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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] 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 Section 240.14a-11(c) or Section 240.14a-12
BANK PLUS CORPORATION
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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BANK PLUS CORPORATION
4565 COLORADO BOULEVARD
LOS ANGELES, CALIFORNIA 90039
March 31, 1997
Dear Stockholder:
You are cordially invited to attend the 1997 annual meeting of stockholders
(the "Annual Meeting") of Bank Plus Corporation (the "Company"). The Annual
Meeting will be held on Wednesday, April 30, 1997, at 11:00 a.m. at the
corporate headquarters of the Company at 4565 Colorado Boulevard, Los Angeles,
California 90039. At the Annual Meeting, you will be asked (i) to elect three
persons to the Board of Directors of the Company; (ii) to approve certain
amendments to and a restatement of the Company's 1996 Stock Option Plan; (iii)
to ratify the appointment of Deloitte & Touche LLP as the Company's
independent public accountants for 1997; and (iv) to transact such other
business as may properly come before the Annual Meeting. Following the
meeting, management will be pleased to answer your questions about the
Company.
Your Board of Directors has approved the nominees for election as set forth
in the accompanying Proxy Statement as being in the best interests of the
Company and recommends that you vote (1) FOR the persons it has nominated for
election to the Board of Directors, (2) FOR approval of the amendments to and
restatement of the 1996 Stock Option Plan, and (3) FOR ratification of the
selection of Deloitte & Touche LLP as the Company's independent public
accountants.
I HOPE YOU WILL BE ABLE TO ATTEND THIS MEETING IN PERSON. WHETHER OR NOT YOU
EXPECT TO ATTEND, I URGE YOU TO SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD
SO THAT YOUR SHARES WILL BE REPRESENTED.
Enclosed herewith is a copy of the Company's Annual Report on Form 10-K,
including financial statements for the year ended December 31, 1996, as filed
with the Securities and Exchange Commission.
If you have any questions, please call Neil L. Osborne, the Company's
Investor Relations Officer, at (818) 549-3116. I look forward to seeing you on
Wednesday, April 30, 1997.
Sincerely,
/s/ Norman Barker, Jr.
Norman Barker, Jr.
Chairman of the Board
<PAGE>
BANK PLUS CORPORATION
4565 COLORADO BOULEVARD LOS ANGELES, CALIFORNIA 90039
----------------
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
----------------
The 1997 annual meeting of stockholders (the "Annual Meeting") of Bank Plus
Corporation (the "Company") will be held at the corporate headquarters of the
Company at 4565 Colorado Boulevard, Los Angeles, California 90039 on Wednesday,
April 30, 1997, at 11:00 a.m. local time for the following reasons:
1. To elect three persons to the Board of Directors of the Company;
2. To approve certain amendments to and a restatement of the Company's
1996 Stock Option Plan;
3. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent public accountants for 1997; and
4. To transact such other business as may properly come before the Annual
Meeting or any or all adjournments or postponements thereof.
Only holders of Common Stock, $0.01 par value, of record at the close of
business on March 26, 1997 will be entitled to notice of and to vote at the
Annual Meeting. A list of such stockholders will be open for examination by any
stockholder at the meeting and for a period of ten days prior to the date of
the meeting during ordinary business hours at the corporate headquarters of the
Company.
EACH HOLDER OF COMMON STOCK, EVEN THOUGH HE OR SHE MAY NOW PLAN TO ATTEND THE
ANNUAL MEETING, IS REQUESTED TO SIGN AND DATE THE ENCLOSED PROXY CARD AND TO
RETURN IT WITHOUT DELAY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. Any stockholder
present at the meeting may withdraw his or her proxy and vote personally on
each matter brought before the meeting.
By Order of the Board of Directors,
/s/ Godfrey B. Evans
Godfrey B. Evans
Corporate Secretary
March 31, 1997
<PAGE>
BANK PLUS CORPORATION
4565 COLORADO BOULEVARD
LOS ANGELES, CALIFORNIA 90039
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PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 30, 1997
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SOLICITATION AND REVOCABILITY OF PROXIES
This Proxy Statement (the "Proxy Statement") is furnished in connection with
the solicitation of proxies by the Board of Directors of Bank Plus Corporation
("Bank Plus" or the "Company") for use at the 1997 Annual Meeting of
Stockholders of Bank Plus to be held at the time and place, and for the
purposes, set forth in the accompanying Notice of Annual Meeting of
Stockholders (the "Annual Meeting"). It is anticipated that the Proxy
Statement will first be mailed to the holders of the Company's common stock,
$0.01 par value (the "Common Stock"), on or about March 31, 1997.
A person giving the enclosed proxy has the power to revoke it at any time
before it is exercised by (1) attending the Annual Meeting and voting in
person, (2) executing and delivering a proxy for the Annual Meeting bearing a
later date, or (3) delivering written notice of revocation to the Secretary of
the Company prior to the Annual Meeting.
The expense of preparing, assembling, printing and mailing the Notice of
Annual Meeting of Stockholders, this Proxy Statement and the materials used in
the solicitation of proxies for the Annual Meeting will be borne by the
Company. Following the mailing of this Proxy Statement, solicitation of
proxies may be made by mail, or by personal calls upon, or telephonic or
electronic communications with, stockholders or their personal representatives
by directors, officers, financial advisors and employees of the Company, none
of whom will be specially compensated for such services. Although there is no
formal agreement to do so, the Company may reimburse banks, brokerage houses
and other custodians, nominees and fiduciaries for their reasonable expenses
in forwarding the Proxy Statement to stockholders whose Common Stock is
entitled to be voted at the Annual Meeting and is held of record by these
entities. In addition, the Company has retained D.F. King & Co., Inc. ("D.F.
King") to assist in the solicitation of proxies. D.F. King may solicit proxies
by mail, telephone, telegraph and personal solicitation, and will request
brokerage houses and other nominees, fiduciaries, and custodians nominally
holding shares of Common Stock of record to forward proxy soliciting material
to the beneficial owners of such shares. For these services, the Company will
pay D.F. King a fee estimated not to exceed $3,000, plus reimbursement for
reasonable out-of-pocket expenses.
VOTING SECURITIES
The Board of Directors has fixed the close of business on March 26, 1997, as
the record date for the determination of stockholders entitled to receive
notice of, and vote at, the Annual Meeting (the "Record Date"). The Company is
authorized to issue 78.5 million shares of Common Stock, which is the only
class of the Company's capital stock entitled to vote at the Annual Meeting.
On the Record Date, 18,245,265 shares of Common Stock were outstanding and
entitled to vote.
1
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Each share of Common Stock entitles the record holder on the Record Date to
one vote on each proposal to be voted on at the Annual Meeting. A majority of
the outstanding shares of Common Stock entitled to vote shall constitute a
quorum. Abstentions, including those stockholders who attend the Annual
Meeting but abstain from voting, and those stockholders who return their proxy
cards to the Company indicating abstention from voting, will be treated as
shares present and entitled to vote for purposes of determining the presence
of a quorum. If a broker indicates on the proxy that it does not have
discretionary authority as to certain shares to vote on a particular matter,
those shares will not be considered as present and entitled to vote with
respect to that matter. Directors will be elected (Proposal Number 1) by a
plurality of the votes of the shares of Common Stock present in person or
represented by proxy and entitled to vote on the election of directors.
Approval of the amendments to and restatement of the 1996 Stock Option Plan
(Proposal Number 2), ratification of the appointment of the Company's
independent public accountants (Proposal Number 3) and any stockholder
proposals that properly come before the Annual Meeting require the affirmative
vote of a majority of the shares of Common Stock present, in person or
represented by proxy, at the Annual Meeting.
PROPOSAL NUMBER 1:
ELECTION OF DIRECTORS
At the Annual Meeting, stockholders of Bank Plus will be asked to vote on
the election of three directors. The three nominees receiving the highest
number of votes at the Annual Meeting will be elected directors of the
Company. To fill these three board positions, the enclosed proxy, unless
indicated to the contrary, will be voted FOR the nominees listed below and on
the enclosed proxy card.
Set forth below are the names of the persons nominated by the Board of
Directors for election as directors at the Annual Meeting. Your proxy, unless
otherwise indicated, will be voted FOR the election of Messrs. Burnside and
Sullivan and Ms. Lee to serve for terms of three years. For a description of
each nominee's principal occupation and business experience during the last
five years and present directorships, please see the following section
entitled "Directors and Executive Officers--Directors."
Bank Plus has been advised by each nominee named in this Proxy Statement
that he or she is willing to be named as such herein and is willing to serve
as a director if elected. However, if any of the nominees should be unable to
serve as a director, the enclosed proxy will be voted in favor of the
remainder of those nominees not opposed by the stockholder on such proxy and
may be voted for a substitute nominee selected by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF MESSRS.
BURNSIDE AND SULLIVAN AND MS. LEE AS DIRECTORS OF BANK PLUS.
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DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS
The following table sets forth the names and certain information with
respect to the three persons nominated by the Board of Directors for election
as directors of Bank Plus at the Annual Meeting and each other director of
Bank Plus who will continue to serve as a director after the Annual Meeting.
Except for Mr. Sullivan, each nominee and each director listed below served on
the board of directors of Fidelity Federal Bank, A Federal Savings Bank
("Fidelity" or the "Bank") prior to becoming a director of Bank Plus. Fidelity
is a wholly-owned subsidiary of Bank Plus, and Bank Plus became the holding
company for Fidelity on May 16, 1996 (the "Reorganization").
<TABLE>
<CAPTION>
NOMINEES FOR FOR TERM DIRECTOR
DIRECTOR AGE TO EXPIRE SINCE(1) POSITIONS HELD WITH BANK PLUS
------------ --- --------- -------- -----------------------------
<S> <C> <C> <C> <C>
Waldo H. Burnside 68 2000 1994 Director
Lilly V. Lee 66 2000 1994 Director
Mark Sullivan III 55 2000 1997 Director
CONTINUING DIRECTORS
- --------------------
Norman Barker, Jr. 74 1998 1994 Chairman and Director
Richard M. Greenwood 49 1999 1992 Vice Chairman, President,
Chief Executive Officer
and Director
George Gibbs, Jr. 66 1999 1994 Director
Gordon V. Smith 64 1998 1996 Director
</TABLE>
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(1) For periods prior to May 16, 1996, the relevant director served as a
director of Fidelity.
Set forth below is certain information concerning the principal occupation
and business experience of each of the persons listed in the table above
during the past five years.
NOMINEES FOR DIRECTOR
MS. LEE is the Chairman of the Board of Lilly International, Inc. and a
director of Fidelity and Gateway Investment Services, Inc., a wholly-owned
subsidiary of the Company ("Gateway"). Ms. Lee currently serves as Chairman of
the Board of the Thrift Depositor Protection--Regional Oversight Board and on
the boards of a number of political, educational, charitable and industry
organizations.
MR. BURNSIDE served as President of Carter Hawley Hale Stores, Inc. until
his retirement in 1991. He was a director of both Bank of America, N.A. and
BankAmerica Corp. from 1992 until 1993. Mr. Burnside currently serves as a
director of the Automobile Club of Southern California and as a member of the
boards of a number of educational, charitable, and municipal service
organizations.
MR. SULLIVAN is a co-founder of the Small Business Funding Corporation, a
company providing a secondary market facility for the purchase and
securitization of non-guaranteed small business loans, and has served as its
President since 1996. From 1989 through 1996, Mr. Sullivan practiced law in
Washington, D.C., advising senior management of financial institutions on
legal and policy matters. Mr. Sullivan was elected to the Board on November
20, 1996 to replace Mel Goldsmith, who retired from the Board.
CONTINUING DIRECTORS
MR. BARKER was Chairman of the Board and Chief Executive Officer of First
Interstate Bank of California until his retirement in 1986. He has served as
the Chairman of the Board of Pacific American Income Shares, a bond fund,
since 1974. Mr. Barker also serves as a director of TCW Convertible
Securities, Inc., American Health Properties, Inc., and ICN Pharmaceuticals,
Inc.
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MR. GREENWOOD joined Fidelity in June 1992 as President and Chief Executive
Officer and served as Chairman of the Board from June 1992 to August 1994.
Since the Reorganization in May 1996, Mr. Greenwood has served as Vice
Chairman, President and Chief Executive Officer of Bank Plus, and as Chairman
of the Board and Chief Executive Officer of Fidelity. Prior to joining
Fidelity, he served as Chief Financial Officer of CalFed, Inc. and California
Federal Bank from 1990 to 1992. Mr. Greenwood also served as President and
Chief Executive Officer and a director of Citadel Holding Corporation
("Citadel") from June 1992 to August 1994.
MR. GIBBS has been a principal and senior vice president of Johnson &
Higgins, an insurance agency, since 1987. Prior to joining Johnson & Higgins
in 1987, he was with Stewart Smith West for 33 years where he was the founding
director of Associated International Insurance Company and Calvert Insurance
Company, two insurance companies organized by the Stewart Smith West
organization. Mr. Gibbs currently serves as a director of Bank Plus and
Fidelity, on the board of First Alliance Corporation and on the boards of a
number of educational and charitable trusts and foundations. Johnson & Higgins
is the Company's insurance broker and a consultant to the Company on certain
health benefit matters. See "Related Party Transactions--Insurance
Commissions" and "--First Alliance Transaction."
MR. SMITH is chairman, founder and principal stockholder of Miller & Smith,
Inc., a diversified real estate investment and construction company in the
Washington, D.C. area. Mr. Smith also serves as a director of Crown North
Corporation, a real estate management company located in Columbus, Ohio. From
1987 until 1993, he served as Chairman of the Board, Chief Executive Officer
and director of Providence Savings and Loan Association in Virginia.
COMMITTEES OF THE BOARD OF DIRECTORS
In 1996 Bank Plus had standing Executive, Audit and Compensation/Stock
Option Committees. The principal responsibilities of these committees and the
number of meetings of each held in 1996, both by Bank Plus and by Fidelity
prior to the Reorganization, appear below.
Executive Committee. Subject to the authority conferred on the Company's
other committees, the Executive Committee is empowered to exercise all
authority in lieu of the Board which may be exercised by a committee of the
Board pursuant to applicable law. In January 1996, the responsibilities of the
Nominating Committee were assumed by the Executive Committee. The Executive
Committee held six meetings in 1996. Any stockholder who wishes to recommend a
prospective nominee for the Board of Directors for the Executive Committee's
consideration may do so by giving the candidate's name and qualifications to
the Secretary of the Company, 4565 Colorado Boulevard, Los Angeles, California
90039. The members of the Executive Committee are Mr. Greenwood, Chairman, and
Messrs. Barker and Gibbs and Ms. Lee.
Audit Committee. The Audit Committee is a joint committee with Fidelity's
Audit Committee. Its responsibilities are generally to assist the Board and
Fidelity's Board in fulfilling their legal and fiduciary responsibilities
relating to accounting, audit and financial reporting policies and practices
of the Company and its subsidiaries. The Audit Committee also, among other
things, recommends to the Board the engagement of the Company's independent
accountants; monitors and reviews the quality and activities of the Company's
internal audit function and those of its independent accountants; and monitors
the adequacy of the Company's operating and internal controls as reported by
management, the independent accountants and internal auditors. In 1996,
Fidelity's Audit Committee held two meetings prior to the Reorganization, and
the joint Audit Committee held three meetings following the Reorganization.
The Bank Plus members of the joint Audit Committee are Mr. Gibbs, Chairman,
and Mr. Burnside.
Compensation/Stock Option Committee. The Compensation/Stock Option Committee
is a joint committee with Fidelity's Compensation/Stock Option Committee. It
is authorized to review salaries and compensation, including non-cash
benefits, of directors, officers and other employees of the Company and its
subsidiaries and to recommend to the Board salaries, remuneration and other
forms of additional compensation and benefits as it deems necessary. The joint
Compensation/Stock Option Committee held four meetings in 1996. The Bank Plus
members of the joint Compensation/Stock Option Committee are Mr. Barker,
Chairman, and Mr. Smith.
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MEETINGS OF THE BOARD OF DIRECTORS
In 1996, there were six meetings of the Board of Directors of Bank Plus and
six meetings of the board of directors of Fidelity prior to the
Reorganization. All directors attended at least 75% of the aggregate of
meetings of the Board of Directors and the committees of the Board on which
they serve, in each case, after the election of such individual to the Board
or such committee.
EXECUTIVE OFFICERS
Set forth below are the executive officers of the Company and the Bank
(other than Mr. Greenwood--see "Continuing Directors" above), together with
the positions currently held by those persons.
<TABLE>
<CAPTION>
NAME AGE POSITION HELD WITH BANK PLUS OR SUBSIDIARY
---- --- ------------------------------------------
<C> <C> <S>
James E. Stutz............ 53 President of Fidelity
Stephen J. Austin......... 57 Executive Vice President and Internal Audit
Director of Fidelity
Robert P. Condon.......... 55 Executive Vice President of Fidelity, Vice
Chairman and Chief Executive Officer of
Gateway and President of Citadel Service
Corporation
Godfrey B. Evans.......... 43 Executive Vice President, General Counsel and
Corporate Secretary of Bank Plus and Fidelity
William L. Sanders........ 50 Executive Vice President and Chief Financial
Officer of Bank Plus and Fidelity
W.C. Taylor III........... 39 Executive Vice President and Chief Lending
Officer of Fidelity
Dennis J. McNamara........ 43 Senior Vice President and Treasurer of
Fidelity
Richard M. Villa.......... 32 Senior Vice President, Controller and Chief
Accounting Officer of Bank Plus and Fidelity
</TABLE>
MR. STUTZ joined Fidelity in January 1994 as Executive Vice President,
Retail Banking. Prior to joining Fidelity, Mr. Stutz served since 1985 as
Executive Vice President and Chief Operating Officer, Consumer Banking, of
HomeFed Bank, where he was responsible for a 215 branch network. Mr. Stutz was
also Chairman, President and Chief Executive Officer of Columbus Savings, a
wholly owned subsidiary of HomeFed Corporation, where he was responsible for
the consolidation of several savings institutions and the subsequent merger of
the company into HomeFed Bank. Mr. Stutz became President of Fidelity on June
1, 1996.
MR. AUSTIN joined Fidelity in November 1995 as Senior Vice President and
Internal Audit Director. Before joining Fidelity, Mr. Austin was employed at
Union Federal Bank in Brea, California from 1991 until 1995 in various
financial management positions including, most recently, Senior Vice President
and Chief Financial Officer. Mr. Austin became an Executive Vice President of
the Bank on June 1, 1996.
MR. CONDON joined Gateway as President and Chief Executive Officer in
September 1993. In November 1994, Mr. Condon also became an Executive Vice
President of Fidelity. Prior to joining Gateway, Mr. Condon served as General
Manager of WellPoint Life Insurance Company, a subsidiary of Blue Cross of
California. Before that, he was President and Chief Executive Officer of
CalFed Investment Services, in charge of the development and sale of
alternative investment products through the bank branch network.
MR. EVANS joined Fidelity as Senior Vice President and Senior Corporate
Counsel in 1987 and has been General Counsel and Corporate Secretary of
Fidelity since 1989 and 1990, respectively, and of Bank Plus since its
formation. Mr. Evans became an Executive Vice President of Fidelity in April
1994.
MR. SANDERS was named Executive Vice President and Chief Financial Officer
of Fidelity in December 1995 and has served in those positions with Bank Plus
since its formation. Before joining Fidelity, Mr. Sanders served as Chief
Financial Officer of H.F. Ahmanson & Co. and Home Savings of America, F.S.B.
from 1992 to 1993, and as Chief Financial Officer and Treasurer of First
Executive Corporation from 1990 until 1992.
5
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MR. TAYLOR joined Fidelity in May 1993 as Senior Vice President in charge of
loan administration and was appointed Chief Lending Officer in September 1994.
From 1992 through 1993, Mr. Taylor was employed as a Senior Vice President and
Senior Lending Officer at Metrobank Home Lenders. Mr. Taylor became an
Executive Vice President of Fidelity in September 1994.
MR. MCNAMARA joined Fidelity in August 1996 as Senior Vice President &
Treasurer. Before that, he worked for Kleinwort Benson, an investment banking
concern, for eight years, serving most recently as a managing director for
Kleinwort Benson Capital Management. He holds an MBA from the University of
Chicago.
MR. VILLA joined Fidelity in April 1996 as Vice President and Corporate
Planning Manager. Before joining Fidelity, Mr. Villa worked as an audit
manager in the internal audit department of Union Bank and, from 1993 until
1996, was employed as a manager by the public accounting firm of Deloitte &
Touche LLP. Mr. Villa was named Senior Vice President and Controller of Bank
Plus and Fidelity in February 1997.
COMPENSATION/STOCK OPTION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The report of the Compensation/Stock Option Committee (the "Committee")
shall not be deemed incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any filing under the
Securities Act of 1933, as amended (the "Securities Act"), or under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), except to
the extent that the Company specifically incorporates this report by
reference, and shall not otherwise be deemed filed under such acts or
regulations.
COMMITTEE COMPOSITION
The Committee is composed of independent, non-employee members of Bank Plus'
Board of Directors and is advised by members of management and outside experts
in the field of compensation program design. The Committee administers,
reviews, and recommends for full Board approval each of the elements of the
executive compensation program of Bank Plus and its subsidiary, Fidelity
Federal Bank (the "Bank").
COMPENSATION PHILOSOPHY
It is the philosophy of the Committee, Bank Plus and the Bank to provide
executives with total compensation opportunities that are competitive with the
marketplace while emphasizing stock ownership over annual cash compensation.
To ensure competitiveness, the Committee reviews compensation levels of a peer
group of California financial institutions considered as competitors for
executive talent.
Compensation practices (i.e., program design) of the California peer group
and of similar size U.S. financial institutions are also reviewed to assess
compensation design "best practices", namely programs which encourage
executive ownership and strengthen the alignment of executives and Bank Plus
stockholders.
ANNUAL CASH COMPENSATION
Base Salary
Each year, the Committee reviews the salary levels of the executive officers
for external competitiveness, internal equity, and individual contribution;
however, salary increases are generally administered in 18 month or longer
cycles, excluding promotional adjustments. Based on input from management, the
Committee develops its recommendations for salary increases, if any, and
presents them to the Board for approval. During 1996, three executive officers
received salary increases, including a 9% increase for Mr. Evans effective
January 1996.
6
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The Board approved 1997 salary increases for executive officers at its
January 1997 meeting. Messrs. Condon and Stutz each received a 25% increase
effective immediately, representing the first salary increase each executive
has received since 1994. Mr. Sanders also received a 25% increase, to be
effective June 1997, representing his first salary increase since he was hired
in December 1995. Mr. Evans received a 11% increase, also effective June 1997.
Annual Incentive
There has been no formal annual incentive plan for Bank Plus executives;
however, in 1995, the Board approved a Recapitalization Transaction and
Retention bonus for four of the five Named Executive Officers (as defined
below under "Executive Compensation"). Cash bonus awards were generally paid
in two equal installments; the first in November 1995, the remainder in
December 1996. All Named Executive Officers who were recipients of the
November 1995 award purchased Fidelity stock with their net proceeds.
To determine bonus awards, if any, for 1996 and in the absence of a formal
executive incentive plan, the Committee reviewed the Bank's 1996 corporate
performance and recommended for the Board's approval discretionary bonus
awards for Executive Vice Presidents and the CEO to recognize corporate
achievement and individual performance. At its January 1997 meeting, the Board
approved awards to seven executive officers, including all of the Named
Executive Officers, totaling $482,500.
In early 1997, the Board approved the 1997 Annual Incentive Plan for the
CEO, Executive Vice Presidents and selected Senior Vice Presidents who have a
significant impact on corporate performance. Target incentive awards are set
at 30% of salary for Senior Vice Presidents, 50% for Executive Vice
Presidents, and 60% for the CEO. Awards are capped at 200% of those targets
(or 60%, 100% and 120% of salary, respectively). Performance measures include
net income, stock price growth versus the thrift index, and business
unit/individual performance.
To further encourage executive stock ownership, at the beginning of each
year, the Committee may determine an exchange formula, if any, for
participants to receive all or a portion of their earned award in the form of
restricted stock, deferred stock units, or stock options. For 1997, the
exchange formula provides $2.00 of restricted stock for each dollar of annual
incentive payment foregone. The stock will vest ratably over a three-year
period.
EXECUTIVE OWNERSHIP
It is the Committee's goal that stock ownership be the largest component of
the executive compensation program to align stockholder and executive
interests and to encourage executive retention. To this extent, executives are
eligible for stock option grants and, subject to stockholder approval of the
amendments to and restatement of the 1996 Stock Option Plan more fully
described below, the Board may also grant awards of restricted stock and
deferred stock units. The Committee believes the amended plan will provide the
necessary means for Bank Plus to reward executives with a significant
opportunity to build a meaningful stake in the Company, and assist in the
retention of key employees.
CEO COMPENSATION
The Committee applies the same philosophy and methodology in determining the
CEO's compensation as with all other executive officers. Pursuant to his
contract, Mr. Greenwood is not eligible for a salary increase until August
1997. At the January 1997 Board meeting, an increase of 20.5% was approved, to
take effect September 1, 1997, resulting in an annual base salary of $500,000
for the CEO. The September adjustment is the first salary increase Mr.
Greenwood has received since June 1994.
In recognition of Mr. Greenwood's significant contributions to Bank Plus'
overall 1996 performance, the Committee recommended, and the Board approved at
its January 1997 meeting, a discretionary cash bonus of $137,500, or 33% of
his annual base salary.
7
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The CEO participates in the 1997 Annual Incentive Plan which rewards net
income results, stock price growth versus the thrift index, and individual
performance. Mr. Greenwood's target award level is 60% of his ending annual
base salary; his bonus award is capped at a maximum award level of 200% of
target (or 120% of ending annual base salary).
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code limits the deduction a publicly
held company is allowed for compensation paid to its highly compensated
executive officers. Generally, amounts in excess of $1 million (other than
performance-based compensation) paid in any tax year to a covered executive
cannot be deducted. The Committee will continue to monitor the compensation
levels of the executive officers and determine the appropriate response to
Section 162(m), including considering ways to maximize the deductibility of
executive compensation while retaining the discretion the Committee deems
necessary to compensate executive officers in a manner commensurate with
performance and the competitive environment, when and if necessary.
The foregoing report has been furnished by the following members of the
Compensation/Stock Option Committee.
Norman Barker, Jr., Chairman
Gordon V. Smith
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PERFORMANCE GRAPH
The performance graph shall not be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement into any
filing under the Securities Act or under the Exchange Act except to the extent
that the Company specifically incorporates this information by reference, and
shall not otherwise be deemed filed under such acts or regulations.
The graph and corresponding table below compare the cumulative total
stockholder return on the Company's (or its predecessor's) Common Stock from
March 31, 1996 to December 31, 1996 with the cumulative total return on a S&P
500 index and the Wall Street Journal Savings & Loan Index, in each case
assuming the investment of $100 on March 31, 1996 at the closing price on that
date and reinvestment of dividends. The measurement period with respect to
which the comparisons are made corresponds to the period during which the
Company's (or its predecessor's) Common Stock has been registered under
Section 12 of the Exchange Act.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG BANK PLUS, S&P 500 INDEX AND WALL STREET JOURNAL
S&L INDEX
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION> WALL STREET
Measurement Period S&P JOURNAL S&L
(Fiscal Year Covered) BANK PLUS 500 INDEX INDEX
- ------------------- ---------- --------- ----------
<S> <C> <C> <C>
Measurement Pt- 3/31/96 $100.00 $100.00 $100.OO
FYE 4/30/96 $ 96.05 $100.79 $ 96.39
FYE 5/31/96 $ 97.37 $102.15 $100.10
FYE 6/30/96 $ 92.11 $104.48 $103.08
FYE 7/31/96 $106.58 $104.72 $105.11
FYE 8/31/96 $103.95 $ 99.93 $106.46
FYE 9/30/96 $111.85 $101.81 $113.40
FYE 10/31/96 $118.43 $107.33 $124.39
FYE 11/30/96 $119.74 $110.13 $132.23
FYE 12/31/96 $121.06 $118.21 $127.19
</TABLE>
9
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth the compensation earned
during the three years ended December 31, 1996 by the Company's Chief
Executive Officer and the four other most highly compensated executive
officers during 1996 who were serving as executive officers at December 31,
1996 (the "Named Executive Officers"):
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------- ----------------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL COMPEN- STOCK COMPEN-
POSITION YEAR SALARY BONUS(1) SATION(2) OPTIONS SATION(3)
- ------------------ ---- -------- -------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Richard M. Greenwood 1996 $415,000 $287,500(4) $-- -- $ --
President & CEO of
Bank Plus; 1995 415,000 150,000(4) -- 300,000 $23,492(5)
Chairman & CEO of Fi-
delity 1994 394,653 -- -- 480,000(6) --
James E. Stutz 1996 $220,000 $125,000(4) $-- -- $ --
President of Fidelity 1995 220,000 50,000(4) -- 168,750 --
1994 173,461 43,553(7) -- 270,000(6) 9,000(8)
Robert P. Condon 1996 $220,000 $125,000(4) $-- -- $ 1,125
Executive Vice Presi-
dent of 1995 220,000 50,000(4) -- 168,750 4,500
Fidelity; CEO of Gate-
way 1994 177,471 -- -- 270,000(6) 1,523
Godfrey B. Evans 1996 $175,000 $100,000(4) $-- -- $ 1,125
Executive Vice Presi-
dent & 1995 160,000 50,000(4) -- 143,750 4,500
General Counsel of 1994 142,692 60,000(9) -- 150,000(6) 4,620
Bank Plus
and Fidelity
William L. Sanders(10) 1996 $220,000 $ 75,000 $-- -- $ --
Executive Vice Presi-
dent & 1995 13,538 -- -- 143,750 --
Chief Financial Offi-
cer of 1994 N/A N/A N/A N/A N/A
Bank Plus and Fidelity
</TABLE>
- --------
(1) Bonuses are presented in the period earned and may have been paid in
subsequent years.
(2) Excludes perquisites if the aggregate amount thereof is less than
$50,000, or 10% of salary plus bonus, if less.
(3) Except as otherwise noted, consists of the Company's matching
contributions to the Company's 401(k) Plan.
(4) Includes 50% of a Recapitalization Transaction and Retention Bonus
awarded in October 1995. The bonus was paid in two equal installments:
the first in November 1995, the remainder in December 1996. All Named
Executive Officers who received the November 1995 award purchased
Fidelity common stock with their net proceeds. Payment of the second
installment in December 1996 was conditioned on the executive remaining
an employee of the Bank until that time. Mr. Greenwood was awarded a
bonus of $300,000; Messrs. Condon, Evans and Stutz were awarded bonuses
of $100,000 each.
(5) Consists of compensation for unused vacation time.
(6) Consists of options granted under the 1995 Equity Incentive Plan. That
plan and all related options have been terminated.
(7) Relocation bonus paid to Mr. Stutz upon hiring on January 5, 1994.
(8) Consists of a moving allowance.
(9) Special bonus for individual contributions and achievements.
10
<PAGE>
(10) Mr. Sanders' employment commenced on December 1, 1995.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
No options to acquire shares of Common Stock were granted by the Company
during 1996.
UNEXERCISED STOCK OPTIONS
During 1996, none of the executive officers of the Company exercised any
stock options. The following table provides information concerning unexercised
options held by the Named Executive Officers as of the end of 1996.
<TABLE>
<CAPTION>
SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS AT YEAR-END(1)
OPTIONS AT EXERCISABLE/
NAME YEAR-END UNEXERCISABLE
---- ----------- ----------------------
<S> <C> <C>
Richard M. Greenwood...................... 300,000 $94,500/$850,500
Robert P. Condon.......................... 168,750 $53,156/$478,406
Godfrey B. Evans.......................... 143,750 $45,281/$407,531
William L. Sanders........................ 143,750 $45,281/$407,531
James E. Stutz............................ 168,750 $53,156/$478,406
</TABLE>
- --------
(1) Based upon the difference between the option exercise price of $8.35 per
share and the closing price of the Common Stock on December 31, 1996 of $11.50
per share.
On December 11, 1995 the Board of Directors of Fidelity adopted the 1996
Stock Option Plan and granted awards pursuant thereto, subject to subsequent
approval by the Bank's stockholders. At a special meeting held on February 9,
1996, Fidelity's stockholders approved the 1996 Stock Option Plan.
Accordingly, Fidelity's non-employee directors, executive officers and certain
other key employees received options to purchase Fidelity common stock. In May
1996, Bank Plus assumed the 1996 Stock Option Plan in connection with the
Reorganization, and the options granted thereunder became options to purchase
Bank Plus Common Stock. The exercise price of all such options is $8.35 per
share. Ten percent of the options granted became exercisable on February 13,
1996, an additional thirty percent of such options became exercisable on
February 9, 1997 and an additional thirty percent of such options will become
exercisable on each of the second and third anniversaries of stockholder
approval of the Plan.
RETIREMENT INCOME (DEFINED BENEFIT) PLAN
Fidelity maintains a Retirement Income Plan which is a qualified, non-
contributory defined benefit retirement plan. The Retirement Income Plan
provides for monthly retirement payments or an actuarially equivalent lump sum
to or on behalf of each covered employee or beneficiary upon retirement at age
65 or upon early retirement (i.e., the attainment of age 55 and the completion
of 10 years of service) and, under certain circumstances, upon disability,
death or other termination of employment, based upon the employee's average
monthly salary and the aggregate number of years of service. Effective
February 28, 1994, the Retirement Income Plan was suspended, thereby freezing
benefit levels and reducing related expense accruals by approximately $1
million annually.
11
<PAGE>
The following table illustrates approximate annual benefits payable under
the Retirement Income Plan at normal retirement age for various combinations
of service and compensation:
<TABLE>
<CAPTION>
YEARS OF SERVICE
AVERAGE FINAL ---------------------------------------
COMPENSATION 15 20 25 30 35
------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$50,000............................. $11,302 $15,069 $18,836 $22,603 $26,370
100,000............................. 24,427 32,569 40,711 48,853 56,995
150,000............................. 37,552 50,069 62,586 75,103 87,620
200,000............................. 37,552 50,069 62,586 75,103 87,620
250,000............................. 37,552 50,069 62,586 75,103 87,620
300,000............................. 37,552 50,069 62,586 75,103 87,620
350,000............................. 37,552 50,069 62,586 75,103 87,620
400,000............................. 37,552 50,069 62,586 75,103 87,620
</TABLE>
Compensation under the Retirement Income Plan includes all regular pay,
excluding overtime, commissions and bonuses, limited by the Internal Revenue
Code Section 401(a)(17) compensation limit. The benefit amounts listed above
were computed on a 10-year certain and life basis, which is the normal form
under the plan, and are not subject to deduction for Social Security or other
offset amounts.
The years of credited service as of December 31, 1996 for each of the Named
Executive Officers are as follows:
<TABLE>
<CAPTION>
CREDITED
NAME SERVICE YEARS
---- -------------
<S> <C>
Richard M. Greenwood........................................... 1 year
Robert P. Condon............................................... None(1)
Godfrey B. Evans............................................... 6 years
William L. Sanders............................................. None(1)
James E. Stutz................................................. None(1)
</TABLE>
- --------
(1) No participation due to plan suspension on February 28, 1994.
EMPLOYMENT CONTRACTS
Mr. Greenwood and the Bank entered into an employment agreement in June
1995, providing for his employment as President and Chief Executive Officer of
the Bank until June 1997, subject to extension, at an annual base salary of at
least $415,000. If Mr. Greenwood's employment is terminated other than for
cause or because of death, disability or retirement, his employment agreement
provides that he will receive, subject to certain limitations, his full base
salary until the second anniversary of the date of termination (provided,
however, that during the second year following such date of termination, the
Bank will only pay such base salary to the extent it exceeds the total cash
compensation received by Mr. Greenwood from other employers during such
period), plus the incentive compensation for the portion of the year preceding
the date of termination that would have otherwise been payable. The employment
agreement does not address termination in connection with a change in control
of the Bank, which is governed by the terms of Mr. Greenwood's severance
agreement. See "--Severance Agreements."
SEVERANCE AGREEMENTS
Fidelity has entered into severance agreements (the "Severance Agreements")
with Mr. Greenwood and certain other executive officers providing for
severance benefits (a) in the event of terminations following a change in
control of the Bank and (b) upon termination without cause under circumstances
other than following a change in control. The purpose of the Severance
Agreements is (i) to secure the employment of key executives, (ii) to ensure
that executive management is reasonably compensated in the light of
competitive industry practices and (iii) to ensure that the executive
management team is able to concentrate on advising the Board of Directors and
maintaining stability in the event of a change in control of the Bank.
12
<PAGE>
The initial term of each Severance Agreement is three years, with one-year
renewals thereafter, subject to Board review and approval before each renewal.
After a change in control, the Severance Agreement will continue automatically
for two years. A "change in control" is generally defined in the Severance
Agreement as: (a) acquisition of 25% or more of the Bank's voting stock by any
"person" (as defined) with certain limited exclusions or (b) change in a
majority of the members of the Board of Directors over a two-year period or
(c) stockholder approval of a merger or consolidation other than a merger or
consolidation that results in the Bank owning 60% or more of the surviving
entity or (d) the Bank entering into one or more agreements to sell or
transfer to one or more third parties, in one transaction or a series of
related transactions, assets and/or liabilities representing fifty (50)
percent or more of the book value of its assets and/or liabilities. Each
Severance Agreement will be terminated if the officer or the Bank experiences
certain regulatory problems.
Termination by the Bank because of disability, retirement or cause, or the
officer's resignation (other than for "good reason" as described below) does
not entitle the officer to any benefits under the Severance Agreement.
Termination for "cause" requires either (i) a willful and continued failure of
an officer to perform substantially all of such officer's duties or (ii)
certain acts of dishonesty, incompetence or illegality. If, following a change
in control, the officer is terminated or voluntarily terminates for "good
reason," the officer is entitled to a specified multiple of base salary plus
the annual costs of (i) the officer's automobile allowance, (ii) the officer's
medical and dental premiums and (iii) 401(k) matching contributions made by
the Bank for the officer's benefit.
Termination by an officer for "good reason" means that an officer may
terminate such officer's own employment and still receive benefits under the
Severance Agreement if (among other reasons listed in the agreement) (1) such
officer's status or position in the Bank has adversely changed from the date
of the Severance Agreement, (2) the officer's base salary is reduced from its
level on the date of the Severance Agreement, (3) the Bank fails to credit the
officer for the correct number of vacation days, (4) the Bank requires the
officer to be based at an office more than thirty-five miles from such
officer's office on the date of the Severance Agreement or (5) after a change
in control, either (a) the Bank fails to continue any benefit plan in which
the officer was participating prior to the change in control or (b) the Bank
does not allow the officer to continue to engage in any business or civic
activities not related to the business of the Bank in which it had, before the
change in control, allowed the officer to participate.
In the event of termination following a change in control, Messrs. Condon,
Evans, Sanders and Stutz would receive 2.0 times annual base salary plus 2.0
times the annual cost of the benefits specified above; and Mr. Greenwood would
receive 2.5 times annual base salary plus 2.5 times the annual cost of the
benefits specified above. In the event of termination without cause and not
following a change in control, Messrs. Condon, Evans and Stutz would be
entitled to receive an amount equal to their annual base salary in effect at
termination.
The officer is entitled to reimbursement for legal expenses for matters
arising under the Severance Agreement following a change in control of the
Bank unless a court finds that the officer seeks reimbursement of funds for
litigating a position that a court determines was frivolous or brought in bad
faith.
DIRECTOR COMPENSATION
Board Retainer and Fees. Until February 1996, the Board of Directors
retainer and meeting fee schedules for non-employee members of the Board of
Directors provided for: (1) Board membership annual retainer of $25,000; (2)
Board Chairmanship annual retainer of $10,000; (3) Committee Chairmanship
annual retainer of $5,000; (4) Board meeting fees of $1,000 per meeting; and
(5) Committee meeting fees of $850 per meeting. In February 1996, the Board of
Directors modified the retainers for Committee Chairmanships by increasing the
annual retainer for the Chairmen of the Audit and Asset Quality and Loan
Committees to $6,000 and decreasing the retainer for all other Committee
Chairmen to $3,000. In February 1997, the Board approved an increase in the
annual retainer to $30,000 for all directors who receive their retainers and
fees in the form of deferred stock grants under the Non-Employee Director
Compensation Program described below. Telephonic Board or
13
<PAGE>
Committee meetings fees are paid at the same rate as in-person meetings,
except that telephonic meetings lasting less than 30 minutes are paid at 50%
of the normal meeting fee rate. Any director who fails to attend at least 50%
of the meetings held in any consecutive six-month period may forfeit a portion
or all of his/her retainer for the subsequent six months, unless absences were
due to illness or unavoidable circumstances, as approved by the Chairman of
the Board. Directors are also reimbursed for reasonable out-of-pocket expenses
incurred in the performance of their duties.
Non-Employee Director Retirement Plan. In November 1994, the Board of
Directors of Fidelity approved a retirement plan for non-employee directors
who have at least three years of Board service, including service on the Board
prior to the 1994 restructuring and recapitalization by Citadel and the Bank
(the "1994 Restructuring and Recapitalization"), and have reached the age of
55. Only directors initially elected prior to January 1, 1996 are eligible to
participate in this plan.
An eligible director shall, after termination from Board service for any
reason other than cause, be entitled to receive a quarterly payment equal to
one quarter of his/her average annual compensation (including compensation for
service on the Board of any of the Company's subsidiaries), including all
retainers and meeting fees, received during his/her last three years of Board
service. Such payments shall commence at the beginning of the first fiscal
quarter subsequent to termination and continue for a 3-year period. If a
director's Board membership is terminated for cause, no benefits are payable
under this plan.
If a director's Board membership is terminated within two years following
the effective date of a change in control, then he/she also shall be eligible
for a lump sum payment in an amount that is the greater of: (1) 150% times
average annual compensation during the preceding 3-year period, (2) the sum of
all retirement benefits payable under normal retirement provisions described
in the preceding paragraph or (3) $78,000.
1996 Stock Option Plan. On December 11, 1995, the Board of Directors of the
Bank adopted the 1996 Stock Option Plan and granted awards pursuant thereto to
its non-employee directors subject to subsequent approval by the Bank's
stockholders. At a special meeting held on February 9, 1996 the Bank's
stockholders approved the plan and in May 1996, Bank Plus assumed the plan in
connection with the Reorganization. Accordingly, each of the Company's and the
Bank's non-employee directors has received options representing 23,000 shares
of Common Stock. All such options were granted at an exercise price of $8.35
per share. Ten percent of the options granted to each non-employee director
became exercisable immediately upon stockholder approval and another thirty
percent became exercisable on the first anniversary of such approval; an
additional thirty percent will become exercisable on each of the second and
third anniversaries of stockholder approval.
Non-Employee Director Compensation Program. At the February 26, 1997 joint
meeting of the Boards of Directors of Bank Plus and Fidelity, both boards
approved the Non-Employee Director Compensation Program to take effect
immediately, subject to stockholder approval of the amended and restated 1996
Stock Option Plan (see "Proposal Number 2" below). The program is designed to
strengthen the relationship between directors and stockholders by aligning
their interests through stock ownership.
Under the new program, non-employee directors initially elected to the Board
on or after January 1, 1996 will receive no cash compensation; their retainers
and meeting fees will be paid in the form of deferred stock grants. Other non-
employee directors may do so on a voluntary basis, until the annual meeting of
stockholders in the year 2000, when it will become mandatory for all directors
to receive their retainers and fees in the form of deferred stock grants. For
example, assuming attendance at twelve Board meetings and eight Committee
meetings, annual earnings of a director who chairs one Committee would be
$51,800. At a stock price of $11 1/8 (the closing price for the Common Stock
on March 26, 1997), a director would have 4,656 shares credited to his or her
deferred stock account.
In addition, subject to stockholder approval of the amended and restated
1996 Stock Option Plan, each non-employee director will receive automatic
annual grants of options to purchase 2,500 shares of Common Stock, at an
exercise price equal to the fair market value of the stock on the grant date,
which will be fully vested and exercisable upon grant.
14
<PAGE>
RELATED PARTY TRANSACTIONS
LOANS TO MANAGEMENT
Fidelity offers home loans to directors, officers, and employees of the
Bank. These loans are made in the ordinary course of business and, in the
judgment of management, do not involve more than the normal risk of
collectibility. The loans are secured by real property and are made on
substantially the same terms, including interest rate and collateral, as those
prevailing at the time for comparable transactions with non-affiliated
persons.
However, pursuant to the provisions of Fidelity's employee loan program
which existed prior to the enactment of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 ("FIRREA"), the interest rate generally
charged was one-half percent less than the rate for comparable transactions
with non-affiliated persons on fixed-rate loans and was one percent below the
margin on adjustable-rate loans. In addition, employees generally do not pay
loan fees or closing costs on their loans. The rate on these types of loans
remain at the reduced level only for so long as the individual obtaining the
loan continues to be employed by, or serves as a director of, the Bank. Since
the passage of FIRREA, Federal Reserve Board regulations applicable to savings
institutions prohibit the making of preferential loans to directors and
executive officers of Fidelity who perform policy-making functions.
Accordingly, Fidelity no longer grants such loans to any director or any
officer who influences corporate policy. Prior to the enactment of FIRREA,
directors and executive officers with policy making functions could
participate in Fidelity's employee loan program and to the extent they had
loans outstanding on the effective date of FIRREA's enactment, such loans have
grandfathered status. Listed below are the currently outstanding loans to
executive officers.
<TABLE>
<CAPTION>
HIGHEST UNPAID
INDEBTEDNESS BALANCE AS INTEREST
SINCE OF RATE AT
DECEMBER 31, DECEMBER 31, DECEMBER 31, YEAR
NAME 1994 1996 1996 MADE
---- ------------ ------------ ------------ ----
<S> <C> <C> <C> <C>
Godfrey B. Evans................. $194,416 $181,330 5.823% 1987
Godfrey B. Evans................. $76,951 $73,451 7.339% 1989
</TABLE>
GREENWOOD LOAN
On July 30, 1996, the Board of Directors approved a personal loan to Mr.
Greenwood in the principal amount of $265,000. The loan is payable on demand
and is interest free. The proceeds of the loan were used by Mr. Greenwood to
refinance an existing loan that had been made to Mr. Greenwood by Citadel in
1992 when Mr. Greenwood commenced his employment with Citadel.
INSURANCE COMMISSIONS
Johnson & Higgins served in 1996 as insurance broker for the Bank. During
1996, the Bank paid to Johnson & Higgins insurance premiums of approximately
$3.0 million, with respect to which the Company has been advised that Johnson
& Higgins has retained commissions of approximately $200,000. Mr. Gibbs, a
director of Bank Plus and of Fidelity, is a principal and senior vice
president of Johnson & Higgins.
FIRST ALLIANCE TRANSACTION
Fidelity has entered into an agreement with First Alliance Corporation
("FACO") pursuant to which FACO will function as Fidelity's affinity partner
in the development of real estate secured credit card receivables. Fidelity
will provide the bank issuer presence required to initiate Visa and Mastercard
accounts and the funding, up to a maximum aggregate amount of $175,000,000,
with individual credit limits of $5,000 to $12,000. FACO will provide credit
enhancement to mitigate any loss exposure Fidelity may have. Mark Mason, a
member of the board of directors of Fidelity, is Executive Vice President and
Chief Financial Officer and a director of FACO. George Gibbs, a director of
both Bank Plus and Fidelity, is also a director of FACO.
15
<PAGE>
BENEFICIAL OWNERSHIP OF BANK PLUS CAPITAL STOCK
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the shares of Common Stock beneficially owned
as of March 26, 1997 by all directors and executive officers as a group, by
each director, the CEO and the Named Executive Officers of the Company during
1996.
<TABLE>
<CAPTION>
SHARES UNDERLYING
SHARES OF COMMON OPTIONS EXERCISABLE TOTAL
STOCK BENEFICIALLY WITHIN 60 DAYS OF BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNED MARCH 26, 1997(1) OWNERSHIP COMMON STOCK
- ------------------------ ------------------ ------------------- ---------- ------------
<S> <C> <C> <C> <C>
Norman Barker, Jr....... 1,250 9,200 10,450 *
Waldo H. Burnside....... 625 9,200 9,825 *
George Gibbs, Jr........ 625 9,200 9,825 *
Lilly V. Lee............ 1,250 9,200 10,450 *
Gordon V. Smith(2)...... 100,112 -- 100,112 *
Mark Sullivan III....... 2,750 -- 2,750 *
Richard M. Greenwood.... 12,500 120,000 132,500 *
Robert P. Condon........ 12,500 67,500 80,000 *
Godfrey B. Evans........ 5,250 57,500 62,750 *
William L. Sanders...... -- 57,500 57,500
James E. Stutz.......... 6,250 67,500 73,750 *
All directors and
executive officers as
a group (15 persons)... 155,612 451,800 607,412 3.3%
</TABLE>
- --------
(1) Options exercisable within 60 days of March 26, 1997 that were granted
pursuant to the 1996 Stock Option Plan. See "Executive Compensation" and
"Director Compensation" for discussion of the amounts and terms of such
options.
(2) Shares are registered in the name of Gordon V. and Helen C. Smith
Foundation, a Section 501(3)(c) organization of which Mr. Smith is
president.
* Represents less than one percent of the outstanding shares of Common Stock.
16
<PAGE>
SECURITY OWNERSHIP BY OTHERS
The following table sets forth, as of March 26, 1997, (i) the name of each
person known to the Company to be the beneficial owner of more than 5% of the
outstanding Common Stock, (ii) the total number of shares of Common Stock
beneficially owned by each person and (iii) the percentage of all Common Stock
outstanding held by each such person.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) COMMON STOCK
- ------------------------------------ --------------------- ------------
<S> <C> <C>
Boston Partners, Inc......................... 1,234,582(2) 6.8%
Boston Partners Asset Managers, L.P.
Desmond John Heathwood
One Financial Center, 43rd Floor
Boston, MA 02111
CNA Financial Corporation.................... 1,220,610 6.7%
Continental Casualty Company
CNA Plaza
Chicago, IL 60685
John Hancock Advisers, Inc................... 1,076,502 5.9%
John Hancock Place
P.O. Box 111
Boston, MA 02199
Jenswold, King and Associates, Inc........... 991,104(3) 5.4%
Two Post Oak Central
1980 Post Oak Blvd., Suite 2400
Houston, TX 77056
</TABLE>
- --------
(1) Except as otherwise indicated, the persons listed as beneficial owners of
the shares have the sole voting and investment power with respect to such
shares.
(2) Boston Partners, Inc., Boston Partners Asset Managers, L.P. and Desmond
John Heathwood share voting and investment power with respect to these
shares, as reported on a Schedule 13G dated February 7, 1997.
(3) Jenswold, King and Associates, Inc. has sole investment power with respect
to all of these shares, and sole voting power with respect to 734,747 of
these shares, according to a Schedule 13G dated February 21, 1997.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the directors and executive
officers of the Company to file reports of ownership and changes in ownership
of their equity securities of the Company. Directors and executive officers
are required to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely on its review of the copies of such reports received by it
during or with respect to the year ended December 31, 1996, and/or written
representations from such reporting persons, the Company believes that all
reports required to be filed by such reporting persons during or with respect
to the year ended December 31, 1996 were timely filed.
17
<PAGE>
PROPOSAL NUMBER 2:
APPROVAL OF CERTAIN AMENDMENTS TO, AND A RESTATEMENT OF,
THE 1996 STOCK OPTION PLAN
On February 26, 1997, the Board of Directors approved the Bank Plus
Corporation Stock Option and Equity Incentive Plan (the "Plan"), subject to
stockholder approval. A copy of the Plan is attached hereto as Appendix A. The
Plan consists of certain amendments to, and a restatement of, the Bank Plus
Corporation 1996 Stock Option Plan which was approved by stockholders at the
February 9, 1996 special meeting of stockholders of Fidelity and was assumed
by Bank Plus in May 1996 in connection with the Reorganization. The 1996 Stock
Option Plan provided for the granting of nonqualified stock options ("NSOs")
and incentive stock options ("ISOs"). Of the 1,375,000 shares reserved under
the 1996 Stock Option Plan, only 124,000 shares are available for future
grants. As amended, the Plan will enable Bank Plus to reward and compensate
executives, directors and key employees with equity-based forms of
compensaiton, to be used primarily in lieu of cash awards. Emphasizing long-
term incentives tied to stock over cash payments ensures key contributors are
focused on creating and sustaining growth in stockholder value. In addition,
the potential gains to be realized encourages retention in a positive,
results-oriented manner.
If approved by stockholders, the amended and restated Plan will provide for
(i) the granting of stock options (ISOs and NSOs), restricted stock and
deferred stock units, (ii) deferred stock awards in lieu of cash compensation
otherwise payable to directors (see "Director Compensation" above), and (iii)
stock options, restricted stock or deferred stock units in lieu of cash awards
for senior officers. In addition, to further align the interests of
stockholders, directors, executives, and key employees, management and the
Board intend to make outright grants of Common Stock to reward significant
performance of executives and key employees, and automatic annual grants of
options to purchase 2,500 shares for each non-employee director.
The Plan will expire on February 9, 2006, unless sooner terminated by the
Board of Directors.
CHANGES FROM 1996 STOCK OPTION PLAN
The following is a summary of the material changes in the Plan, as amended
and restated. The term of the Plan has been increased from five years to ten
years from the February 9, 1996 effective date. The number of shares of Common
Stock available for grants and awards under the Plan has been increased by
750,000 to 2,125,000. A provision has been added limiting to 100,000 the
number of shares of Common Stock that can be subject to stock option grants in
any year to any participant. The Plan permits the grant of restricted stock
and deferred stock units to be made to employees. Finally, as discussed below,
the Plan provides for specific annual grants of stock options to non-employee
directors, as well as deferred stock grants to non-employee directors in
payment of their retainers and fees.
SHARES RESERVED UNDER THE PLAN
The number of shares available for future grants under the current plan is
not sufficient for the Company to achieve its objective of emphasizing stock
ownership over annual cash compensation. Increasing the shares reserved by
750,000 will result in a total of 2,125,000 shares of Common Stock with
respect to which grants and awards in lieu of cash may be made under the Plan,
subject to adjustment in the event of stock dividends, stock splits,
combinations of shares, recapitalizations or other changes in the outstanding
Common Stock. Shares of Common Stock tendered by a participant in payment of
all or a portion of the exercise price of a stock option are then available
again for grants and awards under the Plan. The shares issued under the Plan
consist of authorized and unissued shares of Common Stock or treasury shares.
MATERIAL FEATURES OF THE PLAN
The following description of the material features of the Plan is qualified
in its entirety by reference to the full text of the Plan that is attached to
this Proxy Statement as Appendix A.
The Plan is administered by the Compensation/Stock Option Committee of the
Board of Directors (the "Committee"), each member of which is a "non-employee
director" within the meaning of Rule 16b-3 of the
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Exchange Act and an "outside director" within the meaning of Section 162(m) of
the Internal Revenue Code (the "Code"). The Committee has, among other powers,
the power to interpret the Plan and to establish rules, regulations and
guidelines for the Plan.
The Committee is authorized to select eligible participants, make one or
more awards to participants, including ISOs, NSOs, restricted stock or
deferred stock units. The Committee has the discretion to determine the amount
of any such awards, subject to the condition that no participant shall receive
grants of stock options or Common Stock or its equivalents with respect to
more than 100,000 shares under this Plan during any calendar year. The
Committee also has the authority to establish such vesting periods and/or
performance-based goals that must be attained in order for the participant to
be able to exercise any stock option, to obtain ownership of shares subject to
a restricted stock award or to receive payment with respect to an award of
deferred stock units.
All stock options, restricted stock and deferred stock units shall be
subject to agreements approved by the Committee which shall set forth the
terms, conditions and limitations of the awards. The Committee may, in its
discretion, provide that in the event of a sale, merger, consolidation,
reorganization, liquidation or change in control of the Company, outstanding
awards will vest, become immediately exercisable or payable or have all
restrictions lifted. All grants and awards are non-transferable, except to the
extent that the Committee provides for gifts or other transfers to a
participant's spouse or other immediate relative, or to a trust or estate in
which the participant, spouse or relative has a substantial beneficial
interest.
Non-employee directors will receive annual grants of options on the first
business day following each annual stockholders' meeting, commencing with the
1997 meeting, to purchase 2,500 shares of Common Stock at an exercise price
equal to the fair market value of the shares on the grant date. Such options
will be fully vested and exercisable upon grant.
The Plan also requires non-employee directors initially elected on or after
January 1, 1996 to receive their retainers and fees for their service as
members of the Board (including service as the chair of a Board Committee) in
the form of deferred grants of Common Stock. The number of shares of Common
Stock credited to an account maintained for a non-employee director is
determined by dividing the applicable Board retainer and fees (see "Director
Compensation") by the fair market value of the Common Stock on the applicable
payment date. Other non-employee directors may elect to receive their
retainers and fees in the form of deferred grants of Common Stock. The program
will become mandatory for all non-employee directors as of the date of the
annual meeting of stockholders in the year 2000. The accounts of non-employee
directors will be credited with additional shares of Common Stock on each
dividend payment date, determined by dividing the dividends that would have
been payable if the shares of Common Stock credited to the director's account
had been issued and outstanding by the Common Stock's fair market value on the
dividend payment date. All shares credited to the account of a non-employee
director will be issued to the director by the Company upon the director's
retirement from service on the Board.
The Plan may be amended by the Board of Directors as it deems necessary or
appropriate to better achieve the purposes of the Plan.
The closing price for the Common Stock on March 26, 1997 was $11 1/8 per
share.
ELIGIBLE PARTICIPANTS
Under the Plan, employees, including officers, and non-employee directors of
the Company and its subsidiaries and affiliates or any entity in which it has
a significant equity interest are eligible to receive awards. The
determination of those employees who shall receive awards is determined by the
Committee, in its sole discretion. There are nine (9) non-employee directors
of the Company and its subsidiaries who are eligible for grants of stock
options and deferred stock grants.
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DISCUSSION OF FEDERAL INCOME TAX CONSEQUENCES
Set forth below is a summary of the principal federal income tax
consequences relating to awards under the Plan. Stock option grants under the
Plan have been designed to meet the requirements of Section 162(m) of the
Code.
Incentive Stock Options
No taxable income is recognized by the optionee upon the grant or exercise
of an ISO that meets the requirements of Section 422 of the Code. However, the
exercise of an ISO may result in alternative minimum tax liability for the
optionee. If no disposition of shares issued to an optionee pursuant to the
exercise of an ISO is made by the optionee within two years from the date of
grant or within one year after the date of exercise, then upon sale of such
shares, any amount realized in excess of the exercise price (the amount paid
for the shares) will be taxed to the optionee as a long-term capital loss, and
no deduction will be allowed to the Company for federal income tax purposes.
If shares of Common Stock acquired upon the exercise of an ISO are disposed
of prior to the expiration of the two-year and one-year holding periods
described above, the optionee will realize ordinary income in the year of
disposition in an amount equal to the excess (if any) of the fair market value
of the shares on the date of exercise (or, if less, the amount realized on the
sale of such shares) over the exercise price of the underlying options, and
the Company will be entitled to deduct such amount. Any gain realized from the
shares in excess of the amount realized as ordinary income will be taxed to
the optionee as capital gain and will not be deductible by the Company.
An ISO will not be eligible for the tax treatment described above if it is
exercised more than three months following termination of employment, except
in certain cases where the ISO is exercised after the death or permanent and
total disability of the optionee. If an ISO is exercised at a time when it no
longer qualifies for the tax treatment described above, the option is treated
as an NSO.
Nonstatutory Stock Options
No taxable income is recognized by the optionee on the date an NSO is
granted under the Plan. On the date of exercise of an NSO, ordinary income is
recognized by the optionee in an amount equal to the difference between the
exercise price and the fair market value of the shares on the date of
exercise, and the Company receives a tax deduction for the same amount. Upon
disposition of the shares acquired, an optionee recognizes the appreciation or
depreciation on the shares after the date of exercise as either short-term or
long-term capital gain or loss depending on how long the shares have been
held.
Restricted Stock
A recipient of restricted stock will be subject to tax at ordinary income
rates on the excess of the fair market value of the shares of Common Stock
(determined on the date the shares are no longer subject to forfeiture) over
the amount, if any, paid for such shares. However, a recipient who elects
under Section 83(b) of the Code within 30 days of the date of grant of the
restricted stock to be taxed on the date of grant will realize ordinary income
on that date in an amount equal to the fair market value of the shares of
Common Stock on that date, less any amount paid for such shares. If the shares
subject to such election are forfeited, the recipient will be entitled to a
capital loss for the amount paid for the forfeited shares, if any. The holding
period to determine whether the recipient has long-term or short-term capital
gain or loss upon sale of the shares begins on the date the forfeiture period
expires (or on the date of grant of the shares, if the recipient elected
immediate taxation of income under Section 83(b) of the Code).
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Deferred Stock Units
A recipient of deferred stock units will realize ordinary income in an
amount equal to the fair market value of the identical number of shares of
Common Stock on the date the deferred stock units are no longer subject to
forfeiture.
Deferred Stock Grants
Non-employee directors who receive stock awards will recognize as ordinary
income the fair market value of the shares of Common Stock on the date when
the shares are issued, following the director's retirement from the Board of
Directors.
PLAN BENEFITS
The employees of the Company and its subsidiaries who will receive grants
under the Plan and the size of the grants are generally to be determined by
the Committee in its discretion. Therefore, it is not possible either to
predict the benefits or amounts that will be received or allocated to
particular employees under the Plan, or to determine the amounts that would
have been received or allocated to such persons for 1996 if the Plan had been
in effect.
The following table sets forth the stock option grants that would have been
made under the Plan in 1996 to non-employee directors if the Plan, as amended
and restated, had been in effect in 1996.
<TABLE>
<CAPTION>
SHARES UNDERLYING
NAME DOLLAR VALUE ($)(1) OPTIONS GRANTED
---- ------------------- -----------------
<S> <C> <C>
Non-Employee Directors as a group (9
persons)(2)......................... $40,781 22,500
</TABLE>
- --------
(1) Based on the difference between the exercise price of $9 5/16 (the closing
price of the Common Stock on April 25, 1996, the date on which the grants
would have been made) and the closing price of the Common Stock on March
26, 1997 of $11 1/8.
(2) Including six non-employee directors of Bank Plus and three non-employee
directors of Fidelity.
APPROVAL
Approval of the Plan requires the affirmative vote of a majority of the
votes cast at the Annual Meeting. The Board of Directors believes that the
approval of the Plan is in the best interests of the Company since it will
provide incentives to officers, employees and non-employee directors to create
excellent performance and continue in the service of the Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT BANK PLUS COMMON
STOCKHOLDERS VOTE FOR THE APPROVAL OF THE AMENDMENTS TO AND RESTATEMENT OF THE
1996 STOCK OPTION PLAN AS SET FORTH IN PROPOSAL NUMBER 2.
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<PAGE>
PROPOSAL NUMBER 3: RATIFICATION OF SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
In accordance with the requirements of the Company's Bylaws, the Board of
Directors is required to select independent public accountants as auditors of
the Company for 1997, subject to ratification or rejection by stockholders.
The Board of Directors recommends to stockholders their ratification of the
Board's selection of Deloitte & Touche LLP as the Company's independent public
accountants for 1997. Deloitte & Touche LLP has been the independent certified
public accountants for the Company or the Bank since 1976. Representatives of
Deloitte & Touche LLP are expected to be in attendance at the Annual Meeting of
Stockholders with the opportunity to make a statement if they desire to do so
and respond to appropriate questions, if any, directed to them.
The Company has also engaged Deloitte & Touche LLP to render various types of
non-audit professional and consulting services for the Company, including
assistance with respect to the Company's and the Bank's internal audit
function, tax planning services and consulting services relating to business
operations, process improvements and cost reduction. The compensation for such
non-audit services during 1997 is expected to be substantially in excess of the
compensation to be paid to Deloitte & Touche LLP for audit services during such
period.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE AFOREMENTIONED
PROPOSAL REGARDING RATIFICATION OF ACCOUNTANTS.
STOCKHOLDER PROPOSALS
Any stockholder of the Company wishing to submit a proposal for inclusion in
the proxy statement relating to the Company's 1998 annual meeting of
stockholders must deliver such proposal to the Company at its principal office
at 4565 Colorado Boulevard, Los Angeles, California 90039 on or before December
31, 1997. The Board of Directors will review any proposals from eligible
stockholders which it receives by that date and will determine whether any such
proposal will be included in its 1998 proxy solicitation materials.
OTHER MATTERS
PRESENTED BY MANAGEMENT
At the time of preparation of this Proxy Statement, the Board of Directors of
the Company was not aware of any other matters to be brought before the Annual
Meeting. However, if any other matters are properly presented for action, it is
the intention of the persons named in the enclosed form of proxy to vote, or
refrain from voting, in accordance with their respective best judgment on such
matters.
FINANCIAL INFORMATION
Enclosed herewith is a copy of the Company's Annual Report on Form 10-K,
including financial statements for the year ended December 31, 1996, as filed
with the Securities and Exchange Commission.
By Order of the Board of Directors,
/s/ Goldfrey B. Evans
Godfrey B. Evans
Corporate Secretary
Los Angeles, California
March 31, 1997
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<PAGE>
PLEASE SIGN, DATE, AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. NO POSTAGE
IS REQUIRED IF MAILED IN THE UNITED STATES.
If your shares are held in the name of a brokerage firm, bank nominee or
other institution, only it can vote your shares. Accordingly, please contact
the person responsible for your account and give instructions for your shares
to be voted.
If you have any questions, or have any difficulty voting your shares, please
contact the Company by calling (818) 549-3116.
23
<PAGE>
APPENDIX A
BANK PLUS CORPORATION
STOCK OPTION AND EQUITY INCENTIVE PLAN
1. PURPOSE
The Bank Plus Corporation Stock Option and Equity Incentive Plan (the
"Plan") is intended to promote the success of Bank Plus Corporation, a
Delaware corporation ("Bank Plus"), by providing its officers, employees and
non-employee directors with incentives to create excellent performance and to
continue their services with Bank Plus, its subsidiaries and affiliates. By
encouraging Plan participants to become stockholders of Bank Plus and by
providing actual ownership through Plan awards, it is also intended that
participants will view Bank Plus from an ownership perspective.
2. TERM
The Plan (originally known as the Fidelity Federal Bank 1996 Stock Option
Plan) became effective on February 9, 1996 and shall terminate at the close of
business on the tenth anniversary of such date unless terminated earlier by
the Board (as defined in Section 3). These amendments to and restatement of
the Plan are effective as of February 26, 1997. After termination of the Plan,
no future awards may be granted, but previously granted awards shall remain
outstanding in accordance with their applicable terms and conditions and the
terms and conditions of the Plan.
3. PLAN ADMINISTRATION
A committee (the "Committee") appointed by the Board of Directors of Bank
Plus (the "Board") shall be responsible for administering the Plan. The
Committee shall be comprised of two or more non-employee members of the Board
who shall be "outside directors" as contemplated by Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), and "non-employee
directors" as contemplated by Rule 16b-3 under the Securities and Exchange Act
of 1934, as amended (the "Exchange Act"). The Committee shall have full and
exclusive power to interpret the Plan and to adopt such rules, regulations and
guidelines for carrying out the Plan as it may deem necessary or proper, all
of which power shall be executed in the best interests of Bank Plus and in
keeping with the objectives of the Plan. This power includes but is not
limited to selecting award recipients, establishing all award terms and
conditions and adopting modifications, amendments and procedures, as well as
rules and regulations governing awards under the Plan, and to making all other
determinations necessary or advisable for the administration of the Plan. The
interpretation and construction of any provision of the Plan or any award
granted hereunder and all determinations by the Committee in each case shall
be final, binding and conclusive with respect to all interested parties.
4. ELIGIBILITY
Employees and non-employee directors of Bank Plus, or any subsidiary or
affiliate of Bank Plus or any entity in which Bank Plus has a significant
equity interest, as determined by the Committee, shall be eligible to receive
awards under the Plan; provided, however, that non-employee directors shall
not be eligible for awards of restricted stock or deferred stock units.
5. SHARES OF COMMON STOCK SUBJECT TO THE PLAN
Subject to the provisions of Section 6 of the Plan, the aggregate number of
shares of Common Stock ($.01 par value) of Bank Plus ("Shares") which may be
transferred to participants pursuant to awards under the Plan shall be
2,125,000. In no event may any employee receive stock options with respect to
more than 100,000 Shares in any calendar year.
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<PAGE>
Shares subject to awards under the Plan, which expire, terminate or are
canceled prior to exercise shall thereafter be available for the granting of
other awards. Any Shares tendered by a person as full or partial payment made
to Bank Plus, in connection with any exercise of a stock option or receipt of
Shares under the Plan, shall again be available for grants under the Plan. Any
Shares that are issued by Bank Plus, and any awards that are granted through
the assumption of, or in substitution for, outstanding awards previously
granted by an acquired entity shall not be counted against the Shares
available for issuance under the Plan.
Any Shares issued under the Plan may consist in whole or in part of
authorized and unissued Shares or of treasury Shares, and no fractional Shares
shall be issued under the Plan. Cash may be paid in lieu of any fractional
Shares in settlements of awards under the Plan.
6. ADJUSTMENTS AND REORGANIZATION
In the event of any stock dividend, stock split, reverse stock split,
combination or exchange of Shares, merger, consolidation, spin-off,
recapitalization or other distribution (other than normal cash dividends) of
the assets of Bank Plus to its stockholders, or any other change affecting
Shares or Share price, such proportionate adjustments, if any, as the
Committee in its discretion may deem appropriate to reflect such change shall
be made with respect to (a) the aggregate number of Shares that may be issued
under the Plan, (b) each outstanding award made under the Plan, and (c) the
exercise price per Share for any outstanding stock options under the Plan.
7. AWARDS
Awards under the Plan may consist of stock options, restricted stock,
deferred stock units and deferred stock grants. Set forth below are the terms
and conditions of awards, which may include such other terms and conditions
established by the Committee:
(a) Stock Options. A stock option is a grant of a right to purchase a
specified number of Shares during a specified period as determined by the
Committee. A stock option may be in the form of an incentive stock option
which, in addition to being subject to applicable terms, conditions and
limitations established by the Committee, complies with Section 422 of the
Code. The price at which Shares may be purchased under a stock option shall
be paid in full by the optionee at the time of the exercise in cash or such
other method permitted by the Committee, including (i) tendering Shares,
(ii) authorizing a third party to sell the Shares (or a sufficient portion
thereof) acquired upon exercise of a stock option and assigning the
delivery to Bank Plus of a sufficient amount of the sale proceeds to pay
for all the Shares acquired through such exercise, (iii) delivering an
interest-bearing full recourse promissory note (subject to any limitations
of applicable law), or (iv) any combination of the above.
Notwithstanding anything contained herein to the contrary, the only awards
of stock options to non-employee directors shall be options granted on the
first business day after the date of each annual meeting of the
stockholders of Bank Plus, commencing with the 1997 annual meeting, to
purchase 2,500 Shares at an exercise price equal to the Fair Market Value
of such Shares on such date. Each such award shall be fully vested and
exercisable on the date of the award. For purposes of the Plan, "Fair
Market Value" shall be the closing price of one Share as reported daily in
The Wall Street Journal or similar readily available source for the data in
question. If no sales of Shares were made on such day, the closing price of
a Share as reported for the preceding day on which a sale of Shares
occurred shall be used. In the event that Shares are not listed on a public
market, then the Share price representing the most recent sale shall be
used.
(b) Restricted Stock. An award of restricted stock is made or denominated
in Shares and shall be subject to vesting conditions established by the
Committee which may be based on service with Bank Plus and its subsidiaries
and affiliates (or any entity in which Bank Plus has a significant equity
interest), the achievement of performance criteria or a combination
thereof. Any stock certificate issued in respect of an award of restricted
stock shall be held by Bank Plus until the end of the restricted period.
A-2
<PAGE>
(c) Deferred Stock Units. An award of deferred stock units shall have a
value equal to an identical number of shares. The Committee shall establish
vesting conditions for awards of deferred stock units which may be based on
service with Bank Plus and its subsidiaries and affiliates (or any entity
in which Bank Plus has a significant equity interest), the achievement of
performance criteria, or a combination thereof.
(d) Deferred Stock Grants. Each non-employee director who was elected to
the Board or to the board of directors of a subsidiary of Bank Plus on or
after January 1, 1996 shall receive the retainer and fees payable to the
director in the form of deferred stock grants. Each other non-employee
director may elect to receive the retainer and fees payable to the director
prior to the annual meeting of shareholders of Bank Plus in the year 2000
in the form of deferred stock grants; thereafter, the retainer and fee
payments to all directors shall be made in the form of awards of deferred
stock grants. On the date on which the non-employee director would
otherwise receive a cash payment of retainer or fees, there shall be
credited to an account established for such director a number of Shares
equal to the result of dividing (i) the applicable payment of retainer or
fees by (ii) the Fair Market Value of one Share on the applicable payment
date. On each dividend payment date, an additional number of Shares shall
be credited to the account of each non-employee director equal to the
result of dividing (x) the dividends that would have been payable to the
director if the shares credited to the account had been issued and
outstanding by (y) the Fair Market Value of one Share on the dividend
payment date. The Shares credited to the account of a non-employee director
shall be issued to the director upon the director's retirement from service
on the board (or to the beneficiary designated by the non-employee director
in the event of the director's death).
8. DIVIDENDS AND DIVIDEND EQUIVALENTS
Solely with respect to employees, the Committee may provide that any awards
under the Plan earn dividends or dividend equivalents. Such dividends or
dividend equivalents may be paid currently or may be credited to a
participant's account. Any crediting of dividends or dividend equivalents may
be subject to such restrictions and conditions as the Committee may establish,
including reinvestment in additional Shares or Share equivalents.
9. DEFERRALS AND SETTLEMENTS
Payment of awards may be in the form of cash, stock, other awards or
combinations thereof as the Committee shall determine, and with such
restrictions as it may impose. The Committee also may require or permit
participants to elect to defer the issuance of Shares of the settlement of
awards in cash under such rules and procedures as it may establish under the
Plan. It also may provide that deferred settlements include the payment or
crediting of interest on the deferral amounts, or the payment or crediting of
dividend equivalents where the deferral amounts are denominated in Shares.
10. TRANSFERABILITY AND EXERCISABILITY
Awards granted under the Plan shall not be transferable or assignable other
than by will or the laws of descent and distribution, except that the
Committee may provide for the transferability of particular awards: (a) by
gift or other transfer of an award to (i) any trust or estate in which the
original award recipient or such participant's spouse or other immediate
relative has a substantial beneficial interest or (ii) a spouse or other
immediate relative; and (b) pursuant to a domestic relations order (as defined
by the Code). However, any award so transferred shall continue to be subject
to all the terms and conditions contained in the instrument evidencing such
award.
In the event that a participant terminates his or her position with Bank
Plus or its subsidiary to assume a position with a governmental, charitable,
educational or other non-profit institution, the Committee may subsequently
authorize a third party, including but not limited to a "blind" trust, to act
on behalf of and for the benefit of such participant regarding any outstanding
awards held by the participant subsequent to such termination of employment.
If so permitted by the Committee, a participant may designate a beneficiary or
beneficiaries to exercise the rights of the participant and receive any
distribution under the Plan upon the death of the participant.
A-3
<PAGE>
11. AWARD AGREEMENTS
Awards under the Plan shall be evidenced by agreements that set forth the
terms, conditions and limitations for each award which may include the term of
an award (except that in no event shall the term of any incentive stock option
exceed a period of ten years from the date of its grant), the provisions
applicable in the event the participant's service terminates, and the
authority of the Committee to unilaterally or bilaterally amend, modify,
suspend, cancel or rescind any award. The Committee need not require the
execution of any such agreement, in which case acceptance of the award by the
participant shall constitute agreement to the terms of the award.
12. ACCELERATION AND SETTLEMENT OF AWARDS
The Committee shall have the discretion, exercisable at any time before a
sale, merger, consolidation, reorganization, liquidation or change of control
(as defined below) of Bank Plus, to provide for the acceleration of vesting
and for settlement, including cash payment, of an award granted under the Plan
upon or immediately before such event is effective. However, the granting of
awards under the Plan shall in no way affect the right of Bank Plus to adjust,
reclassify, reorganize, or otherwise change its capital or business structure,
or to merge, consolidate, dissolve, liquidate, sell or transfer all or any
portion of its businesses or assets.
For purposes of this Plan, a "change in control" of Bank Plus shall be
deemed to occur if (a) any "person" (as such term is defined in Section 3(a)
and as used in Sections 13(d) and 14(d) of the Exchange Act), excluding Bank
Plus or any of its subsidiaries, a trustee or any fiduciary holding securities
under an employee benefit plan of Bank Plus or any of its subsidiaries, an
underwriter temporarily holding securities pursuant to an offering of such
securities or a corporation owned, directly or indirectly, by stockholders of
Bank Plus in substantially the same proportion as their ownership of Bank
Plus, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities Bank Plus representing
25% or more of the combined voting power of Bank Plus' then outstanding
securities ("Voting Securities"); (b) during any period of not more than two
years, individuals who constitute the Board as of the beginning of the period
and any new director (other than a director designated by a person who has
entered into an agreement with Bank Plus to effect a transaction described in
clause (a) or (b) of this sentence) whose election by the Board or nomination
for election by Bank Plus' stockholders was approved by a vote of at least
two-thirds ( 2/3) of the directors then still in office who either were
directors at such time or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof;
(c) the stockholders of Bank Plus approve a merger or consolidation of Bank
Plus with any other corporation, other than a merger or consolidation which
would result in the Voting Securities of Bank Plus outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into Voting Securities of the surviving entity) at least 60%
of the combined voting power of the Voting Securities of Bank Plus or such
surviving entity outstanding immediately after such merger or consolidation;
(d) the stockholders of Bank Plus approve a plan of complete liquidation of
Bank Plus; or (e) Bank Plus enters into one or more agreements to sell or
transfer to one or more third parties, in one transaction or a series of
related transactions, assets and/or liabilities representing fifty percent
(50%) or more of the book value of its assets and/or liabilities.
13. PLAN AMENDMENT
The Plan may be amended by the Board at any time and from time to time as it
deems necessary or appropriate to better achieve the purposes of the Plan.
14. TAX WITHHOLDING
Bank Plus shall have the right to deduct from any settlement of an award to
employees made under the Plan, including the delivery or vesting of Shares, a
sufficient amount to cover withholding of any federal, state or local taxes
required by law, or to take such other action as may be necessary to satisfy
any such withholding obligations. The Committee may, in its discretion and
subject to such rules as it may adopt, permit participants to use Shares to
satisfy required tax withholding and such Shares shall be valued at the Fair
Market Value as of the settlement date of the applicable award.
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<PAGE>
15. OTHER BENEFIT AND COMPENSATION PROGRAMS
Unless otherwise specifically determined by the Committee, settlements of
awards received by participants under the Plan shall not be deemed a part of a
participant's regular, recurring compensation for purposes of calculating
payments or benefits from any benefit plan or severance program of Bank Plus
or any subsidiary of Bank Plus, or any severance pay law. Further, Bank Plus
may adopt other compensation programs, plans or arrangements as it deems
appropriate or necessary.
16. UNFUNDED PLAN
Unless otherwise determined by the Committee, the Plan shall be unfunded and
shall not create (or be construed to create) a trust or a separate fund or
funds. The Plan shall not establish any fiduciary relationship between Bank
Plus and any participant or other person. To the extent any person holds any
rights by virtue of an award granted under the Plan, such rights (unless
otherwise determined by the Committee) shall be no greater than the rights or
an unsecured general creditor of Bank Plus.
17. REGULATORY APPROVALS
The implementation of the Plan, the granting of any award under the Plan,
and the issuance of Shares upon the exercise or settlement of any award shall
be subject to Bank Plus' procurement of all approvals required by regulatory
authorities having jurisdiction over the Plan, the awards granted under it or
the Shares issued pursuant to it.
18. FUTURE RIGHTS
No person shall have any claim or rights to be granted an award under the
Plan, and no participant shall have any rights under the Plan to be retained
as a director or as an employee of Bank Plus or its subsidiaries or affiliates
(or any entity in which Bank Plus has a significant equity interest).
19. GOVERNING LAW
The validity, construction and effect of the Plan and any actions taken or
relating to the Plan shall be determined in accordance with the laws of the
State of California and applicable federal law.
20. SUCCESSORS AND ASSIGNS
The Plan shall be binding on all successors and assigns of a participant,
including, without limitation, the estate of such participant and the
executor, administrator or trustee of such estate, or any receiver or trustee
in bankruptcy or representative of the participant's creditors.
A-5
<PAGE>
REVOCABLE PROXY
THIS REVOCABLE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
BANK PLUS CORPORATION
ANNUAL MEETING OF STOCKHOLDERS--APRIL 30, 1997
The undersigned hereby acknowledges receipt of the accompanying Notice of
Annual Meeting of Stockholders of Bank Plus Corporation (the "Company"), dated
March 31, 1997, and the related Proxy Statement, and revoking all prior
proxies, appoints and constitutes Robert P. Condon and James E. Stutz, or
either of them, each with full power of substitution, as the lawful proxies and
agents to represent the undersigned and vote, in the name, place and stead of
the undersigned, all of the shares of the Common Stock, $.01 par value, of the
Company which the undersigned would be entitled to vote if personally present
at the Annual Meeting of Stockholders of the Company to be held at 4565
Colorado Boulevard, Los Angeles, California on Wednesday, April 30, 1997, at
11:00 a.m., local time, or any adjournments or postponements thereof, for the
following matters and in the manner designated below:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED BELOW, FOR THE
--- ---
APPROVAL OF PROPOSAL 2 AND FOR THE APPROVAL OF PROPOSAL 3.
---
MARK HERE FOR
ADDRESS CHANGE [_]
AND NOTE ON REVERSE
SEE REVERSE
SIDE
(Continued and to be signed on other side)
<PAGE>
[X] PLEASE MARK YOUR
VOTES AS AS IN THIS
EXAMPLE.
THIS REVOCABLE PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND, IF NOT
OTHERWISE DIRECTED, IT WILL BE VOTED FOR THE NOMINEES AND PROPOSALS LISTED
BELOW.
1. Election of Directors:
FOR ALL AUTHORITY WITHHELD
NOMINEES (TO VOTE ALL NOMINEES)
[_] [_]
NOMINEES: Waldo H. Burnside, Lilly V. Lee, and Mark Sullivan III
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write that nominee's name on the line provided below.
- -----------------------------------------------------------------------
2. Proposal 2: Approval of certain amendments to, and a restatement of, the
Company's 1996 Stock Option Plan.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. Proposal 3: Ratification of the appointment of Deloitte & Touche LLP as the
Company's independent public accountants for 1997.
FOR AGAINST ABSTAIN
[_] [_] [_]
IMPORTANT--PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED EN-
VELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
Signature(s): Date: Signature(s): Date:
------------- -------- ------------- ---------
NOTE: (PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS CARD. JOINT OWNERS SHOULD
EACH SIGN. ATTORNEYS-IN-FACT, EXECUTORS, ADMINISTRATORS, TRUSTEES, GUARDIANS OR
CORPORATION OFFICERS SHOULD GIVE FULL TITLE. THIS PROXY SHALL BE VALID AND MAY
BE VOTED REGARDLESS OF THE FORM OF SIGNATURE, HOWEVER.)
