<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Community Bancorp Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
COMMUNITY BANCORP INC.
130 WEST FALLBROOK STREET
FALLBROOK, CA 92028
(760) 723-6001
April 17, 2000
Dear Shareholder:
You are cordially invited to attend our Annual Meeting of Shareholders of
Community Bancorp Inc. to be held on Wednesday, May 31, 2000 at The Grand
Tradition, 1602 South Mission Road in Fallbrook.
At this year's meeting, you will be asked to vote for seven persons to be
elected as the Board of Directors. The enclosed notice of meeting and proxy
statement list the nominees. We urge you to read this information carefully.
THE BOARD OF DIRECTORS RECOMMEND THAT YOU VOTE FOR THE LIST OF NOMINEES ON THE
ENCLOSED PROXY CARD.
In addition to the election of Board Members, we will report to you on Fallbrook
National Bank's goals and results and will respond to questions from
stockholders.
We hope you will be able to attend. HOWEVER, YOUR SHARES CANNOT BE VOTED UNLESS
YOU SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD OR ATTEND THE ANNUAL MEETING
IN PERSON.
Cordially,
Thomas E. Swanson Granger Haugh
President and Chief Executive Officer Chairman of the Board
<PAGE>
COMMUNITY BANCORP INC.
130 West Fallbrook Street
Fallbrook, California 92028
-----------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 31, 2000
6:00 P.M.
-----------
TO THE SHAREHOLDERS OF
COMMUNITY BANCORP INC.:
THIS IS TO NOTIFY YOU that pursuant to its Bylaws and the call of its
Board of Directors, Community Bancorp Inc. (the "Company") will hold its 2000
Annual Meeting of Shareholders (the "Meeting") at The Grand Tradition, 1602
South Mission Road, Fallbrook, California on Wednesday, May 31, 2000 at 6:00
p.m. local time for the purpose of considering and voting on the following
matters:
1. ELECTION OF DIRECTORS. To elect seven (7) persons to the Board
of Directors of the Company to serve until the 2001 Annual
Meeting of Shareholders. The Company has nominated the
following persons for election:
Granger Haugh Robert H.S. Kirkpatrick
E. Steve LeFevre Philip D. Oberhansley
Corey Seale Thomas E. Swanson
Gary M. Youmans
2. OTHER BUSINESS. To transact such other business as may
properly come before the Meeting and any adjournment or
adjournments thereof.
You may vote at the Meeting if you were a shareholder of record at the
close of business on April 3, 2000.
In connection with nominations for directors, the Company's Certificate
of Incorporation provides:
"Nominations for election to the Board of Directors of the corporation
may be made by the Board of Directors or by any stockholder of any
outstanding class of capital stock of the corporation entitled to vote
for the election of directors. Nominations, other than those made by
the Board of Directors, shall be made in writing and shall be delivered
or mailed to the president of the corporation, not less than 45 days
nor more than 90 days prior to any meeting of stockholders called for
the election of directors, provided, however, that if less than 45
days' notice of the meeting is given to stockholders, such nomination
shall be mailed or delivered to the president of the corporation not
later than the close of business on the seventh day following the day
on which the notice of meeting was mailed. Such notification shall
contain the following information: (i) the name and address of each
proposed nominee; (ii) the principal occupation of each proposed
nominee; (iii) the consent, in writing, of each nominee to serve, if
elected; (iv) any other information relating to such nominee that is
required to be disclosed in solicitations of proxies for election of
directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended;
(v) the name and residence of the notifying stockholder, and (vi) the
number of shares of capital stock of the corporation owned by the
notifying stockholder. Nominations not made in accordance herewith
shall be disregarded by the chairperson of the meeting, and upon
his/her instructions, the inspectors of election shall disregard all
votes cast for each such nominee."
<PAGE>
IT IS VERY IMPORTANT THAT YOU VOTE. WE URGE YOU TO SIGN AND RETURN THE
ENCLOSED PROXY AS SOON AS POSSIBLE WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING
IN PERSON. IF YOU DO ATTEND THE MEETING, YOU MAY WITHDRAW YOUR PROXY. IF YOU DO
NOT ATTEND THE MEETING, YOU MAY REVOKE THE PROXY PRIOR TO THE TIME IT IS VOTED
BY NOTIFYING THE CORPORATE SECRETARY IN WRITING TO THAT EFFECT OR BY FILING A
LATER DATED PROXY.
