<PAGE> 1
SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
VIB Corp
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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)
Payment of Filing Fee (Check the appropriate box):
[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 applied:
----------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
----------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------
5) Total fee paid:
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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: _________________________________________
2) Form, Schedule or Registration Statement No.: ___________________
3) Filing Party: ___________________________________________________
4) Date Filed: _____________________________________________________
<PAGE> 2
Preliminary Copy Dated March 26, 1998
[VIB CORP LETTERHEAD]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 11,1998
At 6:OO p.m.
NOTICE IS HEREBY GIVEN that, pursuant to the Bylaws of VIB Corp and the call of
its Board of Directors, the 1998 Annual Meeting of Shareholders of VIB Corp
(the "Company") will be held at Valley Independent Bank's Main Office, 1448
Main Street, El Centro, California 92243, on Monday, May 11, 1998, at 6:00
p.m., for the purpose of considering and voting upon the following matters:
1. Election of Directors. Electing the following eight persons to the
Board of Directors, four of whom shall serve until the 1999 Annual
Meeting until their successors are elected and have qualified and four
of whom shall serve until the 2000 Annual Meeting and until their
successors are elected and have qualified:
Charles Ellis Edward McGrew
R. Stephen Ellison Ronald A. (Rusty) Pedersen
Richard D. Foss John L. Skinner
Dennis L. Kern Alice Helen Lowery Westerfield
2. Range of Directors. Readopting Article V(b) of the Company's Articles
of Incorporation providing for supermajority voting protection to
change the range of directors, as more fully described in the
Company's 1998 Proxy Statement.
3. Fair Price Protection. Readopting Article VII of the Company's
Articles of Incorporation providing that shareholders of the Company
will receive fair and equitable treatment in the event of certain
business combinations, as more fully described in the Company's 1998
Proxy Statement.
4. Classification of Board of Directors: Elimination of Cumulative
Voting. Readopting Article VIII(h) of the Company's Articles of
Incorporation providing for supermajority voting protection with
respect to the establishment of the classified Board of Directors and
the elimination of cumulative voting, as more fully described in the
Company's 1998 Proxy Statement.
5. Other Business. Transacting such other business as may properly
come before the Meeting and any adjournment or adjournments thereof.
<PAGE> 3
Notice of Annual Meeting of Shareholders
Page 2
The Board of Directors has fixed the close of business on March 27, 1998, as
the record date for determination of shareholders entitled to notice of, and
the right to vote at, the Meeting.
The Bylaws of the Company provide for the nomination of directors in the
following manner:
"2.14 Nomination of Directors
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 no more than sixty (60) days prior to any
meeting of shareholders called for the election of directors and no more
than ten (10) days after the date the notice of such meeting is sent to
shareholders pursuant to Section 2.4 of these Bylaws; provided, however,
that if ten (10) days' notice of such meeting is sent to shareholders, such
notice of intention to nominate must be received by the President of the
corporation not later than time fixed in the notice of the meeting for the
opening of the meeting. 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 corporation owned by the notifying shareholder; (f) with the
written consent 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 a 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 or 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 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."
WE URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE,
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON. THE ENCLOSED PROXY IS
SOLICITED BY THE COMPANY'S BOARD OF DIRECTORS. ANY SHAREHOLDER GIVING A PROXY
MAY REVOKE IT PRIOR TO THE TIME IT IS VOTED BY NOTIFYING THE SECRETARY OF THE
COMPANY IN WRITING OF REVOCATION OF SUCH PROXY, BY FILING A DULY EXECUTED PROXY
BEARING A LATER DATE, OR BY ATTENDING THE MEETING AND VOTING IN PERSON.
<PAGE> 4
Notice of Annual Meeting of Shareholders
Page 3
PLEASE INDICATE ON THE PROXY WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING SO
THAT WE CAN ARRANGE FOR ADEQUATE ACCOMMODATIONS.
By Order of the Board of Directors
Charlotte Studer, Secretary
Dated: April 10, 1998
ANNUAL REPORT ON FORM 10-K
A COPY OF THE COMPANY'S 1997 ANNUAL REPORT ON FORM 10-K, INCLUDING FINANCIAL
STATEMENTS AND THE FINANCIAL STATEMENT SCHEDULES, AS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION, IS AVAILABLE UPON REQUEST TO HARRY G. GOODING, III,
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, VIB CORP, P.O. BOX 1845,
EL CENTRO, CALIFORNIA 92244, TELEPHONE (760) 337-3200.
<PAGE> 5
VIB CORP
1498 MAIN STREET
EL CENTRO, CALIFORNIA 92243
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 11, 1998
AT 6:00 P.M.
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
Proxies for use at the 1998 Annual Meeting of Shareholders (the "Meeting") of
VIB Corp (the "Company") to be held at the Valley Independent Bank's Main
Office, 1448 Main Street, El Centro, California 92243, at 6:00 p.m., on Monday,
May 11, 1998, and at any and all adjournments thereof.
It is anticipated that this Proxy Statement and the accompanying Notice
will be mailed on or about April 10, 1998, to shareholders eligible to receive
notice of and to vote at the Meeting.
The matters to be considered and voted upon at the Meeting will be:
1. Election of Directors. Electing the following eight persons to
the Board of Directors, four of whom shall serve until the 1999
Annual Meeting until their successors are elected and have
qualified and four of whom shall serve until the 2000 Annual
Meeting and until their successors are elected and have
qualified:
<TABLE>
<S> <C> <C>
Charles Ellis Edward McGrew
R. Stephen Ellison Ronald A. (Rusty) Pedersen
Richard D. Foss John L. Skinner
Dennis L. Kern Alice Helen Lowery Westerfield
</TABLE>
2. Range of Directors. Readopting Article V(b) of the Company's
Articles of Incorporation providing for supermajority voting
protection to change the range of directors, as more fully
described in this Proxy Statement.
3. Fair Price Protection. Readopting Article VII of the Company's
Articles of Incorporation providing that shareholders of the
Company will receive fair and equitable treatment in the event of
certain business combinations, as more fully described in this
Proxy Statement.
4. Classification of Board of Directors; Elimination of Cumulative
Voting. Readopting Article VIII(h) of the Company's Articles of
Incorporation providing for supermajority voting protection with
respect to the establishment of the classified Board of Directors
and the elimination of cumulative voting, as more fully described
in this Proxy Statement.
5. Other Business. Transacting such other business as may properly
come before the Meeting and any adjournment or adjournments
thereof.
<PAGE> 6
PROXY STATEMENT SUMMARY
The following summary is qualified in its entirety by the more detailed
information contained elsewhere in this Proxy Statement. Shareholders are urged
to carefully read this entire Proxy Statement before making any decisions
relating to completion of the enclosed Proxy.
ELECTION OF DIRECTORS (See "PROPOSAL 1 - ELECTION OF DIRECTORS" herein.)
At the Meeting the Company's shareholders will be asked to elect eight
persons to the Board of Directors. Because the Company's Articles of
Incorporation provide for the classification of directors, four directors will
be elected for an initial term of one year, or until the 1999 Annual Meeting,
and four directors will be elected for an initial term of two years, or until
the 2000 Annual Meeting. Thereafter, each class of directors, presently
consisting of four directors each, will stand for reelection for two-year terms.
Because the Company's Articles of Incorporation provide that the initial
classification of directors will be determined based upon those candidates
receiving the highest number of votes, Management's Proxy seeks shareholder
approval to elect the following eight persons to the initial terms indicated
below:
Two-Year Term One-Year Term
Charles Ellis Richard D. Foss
R. Stephen Ellison Dennis L. Kern
Edward McGrew Ronald A. (Rusty) Pedersen
John L. Skinner Alice Helen Lowery Westerfield
RANGE OF DIRECTORS (See "PROPOSAL 2 - READOPTION OF ARTICLE V(b) OF THE
ARTICLES OF INCORPORATION CONCERNING RANGE OF DIRECTORS" herein.)
At the Meeting the Company's shareholders will also be asked to readopt
various provisions of the Company's Articles of Incorporation adopted at the
time of the Company's initial incorporation. These various "anti-takeover"
provisions have been designed to make more difficult certain potential attempts
to obtain control of the Company and include supermajority vote requirements to
enhance their protections.
Article V(a) limits the authorized range of directors to between six and
ten. At the Meeting, shareholders will be asked to readopt the supermajority
vote requirement contained in Article V(b) which requires a vote of at least
66 2/3% of the outstanding shares to amend the authorized range of directors.
These provisions are designed to prevent third parties, by simple majority
vote, from increasing the size of the Board and "packing" the Board with its
designees.
This Proxy Statement solicits shareholders to readopt Article V(b) to
retain the supermajority vote protection with respect to changing the range of
directors.
FAIR PRICE PROTECTION (See "PROPOSAL 3 - READOPTION OF ARTICLE VII OF THE
ARTICLES OF INCORPORATION CONCERNING FAIR PRICE PROTECTION" herein.)
The second provision shareholder will be asked to readopt at the Meeting
is Article VII, the "Fair Price Provision." This provision is intended to
prevent certain of the potential inequities of business combinations where a
purchaser who acquired control of the Company could
2
<PAGE> 7
subsequently, by virtue of such control, force the remaining shareholders to
sell or exchange their shares at a price which might not fully reflect any
premium such purchaser may have paid in order to acquire the controlling
interest. This provision is designed to encourage persons who might seek to
acquire control of the Company to consult first with the Board of Directors to
negotiate the terms of any tender offer or proposed business combination. This
provision presently requires a vote of at least 66 2/3% of the outstanding
shares for certain corporate actions, but in each instance dispenses with such
supermajority vote requirement if the action has been approved by the Board of
Directors or certain other requirements have been met.
This Proxy Statement solicits shareholders to readopt the "Fair Price
Provision," including the supermajority vote protection of that provision.
CLASSIFICATION OF DIRECTORS: ELIMINATION OF CUMULATIVE VOTING (See PROPOSAL 4 -
READOPTION OF ARTICLE VIII(h) OF THE ARTICLES OF INCORPORATION CONCERNING
CLASSIFICATION OF DIRECTORS; ELIMINATION OF CUMULATIVE VOTING" herein.)
The final provision shareholders will be asked to readopt at the Meeting,
Article VIII(h), concerns the supermajority vote requirement to amend the
provisions in Article VIII providing for the classification of directors and
the elimination of cumulative voting. The classification of directors and the
elimination of cumulative voting are designed to reduce the possibility that a
third party could effect a surprise change in the composition of the Board of
Directors without the support of the incumbent Board and to preclude the
election of a director or a small group of directors representing a special
interest group. At the Meeting, shareholders will be asked to readopt the
supermajority vote requirement contained in Article VIII(h) which requires a
vote of at least 66 2/3% of the outstanding shares to amend or repeal the
provisions regarding the classification of directors and the elimination of
cumulative voting.
This Proxy Statement solicits shareholders to readopt Article VIII(h) to
retain the supermajority vote protection with respect to the classification of
directors and the elimination of cumulative voting.
SHAREHOLDERS ARE STRONGLY ENCOURAGED TO VOTE FOR EACH OF THE FOREGOING
PROPOSALS.
REVOCABILITY OF PROXIES
A form of Proxy for voting your shares at the Meeting is enclosed. Any
shareholder who executes and delivers such a Proxy has the right to revoke it at
any time before it is exercised by filing with the Secretary of the Company an
instrument revoking it or a duly executed Proxy bearing a later date. In
addition, the powers of the Proxy Holders will be revoked if the person
executing the Proxy is present at the Meeting and elects to vote in person by
advising the Chairman of such election. Subject to such revocation, all shares
represented by a properly executed Proxy received in time for the Meeting will
be voted by the Proxy Holders in accordance with the instructions specified on
the Proxy. IF NO INSTRUCTION IS SPECIFIED WITH RESPECT TO A PROPOSAL TO BE ACTED
UPON, THE SHARES REPRESENTED BY YOUR EXECUTED PROXY WILL BE VOTED IN FAVOR OF
THE PROPOSAL LISTED ON THE PROXY. IF ANY OTHER BUSINESS IS PROPERLY PRESENTED AT
THE MEETING, THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE COMPANY'S BOARD OF DIRECTORS.
