<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:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE> 2
[VIP CORP LETTERHEAD]
PRELIMINARY COPY DATED MARCH 12, 1999
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
TO BE HELD APRIL 29, 1999
AT 6:00 P.M.
NOTICE IS HEREBY GIVEN that, pursuant to the Bylaws of VIB Corp and the call of
its Board of Directors, the 1999 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 Thursday, April 29, 1999, at 6:00 p.m.,
for the purpose of considering and voting upon the following matters:
1. ELECTION OF DIRECTORS. Electing the following four persons to the
Board of Directors, three of whom shall serve until the 2002
Annual Meeting and until their successors are elected and have
qualified and one of whom shall serve until the 2001 Annual
Meeting and until his or her successor is elected and has
qualified:
Richard D. Foss Ronald A. (Rusty) Pedersen
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 1999 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 1999 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 1999 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 5, 1999, 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 of the meeting and, upon
his instructions, the inspectors of election shall disregard all votes
cast for each such nominee. The restrictions set forth in this paragraph
shall not apply to nomination of a person to replace a proposed nominee
who 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: March 29, 1999
ANNUAL REPORT ON FORM 10-K
COPIES OF THE COMPANY'S 1998 ANNUAL REPORT TO SHAREHOLDERS AND THE COMPANY'S
1998 ANNUAL REPORT ON FORM 10-K, INCLUDING THE AUDITED FINANCIAL STATEMENTS AND
THE FINANCIAL STATEMENT SCHEDULES, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, ARE BEING MAILED TO SHAREHOLDERS ALONG WITH THESE 1999 ANNUAL
MEETING PROXY MATERIALS. ADDITIONAL COPIES ARE 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 APRIL 29, 1999
AT 6:00 P.M.
-----------------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
of Proxies for use at the 1999 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
Thursday, April 29, 1999, and at any and all adjournments thereof.
It is anticipated that this Proxy Statement and the accompanying
Notice will be mailed on or about March 29, 1999, 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 four persons
to the Board of Directors, three of whom shall serve until
the 2002 Annual Meeting and until their successors are
elected and have qualified and one of whom shall serve until
the 2001 Annual Meeting and until his or her successor is
elected and has qualified:
Richard D. Foss Ronald A. (Rusty) Pedersen
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 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 reelect
four persons to the Board of Directors. Because the Company's Articles of
Incorporation provide for the classification of directors, three directors will
be elected for a term of three years, or until the 2002 Annual Meeting, and one
director will be elected for a term of two years, or until the 2001 Annual
Meeting. It is anticipated that at the 2000 Annual Meeting three directors will
be elected for a three-year term and two directors will be elected for a
one-year term, thereby resulting in three classes of directors consisting of
three directors each.
Because the Company's Articles of Incorporation provide that the
classification of directors will be determined based upon those candidates
receiving the highest number of votes, Management's Proxy seeks shareholder
approval to reelect the following four persons to the terms indicated below:
Three-Year Term Two-Year Term
Richard D. Foss Dennis L. Kern
Ronald A. (Rusty) Pedersen
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
662/3% 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 shareholders 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
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<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 subsidiaries, Valley Independent
Bank ("VIB") and Bank of Stockdale, F.S.B. ("BOS ") 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 10,527,689 shares of the Company's
Common Stock on March 5, 1999, 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 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 and broker
non-votes 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 5, 1999, concerning the beneficial ownership of the Company's
outstanding Common Stock by the 5% shareholder, by the Company's directors and
"named" executive officers(1) and by all directors and "named" 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, 1998, 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, VIB's shareholders became the
Company's shareholders, and VIB became the first wholly-owned subsidiary of the
Company.
- ----------
(1) As used throughout this Proxy Statement, the term "executive officer"
means the President and Chief Executive Officer and the Executive
Vice Presidents and the Senor Vice President of the Company. The term
"executive officer" also includes the President and Chief Executive
Officer of BOS. The term "'named' executive officers" includes the
executive officers whose salary and bonus exceeded $100,000 and VIB's
executive vice presidents who do not have separate titles with the
Company. The Company's Chairman of the Board, Vice Chairmen of the
Board, and Secretary are not deemed to be executive officers of the
Company.