IN ORDER TO FACILITATE THE PROVISION OF ADEQUATE ACCOMMODATIONS, PLEASE
INDICATE ON THE PROXY WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
L. Bruce Mills, Jr.
SECRETARY
Dated: April 17, 2000
2
<PAGE>
COMMUNITY BANCORP INC.
PROXY STATEMENT
THE MEETING
INFORMATION CONCERNING THE SOLICITATION
You are receiving this Proxy Statement from Community Bancorp Inc. in
connection with the solicitation of proxies by its Board of Directors for use at
the Annual Meeting of Shareholders to be held at The Grand Tradition, 1602 South
Mission Road, Fallbrook, California on May 31, 2000 at 6:00 p.m. local time (the
"Meeting").
You may vote at the Meeting if you were a shareholder of record on
April 3, 2000. There were 2,536,981 shares of the Company's common stock, par
value $0.625, outstanding and entitled to be voted on such date.
You are entitled to one vote for each share you held, except that for
the election of directors you have cumulative voting rights and you may vote as
many votes as equals the number of shares you held multiplied by the number of
directors to be elected. You may cast all your votes for a single candidate or
distribute such votes among any or all of the candidates as you choose. The
proxy holders are given, under the terms of the proxy, discretionary authority
to cumulate votes on shares for which they hold a proxy.
You have the power to revoke your proxy prior to its exercise. You may
revoke your proxy
- prior to the Meeting by delivering to the Secretary of the
Company either a written instrument revoking the proxy or a
duly executed proxy bearing a later date, or
- by attending and voting at the Meeting.
The Inspectors of Election for the Meeting will count votes cast by
proxy or in person at the Meeting. The Inspectors will treat abstentions and
"broker non-votes" (shares held by brokers or nominees as to which instructions
have not been received from the beneficial owners or persons entitled to vote
and the broker or nominee does not have discretionary voting power under
applicable rules of the stock exchange or other self regulatory organization of
which the broker or nominee is a member) as shares that are present and entitled
to vote for purposes of determining the presence of a quorum. Abstentions and
"broker non-votes" will not be counted as shares voted for purposes of
determining the outcome of any matter as may properly come before the Meeting.
Unless otherwise instructed, the Inspectors of Election will vote each
valid proxy, which is not revoked,
- "FOR" the Company's nominees for the Board of Directors
and, in the proxy holders' judgment, on such other matters, if any, which may
properly come before the Meeting.
The Company will bear the entire cost of preparing, assembling,
printing and mailing proxy materials furnished by the Board of Directors to
shareholders. The Company will furnish copies of proxy materials to brokerage
houses, fiduciaries and custodians to be forwarded to the beneficial owners of
the common stock. In addition to the solicitation of proxies by use of the mail,
some of the officers, directors and regular employees of the Company may
(without additional compensation) solicit proxies by telephone or personal
interview, the costs of which will be borne by the Company.
3
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of February 29, 2000, the Company knew of no person who owned more
than five percent (5%) of the outstanding shares of its common stock except (i)
as set forth in "Security Ownership of Management" or (ii) as described below.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- ---------------- -------------------- --------
<S> <C> <C>
Financial Institutions Partners, L.P. (1)....... 186,590 7.4%
Hovde Capital, Inc., General Partner
1826 Jefferson Place
Washington, DC 20036
Trust for the Fallbrook National Bank........... 157,317 6.2%
Employee Stock Ownership Plan (2)
130 West Fallbrook Street
Fallbrook, California 92028
</TABLE>
- -----------
(1) Based upon information provided by Financial Institutions Partners,
L.P.
(2) The Trust holds the shares of Company common stock for the ultimate
benefit of Fallbrook National Bank employees who participate in the
Bank's Employee Stock Ownership Plan. At December 31, 1999, 7,007
shares were vested. The Trust receives instruction on the voting and
acquisition/disposition of the shares from an administrative committee
composed of three officers/employees of the Bank. Granger Haugh,
Chairman of the Board, and Thomas E. Swanson, President, serve as the
trustees for the Trust.
4
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The Company has only one class of shares outstanding, common stock.
