<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):
---- Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 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) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------
<PAGE>
____ 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 6, 1997
April 1, 1997
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 6, 1997 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 1998;
(2) Ratification of the selection of Ernst & Young LLP as independent auditors
for the Company; and
(3) 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 21, 1997 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 1997 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD TUESDAY,
MAY 6, 1997 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 21, 1997 will be
entitled to vote. On that date, there were outstanding voting shares as
follows:
<TABLE>
<CAPTION>
NUMBER OF SHARES PAR OR VOTE
TITLE OF CLASS OUTSTANDING STATED VALUE PER SHARE
- -------------- ---------------- ------------ -----------
<S> <C> <C> <C>
Common................................ 1,523,895 $2.00 1
Class A Common........................ 1,714,040 $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, 1997.
ELECTION OF DIRECTORS
In accordance with the By-Laws of the Company, the Board of Directors has
fixed at seven, 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 1998 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 has served as a director since 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.
1
<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 21,
1997, 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......................... 11,457(/5/) -- *
Frank M. Paris................................ 3,893(/6/) -- *
Miriam Lutwak Fitzgerald...................... 304(/7/) -- *
Alton M. Withers.............................. 1,125 -- *
Geoffrey R. Stone............................. -- -- --
Robert M. Wrobel.............................. -- -- --
George C. Clam................................ 3,040 -- *
William E. Navolio............................ 138(/8/) -- *
All Directors and Executive Officers as a
Group
(11 Persons)................................... 20,417 -- 1.17
Common Eugene P. Heytow.............................. -- (/9/) 41,600 2.47
Richard M. Rieser, Jr......................... 166,393(/5/) 24,225 11.32
Frank M. Paris................................ 172,519 9,325 10,80
Miriam Lutwak Fitzgerald...................... 307,819(/7/) 2,000 18.40
Alton M. Withers.............................. -- 2,000 *
Geoffrey R. Stone............................. -- 2,000 *
Robert M. Wrobel.............................. 579 *
George C. Clam................................ -- 11,643 *
William E. Navolio............................ -- 11,643 *
All Directors and Executive Officers as a
Group
(11 Persons)................................... 647,310 120,597 45.59
</TABLE>
- --------
*Denotes less than 1% ownership.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS(/1/)
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(/2/) OF CLASS(/4/)
-------------- ------------------------------------ -------------- -------------
<C> <S> <C> <C>
Class A Common Associated Banc-Corp. ........................ 104,150 5.99
112 North Adams Street
Green Bay, Wisconsin 54301
First Union Corporation....................... 94,448 5.42
One First Union Center
Charlotte, North Carolina 28288-0630
Common Mitzi Heytow.................................. 311,649 18.50
c/o Amalgamated Bank of Chicago
One West Monroe Street
Chicago, Illinois 60603
</TABLE>
- --------
(/1/Shares)of stock deemed beneficially owned at March 21, 1997.
(/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 21, 1997 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 160,401 shares which could be
acquired within 60 days under exercisable options.
(/5/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 interest 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.
(/6/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.
(/7/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.
(/8/Excludes)117 shares held by Mr. Navolio's spouse in and over which he
disclaims beneficial interest and voting and investment power.
(/9/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.
3
<PAGE>
BOARD OF DIRECTORS
MEETINGS, FUNCTIONS AND COMPENSATION
During 1996 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 1996 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 1996 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
reviewing and monitoring the internal controls of the subsidiary bank.
The Compensation Committee met once during 1996 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 $50,000 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 four (4) times
in 1996 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 Amended and
Restated 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 eight (8) times
during 1996 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 attended 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.
<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, 62.... 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, Executive Officer and Chairman of the Executive
Chairman of the Committee.
Executive 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
53..................... 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, 58...... 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, 39 ........ School, M.D.
Director Mimi S. Lutwak M.D.S.C.: President.
Oak Brook Bank*: Director.
Amalgamated Bank of Chicago**: Director.
Alton M. Withers, 70.... 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, 50 .. 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, 47 ... Northwestern University, B.A. Oak Brook Bank*:
Director 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.
<CAPTION>
OTHER EXECUTIVE
OFFICERS:
---------------
<C> <S>
Rosemarie Bouman, 40.... Indiana University, B.S., C.P.A. Oak Brook Bank*:
Vice President, Chief Executive Vice President and Chief Financial Officer.