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 AND TITLE BENEFICIALLY OWNED(2) OUTSTANDING WARRANTS(3) OWNED(3)
- -------------- --------------------- ----------------------- ------------
<S> <C> <C> <C>
JACK BRITTAIN, JR., 27,466(4) 7,366 .33%
Executive Vice President
CHARLES ELLIS, 23,472 18,290 .40%
Director
R. STEPHEN ELLISON, 250,016(5) 24,017 2.60%
Director
RICHARD D. FOSS, 101,246(6) 23,698 1.18%
Chairman of the Board
HARRY G. GOODING, III, 15,339(7) 7,366 .22%
Executive Vice President and
Chief Financial Officer
JANICE STEWART GRADY, 4,659(9) 6,105 .10%
Senior Vice President
ED L. HICKMAN, 88,746 42,746 1.24%
Director
DENNIS L. KERN,(8) 405,411(5)(10) 107,997 4.83%
Director, President and
Chief Executive Officer
EDWARD MCGREW, 36,624 18,541 .52%
Director
RONALD A. (RUSTY) PEDERSEN,(11) 570,900(5) 7,192 5.49%
Vice Chairman of the Board
MARTIN E. PLOURD, 21,614(12) 11,969 .32%
Executive Vice President of VIB
JOHN L. SKINNER, 67,637 12,899 .76%
Director
THOMAS TOPUZES, 28,470(13) 11,284 .38%
Executive Vice President of VIB
ALICE HELEN LOWERY WESTERFIELD,(14) 383,004 7,107 3.70%
Vice Chairman of the Board
ALL DIRECTORS AND EXECUTIVE 1,581,612(5) 306,577 17.43%
OFFICERS AS A GROUP
(14 in number)
FINANCIAL INSTITUTIONS PARTNERS, LTD.,(15) 749,735 -- 7.12%
Principal Shareholder
</TABLE>
- ----------
(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 5, 1999 ("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 6,271 shares allocated to Mr. Brittain pursuant to the 401(k)
Plan and 6,008 shares in the ESOP.
(5) Includes 221,496 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 11,652 shares held in trust for the benefit of Mr. Foss.
(7) Includes 3,130 shares allocated to Mr. Gooding pursuant to the 401(k)
Plan and 4,934 shares in the ESOP.
(8) Mr. Kern's business address is 1498 Main Street, El Centro, California
92243.
(footnotes continued on next page)
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<PAGE> 10
(footnotes continued)
(9) Includes 1,326 shares allocated to Ms. Grady pursuant to the 401(k) Plan
and 3,333 shares in the ESOP.
(10) Includes 12,260 shares allocated to Mr. Kern pursuant to the 401(k) Plan
and 9,998 shares in the ESOP.
(11) Mr. Pedersen's business address is 330 West Aten Road, Imperial,
California 92251.
(12) Includes 513 shares allocated to Mr. Plourd pursuant to the 401(k) Plan
and 5,562 shares in the ESOP.
(13) Includes 4,095 shares allocated to Mr. Topuzes pursuant to the 401(k)
Plan and 6,628 shares in the ESOP.
(14) Ms. Westerfield's address is 82-257 Bliss, Indio, California 92201.
(15) The business address for Financial Institutions Partners, Ltd. is 1824
Jefferson Place SW, Washington, D.C. 20036.
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 nine.
Article VIII(b) of the Company's Articles of Incorporation provide
that when the number of directors has been fixed at nine or more the Board of
Directors shall be classified into three classes with each class serving for
staggered three-year terms. Article VIII(e) provides that in the event the
authorized number of directors change, necessitating a change in the number of
classes, the Board of Directors shall be reclassified in accordance with
California law and the principals of Article VIII(d), which provides that the
nominees receiving the highest number of votes shall be elected for the longest
term and for the division of directors as equally as possible into separate
classes. Accordingly, it is proposed that three of the directors standing for
reelection be elected for three-year terms and that one director be reelected
for a two-year term. Thereafter, it is anticipated that at the 2000 Annual
Meeting three directors will be elected for a three-year term and two directors
will be elected for a one-year term, thereby resulting in three classes of three
directors each. 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 2002 or the 2001 Annual Meeting 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 four nominees, including electing the following
three directors for a three-year term: Richard D. Foss, Ronald A. (Rusty)
Pedersen and Alice Helen Lowery Westerfield. It is proposed that the fourth
nominee standing for reelection, Dennis L. Kern, be elected for a two-year term.
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.