The next table provides information as of February 29, 2000, concerning
the equity ownership of the Company's directors/nominees, the Company's and
Fallbrook National Bank's (the "Bank") executive officers, and its directors and
executive officers as a group:
<TABLE>
<CAPTION>
NAME AND ADDRESS(1) AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER RELATIONSHIP WITH COMPANY/BANK BENEFICIAL OWNERSHIP(2) OF CLASS(3)
- ------------------- ------------------------------ ----------------------- -----------
<S> <C> <C> <C>
Barbara C. Ernst..................... Sr. Vice-President/Marketing Director 1,603(4) *
Granger Haugh........................ Chairman of the Board 138,062(5) 5.3%
Robert H.S. Kirkpatrick.............. Director 8,598(6) *
E. Steve LeFevre..................... Director 71,160(7) 2.8%
L. Bruce Mills, Jr................... Sr. Vice-President/Chief Financial 8,253(8) *
Officer
Donald W. Murray..................... Sr. Vice-President/Senior Credit 24,225(9) *
Officer
Philip D. Oberhansley................ Director 3,474(10) *
Corey A. Seale....................... Vice Chairman of the Board 29,582(11) 1.2%
Thomas E. Swanson.................... President, Chief Executive Officer 182,140(12) 6.8%
and Director
Gary M. Youmans...................... Executive Vice-President 82,243(13) 3.2%
All directors and executive officers
of the Bank as a group
(10 persons)...................... 549,340(14) 19.2%
</TABLE>
- -----------
* Less than 1%.
(1) The address for all persons listed is c/o Community Bancorp Inc., 130
West Fallbrook Street, Fallbrook, California, 92028.
(2) Unless otherwise indicated in these notes and subject to applicable
community property laws and shared voting and investment power with a
spouse, each director and executive officer listed above possesses sole
voting power and sole investment power for the shares of the Bank's
common stock listed.
5
<PAGE>
(3) Includes shares of common stock subject to stock options exercisable
within 60 days.
(4) Includes 1,103 shares of common stock subject to stock options
exercisable within 60 days.
(5) Includes 67,733 shares held indirectly through a profit sharing trust
and 66,397 shares of common stock subject to stock options exercisable
within 60 days. Does not include shares held in the Trust for the
Fallbrook National Bank Employee Stock Ownership Plan of which Mr.
Haugh is one of the trustees.
(6) Includes 6,394 shares indirectly in a retirement trust for his benefit
and 2,204 shares of common stock subject to stock options exercisable
within 60 days.
(7) Includes 32,875 shares held in a retirement trust for his benefit,
11,073 shares held in a retirement trust for the benefit of his spouse
and 16,705 shares of common stock subject to stock options exercisable
within 60 days.
(8) Includes 6,048 shares held indirectly in a retirement trust for his
benefit, and 2,205 shares of common stock options exercisable within 60
days.
(9) Includes 7,210 shares held indirectly in a retirement trust for his
benefit and 16,905 shares of common stock subject to stock options
exercisable within 60 days.
(10) Includes 3,254 shares of common stock subject to stock options
exercisable within 60 days.
(11) Includes 2,976 shares held in a family trust and 25,504 shares of
common stock subject to stock options exercisable within 60 days.
(12) Includes 36,802 shares held in a family trust, 13,030 shares held
indirectly through a retirement trust for his benefit and 132,308
shares of common stock subject to stock options exercisable within 60
days. Does not include shares held in the Trust for the Fallbrook
National Bank Employee Stock Ownership Plan of which Mr. Swanson is one
of the trustees.
(13) Includes 10,107 shares held indirectly in a retirement trust for his
benefit, and 61,911 shares of common stock subject to stock options
exercisable within 60 days.
(14) Includes 328,496 shares of common stock subject to stock options
exercisable within 60 days. Does not include shares held in the Trust
for the Fallbrook National Bank Employee Stock Ownership Plan of which
Mr. Haugh and Mr. Swanson are the trustees.
ELECTION OF DIRECTORS OF THE COMPANY
NOMINATIONS
The Company's Certificate of Incorporation provide that the number of
directors may be no less than three (3) and no more than twenty-five (25), with
the exact number to be fixed by resolution of the Board. The Board has fixed the
number at seven (7). Management has nominated the seven (7) persons set forth in
the next table to serve as the Company's directors.
6
<PAGE>
Each director will hold office until the Company's next Annual Meeting
of Shareholders and until his successor is elected and qualified.
The proxy holders will vote all proxies for the election of the seven
(7) nominees listed below unless authority to vote for the election of any
directors is withheld. The nominees receiving the highest number of affirmative
votes of the shares entitled to be voted for them shall be elected as directors.
Abstentions and votes cast against nominees have no effect on the election of
directors. If any of the nominees should unexpectedly decline or be unable to
act as a director, their proxies may be voted for a substitute nominee to be
designated by the Board of Directors. The Board of Directors has no reason to
believe that any nominee will become unavailable and has no present intention to
nominate persons in addition to or in lieu of those named below.
The next table provides certain information as of February 29, 2000,
with respect to those persons nominated by the Board of Directors for election
as directors. The Company knows of no arrangements, including any pledge by any
person of securities of the Company, the operation of which may, at a subsequent
date, result in a change in control of the Company. There are no arrangements or
understandings by which any of the directors of the Company were selected. There
is no family relationship between any of the directors or executive officers.
<TABLE>
<CAPTION>
NAME AGE POSITION/BACKGROUND
- ---- --- -------------------
<S> <C> <C>
Granger Haugh........................ 64 Chairman of the Board and Director of the Company since 1999. Chairman of the Board
of the Bank since 1997 and a Director of the Bank since 1988. President,
International Enzymes, Inc.
Robert H. S. Kirkpatrick............. 50 Director of the Company since 1999. Director of the Bank since 1997. President and
Chief Financial Officer, Rancon Real Estate (1989-1998). Consultant, Kirkpatrick &
Co. (1999 - present).
E. Steve LeFevre..................... 66 Director of the Company since 1999. Director of the Bank since 1985. President,
Mission Motors.
Philip D. Oberhansley................ 41 Director of the Company since 1999. Partner, Cannon, Parks & Oberhansley (law firm).
Corey A. Seale....................... 42 Vice Chairman of the Board and Director of the Company since 1999. Vice Chairman of
the Board since 1998 and a Director of the Bank since 1996. Chief Executive Officer
of Fallbrook Hospital.
Thomas E. Swanson.................... 55 President, Chief Executive Officer and Director of the Company since 1999.
President and Chief Executive Officer of the Bank since 1996 and a Director of the
Bank since 1996. Prior to becoming President, Mr. Swanson was employed by the Bank
as senior credit officer from 1992. Prior to that he had been a banker with another
San Diego based community bank.
Gary M. Youmans...................... 48 Director of the Company since 1999. Executive Vice President of the Bank since 1996.
Director of the Bank since 1996. Mr. Youmans has been employed by the Bank since 1991.
</TABLE>
7
<PAGE>
None of the Company's directors is a director of any other company with
a class of securities registered pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended, or subject to the requirements of Section
15(d) of such Act or any company registered as an investment company under the
Investment Company Act of 1940.
The following is a brief account of the business experience for a
minimum of five years of each non-director executive officer of the Company or
the Bank in addition to their current positions.
<TABLE>
<CAPTION>
NAME POSITION/BACKGROUND
- ---- -------------------
<S> <C>
Barbara C. Ernst..................... Age: 53. Senior Vice President, Marketing Director of the Bank since
November 1998. Prior to that, she was the owner of Ernst Marketing, a
marketing consulting firm from 1993 to 1998.
L. Bruce Mills, Jr................... Age: 43. Senior Vice President, Chief Financial Officer and Corporate
Secretary of the Company since 1999. Senior Vice President, Chief Financial
Officer and Corporate Secretary of the Bank since June 1998. Prior to that,
he was Executive Vice President and Chief Financial Officer for Life
Financial Corporation (1997-1998) and Life Bank (1987-1998), a publicly
traded thrift institution.
Donald Murray........................ Age: 42. Senior Vice President and Senior Lending Officer of the Bank since
1996 and Vice President of the Bank from 1994. Prior to that, he was
employed in various positions by Desert Community Bank.
</TABLE>
COMMITTEES OF THE BOARD OF DIRECTORS
During 1999, the Company's Board of Directors held nine (9) meetings.
The Board of Directors has not established a nominating committee. The
functions of the nominating committee are performed by the full Board of
Directors.
The Company had the following committees during 1999:
Name: Audit Committee
Members: Messrs. Hiscock, Oberhansley, Seale, and Tucker
# of Meetings 4
Function: oversees the Company's independent public
accountants, analyzes the results of internal and
regulatory examinations and monitors the financial
and accounting organization and reporting
During 1999 all directors attended at least seventy-five percent (75%)
of the aggregate of the total number of meetings of the Company's Board of
Directors and the number of meetings of the Company's committees on which they
served.
COMPENSATION OF DIRECTORS
8
<PAGE>
Directors of the Company receive no compensation from the Company.
Directors of the Bank receive fees of $800 for each Board of Directors meeting
they attend, up to a maximum of fifteen (15) meetings during any one calendar
year; provided that the directors are paid for one meeting missed for any reason
and for meetings missed due to illness. Committee members additionally receive
$200 per meeting attended except for Loan Committee members who receive $300 for
Loan Committee meetings attended. The Chairman of the Board receives $1,000 for
each meeting attended again up to fifteen (15) meetings per calendar year with
one excused but paid for absence and excused but paid for meeting in the case of
illness. Neither Mr. Swanson nor Mr. Youmans, employees of the Bank, receive any
fees for attending Board of Director or Committee meetings. The total amount of
fees paid to directors for attendance at Board and Committee meetings during
1999 was $110,700, of which $38,400 was deferred.
On September 24, 1996, the Board of Directors adopted the Directors
Indexed Fee Continuation Program which replaced all prior directors' benefit
plans. As of December 31, 1996, Messrs. LeFevre, Crow, Tucker and Hiscock had
completed the process in order to participate in the Plan. This plan provides
for directors to receive a benefit upon retirement which is determined based on
two factors.
Fee Deferral: Directors may elect to defer up to $100,000 of cumulative
directors fees. Such deferred fees are credited with a rate of interest equal to
the average yield earned on the Bank's loan portfolio, minus 2%. Upon
retirement, these fees are paid out as either a lump sum, or over a specified
number of years. Pursuant to the terms of this Plan, Directors LeFevre, Hiscock
and Tucker agreed to terminate existing Deferred Compensation Plan agreements
with the Bank.
Indexed Retirement Benefit: Directors are also entitled to receive a
benefit equal to the after tax earnings of specific life insurance policies
owned by the Bank, less a cost of funds expense equal to the after tax cost of
the Bank's One Year Investment Instrument. The differential between these two
instruments is held as an accrued liability balance and is payable to the
director upon retirement provided the director retires with ten years of
service. The Plan provides for a minimum retirement benefit of $8,000 per year,
for three years. Thereafter, the benefit may fluctuate based on the relationship
between the policy earnings and the cost of funds index. The benefit is payable
for life. The Plan also provides participants with a death benefit which
decreases each year. In April 1998, the Bank amended the plan for Messrs.
Hiscock, and Crow to provide for a lifetime annual benefit of $8,000 per year.
The accrued liability for each of these directors for all plans, which
includes fee deferrals for prior years, as of December 31, 1998 was:
LeFevre-$81,927, Hiscock-$82,790, Tucker-$74,052 and Crow-$7,908. The cost
incurred for 1999 excluding the deferred income was $17,760, which was offset by
$33,368 in income earned on the insurance policies.
DIRECTOR STOCK OPTION AWARDS
On March 17, 1999, each director received a stock option grant under
the Bank's 1993 Stock Option Plan to purchase 1,050 shares of common stock. The
options were granted at an exercise price of $7.86 per share and are exercisable
for ten years.
On February 17, 1999, Directors Kirkpatrick and Oberhansley received
stock option grants under the Company's 1993 Stock Option Plan to purchase
10,500 and 10,500 shares, respectively, of common stock. The options were
granted at an exercise price of $7.50 per share and are exercisable for ten
years.
EXECUTIVE COMPENSATION
The Company paid no compensation to its officers in 1999. Set forth
below is the summary compensation accrued during 1999 to the six highest paid
officers of the Bank who received total annual salary and bonus of more than
$100,000 during 1999.
9
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------- ------------------------ -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
SECURITIES
OTHER RESTRICTED UNDERLYING
ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARD(S) SARS(#) PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($)(1) ($)(2) ($)(3) ($) (4) ($) ($)(5)
------------------ ---- ------ ------ ------ --- --- --- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Thomas E. Swanson 1999 164,000 16,740 - - 3,060
President and CEO 1998 159,000 33,670 - 33,670(6) - 2,648
1997 119,000 75,000 - - - - 2,903
Gary M. Youmans 1999 109,000 49,829 - - 1,050 - 3,270
Executive Vice 1998 109,000 60,125 - 38,370 - 3,513
President 1997 115,494 57,000 - - - - 5,095
Dale Heyden 1999 66,000 132,301 - - - - 3,385
Vice President 1998 66,000 59,768 - - 3,032 - -
1997 66,000 73,491 - - - - -
L. Bruce Mills, Jr. 1999 120,996 25,013 - - - - -
Senior Vice President 1998 71,382 15,488 - - 11,025 - -
Donald W. Murray 1999 111,000 24,570 - - 16,595 - 3,311
Senior Vice President 1998 106,000 13,467 - 13,467(6) - - 2,516
1997 101,000 23,750 325 - - - 3,630
Bob Sebastian 1999 69,000 80,292 - - - - 3,430
Vice President 1998 60,000 92,692 - - 2,756 - 4,434
1997 60,000 71,749 - - - - 3,801
</TABLE>
- -----------
(1) Amounts shown include cash and non-cash compensation earned and
received, including monthly auto allowances.
(2) Amount shown as bonus payments were earned in the year indicated but
not paid until the first quarter of the next fiscal year, except for
Vice Presidents Heyden and Sebastian, in which case, they were paid in
the year earned. Bonus payments for Mr. Youmans include commissions on
originating SBA loans.
(3) No executive officer received perquisites or other personal benefits in
excess of the lesser of $50,000 or 10% of each such officer's total
annual salary and bonus. Amounts shown reflect the difference between
the exercise price and the market value of options exercised during the
year indicated.
(4) The Company (and prior to its existence - the Bank) has granted stock
options to directors and to key, full-time salaried officers and
employees of the Bank pursuant to two stock option plans (the "Plans"
and the "1985 Plan" and "1993 Plan", respectively). The 1985 Plan has
expired but options granted under such Plan remain outstanding and
effective until their exercise or expiration. Options granted under the
Plans are either incentive options or non-qualified options.
10
<PAGE>
Upon the formation of the Company, it adopted all options granted under
the Plans and adopted the 1993 Plan. Options granted under the Plans
become exercisable in accordance with a vesting schedule established at
the time of grant. Vesting may not extend beyond ten years from the
date of grant. Options become fully exercisable upon the sale, merger
or consolidation of the Bank in which the Bank is not a survivor
notwithstanding the vesting provisions under the Plans. Options granted
under the Plans are adjusted to protect against dilution in the event
of certain changes in the Company's capitalization, including stock
splits and stock dividends. All options granted have an exercise price
equal to the fair market value of the Company's Common Stock on the
date of grant. Options shown in table have been adjusted for the
Company's 5% stock dividends on November 30, 1999 and December 12,
1998.
(5) Amounts shown reflect the amount of matching contributions made by the
Bank pursuant to its 401(k) Plan.
(6) Means that the $33,670 (Swanson) and the $13,467 (Murray) were vested
options earned, and resulted in the issuance of 15,238 options
(Swanson) and 6,095 options (Murray) in February 1999.
OPTION GRANTS IN 1999
Options granted during 1999 under the 1993 Plan to any of the officers
set forth in the preceding table are as follows:
INDIVIDUAL GRANTS IN 1999
<TABLE>
<CAPTION>
NUMBER PERCENT OF
OF SECURITIES TOTAL OPTIONS EXERCISE
UNDERLYING GRANTED TO OR BASE EXPIRATION
NAME OPTIONS GRANTED # EMPLOYEES IN 1999 PRICE ($/SH) DATE
- ---- ----------------- ----------------- ------------ ----
<S> <C> <C> <C> <C>
Swanson................................... 15,238 34.80% 7.50 2/17/2009
1,050 2.40% 7.88 3/17/2009
Youmans................................... 1,050 2.40% 7.88 3/17/2009
Heyden.................................... - - - -
Mills..................................... - - - -
Murray.................................... 6,095 13.92% 7.50 2/17/2009
10,500 23.98% 7.02 1/20/2009
Sebastian................................. - - - -
</TABLE>
11
<PAGE>
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
The following table sets forth certain information as of December 31,
1999 concerning unexercised options under the 1993 Plan for the officers set
forth in the compensation table:
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR, AND FISCAL YEAR-END OPTION/SAR VALUE
(a) (b) (c) (d) (e)
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
VALUE UNEXERCISED IN-THE-MONEY
SHARES ACQUIRED ON REALIZED OPTIONS/SARS AT OPTIONS/SARS AT
NAME EXERCISE(#) ($)(1) FY-END(#) FY-END ($)
- ---- ----------- ------ --------- ----------
EXERCISABLE/ EXERCISABLE/
UNEXERCISABLE UNEXERCISABLE(1)
------------- ----------------
<S> <C> <C> <C> <C>
Swanson................................... 9,702 38,226 125,746/12,074 $37,509/12,270
Youmans................................... - - 56,451/ 9,870 $27,469/ 9,817
Heyden.................................... - - 607/ 2,425 $ -/ -
Mills..................................... - - 2,205/ 8,820 $ -/ -
Murray.................................... - - 12,600/14,910 $ 7,240/ 4,908
Sebastian................................. - - 552/ 2,204 $ -/ -
</TABLE>
- -----------
(1) The aggregate value has been determined based upon the average of the
bid and asked prices for the Company's Common Stock at exercise or
year-end, minus the exercise price.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
Effective January 1, 1998, the Bank entered into employment agreements
with Thomas E. Swanson, its President and Chief Executive Officer, Gary M.
Youmans, Executive Vice President and Donald W. Murray, Senior Vice President
and Senior Credit Officer. Effective July 1, 1998, the Bank entered into an
employment agreement with L. Bruce Mills, Jr., Senior Vice President and Chief
Financial Officer. In general, these agreements provide for three year terms
subject to an annual extension, such that the term of these agreements remain at
three years. Base salaries for Messrs. Swanson, Youmans, Mills and Murray for
2000 have been established as $155,000, $105,000, $118,450 and $115,000,
respectively. The agreements also provide for discretionary bonuses. If the
executive officer is terminated prior to a "Change in Control" but without
cause, such executive officer will be entitled to a lump sum payment equal to
nine months of compensation (12 months in the case of Mr. Swanson) at the base
salary rate then in effect. After a "Change in Control", a termination without
cause or a "resignation with good reason" within 24 months of such "Change in
Control" of the executive officer will result in such executive officer being
entitled to a lump sum payment equal to 18 months of compensation (24 months in
the case of Mr. Swanson) at the base salary rate then in effect. The agreements
define a "Change of Control" as including (i) a transfer of control of the Bank,
(ii) any person becoming the beneficial owner of securities of the Bank
representing 20% or more of the combined voting power of the Bank's outstanding
securities, (iii) a change in the majority of directors of the Bank as a result
of a contested election of directors, (iv) a merger, consolidation or sale of
all or substantially all of the assets of the Bank, or (v) any change in the
majority of the Board of Directors of the Bank during a two year period unless
each new director is approved by two-thirds of the directors then in office who
were directors at the beginning of such two year period.
12
<PAGE>
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and ten percent or more shareholders of
the Company's equity securities, to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes of ownership of
the Company's equity securities. Officers, directors and ten percent or more
shareholders are required by regulation to furnish the Company with copies of
all Section 16(a) forms they file. To the Company's knowledge, based solely on
review of the copies of such reports furnished to the Company and written
representations that no other reports were required, during the fiscal year
ended December 31, 1999, all Section 16(a) filing requirements applicable to its
executive officers, directors and beneficial owners of ten percent or more of
the Company's equity securities appear to have been met except Director and Bank
Executive Vice President Youmans filed one report late relating to one
transaction in the Company's common stock. This report was subsequently filed.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
There have been no transactions, or series of similar transactions,
during 1999, or any currently proposed transaction, or series of similar
transactions, to which the Company or the Bank was or is to be a party, in which
the amount involved exceeded or will exceed $60,000 and in which any director
(or nominee for director) of the Company, executive officer of the Company, any
shareholder owning of record or beneficially 5% or more of the Company's Common
Stock, or any member of the immediate family of any of the foregoing persons,
had, or will have, a direct or indirect material interest.
INDEBTEDNESS OF MANAGEMENT
The Bank has had, and expects in the future to have banking
transactions in the ordinary course of its business with many of the Bank's
directors and officers and their associates, including transactions with
corporations of which such persons are directors, officers or controlling
shareholders, on substantially the same terms (including interest rates and
collateral) as those prevailing for comparable transactions with others.
Management believes that in 1999 such transactions comprising loans did not
involve more than the normal risk of collectibility or present other unfavorable
features. Loans to executive officers of the Bank are subject to limitations as
to amount and purposes prescribed in part by the Federal Reserve Act, as
amended, and other federal laws and regulations.
PROPOSALS OF SHAREHOLDERS
Under certain circumstances, shareholders are entitled to present
proposals at shareholder meetings. Any such proposal to be included in the proxy
statement for the Company's 2001 Annual Meeting of Shareholders must be
submitted by a shareholder prior to December 18, 2000, in a form that complies
with applicable regulation.
ANNUAL REPORT TO SHAREHOLDERS
The Company's Annual Report to shareholders containing audited
financial statements is included in this mailing to shareholders.
ANNUAL REPORT ON FORM 10-KSB
COMMUNITY BANCORP INC. WILL PROVIDE YOU, WITHOUT CHARGE, A COPY OF ITS
ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 1999 ON FORM 10-KSB, INCLUDING
FINANCIAL STATEMENTS AND SCHEDULES, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934. YOU MAY OBTAIN A
COPY BY WRITING TO L. BRUCE MILLS, FALLBROOK NATIONAL BANK, 130 WEST FALLBROOK
STREET, FALLBROOK, CA 92028.
13
<PAGE>
OTHER MATTERS
The Board of Directors knows of no other matters which will be brought
before the Meeting, but if such matters are properly presented to the Meeting,
proxies solicited hereby will be voted in accordance with the judgment of the
persons holding such proxies. All shares represented by duly executed proxies
will be voted at the Meeting in accordance with the terms of such proxies.
COMMUNITY BANCORP INC.
Fallbrook, California
April 17, 2000 By: L. Bruce Mills, Jr.
-------------------
SECRETARY
14
<PAGE>
REVOCABLE PROXY-COMMUNITY BANCORP INC.
ANNUAL MEETING OF SHAREHOLDERS-MAY 31, 2000
The undersigned shareholder(s) of Community Bancorp Inc. (the
"Company") hereby appoints, constitutes and nominates E. Steve LeFevre, Granger
Haugh and Corey Seale, and each of them, the attorney, agent and proxy of the
undersigned, with full power of substitution, to vote all shares of the Company
which the undersigned is entitled to vote at the Annual Meeting of Shareholders
to be held at The Grand Tradition, 1602 South Mission Road, Fallbrook,
California on Wednesday, May 31, 2000 at 6:00 p.m. local time, and any and all
adjournments thereof, as fully and with the same force and effect as the
undersigned might or could do if personally present thereat, as follows:
1. ELECTION OF DIRECTORS. To elect the following seven (7) persons to the
Board of Directors of the Company to serve until the 2001 Annual
Meeting of Shareholders and until their successors are elected:
Granger Haugh Robert H.S. Kirkpatrick
E. Steve LeFevre Philip D. Oberhansley
Corey Seale Thomas E. Swanson
Gary M. Youmans
/ / FOR ALL NOMINEES LISTED ABOVE (EXCEPT AS MARKED TO THE CONTRARY)
/ / WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED ABOVE
A SHAREHOLDER MAY WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE BY LINING THROUGH
OR OTHERWISE STRIKING OUT THE NAME OF SUCH NOMINEE.
<PAGE>
2. 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 FOR each of the foregoing
proposals. If any other business is properly presented at the Annual Meeting,
this Proxy shall be voted in accordance with the judgement of the proxy holders.
THIS PROXY ALSO VESTS DISCRETIONARY AUTHORITY TO CUMULATE VOTES. THIS PROXY IS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE REVOKED PRIOR TO ITS
USE.
Date:
-----------------------------------------
----------------------------------------------
----------------------------------------------
(Signatures(s)
----------------------------------------------
Number of Shares
I (We) will / / will not / / attend the
Annual Meeting in person
NOTE: PLEASE SIGN YOUR FULL NAME. JOINT OWNERS
SHOULD EACH SIGN. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN,
PLEASE GIVE FULL TITLE AS SUCH.
