<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-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 box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
Preliminary Copy
FIRST OAK BROOK BANCSHARES, INC.
1400 Sixteenth Street
Oak Brook, Illinois 60523
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 4, 1999
April 1, 1999
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 60523, on Tuesday, May 4, 1999 at 10:00 A.M. for
the purposes of considering and acting on the following:
(1) Election of eight (8) directors;
(2) Consideration and approval of the amendment and restatement of the
Company's Certificate of Incorporation and By-laws to:
(a) (i) reclassify the Company's Common Stock, $2.00 par value per
share into shares of the Company's Class A Common Stock, $2.00 par
value per share, (ii) increase the voting power of the Class A
Common Stock from 1/20th vote per share to one vote per share,
(iii) provide that the Company's common equity will consist solely
of the Class A Common Stock, (iv) authorize the Company to issue up
to 16 million shares of Class A Common Stock, and (v) subject to
receipt of certain approvals from the NASDAQ Stock Market, to
rename the "Class A Common Stock" as the "Common Stock";
(b) rename from "Preferred Series B Stock" to "Preferred Stock" the
title of the preferred shares which the Company is authorized to
issue and set forth more fully the authority of the Board of
Directors to establish the rights and preferences of any such
preferred shares;
(c) implement a staggered Board of Directors with three-year terms;
(d) prohibit the shareholders from calling a shareholders meeting;
(e) eliminate the power of the shareholders to act by written consent;
(f) establish advance notice requirements which shareholders must meet
in order to bring business, including the nomination of candidates
for election as director, before a meeting of shareholders; and
(g) to increase the vote required from a majority to 75% to amend or
repeal certain provisions of the Restated Certificate of
Incorporation and By-laws.
Each of the foregoing items, and the proposed Restated Certificate of
Incorporation and proposed Amended and Restated By-laws, will be
subject to separate votes at the Annual Meeting.
(3) Ratification of the selection of KPMG Peat Marwick 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 19, 1999 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 1999 Annual Meeting of Shareholders to be held Tuesday,
May 4, 1999 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 "broker 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 19, 1999 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.......................... [2,908,583] $2.00 1
Class A Common.................. [3,675,583] $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, 1999.
ELECTION OF DIRECTORS
In accordance with the By-Laws of the Company, the Board of Directors has
fixed at eight the number of directors to be elected at the Annual Meeting.
All of the nominees are currently directors of the Company. The Board of
Directors currently consists of directors serving one-year terms that expire
at the next 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, Geoffrey R. Stone, Robert M. Wrobel, Michael L.
Stein and Stuart I. Greenbaum as directors. If the proposals concerning the
Reclassification and the Corporate Governance Amendments described elsewhere
in this Proxy Statement are approved by the shareholders, then the slate of
eight directors proposed for election at the 1999 Annual Meeting would be
elected to three separate classes with assigned terms of from one to three
years, as follows: directors in Class I, consisting of two directors, Frank M.
Paris and Robert M. Wrobel, would be elected for a one-year term expiring at
the 2000 annual meeting of shareholders; directors in Class II, consisting of
three directors, Richard M. Rieser, Jr., Stuart I. Greenbaum, and Michael L.
Stein would be elected for a two-year term expiring at the 2001 annual meeting
of shareholders; and directors in Class III, consisting of three directors,
Eugene P. Heytow, Miriam Lutwak Fitzgerald, and Geoffrey R. Stone, would be
elected for a three-year term expiring at the 2002 annual meeting of
shareholders. If either the Reclassification or Corporate Governance
Amendments are not approved, the proxies will be voted for the nominees each
to hold office until the Annual Meeting of Shareholders in 2000 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.
1
<PAGE>
Directors Heytow, Rieser, and Paris have served the Company as directors and
executive officers since its inception in 1983. Dr. Fitzgerald has served as a
director since 1988. Mr. Stone has served as a director since 1992. Mr. Wrobel
has served as a director since 1996. Messrs. Stein and Greenbaum have served
as directors since April, 1998.
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
eight nominees; there is no right to cumulative voting.
2
<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 19,
1999, 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. Information relating to persons other than
directors and executive officers of the Company is taken from the most recent
Schedule 13G filed by such persons with the Securities and Exchange
Commission. The address of all such persons unless otherwise stated is c/o the
Company, 1400 Sixteenth Street, Oak Brook, Illinois 60523.
Security Ownership of Management(/1/)
<TABLE>
<CAPTION>
Amount and
Nature of Acquirable
Name and Address of Beneficial Within 60 Percent of
Title of Class Beneficial Owner Ownership(/2/) Days(/3/) Class(/4/)
-------------- ------------------- -------------- ---------- ----------
<C> <S> <C> <C> <C>
Class A Common
Eugene P. Heytow........ [920] -- *
Richard M. Rieser, Jr... [9,094](/5/) -- *
Frank M. Paris.......... [21,846](/6/) -- *
Miriam Lutwak
Fitzgerald.............. [608](/7/) -- *
Geoffrey R. Stone....... -- -- --
Robert M. Wrobel........ [1,158] -- *
Michael L. Stein........ [1,000] -- --
Stuart I. Greenbaum..... -- -- --
George C. Clam.......... [12,638] -- *
William E. Navolio...... [276](/8/) -- *
All Directors and
Executive Officers as a
Group (13 Persons)...... [45,388] -- [1.23]
Common
Eugene P. Heytow........ -- (/9/) 53,950 [1.69]
Richard M. Rieser, Jr... [322,286](/5/) 53,950 [11.76]
Frank M. Paris.......... [330,978] 31,850 [11.35]
Miriam Lutwak
Fitzgerald.............. [615,638](/7/) 6,001 [19.44]
Geoffrey R. Stone....... [3,000] 3,001 *
Robert M. Wrobel........ -- --
Michael Stein........... -- 1,001 *
Stuart Greenbaum........ -- 1,001 *
George C. Clam.......... -- 21,650 *
William E. Navolio...... -- 21,650 *
All Directors and
Executive Officers as a
Group (13 Persons)...... [1,284,804] 237,052 [47.57]
</TABLE>
- --------
*Denotes less than 1% ownership.
3
<PAGE>
Security Ownership of Certain Beneficial Owners(/1/)
<TABLE>
<CAPTION>
Title of Name and Address Amount and Nature Percent
Class of Beneficial Owner of Beneficial Ownership(/2/) of Class(/4/)
-------- ------------------- ---------------------------- -------------
<S> <C> <C> <C>
Class A First Union Corporation [233,285] [6.35]
Common One First Union Center
Charlotte, North Carolina 28288-0630
Common Mitzi Heytow [679,548] [21.25]
c/o Amalgamated Bank of Chicago
One West Monroe Street
Chicago, Illinois 60603
</TABLE>
FOOTNOTES
(1) Shares of stock deemed beneficially owned at March 19, 1999.
(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 19, 1999 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 289,502 shares which could be
acquired within 60 days under exercisable options.
(5) Includes 12,374 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 9,078 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 3,996 shares
of Common Stock held by Mr. Rieser 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 1,600 shares of Common
Stock held by Mr. Rieser's spouse as custodian for their minor child.
Excludes 13,030 shares of Common Stock held by Mr. Rieser's adult children
in and over which he disclaims beneficial interest and voting and
investment power. Excludes 8,718 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 11,248 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 20,400 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 615,638 shares of Common Stock of which 307,814 is held by
an irrevocable insurance trust and 307,824 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 234 shares held by Mr. Navolio's spouse in and over which he
disclaims beneficial interest and voting and investment power.
(9) Excludes 679,548 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.
4
<PAGE>
BOARD OF DIRECTORS
MEETINGS, FUNCTIONS AND COMPENSATION
During 1998 the Board of Directors met four (4) times. All directors
attended more than 75% of the meetings of the Board of Directors. The Company
has the following committees: Executive, Audit, Compensation, Stock Option
Advisory and a Community Reinvestment Act Committee.
The Executive Committee meets in conjunction with the Board of Directors and
met four (4) times during 1998 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 1998 and is comprised of
independent Directors Fitzgerald, Stein and Stone, Director Rieser and non-
director members Mr. Navolio, General Counsel, Vice President and Secretary,
and Ms. Metido, the Bank's General Auditor. The Audit Committee's functions
include reviewing reports and recommendations of the Company's inside and
outside auditors and reviewing and monitoring the internal controls of the
subsidiary bank.
The Compensation Committee met once during 1998 and is comprised of Director
Heytow and independent Directors Fitzgerald, Stein and Greenbaum. 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. It met once in 1998 and
is comprised of independent Directors Stone, Fitzgerald, Stein and Greenbaum.
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 eight (8) times
during 1998. It 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 meeting.
The members of the Community Reinvestment Act Committee do not receive
compensation. The Company's subsidiary directors also receive $1,000 for each
quarterly meeting attended of the Board of Directors and $200 for each Trust
and Audit Committee meeting.
Each non-employee director has received an option to purchase 1,000 shares
of Common Stock under the formula option provisions of the Company's Amended
and Restated 1987 Stock Option Plan. In addition, on the date of each Annual
Meeting of Shareholders, each non-employee director who is continuing as a
non-employee director receives an option to purchase 500 shares of Common
Stock under such formula option provisions.
5
<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, and Mr. Leckinger, who became an executive officer in October
1997. Officer appointments are made annually.
<TABLE>
<CAPTION>
Education, Principal Occupation
Name and Age During Last Five Years, Other Directorships and
Position with Company Positions
--------------------- -----------------------------------------------
<S> <C>
Directors and Officers
Eugene P. Heytow, 64....... Harvard College, B.A. and University of Chicago
Chairman of the Board, Law School, J.D.
Chief Executive Officer, Oak Brook Bank*: Chairman of the Executive
Chairman of 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., 55. Brown University, B.A. and University of Chicago
President and Director Law School, J.D.
Oak Brook Bank*: Chairman of the Board and Chief
Executive Officer
Amalgamated Bank of Chicago**: Senior Vice
President.
Family relationship: Mr. Rieser is married to
Mr. Heytow's niece.
Frank M. Paris, 60......... Northwestern University, B.S.
Vice Chairman of the Board Oak Brook Bank*: Vice Chairman of the Board.
Miriam Lutwak Fitzgerald, Northwestern University, B.A. and Chicago
41........................ Medical School, M.D.
Director Miriam S. Lutwak M.D.S.C.: President.
Oak Brook Bank*: Director.
Amalgamated Bank of Chicago**: Director.
Geoffrey R. Stone, 52...... Wharton School of Finance and Commerce,
Director University of Pennsylvania, B.S. and University
of Chicago Law School, J.D.
The University of Chicago, Provost, 1994-
Present, and Dean of its law school, 1987-1994.
Oak Brook Bank*: Director.
Robert M. Wrobel, 49....... Northwestern University, B.A.
Director Oak Brook Bank*: Assistant to the Chairman and
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.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Education, Principal Occupation
Name and Age During Last Five Years, Other Directorships and
Position with Company Positions
- --------------------- -----------------------------------------------
<S> <C>
Michael L. Stein, 58.......... Brown University, B.A. and
Director University of Chicago Law School, J.D.
Brownson, Rehmus & Foxworth, Inc., Chicago
(Financial Counseling): Executive Vice President
& Director.
Oak Brook Bank*: Director.
Stuart I. Greenbaum, 62....... New York University, B.S. and The Johns Hopkins
Director University, Ph.D., Economics.
John M. Olin School of Business, Washington
University: Dean, 1995--present.
Kellogg Graduate School of Management,
Northwestern University: Professor and Director
of Banking Research Center: 1983-1995.
Stifel Financial Corp.: Director.
Reinsurance Group of America: Director.
Oak Brook Bank*: Advisory Director.
Other Executive Officers:
Rosemarie Bouman, 42.......... Indiana University, B.S., C.P.A.
Vice President and Chief Fi- Oak Brook Bank*: Vice President and Chief
nancial Officer Financial Officer.
George C. Clam, 49............ Ripon College, B.A. and Northwestern University,
Vice President and Chief M.B.A.
Banking Officer Oak Brook Bank*: President.
William E. Navolio, 49........ University of Notre Dame, B.A. and Georgetown
Vice President, General Coun- University, J.D.
sel and Secretary Oak Brook Bank*: Vice President, Chief Legal
Officer, Secretary and Compliance Officer.
Mary C. Carnevale, 41......... Saint Mary's College of Notre Dame, B.B.A.,
Vice President and Chief Hu- C.P.A.
man Resources Oak Brook Bank*: Vice President and Chief Human
Officer Resources Officer.
James D. Leckinger, 36........ University of Illinois, B.S. and
Treasurer University of Chicago, M.B.A., C.P.A.
Oak Brook Bank*: Vice President and Treasurer
</TABLE>
- --------
*Subsidiary of the Company
**Affiliate of the Company
CERTAIN TRANSACTIONS
During 1998, directors and executive officers of the Company and their
associates were customers of and had transactions with the Company's
subsidiary bank. All such 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.
7
<PAGE>
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.
The following report of the Compensation Committee and Stock Option Advisory
Committee and the Performance Graph included elsewhere in this Proxy Statement
do not constitute soliciting material and should not be deemed filed or
incorporated by reference into any other company filings under the Securities
Act of 1933 or the Securities Exchange Act of 1934 except to the extent the
Company specifically incorporates this Report or the Performance Graph by
reference therein.
REPORT OF COMPENSATION COMMITTEE AND
STOCK OPTION ADVISORY COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee ("Committee") and Stock Option Advisory Committee
have 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, 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, profitability and
individual performance.
The Company's Amended and Restated Performance Bonus Plan (the "Plan")
provides additional incentive to the Company's three senior executive officers
through 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. With
the establishment of this Plan, the Committee has limited 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 four independent directors. Pursuant to the Plan, the Stock Option Advisory
Committee established a number of objective performance goals
8
<PAGE>
(the "Targets") for the calendar year 1998. 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. 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. Based on 1998 performance, the Stock
Option Advisory Committee certified bonuses of $160,176 for Eugene P. Heytow,
$214,390 for Richard M. Rieser, Jr. and $60,374 for Frank M. Paris.
For executive officers (non-director officers of the Company) an objective
performance-based bonus program (a modified version of the Senior Executive
performance bonus plan) provides additional incentive. The objective
performance-based bonus is payable only in the event that the Company's annual
performance meets certain levels as measured by several criteria. The maximum
bonus under this plan is one times the executive officer's annual salary. A
subjective discretionary bonus may also be awarded and this bonus generally
relates most closely to the achievement of goals, departmental business plans
and budgets, and short- and medium-term Company growth and profitability and
individual performance.
For 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.
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 granted 8,000 stock options in January 1998,
adjusted for the 2 for 1 stock split paid in September 1999, and 20,000 stock
options in January 1999.
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 granted a
discretionary bonus of $50,000 in addition to the bonus granted under the
Performance Bonus Plan. Mr. Rieser was also granted 8,000 stock options in
January 1998, adjusted for the 2 for 1 stock split paid in September 1999, and
20,000 stock options in January 1999.
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.
9
<PAGE>
Section 162(m) of the Internal Revenue Code 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 and Performance Bonus Plan should be exempt from
the deduction limitation as "performance-based." The Committee has not made
any changes in its policies relating to the other cash compensation paid to
the executive officers in response to the $1 million deduction limitations
because salary and discretionary bonuses which have been or can be expected to
be paid to the Company's executive officers do not approach such level.
Notwithstanding the above, the Committee or Stock Option Advisory Committee
may determine after consideration of applicable circumstances that it would be
in the best interests of the Company to pay compensation in an amount or
manner that does not satisfy such rules governing deductibility.
Eugene P. Heytow
Dr. Miriam Lutwak Fitzgerald
Geoffrey R. Stone
Stuart I. Greenbaum
Michael L. Stein
SUMMARY COMPENSATION TABLE
The following table sets forth the indicated compensation with respect to
each of the last three fiscal years for the Company's Chief Executive Officer
and its four other most highly compensated executive officers:
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------- ------------ All Other
Name and Principal Salary Bonus Other Annual Option Compensation
Position Year ($) (1) (2) ($) (2) Compensation (3) Awards (#) ($) (4)
- ------------------ ---- ----------- ------- ---------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Eugene P. Heytow CEO.... 1998 279,667 160,176 -- 8,000 120,494
1997 271,500 504,000 -- -- 84,486
1996 262,700 157,491 -- 20,000 101,615
Richard M. Rieser, Jr.
President.............. 1998 367,800 264,390 -- 8,000 136,530
1997 355,600 672,000 -- -- 85,312
1996 340,975 209,987 -- 20,000 113,826
Frank M. Paris
Vice Chairman.......... 1998 118,367 60,374 -- 4,000 55,144
1997 115,632 190,800 -- -- 38,967
1996 112,225 59,626 -- 10,000 42,144
George C. Clam,
Vice President-Chief
Banking Officer........ 1998 148,166 70,000(/5/) -- 2,000 17,201
1997 137,660 66,000(/5/) -- -- 11,543
1996 119,000 52,750(/5/) -- 4,000 15,386
William E. Navolio
General Counsel,
Secretary.............. 1998 134,137 57,000(/5/) -- 2,000 15,545
1997 128,340 53,750(/5/) -- -- 11,403
1996 119,275 43,000(/5/) -- 4,000 15,536
</TABLE>
10
<PAGE>
SUMMARY COMPENSATION TABLE FOOTNOTES
(/1/This)column includes annual base salary, director's fees and committee
fees of the Company and its subsidiary.
(/2/These)columns include amounts elected to be deferred under the Company's
qualified nonqualified deferred compensation plan.
(/3/Each)named executive officer received perquisites and personal benefits in
annual amounts below the applicable reporting threshold of the lesser of
$50,000 or 10% of the base salary and bonus reported for such year.
(/4/This)column includes: (i) the Company's contributions under its 401(k)
Savings Plan, Stock Bonus Plan and related nonqualified deferred
compensation plan; (ii) taxable income for life insurance benefits paid by
the Company with respect to insurance policies covering the life of each
Named Executive Officer; and (iii) 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)
------- ------- -------
<S> <C> <C> <C>
Mr. Heytow........................................... $61,432 $14,222 $44,840
Mr. Rieser........................................... $81,582 $10,108 $44,840
Mr. Paris............................................ $22,289 $ 4,535 $28,320
Mr. Clam............................................. $15,407 $ 1,794
Mr. Navolio.......................................... $13,826 $ 1,719
</TABLE>
(/5/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.
TRANSITIONAL EMPLOYMENT AND OTHER AGREEMENTS WITH EXECUTIVE
OFFICERS
The Company has entered into Transitional Employment Agreements with certain
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 within six months
prior to and in connection with the change in control, 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 or receive
the value of 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, directors 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; but in either
event no less than the average of such amounts received during the five-year
period prior to the change in control. 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
11
<PAGE>
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 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 $25,000 to Mr. Paris.
12
<PAGE>
OPTION GRANTS TABLE
The following table sets forth certain information concerning grants of
stock options during the year ended December 31, 1998 to each of the executive
officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
Individual Grants
---------------------------------------------------------------------
Number of
Securities Percent of Total
Underlying Options Granted Exercise of
Options to Employees in Base Price Expiration Grant Date
Name Granted(#)(/1/) Fiscal Year(/2/) ($/Sh)(/3/) Date Value($)(/4/)
---- --------------- ---------------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Eugene P. Heytow........ 8,000 14.68 21.00 1/21/08 48,080
Richard M. Rieser, Jr... 8,000 14.68 21.00 1/21/08 48,080
Frank M. Paris.......... 4,000 7.34 21.00 1/21/08 24,040
George C. Clam.......... 2,000 3.67 21.00 1/21/08 12,020
William E. Navolio...... 2,000 3.67 21.00 1/21/08 12,020
</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.
The number of options granted are adjusted to reflect a 2-for-1 stock
split paid on September 3, 1998.
(/2/The)percentages shown in the table are based on total options granted
(adjusted to reflect the 2-for-1 stock split paid on September 3, 1998) to
employees in 1998 of 54,500 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 preceding 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 1998 risk-free interest rates of 5.5%; dividend yields of
2.3%; volatility factor of the expected market price of the Company's
common stock of 30%, 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. There is no assurance that the
value realized, if any, will be at or near the value estimated by the
Black-Scholes model.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND
YEAR-END OPTION VALUES
The following table sets forth the indicated year-end 1998 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
12-31-98 12-31-98
Shares Acquired ------------- ----------------
on Exercise Exercisable/ Exercisable/
Name (#) Unexercisable Unexercisable
---- --------------- ------------- ----------------
<S> <C> <C> <C>
Eugene P. Heytow................ -- 52,350/30,400 $561,535/179,240
Richard M. Rieser, Jr........... -- 52,350/30,400 $561,535/179,240
Frank M. Paris.................. -- 31,050/15,200 $361,820/89,620
George C. Clam.................. -- 21,250/8,000 $268,942/49,188
William E. Navolio.............. -- 21,250/8,000 $268,942/49,188
</TABLE>
- --------
(/1/Based)on Company's Class A Common stock price on December 31, 1998 of
$18.50 per share.
13
<PAGE>
FIVE YEAR PERFORMANCE COMPARISON
The graph below provides an indicator of total return performance for the
Company's Class A Common Stock for the past five years as compared with the
Center for Research in Security Prices (CRSP) Index for the NASDAQ Stock
MarketSM (U.S. Companies) and a Peer Group, the CRSP Index for NASDAQ Bank
Stocks.
[To Be Inserted in Definitive Proxy]
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
reports were timely filed.
CONSIDERATION AND APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE CERTIFICATE
OF INCORPORATION AND BY-LAWS TO SIMPLIFY THE CAPITAL STRUCTURE AND AMEND
GOVERNING DOCUMENTS
General
The Board of Directors is recommending that the shareholders approve the
amendment and restatement of the Company's Certificate of Incorporation and a
related amendment and restatement of the Company's By-laws to:
. simplify the Company's capital structure by reclassifying (the
"Reclassification") the Company's common shares into a single class and
thereby eliminate the control of the Company presently vested in the
holders of the Company's "high vote" Common Stock, and
. incorporate certain corporate governance provisions (the "Corporate
Governance Amendments") designed to reduce, or have the effect of
reducing, the vulnerability of the Company to an unsolicited proposal for
the takeover of the Company which is unfair to the shareholders.
The adoption by the Board of Directors of the amendment and restatement of
the Certificate of Incorporation and of the By-laws has been conditioned on
the approval by the shareholders of the Reclassification and each of the
Corporate Governance Amendments. To the extent that the shareholders do not
approve the Reclassification or any of the Corporate Governance Amendments,
then the amendment and restatement of the Certificate of Incorporation and of
the By-laws will be abandoned and not placed into effect.
The following description of certain provisions of the amendments to the
Certificate of Incorporation incorporated into the proposed Restated
Certificate of Incorporation (sometimes referred to as the "Restated
Certificate") and amendments to the By-Laws incorporated into the Amended and
Restated By-laws (sometimes referred to as the "Restated By-Laws") is
necessarily general and is qualified in its entirety by reference to the
Restated Certificate and Restated By-Laws set forth in Appendices A and B
hereto, respectively.
I. RECLASSIFICATION OF COMMON STOCK
Description of the Proposed Reclassification of the Common Stock
Subject to the approval by the shareholders of the Corporate Governance
Amendments described below, the Board of Directors has approved a proposal to
amend the Company's Certificate of Incorporation to provide for, among other
things, the reclassification of all of the shares of Common Stock of the
Company into Class A Common Stock (the "Reclassification").
Effect on Capitalization of the Company. Under the proposed
Reclassification, at the close of business on the day the Reclassification
becomes effective, (i) each share of Common Stock of the Company then issued
and outstanding will be changed and reclassified into one fully paid and
nonassessable share of Class A Common Stock, (ii) each share of Class A Common
Stock will be entitled to one vote per share, and (iii) each share of Class A
Common Stock will be entitled to dividends when and if declared. As a result,
the voting power of the shares held by holders of Common Stock will be reduced
from approximately 94% of the combined voting power of the outstanding Common
Stock and Class A Common Stock to approximately 44% of the voting power of the
Class A Common Stock outstanding after the Reclassification.
15
<PAGE>
As amended by the Company's shareholders at the 1998 Annual Meeting, the
Company's Certificate of Incorporation currently authorizes the Company to
issue 10,000,000 shares of Class A Common Stock, $2.00 par value per share,
6,000,000 shares of Common Stock, $2.00 par value per share, and 100,000
shares of Preferred Series B Stock, without par value. The Reclassification
will not change the total number of shares of all classes of stock which the
Company will be entitled to issue from the 16,100,000 presently authorized.
Under the Restated Certificate, the number of previously authorized shares of
Common Stock have been added to the number of shares of Class A Common Stock
which the Company is authorized, resulting in authority for the Company to
issue up to 16,000,000 shares of Class A Common Stock.
The Class A Common Stock is presently listed on the NASDAQ Stock Market
("NASDAQ") under the symbol "FOBBA." The Company has initiated steps to obtain
NASDAQ approval to retain the listing, but to drop the "Class A" designation
from the name of the stock and to change its trading symbol from "FOBBA" to
"FOBB." The proposed amendment to the Restated Certificate renames the "Class
A Common Stock" as the "Common Stock," subject to receipt of NASDAQ approval.
Although it is anticipated that the NASDAQ approvals will be obtained and
the Class A Common Stock will be renamed "Common Stock," for ease of
understanding, this Proxy Statement will continue to refer to the single class
of common stock which will exist if the Reclassification is approved as the
"Class A Common Stock."
The Restated Certificate also renames, and clarifies the Board of Directors'
authority with respect to establishing the rights and preferences of, the
Preferred Stock, but does not otherwise affect, the amount of Preferred Stock
which the Company is authorized to issue. While part of the Reclassification,
the renaming of the Preferred Stock will be subject to a separate vote.
Effect on Share Certificates. Shareholders of record as of the close of
business on the date the proposal becomes effective would be entitled, but not
required, to surrender to the transfer agent the certificates representing
shares of Common Stock and to receive in exchange a new certificate
representing Class A Common Stock. Until such surrender and exchange is made,
stock certificates representing Common Stock shall be deemed, for all
corporate purposes, to evidence ownership of shares of Class A Common Stock in
which the shares of Common Stock have been reclassified. If the Class A Common
Stock is renamed, the certificates representing Class A Common Stock will
continue to evidence ownership of shares of the class of common stock as
renamed "Common Stock."
Tax Treatment of Reclassification. The Company has been advised by tax
counsel that, for U.S. federal income tax purposes, the receipt of shares of
Class A Common Stock upon conversion of an equal number of shares of Common
Stock will not constitute taxable income to shareholders. The tax basis to a
stockholder of each share of Common Stock held immediately prior to the
Reclassification will be carried over to the corresponding share of Class A
Common Stock into which such share of Common Stock is reclassified, and the
holding period of shares of Class A Common Stock will include the period
during which the corresponding shares of Common Stock was held. Shareholders
are urged to consult their own tax advisers concerning the federal and state
income tax consequences of the Reclassification.
Effect on Stock Options and Treasury Shares. As a result of the
Reclassification, the shares issuable under grants of stock options would also
be adjusted such that each holder of an option will be entitled to receive one
share of Class A Common Stock for each share of Common Stock underlying any
outstanding option. Shares of Common Stock held as treasury shares of the
Company, if any, shall also be reclassified to account for the
Reclassification.
Reasons for the Reclassification
Since going public in 1985, the Company has maintained a two-class structure
for its common shares: Common Stock and Class A Common Stock. With the
exception of voting rights and certain dividend and
16
<PAGE>
liquidation preferences, and that the Common Stock may be converted one for
one into Class A Common Stock, the rights and privileges of the two classes
are the same. Holders of Common Stock are entitled to one vote per share.
Holders of Class A Common Stock are entitled to only 1/20th of a vote per
share and to receive dividends, when and if declared, at a rate equal to at
least 120% of the rate of dividends paid with respect to the Common Stock.
Holders of Class A Common Stock also have a liquidation preference of $3.16
per share, which must be paid prior to any liquidation distribution is paid on
the Common Stock. The dividend and liquidation preferences were included as
part of the two-class structure to compensate the holders of Class A Common
Stock for the differential voting power of the two classes. The
Reclassification eliminates these preferences as no longer necessary.
While the Board of Directors believes the two-class structure has served the
Company well, it has determined that it is appropriate at this time to
simplify the capital structure. The effect of the "high vote" Common Stock
enabled the founding families to retain informal control of approximately 66%
of the voting power. The two-class structure provided concentrated ownership
which allowed certain directors, who are also directors of Amalgamated Bank of
Chicago, to maintain compliance with the rules governing interlocking
management of banks, yet enabled the Company to raise capital in the public
market. In addition, the Common Stock holdings of management have enabled the
Company to pursue long term growth strategies knowing it could not be easily
threatened by an unwanted takeover attempt.
The Board of Directors believes that, to some extent, the two-class capital
structure has inhibited the Company's ability to continue its growth strategy
through acquisitions. The Company's markets have experienced significant
consolidation in recent years, often times through transactions accounted for
as "pooling of interests" ("Pooling"). Pooling transactions involve a stock-
for-stock exchange which is particularly attractive to both buyers and
sellers. Through the use of Pooling, the buyer does not recognize goodwill in
connection with the transaction, avoiding future financial statement expense
and the resulting reduction in earnings that would otherwise occur as goodwill
is amortized. For a seller, the Pooling transaction means its shareholders
receive buyer's shares in a tax-free exchange for all of their shares. In
order to qualify an acquisition for Pooling, the Company must issue shares of
Common Stock in return for the seller's shares. As a result, to accomplish
even a small acquisition on a Pooling basis, the Company would be required to
issue Common Stock representing significant, and potentially controlling
voting power, to the shareholders of the acquisition target. To date, the
Board of Directors has determined that it is not in the best interests of the
shareholders to engage in such transactions. In order to provide the Company
with the maximum degree of future flexibility in pursuing its long term growth
objectives, the Board of Directors determined that it is important for the
Company to simplify its capital structure into a single class of common
shares.
In addition, the Board believes that the Reclassification will enhance
investor interest in the Class A Common Stock by eliminating investor
confusion caused by the two-class structure. The Reclassification will also
increase the number of shares of Class A Common Stock available for sale in
the market and potentially improve the liquidity for the Class A Common Stock.
The Board has chosen to reclassify the Common Stock into the Class A Common
Stock and has requested permission from NASDAQ to drop the "Class A"
designation and have the shares traded on the NASDAQ Stock Market under the
symbol "FOBB."
Possible Disadvantages
In reviewing the proposed Reclassification, shareholders should also
carefully consider the following:
. For purposes of the rules applicable to Pooling transactions, the
Reclassification will constitute a change in the Company's equity
interests, which may make the Company ineligible to participate as either
a buyer or a seller in any Pooling transaction for a period of up to two
years.
. From time to time the Securities and Exchange Commission and the
Financial Accounting Standards Board has announced initiatives to
consider significant modifications to and the possible elimination of
accounting for transactions as Poolings. Although there can be no
assurance if or when any such proposals may be adopted and become
effective, it is possible that the ability to accomplish Pooling
17
<PAGE>
transactions may be eliminated prior to the expiration of the two-year
period referred to above. In the event of such occurrence, the Company may
be precluded from participating in any enhanced merger activity caused by
efforts to complete Pooling transactions before the date any such rule
changes become effective.
Accordingly, a short-term effect of the Reclassification may be to discourage
entities who might otherwise have been interested in accomplishing a takeover
or other transaction with the Company by way of a Pooling from pursuing such a
transaction. Nonetheless, the Board of Directors has determined that the long
term benefits of the flexibility of simplifying the Company's capital
structure at this time is in the best interests of the Company and its
shareholders and outweighs any short term effects of any limitation on the
Company's ability to do Pooling transactions.
Vote Required
Approval of the Reclassification will require the affirmative vote, in
person or by proxy, of a majority of the voting power of the outstanding
shares of the Common Stock and the Class A Common Stock, voting as a single
class, and the affirmative vote of a majority each of the outstanding shares
of the Common Stock and the Class A Common Stock voting as a separate class.
Abstentions and broker non-votes will each have the same effect as a vote
against the Reclassification proposal. Under Delaware law, the
Reclassification, if approved by shareholders along with the Corporate
Governance Amendments set forth below, will take effect upon the filing of the
Restated Certificate with the Delaware Secretary of State. Subject to the
approval of the Corporate Governance Amendments, the Restated Certificate will
be filed as promptly as practicable after the Annual Meeting. In the event any
of the Corporate Governance Amendments are not approved by the shareholders,
then, notwithstanding approval by the shareholders of the Restated
Certificate, the Restated Certificate will be abandoned and the Company's two-
class structure will remain in effect.
Directors and executive officers who, in the aggregate, beneficially own
44.17% of the outstanding shares of the Common Stock and 1.23% of the
outstanding shares of the Class A Common Stock, respectively, have indicated
their intention to vote for the Reclassification.
The Board of Directors believes the Reclassification is in the best
interests of the Company and unanimously recommends that the shareholders vote
FOR the approval of the Reclassification.
II. CORPORATE GOVERNANCE AMENDMENTS
General
To date, the amount of Common Stock held by members of the Board of
Directors and their families has had the practical effect of insuring that any
proposal to the Company's shareholders go through the Board. If the proposed
Reclassification is approved, such voting power will be greatly diminished,
making the Company more vulnerable to a takeover attempt or other transaction
which have not been negotiated or approved by the members of the Board of
Directors. Such unsolicited, nonnegotiated proposals can disrupt the business
and management of a corporation and subject it to great expense. The Board of
Directors believes encouraging potential acquirors to negotiate directly with
management is in the best interests of the Company and all of its
shareholders. Accordingly, the Board of Directors has approved as part of the
proposed Restated Certificate of Incorporation and as part of the Restated By-
laws provisions designed to encourage such negotiations.
While each of the amendments discussed below is subject to a separate vote,
the authorization by the Board of Directors of the Restated Certificate and
the Restated By-laws has been conditioned on the approval by the shareholders
of the Reclassification and each of the Corporate Governance Amendments. To
the extent that the shareholders do not approve the Recapitalization or any of
the Corporate Governance Amendments, then the Restated Certificate of
Incorporation and the By-laws will be abandoned and not placed into effect.
Under
18
<PAGE>
Delaware law, if approved by shareholders along with the Reclassification, the
Corporate Governance Amendments contained in the Restated Certificate will
take effect upon the filing of the Restated Certificate with the Delaware
Secretary of State. Subject to such approvals, the Restated Certificate will
be filed as promptly as practicable after the Annual Meeting. In the event the
Reclassification or any of the Corporate Governance Amendments are not
approved by the shareholders, then the Restated Certificate of Incorporation
will not be filed.
The complete text of each of the subject Restated Certificate and Restated
By-law provisions are provided in Appendices A and B and the following
descriptions are qualified in their entirety by reference to Appendices A and
B.
A. Staggered Board Amendments
Description of Staggered Board Amendments
The Certificate of Incorporation and the By-laws currently provide for a
single class of directors serving one-year terms of office. The Board of
Directors has approved amendments to the Company's Certificate of
Incorporation and By-laws to classify the Company's Board of Directors into
three classes of directors serving staggered three-year terms (the "Staggered
Board Amendments").
The Staggered Board Amendments would classify the Board of Directors into
three classes of directors serving staggered three-year terms. Each director
will hold office until his or her successor is elected and qualified or until
his or her earlier resignation or removal. Under the Delaware General
Corporate Law, a member of a staggered board may only be removed for cause
unless the Certificate of Incorporation provides otherwise. As proposed, the
Restated Certificate does not provide for the removal of directors without
cause.
If the Staggered Board Amendments are approved, the slate of eight directors
proposed for election at the 1999 Annual Meeting would be elected to three
separate classes with assigned terms of from one to three years, as follows:
directors in Class I, consisting of two directors, Frank M. Paris and Robert
M. Wrobel, would be elected for a one-year term expiring at the 2000 annual
meeting of shareholders; directors in Class II, consisting of three directors,
Richard M. Rieser, Jr., Stuart I. Greenbaum, and Michael L. Stein would be
elected for a two-year term expiring at the 2001 annual meeting of
shareholders; and directors in Class III, consisting of three directors,
Eugene P. Heytow, Miriam Lutwak Fitzgerald, and Geoffrey R. Stone, would be
elected for a three-year term expiring at the 2002 annual meeting of
shareholders. Beginning with the 2000 annual meeting of shareholders, only one
class of directors would be elected at each Annual Meeting, the directors so
elected would succeed the directors of the class whose term was then expiring
and each newly elected director would serve for a three-year term.
Reasons for the Staggered Board Amendments
The Board of Directors believes that a staggered board would serve the best
interests of the Company and its shareholders by promoting the continuity and
stability of the Company and its business. The Board also believes that a
staggered board would better enable the Board to protect the interests of all
shareholders in the event that another entity seeks to accumulate a
substantial amount of the Company's Class A Common Stock in order to gain
control of the Company or replace its management. Such actions are often
undertaken without advance notice to or consultation with the target company's
board of directors or management. The purchaser may have its own agenda and
little or no concern for the interests of other shareholders. In many cases,
the purchaser seeks representation on the target company's board in order to
increase the likelihood that any such transaction would be consummated. If the
target company resists these efforts to obtain board representation, the
purchaser may initiate a proxy contest to have itself or its nominees elected
to the board in place of certain existing directors or the entire board.
The Board believes that following the Reclassification, if such a purchaser
acquired a significant or controlling interest in the Company's Class A Common
Stock, the purchaser's ability to promptly remove and
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replace the Board without the Board's consent would severely curtail the
directors' ability to negotiate effectively with the purchaser. The threat of
imminent removal would also deprive the Board of the time and opportunity
necessary to evaluate appropriately any takeover proposal, to study
alternative proposals and to help ensure that the best price would be obtained
for the Company's shareholders in any transaction. A sudden change in Board
membership could be harmful to the continuity of the Company's operations,
deprive shareholders of maximum value for their shares and jeopardize the
rights of minority shareholders.
The Staggered Board Amendments are designed to make it more time-consuming
to obtain majority control of the Board without its consent, and thus reduce
the vulnerability of the Company to an unsolicited takeover proposal or to an
unsolicited proposal for a restructuring or sale of the Company or to enter
into any other extraordinary transaction. Under a three-class structure, at
least two annual stockholder meetings, instead of one, would generally be
required for such an acquiror to obtain control of the Board of Directors by
electing a majority of the directors. The Board believes that the Staggered
Board Amendments will serve to encourage any person intending to attempt such
a takeover or transaction to communicate and negotiate with the Board, and
that the Board therefore will be better able to protect the interests of all
of the Company's shareholders.
Takeovers and changes in management of the Company which are proposed and
effected without prior consultation and negotiation with the Board and
management may not necessarily be detrimental to the Company and its
shareholders. The adoption of the Staggered Board Amendments could discourage
or frustrate future attempts to acquire control of the Company that are not
approved by the incumbent Board, but which a majority of the shareholders
might deem to be in their best interests.
However, the Staggered Board Amendments do not preclude such attempts but
instead are intended to encourage persons seeking to acquire control of the
Company to initiate such transaction through arms-length negotiations with the
Company's Board of Directors. The Board is charged with protecting the
interests of the Company and its shareholders. The Staggered Board Amendments
can help ensure that neither the Board nor shareholders are coerced into a
transaction that is of primary benefit only to the purchaser. They are also
intended to help ensure that the Board will be given ample time to review and
evaluate any acquisition proposal and, if appropriate, to seek alternative
proposals, and to arrive at a result which is in the best interests of the
Company, its shareholders and employees.
Vote Required
Approval of the Staggered Board Amendments will require the affirmative vote
of a majority of the voting power of the shares of Common Stock and Class A
Common Stock, voting together as a single class. Abstentions and broker non-
votes will each have the same effect as a negative vote on the proposal.
Directors and executive officers who, in the aggregate, beneficially own
approximately 41.62% of the voting power of the shares of the Common Stock and
Class A Common Stock have indicated their intention to vote for the Staggered
Board Amendments.
The Board of Directors believes that creating a classified Board of
Directors is in the best interests of shareholders and unanimously recommends
that the shareholders vote FOR the approval of the Staggered Board Amendments
and the classification of the Company's Board of Directors.
B. Stockholder Meeting Amendments
Description of Stockholder Meeting Amendments
As discussed above, the amount of Common Stock held by members of the Board
and their families has, to date, had the practical effect of insuring that any
proposal to the Company's shareholders go through the Board of Directors. The
Board of Directors believes involvement of the Board of Directors in reviewing
and assessing proposals is important to ensuring that the interests of all of
the shareholders will be considered. If the proposed
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Reclassification is approved, such voting control will be greatly diminished
which may increase the likelihood that a third party may attempt unsolicited,
unnegotiated proposals. Accordingly, the proposed Restated Certificate and
Restated By-laws contain provisions intended to ensure that any proposal made
to the shareholders of the Company are not made in the manner which prevents
the Board of Directors from adequately reviewing and assessing the proposal.
These provisions are discussed below. The complete text of each of the subject
Restated Certificate and Restated By-law provisions are provided in Appendices
A and B and the following descriptions are qualified in their entirety by
reference to Appendices A and B.
Special Meetings. The Restated Certificate provides that special meetings of
shareholders shall be called only in accordance with the By-laws. The proposed
By-laws provide that special meetings of the shareholders may be called at any
time by the Board of Directors or any officer at the request, in writing, of a
majority of the Board of Directors. This provision continues the provisions of
the current By-laws which prohibit any stockholder from calling a meeting for
any purpose.
Action by Shareholders. The proposed Restated Certificate and Restated By-
laws state that any action required to be taken or which may be taken at a
meeting of shareholders must be effected at a duly called annual or special
meeting of the shareholders. The Company's current By-laws permit the
shareholders to act by written consent. The power of shareholders to consent
in writing, without a meeting, to the taking of any action is specifically
denied in the Restated Certificate and Restated By-laws. Shareholders are thus
prevented under the By-laws from taking action without a meeting being duly
called by the Board of Directors.
Notice of Stockholder Business or Director Nominations. The Restated
Certificate and Restated By-laws together specify that at an annual meeting of
the shareholders, only such business, including nominations for election of
directors, can be conducted as shall have been properly brought before the
meeting. The Company's current Certificate of Incorporation and By-laws do not
contained any restrictions with respect to such matters. Under the proposed
Restated Certificate and Restated By-laws, to be properly brought before the
annual meeting of shareholders, business must be (i) specified in the notice
of meeting given by the Board of Directors, (ii) otherwise properly brought
before the meeting by the Board, or (iii) otherwise properly brought before
the meeting by a stockholder. For business to be properly brought before an
annual meeting of the shareholders, the stockholder must have the legal right
and authority to make the proposal for consideration at the meeting and the
stockholder must have given timely notice thereof in writing to the Secretary
of the Corporation. To be timely, a stockholder's written notice of intent to
make a proposal must be delivered to or mailed and received by the Secretary
at the principal executive offices of the Company not less than 120 days prior
to the first anniversary of the preceding year's annual meeting. If the
meeting is held more than 30 days before or 60 days after the anniversary
date, then notice is required not later than the later of 120 days before the
meeting or the close of business on the 10th day following the day on which
notice of the day of the annual meeting was publicly announced. A
stockholder's notice to the Secretary must set forth (a) a brief description
of the business desired to be brought before the meeting, and in the case of a
nomination for election of director, such nominee's name and qualifications,
and the reasons for conducting business at the meeting, (b) the name and the
record address of the stockholder proposing such business, (c) the number of
shares of stock of the Company which are beneficially owned by such
stockholder, (d) any material interest of the stockholder in such business,
and (e) whether the stockholder intends to solicit or participate in the
solicitation of proxies in support of such proposal. The chairman of the
meeting may refuse to acknowledge the proposal of any stockholder not made in
compliance with these procedures.
Purpose of Stockholder Meeting Amendments
The foregoing Stockholder Meeting Amendments are intended to avoid the
possibility of a proposal being made by the shareholders in a way that
precludes the Board from investigating and adequately assessing the proposal.
These provisions require that matters be brought before a meeting in an
orderly fashion and sufficiently in advance so that all shareholders may be
provided adequate information in order to vote on a fully informed basis.
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Vote Required
Approval of each of the Stockholder Meeting Amendments will require the
affirmative vote, in person or by proxy, of a majority of the voting power of
the outstanding shares of Common Stock and Class A Common Stock, voting as a
single class. Abstentions and broker non-votes will have the effect of a vote
against the Shareholders Meeting Amendments.
Directors and executive officers who, in the aggregate, beneficially owned
approximately 41.62% of the voting power of the shares of the Common Stock and
Class A Common Stock have indicated their intention to vote for the
Stockholder Meeting Amendments.
The Board of Directors believes that each of the Stockholder Meeting
Amendments is in the best interests of the Company and the shareholders and
unanimously recommends that the shareholders vote FOR approval of the Advance
Notice Amendments.
C. Requirement of Seventy-five percent (75%) Stockholder Vote To Amend or
Repeal Certain Restated Certificate of Incorporation and By-law Provisions
Description of 75% Vote Requirement
The proposed Restated Certificate increases to seventy-five percent (75%) of
the outstanding voting stock, from a simple majority of the voting stock
entitled to vote at a meeting, the required percentage of outstanding voting
stock of the Company necessary to amend or repeal or adopt any provision
inconsistent with the provisions 1 through 8 of Article V of the Restated
Certificate which implement the Corporate Governance Amendments, or to amend
or repeal any related provision of the Restated By-laws (the "75% Vote
Requirement").
Reasons for the 75% Vote Requirement
Increasing the stockholder vote requirement to seventy-five percent (75%) of
the outstanding voting stock to amend or repeal or adopt any provision
inconsistent with the Restated Certificate provisions and related Restated By-
law provisions noted above is designed to prevent a stockholder with a simple
majority of the Company's stock from avoiding such provisions by amending the
Restated Certificate. The Board of Directors believes that the 75% Vote
Requirement will have the effect of making it more difficult for shareholders
to change the provisions that have an anti-takeover effect or would delay,
prevent or impede a change of control of the Company. The effect of the 75%
Vote Requirement will be to further discourage potentially unfriendly bids for
shares of the Company, since a greater percentage of the Company's outstanding
voting stock will be needed before the Restated Certificate or Restated By-law
provisions at issue could be amended, removed or changed to favor an
unfriendly bidder of shares of the Company.
Vote Required
Approval of the 75% Vote Requirement will require the affirmative vote in
person or by proxy, of a majority of the voting power of the outstanding
Common Stock and Class A Common Stock, voting together as a single class.
Abstentions and broker non-votes will have the effect of a vote against the
75% Vote Requirement.
Directors and executive officers who, in the aggregate, beneficially owned
approximately 41.62% of the voting power of the shares of the Common Stock and
Class A Common Stock have indicated their intention to vote for the 75% Vote
Requirement.
The Board of Directors believes that approval of the 75% Voting Requirement
is in the best interests of shareholders and unanimously recommends that the
shareholders vote FOR the Voting Requirement.
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Other Anti-Takeover Considerations
Capitalization of the Company. As described under Reclassification above,
the Restated Certificate will authorize the Company to issue up to 16 million
shares of Class A Common Stock and 100,000 shares of Preferred Stock. The 16
million shares of Class A Common Stock is greater than the number required to
accomplish the Reclassification of the Common Stock into Class A Common Stock.
As noted by the Board of Directors in connection with the approval of the
increase in the number of authorized common shares by the shareholders at the
1998 Annual Meeting, the Board believes that the number of authorized shares
is sufficient to provide the Company with the flexibility in the future to
issue shares of Class A Common Stock for stock dividends, stock splits, future
financings and acquisition transactions, and other general corporate purposes,
without the expense and delay of a special meeting of shareholders. The
Company currently has no arrangements or understandings for the issuance of
additional shares of Class A Common Stock, although the Board of Director has
begun investigation of a Rights Plan (as described below) and has from time to
time considered, and may in the future consider, the issuance of shares of
Class A Common Stock in connection with funding additional capital in its
subsidiary bank. No holder of Class A Common Stock has any preemptive right
with respect to Class A Common Stock. If the Board deems it to be in the best
interest of the Company and the shareholders to issue additional shares of
Class A Common Stock in the future, the Board generally will not seek further
authorization by the vote of the shareholders, unless such authorization is
required by law or stock exchange regulations.
The Restated Certificate retains the authorization to issue up to 100,000
shares of Preferred Stock. As provided in the Company's current Certificate of
Incorporation, the Preferred Stock authorized may be issued at such time as
the Board of Directors of the Company may determine, without further
stockholder action, except as otherwise provided by law or stock exchange
regulations. Shareholders do not have preemptive rights to subscribe for
shares of Preferred Stock. The dividend rights, dividend rates, conversion
rights, conversion prices, voting rights, redemption rights and terms, the
redemption price or prices and liquidation preferences of any series of
authorized Preferred Stock and numbers and shares of Preferred Stock in each
series will be established by the Board of Directors as such shares are to be
issued. Except as described below in connection with consideration of a rights
plan, the Company has no arrangements or understandings for the issuance of
Preferred Stock.
The Board of Directors could cause the Company to issue additional shares of
Class A Common Stock or shares of Preferred Stock, or rights to purchase such
shares, in amounts and on terms which could make it more difficult and,
therefore, less likely, a takeover, proxy contest, change in management or any
other extraordinary corporate transaction which might be opposed by the Board
of Directors to occur. In addition, the issuance of additional shares of Class
A Common Stock or of Preferred Stock could have the effect of diluting the
earnings per share, book value per share and voting power of Class A Common
Stock or other Preferred Stock held by shareholders.
Delaware Business Combination Statute. Section 203 of the Delaware General
Corporation Law provides that, subject to certain exceptions specified herein,
an "interested stockholder" of a Delaware corporation shall not engage in any
business combination, including mergers or consolidations or acquisitions of
additional shares of the corporation, with the corporation for a three-year
period following the time that such stockholder becomes an interested
stockholder unless (i) prior to such time, the board of directors of the
corporation approved either the business combination or the transaction which
resulted in the stockholder becoming an interested stockholder, (ii) upon
consummation of the transaction which resulted in the stockholder becoming an
interested stockholder, the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced (excluding certain shares), or (iii) at or subsequent to such time
the business combination is approved by the board of directors of the
corporation and authorized at an annual or special meeting of shareholders, by
the affirmative vote of at least 66 2/3% of the outstanding voting stock which
is not owned by the interested stockholder. Except as otherwise specified in
Section 203, an interested stockholder is defined to include any person that
is (x) the owner of 15% or more of the outstanding voting stock of the
corporation, or
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(y) is an affiliate or associate of the corporation and was the owner of 15%
or more of the outstanding voting stock of the corporation at any time within
the three-year period immediately prior to the date of determination; and the
affiliates and associates of any such person.
Under certain circumstances, Section 203 makes it more difficult for a
person who would be an interested stockholder to effect various business
combinations with a corporation for a three-year period. The Company has not
elected to be exempt from the restrictions imposed under Section 203. The
provisions of Section 203 may encourage persons interested in acquiring the
Company to negotiate in advance with the Board of Directors of the Company
since the stockholder approval requirement would be avoided if a majority of
the directors then in office approves either the business combination or the
transaction which results in any such person becoming an interested
stockholder. Such provisions also may have the effect of preventing changes in
the management of the Company. It is possible that such provisions could make
it more difficult to accomplish transactions which the Company's shareholders
may otherwise deem to be in their best interests.
Possible Rights Plan. The Board of Directors has begun investigation of the
establishment of a rights plan (a "poison pill" plan) to deter coercive,
hostile bids for corporate control and encourage a potential acquiror to
negotiate with the Board of Directors. Many corporations have adopted such
plans to augment certificate of incorporation and by-law provisions of the
type reflected in the Corporate Governance Amendments described above. If
adopted, a rights plan would create a financial disincentive to potential
raiders not willing to make an offer to all shareholders at a fair price, and
serve as further incentive for a potential acquiror to negotiate with the
Board. If the Reclassification and Corporate Governance Amendments are
approved by the shareholders, the Board of Directors may adopt a rights plan
as early as the date the Restated Certificate becomes effective. The Board
does not intend to seek shareholder approval prior to the adoption of a rights
plan.
D. Restatement of Certificate of Incorporation and By-Laws
Restatement of Certificate of Incorporation and By-laws
Due to the number of amendments to the Company's Certificate of
Incorporation and By-laws necessary to accomplish the Reclassification and
Corporate Governance Amendments, the Board of Directors has approved the
Restated Certificate and Restated By-Laws, as reflected by Appendices A and B.
Except for the amendments described under Reclassification and Corporate
Governance Amendments above, and changes to conform numbering and terminology,
the Restated Certificate and Restated By-laws incorporate and continue the
provisions of the current Certificate of Incorporation and By-laws. The Board
of Directors has requested that the shareholders consider and vote on each of
the Restated Certificate and Restated By-laws as a whole in order to obtain
shareholder approval of such conforming provision (the "Restated").
Vote Required
Approval of the Restatements will require the affirmative vote in person or
by proxy, of a majority of the voting power of the outstanding Common Stock
and Class A Common Stock, voting together as a single class. Abstentions and
broker non-votes will have the effect of a vote against the Restatements.
Directors and executive officers who, in the aggregate, beneficially owned
approximately 41.62% of the voting power of the shares of the Common Stock and
Class A Common Stock have indicated their intention to vote for the
Restatement.
The Board of Directors believes that approval of the Restatements is in the
best interests of shareholders and unanimously recommends that the
shareholders vote FOR the Restatements.
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SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP as independent
auditors for the Company for the year ending December 31, 1999.
Representatives of KPMG Peat Marwick 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.
On July 21, 1998, the Board of Directors approved the recommendation of the
Audit Committee of the Board of Directors to engage KPMG Peat Marwick LLP as
independent auditors for the Company for the year ending December 31, 1998,
and to dismiss Ernst & Young LLP as independent accountants. In connection
with the audits of the two fiscal years ended December 31, 1997 and the
subsequent interim period through July 21, 1998, there were no disagreements
with Ernst & Young LLP on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedures, which
disagreements, if not resolved to their satisfaction, would have caused Ernst
& Young LLP to make reference to the matter in their report, and there were no
reportable events as described under applicable disclosure regulations. The
accountants' report of Ernst & Young LLP on the consolidated financial
statements of the Company and its subsidiaries as of and for the years ended
December 31, 1997 and December 31, 1996, did not contain an adverse opinion or
disclaimer, and was not qualified or modified as to uncertainty, audit scope,
or accounting princples.
The Board of Directors recommends ratification of the selection of KPMG Peat
Marwick LLP as independent auditors.
SHAREHOLDER PROPOSALS
For Inclusion in Proxy Statement
To be considered for inclusion in the Company's proxy statement and form of
proxy relating to the 2000 Annual Meeting of Shareholders, a stockholder
proposal must be received prior to December 3, 1999, by the Secretary of the
Company at the address set forth on the first page of this Proxy Statement.
Any such proposal will be subject to 17 C.F.R. Section 240.14a-8 of the Rules
and Regulations under the Securities Exchange Act of 1934.
Notice of Business to Be Conducted at an Annual Meeting
If the Reclassification and Corporate Governance Amendments described
elsewhere herein are adopted by the shareholders, the By-laws of the Company
will set forth the procedures by which a shareholder may properly bring
business before a meeting of shareholders. Pursuant to the By-laws, only
business brought by or at the direction of the Board of Directors may be
conducted at an annual meeting. The By-laws of the Company provide an advance
notice procedure for a shareholder to properly bring business before an annual
meeting. For the 2000 Annual Meeting, the shareholder must give written
advance notice to the Secretary of the Company not later than January 6, 2000;
provided, however, that in the event that the date of the 2000 Annual Meeting
is held before April 5, 2000 or after July 4, 2000, notice by the shareholder
will be timely if it is received not later than the close of business on later
of (a) 120 days prior to the date of the meeting or (b) the tenth (10th) day
following the date on which the Company's notice to shareholders of the annual
meeting date was mailed or such public disclosure was made. The advance notice
by a shareholder must include the shareholder's name and address, as they
appear on the Company's record of shareholders, a brief description of the
proposed business, the reason for conducting such business at the annual
meeting, the class, the number of shares of the Company's capital stock that
are beneficially owned by such shareholder, any material interest of such
shareholder in the proposed business and whether the shareholder intends to
solicit proxies or participate in the solicitation of proxies in support of
such proposal. In the case of nominations to the Board of Directors, certain
information regarding the nominee must be provided. Nothing in this paragraph
shall be deemed to require the Company to include in its proxy statement or
the proxy relating to any annual meeting any shareholder proposal which does
not meet all of the requirements for inclusion established by the United
States Securities and Exchange Commission in effect at the time such proposal
is received.
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In the event the Reclassification and Corporate Governance Amendments are
not approved by the shareholders, then in the event a proponent of a
stockholder proposal at the 2000 Annual Meeting fails to provide notice of the
intent to make such proposal by personal delivery or mail to the Secretary of
the Company on or before February 16, 2000, then any proxy solicitated by
management may confer discretionary authority to vote on such proposal.
Other Matters Which May Properly Come Before the Meeting
The Board of Directors knows of no business which will be presented for
consideration at the Annual Meeting other than as stated in the Notice of
Annual Meeting of Shareholders. If, however, other matters are properly
brought before the Annual Meeting, it is the intention of the persons named in
the accompanying proxy to vote the shares represented thereby on such matters
in accordance with their best judgment.
By Order of the Board of Directors
William E. Navolio
Secretary
Oak Brook, Illinois
April 1, 1999
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APPENDIX A TO PROXY STATEMENT
RESTATED CERTIFICATE OF INCORPORATION
OF
FIRST OAK BROOK BANCSHARES, INC.
First Oak Brook Bancshares, Inc., a corporation organized and existing under
the laws of the State of Delaware, hereby certifies as follows:
1. The present name of the corporation is First Oak Brook Bancshares,
Inc. First Oak Brook Bancshares, Inc. was originally incorporated under the
same name, and the original Certificate of Incorporation was filed with the
Secretary of State of the State of Delaware on March 3, 1983.
2. This Restated Certificate of Incorporation was duly adopted by the
Board of Directors and the stockholders of First Oak Brook Bancshares, Inc.
(the "Corporation") in accordance with the provisions of Sections 242 and
245 of the General Corporation Law of the State of Delaware.
3. This Restated Certificate of Incorporation restates and integrates and
further amends the provisions of the Certificate of Incorporation of this
corporation.
4. The text of the Certificate of Incorporation as heretofore amended or
supplemented is hereby restated and further amended to read in its entirety
as follows:
ARTICLE I
The name of the corporation (hereinafter called the "Corporation") is First
Oak Brook Bancshares, Inc.
ARTICLE II
The address, including street, number, city, and county, of the registered
office of the Corporation in the State of Delaware is 229 South State Street,
City of Dover, County of Kent; and the name of the registered agent of the
Corporation in the State of Delaware at such address is The Prentice-Hall
Corporation System, Inc.
ARTICLE III
The nature of business to be conducted or promoted and the purpose of the
Corporation is to engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of the State of Delaware
("Delaware General Corporation Law").
ARTICLE IV
1. Authorized Capital Stock. The total number of shares of all classes of
stock which the Corporation is authorized to issue is Sixteen Million One
Hundred Thousand 16,100,000 shares, consisting of two (2) classes. The classes
and aggregate number of shares of each class which this Corporation shall have
authority to issue are as follows:
(a) 16,000,000 shares of Class A Common Stock, $2.00 par value per share;
and
(b) 100,000 shares of Preferred Stock, without par value.
At the close of business on the date this Restated Certificate of
Incorporation becomes effective, and without any further action on the part of
the Corporation or its stockholders, each share of Common Stock, par value
$2.00 per share, then issued and outstanding, and each share then held as
treasury stock of the Corporation, shall be
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changed and reclassified into one fully paid and nonassessable share of Class
A Common Stock, par value $2.00 per share[, whereupon the title of the Class A
Common Stock shall be changed to Common Stock, $2.00 par value per share]/1/.
To reflect the said change and reclassification [and change in title], each
certificate representing theretofore issued and outstanding shares or treasury
shares of Common Stock [and each certificate representing theretofore issued
and outstanding issued shares or treasury shares of Class A Common Stock]
shall represent after such change and reclassification the same number of
shares of [such] [Class A] Common Stock; and the holder of record of each such
certificate shall be entitled to receive a new certificate representing a
number of shares of [such] [Class A] Common Stock, par value $2.00 per share,
equal to the number of shares represented by said certificate for theretofore
issued and outstanding shares, so at the close of business on the date this
Restated Certificate of Incorporation becomes effective, certificates for the
shares of [such] Common Stock herein authorized shall be issued in exchange
for, and upon surrender of, the certificates for shares of the Common Stock
[and Class A Common Stock] as set forth above, and each holder of record of
the Common Stock [and Class A Common Stock] shares at such time shall be and
become a holder of the herein authorized shares [Class A] Common Stock upon
the basis hereinabove specified, whether or not certificates representing said
shares are then issued and delivered.
2. Terms Applicable to the Class A Common Stock.
(a) Voting. Each outstanding share of [Class A] Common Stock of the
Corporation shall entitle the holder thereof to one vote on each matter
submitted to a vote at a meeting of the stockholders.
(b) Dividends. Subject to any rights to receive dividends to which the
holders of the shares of the Preferred Stock may be entitled, the holders of
shares of [Class A] Common Stock shall be entitled to receive dividends, if
and when declared payable from time to time by the Board of Directors from any
funds legally available therefor.
(c) Dissolution. In the event of any dissolution, liquidation or winding up
of the Corporation, whether voluntary or involuntary, after there shall have
been paid to the holders of shares of Preferred Stock the full amounts to
which they shall be entitled, the holders of the then outstanding shares of
[Class A] Common Stock shall be entitled to receive, pro rata, all of the
remaining assets of the Corporation available for distribution to its
stockholders. The Board of Directors may distribute in kind to the holders of
the shares of [Class A] Common Stock such remaining assets of the Corporation
or may sell, transfer or otherwise dispose of all or any part of such
remaining assets to any other corporation, trust or other entity and receive
payment therefor in cash, stock or obligations of such other corporation,
trust or entity, or any combination thereof, and may sell all or any part of
the consideration so received and distribute any balance thereof in kind to
holders of the shares of [Class A] Common Stock. The merger or consolidation
of the Corporation into or with any other corporation, or the merger of any
other corporation into it, or any purchase or redemption of shares of stock of
the Corporation of any class, shall not be deemed to be a dissolution,
liquidation or winding up of the Corporation for the purpose of this
subparagraph 2(c).
3. Terms Applicable to the Preferred Stock. The shares of Preferred Stock
may be issued from time to time in one or more series, each of which shall
have a distinctive serial designation. The Board of Directors is hereby
authorized to specify from time to time the number of shares of any series,
and fix or alter by resolution or resolutions the voting powers, designations,
preferences, and relative, participating optional or other special rights, and
qualifications, limitations or restrictions, of such Preferred Stock,
including but not limited to:
(a) the number of shares constituting that series and the distinctive
designation of that series;
(b) the dividend rate, if any, on the shares of that series, whether
dividends shall be cumulative, and if so, from which date or dates, and the
relative rights of priority, if any, of payment of dividends on shares of
that series;
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/1/Bracketed language to be added and bracketed references to "Class A" to
be deleted if change in title from "Class A Common Stock" to "Common
Stock" is approved by NASDAQ.
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(c) Whether that series shall have voting rights, in addition to the
voting rights provided by law and, if so, the terms and conditions of such
voting rights;
(d) Whether that series shall have conversion privileges, and, if so, the
terms and conditions of such conversion, including provision for adjustment
of the conversion rate in such events as the Board of Directors shall
determine;
(e) Whether or not the shares of that series shall be redeemable, and, if
so, the terms and conditions of such redemption, including the date or
dates upon or after which they shall be redeemable, and the amount per
share payable in case of redemption, which amount may vary under different
conditions and at different redemption dates;
(f) Whether that series shall have a sinking fund for the redemption or
purchase of shares of that series; and, if so, the terms and amount of such
sinking fund;
(g) The rights of the shares of that series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the corporation, and
the relative rights of priority, if any, of payment of shares of that
series; and
(h) Any other relative rights, preferences and limitations of that
series.
4. No Preemptive Rights. No holder of shares of stock of the Corporation
shall, by reason of such holding, have any preemptive right to purchase,
subscribe for or otherwise acquire shares of any class of stock of the
Corporation of any security convertible into, or any warrant, option or right
to purchase, or to subscribe for or otherwise acquire shares of stock of the
Corporation, whether now or hereafter authorized, and whether issued for cash
or other consideration, or by way of dividend.
ARTICLE V
1. Board of Directors: Number, Election and Term of Directors. The number of
directors of the Corporation shall be fixed from time to time by or pursuant
to the By-laws. No decrease in the number of directors constituting the Board
of Directors shall shorten the term of any incumbent director. The directors
shall be classified with respect to the time for which they severally hold
office, into three classes, as nearly equal in number as possible, as shall be
provided in the manner specified in the By-laws, one class to hold office
initially for a term expiring at the 2000 Annual Meeting of Stockholders,
another class to hold office initially for a term expiring at the 2001 Annual
Meeting of Stockholders, and another class to hold office initially for a term
expiring at the 2002 Annual Meeting of Stockholders, with the members of each
class to hold office until their successors have been duly elected and
qualified. At each Annual Meeting of Stockholders, commencing with the 2000
Annual Meeting of Stockholders, the successors to the class of directors whose
term expires at that meeting shall be elected to hold office for a term
expiring at the Annual Meeting of Stockholders held in the third year
following the year of their election and until their successors have been duly
elected and qualified.
2. Stockholder Nomination of Directors Candidates. Advance notice of
nomination for the election of directors, other than by the Board of Directors
or a duly authorized committee thereof or any authorized officer of the
Corporation to whom the Board of Directors or such committee shall have
delegated such authority, and information concerning nominees, shall be given
in the manner provided in the By-laws.
3. Newly Created Directorships and Vacancies. Newly created directorships
resulting from any increase in the authorized number of directors and any
vacancies on the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office or other cause shall be
filled by a majority vote of the directors then in office, and directors so
chosen shall hold office for a term expiring at the next Annual Meeting of
Stockholders at which the term of the class of which they have been elected
expires.
4. Removal. Any director or directors may be removed from office at any
time, but only for cause and only by the affirmative vote of (a) the holders
of at least 75% of the voting power of the then outstanding shares of
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capital stock of the Corporation entitled to vote generally in the election of
directors, voting together as a single class, or (b) a majority of the Board
of Directors.
5. Special Meetings of Stockholders. Special meetings of stockholders of the
Corporation may be called only in the manner provided in the By-laws.
6. Action of Stockholders. Any action required or permitted to be taken by
the holders of Common Stock of the Corporation must be effected at a duly
called annual or special meeting of such holders and may not be effected by
any consent in writing by such holders.
7. Bylaws: Amendment or Repeal. In furtherance and not in limitation of the
powers conferred by statute, the Board of Directors is expressly authorized to
make, alter or repeal the By-laws of the Corporation. Notwithstanding any
other provisions of this Restated Certificate of Incorporation or the By-laws
of the Corporation (and notwithstanding the fact that a lesser percentage may
be specified by law, this Restated Certificate of Incorporation or the By-laws
of the Corporation), the affirmative vote of the holders of seventy-five
percent (75%) or more of the voting power of the then outstanding shares of
capital stock of the Corporation entitled to vote generally in the election of
directors, voting together as a single class, shall be required for the
stockholders to alter or repeal the By-laws of the Corporation.
8. Certificate of Incorporation: Amendment, Repeal, Etc. Notwithstanding any
other provisions of this Restated Certificate of Incorporation or the By-laws
of the Corporation (and notwithstanding the fact that a lesser percentage may
be specified by law, this Restated Certificate of Incorporation or the By-laws
of the Corporation), the affirmative vote of the holders of seventy-five
percent (75%) or more of the voting power of the then outstanding shares of
capital stock of the Corporation entitled to vote generally in the election of
directors, voting together as a single class, shall be required to amend or
repeal, or adopt any provision inconsistent with, Parts 1 through 8 of this
Article V.
ARTICLE VI
1. Liability of Directors. No director shall be liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director, provided, however, that this paragraph shall not eliminate or limit
the liability of a director (a) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (b) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation
of law, (c) under Section 174 of the Delaware General Corporation Law, or (d)
for any transaction from which the director derived an improper personal
benefit. This paragraph shall not eliminate or limit the liability of a
director for any act or omission occurring prior to the date when this
paragraph becomes effective.
2. Indemnification. The Corporation shall, to the fullest extent permitted
by Section 145 of the General Corporation Law of the State of Delaware, as the
same may be amended and supplemented, indemnify any and all persons whom it
shall have power to indemnify under said section from and against any and all
of the expenses, liabilities or other matters referred to in or covered by
said section.
3. Advancement of Expenses. Expenses incurred by an officer or director in
defending a civil or criminal action, suit or proceeding shall be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he or
she is not entitled to be indemnified by the Corporation as mandated in this
paragraph. Such expenses incurred by other employees and agents may be so paid
upon such terms and conditions, if any, as the Board of Directors deems
appropriate.
4. Non-Exclusivity. The indemnification and advancement of expenses provided
for herein shall not be deemed exclusive of any other rights to which those
seeking indemnification and advancement of expenses may be entitled under any
By-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
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ARTICLE VII
A director of the Corporation shall not in the absence of fraud be
disqualified by his office from dealing or contracting with the Corporation
either as a vendor, purchaser or otherwise, nor in the absence of fraud shall
a director of the Corporation be liable to account to the Corporation for any
profit realized by him from or through any transaction or contract of the
Corporation by reason of the fact that he, or any firm of which he is a
member, or any corporation of which he is an officer, director or stockholder,
was interested in such transaction or contract if such transaction or contract
has been authorized, approved or ratified in the manner provided in the
General Corporation Law of Delaware for contracts between the Corporation and
one or more of its directors or officers, or between the Corporation and any
other corporation, partnership, association, or other organization in which
one or more of its directors or officers are directors or officers, or have a
financial interest.
ARTICLE VIII
Whenever a compromise or arrangement is proposed between this Corporation
and its creditors or any class of them and/or between this Corporation and its
stockholders or any or all of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of this
Corporation or of any creditor or stockholder thereof, or on the application
of any receiver or receivers appointed for this Corporation under the
provision of Section 291 of Title 8 of the Delaware Code or on the application
of trustees in dissolution or of any receiver or receivers appointed for this
Corporation under Section 279 of Title 8 of the Delaware Code, order a meeting
of the creditor or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing three-
fourths in value of the creditors, or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
Corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders of this Corporation, as the case may be, and also on this
Corporation.
ARTICLE IX
From time to time any of the provisions of this Restated Certificate of
Incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and
all rights at any time conferred upon the stockholders of the Corporation by
this Restated Certificate of Incorporation are granted subject to the
provisions of this Article IX.
IN WITNESS WHEREOF, First Oak Brook Bancshares, Inc., has caused this
Restated Certificate of Incorporation to be signed by its President and
attested by its Secretary on this day of May, 1999.
FIRST OAK BROOK BANCSHARES, INC.
By: _________________________________
Its: President
ATTEST:
By: _________________________________
Its: Secretary
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APPENDIX B TO PROXY STATEMENT
AMENDED AND RESTATED
BY-LAWS
OF
FIRST OAK BROOK BANCSHARES, INC.
(A DELAWARE CORPORATION)
ARTICLE I
OFFICES AND SEAL
1.01 Offices. The principal office of the Corporation in the State of
Delaware shall be located in the City of Dover and County of Kent. The
Corporation may have such other offices, either within or without the State of
Delaware, as the Board of Directors may designate or the business of the
Corporation may require.
1.02 Seal. The Board of Directors shall provide a corporate seal, which
shall be in the form of a circle and shall have inscribed thereon the name of
the Corporation and the words "Corporate Seal, Delaware."
ARTICLE II
STOCKHOLDERS
2.01 Certificates Representing Stock. Every holder of stock in the
Corporation shall be entitled to have a certificate signed by, or in the name
of, the corporation by the Chairman or Vice-Chairman of the Board of
Directors, if any, or by the President or a Vice-President and by the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary
of the Corporation certifying the number of shares owned by him in the
Corporation. Any and all signatures on any such certificate may be facsimiles.
In case any officer, transfer agent, or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have ceased to be
such officer, transfer agent, or registrar before such certificate is issued,
it may be issued by the Corporation with the same effect as if he were such
officer, transfer agent, or registrar at the date of issue. All certificates
for shares of capital stock shall be consecutively numbered or otherwise
identified.
Whenever the Corporation shall be authorized to issue more than one class of
stock or more than one series of any class of stock, and whenever the
Corporation shall issue any shares of its stock as partly paid stock, the
certificates representing shares of any such class or series or of any such
partly paid stock shall set forth thereon the statements prescribed by the
General Corporation Law. Any restrictions on the transfer or registration of
transfer of any shares of stock of any class or series shall be noted
conspicuously on the certificate representing such shares.
The Corporation may issue a new certificate of stock in place of any
certificate theretofore issued by it, alleged to have been lost, stolen, or
destroyed, and the Board of Directors may require the owner of any lost,
stolen, or destroyed certificate, or his legal representative, to give the
Corporation a bond sufficient to indemnify the Corporation against any claim
that may be made against it on account of the alleged loss, theft, or
destruction of any such certificate or the issuance of any such new
certificate.
2.02 Fractional Share Interests. The Corporation may, but shall not be
required to, issue fractions of a share. If the Corporation does not issue
fractions of a share, it shall (1) arrange for the disposition of fractional
interests by those entitled thereto, (2) pay in cash the fair value of
fractions of a share as of the time when those entitled to receive such
fractions are determined, or (3) issue scrip or warrants in registered or
bearer form which shall entitle the holder to receive a certificate for a full
share upon the surrender of such scrip or warrants aggregating a full share. A
certificate for a fractional share shall, but scrip or warrants shall not
unless otherwise provided
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therein, entitle the holder to exercise voting rights, to receive dividends
thereon, and to participate in any of the assets of the Corporation in the
event of liquidation. The Board of Directors may cause scrip or warrants to be
issued subject to the conditions that they shall become void if not exchanged
for certificates representing full shares before a specified date, or subject
to the conditions that the shares for which scrip or warrants are exchangeable
may be sold by the Corporation and the proceeds thereof distributed to the
holders of scrip or warrants, or subject to any other conditions which the
Board of Directors may impose.
2.03 Stock Transfers. Upon compliance with provisions restricting the
transfer or registration of transfer of shares of stock, if any, transfers or
registration of transfers of shares of stock of the Corporation shall be made
only on the stock ledger of the Corporation by the registered holder thereof,
or by his attorney thereunto authorized by power of attorney duly executed and
filed with the Secretary of the corporation or with a transfer agent or a
registrar, if any, and on surrender of the certificate or certificates for
such shares of stock properly endorsed and the payment of all taxes due
thereon.
2.04 Transfer Agents and Registrars. The Board of Directors may appoint one
or more transfer agents or assistant transfer agents and one or more
registrars of transfers and may require all certificates representing shares
of capital stock of the Corporation to bear the signature of a transfer agent
or an assistant transfer agent and a registrar of transfer. The Board of
Directors may at any time terminate the appointment of any transfer agent,
assistant transfer agent, or registrar of transfers. A transfer agent may
serve as a registrar, and vice versa.
2.05 Record Date for Stockholders. For the purpose of determining the
stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or entitled to receive payment of any dividend or
other distribution or the allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion, or exchange of stock or for the
purpose of any other lawful action, the directors may fix, in advance, a
record date, which shall not be more than sixty days nor less than ten days
before the date of such meeting, nor more than sixty days prior to any other
action. If no record date is fixed: (1) the record date for determining
stockholders entitled to notice of or to vote at a meeting as stockholders
shall be at the close of business on the day next preceding the day on which
notice is given, or, if notice is waived, at the close of business on the day
next preceding the day on which the meeting is held; and (2) the record date
for determining stockholders for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto. A determination of stockholders of record entitled to notice
of or to vote at any meeting of stockholders shall apply to any adjournment of
the meeting; provided, however, that the Board of Directors may fix a new
record date for the adjourned meeting.
2.06 Meaning of Certain Terms. As used herein in respect of the right to
notice of a meeting of stockholders or a waiver thereof or to participate or
vote thereat, as the case may be, the term "share" or "shares" or "share of
stock" or "shares of stock" or "stockholder" or "stockholders" refers to an
outstanding share or shares of stock and to a holder or holders of record of
outstanding shares of stock when the Corporation is authorized to issue only
one class of shares of stock, and said reference is also intended to include
any outstanding share or shares of stock and any holder or holders of record
of outstanding shares of stock of any class upon which or upon whom the
certificate of incorporation confers such rights where there are two or more
classes or series of shares of stock or upon which or upon whom the General
Corporation Law confers such rights notwithstanding that the certificate of
incorporation may provide for more than one class or series of shares of
stock, one or more of which are limited or denied such rights thereunder;
provided, however, that no such right shall vest in the event of an increase
or a decrease in the authorized number of shares of stock of any class or
series which is otherwise denied voting rights under the provisions of the
certificate of incorporation, except as any provision of law may otherwise
require.
2.07 Stockholder Meetings.
(a) Time. The annual meeting of stockholders shall be held on the date and
at the time fixed, from time to time, by the directors, provided that the
first annual meeting shall be held on a date within thirteen months after the
organization of the Corporation, and each successive annual meeting shall be
held on a date within thirteen
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months after the date of the preceding annual meeting. A special meeting of
stockholders shall be held on the date and at the time fixed by the directors.
(b) Place. Annual meetings and special meetings of stockholders shall be
held at such place, within or without the State of Delaware, as the directors
may, from time to time, fix. Whenever the directors shall fail to fix such
place, the meeting shall be held at the principal office of the Corporation in
the State of Illinois.
(c) Call. Annual meetings and special meetings of stockholders may be called
by the Board of Directors or by any officer instructed by the Board of
Directors to call the meeting.
(d) Notice or Waiver of Notice. Written notice of all meetings of
stockholders shall be given, stating the place, date, and hour of the meeting
and, if required by paragraph 2.07(b) of these By-Laws, specifying the place
provided in said paragraph. The notice of an annual meeting shall state that
the meeting is called for the election of directors and for the transaction of
other business which may properly come before the meeting, and shall, if any
other action which could be taken at a special meeting is to be taken at such
annual meeting, state the purpose or purposes. The notice of a special meeting
shall in all instances state the purpose or purposes for which the meeting is
called. The notice of any meeting shall also include, or be accompanied by,
any additional statements, information, or documents prescribed by the General
Corporation Law. Except as otherwise provided by the General Corporation Law,
a copy of the notice of any meeting shall be given, personally or by mail, not
less than ten days nor more than sixty days before the date of the meeting,
unless the lapse of the prescribed period of time shall have been waived, and
directed to each stockholder at his record address or at such other address
which he may have furnished by request in writing to the Secretary of the
Corporation. Notice by mail shall be deemed to be given when deposited, with
postage thereon prepaid, in the United States Mail. If a meeting is adjourned
to another time, not more than thirty days hence, and/or to another place, and
if an announcement of the adjourned time and/or place is made at the meeting,
it shall not be necessary to give notice of the adjourned meeting unless the
directors, after adjournment, fix a new record date for the adjourned meeting.
Notice need not be given to any stockholder who submits a written waiver of
notice signed by him before or after the time stated therein. Attendance of a
stockholder at a meeting of stockholders shall constitute a waiver of notice
of such meeting, except when the stockholder attends the meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the stockholders need be specified in any
written waiver of notice.
(e) Stockholder List. The officer who has charge of the stock ledger of the
Corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders, arranged in alphabetical
order, and showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city or other municipality or community
where the meeting is to be held, which place shall be specified in the notice
of the meeting, or if not so specified, at the place where the meeting is to
be held. The list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by any stockholder
who is present. The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger, the list required by this
section or the books of the Corporation, or to vote at any meeting of
stockholders.
(f) Conduct of Meeting. Meetings of the stockholders shall be presided over
by one of the following officers in the order of seniority and if present and
acting: the Chairman of the Board, if any, the Deputy Chairman of the Board,
if any, the Vice-Chairman of the Board, if any, the President, a Vice-
President, or, if none of the foregoing is in office and present and acting,
by a chairman to be chosen by the stockholders. The Secretary of the
Corporation, or in his absence, an Assistant Secretary, shall act as secretary
of every meeting, but if neither the Secretary nor an Assistant Secretary is
present the Chairman of the meeting shall appoint a secretary of the meeting.
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(g) Proxy Representation. Each stockholder may authorize another person or
persons to act for him or her by proxy in all matters in which a stockholder
is entitled to participate, whether by waiving notice of any meeting or voting
or participating at a meeting. Every proxy must be executed in writing or in
such other manner as permitted under the General Corporation Law and must be
signed by the stockholder or by the stockholder's attorney-in-fact, or
transmitted with information from which it can be determined that the proxy
was authorized by the stockholder. No proxy shall be voted or acted upon after
three years from its date unless such proxy provides for a longer period. A
duly executed proxy shall be irrevocable if it states that it is irrevocable
and, if, and only as long as, it is coupled with an interest sufficient in law
to support an irrevocable power. A proxy may be made irrevocable regardless of
whether the interest with which it is coupled is an interest in the stock
itself or an interest in the Corporation generally.
(h) Inspectors. The Board of Directors, in advance of any meeting, may, but
need not, appoint one or more inspectors of election to act at the meeting or
any adjournment thereof. If an inspector or inspectors are not appointed, the
person presiding at the meeting may, but need not, appoint one or more
inspectors. In case any person who may be appointed as an inspector fails to
appear or act, the vacancy may be filled by appointment made by the directors
in advance of the meeting or at the meeting by the person presiding thereat.
Each inspector, if any, before entering upon the discharge of his duties,
shall take and sign an oath faithfully to execute the duties of inspector at
such meeting with strict impartiality and according to the best of his
ability. The inspectors, if any, shall determine the number of shares of stock
outstanding and the voting power of each, the shares of stock represented at
the meeting, the existence of a quorum, the validity and effect of proxies,
and shall receive votes, ballots or consents, hear and determine all
challenges and questions arising in connection with the right to vote, count
and tabulate all votes, ballots or consents, determine the results, and do
such acts as are proper to conduct the election or vote with fairness to all
stockholders. On request of the person presiding at the meeting, the inspector
or inspectors, if any, shall make a report in writing of any challenge,
question or matter determined by him or them and execute a certificate of any
fact found by him or them.
(i) Quorum. The holders of a majority of the outstanding shares of stock
shall constitute a quorum at a meeting of stockholders for the transaction of
any business. The stockholders present may adjourn the meeting despite the
absence of a quorum. If a quorum is present at the commencement of or during a
meeting, withdrawal of stockholders from such meeting thereafter shall not
cause failure of a duly constituted quorum at the meeting.
(j) Voting. Each share of stock shall entitle the holder thereof to one
vote. In the election of directors, a plurality of the votes cast shall elect.
Any other action shall be authorized by a majority of the votes cast except
where the General Corporation Law prescribes a different percentage of votes
and/or a different exercise of voting power, and except as may be otherwise
prescribed by the provisions of the certificate of incorporation and these By-
Laws. In the election of directors, and for any other action, voting need not
be by ballot, written or otherwise. Persons holding stock in a fiduciary
capacity shall be entitled to vote the shares so held. Persons whose stock is
pledged shall be entitled to vote, unless in the transfer by the pledgor on
the books of the Corporation he or she has expressly empowered the pledgee to
vote thereon, in which case only the pledgee or his or her proxy may represent
the stock and vote thereon. Stock standing in the name of another corporation,
domestic or foreign, may be voted by such officer, agent, or proxy as the
charter or by-laws of such corporation may determine. Shares of its own
capital stock belonging to the Corporation or to another corporation, if a
majority of the shares entitled to vote in the election of directors of such
other corporation is held by the Corporation, shall be neither entitled to
vote nor counted for quorum purposes, but shares of its capital stock held by
the Corporation or any such other corporation in a fiduciary capacity may be
voted by it and counted for quorum purposes.
2.08 Action of Stockholders. Any action required or permitted to be taken at
a meeting of stockholders must be effected at a duly called annual or special
meeting of the stockholders and the power to consent in writing, without a
meeting, to the taking of any action is specifically denied.
2.09 Notice of Stockholder Business. At an annual meeting of the
stockholders, only such business shall be conducted as shall have been
properly brought before the meeting. To be properly brought before the annual
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meeting of stockholders, business must be (a) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board
of Directors, (b) otherwise properly brought before the meeting by or at the
direction of the Board of Directors, or (c) otherwise properly brought before
the meeting by a stockholder. For business to be properly brought before an
annual meeting of stockholders, the stockholder must have the legal right and
authority to make the proposal for consideration at the meeting and the
stockholder must have given timely notice thereof in writing to the Secretary
of the Corporation. To be timely, a stockholder's written notice of intent to
make a proposal or proposals must be personally delivered to or mailed by
United States mail, postage prepaid and received by the Secretary of the
Corporation at the principal executive offices of the Corporation not less
than 120 days prior to the first anniversary of the preceding year's annual
meeting of stockholders; provided, however, that if the date of the annual
meeting of stockholders is advanced by more than 30 days prior to or delayed
by more than 60 days after such anniversary date, notice by the stockholder to
be timely must be so delivered not later than the close of business on the
later of the 120th day prior to such annual meeting or the 10th day following
the day on which the public announcement of the date of such meeting is first
made. A stockholder's notice to the Secretary shall set forth as to each item
of business the stockholder proposes to bring before the annual meeting (a) a
brief description of the business desired to be brought before the meeting,
and the reasons for conducting business at the meeting, (b) the name and the
record address of the stockholder or stockholders proposing such business, (c)
the number of shares of stock of the Corporation which are beneficially held
by such stockholder or stockholders, (d) any material interest of the
stockholder in such business, and (e) whether such stockholder or stockholders
intend to solicit or participate in the solicitation of proxies in favor of
such proposal. The presiding officer of the meeting may refuse to acknowledge
the proposal of any stockholder not made in compliance with this Section 2.09.
Notwithstanding anything in these By-laws to the contrary, no business shall
be brought before or conducted at an annual meeting except in accordance with
the procedures set forth in this Section 2.09.
ARTICLE III
DIRECTORS
3.01 Functions and Definition. The business and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors of the
Corporation.
3.02 Qualifications and Number. The number of directors shall be eight. The
number of directors may be increased or decreased by amendment of this
paragraph 3.02 except as may otherwise be provided in the Certificate of
Incorporation.
3.03 Nomination of Director Candidates. Nominations for the election of
directors may be made by the Board of Directors or a committee appointed by
the Board of Directors or by any stockholder entitled to vote in the election
of directors generally or, if applicable, by any holder of any class or
classes of stock or series thereof are entitled to elect one or more directors
by the provisions of the Certificate of Incorporation. However, any
stockholder entitled to vote in the election of directors generally may
nominate one or more persons for election as directors at a meeting only if
written notice of such stockholder's intent to make such nomination or
nominations has been given, either by personal delivery or by United States
mail, postage prepaid, to the Secretary of the Corporation not later than (i)
with respect to an election to be held at an annual meeting of stockholders,
not less than 120 days prior to the first anniversary of the preceding year's
annual meeting of stockholders; provided, however, that if the date of the
annual meeting of stockholders is advanced by more than 30 days prior to or
delayed by more than 60 days after such anniversary date, notice by the
stockholder to be timely must be so delivered not later than the close of
business on the later of the 120th day prior to such annual meeting or the
10th day following the day on which the public announcement of the date of
such meeting is first made and (ii) with respect to an election to be held at
a special meeting of stockholders for the election of directors, a reasonable
time in advance of the meeting. For purposes of this Section 3.03, a
"reasonable time in advance of the meeting" is at least fifteen days before
the date that the proxy statement in connection with such meeting is to be
mailed to the stockholders. Each such notice shall set forth: (a) the name and
address of the
B-5
<PAGE>
stockholder who intends to make the nomination and of the person or persons to
be nominated; (b) a representation that the stockholder is a holder of record
of stock of the Corporation entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting to nominate the person or persons
specified in the notice; (c) a description of all arrangements or
understandings between the stockholder and each nominee and any other person
or persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder; (d) whether such stockholder
intends to solicit or participate in the solicitation of proxies in favor of
the election of such nominee or nominees, (e) such other information regarding
each nominee proposed by such stockholder as would be required to be included
in a proxy statement filed pursuant to the proxy rules of the Securities and
Exchange Commission, had the nominee been nominated, or intended to be
nominated, by the Board of Directors; and (f) the consent of each nominee to
serve as a director of the Corporation if so elected. The presiding officer at
the meeting may refuse to acknowledge the nomination of any person not made in
compliance with the foregoing procedure.
3.04 Election and Term. Commencing with the 1999 Annual Meeting of
Stockholders, the directors shall be classified with respect to the time for
which they severally hold office, into three classes, as nearly equal in
number as possible, one class to hold office initially for a term expiring at
the 2000 Annual Meeting of Stockholders, another class to hold office
initially for a term expiring at the 2001 Annual Meeting of Stockholders, and
another class to hold office initially for a term expiring at the 2002 Annual
Meeting of Stockholders, with the members of each class to hold office until
their successors have been duly elected and qualified. At each Annual Meeting
of Stockholders, the successors to the class of directors whose term expires
at that meeting shall be elected to hold office for a term expiring at the
Annual Meeting of Stockholders held in the third year following the year of
their election and until their successors have been duly elected and
qualified. Any director may resign at any time upon written notice to the
Corporation. Thereafter, directors who are elected at an annual meeting of
stockholders, and directors who are elected in the interim to fill vacancies
and newly created directorships, shall hold office until the first annual
meeting of stockholders and until their successors are elected and qualified
or until their earlier resignation or removal. In the interim between annual
meetings of stockholders or special meetings of stockholders called for the
election of directors and/or for the removal of one or more directors and for
the filling of any vacancy in that connection, newly created directorships
resulting from any increase in the authorized number of directors and any
vacancies in the Board of Directors, including unfilled vacancies resulting
from the removal of directors for cause or without cause, may be filled by the
vote of a majority of the remaining directors then in office, although less
than a quorum, or by the sole remaining director.
3.05 Meetings.
(a) Time. Meetings shall be held at such time as the Board shall fix, except
that the first meeting of a newly elected Board shall be held as soon after
its election as the directors may conveniently assemble.
(b) Place. Meetings shall be held at the principal office of the Corporation
in the state of Illinois or at such other place within or without the State of
Delaware as shall be fixed by the Board.
(c) Call. No call shall be required for regular meetings for which the time
and place has been fixed. Special meetings may be called by or at the
direction of the Chairman of the Board, if any, of the Deputy Chairman of the
Board, if any, of the Vice-Chairman of the Board, if any, of the President, or
of the majority of the directors in office.
(d) Notice or Actual or Constructive Waiver. No notice shall be required for
regular meetings for which the time and place have been fixed. Written, oral,
or any other mode of notice of the time and place shall be given for special
meetings in sufficient time for the convenient assembly of the directors
thereat. Without limitation of the foregoing, written notice mailed, postage
prepaid, to the address of a director shown on the records of the Corporation
not later than 72 hours prior to the convening of such meeting shall be in
sufficient time for such convenient assembly. Notice need not be given to any
director or to any member of a committee of directors who submits a written
waiver of notice signed by him before or after the time stated therein.
Attendance of any
B-6
<PAGE>
such person at a meeting shall constitute a waiver of notice of such meeting,
except when he attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
directors need be specified in any written waiver of notice.
(e) Quorum and Action. A majority of the whole Board of Directors shall
constitute a quorum except when a vacancy or vacancies prevents such majority,
whereupon one-third of the whole Board shall constitute a quorum. A majority
of the directors present, whether or not a quorum is present, may adjourn a
meeting to another time and place. Except as herein otherwise provided, and
except as otherwise provided by the General Corporation Law, the vote of the
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board. Notwithstanding the foregoing, (i) vacancies
and newly created directorships may be filled as provided in Section 3.04 of
these By-Laws and (ii) the affirmative vote of a majority of the disinterested
directors, even though the disinterested directors be less than a quorum, may
authorize a contract or transaction between the Corporation and a party
described in Section 144(a) of the General Corporation Law when permitted by
subparagraph (1) thereof or when permitted by any other provision of law.
Any member or members of the Board of Directors, or of any committee
designated by the Board, may participate in a meeting of the Board, or any
such committee, as the case may be, by means of conference telephone or
similar communications equipment by means of which all persons participating
in the meeting can hear each other.
(f) Chairman of the Meeting. The Chairman of the Board, if any and if
present and acting, shall preside at all meetings. Otherwise, the Deputy
Chairman of the Board, if any and if present and acting, the Vice-Chairman of
the Board, if any and if present and acting, or the President, if present and
acting, or any other director chosen by the Board, shall preside.
(g) Compensation. The Board of Directors, irrespective of any personal
interest of any of its members, shall have authority to establish the
compensation of all directors for services to the Corporation as directors,
officers, or otherwise. By resolution of the Board of Directors, the directors
may be paid their expenses, if any, of attendance at each meeting of the
Board.
(h) Presumption of Assent. A director who is present at a meeting of the
Board of Directors at which action on any corporate matter is taken shall be
conclusively presumed to have assented to the action taken, unless his dissent
shall have been entered in the minutes of the meeting or unless he either
shall have filed his written dissent to the action with the person acting as
the secretary of the meeting before the adjournment thereof or shall have
forwarded such dissent by registered mail to the Secretary of the Corporation
within 24 hours after the adjournment of the meeting. The right to dissent
shall not apply to a director who voted in favor of the action.
3.06 Removal of Directors. Any director or the entire Board of Directors may
be removed, but only for cause, by the affirmative vote of (a) holders of at
least 75% of the voting power of the shares then entitled to vote at an
election of directors, or (b) a majority of the Board of Directors.
3.07 Committees. The Board of Directors may, by resolution passed by a
majority of the whole Board, designate one or more committees, each committee
to consist of one or more of the directors of the Corporation. The board may
designate one or more directors as alternative members of any committee, who
may replace any absent or disqualified member at any meeting of the committee.
In the absence or disqualification of any member of any such committee or
committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board, shall have
and may exercise the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation other than a power
or authority which such committee expressly may not have pursuant to Section
141(c) of the General Corporation Law and, unless the resolution, By-Laws or
Certificate of Incorporation so provides, no
B-7
<PAGE>
committee shall have the power or authority to declare a dividend, to
authorize the issuance of stock, or to adopt a certificate of ownership or
merger pursuant to Section 253 of the General Corporation Law. Any such
committee may authorize the seal of the Corporation to be affixed to all
papers which may require it. If the Board designates an Executive Committee,
such Executive Committee shall have all the power and authority which may be
exercised by a committee pursuant to this Section 3.07.
3.08 Written Action. Any action required or permitted to be taken at any
meeting of the Board of Directors or any committee thereof may be taken
without a meeting if all members of the Board or committee, as the case may
be, consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board or committee.
ARTICLE IV
OFFICERS
The officers of the Corporation shall consist of a President, a Secretary, a
Treasurer, and, if deemed necessary, expedient, or desirable by the Board of
Directors, a Chairman of the Board, a Deputy Chairman of the Board, a Vice-
Chairman of the Board, an Executive Vice-President, one or more other Vice-
Presidents, one or more Assistant Secretaries, one or more Assistant
Treasurers, and such other officers with such title as the resolution of the
Board of Directors choosing them shall designate. Except as may otherwise be
provided in the resolution of the Board of Directors choosing him, no officer
other than the Chairman, Deputy Chairman or Vice-Chairman of the Board, if
any, need be a director. Any number of offices may be held by the same person,
as the directors may determine, except that no person may hold the offices of
President and Secretary simultaneously.
Unless otherwise provided in the resolution choosing him, each officer shall
be chosen for a term which shall continue until the meeting of the Board of
Directors following the next annual meeting of stockholders and until his
successor shall have been chosen and qualified.
All officers of the Corporation shall have such authority and perform such
duties in the management and operation of the Corporation as shall be
prescribed in the resolutions of the Board of Directors designating and
choosing such officers and prescribing their authority and duties, and shall
have such additional authority and duties as are incident to their office
except to the extent that such resolutions may be inconsistent therewith. The
Secretary or an Assistant Secretary of the Corporation shall record all of the
proceedings of all meetings and actions in writing of stockholders, directors,
and committees of directors in a book to be kept for that purpose, and shall
exercise such additional authority and perform such additional duties as the
Board shall assign to him. Any officer may be removed, with or without cause,
by the Board of Directors. Any vacancy in any office may be filled by the
Board of Directors.
ARTICLE V
FISCAL YEAR
The fiscal year of the Corporation shall be fixed, and shall be subject to
change, by the Board of Directors.
ARTICLE VI
CONTROL OVER BY-LAWS
These By-Laws may be altered, amended or repealed and new By-Laws may be
adopted by the Board of Directors. Subject to the provisions of the
Certificate of Incorporation, these By-Laws may also be altered, amended or
repealed by the stockholders of the Corporation.
B-8
<PAGE>
PROXY FIRST OAK BROOK BANCSHARES, INC.
1400 Sixteenth Street, Oak Brook, Illinois 60523
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder(s) of First Oak Brook Bancshares, Inc., a
Delaware corporation (the "Company"), does (do) hereby constitute and appoint
Eugene P. Heytow, Frank M. Paris and Richard M. Rieser, Jr., or any one or more
of them, each with full power of substitution, to appear and act as the proxy
or proxies of the undersigned at the Annual Meeting of Shareholders of said
corporation to be held in the Conference Center of the Oak Brook Bank Building,
1400 Sixteenth Street, Oak Brook, Illinois, 60523, on Tuesday, May 4, 1999 at
10:00 a.m. and at any adjournment thereof, and to vote all the shares of Class
A Common Stock of First Oak Brook Bancshares, Inc. standing in the name of the
undersigned, or which the undersigned may be entitled to vote, as fully as the
undersigned might or could do if personally present, as set forth below.
1. The election of eight (8) directors of the Company's Board of Directors.
[_] For All[_] Withheld For All[_] For All Except
Nominees: Eugene P. Heytow, Richard M. Rieser, Jr., Frank M. Paris, Dr.
Miriam Lutwak Fitzgerald, Geoffrey R. Stone, Robert W. Wrobel, Michael L.
Stein and Stuart I. Greenbaum.
Instructions: To withhold authority to vote for any individual nominee,
write that nominee in the space provided below.
---------------------------------------------------------------------------
2. Amendment of the Company's Certificate of Incorporation to (i)
reclassify each share of the Company's Common Stock into one share of
Class A Common Stock; (ii) increase the voting power of Class A Common
Stock from 1/20th per share to one vote per share; (iii) increase the
number of authorized shares to 16,000,000 of Class A Common Stock; (iv)
provide that the Company's common equity will consist solely of the
Class A Common Stock; (v) subject to receipt of certain approvals,
rename from "Class A Common Stock" to "Common Stock" the title of the
common shares.
[_] FOR[_] AGAINST[_] ABSTAIN
3. Amendment of the Company's Certificate of Incorporation to (i) rename
from "Preferred Series B Stock" to "Preferred Stock" the title of
preferred shares which the Company is authorized to issue and set forth
more fully the authority of the Board of Directors to establish the
rights and preferences of any such preferred shares.
[_] FOR[_] AGAINST[_] ABSTAIN
4. Amendment of the Company's Certificate of Incorporation and the
Company's By-laws to provide for staggered three-year terms for the
Company's Board of Directors.
[_] FOR[_] AGAINST[_] ABSTAIN
5. Amendment of the Company's Certificate of Incorporation and By-laws to
prohibit the shareholders from calling a shareholders meeting.
[_] FOR[_] AGAINST[_] ABSTAIN
6. Amendment of the Company's Certificate of Incorporation and By-laws to
eliminate the power of shareholders to act by written consent.
[_] FOR[_] AGAINST[_] ABSTAIN
7. Amendment of the Company's Certificate of Incorporation and By-laws to
establish advance notice requirements which shareholders must meet in
order to bring business, including the nomination of candidates for
election as director, before a meeting of shareholders.
[_] FOR[_] AGAINST[_] ABSTAIN
8. Amendment of the Company's Certificate of Incorporation to increase the
required percentage of voting stock needed to amend certain provisions
of the Restated Certificate of Incorporation to 75%.
[_] FOR[_] AGAINST[_] ABSTAIN
9. Amendment of the Company's By-laws to increase the required percentage
of voting stock needed to amend certain provisions of the By-laws to
75%.
[_] FOR[_] AGAINST[_] ABSTAIN
(Continued and to be signed on reverse)
(Continued from other side)
10. Adoption of the Restated Certificate of Incorporation of the Company.
[_] FOR[_] AGAINST[_] ABSTAIN
11. Adoption of the Amended and Restated By-laws of the Company.
[_] FOR[_] AGAINST[_] ABSTAIN
12. Ratification of the appointment of KPMG Peat Marwick LLP as independent
auditors of the Company.
[_] FOR[_] AGAINST[_] ABSTAIN
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder(s). If no direction is made, this proxy
will be voted "FOR ALL" of the eight nominees for director, "FOR" the amendment
of the Company's Certificate of Incorporation to (i) reclassify each share of
the Company's Common Stock into one (1) fully paid and nonassessable share of
Class A Common Stock and eliminate the present class of Common Stock (ii)
increase the voting power of Class A Common Stock from 1/20th per share to one
vote per share, (iii) increase the number of authorized shares to 16,000,000,
of Class A Common Stock, (iv) provide that the Company's common equity will
consist solely of the Class A Common Stock; (v) rename from "Class A Common
Stock" to "Common Stock" the title of the common shares, "FOR" the amendment of
the Company's Certificate of Incorporation to rename from "Preferred Series B
Stock" to "Preferred Stock" the title of preferred shares and set forth more
fully the authority of the Board of Directors to establish the rights and
preferences of any such preferred shares,"FOR" the amendment of the Company"s
Certificate of Incorporation and By-laws to provide for staggered terms for the
Company's Board of Directors, "FOR" the amendment of the Company's Certificate
of Incorporation and By-laws to eliminate the ability of shareholders to call a
shareholders meeting, "FOR" the amendment of the Company's Certificate of
Incorporation and By-laws to eliminate the power of shareholders to act by
written consent, "FOR" the amendment of the Company's Certificate of
Incorporation to increase the required percentage of voting stock needed to
amend certain provisions of the Certificate of Incorporation, "FOR" the
amendment of the Company's By-laws to increase the required percentage of
voting stock needed to amend certain provisions of the Amended and Restated By-
laws, "FOR" the Restatement of the Company's Certificate of Incorporation,
"FOR" the Restatement of the Company's By-Laws, and "FOR" the ratification of
the appointment of KPMG Peat Marwick LLP as independent auditors of the
Company.
Please sign exactly as name ap-
pears hereon. When shares are held
by joint tenants, both should
sign. When signing as attorney,
executor, administrator, trustee
or guardian, please give full ti-
tle as such. If a corporation,
please sign the full corporate
name by president or other autho-
rized officer. If a partnership,
please sign in partnership name by
authorized person.
-----------------------------------
Signature
-----------------------------------
Signature if held jointly
Dated _____________________________
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE
<PAGE>
PROXY FIRST OAK BROOK BANCSHARES, INC.
1400 Sixteenth Street, Oak Brook, Illinois 60523
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder(s) of First Oak Brook Bancshares, Inc., a
Delaware corporation (the "Company"), does (do) hereby constitute and appoint
Eugene P. Heytow, Frank M. Paris and Richard M. Rieser, Jr., or any one or more
of them, each with full power of substitution, to appear and act as the proxy
or proxies of the undersigned at the Annual Meeting of Shareholders of said
corporation to be held in the Conference Center of the Oak Brook Bank Building,
1400 Sixteenth Street, Oak Brook, Illinois, 60523, on Tuesday, May 4, 1999 at
10:00 a.m. and at any adjournment thereof, and to vote all the shares of Common
Stock of First Oak Brook Bancshares, Inc. standing in the name of the
undersigned, or which the undersigned may be entitled to vote, as fully as the
undersigned might or could do if personally present, as set forth below.
1. The election of eight (8) directors of the Company's Board of Directors.
[_] For All[_] Withheld For All[_] For All Except
Nominees: Eugene P. Heytow, Richard M. Rieser, Jr., Frank M. Paris, Dr.
Miriam Lutwak Fitzgerald, Geoffrey R. Stone, Robert W. Wrobel, Michael L.
Stein and Stuart I. Greenbaum.
Instructions: To withhold authority to vote for any individual nominee,
write that nominee in the space provided below.
---------------------------------------------------------------------------
2. Amendment of the Company's Certificate of Incorporation to (i)
reclassify each share of the Company's Common Stock into one share of
Class A Common Stock; (ii) increase the voting power of Class A Common
Stock from 1/20th per share to one vote per share; (iii) increase the
number of authorized shares to 16,000,000 of Class A Common Stock; (iv)
provide that the Company's common equity will consist solely of the
Class A Common Stock; (v) subject to receipt of certain approvals,
rename from "Class A Common Stock" to "Common Stock" the title of the
common shares.
[_] FOR[_] AGAINST[_] ABSTAIN
3. Amendment of the Company's Certificate of Incorporation to (i) rename
from "Preferred Series B Stock" to "Preferred Stock" the title of
preferred shares which the Company is authorized to issue and set forth
more fully the authority of the Board of Directors to establish the
rights and preferences of any such preferred shares.
[_] FOR[_] AGAINST[_] ABSTAIN
4. Amendment of the Company's Certificate of Incorporation and the
Company's By-laws to provide for staggered three-year terms for the
Company's Board of Directors.
[_] FOR[_] AGAINST[_] ABSTAIN
5. Amendment of the Company's Certificate of Incorporation and By-laws to
prohibit the shareholders from calling a shareholders meeting.
[_] FOR[_] AGAINST[_] ABSTAIN
6. Amendment of the Company's Certificate of Incorporation and By-laws to
eliminate the power of shareholders to act by written consent.
[_] FOR[_] AGAINST[_] ABSTAIN
7. Amendment of the Company's Certificate of Incorporation and By-laws to
establish advance notice requirements which shareholders must meet in
order to bring business, including the nomination of candidates for
election as director, before a meeting of shareholders.
[_] FOR[_] AGAINST[_] ABSTAIN
8. Amendment of the Company's Certificate of Incorporation to increase the
required percentage of voting stock needed to amend certain provisions
of the Restated Certificate of Incorporation to 75%.
[_] FOR[_] AGAINST[_] ABSTAIN
9. Amendment of the Company's By-laws to increase the required percentage
of voting stock needed to amend certain provisions of the By-laws to
75%.
[_] FOR[_] AGAINST[_] ABSTAIN
(Continued and to be signed on reverse)
(Continued from other side)
10. Adoption of the Restated Certificate of Incorporation of the Company.
[_] FOR[_] AGAINST[_] ABSTAIN
11. Adoption of the Amended and Restated By-laws of the Company.
[_] FOR[_] AGAINST[_] ABSTAIN
12. Ratification of the appointment of KPMG Peat Marwick LLP as independent
auditors of the Company.
[_] FOR[_] AGAINST[_] ABSTAIN
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder(s). If no direction is made, this proxy
will be voted "FOR ALL" of the eight nominees for director, "FOR" the amendment
of the Company's Certificate of Incorporation to (i) reclassify each share of
the Company's Common Stock into one (1) fully paid and nonassessable share of
Class A Common Stock and eliminate the present class of Common Stock (ii)
increase the voting power of Class A Common Stock from 1/20th per share to one
vote per share, (iii) increase the number of authorized shares to 16,000,000,
of Class A Common Stock, (iv) provide that the Company's common equity will
consist solely of the Class A Common Stock, (v) rename from "Class A Common
Stock" to "Common Stock" the title of the common shares, "FOR" the amendment of
the Company's Certificate of Incorporation to rename from "Preferred Series B
Stock" to "Preferred Stock" the title of preferred shares and set forth more
fully the authority of the Board of Directors to establish the rights and
preferences of any such preferred shares,"FOR" the amendment of the Company"s
Certificate of Incorporation and By-laws to provide for staggered terms for the
Company's Board of Directors, "FOR" the amendment of the Company's Certificate
of Incorporation and By-laws to eliminate the ability of shareholders to call a
shareholders meeting, "FOR" the amendment of the Company's Certificate of
Incorporation and By-laws to eliminate the power of shareholders to act by
written consent, "FOR" the amendment of the Company's Certificate of
Incorporation to increase the required percentage of voting stock needed to
amend certain provisions of the Certificate of Incorporation, "FOR" the
amendment of the Company's By-laws to increase the required percentage of
voting stock needed to amend certain provisions of the Amended and Restated By-
laws, "FOR" the Restatement of the Company's Certificate of Incorporation,
"FOR" the Restatement of the Company's By-Laws, and "FOR" the ratification of
the appointment of KPMG Peat Marwick LLP as independent auditors of the
Company.
Please sign exactly as name ap-
pears hereon. When shares are held
by joint tenants, both should
sign. When signing as attorney,
executor, administrator, trustee
or guardian, please give full ti-
tle as such. If a corporation,
please sign the full corporate
name by president or other autho-
rized officer. If a partnership,
please sign in partnership name by
authorized person.
-----------------------------------
Signature
-----------------------------------
Signature if held jointly
Dated _____________________________
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE
