<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
ITLA Capital Corporation
- --------------------------------------------------------------------------------
(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:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[ITLA LOGO]
ITLA CAPITAL CORPORATION
888 PROSPECT STREET
LA JOLLA, CALIFORNIA 92037
(619) 551-0511
June 30, 1998
Dear Fellow Shareholder:
On behalf of the Board of Directors and management of ITLA Capital
Corporation (the "Company"), we cordially invite you to attend the Annual
Meeting of Shareholders of the Company (the "Meeting"). The Meeting will be held
at 1:00 P.M., California time, on July 30, 1998 at the Radisson Hotel at 3299
Holiday Court, La Jolla, California.
An important aspect of the Meeting is the shareholder vote on corporate
business items. I urge you to exercise your rights as a shareholder to vote and
participate in this process. Shareholders are being asked to consider and vote
upon (i) the election of three directors of the Company, and (ii) the
ratification of the appointment of Arthur Andersen, LLP as the Company's
independent auditors. Your Board of Directors unanimously recommends that you
vote for each of Management's nominees for election as directors and for the
ratification of the appointment of Arthur Andersen, LLP.
We encourage you to attend the Meeting in person. Whether or not you plan
to attend, however, please read the enclosed Proxy Statement and then complete,
sign and date the enclosed proxy and return it in the accompanying postpaid
return envelope as promptly as possible. This action will save the Company
additional expense in soliciting proxies and will ensure that your shares are
represented at the meeting.
Thank you for your attention to this important matter.
Very truly yours,
/s/ GEORGE W. HALIGOWSKI
George W. Haligowski
Chairman of the Board
<PAGE> 3
[ITLA LOGO]
ITLA CAPITAL CORPORATION
888 PROSPECT STREET
LA JOLLA, CALIFORNIA 92037
(619) 551-0511
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 30, 1998
Notice is hereby given that the Annual Meeting of Shareholders of ITLA
Capital Corporation (the "Company") will be held at the Radisson Hotel at 3299
Holiday Court, La Jolla, California, on July 30, 1998 at 1:00 P.M., California
time.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of three (3) directors of the Company;
2. The ratification of the appointment of Arthur Andersen, LLP as
independent auditors for the Company for the fiscal year ending December
31, 1998; and
such other matters as may properly come before the Meeting, or any adjournments
or postponements thereof. The Board of Directors is not aware of any other
business to come before the Meeting.
Any action may be taken on the foregoing proposals at the Meeting on the
date specified above, or on any date or dates to which the Meeting may be
adjourned. Shareholders of record at the close of business on June 29, 1998 are
the shareholders entitled to vote at the Meeting and any adjournments thereof. A
complete list of shareholders entitled to vote at the Meeting will be available
for inspection by shareholders at the offices of the Company during the ten days
prior to the Meeting, as well as at the Meeting.
You are requested to complete, sign and date the enclosed form of proxy
which is solicited on behalf of the Board of Directors and to mail it promptly
in the enclosed envelope. The Proxy will not be used if you attend and vote at
the Meeting in person.
By Order of the Board of Directors
/s/ GEORGE W. HALIGOWSKI
George W. Haligowski
Chairman of the Board, President and
Chief Executive Officer
La Jolla, California
June 30, 1998
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED
WITHIN THE UNITED STATES.
<PAGE> 4
ITLA CAPITAL CORPORATION
888 PROSPECT STREET
LA JOLLA, CALIFORNIA 92037
(619) 551-0511
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 30, 1998
------------------------
This Proxy Statement is furnished in connection with the solicitation, on
behalf of the Board of Directors of ITLA Capital Corporation (the "Company"), of
proxies to be used at the Annual Meeting of Shareholders of the Company (the
"Meeting"), and all adjournments of the Meeting. The Meeting is to be held at
the Radisson Hotel, 3299 Holiday Court, La Jolla, California, on July 30, 1998
at 1:00 P.M., California time. The accompanying Notice of Annual Meeting of
Shareholders and this Proxy Statement are first being mailed to shareholders on
or about June 30, 1998. Certain of the information provided herein relates to
Imperial Thrift and Loan Association ("Imperial") and ITLA Funding Corporation
("ITLA Funding"), wholly-owned subsidiaries of the Company.
At the Meeting, shareholders of the Company are being asked to consider and
vote upon the election of three directors of the Company and the ratification of
the appointment of Arthur Andersen, LLP as the Company's independent auditors
for the fiscal year ending December 31, 1998.
VOTING RIGHTS AND PROXY INFORMATION
All shares of Company common stock, par value $.01 per share (the "Common
Stock"), represented at the Meeting by properly executed proxies received prior
to or at the Meeting and not revoked will be voted at the Meeting in accordance
with the instructions thereon. If no instructions are indicated, properly
executed proxies will be voted for the nominee and the adoption of the proposal
set forth in this Proxy Statement. The Company does not know of any matters,
other than as described in the Notice of Annual Meeting of Shareholders, that
are to come before the Meeting. If any other matters are properly presented at
the Meeting for action, the persons named in the enclosed Form of Proxy and
acting thereunder will have the discretion to vote on such matters in accordance
with their best judgment.
