<PAGE> 1
SCHEDULE 14A INFORMATION
(Rule 14a-101)
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] 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, SUITE 110
LA JOLLA, CALIFORNIA 92037
(619) 551-0511
------------------------
JUNE 21, 1999
Dear Fellow Shareholder:
On behalf of the Board of Directors and management of ITLA Capital
Corporation ("ITLA Capital"), we cordially invite you to attend the Annual
Meeting of Shareholders of ITLA Capital (the "Meeting"). The Meeting will be
held at 1:00 p.m., California time, on July 30, 1999 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 two directors of ITLA Capital, and (ii) the
ratification of the appointment of Arthur Andersen LLP as ITLA Capital's
independent auditors for the fiscal year ending December 31, 1999. Your Board of
Directors unanimously recommends that you vote FOR each of the Board of
Directors' nominees for election as directors and FOR the ratification of the
appointment of Arthur Andersen LLP as ITLA Capital's independent auditors for
the fiscal year ending December 31, 1999.
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 ITLA Capital
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, SUITE 110
LA JOLLA, CALIFORNIA 92037
(619) 551-0511
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 30, 1999
Notice is hereby given that the Annual Meeting of Shareholders of ITLA
Capital Corporation ("ITLA Capital") will be held at the Radisson Hotel at 3299
Holiday Court, La Jolla, California, on July 30, 1999 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 two (2) directors of ITLA Capital;
2. The ratification of the appointment of Arthur Andersen LLP as
independent auditors for ITLA Capital for the fiscal year ending
December 31, 1999; 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, eastern standard
time, on June 2, 1999 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
ITLA Capital 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 21, 1999
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE ITLA CAPITAL 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, SUITE 110
LA JOLLA, CALIFORNIA 92037
(619) 551-0511
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 30, 1999
This Proxy Statement is furnished in connection with the solicitation, on
behalf of the Board of Directors of ITLA Capital Corporation ("ITLA Capital"),
of proxies to be used at the Annual Meeting of Shareholders of ITLA Capital (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, 1999
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 21, 1999. Certain of the information provided herein relates to
Imperial Thrift and Loan Association ("Imperial Thrift and Loan") and ITLA
Funding Corporation ("ITLA Funding"), wholly-owned subsidiaries of ITLA Capital.
At the Meeting, shareholders of ITLA Capital are being asked to consider
and vote upon the election of two directors of ITLA Capital and the ratification
of the appointment of Arthur Andersen LLP as ITLA Capital's independent auditors
for the fiscal year ending December 31, 1999.
VOTING RIGHTS AND PROXY INFORMATION
All shares of ITLA Capital 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. ITLA Capital 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 ITLA Capital'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 ITLA Capital a subsequent proxy relating to the same shares
prior to the exercise of such proxy, (ii) filing with the Secretary of ITLA
Capital 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 ITLA Capital, at ITLA Capital
Corporation, 888 Prospect Street, Suite 110, La Jolla, California 92037.
<PAGE> 5
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Shareholders of record as of the close of business, eastern standard time
on June 2, 1999 will be entitled to one vote for each share then held. As of
that date, ITLA Capital had 7,166,484 shares of Common Stock outstanding.
The following table sets forth, as of June 2, 1999, certain information as
to (i) those persons who were known by management to be beneficial owners of
more than five percent of ITLA Capital 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 ITLA Capital as a group.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENT OF
BENEFICIAL OWNER OWNED CLASS
- ---------------- ------------ ----------
<S> <C> <C>
Thomson Horstmann & Bryant, Inc............................. 860,700(1) 12.01%
Park 80 West, Plaza Two
Saddle Brook, New Jersey 07663
Wellington Management Company, LLP.......................... 717,400(2) 10.10%
75 State Street
Boston, Massachusetts 02109
Franklin Mutual Advisors, Inc............................... 709,000(3) 9.89%
51 John F. Kennedy Parkway
Short Hills, New Jersey 07078
Dimensional Fund Advisors................................... 503,300(4) 7.02%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
Friedman, Billings, Ramsey Group, Inc. ..................... 485,170(5) 6.77%
1001 19th Street North
Arlington, Virginia 22209
George W. Haligowski........................................ 342,204(6) 4.58%
Chairman of the Board, Chief Executive Officer and
President of ITLA Capital
Norval L. Bruce............................................. 55,116(6) (7)
President and Chief Operating Officer of Imperial Thrift
and Loan
Michael A. Sicuro........................................... 43,837(6) (7)
Managing Director and Chief Financial Officer of ITLA
Capital
George J. Guarini........................................... 43,079(6) (7)
President and Chief Executive Officer of ITLA Funding
Steven C. Romelt............................................ 21,666(6) (7)
Senior Vice President and Chief Lending Officer of
Imperial Thrift and Loan
All directors and executive officers as a group
(11 persons).............................................. 569,935(6) 7.40%
</TABLE>
- ---------------
(1) As reported by Thomson Horstmann & Bryant, Inc. ("Thomson") on a Schedule
13G/A filed on or about January 29, 1999 with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended. Thomson
reported sole voting power as to 537,300 shares, sole dispositive power as
to 860,700 shares, shared voting power as to 10,700 shares, and shared
dispositive power as to none of the 860,700 shares covered by the report.
Management and the Board are not aware of any additional filings.
(2) As reported by Wellington Management Company, LLP ("Wellington") on a
Schedule 13G/A filed on or about February 10, 1999 with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended.
Wellington reported sole voting and sole dispostive powers as to none of the
shares, shared voting power as to 355,000 shares, and shared dispositive
power as to all of the 717,400 shares covered by the report. Management and
the Board are not aware of any additional filings.
(3) As reported by Franklin Resources, Inc. ("Franklin") on a Schedule 13G/A
filed on or about February 4, 1998 with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended. Franklin
reported sole voting and sole dispositive powers as to 709,000 shares, and
2
<PAGE> 6
shared voting and shared dispositive powers as to none of the 709,000 shares
covered by the report. Management and the Board are not aware of any
additional filings.
(4) As reported by Dimensional Fund Advisors ("Dimensional") on a Schedule 13D
filed on or about February 6, 1999 with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended.
Dimensional reported sole voting and sole dispositive powers as to 503,300
shares, and shared voting and shared dispositive powers as to none of the
503,300 shares covered by the report. Management and the Board are not aware
of any additional filings.
(5) As reported by Friedman, Billings, Ramsey Group, Inc. ("FBR") on a Schedule
13G/A filed on or about February 16, 1999 with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended. FBR
reported sole voting and sole dispositive powers as to 485,170 shares, and
shared voting and shared dispostive powers as to none of the 485,170 shares
covered by the report. Management and the Board are not aware of any
additional filings.
(6) Includes shares held directly, as well as an aggregate of 536,167 shares
which are subject to immediately exercisable options and options exercisable
within 60 days of June 2, 1999, under ITLA Capital's Stock Option Plan,
shares held in retirement accounts or by certain members of the named
individual's 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 dispositive power. The named individuals
of the group held exercisable options and options exercisable within 60 days
of June 2, 1999 as follows: Chairman Haligowski -- 313,334 shares; Director
Lipscomb -- 8,000 shares; Director Mayuga -- 8,000 shares; Director
Oribe -- 8,000 shares; Director Reed -- 8,000 shares; Norval L.
Bruce -- 53,334 shares; Michael A. Sicuro -- 43,333 shares; George J.
Guarini -- 41,667 shares; and Steven C. Romelt -- 21,666 shares.
(7) Less than one percent.
PROPOSAL I -- ELECTION OF DIRECTORS
ITLA Capital's Board of Directors is composed of six members. One-third of
the directors are scheduled to be elected annually. Directors of ITLA Capital
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
ITLA Capital's Board of Directors, including the directors' terms of office. The
composition of the Board of Directors of ITLA Capital and its subsidiary,
Imperial Thrift and Loan 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
BENEFICIALLY
POSITIONS HELD IN ITLA DIRECTOR TERM TO OWNED AT PERCENT OF
NAME AGE(1) CAPITAL SINCE EXPIRE JUNE 2, 1999(2) CLASS
- ---- ------ ---------------------- -------- ------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
NOMINEES
George W.
Haligowski.......... 44 Chairman of the Board, 1996 2002 342,204 4.58%
President and Chief
Executive Officer
Hirotaka Oribe........ 64 Director 1996 2002 8,200 (3)
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY
POSITIONS HELD IN ITLA DIRECTOR TERM TO OWNED AT PERCENT OF
NAME AGE(1) CAPITAL SINCE EXPIRE JUNE 2, 1999(2) CLASS
- ---- ------ ---------------------- -------- ------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
DIRECTORS CONTINUING IN
OFFICE
Norval L. Bruce....... 57 Director 1997 2000 55,116 (3)
Jeffrey L. Lipscomb... 44 Director 1996 2000 8,000 (3)
Sandor X. Mayuga...... 50 Director 1996 2001 8,800 (3)
Robert R. Reed........ 62 Director 1996 2001 8,200 (3)
</TABLE>
- ---------------
(1) As of June 2, 1999.
(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, 313,334 shares, 8,000 shares, 8,000 shares, 53,334
shares, 8,000 shares, and 8,000 shares, which are subject to currently
exercisable options and options exercisable within 60 days of June 2, 1999,
under ITLA Capital's stock option plans.
(3) Less than 1%.
The business experience of each of the directors of ITLA Capital and
Imperial Thrift and Loan 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 ITLA Capital since inception, and of Imperial Thrift
and Loan from 1992 until October 1997. He has served as Chairman of the Board
and Chief Executive Officer of Imperial Thrift and Loan since 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 to 1990) and Prudential-Bache Securities (1983 to
1988), and by Avco Financial Services as Regional Director of its Japanese
branch operations (1976 to 1981), as Training Coordinator for Avco Thrift and
Loan (1976) and as a Branch Manager (1974 to 1976).
Hirotaka Oribe is a licensed architect with international experience in
real estate development and urban planning. Since 1993, Mr. Oribe has served as
an advisor 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 multi-family 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.
Sandor X. Mayuga is a member of the State Bar of California, and has been a
member of the law firm of Tisdale & Nicholson since 1994. He conducted his own
law practice from 1983 to 1994 and was a partner in the Financial Institutions
Department of Finley, Kumble, Wagner, Heine, Underberg, Manly & Casey, a New
York-based national law firm, from 1980 to 1983. Previously, he served as
Assistant General Counsel of Hunt-Wesson Foods, Inc., a subsidiary of Norton
Simon, Inc., and was associated with two large regional law firms in Los Angeles
County. Since 1980, Mr. Mayuga's practice has focused on the representation of
financial institutions and other finance-related businesses in corporate,
transactional and regulatory matters.
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.
Norval L. Bruce has served as President and Chief Operating Officer of
Imperial Thrift and Loan since October 1997, and previously was the Executive
Vice President and Chief Credit Officer of Imperial Thrift and Loan from 1990 to
October 1997. Mr. Bruce is also a director of ITLA Capital, Imperial Thrift and
Loan
4
<PAGE> 8
and ITLA Funding. From 1988 to 1989, he served as Executive Vice President and
Chief Credit Officer of Security Pacific Bank, Nevada. He 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.
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 ITLA Capital are generally held as
required. During fiscal 1998 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 ITLA Capital held during 1998 and the total number of meetings held
by all Board committees on which any such director served during 1998. The Board
of Directors of ITLA Capital has standing Executive, Audit and Compensation
Committees, the function and composition of which are set forth below.
ITLA Capital'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 ITLA Capital's Bylaws,
nominations must be delivered in writing to the Secretary of ITLA Capital at
least 60 days prior to the date of the annual meeting.
Executive Committee. The primary responsibilities of the Executive
Committee are to advise ITLA Capital'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 thirteen meetings in
fiscal 1998.
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 ITLA Capital'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 ITLA Capital's system of
internal controls. The members of the Audit Committee are Messrs. Lipscomb and
Mayuga. The Audit Committee held four meetings in fiscal 1998.
Compensation Committee. The primary responsibilities of the Compensation
Committee are to establish and review the compensation, both direct and
indirect, to be paid to ITLA Capital'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 ITLA Capital's policies relating to executive perquisites; and to
oversee ITLA Capital's employee benefit plans. The members of the Compensation
Committee are Messrs. Lipscomb and Oribe. The Compensation Committee met twice
in fiscal 1998.
DIRECTORS COMPENSATION
Directors Fees. Each non-employee director was paid a monthly fee during
1998 of $1,800 for serving on ITLA Capital'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. ITLA Capital 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 ITLA Capital 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.
5
<PAGE> 9
For dividends paid with respect to ITLA Capital'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 ITLA Capital 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. ITLA Capital 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 ITLA
Capital to attract, retain and motivate directors and further align their
interests with those of ITLA Capital.
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 1998, the Compensation Committee, which acts as the compensation
committee of ITLA Capital and its subsidiaries, was comprised of Messrs.
Lipscomb and Oribe.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation for
services in all capacities to ITLA Capital and its subsidiaries for the years
ended December 31, 1998, 1997 and 1996 of the Chief Executive Officer and the
named executive officers of ITLA Capital and its subsidiaries with salary and
bonus greater than $100,000 for the year ended December 31, 1998 (the "named
executive officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------- --------------------
RESTRICTED
STOCK ALL OTHER
SALARY BONUS OPTIONS AWARDS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($)(9) (#)(2) ($)(10) ($)
- --------------------------- ---- -------- -------- ------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
George W. Haligowski.................... 1998 $345,765 $344,144 45,000 $111,717 $62,751(3)
Chairman of the Board, President 1997 $299,250 $374,050 20,000 111,717 $59,716(3)
and Chief Executive Officer 1996 $293,316 $ 81,545(1) -- -- $65,904(3)
Norval L. Bruce......................... 1998 $185,832 $ 71,251 30,000 33,849 $ 7,400(4)
President and Chief Operating 1997 $131,670 $ 75,600 5,000 33,849 $ 7,780(4)
Officer of Imperial Thrift and Loan 1996 $123,500 -- -- -- $ 8,277(4)
Michael A. Sicuro....................... 1998 $167,979 $ 78,375 25,000 32,697 $ 6,036(5)
Managing Director and 1997 $156,188 $ 62,327 15,000 32,697 $ 5,933(5)
Chief Financial Officer of ITLA 1996 $ 68,521(8) $ -- 25,000 -- $ 7,778(5)
Capital
George J. Guarini....................... 1998 $178,667 $ 43,750 5,000 34,623 $ 6,552(6)
President and Chief Executive 1997 $177,625 $ 88,200 -- 34,623 $ 6,386(6)
Officer of ITLA Funding 1996 $119,334 $ -- -- -- $11,495(6)
Steven C. Romelt........................ 1998 $138,750 $ 75,000 15,000 27,081 $14,805(7)
Senior Vice President and Chief 1997 $114,583 $ 9,508 25,000 27,081 $12,997(7)
Lending Officer of Imperial 1996 $ 16,346(8) $ -- -- -- $ 1,558(7)
Thrift and Loan
</TABLE>
- ---------------
(1) $55,000 of the 1996 bonus was deferred at the election of the named officer
under ITLA Capital'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.
6
<PAGE> 10
(3) Consists of (a) $5,114 in auto related benefits, (b) $30,000 in
supplemental housing payments, (c) $7,290 in life insurance premiums, (d)
$4,800 in employer contributions to ITLA Capital's 401(k) plan and (e)
$15,547 in preferential interest on employee savings accounts in 1998. The
respective amounts were $4,288, $26,600, $7,100, $4,800 and $16,928 in 1997
and $21,000, $22,850, $6,950, $4,500 and $10,604 in 1996.
(4) Consists of (a) $2,139 in auto related benefits, (b) $136 in life insurance
premiums, (c) $4,800 in employer contributions to ITLA Capital's 401(k)
plan and (d) $325 in preferential interest on employee savings accounts in
1998. The respective amounts were $2,296, $144, $4,800 and $540 in 1997 and
$3,488, $576, $3,705 and $548 in 1996.
(5) Consists of (a) $1,236 of auto related benefits, (b) $4,800 in employer
contributions to ITLA Capital's 401(k) plan and (c) $0 in life insurance
benefits in 1998. The respective amounts were $1,133, $4,800 and $0 in 1997
and $5,600, $2,043 and $132 in 1996.
(6) Consists of (a) $1,429 of auto related benefits, (b) $4,800 in employer
contributions to ITLA Capital's 401(k) plan and (c) $322 of preferential
interest on employee savings accounts in 1998. The respective amounts were
$1,013, $4,800 and $573 in 1997 and $10,200 $1,295 and $0 in 1996.
(7) Consists of (a) $9,000 in auto related benefits, (b) $0 in life insurance
premiums, (c) $4,800 in employer contributions to ITLA Capital's 401(k)
plan and (d) $1,005 in preferential interest on employee savings accounts
in 1998. The respective amounts were $9,000, $4, $3,993 and $0 in 1997 and
$1,500, $58, $0 and $0 in 1996.
(8) Partial year.
(9) Includes ITLA Capital stock issued under the Recognition and Retention Plan
in 1997 at a price of $14.50 per share.
(10) Includes ITLA Capital stock allocated to the Long-Term Supplemental
Executive Retirement Plan under the Recognition and Retention Plan
previously approved by the shareholders. Amounts have not been earned or
vested. No cash or stock has been distributed to the named officers.
EMPLOYMENT AGREEMENT
ITLA Capital has entered into an employment agreement with Mr. Haligowski.
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 ITLA
Capital may terminate Mr. Haligowski "for cause," as defined in the employment
agreement. In the event Mr. Haligowski is involuntarily terminated as defined in
the employment agreement, including following a change of control as defined in
the employment agreement, Mr. Haligowski will be entitled to receive during the
remaining term of the agreement his base salary calculated at the highest annual
rate during the three years prior to his involuntary termination (or for 36
months following the date of termination due to a change in control) and the
average amount of cash bonus and incentive compensation paid for the two years
prior to his involuntary termination, if any, the continuation of all employment
related benefits for the 36 months following the date of termination and the
immediate vesting of any stock options and restricted stock awards previously
granted and outstanding. As a result of a change of control, Mr. Haligowski will
also be retained as a consultant for an eighteen month period following the
change in control at a monthly consulting fee equal to 75% of his base salary
and an additional contribution to his account in ITLA Capital's Supplemental
Executive Retirement Plan equal to 3.75 times his base salary. 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. In addition, ITLA Capital shall maintain health, dental and life
insurance benefits for the three years following an involuntary termination and
transfer title to the ITLA Capital owned vehicle currently used by Mr.
Haligowski.
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<PAGE> 11
CHANGE OF CONTROL AGREEMENTS
ITLA Capital has entered into change of control agreements with Messrs.
Bruce, Sicuro, Guarini and Romelt. 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 24 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 for a period of eighteen months
and a pro rata portion of his bonus from the previous year. In addition ITLA
Capital shall maintain health, dental and life insurance benefits for the next
18 months for each officer and transfer title to the ITLA Capital owned vehicle
currently used by the officer or, in the event the officer receives a monthly
cash car allowance in lieu of a ITLA Capital vehicle, ITLA Capital shall pay an
amount equal to 18 times the monthly allowance. The annual base salary for
Messrs. Bruce, Sicuro, Guarini and Romelt is currently $182,000, $175,000,
$179,000, and $145,000, respectively.
Both the employment agreement and the change of control agreements also
will provide that to the extent any payments made may be considered excess
parachute payments under Section 280G of the Internal Revenue Code that are
subject to excise tax, ITLA Capital shall pay an additional amount needed to
ensure that the amount of payments and value of benefits received equals the
same amount in the absence of any excise tax.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (SERP)
The SERP provides that the Compensation Committee may make restricted stock
awards under ITLA Capital's Recognition and Retention Plan (RRP) on a tax
deferred basis through the SERP. The SERP provides that Mr. Haligowski shall
receive an allocation annually, subject to the performance terms of the RRP, a
restricted stock award equal to one-third of his base salary and all other
participants shall receive an award equal to one-fifth of base salary subject to
the approval of the Compensation Committee, which may also allocate a greater,
lesser or no award in its discretion. For this purpose, each share of common
stock has been valued at $9.00 per share, the fair market value of the common
stock on the date of transfer to the SERP. A participant shall only have a
vested right to amounts allocated to his account if the participant is employed
on the last day of a three year vesting cycle, in the event of a change of
control (as defined in the SERP), or upon normal retirement, death or
disability. The last day of the first vesting cycle is December 31, 1999.
OPTION GRANTS FOR 1998
The following table sets forth certain information concerning the number
and value of stock options grants for the named executive officers in 1998. No
stock appreciation rights have been granted pursuant to the Stock Option Plan.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
------------------------ AT ASSUMED ANNUAL RATES
% OF TOTAL OF STOCK PRICE
OPTIONS EXERCISE APPRECIATION FOR OPTION
OPTIONS GRANTED TO OR BASE TERM
GRANTED EMPLOYEES PRICE EXPIRATION ---------------------------
NAME (#) IN FISCAL YEAR ($/SH) DATE 5% 10%
- ---- ------- -------------- -------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
George W. Haligowski............... 45,000 22.5% $18.00 2/02/08 $509,405 $1,290,931
Norval L. Bruce.................... 30,000 15.0% $18.00 2/02/08 $339,603 $ 860,621
Michael A. Sicuro.................. 25,000 12.5% $18.00 2/02/08 $283,003 $ 717,184
George J. Guarini.................. 5,000 2.5% $18.00 2/02/08 $ 56,601 $ 143,437
Steven C. Romelt................... 15,000 7.5% $18.00 2/04/08 $169,802 $ 430,310
</TABLE>
8
<PAGE> 12
The following table sets forth certain information concerning the number
and value of stock options at December 31, 1998 held by the named executive
officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
OPTION VALUES AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES FY-END (#) FY-END ($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME (#) ($) (#) (#) ($) ($)
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
George W. Haligowski.......... -- N/A 291,667 58,333 $1,464,792 $ 8,333
Norval L. Bruce............... -- N/A 41,667 33,333 $ 206,042 $ 2,083
Michael A. Sicuro............. -- N/A 21,667 43,333 $ 15,625 $12,500
George J. Guarini............. -- N/A 40,000 5,000 $ 205,000 $ --
Steven C. Romelt.............. -- N/A 8,333 31,667 $ 5,208 $10,417
</TABLE>
- ---------------
(1) The difference between the aggregate option exercise price and the closing
price of $15.125 of the underlying shares at December 31, 1998.
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,
ITLA Capital has developed and implemented compensation policies, plans and
programs which seek to enhance the profitability of ITLA Capital, and thus
shareholder value, by closely aligning the financial interests of ITLA Capital's
employees, including its Chief Executive Officer and ITLA Capital's other senior
management, with those of its shareholders.
The executive compensation program of ITLA Capital 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 ITLA Capital to compete for and
retain talented executives who are critical to ITLA Capital'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.
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 restricted stock awards, 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 ITLA Capital performance incentives rather
than on salary. Reliance on ITLA Capital performance causes greater variability
in the individual's total compensation from year to year. By varying annual and
long-term compensation and basing
9
<PAGE> 13
both on corporate performance, ITLA Capital 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 maintained Mr. Haligowski's salary at $350,000 as of
January 1, 1999. Likewise, each executive officer's base salary was determined
utilizing financial institution compensation surveys.
Stock Option Awards. ITLA Capital'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. ITLA Capital has adopted the Recognition and
Retention Plan ("RRP"), the purpose of which is to promote the long-term
interests of ITLA Capital and its shareholders by providing a means for
attracting and retaining officers and employees of ITLA Capital and its
affiliates. Under the RRP, awards of restricted shares of ITLA Capital's common
stock may be made to employees as additional long-term incentive compensation.
Every employee of ITLA Capital is eligible to be considered for the grant of
awards under the RRP. The maximum number of shares of common stock which may be
issued pursuant to the RRP is 300,000 shares over the ten year life of the plan.
No RRP shares may be granted in any fiscal year in which the Imperial Thrift and
Loan fails to maintain an "adequately capitalized" designation under the FDIC
regulations and fails to achieve a return on average assets of at least 50 basis
points for the fiscal year. The RRP is administered by the Compensation
Committee of the Board which has a wide degree of flexibility, within the
provisions of the RRP, in determining the terms and conditions of awards and the
number of shares to be issued pursuant thereto.
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 ITLA Capital. 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 ITLA Capital's executive
officers is below the $1 million threshold, ITLA Capital 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 ITLA Capital'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, 1998.
<TABLE>
<CAPTION>
ITLA CAPITAL CORPORATION NASDAQ - TOTAL U.S. SNL ALL THRIFT 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
12/31/96 131.87 126.50 139.19
12/31/97 169.23 155.19 236.83
12/31/98 132.97 218.16 208.30
</TABLE>
- ---------------
* Assumes $100 invested on October 27, 1995. Total return assumes reinvestment
of dividends.
CERTAIN TRANSACTIONS
During the year, ITLA Capital utilized the services of Tisdale & Nicholson.
Director Mayuga is a partner in that law firm. During 1998, this law firm
received $4,857 in legal fees from ITLA Capital, which was not in excess of 5%
of the firm's total revenues during 1998.
During the year, ITLA Capital utilized the services of a public relations
firm which is owned by Director Lipscomb's spouse. During 1998, this public
relations firm received $35,873 in fees from ITLA Capital.
PROPOSAL II -- RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has renewed ITLA Capital's arrangement for Arthur
Andersen LLP to be its independent auditors for the 1999 fiscal year, subject to
the ratification of the appointment by ITLA Capital'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 ITLA CAPITAL'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1999.
11
<PAGE> 15
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in ITLA Capital's proxy materials for
next year's Annual Meeting of Stockholders, any stockholder proposal to take
action at such meeting must be received at ITLA Capital's executive office at
888 Prospect Street, Suite 110, La Jolla, California 92037 no later than
February 22, 2000. Any such proposal shall be subject to the requirements of the
proxy rules adopted under the Securities Exchange Act of 1934, as amended.
Otherwise, any stockholder proposal to take action at such meeting must be
received at ITLA Capital's executive office at 888 Prospect Street, Suite 110 La
Jolla, California 92037 by June 1, 2000; provided, however, that in the event
that the date of the annual meeting is held before July 10, 2000 or after
September 28, 2000, the stockholder proposal must be received not later than the
close of business on the later of the 60th day prior to such annual meeting or
the tenth day following the day on which notice of the date of the annual
meeting was mailed or public announcement of the date of such meeting was first
made. All stockholder proposals must also comply with ITLA Capital's by-laws and
Delaware law.
OTHER MATTERS
As of the date of this Proxy Statement, 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.
The cost of solicitation of proxies will be borne by ITLA Capital. ITLA
Capital 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 ITLA Capital may solicit proxies
personally or by telegraph or telephone, without additional compensation. ITLA
Capital 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 21, 1999
12
<PAGE> 16
REVOCABLE PROXY
ITLA CAPITAL CORPORATION
ANNUAL MEETING OF STOCKHOLDERS -- JULY 30, 1999
The undersigned hereby appoints the Board of Directors of ITLA Capital
Corporation ("ITLA Capital"), 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 ITLA Capital which the undersigned is entitled to vote at the Annual
Meeting of Stockholders (the "Meeting"), to be held on July 30, 1999 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.
GEORGE W. HALIGOWSKI HIROTAKA ORIBE
II. The ratification of the appointment of Arthur Andersen LLP as
independent auditors for ITLA Capital for the fiscal year ending December 31,
1999.
[ ] 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 ITLA Capital prior to the exercise of this proxy; (ii) filing
with the Secretary of ITLA Capital 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 ITLA Capital prior to the
execution of this Proxy, of Notice of the Meeting, a related Proxy Statement and
ITLA Capital's Annual Report to Stockholders for the fiscal year ended December
31, 1998.
Dated: ------------------
-------------------------
PRINT NAME OF STOCKHOLDER
-------------------------
SIGNATURE OF STOCKHOLDER
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
