
to the contrary listed below
below)
Eugene P. Heytow Richard M. Rieser, Jr. Frank M. Paris
Miriam Lutwak Fitzgerald Alton M. Withers Geoffrey R. Stone Robert M.
Wrobel
(Instruction: to withhold authority to vote for an individual nominee, write
that nominee's name on the line below)
----------------------------------------------------------------------------
2. Consideration and Approval of the Company's amended and restated
Performance Bonus Plan.
[_] FOR [_] AGAINST [_] ABSTAIN
3. Ratification of the selection of Ernst & Young LLP as independent
auditors for the Company.
[_] FOR [_] AGAINST [_] ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
(Continued and to be signed on reverse side)
(Continued from other side)
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF THE NOMINEES NAMED IN PART 1, AND FOR THE AMENDED
AND RESTATED PERFORMANCE BONUS PLAN IN PART 2 AND FOR THE RATIFICATION OF ERNST
& YOUNG LLP AS INDEPENDENT AUDITORS FOR THE COMPANY.
Dated: ______________________, 1996
-----------------------------------
-----------------------------------
(Signature if held jointly)
Please sign exactly as name ap-
pears on this Proxy. When shares
are held by joint tenants, both
should sign. When signing as at-
torney, executor, administrator,
trustee or guardian, please give
full title as such. If a corpora-
tion, please sign in full corpo-
rate name by President or other
authorized officer. If a partner-
ship, please sign in partnership
name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED,
PREPAID ENVELOPE.
<PAGE>
PROXY FIRST OAK BROOK BANCSHARES, INC.
1400 SIXTEENTH STREET, OAK BROOK, ILLINOIS 60521
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Eugene P. Heytow, Frank M. Paris and Richard
M. Rieser, Jr., or any one or more of them, as Proxies, each with the power to
appoint his substitute, and hereby authorizes them to represent and to vote as
designated below, all the shares of Common Stock of First Oak Brook Bancshares,
Inc. held of record by the undersigned on March 22, 1996 at the Annual Meeting
of Shareholders to be held on May 7, 1996 or any adjournment thereof. A
majority (or if only one, then that one) of the above Proxies or their
substitutes who shall be present at the meeting shall have all of the powers
conferred hereby.
1. Election of Directors.
[_] FOR nominees [_] WITHHOLD
listed below AUTHORITY to vote
(except as marked for the nominees
to the contrary listed below
below)
Eugene P. Heytow Richard M. Rieser, Jr. Frank M. Paris
Miriam Lutwak Fitzgerald Alton M. Withers Geoffrey R. Stone Robert M.
Wrobel
(Instruction: to withhold authority to vote for an individual nominee, write
that nominee's name on the line below)
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2. Consideration and Approval of the Company's amended and restated
Performance Bonus Plan.
[_] FOR [_] AGAINST [_] ABSTAIN
3. Ratification of the selection of Ernst & Young LLP as independent
auditors for the Company.
[_] FOR [_] AGAINST [_] ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
(Continued and to be signed on reverse side)
(Continued from other side)
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF THE NOMINEES NAMED IN PART 1, AND FOR THE AMENDED
AND RESTATED PERFORMANCE BONUS PLAN IN PART 2 AND FOR THE RATIFICATION OF ERNST
& YOUNG LLP AS INDEPENDENT AUDITORS FOR THE COMPANY.
Dated: ______________________, 1996
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(Signature if held jointly)
Please sign exactly as name ap-
pears on this Proxy. When shares
are held by joint tenants, both
should sign. When signing as at-
torney, executor, administrator,
trustee or guardian, please give
full title as such. If a corpora-
tion, please sign in full corpo-
rate name by President or other
authorized officer. If a partner-
ship, please sign in partnership
name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED,
PREPAID ENVELOPE.