Directors shall be elected by a plurality of the votes present in person or
represented by proxy at the Meeting and entitled to vote on the election of
directors. In all matters other than the election of directors, the affirmative
vote of the majority of shares present in person or represented by proxy at the
Meeting and entitled to vote on the matter shall be the act of the shareholders.
Proxies marked to abstain have the same effect as votes against the
proposal, while broker non-votes have no effect on the vote. A majority of the
shares of the Company's Common Stock, present in person or represented by proxy,
shall constitute a quorum for purposes of the Meeting. Abstentions and broker
non-votes are counted for purposes of determining a quorum.
A proxy given pursuant to this solicitation may be revoked at any time
before it is voted. Proxies may be revoked by: (i) duly executing and delivering
to the Secretary of the Company a subsequent proxy relating to the same shares
prior to the exercise of such proxy, (ii) filing with the Secretary of the
Company at or before the Meeting a written notice of revocation bearing a later
date than the proxy, or (iii) attending the Meeting and voting in person
(although attendance at the Meeting will not in and of itself constitute
revocation of a proxy). Any written notice revoking a proxy should be delivered
to Anthony A. Rusnak, Esq., Secretary of the Company, at ITLA Capital
Corporation, 888 Prospect Street, La Jolla, California 92037.
<PAGE> 5
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Shareholders of record as of the close of business on June 29, 1998 will be
entitled to one vote for each share then held. As of that date, the Company had
7,701,984 shares of Common Stock issued and outstanding.
The following table sets forth, as of June 29, 1998, certain information as
to (i) those persons who were known by management to be beneficial owners of
more than five percent of Company Common Stock outstanding; (ii) the shares of
Common Stock beneficially owned by the executive officers named below; and (iii)
as to the shares of Common Stock beneficially owned by all executive officers
and directors of the Company as a group.
<TABLE>
<CAPTION>
SHARES PERCENT
BENEFICIALLY OF
BENEFICIAL OWNER OWNED CLASS
---------------- ------------ -------
<S> <C> <C> <C>
Thomson Horstmann & Bryant, Inc............................. 811,300(1) 10.53%
Park 80 West, Plaza Two
Saddle Brook, New Jersey 07663
Wellington Management Company, LLP.......................... 776,400(2) 10.08%
75 State Street
Boston, Massachusetts 02109
Franklin Mutual Advisors, Inc............................... 709,000(3) 9.21%
51 John F. Kennedy Parkway
Short Hills, New Jersey 07078
FBR Ashton, Limited Partnership............................. 467,670(4) 6.07%
1001 19th Street, North, 18th Floor
Arlington, Virginia 22209
Wanger Asset Management, L.P................................ 446,000(5) 5.79%
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606
Corbyn Investment Management, Inc........................... 410,912(6) 5.34%
2330 West Joppa Road, Suite 108
Lutherville, Maryland 21093
George W. Haligowski........................................ 225,537(7) 2.86%
Chairman of the Board, Chief Executive Officer and
President of the Company
Norval L. Bruce............................................. 30,115(7) (8)
President and Chief Operating Officer of Imperial
George J. Guarini........................................... 28,079(7) (8)
President and Chief Executive Officer of ITLA Funding
Michael A. Sicuro........................................... 22,171(7) (8)
Managing Director and Chief Financial Officer of the
Company
Steven C. Romelt............................................ 8,333(7) (8)
Senior Vice President and Chief Lending Officer of
Imperial
All directors and executive officers as a group(11 351,935(7) 4.39%
persons)..................................................
</TABLE>
- ---------------
(1) As reported by Thomson Horstmann & Bryant, Inc. ("Thomson") on a Schedule
13G dated on or about January 27, 1998 and filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended.
Thomson reported sole voting power as to 496,300 shares, sole investment
power as to 811,300 shares, shared voting power as to 9,800 shares, and
shared investment power as to none of the 811,300 shares covered by the
report.
(2) As reported by Wellington Management Company, LLP ("Wellington") on a
Schedule 13G dated on or about April 30, 1998 and filed with the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as
amended. Wellington reported sole voting and investment powers as to no
shares, shared voting power as to 466,000 shares, and shared investment
power as to 776,400 of the 776,400 shares covered by the report.
2
<PAGE> 6
(3) As reported by Franklin Resources, Inc. ("Franklin") on a Schedule 13G dated
on or about January 30, 1998 and filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended. Franklin
reported sole voting and investment powers as to 709,000 shares, and shared
voting and investment powers as to none of the 709,000 shares covered by the
report.
(4) As reported by FBR Ashton, Limited Partnership ("FBR") on a Schedule 13D
dated on or about December 23, 1997 and filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended.
