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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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<S> <C>
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 Section240.14a-11(c) or
Section240.14a-12
MID-STATE BANCSHARES
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment of Filing Fee (Check the appropriate box):
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<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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
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(1) Amount Previously Paid:
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(4) Date Filed:
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[LOGO]
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF
MID-STATE BANCSHARES
TO BE HELD MAY 18, 2000
------------------------
TO THE SHAREHOLDERS OF MID-STATE BANCSHARES:
NOTICE IS HEREBY GIVEN that, pursuant to its Bylaws and the call of its
Board of Directors, the Annual Meeting of Shareholders of Mid-State Bancshares
("Mid-State") will be held on Thursday, May 18, 2000, at 7:30 p.m., California
Time, at the Rancho Santa Barbara Marriott Santa Ynez Valley, 555 McMurray Road,
Buellton, California, (the "Meeting") for the following purposes, as set forth
in the attached Proxy Statement:
1. To consider and vote upon a proposal to elect four (4) persons to the
Board of Directors of Mid-State to serve until the 2003 Annual Meeting of
Shareholders and until their successors have been elected and have
qualified.
2. To approve an amendment to Mid-State's 1996 Stock Option Plan to
increase the number of shares reserved for future stock options.
3. To transact any other business which may properly come before the
Meeting or any adjournments or postponements thereof.
Only those shareholders of record at the close of business on April 14,
2000, are entitled to notice of and to vote at the Meeting or any adjournments
or postponements thereof (the "Record Date").
Section 2.11 of the Mid-State bylaws provide for the nomination of directors
as follows:
"Nominations for election of members of the Board of Directors may be
made by the Board of Directors or by any shareholder of any outstanding
class of capital stock of the Corporation entitled to vote for the election
of directors. Notice of intention to make any nominations (other than for
persons named in the notice of the meeting at which such nomination is to be
made) shall be made in writing and shall be delivered or mailed to the
president of the Corporation by the later of the close of business 21 days
prior to any meeting of shareholders called for the election of directors or
10 days after the date of mailing of notice of the meeting to shareholders.
Such notification shall contain the following information to the extent
known to the notifying shareholder: (a) the name and address of each
proposed nominee; (b) the principal occupation of each proposed nominee;
(c) the number of shares of capital stock of the corporation owned by each
proposed nominee; (d) the name and residence address of the notifying
shareholder; (e) the number of shares of capital stock of the proposed
nominee, a copy of which shall be furnished with the notification, whether
the proposed nominee has ever been convicted of or pleaded nolo contendere
to any criminal offense involving dishonesty or breach of trust, filed a
petition in bankruptcy, or been adjudged bankrupt. The notice shall be
signed by the nominating shareholder and by the nominee. Nominations not
made in accordance herewith shall be disregarded by the chairman of the
meeting, and upon his instructions, the inspectors of election shall
disregard all votes cast for each such nominee. The restrictions set forth
in this paragraph shall not apply to nomination of a person to replace a
proposed nominee who
<PAGE>
has died or otherwise become incapacitated to serve as a director between
the last day for giving notice hereunder and the date of election of
directors if the procedure called for in this paragraph was followed with
respect to the nomination of the proposed nominee.
By order of the Board of Directors
/s/ Raymond E. Jones
Raymond E. Jones
SECRETARY
April 21, 2000
IT IS VERY IMPORTANT THAT EVERY SHAREHOLDER VOTE. WE URGE YOU TO SIGN AND RETURN
THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO
ATTEND THE MID-STATE MEETING IN PERSON. IF YOU DO ATTEND THE MID-STATE MEETING,
YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON AT THAT TIME. YOU MAY REVOKE YOUR
PROXY AT ANY TIME PRIOR TO ITS EXERCISE.
PLEASE INDICATE ON THE PROXY CARD WHETHER OR NOT YOU EXPECT TO ATTEND THE
MEETING SO WE CAN PROVIDE ADEQUATE ACCOMMODATIONS.
<PAGE>
[LOGO]
MID-STATE BANCSHARES
----------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
---------------------
This Proxy Statement ("Proxy Statement") is being furnished to shareholders
of Mid-State, in connection with the solicitation of proxies by the Board of
Directors of Mid-State for use at the Annual Meeting of Shareholders of
Mid-State (including any adjournments thereof) to be held on May 18, 2000
("Meeting").
This Proxy Statement relates to the election of four directors for the Board
of Directors of Mid-State, to approve an amendment to Mid-State's 1996 Stock
Option Plan to increase the number of shares reserved for future stock options,
and any such other business as may properly come before the Meeting. This Proxy
Statement is dated April 14, 2000, and is first being mailed to shareholders of
Mid-State on or about April 21, 2000.
DATE, TIME AND PLACE
The Meeting will be held on Thursday, May 18, 2000, at the Rancho Santa
Barbara Marriott Santa Ynez Valley, 555 McMurray Road, Buellton, California, at
7:30 p.m., California Time, and any adjournment or adjournments thereof.
RECORD DATE
The Board has fixed the close of business on April 14, 2000, as the Record
Date for the determination of shareholders entitled to notice of, and to vote
at, the Meeting. Accordingly, only holders of record of shares of Mid-State
Bancshares Common Stock, no par value ("Mid-State Stock") at the close of
business on the Record Date will be entitled to vote at the Mid-State Meeting
and any adjournment thereof. As of Record Date, there were 11,300,433 shares of
stock outstanding, held by approximately 3,550 shareholders of record.
PROXIES AND REVOCABILITY OF PROXIES
A proxy card for voting at the Meeting is enclosed with this Proxy
Statement. When a proxy card is returned, properly signed and dated, the shares
represented thereby will be voted in accordance with the instructions on the
proxy card. If a shareholder does not attend the Meeting and does not return the
signed proxy card, such holder's shares will not be voted and this will have the
effect of a vote "AGAINST" the matters to be voted on at the Meeting.
Shareholders are urged to mark the box on the proxy card to indicate how the
shares represented by the proxy card are to be voted. If a shareholder returns a
signed proxy card but does not indicate how his or her shares are to be voted,
such shares will be voted "FOR" the election of the four directors named herein
and "FOR" the amendment to the Stock Option Plan. The proxy card also confers
discretionary authority on the individual appointed by the Board named on the
proxy card to vote the shares represented thereby on any other matter that is
properly presented for action
1
<PAGE>
at the Meeting. A shareholder who has given a proxy may revoke it at any time
prior to its exercise at the Meeting by delivering an instrument of revocation
to the secretary of Mid-State, by duly executing and submitting a proxy card
bearing a later date, or by appearing at the Meeting and voting in person. The
mere presence at the Meeting of the person who has given a proxy will not revoke
such proxy.
COSTS OF SOLICITATIONS OF PROXIES
Mid-State will bear its own costs in connection with this solicitation. It
is contemplated that proxies will be solicited principally through the mails,
but directors, officers and regular employees of Mid-State may solicit proxies
(for no additional compensation) by personal interview, telephone, telex,
telegram, facsimile or similar means of communication. Although there is no
formal agreement to do so, Mid-State may reimburse banks, brokerage houses and
other custodians, nominees and fiduciaries for their reasonable expenses in
forwarding these proxy materials to their principals.
OUTSTANDING SECURITIES; QUORUM
As of the Record Date, there were issued and outstanding 11,300,433 shares
of Mid-State Stock. The presence, either in person or by properly executed
proxies, of the holders of a majority of the outstanding shares of Mid-State
Stock is necessary to constitute a quorum at the Meeting. Abstentions will be
counted for purposes of establishing a quorum.
VOTE REQUIRED
Shareholders are entitled to one vote at the Meeting for each share of
Mid-State Stock held of record by them on the Record Date. The candidates
receiving the highest number of affirmative votes up to the number of directors
to be elected will be elected. Cumulative voting is not permitted under
Mid-State's Articles of Incorporation.
As of the Record Date, Mid-State knew of no person who owned more than five
percent (5%) of the outstanding shares of Mid-State Stock. As of the Record
Date, directors and executive officers(a) of Mid-State beneficially owned an
aggregate of 614,882 shares of Mid-State Stock (including shares issuable upon
exercise of stock options within 60 days of the Record Date), or approximately
5.44% of the outstanding shares of Mid-State Stock.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Mid-State's Bylaw and implementing resolutions provide for Mid-State to have
a total of eleven (11) directors. Mid-State has a "Classified" Board of
Directors. A "Classified" Board means that the directors are divided into three
classes with staggered terms. As a result, four persons will be elected at the
Meeting to a term of three years. At subsequent annual meetings of the
Mid-State's shareholders, a number of directors will be elected equal to the
number of directors with terms expiring at that annual meeting. The directors so
elected at these subsequent annual meetings will each be elected for a three
year term.
The four persons nominated for election are referenced in the following
table. In the event that any of the nominees should be unable to serve as a
director, it is intended that proxies will be voted for the election of such
substitute nominee, if any, as shall be designated by the Board of Directors.
Management has no reason to believe that any nominee will become unavailable.
The following table sets forth certain information, as of March 31, 2000,
with respect to the four persons nominated by the Board of Directors for
election as directors and the seven continuing directors whose terms
- ------------------------
(a) Executive officers include the President and Chief Executive Officer,
Executive Vice President and Chief Credit Officer, and Executive Vice
President and Chief Financial Officer.
2
<PAGE>
do not expire at the Meeting. Mid-State knows of no arrangements, including any
pledge by any person of securities of Mid-State, the regulation of which may, at
a subsequent date, result in a change in control of the Company. There are no
arrangements or understandings by which any of the directors of Mid-State were
selected. There are no family relationships between any of the directors or
executive officers.
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY
OWNED ON MARCH 31, 2000
YEAR FIRST -----------------------------
NAME, ADDRESS(1) AND ELECTED OR PERCENTAGE
RELATIONSHIP WITH THE PRINCIPAL OCCUPATION FOR APPOINTED NUMBER OF SHARES
COMPANY OF BENEFICIAL OWNER PAST FIVE YEARS AGE DIRECTOR TERM(2) OF SHARES(3) OUTSTANDING(4)
- --------------------------- --------------------------------- -------- ---------- -------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
THE FOLLOWING FOUR PERSONS HAVE BEEN NOMINATED FOR ELECTION:
Trudi Carey ................ Architect, Contractor, 41 2000 I -- --
Director Real Estate Broker
The Carey Group, Inc.
H. Edward Heron ............ Vice President 59 1996 I 24,023(5) .21%
Director Coldwell Banker
James W. Lokey ............. President/Chief Executive 52 2000 I 2,000 .02%
Director, Mid-State Officer, Mid-State Bank beginning
Bancshares and 3/1/00 President, Downey Savings
President/Chief Executive in 1997 and 1998
Officer, Mid-State Bank Executive Vice President, Wells
Fargo Bank in 1996
Stephen P. Maguire ......... Investment Broker 49 1999 I 23,993 .21%
Director President, Maguire Investments,
Inc.
THE FOLLOWING SEVEN DIRECTORS' TERMS DO NOT EXPIRE AT THIS MEETING:
Gracia B. Bello ............ Registered Pharmacist 70 1996 II 8,412(5) .07%
Director
A. J. Diani ................ Construction 78 1977 II 89,588(5) .79%
Director
Daryl L. Flood ............. Executive Vice President/ 65 1978 II 101,232(5) .90%
Director Credit Administration
Mid-State Bank (Retired)
Raymond E. Jones ........... Executive Vice President/ 71 1990 III 58,533(5) .52%
Director Chief Financial Officer
Mid-State Bank (Retired)
Gregory R. Morris .......... Insurance Broker, Morris & 59 1987 III 52,370(6) .46%
Director Garritano Insurance
Carrol R. Pruett ........... Chairman of the Board, Mid-State 62 1967 III 127,849(7) 1.13%
Chairman of the Bancshares and Mid-State Bank.
Board/President/ Chief President/Chief Executive Officer
Executive Officer of Mid-State Bank until 3/1/00
William L. Snelling ........ Business Manager, Consultant 68 1977 III 86,140(5) .76%
Director
Directors and Executive
Officers as a group (13
persons).................. 614,882(8) 5.44%
</TABLE>
- ----------------------------------
(1) The address for all persons listed is c/o Mid-State Bancshares, 1026 Grand
Avenue, Arroyo Grande, California 93420.
(2) I-Term expiring in 2003; II-Term expiring in 2001; and III-Term expiring in
2002.
(3) Except as otherwise noted, includes shares held by each person's spouse
(except where legally separated) and minor children; shares held by any
other relative of such person who has the same home; shares held by a family
trust as to which such person is a trustee with sole voting and investment
power (or shares power with a spouse); or shares held in an Individual
Retirement Account as to which such person has pass-through voting rights
and investment power.
(4) Includes shares of common stock subject to stock option exercisable within
60 days.
(5) Includes 2,000 shares of common stock subject to stock option exercisable
within 60 days.
(6) Includes 32,720 shares held by Mr. Morris as Trustee for Morris & Garritano
Profit Sharing Trust, as to which Mr. Morris has sole voting and investment
power; and 2,000 shares of common stock subject to stock option exercisable
within 60 days.
(7) Includes 12,046 shares of common stock subject to stock option exercisable
within 60 days.
(8) Includes 40,742 shares of common stock owned by the executive officers and
shares subject to stock option exercisable within 60 days.
3
<PAGE>
None of the Bank's directors of Mid-State is a director of any other company
with a class of securities registered pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended, or subject to the requirements of
Section 15(d) of such Act or any company registered as an investment company
under the Investment Company Act of 1940.
THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors has, among others, a standing Audit Committee of
which Directors Morris (Chairman), Bello, Diani, Flood, Heron and Maguire are
members. During the year ended December 31, 1999, the Audit Committee held a
total of four (4) meetings. The purpose of the Audit Committee is to meet with
the outside auditors in order to fulfill the legal and technical requirements
necessary to adequately protect the directors, shareholders, employees and
depositors of Mid-State. The Audit Committee also meets with Mid-State's
internal auditor to review Mid-State's internal auditing program and supervises
and reviews audits of Mid-State and its departments. In addition, it is the
responsibility of the Audit Committee to recommend to the Board of Directors the
selection of independent accountants and to make certain that the independent
accountants have the necessary freedom and independence to properly examine all
Mid-State records.
Mid-State has a standing Nominating Committee of which Directors Pruett
(Chairman), Clark, Hares and Morris are members. During the year ended
December 31, 1999, the Nominating Committee held a total of three (3) meetings.
The Committee reviews information assembled for the purpose of selecting
candidates for nomination to membership on the Board. Following appropriate
investigations, it ascertains the willingness of selected candidates to serve
and extends on behalf of the Board, invitations to become candidates. Its
recommendations are presented to the Board at regularly scheduled meetings. The
Committee will also consider, at its regularly scheduled meetings, those
recommendations by shareholders which are submitted, along with biographical and
business experience information to the Chief Executive Officer.
The Board also has a standing Compensation Committee, of which Executive
Vice President James G. Stathos, an ex-officio member, serves as Chairman, and
Directors Diani, Flood, Jones, Morris and Pruett are members. The primary
function of the Compensation Committee, which met twelve (12) times during 1999,
is to establish proper compensation ranges for officers and employees, delegate
certain authority to management regarding salary procedure, and determine
salaries for Mid-State officers depending upon experience, performance and
contribution to the success of Mid-State.
During the fiscal year ended December 31, 1999, the Board of Directors of
Mid-State held a total of thirteen (13) meetings. All of the persons who were
directors during 1999, attended at least 75% of the aggregate of, 1) the total
number of such meetings, and 2) the total number of meetings held by all
committees of the Board on which such director served during 1999.
REPORT OF THE COMPENSATION COMMITTEE
Mid-State applies a consistent philosophy to compensation for all employees,
including senior management. This philosophy is based on the premise that the
achievements of Mid-State result from the coordinated efforts of all individuals
working toward common objectives. Mid-State strives to achieve those objectives
through teamwork that is focused on meeting the expectations of customers and
shareholders.
Mid-State has had a long and successful history of using a simple total
compensation program that consists of cash and equity-based compensation. Having
a compensation program that allows Mid-State to successfully attract and retain
key employees permits it to provide useful products and services to customers,
enhance shareholder value, motivate innovation, foster teamwork, and adequately
reward employees.
4
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The goals of the compensation program are to align compensation with
business objectives and performance, and to enable Mid-State to attract and
reward executive officers whose contributions are critical to the long-term
success of Mid-State. Mid-State is committed to maintaining a pay program that
helps attract and retain the best people in the industry. To ensure that pay is
competitive, Mid-State regularly compares its pay practices with those of other
leading independent banks and sets its pay parameters based on this review.
Executive officers are rewarded based upon corporate performance, and
individual performance. Mid-State performance is evaluated by reviewing the
extent to which strategic and business plan goals are met, including such
factors as profitability, performance relative to competitors and achievement of
corporate goals. Individual performance is evaluated by reviewing organizational
and management development progress against set objectives and the degree to
which teamwork and Mid-State values are fostered.
CEO COMPENSATION
Carrol R. Pruett has been President and Chief Executive Officer of Mid-State
since March 20, 1969. The Committee used the same compensation policy described
above for all Executive Officers to determine Mr. Pruett's fiscal 1999
compensation.
In setting Mr. Pruett's compensation, the Compensation Committee made an
overall assessment of Mr. Pruett's leadership in achieving Mid-State's long-term
strategic and business goals. Mr. Pruett's salary reflects a consideration of
both competitive forces and Mid-State's performance. Mid-State does not assign
specific weights to these categories.
COMPENSATION COMMITTEE:
<TABLE>
<S> <C>
James. G. Stathos, Chair Daryl L. Flood
Raymond E. Jones Gregory Morris
Carrol R. Pruett A.J. Diani
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Carrol R. Pruett, the Chairman of the Board, President and Chief Executive
Officer of Mid-State, and James G. Stathos, Executive Vice President of
Mid-State, each served as a member of the Compensation Committee during 1999.
Mr. Stathos also served as Chairman of the Committee. Neither Mr. Pruett nor
Mr. Stathos participated in the discussion of their respective compensation or
performance when such matters were addressed by the Committee.
5
<PAGE>
EXECUTIVE COMPENSATION
No person serving as an executive officer of Mid-State or its banking
subsidiary received aggregate cash compensation of more than $100,000 during
1999, except Carrol R. Pruett, Chairman of the Board, President/Chief Executive
Officer; Thomas E. Reese, Executive Vice President/Chief Credit Officer;
James G. Stathos, Executive Vice President/Chief Financial Officer; and Jeffrey
DeVine, Vice President/ Corporate Banking Manager. The Board of Directors
establishes the compensation awarded to the Executive Officers, and determines
the salaries of those executive officers based upon their experience,
performance, and contribution to the success of Mid-State. The following table
sets forth the aggregate compensation for services in all capacities paid or
accrued by Mid-State to each of these individuals.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
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# OF
RESTRICTED STOCK
NAME OF OFFICER AND OTHER ANNUAL STOCK OPTIONS/ LT1P
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS SAR'S(10) PAYOUTS
- ------------------- -------- ----------- ---------- ------------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Carrol R. Pruett....... 1999 $317,500.00(12) $ 0 $0 $0 $0 $ 0.00
Chairman of the 1998 $253,039.00(13) $ 0 $0 $0 $0 $185,000.00
Board, President, and 1997 $233,614.00(14) $ 0 $0 $0 $0 $210,500.00
Chief Executive
Officer
Thomas E. Reese........ 1999 $148,451.00(16) $ 0 $0 $0 $0 $ 0
Executive Vice 1998 $136,243.00(17) $ 0 $0 $0 $0 $ 0
President 1997 $126,336.00(18) $ 0 $0 $0 $0 $ 0
James G. Stathos....... 1999 $148,452.00(20) $ 0 $0 $0 $0 $ 0
Executive Vice 1998 $133,938.00(21) $ 0 $0 $0 $0 $ 0
President 1997 $126,336.00(22) $ 0 $0 $0 $0 $ 0
Jeffrey DeVine......... 1999 $ 92,991.50 $52,145.80 $0 $0 $0 $ 0
Vice President 1998 $ 91,020.00(24) $11,235.00 $0 $0 $0 $ 0
1997 $ 85,757.70(24) $10,020.00 $0 $0 $0 $ 0
<CAPTION>
ALL OTHER
NAME OF OFFICER AND COMPENSATION
PRINCIPAL POSITION (11)
- ------------------- -------------
<S> <C>
Carrol R. Pruett....... $334,062.00(15)
Chairman of the $206,250.00
Board, President, and $ 2,478.31
Chief Executive
Officer
Thomas E. Reese........ $213,571.33(19)
Executive Vice $104,540.00
President $ 1,981.08
James G. Stathos....... $205,323.22(23)
Executive Vice $158,789.00
President $104,540.00
Jeffrey DeVine......... $ 244.98
Vice President $ 0.00
$ 0.00
</TABLE>
- ------------------------------
(10) Refer to "Aggregated Options/SAR Exercises Table" on Page 9 of this Proxy
Statement.
(11) Includes Mid-State contributions to defined contribution plans (qualified
and non-qualified, and whether or not vested.)
(12) Includes $10,000.00 accrued in 1999 but deferred pursuant to the
Mid-State's 401(k) Plan (see "Profit Sharing 401(k) Plan").
(13) Includes $9,500.00 accrued in 1998 but deferred pursuant to the Mid-State's
401(k) Plan (see "Profit Sharing 401(k) Plan").
(14) Includes $9,500.00 accrued in 1997 but deferred pursuant to the Mid-State's
401(k) Plan (see "Profit Sharing 401(k) Plan").
(15) Includes 1999 Deferred Compensation Contribution of $331,000.00.
(16) Includes $10,000.00 accrued in 1999 but deferred pursuant to the
Mid-State's 401(k) Plan (see "Profit Sharing 401(k) Plan").
(17) Includes $8,175.00 accrued in 1998 but deferred pursuant to the Mid-State's
401(k) Plan (see "Profit Sharing 401(k) Plan").
(18) Includes $9,500.00 accrued in 1997 but deferred pursuant to the Mid-State's
401(k) Plan (see "Profit Sharing 401(k) Plan").
(19) Includes 1999 Deferred Compensation Contribution of $207,490.00.
(20) Includes $10,000.00 accrued in 1999 but deferred pursuant to the
Mid-State's 401(k) Plan (see "Profit Sharing 401(k) Plan").
(21) Includes $8,156.00 accrued in 1998 but deferred pursuant to the Mid-State's
401(k) Plan (see "Profit Sharing 401(k) Plan").
(22) Includes $7,580.16 accrued in 1997 but deferred pursuant to the Mid-State's
401(k) Plan (see "Profit Sharing 401(k) Plan").
(23) Includes 1999 Deferred Compensation Contribution of $189,053.33.
(24) Paid by City Commerce Bank prior to merger.
6
<PAGE>
STOCK OPTIONS
Mid-State's 1996 Stock Option Plan (the "Stock Option Plan"), is intended to
advance the interests of Mid-State by encouraging stock ownership on the part of
key employees and non-employee directors. As of March 31, 2000, Mid-State had
options outstanding to purchase a total of 728,877 shares of its Common Stock
under the Stock Option Plan and 80,287 shares available for grant.
The following table furnishes certain information regarding stock options
outstanding and exercised under the Stock Option Plan for (a) Mr. Pruett,
(b) Mr. Reese, (c) Mr. Stathos, and (d) Mr. DeVine. Mr. Pruett was granted a
stock option in 1999 for 50,000 shares at an exercise price of $35.87 per share.
Mr. Reese and Mr. Stathos each received a stock option grant in 1999 for 25,000
shares each at an exercise price of $35.87 per share. Each option is a ten
(10) year option fully vested after five (5) years.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR, AND FISCAL YEAR-END
OPTION/SAR VALUE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED
SHARES OPTIONS/SARS AT FY-END VALUE OF IN-THE-MONEY
ACQUIRED ON VALUE OPTIONS/SARS AT FY-END OPTIONS/SARS FY-END
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(25)
- ---- ----------- ---------- ------------------------- -----------------------------
<S> <C> <C> <C> <C>
Carrol R. Pruett......... 0 0 12,046 Exercisable $213,971.75
64,698 Unexercisable $ 7,000.00
Thomas E. Reese.......... 0 0 5,348 Exercisable $ 72,476.50
35,233 Unexercisable $ 7,000.00
James G. Stathos......... 0 0 5,348 Exercisable $ 72,476.50
35,233 Unexercisable $ 7,000.00
Jeffrey DeVine........... 5,048 $56,761.59 0 Exercisable $ .00
0 Unexercisable $ .00
</TABLE>
PROFIT SHARING/401(k) PLAN
In 1963, the Board of Directors of Mid-State Bank entered into a Profit
Sharing Retirement Plan and Trust under a group program offered through the
California Bankers Association. The Plan covers substantially all of Mid-State
employees, and was amended in 1985 to be a combination qualified Profit Sharing
Plan (the "Profit Sharing Plan") and Savings and Retirement Plan designed to
comply with Internal Revenue Code Section 401(k) (the "401(k) Plan"). Under the
Profit Sharing Plan, the Board of Directors, in its discretion, decides how much
money, if any, will be contributed by Mid-State to the Profit Sharing Plan
depending on the amount of Mid-State's profits for the year. Employees are not
permitted to contribute to the Profit Sharing Plan. Effective January 1, 1989,
once an employee has been in service with Mid-State three (3) full years, his
interest begins to vest at a rate of twenty percent (20%) per year for each year
of service up to seven (7) years, at which point his interest is fully vested.
The maximum amount which can be contributed by Mid-State to the Profit Sharing
Plan is equal to fifteen percent (15%) of the base salary paid to participating
employees of Mid-State. No amounts are accrued or set aside for the account of
non-employee directors. Mid-State contributed approximately $1,396,000.00 to the
Profit Sharing Plan for the year ending December 31, 1999. The amounts allocated
to individual principal officers in previous years are set forth in the Cash
Compensation Table above (see "Executive Compensation" above).
- ------------------------
(25) Unexercisable stock options represent those options granted, but not yet
fully vested. Exercisable stock options represent the fully vested portion.
Stock options vest at the rate of 20% per year from date of grant. Value of
options determined by multiplying number of shares by the difference between
the closing price on December 31, 1999 of $31.875 per share, and the
respective exercise price per share.
7
<PAGE>
Under the 401(k) Plan, each covered employee can make voluntary
contributions to his or her account in an amount up to ten percent (10%) of his
or her base salary; such contributions vest immediately when made. Mid-State
makes a contribution to the employee's account in an amount equal to fifty
percent (50%) of the employee's contributions, up to a maximum of six percent
(6%) of the employee's salary. Mid-State's contributions to the employee's
account vest at the rate of twenty percent (20%) per year, beginning after the
third full year of service. For the year ended December 31, 1999, Mid-State
contributed approximately $418,000.00 to the 401(k) Plan.
DEFERRED COMPENSATION PLAN
The Board of Directors also adopted a Deferred Compensation Plan in 1983,
which was amended in July 1996, in order to provide performance-oriented
deferred compensation for Mid-State's senior management including its executive
officers. Pursuant to the Deferred Compensation Plan, the Board of Directors
sets aside a specified amount for contribution to the Plan, representing between
two percent (2%) and four percent (4%) of Mid-State's net profits, depending
upon Mid-State's return on equity for the previous year. A committee appointed
by the Board of Directors allocates the amount contributed to the Plan among the
accounts of the participants in such proportions as the Committee shall
determine from time to time. Contributions pursuant to the Deferred Compensation
Plan become vested at the rate of ten percent (10%) per year for each full year
of service up to ten (10) years. The funds credited to the account of each
participant accrue interest at an annual rate of return equal to ninety percent
(90%) of Mid-State's prime rate, with such interest adjusted and credited to
each account quarterly. Payment of vested amounts may be made either upon
retirement or after the fifth year of participation in the Plan, in certain
specified installments, at the election of the participant. For the year ended
December 31, 1999, Mid-State made a contribution of $662,000.00 to the Deferred
Compensation Plan for the benefit of executive officers.
CHANGE IN CONTROL AGREEMENTS
Mid-State entered into "change in control" agreements with Messrs. Pruett,
Reese and Stathos as of November 12, 1997. Each agreement provides that, if a
person who has acquired control of Mid-State terminates the officer within
24 months after such change in control other than for cause, disability or
retirement (as such terms are defined in the agreement) or if, within 24 months
of such a change in control, the officer terminates the agreement for good
reason (as defined in the agreement), the officer will receive (i) a lump sum
severance payment equal to two times his annual salary and bonus (provided that
in no event shall such amount exceed 2.99 times such officer's "annualized
includible compensation for the base period" (as defined in the Internal Revenue
Code)) and (ii) continued benefits under all insured and self-insured employee
welfare benefit plans for a period ending on the earliest of (A) three
(3) years, (B) the commencement date of equivalent benefits from a new employer
or (C) the officer's normal retirement date under the terms of such plans. In
general, a "change in control" includes a change in the majority of directors as
a result of an election contest, an acquisition of 25% of the outstanding
shares, a merger, consolidation, sale of substantially all the assets, a change
in the majority of directors over a two (2) year period as well as any other
transfer, voluntarily or by hostile takeover or proxy contest, operation of law
or otherwise, of control of Mid-State.
OTHER COMPENSATION
Mid-State has provided and plans to continue to provide its principal
officers with automobiles, which are not available to all employees of
Mid-State. It is impracticable to estimate the percentage of the total costs of
these benefits attributable to personal use. No amount is stated for the
foregoing, since management has concluded that the amount of any personal
benefits to any principal officer and to the principal officers as a group is
LESS than the lesser of $25,000.00 per person or ten percent (10%) of the
compensation reported under "Cash Compensation" for each such person and for the
group.
8
<PAGE>
COMPENSATION OF DIRECTORS
Non-officer directors received $1,500.00 per month for their service as
directors and attendance at Board meetings. Loan Committee and Audit Committee
members received $200.00 per meeting, for attendance at such Committee meetings.
Compensation Committee members received $100.00 per meeting, for attendance at
such Committee meetings. The total amount of fees paid to directors for
attendance at Board and Committee meetings during 1999 was $208,300.00. During
1998, each director received a stock option grant under the 1996 Stock Option
Plan to purchase 10,000 shares of Mid-State Stock. The options were granted at
an exercise price of $31.00 per share, fully vested in five (5) years, and are
exercisable for ten (10) years.
PERFORMANCE GRAPH
The following table and graph display five (5) year comparative total return
performance information for Mid-State Stock, the Standard and Poors 500 Index
(S&P 500), NASDAQ Bank Index, and a proxy for Southern California banks
published by SNL Securities (Southern California Proxy). The information is
prepared assuming $100.00 is invested in each of the four (4) potential
investments, five (5) years ago. The performance information takes into account
dividends paid and the price appreciation or depreciation of the stock(s). It
should be noted that historical performance information is no guarantee of
future performance.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MID-STATE BANCSHARES 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
TOTAL RETURN PERFORMANCE
INDEX VALUE
<S> <C> <C> <C> <C> <C> <C>
Mid-State Bancshares 100.00 107.39 146.77 286.09 299.56 346.84
S&P 500 100.00 137.58 169.03 225.44 289.79 350.78
NASDAQ Bank Index* 100.00 149.00 196.73 329.39 327.11 314.42
Southern California Proxy 100.00 126.83 191.46 366.10 332.04 329.18
</TABLE>
- ------------------------
* Source: CRSP, Center for Research in Security Prices, Graduate School of
Business, The University of Chicago 1999.
Used with permission. All rights reserved. crsp.com.
9
<PAGE>
CERTAIN TRANSACTIONS
Some of the current directors and executive officers of Mid-State and the
companies with which they are associated have been customers of, and have had
banking transactions with Mid-State, in the ordinary course of Mid-State's
business, and Mid-State expects to continue to have such banking transactions in
the future. All loans and commitments to lend included in such transactions have
been made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
persons of similar creditworthiness, and in the opinion of management of
Mid-State, have not involved more than the normal risk of repayment or presented
any other unfavorable features.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires Mid-State's directors, executive
officers and ten percent (10%) or more shareholders of Mid-State's equity
securities to file with the SEC initial reports of ownership and reports of
changes of ownership of Mid-State's equity securities. Officers, directors and
ten percent (10%) or more shareholders are required by SEC regulations to
furnish Mid-State with copies of all Section 16(a) forms they file. To
Mid-State's knowledge, based solely on review of the copies of such reports
furnished to Mid-State and written representations that no other reports were
required, during the fiscal year ended December 31, 1999, all Section 16(a)
filing requirements applicable to its executive officers, directors and
beneficial owners of ten percent (10%) or more of Mid-State's equity securities
appear to have been met.
PROPOSAL NO. 2
AMENDMENT OF STOCK OPTION PLAN
INTRODUCTION
Mid-State's 1996 Stock Option Plan, as amended to date, (the "1996
Plan")(26) presently provides for the issuance of up to 892,542 shares of
Mid-State Stock upon the exercise of option granted under the 1996 Plan. At
March 15, 2000, Mid-State had options outstanding pursuant to the 1996 Plan to
purchase a total of 728,877 shares, options for 81,778 shares have been
exercised, and only 81,887 shares available for future grants. A description of
options granted to and exercised by Mid-State's executive officers and directors
during 1999 is included here in "ELECTION OF DIRECTORS OF MID-STATE."
Shareholders are being asked to approve an amendment to the 1996 Plan to
increase the maximum number of shares of Mid-State Stock, which are reserved
under the 1996 Plan, in the aggregate, from 892,542 shares to 1,500,000 shares.
Mid-State's Board of Directors believes it is advisable for the shareholders
to approve the proposed amendment to the 1996 Plan in order to have options
available to encourage eligible participants to remain with Mid-State and to
attract new, qualified officers, key employees and directors in today's
competitive market. If the proposed amendment to the 1996 Plan is approved, the
total shares available pursuant to the 1996 Plan would be approximately 13.27%
of the total shares outstanding at March 15, 2000.
SUMMARY OF 1996 PLAN
The following is a summary of the 1996 Plan. This summary does not purport
to be complete and is qualified in its entirety by reference to the complete
text of the 1996 Plan, which is available for inspection at the Administrative
Office of Mid-State.
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(26) The 1996 Plan was originally adopted by the Board of Directors and
shareholders of BSM Bancorp, which was the bank holding company for Bank of
Santa Maria. When Mid-State Bank acquired Bank of Santa Maria in 1998, the
holding company structure was preserved; the company was renamed Mid- State
Bancshares and the 1996 Plan continued.
10
<PAGE>
PURPOSE OF THE 1996 PLAN
The Board of Directors and shareholders adopted and approved the 1996 Plan
to provide that employees and officers ("Employees"), employee directors
("Employee Directors"), non-employee directors ("Non-Employee Directors") and
consultants ("Consultants") (collectively "Participants") will be eligible to
receive options to purchase shares of Mid-State Stock.
The purpose of the 1996 Plan is to strengthen Mid-State by providing to
Participants added incentive for high performance and to encourage stock
ownership in Mid-State. The 1996 Plan seeks to accomplish these goals by a means
whereby such Participants may be given an opportunity to purchase, by way of
option, Mid-State Stock. The 1996 Plan is also intended to enable Mid-State to
compete effectively for and retain the services of such persons and to provide
incentives for such persons to exert maximum efforts for the success of
Mid-State.
Mid-State intends that the options issued under the 1996 Plan shall, in the
discretion of the Committee which administers the 1996 Plan, be either incentive
stock options ("Incentive Stock Options") as that term is used in Section 422A
of the Internal Revenue Code of 1986, as amended (the "Code"), or any successor
thereto, or options which do not qualify as incentive stock options
("Non-Qualified Stock Options").
ADMINISTRATION
A Committee, appointed by the Board of Directors and composed of not less
than three nor more than five persons at least two of whom must be directors,
administers the 1996 Plan (the "Committee"). The Committee has full power and
authority in its discretion to take any and all action required or permitted to
be taken under the 1996 Plan, including the selection of Participants to whom
stock options may be granted, the determination of the number of shares which
may be covered by stock options, the purchase price, and other terms and
conditions thereof. Regardless of whether a Committee is selected, the Board of
Directors of Mid-State may act as the Committee and any action taken by said
Board as such shall be deemed to be taken by the Committee.
SHARES RESERVED
There are currently 810,764 shares of Mid-State Stock reserved for issuance
upon exercise of options granted under the 1996 Plan. The proposed amendment to
the 1996 Plan would increase the number of shares reserved under the 1996 Plan
to 1,500,000 shares. If any option granted under the 1996 Plan shall for any
reason expire, be canceled or otherwise terminate without having been exercised
in full, the shares not purchased under such option shall again become available
for the 1996 Plan.
ELIGIBILITY
All Employees, Employee Directors, Non-Employee Directors and Consultants
are eligible to participate in the 1996 Plan and Employees and Employee
Directors are eligible to receive Incentive and Non-Qualified Stock Options.
Non-Employee Directors and Consultants are only eligible to receive Non-
Qualified Stock Options. Mid-State may issue Incentive Stock Options provided
that the aggregate fair market value (determined at the time the Incentive Stock
Option is granted) of the stock with respect to which Incentive Stock Options
are exercisable for the first time by the optionee during any calendar year
shall not exceed $100,000. Should it be determined that any Incentive Stock
Option granted pursuant to the 1996 Plan exceeds such maximum, such Incentive
Stock Option shall be considered to be a Non-Qualified Stock Option and not
qualify for treatment as an Incentive Stock Option under Section 422A of the
Code to the extent, but only to the extent, of such excess.
11
<PAGE>
OPTION PRICE
The exercise price of each option shall be determined by the Committee and
shall not be less than the fair market value of the stock subject to the option
on the date the option is granted; provided, however, that the purchase price of
the stock subject to an Incentive Stock Option may not be less than 110% of such
fair market value where the optionee owns (or is deemed to own pursuant to the
Code) shares of stock representing more than 10% of total combined voting power
of all classes of stock of Mid-State. The purchase price of Mid-State Stock
acquired pursuant to an option may be paid, subject to certain approval by the
Committee, (i) in cash, (ii) with other shares of Mid-State Stock, (iii) on a
deferred basis through a loan arrangement, or (iv) by surrender of a portion of
the option.
ADJUSTMENTS UPON CHANGES IN COMMON STOCK
If the outstanding shares of the Mid-State Stock are increased, decreased,
or changed into, or exchanged for a different number or kind of shares or
securities of Mid-State without receipt of consideration by Mid-State, through
reorganization, merger, recapitalization, reclassification, stock split, stock
dividend, stock consolidation, or otherwise, an appropriate and proportionate
adjustment shall be made in the number and kind of shares as to which options
may be granted. A corresponding adjustment changing the number or kind of shares
and the exercise price per share allocated to unexercised options, or portions
thereof, which shall have been granted prior to any such change shall likewise
be made. Any such adjustment, however, in an outstanding option shall be made
without change in the total price applicable to the unexercised portion of the
option but with a corresponding adjustment in the price for each share subject
to the option adjustments being made by the Committee whose determination as to
what adjustments shall be made, and the extent thereof, shall be final and
conclusive. No fractional shares of stock shall be issued under the 1996 Plan on
account of any such adjustment.
EXPIRATION, TERMINATION AND TRANSFER OF OPTIONS
No option under the 1996 Plan may extend more than ten (10) years from the
date of grant. Notwithstanding the foregoing, any Incentive Stock Option granted
to an optionee who owns (or is deemed to own pursuant to the Code) shares of
stock representing more than ten percent (10%) of the total combined voting
power of all classes of stock of Mid-State or any of its affiliates shall expire
not later than five (5) years from the date of grant.
Except in the event of termination of employment due to death, disability or
termination for cause, options will terminate three months after an Employee or
Employee Director optionee ceases to be employed by Mid-State or its
subsidiaries unless the options by their terms were scheduled to terminate
earlier. If such termination was due to such optionee's disability (as defined
in the 1996 Plan), or such optionee's death, the option, by its terms, may be
exercisable for one year after such termination of employment or cessation of
directorship unless the option by its terms was scheduled to terminate earlier.
In the event of disability or death, such options shall be exercisable only as
to those shares with respect to which installments, if any, had accrued as of
the date of death or disability. If an optionee's employment is terminated for a
violation of the Standards of Conduct, the option terminates immediately subject
to reinstatement by the Committee in its sole discretion. An option by its terms
may only be transferred by will or by laws of descent and distribution upon the
death of the optionee, and shall be exercisable during the lifetime of the
person to whom the option is granted only by such person.
TERMINATION AND AMENDMENT OF THE 1996 PLAN
The 1996 Plan and the options granted thereunder will terminate upon the
occurrence of a terminating event, including, but not limited to, liquidation,
reorganization, merger or consolidation of Mid-State with another company in
which Mid-State is not the surviving entity, or a sale of substantially all the
assets of Mid-State to another person, or the acquisition of stock representing
more than 50% of the voting
12
<PAGE>
power of Mid-State then outstanding by another person or company (a "Terminating
Event") unless provision is made in connection with such transaction for
assumption of options theretofore granted, or substitution for such options with
new options covering stock of a successor employer, solely in the discretion of
such successor, with appropriate adjustment as to the number and kind of shares
and prices. The Committee shall notify each optionee of the pendency of a
Terminating Event. Upon the delivery of such notice, any option outstanding
shall, notwithstanding any vesting schedule contained in an option agreement,
become fully exercisable within the time period established by the Committee.
The Board of Directors may also suspend or terminate the 1996 Plan at any
time. Unless sooner terminated, the 1996 Plan shall terminate ten (10) years
from the effective date of the 1996 Plan--November 12, 2006. No options may be
granted under the 1996 Plan while it is suspended or after it is terminated.
Rights and obligations under any option granted pursuant to the 1996 Plan while
it is in effect shall not be altered or impaired by suspension or termination of
the 1996 Plan, other than pursuant to the terms thereof, except with the consent
of the person to whom the stock option was granted.
The 1996 Plan may be amended by the Board of Directors at any time, and from
time to time. However, except as otherwise provided in the 1996 Plan relating to
adjustments upon changes in stock (e.g., stock splits or stock dividends), no
amendment shall be effective unless approved by the affirmative vote of a
majority of the outstanding shares of Mid-State Stock present and voting, if the
amendment will, among other things; (a) materially increase the number of shares
reserved for options under the 1996 Plan; (b) materially modify the requirements
as to eligibility for participation in the 1996 Plan; (c) increase or decrease
the exercise price of any option granted under the 1996 Plan; or (d) increase
the maximum term of options provided for in the Plan.
FEDERAL INCOME TAX CONSEQUENCES
Generally under present law, when an option qualifies as an Incentive Stock
Option under Section 422A of the Code: (a) an Employee will not realize taxable
income either upon the grant or the exercise of the option, (b) any gain or loss
upon a qualifying disposition of the shares acquired by the exercise of the
option will be treated as capital gain or loss, and (c) no deduction will be
allowed to Mid-State for federal income tax purposes in connection with the
grant or exercise of an Incentive Stock Option or a qualifying disposition of
the shares. A disposition by an Employee of stock acquired upon exercise of an
Incentive Stock Option will constitute a qualifying disposition if it occurs
more than two years after the grant of the option, and one-year after the
transfer of the shares to the Employee. If such stock is disposed of by the
Employee before the expiration of those time limits, the transfer would be a
"disqualifying disposition" and the Employee, in general, will recognize
ordinary income equal to the lesser of (a) the aggregate fair market value of
the shares as of the date of exercise less the option price, or (b) the amount
realized on the disqualifying disposition less the option price. Ordinary income
from a disqualifying disposition will constitute compensation to the Employee.
Upon the exercise of an Incentive Stock Option, the difference between the
fair market value of stock on the date of exercise and the option price
generally is treated as a "tax preference" item in that taxable year for
alternative minimum tax purposes, as are a number of other items specified by
the Code. Such tax preference items (with adjustments) form the basis for the
alternative minimum tax, which may apply depending on the amount of the computed
"regular tax" of the Employee for that year. Under certain circumstances the
amount of alternative minimum tax is allowed as a carry forward credit against
regular tax liability in subsequent years.
In the case of stock options which do not qualify as an Incentive Stock
Option (Non-Qualified Stock Options), no income generally is recognized by the
optionee at the time of the grant of the option. Under present law, the optionee
generally will recognize ordinary income at the time the Non-Qualified Stock
Option is exercised equal to the aggregate fair market value of the shares
acquired less the option price.
13
<PAGE>
Notwithstanding the foregoing, if the shares received upon exercising a
Non-Qualified Stock Option are subject to certain restrictions, the taxable
event is postponed until the restrictions lapse.
Shares acquired upon exercise of Non-Qualified Stock Option will have a tax
basis equal to their market value on the exercise date or other relevant date on
which ordinary income is recognized and the holding period for the shares
generally will begin on the date of exercise or such other relevant date. Upon
subsequent disposition of the shares, the optionee generally will recognize
capital gain or loss provided the shares are held by the optionee for more than
one year prior to disposition.
Mid-State generally will be entitled to a deduction equal to the ordinary
income recognized by the optionee in the case of a disqualifying disposition of
an Incentive Stock Option or in connection with the exercise of a Non-Qualified
Stock Option.
APPROVAL OF THE AMENDMENT TO THE 1996 PLAN REQUIRES THE APPROVAL OF THE
HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES OF MID-STATE'S COMMON STOCK.
THE BOARD OF DIRECTORS OF MID-STATE RECOMMENDS A VOTE OF "FOR" THIS
PROPOSAL.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Mid-State has not yet selected its independent public accountants for the
fiscal year ending December 31, 2000, but intends to do so later this year.
Arthur Andersen, LLP audited Mid-State's financial statements for the year ended
December 31, 1999, and have been Mid-State's accountants since 1979. It is
anticipated that a representative of Arthur Andersen, LLP will be present at the
Mid-State Meeting and will be available to respond to appropriate questions from
shareholders. All professional services rendered by Arthur Andersen LLP during
1999 were furnished at customary rates and terms.
PROPOSALS OF SHAREHOLDERS
Under certain circumstances, shareholders are entitled to present proposals
at shareholder meetings. Any such proposal to be included in the Proxy Statement
for Mid-State's 2001 Annual Meeting of Shareholders must be submitted by a
shareholder prior to December 22, 2000 in a form that complies with applicable
regulations.pqs]
OTHER MATTERS
Mid-State does not know of any other matters than that described in this
Proxy Statement which will be presented for consideration at the Meeting. If any
other matter properly comes before the respective meetings or any and all
adjournments or postponements thereof, the proxy holders named on the
accompanying proxies will vote the shares requested by such proxies in
accordance with their best judgement and as in accordance with said proxies.
<TABLE>
<S> <C>
MID-STATE BANCSHARES
Arroyo Grande, California /s/ RAYMOND E. JONES
April 14, 2000 -------------------------------------------
By: Raymond E. Jones
SECRETARY
</TABLE>
14
<PAGE>
1. ELECTION OF DIRECTORS. To elect the following four (4) persons to the Board
of Directors of Mid-State to serve for a three (3) year term and until
their successors are elected and have qualified:
Trudi Carey H. Edward Heron James W. Lokey Stephen P. Maguire
A SHAREHOLDER MAY WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE BY LINING
THROUGH OR OTHERWISE STRIKING OUT THE NAME OF SUCH NOMINEE.
2. AMEND 1996 STOCK OPTION PLAN. To approve an amendment to Mid-
State's 1996 Stock Option Plan to increase the number of shares reserved
for future stock options.
3. OTHER BUSINESS. To transact such other business as may properly come before
the Meeting and any adjournment or adjournments thereof.
Please mark
your votes as /X/
indicated in
this example
FOR all nominees listed WITHHOLD AUTHORITY
(except as marked to vote for all nomiees
to the contrary) listed
/ / / /
FOR AGAINST ABSTAIN
/ / / / / /
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED
PROPOSALS.
THE PROXY CONFERS AUTHORITY AND SHALL BE VOTED IN ACCORD ANCE WITH THE
RECOMMENDATION OF THE BOARD OF DIRECTORS UNLESS A CONTRARY INSTRUCTION IS
INDICATED, IN WHICH CASE THE PROXY SHALL BE VOTED IN ACCORDANCE WITH
INSTRUCTIONS. IF NO INSTRUCTION IS SPECIFIED, THE SHARES REPRESENTED BY THE
PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS LISTED ON THIS PROXY. IN ALL
OTHER MATTERS, IF ANY, PRESENTED AT THE ANNUAL MEETING, THE PROXY SHALL BE
VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS WHO
WILL MAKE ANY SUCH DETERMINATION IN THEIR SOLE DISCRETION.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE
REVOKED PRIOR TO USE.
The undersigned hereby acknowledges receipt of the Notice of Meeting, Proxy
Statement and Annual Report that accompanies this proxy and ratifies all
lawful actions taken by the above-named proxies.
SIGNATURE(S) ________________________ DATE____________ Number of Shares ______
________________________ ____________ I (We) will
[ ] will not [ ] attend the Annual Meeting in Person
NOTE: PLEASE SIGN AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHEN
SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE
FULL TITLE AS SUCH.
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE>
REVOCABLE PROXY - MID-STATE BANCSHARES
ANNUAL MEETING OF SHAREHOLDERS - MAY 18, 2000
The undersigned shareholder(s) of Mid-State Bancshares ("Mid-State")
hereby appoints, constitutes and nominates Carrol R. Pruett, Raymond E. Jones
and James G. Stathos, and each of them, the attorney, agent and proxy of the
undersigned, with full power of substitution, to vote all shares of Mid-State
which the undersigned is entitled to vote at the Annual Meeting of Shareholders
to be held at the Rancho Santa Barbara Marriott Santa Ynez Valley, 555 McMurray
Road, Buellton, California on May 18, 2000 at 7:30 p.m. local time, and any and
all adjournments thereof, as fully and with the same force and effect as the
undersigned might or could do if personally thereat, as follows:
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