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<PAGE> 8
PERSONS MAKING THE SOLICITATION
This solicitation of Proxies is being made by the Board of Directors of
the Company. The expense of preparing, assembling, printing and mailing this
Proxy Statement and the materials used in the solicitation of Proxies for the
Meeting will be borne by the Company. It is contemplated that Proxies will be
solicited principally through the use of the mail, but officers, directors and
employees of the Company, and its wholly-owned subsidiary, Valley Independent
Bank (the "Bank"), may solicit Proxies personally or by telephone, without
receiving special compensation therefor. 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
these Proxy Materials to shareholders whose stock in the Company is held of
record by such entities. In addition, the Company may use the services of
individuals or companies it does not regularly employ in connection with this
solicitation of Proxies, if Management determines it advisable.
VOTING SECURITIES
There were issued and outstanding 6,194,116 shares of the Company's
Common Stock on March 27, 1998, which has been fixed as the record date for the
purpose of determining the shareholders entitled to notice of, and to vote at,
the Meeting. On any matter submitted to the vote of the shareholders, each
holder of Common Stock will be entitled to one vote, in person or by Proxy, for
each share of Common Stock held of record on the books of the Company as of the
record date for the Meeting. In connection with the election of directors,
shares may not be voted cumulatively.
A majority vote of the outstanding shares is required for each of the
proposals to ratify and readopt provisions of the Company's Articles of
Incorporation. Directors are elected by plurality vote. Abstentions and broker
non-votes do not have the effect of votes in opposition to a director, but
abstentions have the affect of "no" votes with respect to each of the proposals
to readopt provisions of the Company's Articles of Incorporation. Abstentions
are also counted towards a quorum.
SHAREHOLDINGS OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Except as set forth below, Management of the Company does not know of
any person who owns beneficially or of record, more than 5% of the Company's
outstanding Common Stock. The following table sets forth certain information as
of March 27, 1998, concerning the beneficial ownership of the Company's
outstanding Common Stock by each of the directors and executive officers(1) and
by all directors and executive officers of the Company as a group. Management is
not aware of any change in control of the Company which has occurred since
January 1, 1997, or of any arrangement which may, at a subsequent date, result
in a change in control of the Company, except the bank holding company
reorganization consummated on March 12, 1998 pursuant to which the Company's
sole incorporating shareholder, Mr. Dennis L. Kern, resold his shares to the
Company, the Bank's shareholders became the Company's shareholders, and the Bank
became the wholly-owned subsidiary of the Company.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
NUMBER OF SHARES SUBJECT TO VESTED OF CLASS
OF COMMON STOCK STOCK OPTIONS AND BENEFICIALLY
NAME BENEFICIALLY OWNED(2) OUTSTANDING WARRANTS(3) OWNED(3)
- ---- --------------------- ----------------------- ---------
<S> <C> <C> <C>
JACK BRITTAIN, JR. 15,091(4) 1,506 .27%
CHARLES ELLIS 16,904 22,150 .63%
R. STEPHEN ELLISON 188,624(5) 27,846 3.48%
RICHARD D. FOSS 78,639(6) 27,598 1.71%
</TABLE>
4
<PAGE> 9
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT
NUMBER OF SHARES SUBJECT TO VESTED OF CLASS
OF COMMON STOCK STOCK OPTIONS AND BENEFICIALLY
NAME BENEFICIALLY OWNED(2) OUTSTANDING WARRANTS(3) OWNED(3)
- ---- --------------------- ----------------------- ---------
<S> <C> <C> <C>
HARRY G. GOODING, III 6,097(7) 8,399 .23%
DENNIS L. KERN (8) 252,424(5)(9) 122,171 5.93%
EDWARD MCGREW 28,447 27,889 .91%
RONALD A. (RUSTY) PEDERSEN(10) 421,507(5) 14,779 7.03%
MARTIN E. PLOURD 16,382(11) 4,802 .34%
JOHN L. SKINNER 47,827 19,212 1.08%
THOMAS TOPUZES 16,806(12) 13,874 .49%
ALICE HELEN LOWERY WESTERFIELD(13) 295,840(14) 23,302 5.13%
ALL DIRECTORS AND EXECUTIVE 1,057,486(5) 313,528 21.07%
OFFICERS AS A GROUP (12 IN NUMBER)
</TABLE>
- --------------------------------
(1) As used throughout this Proxy Statement, the term "executive
officer" means the President and Chief Executive Officer and
the Executive Vice President and Chief Financial Officer. The
Company's Chairman of the Board, Vice Chairmen of the Board,
and Secretary are not deemed to be executive officers of the
Company. However, the Bank's Executive Vice President and
Chief Administrative Officer, the Executive Vice President and
Chief Credit Officer, and the Executive Vice President and
Branch Administrator are also considered executive officers of
the Company.
(2) Includes shares beneficially owned, directly and indirectly,
together with associates, except for shares subject to vested
stock options and outstanding Warrants. Also includes shares
held as trustee and held by or as custodian for minor
children. Unless otherwise noted, all shares are held as
community property under California law or with sole
investment and voting power.
(3) Shares subject to options held by directors or executive
officers that were exercisable within 60 days after March 27,
1998 ("vested") and all outstanding Warrants held by directors
or executive officers are treated as issued and outstanding
for the purpose of computing the percent of the class owned by
such person but not for the purpose of computing the percent
of class owned by any other person.
(4) Includes 1,902 shares allocated to Mr. Brittain pursuant to
the 401(k) Plan and 4,122 shares in the ESOP.
(5) Includes 163,551 shares held as trustee of the ESOP. The
trustees have voting rights over these shares to the extent
not exercised by the ESOP's participants. These shares are
included for each of Messrs. Ellison, Kern and Pedersen, the
trustees, and are included once for the category "All
Directors and Executive Officers as a Group."
(6) Includes 9,051 shares held in trust for the benefit of Mr.
Foss.
(7) Includes 1,960 shares allocated to Mr. Gooding pursuant to the
401(k) Plan and 3,308 shares in the ESOP.
(8) Mr. Kern's business address is 1498 Main Street, El Centro,
California 92243.
(9) Includes 8,881 shares allocated to Mr. Kern pursuant to the
401(k) Plan and 6,957 shares in the ESOP.
(10) Mr. Pedersen's business address is 330 West Aten Road,
Imperial, California 92251.
(11) Includes 364 shares allocated to Mr. Plourd pursuant to the
401(k) Plan and 3,788 shares in the ESOP.
(12) Includes 2,875 shares allocated to Mr. Topuzes pursuant to the
401(k) Plan and 4,585 shares in the ESOP.
(13) Ms. Westerfield's address is 82-257 Bliss, Indio, California
92201.
(14) Includes 196 shares allocated to Ms. Westerfield pursuant to
the 401(k) Plan and 2,170 shares in the ESOP.
5
<PAGE> 10
PROPOSAL 1
ELECTION OF DIRECTORS
NUMBER OF DIRECTORS; CLASSIFICATION OF BOARD
Article V(a) of the Company's Articles of Incorporation provide for a
range of six to ten directors and permit the exact number of directors to be
fixed by Board or shareholder action. The Board of Directors has fixed the
number of directors at eight.
Article VIII(b) of the Company's Articles of Incorporation provide that
when the number of directors has been fixed at six or more, but less than nine,
the Board of Directors shall be classified into two classes with each class
serving for staggered two-year terms. Article VIII(d) provides that at the first
Annual Meeting of Shareholders held after the Company qualifies as a "listed
corporation" the directors shall be classified on the basis of the number of
votes received, with the candidates receiving the highest number of votes being
elected to an initial two-year term and the remaining directors being elected to
an initial one-year term.
The Company has qualified as a "listed corporation." Accordingly, at the
Meeting the directors will be elected to initial one- or two-year terms,
depending on the vote tabulation. Thereafter, each class of directors will stand
for reelection for new two-year terms, on an alternating, or staggered, basis.
In the event a vacancy should occur, any director elected to fill the vacancy
would hold office for the balance of the term of the class in which the vacancy
occurred.
NOMINEES
The persons named below, all of whom are currently members of the
Company's Board of Directors, will be nominated for election as directors to
serve until the 1999 or the 2000 Annual Meetings of Shareholders and until their
successors are elected and have qualified. Votes will be cast in such a way as
to effect the election of all eight nominees, including electing the following
four directors for an initial two-year term: Charles Ellis, R. Stephen Ellison,
Edward McGrew and John L. Skinner; and electing the following four directors for
an initial one-year term: Richard D. Foss, Dennis L. Kern, Ronald A. (Rusty)
Pedersen and Alice Helen Lowery Westerfield.
In the event that any of the nominees should be unable to serve as a
director, it is intended that the Proxy will be voted for the election of such
substitute nominees, if any, as shall be designated by the Board of Directors.
The Board of Directors has no reason to believe that any of the nominees will be
unavailable to serve if elected. Additional nominations can only be made by
complying with the notice provision set forth in the Bylaws of the Company, an
extract of which is included in the Notice of Annual Meeting of Shareholders
accompanying this Proxy Statement. This Bylaw provision is designed to give the
Board of Directors advance notice of competing nominations, if any, and the
qualifications of nominees, and may have the effect of precluding third-party
nominations if the notice provisions are not followed.
None of the directors or executive officers of the Company were selected
pursuant to any arrangement or understanding, other than with the directors and
executive officers of the Company, acting within their capacities as such. There
are no family relationships between the directors and executive officers of the
Company and none of the directors or executive officers of the Company serve as
directors of any other company which has a class of securities registered under,
or which is subject to the periodic reporting requirements of, the Securities
Exchange Act of 1934 or any investment company registered under the Investment
Company Act of 1940.
The following table sets forth the names and certain information as of
March 27, 1998, concerning the persons to be nominated by the Board of Directors
for election as directors of the Company:
6
<PAGE> 11
<TABLE>
<CAPTION>
YEAR FIRST YEAR FIRST
ELECTED OR ELECTED OR
BUSINESS EXPERIENCE APPOINTED APPOINTED
DURING THE PAST DIRECTOR OF DIRECTOR OF
NAME AND TITLE AGE FIVE YEARS THE COMPANY THE BANK
- -------------- --- ---------- ----------- --------
<S> <C> <C> <C>
CHARLES ELLIS, 70 President, Coachella Valley 1997 1995
Director Insurance Service, Inc.
R. STEPHEN ELLISON, 48 President, Jordan/Central 1997 1990
Director Implement (Machinery)
RICHARD D. FOSS, 58 President, Foss Account- 1997 1980
Chairman of the tancy Corporation,
Board of Directors Certified Public Accountants
DENNIS L. KERN, 58 President and Chief 1997 1983
Director, President Executive Officer,
and Chief Executive Valley Independent Bank
Officer(1)
EDWARD MCGREW, 60 Owner-Operator of MAGCO 1997 1983
Director (general farming and
cattle feeding)
RONALD A. (RUSTY) PEDERSEN, 64 Owner, Imperial Pre-Mix 1997 1983
Vice Chairman of the Co. (cattle feed supplement
Board of Directors manufacturing)
JOHN L. SKINNER, 68 Owner, T.C. Worthy 1997 1990
Director Cash & Carry
ALICE HELEN LOWERY 69 Retired; Regional Customer 1997 1992
WESTERFIELD, Relations Officer, Valley
Vice Chairman of the Independent Bank (1993 to
Board of Directors 1997); previously Chairman,
President and Chief Executive
Officer, The First National
Bank in Coachella
</TABLE>
- -------------------------------------
(1) This person is an executive officer of the Company.
EXECUTIVE OFFICERS
The following table sets forth the names and certain information as of
March 27, 1998, concerning the executive officers of the Company, except Mr.
Kern, who is a director and included in the table set forth above. Messrs.
Brittain, Plourd and Topuzes are executives of the Bank and are considered to be
executive officers of the Company.
<TABLE>
<CAPTION>
TERM OF
TITLE WITH TITLE WITH BUSINESS EXPERIENCE OFFICE WITH
NAME THE COMPANY THE BANK AGE DURING THE PAST FIVE YEARS THE BANK
- ---- ----------- -------- --- -------------------------- --------
<S> <C> <C> <C> <C> <C>
JACK BRITTAIN, JR. N/A Executive Vice 49 Chief Credit Officer, Since 1988
President and Valley Independent Bank
Chief Credit
Officer
</TABLE>
7
<PAGE> 12
<TABLE>
<CAPTION>
TERM OF
TITLE WITH TITLE WITH BUSINESS EXPERIENCE OFFICE WITH
NAME THE COMPANY THE BANK AGE DURING THE PAST FIVE YEARS THE BANK
- ---- ----------- -------- --- -------------------------- --------
<S> <C> <C> <C> <C> <C>
HARRY G. GOODING, III Executive Vice Executive Vice 50 Chief Financial Officer, Since 1991
President and President and Valley Independent Bank
Chief Financial Chief Financial
Officer Officer
MARTIN E. PLOURD N/A Executive Vice 39 Branch Administrator, Since 1986
President and Valley Independent Bank
Branch
Administrator
THOMAS TOPUZES N/A Executive Vice 51 Chief Administrative Since 1991
President and Officer, Valley Independent
Chief Bank
Administrative
Officer
</TABLE>
SIGNIFICANT EMPLOYEE
The following table sets forth the name and certain information as of
March 27, 1998, concerning the significant employee of the Bank who is not
deemed an executive officer of the Bank or the Company:
<TABLE>
<CAPTION>
TERM OF
TITLE WITH TITLE WITH BUSINESS EXPERIENCE OFFICE WITH
NAME THE COMPANY THE BANK AGE DURING THE PAST FIVE YEARS THE BANK
- ---- ----------- -------- --- --------------------------- --------
<S> <C> <C> <C> <C> <C>
JANICE STEWART GRADY N/A Senior Vice 45 Human Resources Director, Since 1989
President and Valley Independent Bank
Human Resources
Director
</TABLE>
THE BOARD OF DIRECTORS AND COMMITTEES
The Company was incorporated on November 7, 1997 and held two Board
meetings during 1997. No committees were established during the year. During
1997, none of the directors attended less than 75% of the Board meetings.
During 1997, the Bank's Board of Directors held 12 regular meetings and
one special meetings. In addition to attending Board meetings, certain of the
directors serve on committees of the Bank's Board.
The Audit Committee, which consisted of Directors Ellison, Skinner and
Westerfield, reviews all internal and external examination reports and selects
the Bank's independent accountants. The Audit Committee met five times during
1997.
The Loan Committee, which consisted of Directors Foss, McGrew, Pedersen
and Skinner, establishes the loan policy, reviews loans made by Management, and
approves loans in excess of Management's lending authority. The Loan Committee
met 38 times during 1997.
The Bank's Executive/Investment Committee, which consisted of Directors
Ellison, Foss, Kern and Pedersen, sets policies and supervises Management
between regular Board meetings and reviews the Bank's investments. The
Executive/Investment Committee also serves as the Bank's
8
<PAGE> 13
Compensation Committee. In that capacity, the Executive/Investment Committee
reviews and approves the Bank's overall compensation and benefit programs and
administers the compensation for the Bank's executive and senior officers. There
were two Executive/Investment Committee meetings during 1997.
The Bank does not have a Nominating Committee.
During 1997, none of the Bank's directors attended less than 75% of the
Bank's Board meetings and meetings of committees on which they served.
COMPENSATION AND OTHER TRANSACTIONS WITH MANAGEMENT AND OTHERS
SUMMARY COMPENSATION
The Company did not conduct operations during 1997. The following table
sets forth a summary of annual and long-term compensation for services in all
capacities to the Bank for the President and Chief Executive Officer and the
four other executive officers:
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------------- ------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND POSITION IN BANK YEAR SALARY BONUS COMPENSATION (1) OPTIONS(2) COMPENSATION(3)
- ------------------------- ---- ----------- ------- ---------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
JACK BRITTAIN, JR., 1997 $103,217 - - 4,896 $ 4,728
Executive Vice President 1996 $ 95,100 $ 7,716 - - $ 5,721
and Chief Credit Officer 1995 $ 94,146 $18,700 - 12,813 $ 7,015
HARRY G. GOODING, III, 1997 $100,506 - - 4,896 $ 4,624
Executive Vice President 1996 $ 93,312 $ 7,225 - - $ 6,315
and Chief Financial Officer 1995 $ 88,200 $18,300 - 12,813 $ 6,574
DENNIS L. KERN, 1997 $190,008 - $14,400 14,583 $ 6,115
President and Chief 1996 $180,000 $90,000 $14,400 6,364 $ 8,347
Executive Officer 1995 $172,000 $85,000 $14,400 - $ 9,324
MARTIN E. PLOURD, 1997 $100,664 - - 4,896 $ 4,810
Executive Vice President 1996 $ 90,012 $ 7,265 - - $ 5,378
and Branch Administrator 1995 $ 85,668 $16,300 - 12,813 $ 6,067
THOMAS TOPUZES, 1997 $109,008 - - 4,896 $ 4,749
Executive Vice President 1996 $104,016 $ 8,480 - - $ 6,382
and Chief Administrative 1995 $ 99,996 $27,350 - 12,813 $ 8,084
Officer
</TABLE>
- -------------------------------------
(1) These figures represent director's fees.
(2) All share figures have been adjusted for the Bank's stock dividends
and the Bank's three-for-two and six-for-five stock splits.
(3) These figures include the Bank's matching contributions to the
401(k) Plan ($1,848, $1,542 and $1,693 for Mr. Brittain, $1,807,
$1,508 and $1,551 for Mr. Gooding, $2,375, $2,250 and $2,250 for Mr.
Kern, $1,872, $1,424 and $1,258 for Mr. Plourd, and $1,860, $1,720
and $1,942 for Mr. Topuzes, for 1997, 1996 and 1995, respectively)
and the Bank's contributions to the Employee Stock Ownership Plan
($2,880, $4,179 and $5,322 for Mr. Brittain, $2,817, $4,087 and
$5,023 for Mr. Gooding, $3,740, $6,097 and $7,074 for Mr. Kern,
$2,938, $3,954 and $4,809 for Mr. Plourd, and $2,889, $4,662 and
$6,106 for Mr. Topuzes, for 1997, 1996 and 1995, respectively).
9
<PAGE> 14
STOCK OPTIONS
The Bank's 1989 Stock Option Plan provided for the issuance of up to
1,645,874 shares, of which options for 704,769 shares were outstanding on March
12, 1998, the effective date for the bank holding company reorganization. In
connection with the reorganization the Company adopted the VIB Corp 1997 Stock
Option Plan providing for the issuance of up to 2,000,000 shares. On March 10,
1998, the Company's Board of Directors, pursuant to the terms of the bank
holding company reorganization, issued options in exchange for the then
outstanding Bank options, effective as of the effective date for the
reorganization. As of March 27, 1998, the Company's 1997 Stock Option Plan
provided for the issuance of 2,000,000 shares, of which no shares had been
exercised and options for 704,769 shares were outstanding, leaving 1,295,231
shares available for future grants. The following table sets forth certain
information regarding stock options granted by the Bank to Messrs. Brittain,
Gooding, Kern, Plourd and Topuzes during 1997:
<TABLE>
<CAPTION>
Potential Realized
Value at Assumed
Annual Rates of
Percentage of Stock Price
Number of Total Options Appreciation for
Options Granted to Option Term
Granted in Employees(2) Exercise Expiration -------------------
NAME 1997(1) During 1997 Price(1) Date 5% 10%
- ---- --------------- ----------- -------- ---------- -------- -----
<S> <C> <C> <C> <C> <C> <C>
JACK BRITTAIN, JR. 4,896 4.34% $13.07 2/12/02 $ 67,190 $ 70,389
HARRY G. GOODING, III 4,896 4.34% $13.07 2/12/02 $ 67,190 $ 70,389
DENNIS L. KERN 14,583 14.00% $12.87 1/21/02 $ 197,066 $ 206,450
MARTIN E. PLOURD 4,896 4.34% $13.07 2/12/02 $ 67,190 $ 70,389
THOMAS TOPUZES 4,896 4.34% $13.07 2/12/02 $ 67,190 $ 70,389
</TABLE>
The following table sets forth certain information regarding stock options
exercised during 1997 by Messrs. Brittain, Gooding, Kern, Plourd and Topuzes:
<TABLE>
<CAPTION>
Value(3) of Unexercised in
Number of Unexercised the Money Options
Number of Options at December 31, 1997 at December 31, 1997
Shares ---------------------------- --------------------
Acquired on Value
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
JACK BRITTAIN, JR. 11,139 $128,571 527 18,432 $ 9,683 $336,703
HARRY G. GOODING, III 2,093 $ 13,186 6,017 17,276 $ 110,562 $317,446
DENNIS L. KERN - - 103,823 28,736 $1,907,747 $528,024
MARTIN E. PLOURD 7,802 $ 95,304 2,648 16,606 $ 48,657 $305,135
THOMAS TOPUZES 8,199 $102,405 9,147 16,606 $ 168,076 $305,135
</TABLE>
- -----------------------------------
(1) All share figures and dollar amounts have been adjusted for the
Bank's stock dividend and the Bank's six-for-five stock split.
(2) Does not include options granted to the Bank's non-employee
directors during 1997. (See "COMPENSATION AND OTHER TRANSACTIONS
WITH MANAGEMENT AND OTHERS -Directors' Compensation" herein.)
(3) Assumes a market value of $18.32 per share on December 31, 1997.
10
<PAGE> 15
EMPLOYMENT AGREEMENTS
Neither the Company nor the Bank have entered into written employment
agreements with any of their executive officers.
During 1994 the Bank adopted a Deferred Compensation Plan for its
executive and other senior officers pursuant to which the participating officers
elect to defer future salary or bonus income. The compensation deferred is
maintained in a separate account for each participant, earns interest at 10%,
and is fully vested. Participants can select the mode of distribution, lump sum
or installments, payable upon termination of employment. In the event of a
change in control of the Bank, participants are entitled to a lump sum
distribution. The Bank pays the costs of administering these Deferred
Compensation Plans as well as the interest earned on the amounts deferred, but
the Bank makes no contributions to the participants' individual deferral
accounts.
DIRECTORS' COMPENSATION
In 1997, the Bank's directors were paid for attendance at Bank Board
meetings at the rate of $1,200 for each regular Board meeting (with the Chairman
receiving $2,100); $1,200 for each special meeting (except the Organizational
Board meeting); and, for all directors except Mr. Kern, $300 for each committee
meeting ($150 for any committee meeting held on the same day as a Board meeting
or any second or subsequent committee meeting held on the same day).
The Bank has entered into Deferred Compensation Agreements with each of
its directors, except Ms. Westerfield, pursuant to which between $300 and $600
of directors' fees per month are deferred until May, 2000, at which time the
director or his beneficiary will be paid the amount of between $812 and $1,624
per month for 10 years. If the director dies before the commencement date of the
payments, the director's beneficiary will receive a death benefit of between
$812 and $1,624 per month for 10 years. If the director's service as a director
terminates for any other reason before May, 2000, the amount deferred, plus
accrued interest at 10%, will be paid to the director.
Ms. Westerfield, as the Bank's Customer Relations Officer for Coachella
Valley until her retirement in 1997, participated in the Bank's 401(k) Plan and
ESOP.
PROFIT SHARING AND 401(K) PLAN
In March, 1989, the Bank's Board of Directors adopted, effective as of
January 1, 1989, the Valley Independent Bank Profit Sharing and 401(k) Plan (the
"401(k) Plan"). All full-time employees are eligible to participate after 90
days of employment. Pursuant to the 401(k) Plan, participating employees of the
Bank may voluntarily contribute a portion of their compensation to a trust. Each
year the Bank may make matching contributions to the trust for the benefit of
participating employees with at least one year of employment. Benefits from the
401(k) Plan become available to the employee upon retirement, or in the event of
disability. If employment is terminated prior to normal retirement, the employee
receives all voluntary contributions and a portion of the Bank's contributions,
based upon an established vesting schedule.
As of December 31, 1997, 315 employees were participating in the 401(k)
Plan. During 1997, the Bank contributed $82,891 to the 401(k) Plan, on a
matching basis. The 401(k) Plan has been qualified by the Internal Revenue
Service ("IRS") pursuant to the Employee Retirement Income Security Act of 1974.
EMPLOYEE STOCK OWNERSHIP PLAN
In December, 1991, the Bank's Board of Directors adopted, effective as
of January 1, 1991, the Valley Independent Bank Employee Stock Ownership Plan
(the "ESOP"). Pursuant to the ESOP,
11
<PAGE> 16
annual contributions at the discretion of the Bank are made to a trust for the
benefit of the Bank's employees who are participants. All full-time employees
are eligible to participate after one year of employment. Contributions shall
not exceed limitations imposed by the Internal Revenue Code, and vest 20% after
three years of service, 40% after four years, 60% after five years, 80% after
six years, and 100% after seven years of service. Participants become 100%
vested if termination is by reason of normal or deferred retirement, death or
disability, or termination of the ESOP.
As a stock ownership plan, it is intended that contributions to the ESOP
trust will be utilized to purchase the Company's (previously, the Bank's) Common
Stock, which will then be allocated to the accounts of the participants, thereby
enabling them to participate in the Company's growth. Distributions pursuant to
the ESOP will be in cash or in shares of the Company's Common Stock.
Each of the Bank's executive officers participate in the ESOP. Directors
who are not also employed by the Bank are not eligible to participate. The total
amount contributed for all participants to the ESOP for 1997 was $159,996.
As of December 31, 1997, 213 employees were participating in the ESOP.
The ESOP has been qualified by the IRS pursuant to the Employee Retirement
Income Security Act of 1974.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Bank's Executive/Investment Committee, acting as the
Compensation Committee (the "Committee"), are Directors Ellison, Foss, Kern and
Pedersen, none of whom serve as an officer of the Bank except Mr. Kern, who is
the Bank's President and Chief Executive Officer. None of the Bank's executive
officers served on the board of directors or compensation committee, or
equivalent, of another entity, one of whose executive officers served on the
Bank's Committee or the Bank's Board of Directors. Mr. Kern does not participate
in Committee deliberations and voting regarding his compensation.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Executive/Investment Committee, acting as the Compensation
Committee, is responsible for reviewing and approving the Bank's overall
compensation and benefit programs, and for administering the compensation of the
Bank's executive and senior officers.
The objectives of the Bank's compensation programs are to attract,
motivate and retain executive and senior officers by insuring that appropriate
total compensation is paid for positions of equivalent responsibility when
compared to a sample of peer banks.
As a general rule, the Committee evaluates management and public
relations skills as well as annual corporate goals, such as profitability, asset
quality and growth in loans and deposits, in determining compensation levels.
Approximately 60% of compensation is based on Bank performance and approximately
40% is based on individual criteria.
In evaluating Mr. Kern's compensation the Committee, with Mr. Kern
absent, evaluates compensation surveys for peer banks covering salary and other
compensation components for presidents and CEOs. Consistent with the Committee's
compensation philosophy, approximately 40% of Mr. Kern's compensation is based
on an evaluation of his management and public relations skills. Approximately
60% of Mr. Kern's compensation is based on Bank performance, in particular, the
following factors in the following order of priority: (1) improving shareholder
value; (ii) profitability; (iii) asset quality; and (iv) growth in loans and
deposits. The Committee also evaluates Mr. Kern's actions taken during the year
to achieve the Bank's longer term strategic goals.
12
<PAGE> 17
The Committee believes that the Bank's compensation program and
compensation levels are effective in attracting, motivating and retaining
outstanding executive and senior officers and that they are consistent with the
Bank's immediate and long-term goals.
EXECUTIVE/INVESTMENT COMMITTEE
R. Stephen Ellison
Richard D. Foss
Dennis L. Kern, Chairman
Ronald A. (Rusty) Pedersen
STOCK PERFORMANCE GRAPH
The following graph presents the cumulative, five-year total return for
the Bank's Common Stock compared with the Nasdaq Total Return Index, a broad
market index of stocks traded in the Nasdaq National Market, and the SNL
Securities Index of Banks under $500 million in total assets. The SNL Bank Index
has been selected as the most representative of peer issuers. The graph assumes
the value of an investment in the Bank's Common Stock, the Nasdaq Index and the
SNL Bank Index each was $100 on December 31, 1992, and that all dividends were
reinvested.
[VALLEY INDEPENDENCE BANK CHART]
<TABLE>
<CAPTION>
PERIOD ENDING
--------------------------------------------------------
INDEX 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Valley Independent Bank 100.00 94.16 127.32 187.17 260.30 371.70
NASDAQ - Total US 100.00 114.80 112.21 158.70 195.19 239.53
SNL <$500M Bank Index 100.00 130.56 140.42 192.09 247.24 421.47
</TABLE>
13
<PAGE> 18
CERTAIN TRANSACTIONS
There are no existing or proposed material transactions between the
Company and any of the Company's executive officers, directors, or beneficial
owners of 5% or more of the Company's Common Stock, or the immediate family or
associates of any of the foregoing persons, except as indicated below.
Some of the directors and executive officers of the Company, as well as
the companies with which such directors and executive officers are associated,
are customers of, and have had banking transactions with the Bank in the
ordinary course of the Bank's business and the Bank expects to have such
ordinary banking transactions with such persons in the future. In the opinion of
Management of the Bank, all loans and commitments to lend included in such
transactions were made in compliance with applicable laws on substantially the
same terms, including interest rates and collateral, as those prevailing for
comparable transactions with other persons of similar creditworthiness and did
not involve more than a normal risk of collectibility or present other
unfavorable features. Although the Bank does not have any limits on the
aggregate amount it would be willing to lend to directors and officers as a
group, loans to individual directors and officers must comply with the Bank's
lending policies and statutory lending limits. The aggregate extensions of
credit to the Company's executive officers and directors, together with their
associates, was approximately $4.2 million on December 31, 1997, constituting
approximately 10.4% of the Bank's equity capital accounts at that date.
PROPOSAL 2
READOPTION OF ARTICLE V(B) OF THE ARTICLES OF INCORPORATION
CONCERNING RANGE OF DIRECTORS
GENERAL
Article V(a) of the Company's Articles of Incorporation provides that
the authorized number of directors of the Company shall not be less than six nor
more than ten, and that the exact number of directors can be fixed from time to
time within that range by the Board of Directors or the shareholders.
Article V(b) of the Company's Articles of Incorporation provides that
the range of authorized directors of the Company may only be amended by the vote
of at least 66 2/3% of the outstanding shares entitled to vote thereon; provided
however, that an amendment reducing the minimum number of directors to a number
less than five cannot be adopted if the votes cast against its adoption at a
meeting, or the shares not consenting in the case of an action by written
consent, are equal to more than 16 2/3% of the outstanding shares entitled to
vote thereon. Thus, Article V(b) imposes a supermajority shareholder vote
requirement to amend the range of directors set forth in Article V(a). Exhibit
"A" to this Proxy Statement contains the text of Article V as well as the text
of the only other Articles of the Articles of Incorporation which contain
supermajority vote requirements, all of which are being presented for
shareholder ratification. (See "PROPOSAL 3 - READOPTION OF ARTICLE VII OF THE
ARTICLES OF INCORPORATION CONCERNING FAIR PRICE PROTECTION" and "PROPOSAL 4 -
READOPTION OF ARTICLE VIII(h) OF THE ARTICLES OF INCORPORATION CONCERNING
CLASSIFICATION OF DIRECTORS; ELIMINATION OF CUMULATIVE VOTING" herein.)
Shareholders are encouraged to read Article V in its entirety and all of Exhibit
"A."
California law requires the renewal every two years of all provisions in
articles of incorporation which contain supermajority vote requirements and,
further, provides that the supermajority vote requirement cannot exceed the
lesser of the percentage of shareholders voting in favor or 66 2/3%. The
Company's Board of Directors has unanimously approved and for the reasons
described below unanimously recommends that the Company's shareholders readopt
Article V(b).
14
<PAGE> 19
All shareholders are especially encouraged to vote in favor of this proposal to
maximize the supermajority protections afforded by this provision.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE
READOPTION OF ARTICLE V(B) AND UNANIMOUSLY RECOMMENDS THAT YOU
VOTE FOR THE PROPOSAL. PROXIES SOLICITED BY THE BOARD OF DIRECTORS
WILL BE VOTED FOR THE PROPOSAL UNLESS A VOTE AGAINST THE PROPOSAL
OR ABSTENTION IS SPECIFICALLY INDICATED.
REASONS FOR THE PROPOSAL
This provision is designed to prevent a third party, by simple majority
vote, from increasing the size of the Board and "packing" the Board with its
designees. If a third party could do so, it could circumvent the intent of the
classified directors provision, Article VIII. (See "PROPOSAL 4 -READOPTION OF
ARTICLE VIII(h) OF THE ARTICLES OF INCORPORATION CONCERNING CLASSIFICATION OF
DIRECTORS; ELIMINATION OF CUMULATIVE VOTING" herein.)
The Board of Directors anticipates that this provision will protect the
Company's shareholders by rendering more difficult certain attempts to obtain
control of the Company. This provision may be characterized as an
"anti-takeover" proposal as the overall effect may be to discourage any attempt
to take over control of the Company through a proxy solicitation contest, tender
offer or merger. To the extent that such takeover attempts are discouraged,
temporary fluctuations in the market price of the Company's Common Stock
resulting from actual or rumored takeover attempts may be inhibited.
This provision is not being proposed in response to any present attempt,
known by the Board of Directors, to acquire control of the Company, to change
the range of directors, or to take other significant corporate action. Rather,
the Board of Directors believes that this supermajority vote requirement is
prudent and in the best interests of the Company and its shareholders and should
be readopted for their continued protection.
PROCEDURE FOR AMENDING THE RANGE OF DIRECTORS
Any amendment to the range of directors set forth in Article V(a)
presently requires approval by at least 66 2/3% of the outstanding shares. If
Article V(b) is readopted, the percentage will be the lesser of the percentage
of shareholders voting in favor of readoption, or 66 2/3%.
VOTE REQUIRED; BOARD RECOMMENDATION
A favorable vote by the holders of a majority of the Company's
outstanding Common Stock entitled to vote is required to readopt Article V(b).
If shareholders reapprove Article V(b), the provision will remain effective for
a period of two years from the date a Certificate of Amendment is filed with the
Secretary of State. The Board of Directors has instructed Management to refile
Article V(b) to be effective as soon as possible. Shareholder approval of this
proposal is deemed to authorize any changes to the text of Article V(b) as may
be required by regulatory agencies.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "FOR" ON THIS PROPOSAL.
15
<PAGE> 20
PROPOSAL 3
READOPTION OF ARTICLE VII OF THE ARTICLES OF INCORPORATION
CONCERNING FAIR PRICE PROTECTION
GENERAL
Shareholders are being asked to readopt Article VII of the Company's
Articles of Incorporation (the "Fair Price Provision"), which is designed to
ensure that shareholders of the Company will receive fair and equitable
treatment in the event of a business combination or other significant
transaction between the Company and a shareholder of the Company (or business
entity controlled by such shareholder) who holds a 10% or more stock interest in
the Company at the time of the proposed transaction. The most significant
aspects of the Fair Price Provision are: (i) imposing supermajority shareholder
vote or disinterested director approval requirements in connection with certain
mergers, acquisitions and other business combinations, unless specified minimum
price and procedural requirements are satisfied in the proposed transaction; and
(ii) imposing a supermajority shareholder vote requirement for an amendment,
change or repeal of the Fair Price Provision.
California law requires the renewal every two years of all provisions in
articles of incorporation which contain supermajority vote requirements and,
further, provides that the supermajority vote requirement cannot exceed the
lesser of the percentage of shareholders voting in favor or 66 2/3%. The
Company's Board of Directors has unanimously approved and for the reasons
described below unanimously recommends that the Company's shareholders readopt
the Fair Price Provision. All shareholders are especially encouraged to vote in
favor of this proposal to maximize the supermajority protections afforded by the
Fair Price Provision.
The Board of Directors expects the Fair Price Provision will protect the
Company's shareholders by rendering more difficult certain attempts to obtain
control of the Company and certain other related transactions. The Fair Price
Provision is expected to encourage a potential acquiror to present any takeover
proposal to the Board of Directors of the Company and negotiate the terms of
such proposal with the Board. As more fully described below, the Board of
Directors believes that this will increase the probability that all shareholders
will be treated fairly if an attempt is made to take over the Company.
However, as described in more detail below under the heading "Reasons
for the Fair Price Provision," the Fair Price Provision may be characterized as
an "anti-takeover" proposal as the overall effect of the Fair Price Provision
may be to discourage any attempt to take over control of the Company. If the
Fair Price Provision is readopted by the Company's shareholders, it is likely to
be more difficult for a large block of voting securities of the Company to
acquire the Company in a merger or other transaction which has not been approved
by the Company's Board of Directors. Accordingly, the effect of the Fair Price
Provision may be to deprive shareholders of an opportunity to sell their shares
at a premium over prevailing market prices as takeover bids frequently involve
purchases of stock directly from shareholders at such a premium.
The affirmative vote of a majority of the outstanding shares of the
Company's Common Stock is required for readoption of the Fair Price Provision.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE FAIR PRICE PROVISION
AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL. PROXIES SOLICITED BY
THE BOARD OF DIRECTORS WILL BE VOTED FOR THE PROPOSAL UNLESS A VOTE AGAINST THE
PROPOSAL OR ABSTENTION IS SPECIFICALLY INDICATED.
16
<PAGE> 21
REASONS FOR THE FAIR PRICE PROVISION
A principal reason for the Fair Price Provision is that it may reduce
the Company's vulnerability to certain uninvited attempts to obtain control of
the Company and other related transactions.
In recent years, there has been an increasing incidence of accumulations
by third parties of substantial stock positions in public corporations,
including financial institutions, with a view toward utilizing a large block of
stock to force a merger or other business combination in which certain of the
corporation's shareholders receive less valuable consideration than other
shareholders or toward forcing the corporation to repurchase the block at a
premium. Such premium is often obtained through express or implied threats of
disruptive tactics. In some instances, the accumulation of stock has been a
prelude to a proposal for the restructuring of the corporation or the sale of
all or a portion of its assets for what might be considered to be less than fair
consideration. In many cases, such third parties have sought representation on
the corporation's board of directors in order to increase the likelihood that
their proposal will be implemented. If the corporation resists these efforts to
obtain representation or declines to repurchase stock at a premium, such third
parties may commence proxy contests so that they or their nominees may be
elected to the board of directors in place of certain directors or even in place
of the entire board.
It is the belief of the Company's Board of Directors that tender or
exchange offers and other unsolicited or unnegotiated attempts to acquire
control of a company may often deprive the shareholders of an adequate
opportunity to evaluate the merits of the proposed transaction. In view of the
time pressures generally involved in such acquisition attempts, shareholders may
not have the opportunity to compare the offer to possible alternatives in
evaluating what action would be most likely to maximize the value to be received
by them for their shares. Forming a considered judgment with respect to such a
proposal requires, among other things, an assessment of its fairness, an
analysis of its tax implications for shareholders and the target company and
consideration of the impact of the transaction on the target company and its
employees. If acquisition of all of the stock of the target company does not
coincide with the initial taking of control, the remaining shareholders may find
the value of their investment reduced by the adoption of corporate policies and
practices significantly different from those upon which they based their initial
investment. Nor is there any guarantee that in any subsequent acquisition of the
remaining shares of the target company such remaining shareholders will receive
a price for their shares which reflects the value of such shares or which is
equal to the price paid by the acquiring person in connection with the initial
acquisition of control.
The Fair Price Provision is intended to prevent certain of the potential
inequities of business combinations to which the Company is a party which are
part of a "two-step" transaction. In the absence of the Fair Price Provision, a
purchaser who acquired control of the Company could subsequently, by virtue of
such control, force the remaining shareholders to sell or exchange their shares
at a price which might not fully reflect any premium such purchaser may have
paid in order to acquire his controlling interest.
The Fair Price Provision is designed to encourage any person who might
seek to acquire control of the Company to consult first with the Company's Board
of Directors and to negotiate the terms of any tender offer or proposed business
combination. The Board believes that, for the protection of the Company's
shareholders, any proposed acquisition of control of the Company, and any
proposed business combination in which the Company might be involved, should be
thoroughly studied by the Company's Board of Directors to assure that such
transaction would be in the Company's best interest and that all of the
Company's shareholders would be treated fairly. The Fair Price Provision
presently requires 66 2/3% or more shareholder approval for certain corporate
actions, but in each instance dispenses with such supermajority requirement if:
(i) the action is approved by the Board of Directors of the Company prior to the
time the hostile party involved in the transaction becomes a Major Shareholder
(as that term is defined below); (ii) the hostile party sought and
17
<PAGE> 22
obtained the unanimous prior approval of the Board of Directors to become a
Major Shareholder and the transaction was approved by not less than 80% of the
Board of Directors; (iii) the transaction was approved by not less than 90% of
the Board of Directors of the Company (these three methods of Board approval
being hereinafter referred to as the "requisite majority of the Board of
Directors"); or (iv) the transaction complied with specified minimum price and
procedural requirements. If readopted, the supermajority shareholder vote
requirement will be the percentage of shareholders voting in favor of
readoption, but not greater than 66 2/3%.
The Fair Price Provision should not, in the opinion of the Board of
Directors, prevent or discourage tender offers or other acquisition transactions
in which the acquiring person is prepared to pay the same price to all
shareholders. On the other hand, the Fair Price Provision would discourage some
takeover attempts by persons intending to acquire the Company in two steps and
to eliminate remaining shareholder interests by means of a business combination
in which the Company is a party involving less consideration per share than the
acquiring person would propose to pay for its initial interest in the Company.
Some shareholders may consider the Fair Price Provision to be disadvantageous to
the extent that it discourages takeovers which are not approved by the requisite
majority of the Board of Directors but in which shareholders might receive, for
at least some of their shares, a substantial premium above the market price at
the time a tender offer or other acquisition transaction is made.
Another effect of the readoption of the Fair Price Provision could be to
give a veto power to substantial shareholders with respect to a business
combination involving the Company which does not meet the price and procedural
requirements and is not approved by the requisite majority of the Board of
Directors.
Shareholders should also note that, to the extent that the Fair Price
Provision discourages corporate transactions which would result in a change of
the Company's Management, such changes might be less likely to occur as long as
this provision remains in effect. Because the Fair Price Provision has the
effect of giving Management more bargaining power in negotiations with an entity
attempting to acquire control of the Company, it could result in Management
using such bargaining power not only to try to negotiate a favorable price for
an acquisition of the Company, but also to retain their positions and negotiate
more favorable terms for Management.
The Fair Price Provision is not being proposed in response to any
present attempt, known by the Board of Directors, to acquire control of the
Company, to obtain representation on the Company's Board of Directors or to take
significant corporate action. Rather, the Board of Directors believes that the
Fair Price Provision is prudent and in the best interests of the Company and its
shareholders and should be ratified and readopted for their continued
protection. The Board further believes that it is appropriate to readopt the
Fair Price Provision inasmuch as it would continue to lessen the likelihood of
an inequitable attempt to acquire control of the Company and thus reduce the
likelihood that the Company would be required to incur significant expense and
be subject to substantial disruption in connection with such an attempt.
Except as described in this Proxy Statement, the Board of Directors does
not have any current plans to propose amendments to, or to make changes in, the
Company's charter documents which might be deemed to have "anti-takeover"
implications.
The following description is a summary of the Fair Price Provision,
which constitutes Article VII of the Company's Articles of Incorporation. The
text of Article VII is included in Exhibit "A" hereto and should be read in its
entirety by shareholders.
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ANALYSIS OF THE FAIR PRICE PROVISION
a. Definitions.
Set forth below are definitions of certain terms included in the Fair
Price Provision.
For purposes of the Fair Price Provision, a "Major Shareholder" is
defined, in general, as a person who is the beneficial owner of 10% or more of
the outstanding shares of Voting Stock of the Company. A Major Shareholder will
also be deemed to own beneficially those shares held by persons considered to be
"Affiliates" or "Associates" of the Major Shareholder. These terms include such
person's spouse and other close relatives, as well as business entities in which
the person has a significant ownership or controlling interest. In the following
discussion, references to shares owned by a Major Shareholder will include
shares owned by such person's Affiliates and Associates, and references to
transactions with, or proposed by or on behalf of, a Major Shareholder will
include transactions with, or proposed by or on behalf of, Affiliates and
Associates of the Major Shareholder. To the Company's best knowledge, no current
shareholder of the Company is a "Major Shareholder."
"Business Combinations" covered by the Fair Price Provision include the
following transactions: (i) a merger or consolidation of the Company or any
subsidiary with a Major Shareholder; (ii) the sale or other disposition by the
Company or any subsidiary to a Major Shareholder of all, or substantially all or
any "Substantial Part" of the assets of the Company or any subsidiary; (iii) the
purchase, exchange, lease or other acquisition by the Company or any subsidiary
of all, substantially all or any "Substantial Part" of the assets or business of
a Major Shareholder; (iv) the issuance of any securities, or of any rights,
warrants or options to acquire any securities, of the Company or a subsidiary,
80% or more of which are issued to a Major Shareholder, or the acquisition by
the Company or a subsidiary of any securities, or of any rights, warrants or
options to acquire any securities, of a Major Shareholder; (v) any
reclassification of securities, recapitalization or other transaction of the
Company which has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding stock (or securities convertible into
stock) of any class of the Company or a subsidiary owned by a Major Shareholder,
or any partial liquidation, spin off, split off or split up of the Company or a
subsidiary, unless any such transaction has been approved by 80% of the Board of
Directors; (vi) the acquisition by a Major Shareholder of more than 15% of the
Voting Stock of the Company; and (vii) any agreement, contract or other
arrangement providing for any transaction otherwise defined as a Business
Combination.
The term "Substantial Part" as used in the Fair Price Provision in
reference to the assets of the Company, of any subsidiary or of any Major
Shareholder, means assets having a value of more than 5% of the total
consolidated assets of the Company's most recent fiscal year ending prior to the
time the determination is made.
The term "Voting Stock" as used in the Fair Price Provision means stock
or other securities entitled to vote upon any action to be taken in connection
with any Business Combination or entitled to vote generally in the election of
directors, and shall also include stock or other securities convertible into
Voting Stock.
b. Approval of Business Combinations.
Under the Fair Price Provision, a Business Combination may be effected
only if, in addition to any Board and shareholder approval required by law, the
Company's Articles of Incorporation or any resolution adopted by the Board of
Directors providing for the issuance of a class or series of stock, it is
approved in one of the following ways:
(i) Certain minimum price and procedural requirements. If the
proposed Business Combination satisfies certain minimum price and
procedural requirements
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summarized below, then the Business Combination may proceed if it is
approved by a majority of the voting power of all outstanding shares of
Voting Stock;
(ii) Board of Directors Approval. If (a) the Business
Combination was approved by the Board of Directors of the Company prior
to the Major Shareholder involved in the Business Combination becoming
such, (b) the Major Shareholder involved in the Business Combination
sought and obtained the unanimous prior approval of the Board of
Directors to become a Major Shareholder and the Business Combination was
approved by not less than 80% of the Board of Directors of the Company,
or (c) the Business Combination was approved by not less than 90% of the
Board of Directors of the Company; or
(iii) Supermajority shareholder approval. If the proposed
Business Combination does not satisfy the minimum price and procedural
requirements summarized below and is not approved by the requisite
majority of the Board of Directors, then the Business Combination may
proceed only if it is approved by supermajority shareholder vote.
Presently, the Fair Price Provision provides for the affirmative vote by
the holders of not less than 662/3% of the voting power of all
outstanding shares of Voting Stock. If readopted, the percentage will be
the lesser of the percentage of shareholders voting in favor of
readoption, or 66 2/3%.
c. Minimum Price and Procedural Requirements.
The Major Shareholder must, in connection with a Business Combination
involving payment of cash or other consideration to shareholders, offer either
cash or the same type of consideration used by the Major Shareholder in
acquiring the shares of the Company's Common Stock previously acquired by the
Major Shareholder. In addition, the aggregate amount of cash and the fair market
value of the consideration other than cash to be received per share by holders
of the Company's Common Stock in any Business Combination must be not less than
the higher of the greatest per share amount determined under the following
alternatives: (i) the highest per share price paid by the Major Shareholder in
acquiring any of the Company's Voting Stock; or (ii) an amount which bears the
same or a greater percentage relationship to the market price of the Company's
Voting Stock immediately prior to the announcement of such Business Combination
as the highest per share price determined in (i) above bears to the market price
of the Company's Voting Stock immediately prior to the commencement of
acquisition of the Company's Voting Stock by the Major Shareholder.
Under the Fair Price Provision, unless a proposed Business Combination
is approved by the requisite majority of the Board of Directors or by the
supermajority vote of shareholders described above, a Major Shareholder would
have had to comply, from and after the time he became a Major Shareholder, with
all of the procedural requirements described below, as well as with the minimum
price criteria described above.
The Major Shareholder must not have acquired, with or without Board
approval, any newly-issued shares of the Company's Voting Stock at any time
subsequent to the transaction pursuant to which he became a Major Shareholder,
except under limited circumstances. This provision is intended to prevent a
Major Shareholder who intends to propose a Business Combination from purchasing
additional, newly-issued shares of the Voting Stock at prices which are lower
than those set by the minimum price criteria of the Fair Price Provision. Thus,
any Business Combination proposed by a Major Shareholder who has purchased
additional shares cannot satisfy the procedural requirements and, accordingly,
will require approval by a supermajority vote of shareholders or by the
requisite majority of the Board of Directors and such shareholder vote, if any,
as is required by law. It should be noted, however, that this provision does not
in any way prohibit a Major Shareholder from purchasing additional shares in
open market or private transactions, so long as such Major Shareholder does not
propose or otherwise engage in a Business Combination. In addition to
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the foregoing, the Major Shareholder must not have received certain benefits,
including loans, from the Company subsequent to the time he became a Major
Shareholder.
Finally, a proxy statement describing the proposed Business Combination
and complying with the requirements of the rules promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of 1934 must be mailed
to all shareholders of the Company, prior to the consummation of the Business
Combination, to solicit shareholders' approval of such Business Combination. In
addition, this proxy statement must contain: (i) any recommendations as to the
advisability (or inadvisability) of the Business Combination which any one or
more members of the Board of Directors may choose to state; and (ii) the opinion
of a reputable national investment banking firm as to the fairness (or lack
thereof) of the terms of such Business Combination, from the point of view of
the remaining shareholders of the Company.
PROCEDURE FOR AMENDING THE FAIR PRICE PROVISION
Any amendment, change or repeal of the Fair Price Provision or any other
amendment of the Company's Articles of Incorporation which would have the effect
of modifying or permitting circumvention of the Fair Price Provision requires
supermajority shareholder approval. Presently, the Fair Price Provision requires
approval by at least 66 2/3% of the Voting Stock of the Company. If readopted,
the percentage will be the lesser of the percentage of shareholders voting in
favor of readoption, or 66 2/3%.
VOTE REQUIRED; BOARD RECOMMENDATION
A favorable vote by the holders of a majority of the Company's
outstanding Common Stock entitled to vote is required to readopt the Fair Price
Provision. If shareholders reapprove Article VII, Article VII will remain
effective for a period of two years from the date a Certificate of Amendment is
filed with the Secretary of State. The Board of Directors has instructed
Management to refile Article VII to be effective as soon as possible.
Shareholder approval of this proposal is deemed to authorize any changes to the
text of Article VII as may be required by regulatory agencies.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "FOR" ON THIS PROPOSAL.
PROPOSAL 4
READOPTION OF ARTICLE VIII(h) OF THE ARTICLES OF INCORPORATION
CONCERNING CLASSIFICATION OF DIRECTORS; ELIMINATION OF CUMULATIVE
VOTING
GENERAL
Article VIII of the Company's Articles of Incorporation provides that
the Board of Directors shall be classified into two or three classes, depending
on the number of directors, and that directors shall be elected for staggered
terms. Article VIII also provides for the elimination of cumulative voting in
connection with the election of directors. Pursuant to these provisions, at the
Meeting the shareholders will be asked to elect eight directors, four for an
initial term of one year and four for an initial term of two years. Thereafter,
directors will be elected for staggered two-year terms. At the Meeting
shareholders will not be entitled to use cumulative voting.
Article VIII(h) of the Company's Articles of Incorporation provides that
Article VIII may only be amended or repealed by the vote of at least 66 2/3% of
the outstanding shares entitled to vote thereon. Exhibit "A" to this Proxy
Statement contains the text of Article VIII. Shareholders are encouraged to read
Article VIII in its entirety.
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California law requires the renewal every two years of all provisions in
Articles of Incorporation which contain supermajority vote requirements and,
further, provides that the supermajority vote requirement cannot exceed the
lessor of the percentage of shares voting in favor or 66 2/3%. The Company's
Board of Directors has unanimously approved and for the reasons described below
unanimously recommends that the Company's shareholders readopt Article VIII(h).
All shareholders are especially encouraged to vote in favor of this proposal to
maximize the supermajority protections afforded by this provision.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE
READOPTION OF ARTICLE VIII(h) AND UNANIMOUSLY RECOMMENDS THAT YOU
VOTE FOR THE PROPOSAL. PROXIES SOLICITED BY THE BOARD OF DIRECTORS
WILL BE VOTED FOR THE PROPOSAL UNLESS A VOTE AGAINST THE PROPOSAL
OR ABSTENTION IS SPECIFICALLY INDICATED.
ANALYSIS OF ARTICLE VIII
Article VIII, by providing for the classification of directors, provides
that if the number of directors shall be fixed at nine or more, the Board shall
be divided into three classes of directors serving staggered three-year terms,
with each class being as nearly equal in number as possible. In the event the
number of directors shall be fixed at six or more, but less than nine, the Board
shall be divided into two classes of directors serving staggered two-year terms
with each class being as nearly equal in number as possible. As a result, if
there are three classes of directors, approximately one-third of the Board of
Directors would be elected each year, and if there are two classes of directors,
approximately one-half of the Board of Directors would be elected each year.
Article VIII further provides that at the first annual meeting of shareholders
held after the Company becomes a "listed corporation," which is this Meeting,
nominees elected as directors will be classified on the basis of the number of
votes received, with the nominees receiving the highest number of votes elected
to the class with the longest initial term. Thus, because eight directors are to
be elected, there will only be two classes of directors, with one class serving
until the 1999 annual meeting of shareholders and the other class serving until
the 2000 annual meeting of shareholders. Thereafter, each class of directors
will be elected for staggered two-year terms. In the event of a vacancy on the
Board, any director elected by the shareholders or the Board to fill the vacancy
would hold office for the balance of the term of the class in which the vacancy
occurred.
Article VIII also provides that the election of directors by the
shareholders shall not be by cumulative voting. Cumulative voting entitles
shareholders to give one nominee as many votes as are equal to the number of
directors to be elected, multiplied by the number of shares owned, or to
distribute his or her votes on the same principle between two or more nominees
as he or she sees fit. With cumulative voting, therefore, it is possible for a
minority shareholder or group of shareholders to obtain representation on the
Board of Directors even if a majority of shareholders prefer other candidates.
To this extent, cumulative voting may permit a more representative board of
directors in a company in which there are distinctly differing interests among
different shareholders or shareholder groups. Without cumulative voting,
directors will be elected by a simple majority vote of shares voting. Each
shareholder entitled to vote may vote all the shares held by that shareholder
for each of several nominees for director up to the number of directors to be
elected. The shareholder may not cast more votes for any single nominee than the
number of shares held by that shareholder. The elimination of cumulative voting
will eliminate the possibility of the election of one or more directors by a
small group of shareholders having less than a majority of the shares voting.
REASONS FOR THE PROPOSAL
The Board of Directors believes that the classification of directors
will reduce the possibility that a third party could effect a sudden or surprise
change in the composition of the Board of Directors without the support of the
incumbent Board. Thus, the classification of directors will affect
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the ability of shareholders of the Company to effect immediate changes in the
composition of the Board of Directors.
Because the classification of directors will make more difficult or
deter a proxy contest or the assumption of control of the Board by a holder of a
substantial block of the Company's Common Stock, it will increase the likelihood
that incumbent members of Management will retain their position. The
classification of directors will apply to every election of directors whether or
not a change in the composition of the Board would be beneficial and whether or
not the holders of a majority of the Company's Common Stock believe that such a
change wold be desirable. As a result of the classification of directors it
would require shareholders who do not favor the policies of the Board at least
two annual meetings of shareholders to replace a majority of the Board.
In addition, the classification of directors could have the effect of
deterring a third party from making a tender offer for or otherwise acquiring
significant blocks of the Company's shares, even though such an action might
increase, at least temporarily, market prices for the Company's shares, and even
though a number of shareholders of the Company might be willing to sell their
shares at the price offered. Because the deterrence of such acquisitions could
tend to reduce such temporary fluctuations in the market price of the Company's
shares, shareholders could be denied certain opportunities to sell their shares
at temporarily higher market prices. However, the Board believes that the
benefits in protecting the ability of a Board of Directors to negotiate with a
proponent of an unfriendly or unsolicited proposal to take over or restructure a
corporation outweigh the disadvantage of discouraging such proposals.
The Board of Directors believes that elimination of cumulative voting is
desirable in order to preclude the election of a director or small group of
directors representing a special interest group of shareholders because of the
potential for dissension on the Board of Directors. Members of the Board have
observed situation in other corporations where differing factions, through the
use of cumulative voting, have been able to put persons on the board of
directors who appeared to be more interested in the interests of their
sponsoring shareholders than those of the corporation as a whole. The Board
believes that those situations have been injurious to the interests of the
corporations involved and that the affairs of a corporation such the Company can
be better handled in the absence of such dissension. At present, no individual
shareholder or group of shareholders, which is know to the Board of Directors,
controls a large enough number of shares of the Company to be able to elect a
director through the use of cumulative voting. Therefore, this change will only
affect actions of individuals or groups which might occur in the future.
In recent years, accumulations by third parties of substantial stock
positions in publicly held corporations frequently have been preludes to hostile
attempts to take over or restructure such corporations or to sell all or part of
such corporations' assets or to take other similar extraordinary corporate
actions. Such actions are often undertaken by third parties without advance
notice to or consultation with management. In many cases, such third parties
position themselves through stock ownership to seek representation on boards of
directors in order to increase the likelihood that they will be able to
implement proposed transactions opposed by the corporation's management. If a
corporation resists the efforts of a third party to obtain representation on its
board, the third party may commence a proxy contest to have its nominees elected
to the board in place of certain directors or the entire board. In some cases, a
third party may not truly be interested in taking over the corporation, but uses
the threat of a proxy fight or a bid to take over the corporation, or both, as a
means of obtaining for itself a special benefit which might not be available to
all of the corporation's shareholders. Cumulative voting would allow a minority
shareholder or group to elect a member to the Company's Board of Directors.
The Board believes that the imminent threat of removal of the Company's
Management in such a situation, through a change in the composition of the
Board, could severally curtail Management's ability to negotiate effectively
with such a party. Management could be deprived of
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the time and information necessary to evaluate a particular takeover or other
proposal, to seek and study alternative proposals that may better serve the
interests of the Company's shareholders and, in an appropriate case, to help
achieve a better price in any transaction involving the Company that may
ultimately be undertaken. If readopted, Article VIII(h) would enhance the
protections of Article VIII by making any amendment or repeal of Article VIII
more difficult.
Takeovers or changes in management of a corporation which are proposed
and effected without prior consultation and negotiation with its Board of
Directors are not necessarily detrimental to the corporation and its
shareholders. However, the Board believes that the benefits in protecting the
ability of a Board of Directors to negotiate with a proponent of an unfriendly
or unsolicited proposal to take over or restructure a corporation outweigh the
disadvantages of discouraging such proposals.
Article VIII, in conjunction with the other "anti-takeover" provisions
of the Company's Article of Incorporation, are designed, in part, to encourage a
third party seeking to acquire control of the Company to consult first with the
Company's Board of Directors regarding any proposed business combination or
other transaction involving the Company, so that it may be studied by the Board
and so that the Company's shareholders can have the benefit of the Board's
recommendations in cases where shareholder approval is required. Although a
takeover bid may be made at prices representing premiums over the then current
market price of the shares being sought, the Board believes that, in a situation
where a third party seeks Management's cooperation, the Company's Board of
Directors will be in a better position to promote consideration of a broader
range of relevant factors, such as the structuring of a proposed transaction and
its tax consequences and the underlying value and prospects of the Company.
These issues may not otherwise adequately be addressed by such a third party.
The supermajority voting requirement contained in Article VIII(h) is
designed to enhance the protections afforded by Article VIII.
PROCEDURE FOR AMENDING ARTICLE VIII
Any amendment to the provisions of Article VIII, establishing a
classified board of directors and eliminating cumulative voting, presently
requires approval by at least 66 2/3% of the outstanding shares. If Article
VIII(h) is readopted, the percentage will be the lesser of the percentage of
shareholders voting in favor of readoption, or 66 2/3%.
VOTE REQUIRED; BOARD RECOMMENDATION
A favorable vote by the holders of a majority of the Company's
outstanding Common Stock entitled to vote is required to readopt Article
VIII(h). If shareholders reapprove Article VIII(h), the provision will remain
effective for a period of two years from the date a Certificate of Amendment is
filed with the Secretary of State. The Board of Directors has instructed
Management to refile Article VIII(h) to be effective as soon as possible.
Shareholder approval of this proposal is deemed to authorize any changes to the
text of Article VIII(h) as maybe required by regulatory agencies.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "FOR" ON THIS PROPOSAL.
INDEPENDENT ACCOUNTANTS
The firm of Vavrinek, Trine, Day & Co., LLP, served as independent
public accountants for the Bank for 1997. In addition to audit services, that
firm performed selected non-audit services, including assisting in the
preparation of the Bank's tax returns and regulatory reports. The fees paid for
non-audit services was approximately 18.4% of the fees for audit services. All
services rendered by Vavrinek, Trine, Day & Co., LLP, were approved by the Board
of Directors of the Bank, which
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considered the possible effect of each such service on the independence of the
accountants. The Bank and the Company have selected this firm to be their
accountants for 1998.
It is anticipated that a representative of Vavrinek, Trine, Day & Co.,
LLP, will be present at the Meeting to respond to appropriate questions from
shareholders.
SHAREHOLDER PROPOSALS
The deadline for shareholders to submit proposals to be considered for
inclusion in the Proxy Statement for the Company's 1999 Annual Meeting of
Shareholders, which is tentatively scheduled for April 22, 1999, is December 11,
1998.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's (and previously the Bank's) executive officers, directors, and persons
who own more than 10% of the Common Stock to file reports of stock ownership and
changes in stock ownership with the Securities and Exchange Commission
(previously the bank regulatory agencies). The executive officers, directors and
greater than 10% shareholders are required by regulation to furnish the Company
(previously the Bank) with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by the
Bank, or written representations from certain reporting persons that no such
forms were required for those persons, the Company believes that during 1997 all
filing requirements applicable to the Bank's executive officers, directors, and
greater than 10% shareholders were complied with.
OTHER MATTERS
Management does not know of any matters to be presented at the Meeting
other than those set forth above. However, if other matters come before the
Meeting, it is the intention of the persons named in the accompanying Proxy to
vote said Proxy in accordance with the recommendations of the Board of Directors
on such matters, and discretionary authority to do so is included in the Proxy.
VIB CORP
Charlotte Studer, Secretary
Dated: April 10, 1998
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EXHIBIT "A"
ARTICLES OF INCORPORATION
OF
VIB CORP
(SELECTED ARTICLES)
ARTICLE V: RANGE OF DIRECTORS
(a) The business and affairs of the corporation shall be managed
under the direction of the Board of Directors. The authorized number of
directors of the corporation shall be not less than six (6) nor more than ten
(10). The exact number of directors shall be determined within the limits
specified above by a bylaw or by a resolution duly adopted by the Board of
Directors or by the shareholders.
(b) Notwithstanding any other provisions of these Articles of
Incorporation, the range of authorized directors of the corporation set forth in
Section (a) of Article V may only be amended by the vote of at least sixty-six
and two-thirds percent (66 2/3%) of the outstanding shares entitled to vote
thereon; provided, however, that an amendment reducing the minimum number of
directors to a number less than five (5) cannot be adopted if the votes cast
against its adoption at a meeting, or the shares not consenting in the case of
an action by written consent, are equal to more than sixteen and two-thirds
percent (16 2/3%) of the outstanding shares entitled to vote thereon.
ARTICLE VII: FAIR PRICE PROTECTION
(a) Definitions. For the purposes of this Article VII:
1. The term "Beneficial Owner" and correlative terms shall have
the meaning as set forth in Rule 13d-3 under the Securities Exchange Act of
1934, as amended, or any similar successor Rule. Without limitation and in
addition to the foregoing, any Voting Stock of this corporation which any Major
Shareholder has the right to vote or to acquire: (i) pursuant to any agreement;
(ii) by reason of tenders of shares by shareholders of the corporation in
connection with or pursuant to a tender offer made by such Major Shareholder
(whether or not any tenders have been accepted, but excluding tenders which have
been rejected); or (iii) upon the exercise of conversion rights, warrants,
options or otherwise, shall be deemed "beneficially owned" by such Major
Shareholder.
2. The term "Business Combination" shall mean:
A. Any merger or consolidation (whether in a single
transaction or a series of related transactions, including a series of separate
transactions with a Major Shareholder, any Affiliate or Associate thereof, or
any Person acting in concert therewith) of this corporation or any Subsidiary
with or into a Major Shareholder or of a Major Shareholder with or into this
corporation or a Subsidiary;
A-1
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B. Any sale, lease, exchange, transfer, distribution to
shareholders or other disposition, including without limitation, a mortgage,
pledge or any other security device, to or with a Major Shareholder by the
corporation or any of its Subsidiaries (in a single transaction or a series of
related transactions) of all, substantially all or any Substantial Part of the
assets of this corporation or a Subsidiary (including, without limitation, any
securities of a Subsidiary);
C. The purchase, exchange, lease or other acquisition by
the corporation or any of its Subsidiaries (in a single transaction or a series
of related transactions) of all, substantially all or any Substantial Part of
the assets or business of a Major Shareholder;
D. The issuance of any securities, or of any rights,
warrants or options to acquire any securities, of this corporation or a
Subsidiary, eighty percent (80%) or more of which are issued to a Major
Shareholder, or the acquisition by this corporation or a Subsidiary of any
securities, or of any rights, warrants or options to acquire any securities, of
a Major Shareholder;
E. Any reclassification of Voting Stock, recapitalization
or other transaction (other than a redemption in accordance with the terms of
the security redeemed) which has the effect, directly or indirectly, of
increasing the proportionate amount of Voting Stock of the corporation or any
Subsidiary thereof which is beneficially owned by a Major Shareholder, or any
partial liquidation, spin off, split off or split up of the corporation or any
Subsidiary thereof; provided, however, that this Section (a)2.E of Article VII
shall not relate to any transaction of the types specified herein that has been
approved by eighty percent (80%) of the Board of Directors; and
F. Any Agreement, contract or other arrangement providing
for any of the transactions described herein.
3. The term "Major Shareholder" shall mean any Person which,
together with its "Affiliates" and "Associates" (as defined in Rule 12b-2 of the
Securities Exchange Act of 1934, as amended, or any similar successor Rule) and
any Person acting in concert therewith, is the beneficial owner of shares
possessing ten percent (10%) or more of the voting power of the Voting Stock of
this corporation, and any Affiliate or Associate of a Major Shareholder,
including a Person acting in concert therewith. The term "Major Shareholder"
shall not include a Subsidiary of this corporation.
4. The term "other consideration to be received" shall include,
without limitation, Voting Stock of this corporation retained by its existing
shareholders in the event of a Business Combination which is a merger or
consolidation in which this corporation is the surviving corporation.
5. The term "Person" shall mean any individual, corporation,
partnership or other person, group or entity (other than this corporation, any
Subsidiary of this corporation or a trustee holding stock for the benefit of
employees of this corporation or its Subsidiaries, or any one of them, pursuant
to one or more employee benefit plans or arrangements). When two or more Persons
act as a partnership, limited partnership, syndicate,
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association or other group for the purpose of acquiring, holding or disposing of
shares of stock, such partnership, syndicate, association or group will be
deemed a "Person."
6. The term "Subsidiary" shall mean any business entity fifty
percent (50%) or more of which is beneficially owned by this corporation.
7. The term "Substantial Part," as used in reference to the
assets of the corporation, of any Subsidiary or of any Major Shareholder means
assets having a value of more than five percent (5%) of the total consolidated
assets of the corporation and its Subsidiaries as of the end of the
corporation's most recent fiscal year ending prior to the time the determination
is made.
8. The term "Voting Stock" shall mean stock or other securities
entitled to vote upon any action to be taken in connection with any Business
Combination or entitled to vote generally in the election of directors, and
shall also include stock or other securities convertible into Voting Stock.
(b) Notwithstanding any other provisions of these Articles of
Incorporation and except as set forth in Section (c) of Article VII, neither the
corporation nor any Subsidiary shall be party to a Business Combination unless:
1. The Business Combination was approved by the Board of
Directors of the corporation prior to the Major Shareholder involved in the
Business Combination becoming such; or
2. The Major Shareholder involved in the Business Combination
sought and obtained the unanimous prior approval of the Board of Directors to
become a Major Shareholder and the Business Combination was approved by not less
than eighty percent (80%) of the Board of Directors; or
3. The Business Combination was approved by not less than ninety
percent (90%) of the Board of Directors of the corporation.
(c) The approval requirements of Section (b) of Article VII shall not
apply if the Business Combination is approved by the vote of at least sixty-six
and two-thirds percent (66 2/3%) of the shares of the Voting Stock of this
corporation and all of the following conditions are satisfied:
1. The aggregate of the cash and the fair market value of other
consideration to be received per share (as adjusted for stock splits, stock
dividends, reclassification of shares into a lesser number and similar events)
by holders of the Voting Stock of this corporation in the Business Combination
is not less than the higher of: (i) the highest per share price (including
brokerage commissions, soliciting dealers' fees, dealer-management compensation,
and other expenses, including, but not limited to, costs of newspaper
advertisements, printing expenses and attorneys' fees) paid by the Major
Shareholder in acquiring any of this corporation's Voting Stock; or (ii) an
amount which bears the same or a greater percentage relationship to the market
price of this corporation's Voting Stock immediately prior to the announcement
of such Business Combination as the highest per share price determined in
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(i) above bears to the market price of this corporation's Voting Stock
immediately prior to the commencement of acquisition of this corporation's
Voting Stock by such Major Shareholder;
2. The consideration to be received in such Business Combination
by holders of the Voting Stock of this corporation shall be, except to the
extent that a shareholder agrees otherwise as to all or a part of his or her
shares, in the same form and of the same kind as paid by the Major Shareholder
in acquiring his Voting Stock of the corporation;
3. After becoming a Major Shareholder and prior to consummation
of such Business Combination: (i) such Major Shareholder shall not have acquired
any newly-issued shares of capital stock, directly or indirectly, from this
corporation or a Subsidiary (except upon conversion of convertible securities
acquired by it prior to becoming a Major Shareholder or upon compliance with the
provisions of this Article VII or as a result of a pro rata share dividend or
share split); and (ii) such Major Shareholder shall not have received the
benefit, directly or indirectly (except proportionately as a shareholder), of
any loans, advances, guarantees, pledges or other financial assistance or tax
credits provided by this corporation or a Subsidiary, or made any major changes
in this corporation's business or equity capital structure; and
4. A proxy statement responsive to the requirements of the
Securities Exchange Act of 1934 and Rules promulgated thereunder, whether or not
this corporation is then subject to such requirements, shall be mailed to all
shareholders of this corporation for the purpose of soliciting shareholders'
approval of such Business Combination and shall contain at the front thereof, in
a prominent place: (i) any recommendations as to the advisability (or
inadvisability) of the Business Combination which any one or more members of
Board of Directors may choose to state; and (ii) the opinion of a reputable
national investment banking firm as to the fairness (or lack thereof) of the
terms of such Business Combination, from the point of view of the remaining
shareholders of this corporation (such investment banking firm to be engaged
solely on behalf of the remaining shareholders, to be paid a reasonable fee for
their services by this corporation upon receipt of such opinion, to be one of
the so-called major bracket investment banking firms which has not previously
been associated with such Major Shareholder and to be selected by the Board of
Directors).
(d) The affirmative vote required by this Article VII is in addition
to the vote of the holders of any class or series of stock of the corporation
otherwise required by law, these Articles of Incorporation, or any resolution
which has been adopted by the Board of Directors providing for the issuance of a
class or series of Preferred Stock.
(e) Nothing contained in this Article VII shall be construed as
relieving any Major Shareholder or any Affiliate or Associate thereof from any
fiduciary obligation imposed by law.
(f) The fact that any action or transaction complies with the
provisions of this Article VII shall not be construed as imposing any fiduciary
duty, obligation or responsibility on the Board of Directors or any member
thereof to approve such action or transaction or recommend its adoption or
approval to the shareholders of the corporation, nor shall such compliance
limit, prohibit or otherwise restrict in any manner the Board of Directors, or
any member thereof, with respect to evaluations of, or action and responses
taken with respect to, such action or transaction.
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<PAGE> 34
(g) Any amendment, change or repeal of this Article VII or any other
amendment of these Articles of Incorporation which would have the effect of
modifying or permitting circumvention of the provisions of this Article VII
shall require approval by at least a sixty-six and two-thirds percent (66 2/3%)
vote of the Voting Stock of the corporation.
ARTICLE VIII: CLASSIFICATION OF DIRECTORS
(a) This Article VIII shall become effective only when the
corporation becomes a listed corporation within the meaning of Section 301.5 of
the Corporations Code, which provision refers to a corporation whose shares are
traded on the New York Stock Exchange, American Stock Exchange, or Nasdaq
National Market System.
(b) In the event the authorized number of directors shall be fixed at
nine (9) or more, the Board of Directors shall be classified into three (3)
classes, the members of each class to serve for a term of three (3) years. In
the event the authorized number of directors shall be fixed at six (6) or more,
but less than nine (9), the Board of Directors shall be classified into two (2)
classes, the members of each class to serve for a term of two (2) years.
(c) The election of directors by the shareholders shall not be by
cumulative voting. At each election of directors, each shareholder entitled to
vote may vote all the shares held by that shareholder for each of several
nominees for director up to the number of directors to be elected. The
shareholder may not cast more votes for any single nominee than the number of
shares held by that shareholder.
(d) At the first annual meeting of shareholders held after the
corporation qualifies as a listed corporation within the meaning of Section
301.5 of the Corporations Code the nominees elected as directors will be
classified on the basis of the number of votes received; the nominees receiving
the highest number of votes will be elected to the class(es) with the longest
initial terms, as follows: (i) if there shall be three (3) classes one-third
(1/3) of the directors shall be elected for a term of three (3) years, one-third
(1/3) of the directors shall be elected for a term of two (2) years, and
one-third (1/3) of the directors shall be elected for a term of one (1) year. If
the number of directors is not divisible by three (3), the first extra director
shall be elected for a term of three (3) years and a second extra director, if
any, shall be elected for a term of two (2) years; and (ii) if there shall be
two (2) classes, one-half (1/2) of the directors shall be elected for a term of
two (2) years and one-half (1/2) of the directors shall be elected for a term of
one (1) year. If the number of directors is not divisible by two (2), the first
extra director shall be elected for a term of two (2) years.
(e) Subject to the provisions of Section (a) of Article V providing
for a change in the authorized number of directors, at subsequent annual
meetings of shareholders, a number of directors shall be elected equal to the
number of directors with terms expiring at that annual meeting. If there shall
be three (3) classes, at each subsequent annual meeting the directors elected
shall be elected for a term of three (3) years. If there shall be two (2)
classes, at each subsequent annual meeting the directors elected shall be
elected for a term of two (2) years. In the event the authorized number of
directors changes necessitating a change in the number of classes, the directors
of the corporation shall be reclassified in accordance with California law and
the principles of Section (d) of this Article VIII; provided, however, any
change in the number of classes shall not operate to shorten the term of any
director.
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(f) If the number of directors is changed, any increase or decrease
shall be apportioned among the classes so as to maintain the number of directors
in each class as nearly equal as possible, and any additional directors of any
class elected to fill a vacancy resulting from an increase in such class shall
hold office for a term that shall coincide with the remaining term of that
class, but in no case will a decrease in the number of directors shorten the
term of any incumbent director. A director shall hold office until the annual
meeting for the year in which his term expires and until his successor shall be
elected and shall qualify, subject, however, to prior death, resignation,
retirement, disqualification or removal from office. Any vacancy on the Board of
Directors, howsoever resulting, may be filled by a majority of the directors
then in office, even if less than a quorum, or by a sole remaining director. Any
director elected to fill a vacancy shall hold office for a term that shall
coincide with the term of the class to which such director shall have been
elected.
(g) Notwithstanding the foregoing provisions of this Article VIII,
whenever the holders of any one or more classes or series of Preferred Stock
issued by the corporation shall have the right, voting separately by class or
series, to elect directors at an annual or special meeting of shareholders, the
election, term of office, filling of vacancies and other features of such
directorships shall be governed by the terms of these Articles of Incorporation
or the resolution or resolutions adopted by the Board of Directors pursuant to
Article IV applicable thereto, and such directors so elected shall not be
divided into classes pursuant to this Article VIII unless expressly provided by
such terms.
(h) Notwithstanding any other provision of these Articles of
Incorporation, any amendment, change or repeal of this Article VIII shall
require the vote of at least sixty-six and two-thirds percent (66 2/3%) of the
outstanding shares entitled to vote thereon.
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<PAGE> 36
PROXY
VIB CORP
ANNUAL MEETING OF SHAREHOLDERS
MAY 11, 1998
The undersigned shareholder of VIB Corp (the "Company") hereby
nominates, constitutes and appoints R. Stephen Ellison, John L. Skinner and
Alice Helen Lowery Westerfield, and each of them, the attorney, agent, and proxy
of the undersigned, with full powers of substitution, to vote all stock of the
Company which the undersigned is entitled to vote at the Annual Meeting of
Shareholders of the Company to be held at Valley Independent Bank's Main Office,
1448 Main Street, El Centro, California 92243, on Monday, May 11, 1998, at 6:00
p.m. and at any and all adjournments thereof, as fully and with the same force
and effect as the undersigned might or could do if personally present there at,
as follows:
1. Election of Directors. Authority to elect the eight persons
named below and in the Proxy Statement dated April 10, 1998,
accompanying the Notice of said Meeting, to serve and until
their successors are elected and have qualified, including the
authority to elect the following eight persons to the initial
terms indicated below:
<TABLE>
<CAPTION>
Two-Year Term One-Year Term
------------- -------------
<S> <C> <C>
Charles Ellis Richard D. Foss
R. Stephen Ellison Dennis L. Kern
Edward McGrew Ronald A. (Rusty) Pedersen
John L. Skinner Alice Helen Lowery Westerfield
</TABLE>
AUTHORITY GIVEN [ ] AUTHORITY WITHHELD [ ]
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR SOME, BUT NOT ALL
OF THE NOMINEES NAMED ABOVE, YOU SHOULD CHECK THE BOX "AUTHORITY
GIVEN" AND YOU SHOULD ENTER THE NAME(S) OF THE NOMINEE(S) WITH
RESPECT TO WHOM YOU WISH TO WITHHOLD AUTHORITY TO VOTE IN THE
SPACE PROVIDED BELOW:
2. Range of Directors. To readopt Article V(b) of the Company's
Articles of Incorporation providing for supermajority voting
protection to change the range of directors.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
PLEASE SIGN AND DATE THE OTHER SIDE
<PAGE> 37
PLEASE SIGN AND DATE BELOW
3. Fair Price Protection. To readopt Article VII of the Company's
Articles of Incorporation providing that the Company's
shareholders will receive fair and equitable treatment in the
event of certain business combinations.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. Classification of Board of Directors; Elimination of Cumulative
Voting. To readopt Article VIII(h) of the Company's Articles of
Incorporation providing for supermajority voting protection with
respect to the establishment of the classified Board of Directors
and the elimination of cumulative voting.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. Other Business. To transact such other business as may properly
come before the Meeting and any adjournment or adjournments
thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "AUTHORITY GIVEN" ON
PROPOSAL 1 AND "FOR" ON PROPOSALS 2, 3 AND 4. THE PROXY CONFERS AUTHORITY AND
SHALL BE VOTED IN ACCORDANCE 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 SUCH INSTRUCTION. IN ALL OTHER MATTERS, IF ANY,
PRESENTED AT THE MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE
RECOMMENDATIONS OF THE BOARD OF DIRECTORS.
Dated: ______________ , 1998
----------------------------
(Number of Shares)
---------------------------- ----------------------------
(Please Print Your Name) (Signature of Shareholder)
---------------------------- ----------------------------
(Please Print Your Name) (Signature of Shareholder)
(Please date this Proxy and sign your name as it appears on the
stock certificates. Executors, administrators, trustees, etc., should give their
full titles. All joint owners should sign.)
I do [ ] do not [ ] expect to attend the Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS, AND
MAY BE REVOKED BY THE SHAREHOLDER DELIVERING IT PRIOR TO ITS EXERCISE BY FILING
WITH THE CORPORATE SECRETARY OF THE COMPANY AN INSTRUMENT REVOKING THIS PROXY OR
A DULY EXECUTED PROXY BEARING A LATER DATE OR BY APPEARING AND VOTING IN PERSON
AT THE MEETING.