FBR reported sole voting power as to 395,250 shares, sole investment power
as to 395,250 shares, shared voting power as to 467,670 shares, and shared
investment power as to 467,670 of the 467,670 shares covered by the report.
(5) As reported by Wanger Asset Management, L.P. ("Wanger") on a Schedule 13G
dated on or about February 6, 1998 and filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended.
Wanger reported sole voting and investment powers as to no shares, and
shared voting and investment powers as to 446,000 of the 446,000 shares
covered by the report.
(6) As reported by Corbyn Investment Management, Inc. ("Corbyn") on a Schedule
13G dated on or about January 8, 1998 and filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended.
Corbyn reported sole voting and investment powers as to 410,912 shares, and
shared voting and investment powers as to none of the 410,912 shares covered
by the report.
(7) Includes shares held directly, shares held in retirement accounts or by
certain members of the named individuals' families or corporations for which
an individual is an officer or director or held by trust of which an
individual is trustee or a substantial beneficiary, over which shares the
individual may be deemed to have sole or shared voting and/or investment
power. Includes for Messrs. Haligowski, Guarini, Sicuro, Bruce, and Romelt
respectively, 196,667 shares, 26,667 shares, 21,667 shares, 28,333 shares,
and 8,333 shares, and 305,667 shares for all directors and officers of the
group, which are subject to currently exercisable options and options
exercisable within 60 days of June 29, 1998, under the Company's stock
option plans.
(8) Less than 1%.
3
<PAGE> 7
PROPOSAL I -- ELECTION OF DIRECTORS
The Company's Board of Directors is composed of six members. One-third of
the directors are generally scheduled to be elected annually. Directors of the
Company are generally elected to serve for a three-year term or until their
respective successors shall have been elected and shall have qualified.
The table below sets forth certain information regarding the composition of
the Company's Board of Directors, including their terms of office. The
composition of the Board of Directors of the Company and Imperial is identical.
It is intended that the proxies solicited on behalf of the Board of Directors
(other than proxies in which the vote is withheld as to the nominee) will be
voted at the Meeting for the election of the nominees identified below. If any
nominee is unable to serve, the shares represented by all such proxies will be
voted for the election of such substitute as the Board of Directors may
recommend. At this time, the Board of Directors knows of no reasons why the
nominees might be unable to serve, if elected. There are no arrangements or
understandings between any nominee and any other person pursuant to which such
nominee was selected.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
TERM BENEFICIALLY PERCENT
DIRECTOR TO OWNED AT OF
NAME AGE(1) POSITIONS HELD IN THE COMPANY SINCE EXPIRE JUNE 29, 1998(2) CLASS
---- ------ ----------------------------- -------- ------ ---------------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
NOMINEES
Sandor X. Mayuga 49 Director 1996 2001 6,800 (3)
Robert R. Reed 61 Director 1996 2001 6,200 (3)
Norval L. Bruce 56 Director 1997 2000 30,115 (3)
DIRECTORS CONTINUING IN OFFICE
George W. Haligowski 43 Chairman of the Board, 1996 1999 225,537 2.86%
President and Chief Executive
Officer
Hirotaka Oribe 63 Director 1996 1999 6,200 (3)
Jeffrey L. Lipscomb 44 Director 1996 2000 6,000 (3)
</TABLE>
- ---------------
(1) As of June 29, 1998.
(2) Includes shares held directly, shares held in retirement accounts or by
certain members of the named individuals' families or corporations for which
an individual is an officer or director or held by trust of which an
individual is trustee or a substantial beneficiary, over which shares the
individual may be deemed to have sole or shared voting and/or investment
power. Includes for Messrs. Haligowski, Mayuga, Reed, Bruce, Oribe and
Lipscomb, respectively, 196,667 shares, 6,000 shares, 6,000 shares, 28,333
shares, 6,000 shares, and 6,000 shares, which are subject to currently
exercisable options and options exercisable within 60 days of June 29, 1998,
under the Company's stock option plans.
(3) Less than 1%.
The business experience of each of the directors of the Company and
Imperial for at least the past five years is as follows:
George W. Haligowski has served as Chairman of the Board, President and
Chief Executive Officer of the Company since inception. Mr. Haligowski has also
served as Chairman of the Board and Chief Executive Officer of Imperial since
July 1992, and was President from July 1992 through October 1997. From 1990 to
the present, he has also served as President, Chief Executive Officer and
Principal of Halivest International, Ltd., an international finance and asset
management company. He was previously employed as a Vice President by Shearson
Lehman Hutton (1988-1990) and Prudential-Bache Securities (1983-1988), and by
Avco Financial Services as Regional Director of its Japanese branch operations
in 1976 to 1981, as Training Coordinator for Avco Thrift and Loan in 1976 and as
a Branch Manager from 1974 to 1976.