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<PAGE> 11
The following table sets forth the names and certain information as
of March 5, 1999, concerning the persons to be nominated by the Board of
Directors for election as directors of the Company:
<TABLE>
<CAPTION>
YEAR FIRST YEAR FIRST
ELECTED OR ELECTED OR
BUSINESS EXPERIENCE APPOINTED APPOINTED
DURING THE PAST DIRECTOR OF CURRENT TERM DIRECTOR OF
NAME AND TITLE AGE FIVE YEARS THE COMPANY EXPIRES VIB OR BOS
- -------------- --- --------------------------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C>
RICHARD D. FOSS, 59 President, Foss Accountancy 1997 1999 1980
Chairman of the Corporation, Certified Public
Board of Directors Accountants
DENNIS L. KERN, 59 President and Chief 1997 1999 1983
Director, President Executive Officer, Valley
and Chief Executive Independent Bank
Officer (1)
RONALD A. (RUSTY) 65 Owner, Imperial Pre-Mix Co. 1997 1999 1983
PEDERSEN, (cattle feed supplement
Vice Chairman of manufacturing)
the Board of
Directors
ALICE HELEN LOWERY 70 Retired; Regional Customer 1997 1999 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.
OTHER DIRECTORS
The persons named below are currently members of the Company's Board
of Directors whose terms of office run until the 2000 Annual Meeting and until
their successors are elected and have qualified. The following table sets forth
the names and certain information as of March 5, 1999, concerning the members of
the Board of Directors not standing for reelection:
<TABLE>
<CAPTION>
YEAR FIRST YEAR FIRST
ELECTED OR ELECTED OR
BUSINESS EXPERIENCE APPOINTED APPOINTED
DURING THE PAST DIRECTOR OF CURRENT TERM DIRECTOR OF
NAME AND TITLE AGE FIVE YEARS THE COMPANY EXPIRES VIB OR BOS
- -------------- --- --------------------------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C>
CHARLES ELLIS, 71 President, Coachella Valley 1997 2000 1995
Director Insurance Service, Inc
R. STEPHEN ELISON, 49 President, Jordan/Central 1997 2000 1990
Director Implement (Machinery)
ED L. HICKMAN, 60 President and Chief 1999 2000 1988
Director(1) Executive Officer, Bank of
Stockdale, F.S.B.
EDWARD MCGREW, 61 Owner-Operator of 1997 2000 1983
Director MAGCO (general farming
and cattle feeding)
JOHN L. SKINNER, 69 Owner, T.C. Worthy Cash 1997 2000 1990
Director & Carry
</TABLE>
- ----------
(1) This person is an executive officer of the company.
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<PAGE> 12
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, except that Mr. Hickman was added to the Board of Directors pursuant to
the terms of the Agreement and Plan of Reorganization the Company entered into
with BOS. 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.
EXECUTIVE OFFICERS
The following table sets forth the names and certain information as
of March 5, 1999, concerning the executive officers of the Company, except Mr.
Kern and Mr. Hickman, who are directors and included in one of the tables set
forth above:
<TABLE>
<CAPTION>
TERM OF
TITLE WITH BUSINESS EXPERIENCE OFFICE WITH
NAME THE COMPANY TITLE WITH VIB AGE DURING THE PAST FIVE YEARS THE COMPANY
- ---- ----------- -------------- --- -------------------------- -----------
<S> <C> <C> <C> <C> <C>
JACK BRITTAIN, JR. Executive Vice Executive Vice 50 Chief Credit Officer, Valley Since 1998
President President and Independent Bank
Chief Credit
Officer
HARRY G. GOODING, III Executive Vice Executive Vice 51 Chief Financial Officer, Since 1997
President and President and Valley Independent Bank
Chief Financial Chief Financial
Officer Officer
JANICE STEWART GRADY Senior Vice Senior Vice 46 Human Resources Director, Since 1998
President President and Valley Independent Bank
Human Resources
Director
</TABLE>
SIGNIFICANT EMPLOYEES
The following table sets forth the names and certain information as
of March 5, 1999, concerning the significant employees of VIB or BOS who are not
deemed executive officers of the Company:
<TABLE>
<CAPTION>
TERM OF
TITLE WITH BUSINESS EXPERIENCE OFFICE WITH
NAME VIB OR BOS AGE DURING THE PAST FIVE YEARS VIB OR BOS
- ---- ---------- --- -------------------------- ----------
<S> <C> <C> <C> <C>
BRUCE C. JAY Executive Vice 48 Executive Vice President and Since 1984
President and Chief Chief Financial Officer, Bank
Financial Officer of Stockdale
MARTIN E. PLOURD Executive Vice 40 Branch Administrator, Valley Since 1986
President and Independent Bank
Branch
Administrator
RICK L. ROPER Executive Vice 45 Executive Vice President and Since 1989
President and Chief Chief Loan Officer, Bank of
Loan Officer Stockdale
</TABLE>
8
<PAGE> 13
<TABLE>
<CAPTION>
TERM OF
TITLE WITH BUSINESS EXPERIENCE OFFICE WITH
NAME VIB OR BOS AGE DURING THE PAST FIVE YEARS VIB OR BOS
- ---- ---------- --- -------------------------- ----------
<S> <C> <C> <C> <C>
RONALD L. SCHEIDT Senior Vice 60 Senior Vice Since 1995
President/ President/Commercial Loan
Commercial Officer, Bank of Stockdale
Loan Officer (1995 to present);
Executive Administrator
and Marketing Director,
Dowling, Magarian, Aaron &
Heyman (1992 to 1995);
President and Chief
Operating Officer,
Community First Bank (1984
to 1992.)
THOMAS TOPUZES Executive Vice 52 Chief Administrative Officer, Since 1991
President and Chief Valley Independent Bank
Administrative
Officer
</TABLE>
THE BOARD OF DIRECTORS AND COMMITTEES
During 1998, the Company's Board of Directors held 12 regular
meetings and one special meeting. In addition to attending Board meetings,
certain of the directors serve on committees of the Board.
The Audit Committee, which consisted of Directors Ellison, Skinner
and Westerfield, reviews all internal and external examination reports and
selects the Company's independent accountants. The Audit Committee met four
times during 1998.
The Executive Committee, which consisted of Directors Ellison, Foss,
and Pedersen, sets policies and supervises Management between regular Board
meetings. The Executive Committee met two times in 1998.
The Company does not have a Nominating Committee.
In addition, the Company's directors serve on the Boards of Directors
of VIB and/or BOS, including the various committees established by those
subsidiaries.
During 1998, none of the Company's directors attended less than 75%
of the Company's Board meetings and meetings of committees on which they served.
COMPENSATION AND OTHER TRANSACTIONS WITH MANAGEMENT AND OTHERS
SUMMARY COMPENSATION
The following table sets forth a summary of annual and long-term
compensation for services in all capacities to the Company or its subsidiaries
for the "named" executive officers. All compensation was paid by VIB or BOS:
9
<PAGE> 14
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------------------------------- ------------
SECURITIES
NAME AND POSITION OTHER ANNUAL UNDERLYING ALL OTHER
IN VIB OR BOS YEAR SALARY BONUS COMPENSATION (1) OPTIONS(2) COMPENSATION(3)
- ----------------- ---- -------- -------- ---------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
JACK BRITTAIN, JR., 1998 $114,996 $ 30,000 -- 7,725 $ 8,157
Executive Vice President 1997 $103,217 -- -- 6,303 $ 4,728
and Chief Credit Officer 1996 $ 95,100 $ 20,000 -- -- $ 5,721
HARRY G. GOODING, III, 1998 $117,996 $ 30,000 -- 7,725 $ 8,488
Executive Vice President 1997 $100,506 -- -- 6,303 $ 4,624
and Chief Financial Officer 1996 $ 93,312 $ 20,000 -- -- $ 6,315
ED L. HICKMAN, 1998 $150,000 $ 22,500 -- -- $ 2,250
President and Chief 1997 $150,000 -- -- -- $ 2,250
Executive Officer 1996 $150,000 -- -- -- $ 2,250
DENNIS L. KERN, 1998 $210,012 $105,000 $ 15,500 32,356 $ 10,101
President and Chief 1997 $190,008 -- $ 14,400 18,775 $ 6,115
Executive Officer 1996 $180,000 $ 90,000 $ 14,400 8,193 $ 8,347
MARTIN E. PLOURD, 1998 $114,000 $ 30,000 -- 7,725 $ 7,486
Executive Vice President 1997 $100,664 -- -- 6,303 $ 4,810
and Branch Administrator 1996 $ 90,012 $ 25,000 -- -- $ 5,378
THOMAS TOPUZES, 1998 $113,364 $ 15,000 -- 7,725 $ 7,989
Executive Vice President 1997 $109,008 -- -- 6,303 $ 4,749
and Chief Administrative 1996 $104,016 $ 15,000 -- -- $ 6,382
Officer
</TABLE>
- ----------
(1) These figures represent directors' fees. Perquisites paid to an
executive officer which total less than the lesser of $50,000 or 10% of
salary and bonus are omitted.
(2) All share figures have been adjusted for the Company's and VIB's stock
dividends and stock splits.
(3) These figures include VIB's matching contributions to the 401(k) Plan
($1,580, $1,848 and $1,542 for Mr. Brittain, $1,549, $1,807 and $1,508
for Mr. Gooding, $1,051, $2,375 and $2,250 for Mr. Kern, $855, $1,872
and $1,424 for Mr. Plourd, and $1,488, $1,860 and $1,720 for Mr.
Topuzes, for 1998, 1997 and 1996, respectively) and the Bank's
contributions to the Employee Stock Ownership Plan ($6,577, $2,880 and
$4,179 for Mr. Brittain, $6,939, $2,817 and $4,087 for Mr. Gooding,
$9,050, $3,740 and $6,097 for Mr. Kern, $6,631, $2,938 and $3,954 for
Mr. Plourd, and $6,501, $2,889 and $4,662 for Mr. Topuzes, for 1998,
1997 and 1995, respectively). For Mr. Hickman, these figures represent
401(k) Plan contributions.
STOCK OPTIONS
In connection with the bank holding company reorganization the
Company adopted the VIB Corp 1997 Stock Option Plan providing for the issuance
of up to 2,000,000(1) shares. On March 10, 1998, the Company's Board of
Directors, pursuant to the terms of the bank holding company reorganization,
issued 704,769(1) options in exchange for the then outstanding VIB options,
effective as of the effective date for the reorganization. As of March 5, 1999,
the Company's 1997 Stock Option Plan provided for the issuance of 2,575,000
shares, of which 196,855 shares had been exercised and options for 907,803
shares were outstanding, leaving 1,470,342 shares available for future grants.
The following table sets forth certain information regarding stock options
granted by the Company to the "named" executive officers during 1998:
- ----------
(1) These figures have not been adjusted to reflect the Company's
five-for-four stock split and 3% stock dividend declared in 1998.
10
<PAGE> 15
<TABLE>
<CAPTION>
POTENTIAL REALIZED
VALUE AT ASSUMED
PERCENTAGE OF ANNUAL RATES OF STOCK
NUMBER OF TOTAL OPTIONS PRICE APPRECIATION
OPTIONS GRANTED TO FOR OPTION TERM
GRANTED IN EMPLOYEES(3) EXERCISE EXPIRATION --------------------------
NAME 1998(2) DURING 1998 PRICE(2) DATE 5% 10%
- ---- ---------- ----------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
JACK BRITTAIN, JR 7,725 5.03% $ 12.91 1/20/03 $104,716 $109,703
HARRY G. GOODING, III 7,725 5.03% $ 12.91 1/20/03 $104,716 $109,703
ED L. HICKMAN -- N/A N/A N/A N/A N/A
DENNIS L. KERN(4) 32,356 21.08% $ 13.20 2/18/03 $448,454 $469,809
MARTIN E. PLOURD 7,725 5.03% $ 12.91 1/20/03 $104,716 $109,703
THOMAS TOPUZES 7,725 5.03% $ 12.91 1/20/03 $104,716 $109,703
</TABLE>
- ----------
(2) These figures and dollar amounts have been adjusted for the Company's 3%
stock dividend and five-for-four stock split.
(3) Does not include options granted to the Company's non-employee directors
during 1998. (See "COMPENSATION AND OTHER TRANSACTIONS WITH MANAGEMENT
AND OTHERS - Directors' Compensation" herein.)
(4) During 1998, the Company amended a previously granted stock option to
Mr. Kern by extending the expiration date from May 25, 1998 to May 25,
2003. No change was made in the number of shares covered by the option
or the exercise price per share.
The following table sets forth certain information regarding stock
options exercised during 1998 by the "named" executive officers:
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE(5) OF UNEXERCISED
NUMBER OPTIONS AT DECEMBER 31, IN THE MONEY OPTIONS
OF SHARES 1998 AT DECEMBER 31, 1998
ACQUIRED VALUE ------------------------------ ------------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
JACK BRITTAIN, JR 7,337 $ 64,046 4,070 24,370 $ 19,609 $ 48,236
HARRY G. GOODING, III 13,318 $137,597 2,964 24,370 $ 11,038 $ 48,236
ED L. HICKMAN(6) -- N/A 42,746 -- $336,838 N/A
DENNIS L. KERN 65,981 $623,917 97,761 67,324 $856,486 $ 87,117
MARTIN E. PLOURD -- N/A 9,738 24,370 $ 67,078 $ 48,236
THOMAS TOPUZES 10,051 $ 80,760 11,283 24,370 $ 60,668 $ 48,236
</TABLE>
- ----------
(5) Assumes a market value of $12.00 per share on December 31, 1998.
(6) Mr. Hickman's stock option, originally granted by BOS, was converted
into a Company stock option effective upon the closing of the BOS merger
on January 28, 1999.
EMPLOYMENT AND OTHER COMPENSATION AGREEMENTS
Neither the Company nor its subsidiaries have entered into written
employment agreements with any of the Company's executive officers.
During 1994 VIB 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 VIB, participants are entitled to a lump sum distribution.
VIB pays the costs of administering these Deferred Compensation Plans
11
<PAGE> 16
as well as the interest earned on the amounts deferred, but VIB makes no
contributions to the participants' individual deferral accounts.
In February, 1994, BOS adopted a Salary Continuation Plan (the "SCP")
for its executive officers, Messrs. Hickman, Jay, Roper, and Scheidt. Under the
SCP, BOS agreed to pay the executive additional benefits at retirement in return
for continued current satisfactory performance by the executive. The maximum
benefit to each executive is a payment of $50,000 per year for 15 years
beginning at age 65. The SCP is embodied in a written agreement between BOS and
the executives.
The SCP is an unfunded pan, which means that the executives have no
rights under the agreement beyond those of a general creditor of BOS, and there
are no specific assets set aside by BOS in connection with the establishment of
the SCP. The SCP is not an employment contract and, if the covered executive
leaves BOS's employ, either voluntarily or involuntarily, the agreement
terminates and the executive receives no immediate benefits, but may be vested
in certain amounts payable on termination of employment or beginning at age 65,
at the discretion of BOS's Board. Additionally, the executive's beneficiaries
are entitled to certain benefits under the SCP in the event the executive dies
while employed by BOS. BOS paid an aggregate single premium of $860,000 to
purchase life insurance policies on each executive included in the SCP to fund
the death benefit. BOS owns each policy and earns a rate of return on the
invested premium which is reflected by an increase in the cash value of each
policy.
The accounting rules concerning deferred compensation plans,
including salary continuation plans, require that BOS accrue sufficient expenses
so that the present value of the benefits to be paid to the executive at
retirement is reflected as a liability on BOS's books by the time of retirement.
The accrual for 1998 was approximately $25,239. Management of BOS believes this
expense is partially offset by the higher earnings on the insurance premium
investment, which are non-taxable if certain conditions are met, than the
earnings on taxable investments made in the ordinary course of business.
In March, 1996, BOS entered into an agreement with each of its
executive officers, Messrs. Hickman, Jay, Roper, and Scheidt, that provides
certain severance benefits in the event that a change in control of BOS occurs.
Under these Change in Control Agreements, each executive officer is entitled to
12 months salary from the date of termination following a change in control.
This severance payment is triggered if the executive terminates his employment
for "good reason" or if the executive's employment is terminated without
"cause," in either case within 24 months following a change in control.
DIRECTORS' COMPENSATION
In 1998, the Company's directors were paid for attendance at VIB
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).
VIB 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.
12
<PAGE> 17
Ms. Westerfield, as VIB's Customer Relations Officer for Coachella
Valley until her retirement in 1997, participated in the 401(k) Plan and ESOP.
PROFIT SHARING AND 401(K) PLAN
In March, 1989, VIB'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 VIB
may voluntarily contribute a portion of their compensation to a trust. Each year
VIB 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 VIB's contributions, based
upon an established vesting schedule.
As of December 31, 1998, 316 employees were participating in the
401(k) Plan. During 1998, VIB contributed $92,244 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, VIB'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, annual contributions at the discretion of VIB are
made to a trust for the benefit of VIB'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, VIB'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 "named" executive officers, except Mr. Hickman,
participated in the ESOP during 1998. Directors who are not also employed by VIB
are not eligible to participate. The total amount contributed for all
participants to the ESOP for 1998 was $415,635.
As of December 31, 1998, 290 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 Company does not have a Compensation Committee and did not pay
compensation during 1998. The members of VIB's Executive/Investment Committee,
acting as VIB's Compensation Committee (the "Committee"), are Directors Ellison,
Foss, Kern and Pedersen, none of whom serve as an officer of the Company or VIB
except Mr. Kern, who is the Company's and VIB's President and Chief Executive
Officer. None of the Company's or VIB'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 Company's or VIB's Committee or the
Company's or VIB's Board of Directors. Mr. Kern does not participate in
Committee deliberations and voting regarding his compensation.
13
<PAGE> 18
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
During 1998, the inaugural year for the Company, all compensation
(except with respect to Mr. Hickman) was paid by VIB. VIB's Executive/Investment
Committee, acting as the Compensation Committee, was responsible for reviewing
and approving VIB's overall compensation and benefit programs, and for
administering the compensation of VIB's executive and senior officers.
The Compensation Committee establishes the factors and criteria upon
which the executive and senior officers' compensation is based and how such
compensation relates to performance, general compensation policies, competitive
realities and regulatory requirements.
The Compensation Committee's functions and objectives are:
- to determine the competitiveness of current base salary,
annual incentives and long- term incentive relative to
specific competitive markets for the President;
- to develop a performance review mechanism that has written
objectives and goals which are used to make salary increase
determinations;
- to develop an annual incentive plan for senior management;
and
- to provide guidance to the Board of Directors in their role
in establishing objectives regarding executive compensation.
The Compensation Committee's overall compensation philosophy is as
follows:
- to attract and retain quality talent, which is critical to
both short-term and long-term success;
- to reinforce strategic performance objectives through the
use of incentive compensation programs;
- to create a mutuality of interest between executive and
senior officers and shareholders through compensation
structures that share the rewards and risks of strategic
decision-making; and
- to encourage executives to achieve substantial levels of
ownership of stock in the Company.
The compensation package offered to executive officers consists of a
mix of salary, incentive bonus awards, and stock option awards as well as
benefits under several employee benefit plans.
In establishing executive compensation for the President, the
Compensation Committee considered the following factors in the following order
of priority: (1) improving shareholder value; (2) profitability; (3) return on
assets; (4) return on equity; (5) asset quality; and (6) growth in loans and
deposits as it relates to overall industry performance. Excluded from the
Committee's consideration of incentive bonuses would be income or expenses
resulting from extraordinary or non-recurring events, regulatory changes, merger
or acquisition activity, or the imposition of changes in generally accepted
accounting principles.
The Compensation Committee investigates the competitiveness of the
compensation of the President by having peer survey data updates at least
annually. Among the sources consulted are the State of California Department of
Financial Institutions Executive Officer and Director Compensation
14
<PAGE> 19
Survey, SNL Securities Executive Compensation Review and the California Bankers
Association Compensation and Benefits Survey.
The Committee believes that VIB'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
VIB'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 Company's (and previously VIB's) Common Stock compared with the Nasdaq
Total Return Index, a broad market index of stocks traded in the Nasdaq National
Market, the SNL Securities Index of Banks under $500 million in total assets and
the SNL Securities Index of Banks between $500 million and $1 billion in total
assets. The SNL Index for Banks under $500 million was originally selected as
most representative of peer issuers. However, by year end 1998 the Company's
total assets exceeded $500 million and, therefore, the SNL Index for Banks
between $500 million and $1 billion is now deemed most representative. The graph
assumes the value of an investment in the Company's Common Stock, the Nasdaq
Index and both SNL Bank Indexes each was $100 on December 31, 1993, and that all
dividends were reinvested.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
PERIOD ENDING
------------------------------------------------------------------------------
INDEX 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
VIB Corp 100.00 135.20 198.76 276.42 394.74 331.90
NASDAQ - Total US 100.00 97.75 138.26 170.01 208.58 293.21
SNL $500M-$1B Bank Asset-Size Index 100.00 106.76 141.74 177.19 288.03 283.20
SNL <$500M Bank Asset-Size Index 100.00 107.55 147.13 189.37 322.82 294.76
</TABLE>
15
<PAGE> 20
CERTAIN TRANSACTIONS
During 1998 there were no, and as of the date of this Proxy Statement
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 VIB or BOS
in the ordinary course of the subsidiaries' businesses and the subsidiaries
expect to have such ordinary banking transactions with such persons in the
future. In the opinion of Management of the subsidiaries, 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 subsidiaries
do not have any limits on the aggregate amount they would be willing to lend to
directors and officers as a group, loans to individual directors and officers
must comply with their internal lending policies and statutory lending limits.
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%. Article
V(b) was originally adopted on November 7, 1997, when the Company's Articles of
Incorporation were filed with the California Secretary of State. 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). All
shareholders are especially
16
<PAGE> 21
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)
upon its expiration on November 6, 1999. 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 on
November 7, 1999. 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.
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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%. Article VII
was originally adopted on November 7, 1997, when the Company's Articles of
Incorporation were filed with the California Secretary of State. 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
upon its expiration on November 6, 1999.
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.
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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
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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 on November 7, 1999.
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 four directors, three for a term
of three years and one for a term of two years. Thereafter, directors will be
elected for staggered three-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
lesser of the percentage of shares voting in favor or 66-2/3%. Article VIII(h)
was originally adopted on November 20, 1997, when the Company filed a
Certificate of Amendment of Articles of Incorporation with the California
Secretary of State. 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 in the event the
authorized number of directors changes, necessitating a change in the number of
classes, the Board of Directors shall be reclassified in accordance with
California law and the principals of Article VIII; provided, however, that
changes in the number of classes shall not operate to shorten the term of any
director. Because the Board of Directors now consists of nine members,
necessitating a change in the number of classes from two to three, three
directors will be elected for three-year terms and the fourth director will be
elected for a two-year term, thereby beginning the process of dividing the two
classes into three classes of directors. It is anticipated that at the 2000
Annual Meeting three directors will again be elected for three-year terms and
the remaining two directors standing for reelection will be elected for one-year
terms, thereby resulting in three classes consisting of three directors each.
Thereafter, each class of directors will be elected for staggered three-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 are 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
eliminates 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.
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REASONS FOR THE PROPOSAL
The Board of Directors believes that the classification of directors
reduces 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 affects the ability of
shareholders of the Company to effect immediate changes in the composition of
the Board of Directors.
Because the classification of directors makes more difficult or
deters 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 applies 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 would be desirable. As a result of the classification of directors it
would take 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
should be retained 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 situations 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 as the Company
can be better handled in the absence of such dissension. At present, no
individual shareholder or group of shareholders, which is known 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, retaining the
elimination of cumulative voting may 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
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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 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)
upon expiration on November 19, 1999. 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 on
November 20, 1999. 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.
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INDEPENDENT ACCOUNTANTS
The firm of Vavrinek, Trine, Day & Co., LLP, served as independent
public accountants for the Company for 1998. In addition to audit services, that
firm performed selected non-audit services, including assisting in the
preparation of the Company's and VIB's tax returns and regulatory reports. The
fees paid for non-audit services was approximately 16.1% of the fees for audit
services. All services rendered by Vavrinek, Trine, Day & Co., LLP, were
approved by the Board of Directors of the Company and VIB, who considered the
possible effect of each such service on the independence of the accountants. The
Company has selected this firm to be its accountants for 1999.
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 2000 Annual Meeting of
Shareholders, which is tentatively scheduled for April 27, 2000, is December 1,
1999.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company'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 (the "SEC"). The executive
officers, directors and greater than 10% shareholders are required by regulation
to furnish the Company with copies of all Section 16(a) reports they file.
Based solely on its review of the copies of such forms received by
the Company, or written representations from certain reporting persons that no
such forms were required for those persons, the Company believes that during
1998 all filing requirements applicable to the Company's executive officers,
directors, and greater than 10% shareholders were complied with except Ms.
Janice Stewart Grady, whose Initial Statement of Beneficial Ownership of
Securities on Form 3 was filed late due to an internal miscommunication
regarding the effective date of her appointment as an executive officer.
OTHER MATTERS
The SEC's rules permit the Proxy to confer discretionary authority to
vote on any matter if the Company did not have notice of the matter at least 45
days before the date on which the Company first mailed its Proxy Materials for
the prior year's Annual Meeting of Shareholders. The Company mailed its Proxy
Materials for the 1998 Annual Meeting on April 10, 1998 and, accordingly,
discretionary authority is conferred to the persons named in the accompanying
Proxy to vote on any matter notice of which is not received until after February
24, 1999.
Management does not presently know of any matters to be presented at
the Meeting other than those set forth above. If other matters come before the
Meeting, it is the intention of the persons named in the accompanying Proxy to
vote the Proxy in accordance with the recommendations of the Board of Directors
on such matters.
VIB CORP
Dated: March 29, 1999 Charlotte Studer, Secretary
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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;
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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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<PAGE> 34
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> 36
(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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<PAGE> 37
(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> 38
PROXY
VIB CORP
ANNUAL MEETING OF SHAREHOLDERS
APRIL 29, 1999
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 Thursday, April 29, 1999, 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 four persons
named below and in the Proxy Statement dated March 29, 1999,
accompanying the Notice of said Meeting, to serve until
their successors are elected and have qualified, including
the authority to elect the following four persons to the
initial terms indicated below:
Three-Year Term Two-Year Term
Richard D. Foss Dennis L. Kern
Ronald A. (Rusty) Pedersen
Alice Helen Lowery Westerfield
AUTHORITY GIVEN [ ] AUTHORITY WITHHELD [ ]
IF YOU WISH TO VOTE FOR SOME, BUT NOT ALL OF THE NOMINEES
NAMED ABOVE, YOU SHOULD ENTER THE NAME(S) OF THE NOMINEE(S)
WITH RESPECT TO WHOM YOU DO NOT WISH TO VOTE FOR 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> 39
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. THIS PROXY CONFERS DISCRETIONARY
AUTHORITY TO VOTE ON ANY OTHER MATTER, IF ANY, PRESENTED AT THE MEETING, NOTICE
OF WHICH IS RECEIVED AFTER FEBRUARY 24, 1999. THIS PROXY SHALL BE VOTED IN
ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS WITH RESPECT TO
SUCH OTHER MATTERS.
______________________________ Dated: _________________, 1999
(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.