Financial Officer and
Treasurer
George C. Clam, 47...... 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, 47.. 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, 39... 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 1996, 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 $50,000 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 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>
In May 1996, the Company's Stockholders approved the Amended and Restated
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 number of objective performance goals as compared to peer group
results (the "Targets") for the calendar year 1996. 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 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. 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. The Company's performance
relative to such targets resulted in bonuses of $157,491 for Eugene P. Heytow,
$209,987 for Richard M. Rieser, Jr. and $59,626 for Frank M. Paris.
For the executive officers (non-director officers of the Company) and senior
executive officers (Messrs. Heytow, Rieser and Paris) subjective,
discretionary bonuses may be awarded. Such bonuses generally relate most
closely to maintenance of safety and soundness and to consistent medium-term
and longer-term Company growth and profitability, areas of achievement that
may not be reflected within the objective criteria of the Performance Bonus
Plan. In awarding 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
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 discretionary 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.
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 10,000 stock options.
7
<PAGE>
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
10,000 stock options.
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 (on a maximum salary of $150,000) and an employees' Stock Bonus Plan (a
form of profit sharing plan). 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 401(k) and Stock Bonus Plan,
but for tax law limitations which require a reduction in the rate of
contribution (supplemental make-up payments). The bonus set forth in the table
for Messrs. Heytow, Rieser and Paris includes such bonus amounts of $32,989,
$48,666 and $899 respectively, and no other discretionary bonuses were awarded
in 1996. It is anticipated that discretionary bonuses based on performance
relative to the Company's longer-term objectives may be awarded in 1997 and
future years.
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 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. 1996 262,700 157,491 10,000 101,615
Heytow
CEO 1995 251,417 172,343 8,000 44,893
1994 245,200 132,000 10,000 32,446
Richard M. 1996 340,975 209,987 10,000 113,826
Rieser, Jr.
President 1995 307,600 214,124 8,000 49,182
1994 296,800 189,000 10,000 39,903
Frank M. 1996 112,225 59,626 5,000 42,144
Paris
Vice Chair- 1995 107,900 65,207 4,000 15,256
man
1994 105,000 45,000 5,000 12,171
George C. 1996 119,000 52,750(/3/) 2,000 15,386
Clam,
Vice Presi- 1995 111,650 55,000(/3/) 3,000 15,744
dent--Chief
Banking Of- 1994 107,800 52,000(/3/) 3,000 14,780
ficer
William E. 1996 119,275 43,000(/3/) 2,000 15,536
Navolio
General 1995 113,850 43,200(/3/) 3,000 13,332
Counsel,
Secretary 1994 110,000 39,000(/3/) 3,000 12,277
</TABLE>
- --------
(/1/This)column includes annual base salary, director's fees and committee
fees.
(/2/This)column includes: (i) the Company's matching contributions (including
the supplemental make-up payments as described in the Compensation
Committee Report) under its 401(k) Plan; (ii) the Company's Stock Bonus
Plan contribution (including the supplemental make-up payments as
described in the Compensation Committee Report); (iii) taxable income for
life insurance benefits paid by the Company with respect to insurance
policies covering the life of each Named Executive Officer; and (iv)
amounts paid to the Named Executive Officer with respect to certain life
insurance agreements, as set forth in the table below:
<TABLE>
<CAPTION>
(I) (II) (III) (IV)
------- ------- ------- -------
<S> <C> <C> <C> <C>
Mr. Heytow................................ $23,593 $19,549 $13,633 $44,840
Mr. Rieser................................ 31,955 26,864 10,167 44,840
Mr. Paris................................. 6,480 4,572 2,772 28,320
Mr. Clam.................................. 7,896 5,812 1,678
Mr. Navolio............................... 7,966 5,874 1,696
</TABLE>
(/3/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
10
<PAGE>
of the executive officer's employment was involuntary (other than for cause)
or voluntary following an 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 $25,000 to Mr. Paris. Such
payments, in the aggregate, approximate two times the respective executive
officer's current annual cash compensation.
11
<PAGE>
OPTION GRANTS TABLE
The following table sets forth certain information concerning grants of stock
options during the year ended December 31, 1996 to each of the Named Executive
Officers.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ----------------------------------------------------------------------------------
PERCENT OF
TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO EXERCISE
UNDERLYING EMPLOYEES OF BASE
OPTIONS IN FISCAL PRICE EXPIRATION GRANT DATE
NAME GRANTED(/1/) YEAR(/2/) ($/SH)(/3/) DATE VALUE(/4/)
- ---- ------------ ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Eugene P. Heytow........ 10,000 19.61% $22.75 12/27/06 $44,300
Richard M. Rieser, Jr... 10,000 19.61% $22.75 12/27/06 $44,300
Frank M. Paris.......... 5,000 9.80% $22.75 12/27/06 $22,150
George C. Clam.......... 2,000 3.92% $22.75 12/27/06 $ 8,860
William E. Navolio...... 2,000 3.92% $22.75 12/27/06 $ 8,860
</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 termination of employment. 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 1996 of 51,001 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, into which the Common Stock is convertible, on the
day preceeding the date of grant.
(/4/The)fair value for these options was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted-average
assumptions for 1996: risk-free interest rates of 6.4%; dividend yields of
3.1%; volatility factor of the expected market price of the Company's
common stock of .18; and a weighted-average expected life of the option of
5 years. The Black- Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting
restrictions and are fully transferable.
12
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND
YEAR-END OPTION VALUES
The following table sets forth the indicated year-end 1996 value and number
of unexercised options for each of the executive officers named in the Summary
Compensation Table.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
12-31-96 12-31-96(/1/)
SHARES ACQUIRED ------------- ----------------
ON EXERCISE VALUE EXERCISABLE/ EXERCISABLE/
NAME (#) REALIZED UNEXERCISABLE UNEXERCISABLE
- ----------------------- --------------- -------- ------------- ----------------
<S> <C> <C> <C> <C>
Eugene P. Heytow....... 41,600/23,900 $650,364/$75,580
Richard M. Rieser, Jr.. 11,000 $173,140 24,225/23,900 $342,131/$75,580
Frank M. Paris......... (/2/) 16,355/11,800 $249,206/$36,542
George C. Clam......... 11,643/ 6,200 $185,884/$19,200
William E. Navolio..... 11,643/ 6,200 $185,884/$19,200
</TABLE>
- --------
(/1/Based)on Company's Class A Common stock price on December 31, 1996 of
$23.25 per share.
(/2/On)January 29, 1997 Mr. Paris exercised 7,030 options at a price of $5.51
with a realized value of $128,227. These shares are included as owned by
Mr. Paris in the Security Ownership of Management Table. If the exercise
was reflected in this Table Mr. Paris' Exercisable Options would have been
9,325 and Exercisable in the Money Options amount would have been $124,494.
13
<PAGE>
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]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG FIRST OAK BROOK BACCSHARES, NASDAQ AND NASDAQ BANK STOCK
<CAPTION>
Measurement Period FIRST NASDAQ
(Fiscal Year Covered) OAK BROOK NASDAQ BANK STOCK
- ------------------- ---------- --------- ----------
<S> <C> <C> <C>
Measurement Pt-
12/31/91 $100.0 $100.0 $100.0
FYE 12/31/92 $117.1 $116.4 $145.6
FYE 12/31/93 $160.2 $133.6 $166.0
FYE 12/31/94 $195.9 $130.6 $165.4
FYE 12/31/95 $239.7 $184.7 $246.3
FYE 12/31/96 $273.1 $227.2 $325.6
</TABLE>
14
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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, 1997. 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.
1997 SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1998 Annual
Meeting must be received by the Company no later than December 2, 1997, 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, 1997
15
<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 21, 1997 at the Annual Meeting
of Shareholders to be held on May 6, 1997 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. Ratification of the selection of Ernst & Young LLP as independent
auditors for the Company.
[_] FOR [_] AGAINST [_] ABSTAIN
3. 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
RATIFICATION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR THE COMPANY.
Dated: ______________________, 1997
-----------------------------------
-----------------------------------
(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 Class A Common Stock of First Oak Brook
Bancshares, Inc. held of record by the undersigned on March 21, 1997 at the
Annual Meeting of Shareholders to be held on May 6, 1997 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. Ratification of the selection of Ernst & Young LLP as independent
auditors for the Company.
[_] FOR [_] AGAINST [_] ABSTAIN
3. 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
RATIFICATION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR THE COMPANY.
Dated: ______________________, 1997
-----------------------------------
-----------------------------------
(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.