4
<PAGE> 8
Sandor X. Mayuga is a member of the state bar of California, has been a
member of the law firm of Tisdale & Nicholson since 1994, and previously
conducted his own private law practice from 1985 to 1995. Mr. Mayuga previously
served as a Director of Imperial from December 1983 to June 1993.
Robert R. Reed is retired from Household International where he was
employed in various positions from 1960 to 1992. Mr. Reed served as Vice
President of Household Bank from 1980 to 1992. Mr. Reed was previously employed
in management positions with Household Financial Corporation from 1962 to 1980.
Mr. Reed previously served as a Director of Imperial from September 1994 to
August 1995, when all directors appointed by Imperial's former parent resigned
as part of Imperial's initial public offering.
Norval L. Bruce has served as President and Chief Operating Officer of
Imperial since October 1997, and previously was the Executive Vice President and
Chief Credit Officer of Imperial since 1990. From 1988 to 1989, Mr. Bruce served
as Executive Vice President and Chief Credit Officer of Security Pacific Bank,
Nevada. Mr. Bruce was previously employed by Security Pacific Bank from 1965 to
1988 in a variety of positions including management positions in which he was
responsible for both loan origination and credit quality.
Hirotaka Oribe is a licensed architect with international experience in
real estate development and urban planning. Since 1993, Mr. Oribe has served as
an adviser to Kajima Development Resources, Inc. From 1979 to 1993, Mr. Oribe
was Executive Vice President, Chief Operating Officer, and a Director of Kajima
Development Corporation, a firm engaged in development and construction of
single-family and multifamily housing, office buildings and retail space, and
land development. Mr. Oribe previously held other positions with affiliates of
Kajima Corporation of Japan from 1973 to 1979 and was a practicing architect
from 1962 to 1973.
Jeffrey L. Lipscomb is an Investment Advisory Associate with EQ Financial
Consultants, Inc. and formerly was a Registered Principal and Assistant Manager
of the San Diego office of Equitable Financial Companies since 1986, handling
corporate group benefits and personal financial planning.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
Meetings of the Board of Directors of the Company are generally held as
required. During fiscal 1997 the Board of Directors held six meetings. No
director attended fewer than 75% of the total number of meetings of the Board of
Directors of the Company held during 1997 and the total number of meetings held
by all Board committees on which any such director served during 1997.
The Board of Directors of the Company has standing Executive, Audit and
Compensation Committees, the function and composition of which are set forth
below.
The Company's Board of Directors acts as the nominating committee that
nominates officers and directors for election as well as nominees to fill any
vacancies which may exist on the Board. The Board will consider nominees
recommended by others; however, it has not actively solicited nominations nor
established any procedures for this purpose. Pursuant to the Company's Bylaws,
nominations must be delivered in writing to the Secretary of the Company at
least 60 days prior to the date of the annual meeting.
Executive Committee. The primary responsibilities of the Executive
Committee are to advise the Company's management on matters when the full Board
of Directors is unavailable or to conduct business as specifically designated by
the full Board. The current members of the Executive Committee are Messrs.
Haligowski, Oribe and Bruce. The Executive Committee held eleven meetings in
fiscal 1997.
Audit Committee. The primary responsibilities of the Audit Committee are to
recommend to the Board of Directors a firm of independent certified public
accountants to conduct the annual audit of the Company's books and records; to
review with such accounting firm the scope and results of the annual audit; to
review the performance by such independent accountants of professional services
in addition to those which are audit related; and to consult with the internal
and independent auditors with regard to the adequacy of the Company's system of
internal controls. The members of the Audit Committee are Messrs. Lipscomb and
Mayuga. The Audit Committee held four meetings in fiscal 1997.
5
<PAGE> 9
Compensation Committee. The primary responsibilities of the Compensation
Committee are to establish and review the compensation, both direct and
indirect, to be paid to the Company's executive officers and other members of
management; to review and submit to the Board of Directors its recommendations
with respect to executive compensation plans; to establish and review
periodically the Company's policies relating to executive perquisites; and to
oversee the Company's employee benefit plans. The members of the Compensation
Committee are Messrs. Lipscomb and Oribe. The Compensation Committee met twice
in fiscal 1997.
DIRECTORS COMPENSATION
Directors Fees. Each non-employee director was paid a monthly fee during
1997 of $1,250 for serving on the Company's Board of Directors. Each
non-employee director is paid $500 for each board and committee meeting
attended.
Voluntary Retainer Stock and Deferred Compensation Plan. The Company has a
Voluntary Retainer Stock and Deferred Compensation Plan for Outside Directors
(the "Outside Director Plan"). The Outside Director Plan provides for the
deferral of compensation earned by non-employee directors of the Company in the
form of Stock Units ("Stock Units") in a Stock Unit account ("Stock Unit
Account"). Directors may elect to have up to 100% of their fees converted into
stock units.
For dividends paid with respect to the Company's Common Stock, each
non-employee director has credited to his or her Stock Unit Account an
additional number of Stock Units in an amount determined under the Outside
Director Plan. Each non-employee director's Stock Unit Account shall be settled
by delivering to the non-employee director (or his beneficiary) the number of
shares of Company Common Stock equal to the number of whole Stock Units then
credited to the non-employee director's Stock Unit Account, in either (i) a lump
sum or (ii) substantially equal annual installments over a period not to exceed
ten years.
The Director Stock Option Plan. The Company has a Director Stock Option
Plan pursuant to which directors are eligible to receive options to purchase
Common Stock. The purpose of the Director Stock Option Plan is to enable the
Company to attract, retain and motivate directors and further align their
interests with those of the Company.
Grants to non-employee directors are made by the Board of Directors
pursuant to a predetermined formula. Stock options to purchase 5,000 shares of
Common Stock are automatically granted to non-employee directors upon their
initial election to the Board of Directors, and options to purchase an
additional 1,000 shares are granted annually thereafter, provided such
individuals continue to serve as directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1997, the Compensation Committee, which acts as the compensation
committee of the Company and its subsidiaries, was comprised of Messrs. Lipscomb
and Oribe.
6
<PAGE> 10
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation for
services in all capacities to the Company and its subsidiaries for the years
ended December 31, 1997, 1996 and 1995 of the Chief Executive Officer and the
named executive officers of the Company and its subsidiaries with salary and
bonus greater than $100,000 for the year ended December 31, 1997 (the "named
executive officers").
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------- ------------ ALL OTHER
SALARY BONUS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) (9) (#) (2) ($)
--------------------------- ---- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
George W. Haligowski........... 1997 $299,250 $374,050 20,000 $59,716(3)
Chairman of the Board,
President 1996 $293,316 $ 81,545(1) -- $65,904(3)
and Chief Executive Officer 1995 $174,058 $136,888 285,000 $70,572(3)
George J. Guarini.............. 1997 $177,625 $ 88,200 -- $ 6,386(4)
President and Chief Executive 1996 $119,334 $ -- -- $11,495(4)
Officer of ITLA Funding 1995 $ 89,796 $ 8,500 40,000 $12,445(4)
Michael A. Sicuro.............. 1997 $156,188 $ 62,327 15,000 $ 5,933(5)
Managing Director and 1996 $ 68,521(8) $ -- 25,000 $ 7,778(5)
Chief Financial Officer 1995 $ -- $ -- -- $ --
Norval L. Bruce................ 1997 $131,670 $ 75,600 5,000 $ 7,780(6)
President and Chief Operating 1996 $123,500 $ -- -- $ 8,277(6)
Officer of Imperial 1995 $108,125 $ 13,500 40,000 $15,168(6)
Steven C. Romelt............... 1997 $114,583 $ 9,508 25,000 $12,997(7)
Senior Vice President and
Chief 1996 $ 16,346(8) $ -- -- $ 1,558(7)
Lending Officer of Imperial 1995 $ 17,010(8) $ 10,000 -- $ 1,875(7)
</TABLE>
- ---------------
(1) $55,000 of the 1996 bonus was deferred under the Company's Nonqualified
Deferred Compensation Plan.
(2) Options were granted on various dates and vest one-third on each of the
three subsequent anniversary dates of issuance.
(3) Consists of (a) $4,288 in auto related benefits, (b) $26,600 in supplemental
housing payments, (c) $7,100 in life insurance premiums, (d) $4,800 in
employer contributions to the Company's 401(k) plan and (e) $16,928 in
preferential interest on employee savings accounts in 1997. The respective
amounts were $21,000, $22,850, $6,950, $4,500 and $10,604 in 1996 and
$19,321, $22,850, $7,154, $6,682 and $14,565 in 1995.
(4) Consists of (a) $1,013 of auto related benefits, (b) $4,800 in employer
contributions to the Company's 401(k) plan and (c) $573 of preferential
interest on employee savings accounts in 1997. The respective amounts were
$10,200, $1,295 and $0 in 1996 and $9,600, $2,845 and $0 in 1995.
(5) Consists of $1,133 of auto related benefits and $4,800 in employer
contributions to the Company's 401(k) plan in 1997. Consists of (a) $5,600
of auto related benefits, (b) $2,046 in employer contributions to the
Company's 401(k) plan and (c) $132 of life insurance benefits in 1996.
(6) Consists of (a) $2,296 in auto related benefits, (b) $144 in life insurance
premiums, (c) $4,800 in employer contributions to the Company's 401(k) plan
and (d) $540 in preferential interest on employee savings accounts in 1997.
The respective amounts were $3,448, $576, $3,705 and $548 in 1996 and
$8,750, $576, $5,492 and $350 in 1995.
(7) Consists of (a) $9,000 in auto related benefits, (b) $4 in life insurance
premiums and (c) $3,993 in employer contributions to the Company's 401(k)
plan in 1997. Consists of (a) $1,500 in auto related benefits and (b) $58 in
life insurance premiums in 1996, and $1,875 of auto related benefits in
1995.
(8) Partial year.
(9) Includes Company Common Stock issued under the Recognition and Retention
Plan in 1997 at a price of $14.50 per share.
7
<PAGE> 11
EMPLOYMENT AGREEMENT AND CHANGE OF CONTROL AGREEMENTS
The Company has entered into an employment agreement with Mr. Haligowski,
and change of control agreements with Messrs. Bruce, Guarini and Sicuro. The
employment agreement provides for an initial employment term of three years,
with the agreement automatically annually extending for an additional one-year
period unless either party provides the other with at least 90 days notice of
the nonextension or termination. The employment agreement provides that the
Company may terminate the officer "for cause," as defined in the employment
agreement, and that in the event the Company terminates the officer without
cause including as a result of a change of control, the officer will be entitled
to receive his base salary for the remaining term of the agreement and a pro
rata portion of his bonus, if any, for the year in which his employment is
terminated as well as a continuation of all employment related benefits through
the remaining term of the agreement and the immediate vesting of any stock
options previously granted and outstanding. The annual base salary for Mr.
Haligowski under the employment agreement is currently $350,000 (which may be
increased from time to time by the Board of Directors). The employment agreement
also provides for, among other things, annual incentive compensation, disability
pay, participation in stock benefit plans, and other fringe benefits, including
a supplemental housing payment of not less than $2,500 per month, an automobile
allowance of not less than $1,750 per month, and life insurance coverage in an
amount not less than four times Mr. Haligowski's annual salary.
The change in control agreements have initial terms of one year and shall
automatically extend for additional one-year periods upon a change of control,
as defined in the agreement, or upon their anniversary date, unless either party
provides the other with at least 90 days notice of termination. These agreements
provide that in the event the officer is terminated within twelve months
following a change of control, as defined in the agreement, the officer shall be
entitled to receive upon such termination an amount equal to the greater of the
annualized salary as in effect on the date of the change of control or the date
of termination and a pro rata portion of his bonus, if any, for the year in
which his employment is terminated. The annual base salary for Messrs. Bruce,
Guarini and Sicuro is currently $175,000, $179,000 and $169,000, respectively.
Change of control, in both the employment agreement and the change in
control agreements, is defined to include (i) the sale of substantially all of
the stock or assets of the Company, whether by merger, consolidation, sale of
assets or sale or exchange of Common Stock or the complete liquidation of the
Company, (ii) the sale by the Company or the acquisition by any person in any
single transaction (or series of related transactions) of more than 30% of the
then outstanding Common Stock of the Company (on a fully diluted basis), or
(iii) any date upon which the directors of the Company nominated by the Board
cease to constitute a majority of the Board. Both the employment agreement and
the change of control agreements will provide that no payments may be made
thereunder in connection with the termination of the officers covered by such
agreements if, at the time such payments would otherwise be made, the Company is
prohibited from making such payments by any applicable federal or state law or
regulation governing its operations, unless the Company has obtained prior
approval for such otherwise prohibited payments from the appropriate regulatory
authorities.
8
<PAGE> 12
OPTION GRANTS FOR 1997
The following table sets forth certain information concerning the number
and value of stock options grants for the named executive officers in 1997. No
stock appreciation rights have been granted pursuant to the Stock Option Plan.
<TABLE>
<CAPTION>
STOCK OPTION GRANTS IN LAST FISCAL YEAR
- ----------------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------- VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF STOCK
NUMBER OF OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM
OPTIONS EMPLOYEES OR BASE -----------------------
GRANTED IN FISCAL PRICE EXPIRATION 5% 10%
NAME (#) YEAR ($/SHARE) DATE ($) ($)
---- ---------- ----------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
George W. Haligowski............... 20,000 16.6% $14.50 1/23/07 $182,379 $462,185
Michael A. Sicuro.................. 15,000 12.4% $14.50 1/23/07 $136,785 $346,639
Norval L. Bruce.................... 5,000 4.1% $14.50 1/23/07 $ 45,595 $115,546
Steven C. Romelt................... 25,000 20.7% $14.50 1/23/07 $227,974 $577,732
</TABLE>
The following table sets forth certain information concerning the number
and value of stock options at December 31, 1997 held by the named executive
officers.
<TABLE>
<CAPTION>
OPTION VALUES AT DECEMBER 31, 1997
- -----------------------------------------------------------------------------------------------------------------
NUMBER OF VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS "IN-THE-MONEY" OPTIONS
ACQUIRED AT FISCAL YEAR-END AT FISCAL YEAR-END(1)
ON VALUE (#) ($)
EXERCISE REALIZED --------------------------- ---------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
George W. Haligowski........... -- N/A 190,000 115,000 $1,757,500 $973,750
George J. Guarini.............. -- N/A 26,667 13,333 $ 246,667 $123,333
Norval L. Bruce................ -- N/A 26,667 18,333 $ 246,667 $147,083
Michael A. Sicuro.............. -- N/A 8,333 31,667 $ 40,625 $152,500
Steven C. Romelt............... -- N/A -- 25,000 $ -- $118,750
</TABLE>
- ---------------
(1) The difference between the aggregate option exercise price and the closing
price of $19.25 of the underlying shares at December 31, 1997.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") has furnished the following
report on executive compensation:
Compensation Policies. Under the supervision of the Board of Directors, the
Company has developed and implemented compensation policies, plans and programs
which seek to enhance the profitability of the Company, and thus shareholder
value, by closely aligning the financial interests of the Company's employees,
including its Chief Executive Officer ("CEO") and the Company's other senior
management, with those of its shareholders.
The executive compensation program of the Company is designed to:
- Support a pay-for-performance policy that differentiates compensation
based on corporate and individual performance;
- Motivate employees to assume increased responsibility and reward them for
their achievement;
- Provide compensation opportunities that are comparable to those offered
by other leading companies, allowing the Company to compete for and
retain talented executives who are critical to the Company's long-term
success; and
- Align the interests of executives with the long-term interests of
shareholders through award opportunities that can result in ownership of
Common Stock.
9
<PAGE> 13
At present, the executive compensation program is comprised of salary,
annual cash incentive opportunities, long-term incentive opportunities in the
form of stock options, and miscellaneous benefits typically offered to
executives by major corporations. The Committee considers the total compensation
(earned or potentially available) in establishing each element of compensation
so that total compensation paid is competitive with the market place, based on
an independent consultant's survey of salary competitiveness of other financial
institutions. The Committee intends to be advised periodically by independent
compensation consultants concerning salary competitiveness.
As to Mr. Haligowski and other executive officers, as an executive's level
of responsibility increases, a greater portion of his or her potential total
compensation opportunity is based on the Company performance incentives rather
than on salary. Reliance on the Company performance causes greater variability
in the individual's total compensation from year to year. By varying annual and
long-term compensation and basing both on corporate performance, the Company
believes executive officers are encouraged to continue focusing on building
profitability and shareholder value.
Salaries. With respect to Mr. Haligowski's base salary, this Committee took
into account a comparison of salaries of chief executive officers of local
financial institutions and increased Mr. Haligowski's salary to $350,000 as of
January 1, 1998. Likewise, each executive officer's base salary was determined
utilizing financial institution compensation surveys.
Stock Option Awards. The Company's Employee Stock Option Plan is designed
to align a significant portion of the executive compensation program with
shareholder interests. The Employee Stock Option Plan provides for the granting
of stock-based awards. To date, the only type of award granted under the
Employee Stock Option Plan to executive officers and other key employees
consists of stock options.
Restricted Stock Awards. In 1996, the Committee adopted a policy relating
to the granting of restricted stock awards in lieu of a portion of the cash
bonus which would otherwise be paid to executive officers and certain key
employees under the Company's Recognition and Retention Plan (the "RRP") to be
carried out by the Compensation Committee. Under this policy, awards may be
granted to plan participants by the Committee utilizing objective criteria
adopted by the Compensation Committee and approved by the Board of Directors,
after taking into account the practices of other publicly traded financial
institutions and such other factors as deemed appropriate. In addition, under
the formula, no awards under the proposed RRP will be granted in any year in
which Imperial does not achieve a return on average assets of at least .50% and
remains adequately capitalized under FDIC rules. In 1997, the Company granted
3,870 RRP shares to Mr. Haligowski, and 2,198 RRP shares to the other named
executive officers, which RRP shares vested immediately.
In 1993, Section 162(m) was added to the Internal Revenue Code, the effect
of which is to eliminate the deductibility of compensation over $1 million, with
certain exclusions, paid to each of certain highly compensated executive
officers of publicly held corporations, such as the Company. Section 162(m)
applies to all remuneration (both cash and non-cash) that would otherwise be
deductible for tax years beginning on or after January 1, 1994, unless expressly
excluded. Because the current compensation of each of the Company's executive
officers is well below the $1 million threshold, the Company has not yet
considered its policy regarding this provision.
Jeffrey L. Lipscomb Hirotaka Oribe
10
<PAGE> 14
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock against
the cumulative total return of the SNL All Thrift Index and the Nasdaq Market
Index for the period commencing October 27, 1995 and ended December 31, 1997.
ITLA CAPITAL CORPORATION
TOTAL RETURN PERFORMANCE
<TABLE>
<CAPTION>
MEASUREMENT PERIOD ITLA CAPITAL NASDAQ - SNL THRIFT
(FISCAL YEAR COVERED) CORPORATION TOTAL U.S. INDEX
<S> <C> <C> <C>
10/27/95 100.00 100.00 100.00
12/31/95 107.69 102.87 106.82
6/30/96 129.67 116.45 111.47
12/31/96 131.87 126.52 139.19
6/30/97 142.86 141.60 180.43
12/31/97 169.23 155.26 236.83
</TABLE>
* Assumes $100 invested on October 27, 1995. Total return assumes reinvestment
of dividends.
CERTAIN TRANSACTIONS
During the year, the Company utilized the services of various law firms,
including the law firm of Tisdale & Nicholson. Sandor X. Mayuga, a director of
the Company, is a partner in that law firm. During 1997, Mr. Mayuga's firm
received approximately $12,475 in legal fees from the Company, which amount was
not in excess of 5% of such firm's revenues during 1997.
During the year, the Company utilized the services of a public relations
firm, which is owned by Director Lipscomb's spouse. During 1997, this public
relations firm received $62,657 of fees from the Company.
PROPOSAL II -- RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board of directors has renewed the Company's arrangement for Arthur
Andersen, LLP to be its independent auditors for the 1998 fiscal year, subject
to the ratification of the appointment by the Company's shareholders. A
representative of Arthur Andersen, LLP is expected to attend the Meeting to
respond to appropriate questions and will have an opportunity to make a
statement if he or she so desires. Ratification of the appointment of
independent auditors requires approval of a majority of the votes cast on the
proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN, LLP AS THE COMPANY'S
AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1998.
11
<PAGE> 15
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with the SEC
initial reports of ownership and reports of changes in ownership of common stock
and other equity securities of the Company. Officers, directors and greater than
10% shareholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1997, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10% beneficial owners were complied with.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than the matters described above in this Proxy Statement. However,
if any other matters should properly come before the Meeting, it is intended
that holders of the proxies will act in accordance with their best judgment.
In order to be eligible for inclusion in the Company's proxy materials for
next year's Annual Meeting of Shareholders, any shareholder proposal to take
action at such meeting must be received at the Company's executive office, at
888 Prospect Street, La Jolla, California 92037, no later than April 1, 1999.
Any such proposal shall be subject to the requirements of the proxy rules
adopted under the Securities Exchange Act of 1934, as amended.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitation by mail,
directors, officers and regular employees of the Company may solicit proxies
personally or by telegraph or telephone, without additional compensation. The
Company has retained Regan & Associates, Inc. to assist in the solicitation of
proxies for a fee estimated to be approximately $1,500, plus reasonable out of
pocket expenses.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ GEORGE W. HALIGOWSKI
George W. Haligowski
Chairman of the Board, President and
Chief Executive Officer
La Jolla, California
June 30, 1998
12
<PAGE> 16
REVOCABLE PROXY
ITLA CAPITAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS -- JULY 30, 1998
The undersigned hereby appoints the Board of Directors of ITLA Capital
Corporation (the "Company"), and its survivor, with full power of substitution,
to act as attorneys and proxies for the undersigned to vote all shares of common
stock of the Company which the undersigned is entitled to vote at the Annual
Meeting of Shareholders (the "Meeting"), to be held on Thursday, July 30, 1998
at the Radisson Hotel at 3299 Holiday Court, La Jolla, California, at 1:00 P.M.
(California Time), and at any and all adjournments thereof, as follows:
I. The election as directors of all nominees listed below (except as marked
to the contrary).
[ ] FOR [ ] VOTE WITHHELD
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE IN
THAT NOMINEE'S NAME BELOW.
SANDOR X. MAYUGA ROBERT R. REED NORVAL L. BRUCE
II. The ratification of the appointment of Arthur Andersen, LLP as
independent auditors for the Company for the fiscal year ending December 31,
1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their discretion, the proxies are authorized to vote on any other
business that may properly come before the Meeting or any adjournment thereof.
The Board of Directors recommends a vote "FOR" the listed proposals.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE PROPOSALS STATED. IF ANY OTHER BUSINESS IS PRESENTED
AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN THEIR
BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE MEETING.
<PAGE> 17
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
This proxy may be revoked at any time before it is voted by: (i) duly
executing a subsequent proxy relating to the same shares and delivering it to
the Secretary of the Company prior to the exercise of this proxy; (ii) filing
with the Secretary of the Company at or before the Meeting a written notice of
revocation bearing a later date than the proxy; or (iii) attending the Meeting
and voting in person (although attendance at the Meeting will not in and of
itself constitute revocation of a proxy). If this proxy is properly revoked as
described above, then the power of such attorneys and proxies shall be deemed
terminated and of no further force and effect.
The undersigned acknowledges receipt from the Company prior to the execution
of this Proxy, of Notice of the Meeting, a related Proxy Statement and the
Company's Annual Report to Shareholders for the fiscal year ended December 31,
1997.
Dated: , 1998
-------------
-------------------------
PRINT NAME OF SHAREHOLDER
-------------------------
SIGNATURE OF SHAREHOLDER
Please sign exactly as
your name appears above
on this card. When
signing as attorney,
executor, administrator,
trustee or guardian,
please give your full
title. If shares are held
jointly, each holder
should sign.
PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE
