<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
/x/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-10198
THE SAN FRANCISCO COMPANY
- - --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 94-3071255
- - ---------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
550 Montgomery Street, 10th Floor
San Francisco, California 94111
- - ---------------------------------- ------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (415) 781-7810
Securities registered pursuant to Section 12(b) of the Act:
Title of Class Name of Each Exchange on Which
Registered
- - ---------------------------------- ------------------------------------
Class A Common Stock, $0.01 Par Value None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes x No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ].
The aggregate market value of the voting stock held by non-affiliates of the
Registrant on March 17, 1996, was $2,018,092 computed by reference to the
closing sales price of the Class A Common Stock as reported by Van Kasper &
Company.
The Registrant had 5,765,978 shares of Class A Common Stock outstanding on March
12, 1996.
Documents Incorporated by Reference
None
<PAGE> 2
THE SAN FRANCISCO COMPANY
AMENDMENT TO 1995 ANNUAL REPORT (FORM 10-K/A)
TABLE OF CONTENT
PART III
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Item 10. Directors and Executive Officers of the Registrant 1
Item 11. Executive Compensation 2
Item 12. Security Ownership of Certain Beneficial Owners and Management 9
Item 13. Certain Relationships and Related Transactions 9
</TABLE>
<PAGE> 3
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS
The following is a list of directors of the Company, their occupation
for the previous five years, age and the length of service as a director. Except
as stated below, no director of the Company is a director of any 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 of any company registered as an investment company under the Investment
Company Act of 1940, as amended. Except for the Bank, none of the corporations
or organizations discussed below is an affiliate of the Company. No director,
nominee for director or executive officer of the Company or the Bank has any
family relationship with any other director or executive officer of the Company
or director or executive officer of the Bank.
JAMES E. GILLERAN...............................................................
Mr. Gilleran has served as the Chairman and Chief Executive Officer of
the Company and the Bank since October 1994. He served as
Superintendent of Banks for the state of California from 1989 to 1994.
At December 31, 1995, Mr. Gilleran was 62 years of age and he had been
serving as a director of the Company since 1994 and a director of the
Bank since 1994.
STEVEN R. CHAMPION..............................................................
Mr. Champion has served as President and Chief Financial Officer of San
Francisco and East Asia Capital Management since January 1995. Mr.
Champion was the Vice Chairman and Chief Financial Officer of the
Company and the Bank, and Chief Investment Officer of the Bank, from
August 1993 to October 1994. He served as Chief International
Investment Officer of Bank of America from 1992 to 1993, President and
Chief Executive Officer of the R.O.C. - Taiwan Fund from 1989 to 1992,
and President and Chief Executive Officer of International Investment
Trust Company in Taipei, Taiwan from 1987 to 1992. At December 31,
1995, Mr. Champion was 50 years of age and he had been serving as a
director of the Company since 1993 and a director of the Bank since
1993.
KENT D. PRICE...................................................................
Mr. Price has served as Executive Vice President of IBM since September
1994. Mr. Price was the Chairman and Chief Executive Officer of the
Company and the Bank from September 1993 to August 1994. He served as
Executive Vice President, Private Banking and Corporate Development of
Bank of America from 1991 to 1993; Chief Financial Officer and
Executive Vice President of Bank of New England Corporation from 1990
to 1991; and Chief Operating Officer, Chief Financial Officer and
Director of Barr Rosenberg Investment Management in 1990. At December
31, 1995, Mr. Price was 52 years of age and he had been serving as a
director of the Company since 1993 and was a director of the Bank from
1993 to 1994.
JACKSON SCHULTZ ................................................................
Mr. Schultz is a retired banker who, has provided consulting services
to Wells Fargo Bank for more than five years through 1995. Prior to his
existing consulting arrangement Mr. Schultz served as a Senior Vice
President of Wells Fargo. At December 31, 1995, Mr. Schultz was 70
years of age and he had been serving as a director of the Company since
1996 and a director of the Bank since 1996.
WILLARD D. SHARPE...............................................................
Mr. Sharpe is a retired economist who, at the time of his retirement in
1987, served as a Vice President of Chase Manhattan Bank and as the
Bank's chief economist for Asia. In addition, since 1993, Mr. Sharpe
has been a Vice President of two privately held companies involved in
efforts to explore prospects for investment in Vietnam. At December 31,
1995, Mr. Sharpe was 72 years of age and he had been serving as a
director of the Company since 1993 and a director of the Bank since
1993.
GORDON B. SWANSON ..............................................................
Mr. Swanson has been Vice President of Real Estate with Levi Strauss &
Company since 1993. He served as President of G. B. Swanson & Co., a
real estate advisory firm from 1991 to 1992. Mr. Swanson has served as
Director Emeritus of the San Francisco Chamber of Commerce since 1986
and as Managing Director of Jones Lang Wootton U.S.A., a commercial
real estate investment company, from 1989 to 1991. At December 31,
1995, Mr.
1
<PAGE> 4
Swanson was 51 years of age and he had been serving as a director of
the Company since 1985 and a director of the Bank since 1985.
NICHOLAS UNKOVIC................................................................
Mr. Unkovic has been a partner for the law firm of Graham & James, LLP
for more than five years. At December 31, 1995, Mr. Unkovic was 44
years of age and he had been serving as a director of the Company since
1994.
EXECUTIVE OFFICERS AND OTHER SIGNIFICANT OFFICERS
Each executive officer is selected annually by the Board of Directors
pursuant to provisions of the bylaws of the Company and the Bank. The following
is a listing of executive officers of the Company and/or Bank, their occupation
for the previous five years, age and the length of service as an officer.
JAMES E. GILLERAN...............................................................
(See position description of Mr. Gilleran's position with the Company
and the Bank, and his background under the heading "DIRECTORS").
JOHN McGRATH....................................................................
Mr. McGrath has served as President, Chief Operating Officer and Chief
Credit Officer of the Bank since December 1995. He served as President
and Chief Executive Officer of Sacramento First National Bank from 1982
to 1995. At December 31, 1995, Mr. McGrath was 53 years of age and he
had been servings as a director and officer of the Bank since 1995.
ITEM 11 - EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
Decisions on the compensation of the Company's and the Bank's
executives are generally made by the four- member Personnel/Compensation
Committee. The members of the Personnel/Compensation Committee are members of
the Board of Directors of the Company. All decisions by the
Personnel/Compensation Committee relating to the compensation of the Company's
and the Bank's executive officers are reviewed by the Company's and the Bank's
full Boards of Directors, except for decisions about awards under certain of the
Company's stock- based compensation plans, which are made solely by the
Committee in order for the grants or awards under such plans to satisfy Rule
16b-3 under the Securities Exchange Act of 1934, as amended. Set forth below is
a report of the Personnel/Compensation Committee addressing the Company's
compensation policies for 1995 as they affected the Chief Executive Officer of
the Company and the Bank serving at the end of 1995, and the one other most
highly-compensated officer of the Bank at the end of 1995, and two additional
highly-compensated officers who would have qualified for disclosure if they had
not terminated employment, (collectively, the "Named Executives") as December
31, 1995. The Named Executives compensation in 1995 is shown in the "Executive
Compensation Tables" below.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
The Company's Personnel/Compensation Committee, which during 1995
consisted of Mrs. Donna Miller Casey, Mr. Gilleran (Chairman and Chief Executive
Officer of the Company and the Bank), Mr. Unkovic and Mr. Sharpe, makes
decisions with respect to the compensation of executive officers. In 1996, Mr.
Schultz filled Mrs. Casey's position as Chairman of the Personnel/Compensation
Committee.
BOARD OF DIRECTORS' FEES
The Company and the Bank pay director fees to each non-employee
Director for attendance at Board meetings and Committee meetings which are held
monthly. The fee for attendance at a Board meeting is $750 per meeting. The
Chairman of each committee receives $300 and each member receives $200 for each
committee meeting attended.
2
<PAGE> 5
COMPENSATION PHILOSOPHY
The compensation policies adopted by the Personnel/Compensation
Committee and approved by the Board of Directors of the Company and the Bank in
1992, and continued since then, were designed to provide competitive levels of
compensation, reward improvements in corporate performance, recognize
above-average individual achievements and initiative, and thereby assist the
Bank in attracting and retaining qualified employees.
The Personnel/Compensation Committee either approved or recommended to
the Board of Directors payment amounts and award levels for all executives of
the Bank including the Named Executives. With regard to compensation actions
affecting Mr. Gilleran, Chairman and Chief Executive Officer of the Company and
Bank, all of the non-employee members of the Board of Directors acted as the
approving body.
The Company and the Bank experienced significant financial losses from
1991 to 1994, and, in connection therewith, the Named Executives were required
to devote a substantial and unusual amount of time and effort in dealing with
non-performing assets, raising new capital, responding to regulatory concerns
and implementing changes in operating systems and controls. Consequently, the
use of traditional corporate performance measures such as earnings per share or
increases in book value to determine executive compensation was not considered
to be in the Company's best interests. Therefore, there was no direct
relationship in 1994 or 1995 between executive compensation and the Company's
financial performance, either as compared to the Company's prior performance or
as compared to the banking companies with which the Company competes for
executive talent. Instead, the 1994 and 1995 executive compensation programs of
the Bank were designed to provide compensation which would allow the Bank to
attract and retain talented and experienced executives necessary for management
of the Bank's turnaround program. The focus of the executive compensation
program was on base salary, although some effort was made to provide longer term
incentives through the grant of stock options. None of the Named Executives
received a cash bonus in 1994 or 1995.
Going forward, in addition to the philosophies described above, the
Committee will also be guided by the terms of the FDIC Order in setting
executive compensation. The FDIC Order provides that, without the prior written
approval of the FDIC, the Bank may not (a) pay a bonus to an executive officer,
or (b) provide compensation to an executive officer at a rate exceeding his or
her average rate of compensation (excluding bonuses, stock options and
profit-sharing) during the 12 calendar months preceding the months in which the
Bank first became undercapitalized.
EXECUTIVE COMPENSATION TABLES
SUMMARY OF 1993-1995 COMPENSATION. The following table sets forth the
annual compensation, long-term compensation and other compensation paid to each
of the Named Executives. Compensation is listed as of
3
<PAGE> 6
December 31, 1995, 1994 and 1993. Messrs. Spaulding, Criss, Price, Freed, and
Champion, have terminated their employment with the Bank and Company, all other
positions listed on the table are positions held by the Named Executives as of
December 31, 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
=================================================================================================================================
ANNUAL COMPENSATION LONG TERM COMPENSATION
- - ---------------------------------------------------------------------------------------------------------------------------------
AWARDS
- - ---------------------------------------------------------------------------------------------------------------------------------
OTHER ALL
ANNUAL RESTRICTED OTHER
COMPEN- STOCK COMPEN
NAME AND PRINCIPAL SALARY BONUS SATION AWARD(S) OPTIONS/ -SATION
POSITION YEAR ($) ($) ($) ($)(7) SARS(#) ($) (4)
- - ---------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (i)
- - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Chairman/CEO 1995 262,507 0 0 0 0 0
1994 51,681 0 7,936(1) 0 313,369(6) 0
James E. Gilleran 1993 0 0 0 0 0 0
- - ---------------------------------------------------------------------------------------------------------------------------------
President/COO/CCO - 1995 0 0 11,308(1) 0 0 0
Bank 1994 0 0 0 0 0 0
John McGrath 1993 0 0 0 0 0 0
- - ---------------------------------------------------------------------------------------------------------------------------------
EVP - Former 1995 142,339 0 0 0 0 29,327
1994 150,000 0 0 0 0 0
Stephen V. R. Spaulding 1993 25,096 0 17,692(1) 0 0 0
- - ---------------------------------------------------------------------------------------------------------------------------------
EVP/CCO - Former 1995 48,217 0 0 0 0 0
1994 125,000 8,624 0 0 0 0
C. William Criss, Jr. 1993 125,000 63,097 3,000(2) 0 0 1,014
- - ---------------------------------------------------------------------------------------------------------------------------------
Vice Chairman/CFO - 1995 0 0 0 0 0 0
Former 1994 184,708 0 0 0 125,348(5) 4,650
Steven R. Champion 1993 55,000 0 55,000(1) 0 0
- - ---------------------------------------------------------------------------------------------------------------------------------
President/COO - Former 1995 0 0 0 0 0 0
1994 190,512 0 0 0 0 204,250
Rodney D. Freed 1993 178,077 0 4,180(3) 0 0 759
- - ---------------------------------------------------------------------------------------------------------------------------------
Chairman/CEO - Former 1995 0 0 0 0 0 0
1994 128,333 0 0 0 62,674(5) 1,886
Kent D. Price 1993 55,000 0 31,026(1) 0 0 170
=================================================================================================================================
</TABLE>
(1) "Other annual compensation" consists solely of consulting fees paid for
consulting services prior to formal appointment into designated
positions.
(2) Consists solely of auto allowance expense of $500 per month. All auto
allowances were eliminated as of July 1, 1993.
(3) During the 1993 fiscal year Mr. Freed's "Other annual compensation"
consisted primarily of allowances for an auto allowance at a rate of
$500 per month. All auto allowances were eliminated as of July 1, 1993.
Mr. Freed was also reimbursed for moving costs related to his
relocation from Singapore.
(4) "All other compensation" consists of group term life insurance coverage
and severance expenses related to the termination of employment.
(5) These options were granted pursuant to separation agreements described
below.
(6) These options were granted pursuant to Mr. Gilleran's employment
described below.
(7) The options granted are out-of-the-money with an exercise price of $5.68
per share.
4
<PAGE> 7
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
EMPLOYMENT AGREEMENT OF MR. GILLERAN. The Company and the Bank entered
into an employment agreement with Mr. Gilleran dated October 1, 1994 which
provided, among other things, for Mr. Gilleran to receive an annual salary of at
least $250,000 per year, payable in accordance with the Bank's usual payment
practices. Mr. Gilleran's annual base salary will be increased to $300,000 upon
the conclusion of the Company's third consecutive profitable quarter, subject to
regulatory approval. In addition, the employment agreement provides for an
annual cash performance bonus of between 0% and 100% of base salary, and a
special incentive one-time bonus of $150,000 at such time that the condition of
the Company and Bank are deemed satisfactory. The employment contract expires on
September 30, 1998.
The agreement provides that the Board of Directors shall grant Mr.
Gilleran options under the 1993 Executive Stock Option plan to acquire shares of
the Company's Class A Common Stock equal to 5% of the fully-diluted shares of
Common Stock, with additional options to be granted in the future as necessary
to maintain the 5% interest. For purposes of determining the number of
fully-diluted shares, Warrants would not be counted until they become
exercisable. Effective October 1, 1994, options to acquire 313,369 shares of
Common Stock were granted to Mr. Gilleran pursuant to his employment agreement.
The exercise price of these options is $5.68 per share. Based on the
capitalization of the Company as of March 31, 1996 and assuming the conversion
of Series D Preferred Stock into Common Stock, Mr. Gilleran would receive
additional options to purchase 862,970 shares of Common Stock. The options
granted to Mr. Gilleran vest over a three-year period, with one-third vesting on
the each anniversary of the employment agreement. The exercise price of the
options to be granted would be $0.34 per share (the effective price of the
Second Quarter 1995 Investment by Mr. Masagung), and the exercise price of
subsequent anti-dilution options would be the then-current fair market value of
the Common shares or the price per share for shares issued to others prior to a
public offering. Assuming the conversion of the Series D Preferred Stock into
Common Stock and the granting of other anti-dilution stock options under
existing employment and separation agreements, as of March 31, 1996, Mr.
Gilleran would hold an option to acquire a total of 1,176,339 shares of Common
Stock.
Under the employment agreement, Mr. Gilleran is indemnified by the
Company and the Bank from any liability or expense arising as a result of
actions taken by the Company or the Bank, or events relating to the business of
the Company or the Bank, occurring prior to the execution of the employment
agreement. Subject to certain limitations, Mr. Gilleran is also indemnified by
the Company and the Bank from any liability or expense arising as a result of
actions taken by the Company or the Bank, or events relating to the business of
the Company or the Bank, occurring after the execution of the employment
agreement, unless such liability or expense is due to the officer's bad faith or
gross negligence.
EMPLOYMENT AGREEMENT OF MR. MCGRATH. The Bank entered into an
employment agreement with Mr. McGrath dated November 27, 1995 which provides,
among other things, for Mr. McGrath to receive an annual salary of at least
$170,000 per year, payable in accordance with the Bank's usual payment
practices. In addition, the employment agreement provides for an annual cash
performance bonus of between 0% and 50% of base salary. The employment contract
expires on November 27, 1998.
The agreement provides that the Board of Directors shall grant Mr.
McGrath options under the 1993 Executive Stock Option plan to acquire shares of
the Company's Common Stock equal to 1% of the fully-diluted shares of Class A
Common Stock, with additional options to be granted in the future as necessary
to maintain the 1% interest. For purposes of determining the number of
fully-diluted shares, Warrants would not be counted until they become
exercisable. The initial grant of options to acquire 63,455 shares of Common
Stock are to be granted effective December 1, 1995. Based on the capitalization
of the Company as of March 31, 1996 and assuming the conversion of the Series D
Preferred Stock into Common Stock, Mr. McGrath will receive additional options
to purchase 171,813 shares of Common Stock. The options to be granted to Mr.
McGrath will vest over a three-year period, with one-third vesting on each
anniversary of the employment agreement. The exercise price of the options to be
granted will be $0.34 per share (the effective price of the Second Quarter 1995
Investment by Mr. Masagung), and the exercise price of subsequent anti-dilution
options would be the then-current fair market value of the Common shares or the
price per share for shares issued to others prior to a public offering. Assuming
the conversion of the Series D Preferred Stock into Class A Common Stock and the
granting of other stock options under existing employment and separation
agreements, as of March 31, 1996, Mr. McGrath would hold an option to acquire a
total of 235,268 shares of Common Stock.
5
<PAGE> 8
Under the Employment Agreement, Mr. McGrath is indemnified by the Bank
from any liability or expense arising as a result of actions taken by the Bank
or the Company, or events relating to the business of the Bank or the Company,
occurring prior to the execution of the Employment Agreement. Subject to certain
limitations, Mr. McGrath is also indemnified by the Bank from any liability or
expense arising as a result of actions taken by the Bank or the Company, or
events relating to the business of the Bank or the Company, occurring after the
execution of the Employment Agreements, unless such liability or expense is due
to the officer's bad faith or gross negligence.
SEPARATION AGREEMENTS WITH CERTAIN FORMER EXECUTIVE OFFICERS OF THE
BANK. During 1994 certain executive officers resigned from their employment with
the Bank. Effective September 16, 1994, Mr. Price resigned as Chairman and Chief
Executive Officer of the Bank and the Company. Effective November 1, 1994, Mr.
Champion resigned as Vice Chairman and Chief Financial Officer of the Bank and
the Company.
Separation agreements Messrs. Price and Champion provide for the
termination of prior employment agreements. In consideration for the termination
of such employment agreements, the Board of Director's granted each of Messrs.
Price and Champion options under the 1993 Executive Stock Option Plan to acquire
shares of the Company's Common Stock equal to 1% and 2%, respectively of the
fully-diluted shares of Common Stock, with additional options to be granted in
the future as necessary to maintain the 1% and 2% interest, respectively. For
purposes of determining the number of fully-diluted shares, Warrants would not
be counted until they become exercisable. As of December 31, 1995, the total
options granted to Messrs, Price and Champion are 62,674 and 125,348,
respectively. The exercise price of these options is $5.68 per share. Based on
the capitalization of the Company as of March 31, 1996 and assuming the
conversion of Series D Preferred Stock, each of Mr. Price and Mr. Champion would
receive additional options to purchase 172,594 and 345,187 shares, respectively
of the Company. The options granted to Messrs. Price and Champion vest
immediately. The exercise price of the options to be granted is $0.34 per Common
Share (the effective price of the Second Quarter 1995 Investment by Mr.
Masagung), and the exercise price of subsequent anti-dilution options would be
the then-current fair market value of the Common shares or the price per share
for shares issued to others prior to a public offering. Assuming the conversion
of the Series D Preferred Stock into Common Stock and the granting of other
anti-dilution stock options under existing separation agreements, as of March
31, 1996, Messrs. Price and Champion would hold an option to acquire a total of
235,268 and 470,535 shares of Common Stock.
DESCRIPTION OF BENEFIT PLANS
401(K) PROFIT SHARING PLAN. In 1986 the Company established a 401(k)
Profit Sharing Plan (the "Plan") which is intended to qualify under Sections
401(a) and 401(k) of the Internal Revenue Code. The Plan permits each
participating employee with six months of service to contribute to the Plan
through payroll deductions ("salary deferral contributions") of from 2% to 16%
of the participant's eligible compensation from the Company and its
subsidiaries, thereby deferring taxes on all or a portion of these amounts.
Under the Plan, the Company currently will match a participant's tax deferred
contributions by an amount equal to 100% of such contribution for each year,
except that the matching contribution by the Company for the participant may not
exceed 2% of the participant's eligible compensation for that year.
The Company may also make additional contributions to the Plan in such
amounts as may be determined by the Company's Board of Directors. Any such
additional contributions are allocated among Plan participants based upon their
compensation levels. The Company's contribution vests 100% after a participant
has completed five years of participation in the Plan, with vesting of 20% per
year for each of years one through five. In addition, the Company's contribution
vests upon a participant's retirement at age 65 or upon a participant's death or
permanent disability. Participants are entitled to receive their salary deferral
contributions and vested benefits under the Plan upon termination of employment,
retirement, death or disability. Participants have the right to allocate their
salary deferral contributions among four different investment funds.
1993 EXECUTIVE STOCK OPTION PLAN. Awards under the Executive Plan will
be discretionary and will be based on the performance of the Company, the
officer's job performance, the importance of his or her position, and his or her
contribution to the organization's goals for the award period (which goals in
the short term are likely to focus more on capital raising, compliance with
regulatory requirements, and improvements in financial performance than on
financial performance comparative to other bank holding companies). No grants
were made in 1995.
6
<PAGE> 9
The following table shows outstanding grants made as of December 31,
1995 for the individuals and groups set forth below under the Executive Plan:
<TABLE>
<CAPTION>
OPTIONS GRANTED UNDER THE
1993 EXECUTIVE STOCK OPTION PLAN
--------------------------------
NUMBER OF SHARES OF CLASS A
COMMON STOCK UNDERLYING
NAME AND POSITION OPTIONS GRANTED THROUGH
----------------- -----------------------
1995 (4)(5)
-----------
<S> <C>
James E. Gilleran (1) 313,369
Director of the Company and the Bank
John McGrath(2) --
Director of the Bank
Kent D. Price(3) 62,674
Director of the Company and the Bank
Stephen R. Champion(3) 125,348
Director of the Company and the Bank
Executive Officer Group 501,391
Non-Executive Officer Director Group 0
Non-Executive Officer Employee Group 0
</TABLE>
- - ---------------------
(1) The options granted effective October 1, 1994. See Employment Agreement
- Mr. Gilleran above.
(2) Options will be granted with an effective date of December 1, 1995. See
Employment Agreement - Mr. McGrath above.
(3) The options were granted in 1994 and are 100% vested.
(4) The table does not include options to be granted Mr. McGrath nor the
additional options required to be granted pursuant to the anti-dilution
provisions of the employment and/or separation agreements described
above which as of March 31, 1996 totaled 1,616,180. All options
included are out-or-the-money with an exercise price of $5.68 per
share.
(5) The table does not include additional anti-dilution options to be
granted related to the options to be granted to the Company's majority
shareholder pursuant to the February 26, 1996 agreement between the
Company and the majority shareholder.
7
<PAGE> 10
1993 NON-EMPLOYEE OPTION PLAN. No grants of options were made during
1995 under the Directors Plan. The following table shows grants outstanding as
of December 31, 1995 for the individuals and groups set forth below under the
Directors Plan:
<TABLE>
<CAPTION>
OPTIONS GRANTED UNDER THE
1993 NONEMPLOYEE DIRECTORS STOCK PLAN
THROUGH DECEMBER 31, 1995
-------------------------
NUMBER OF SHARES OF CLASS A
COMMON STOCK UNDERLYING
OPTIONS GRANTED THROUGH
NAME AND POSITION DECEMBER 1995(1)
----------------- ----------------
<S> <C>
Donna Miller Casey 1,250
Former Director of the Company and Bank
Nicholas Unkovic (2) --
Director of the Company
David R. Holbrooke 1,250
Former Director of the Company and Bank
Willard D. Sharpe (2) 2,500
Director of the Company and Bank
Kent D. Price (3) --
Director of the Company
Steven R. Champion (3) --
Director of the Company and Bank
Gordon B. Swanson(2) 2,500
Director of the Company and Bank
Executive Officer Group 0
Non-Executive Officer Director Group 7,500
Non-Executive Officer Employee Group 0
</TABLE>
- - ---------------------
(1) The options were granted effective April 1, 1994 and are currently
out-of-the-money. The options vest over a two-year period, with 50%
vesting on the expiration of one full year of service as a Nonemployee
Director following the date of the grant of such stock option, and the
remaining 50% vesting on the expiration of two full years of service as
a Nonemployee Director following the date of the grant of such option.
(2) Options to purchase 3,377 shares, effective April 1, 1995, are to be
granted under the Non-employee director plan. Effective April 1, 1996,
additional options of 7,147 will be granted.
(3) Messrs Price and Champion are not eligible to participate under this
plan.
8
<PAGE> 11
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following sets forth information regarding the beneficial ownership
of the Class A Common Stock by Mr. Putra Masagung, Mr. Latief and by all other
shareholders as December 31, 1995. The address of Mr. Masagung is 55 MH Thamrin,
Jakarta, Indonesia. The address of Mr. Latief is Tamara Center, 20th Floor, Jl
Jend. Sudirman Kav.24, Jakarta, Indonesia. The information does not assume the
conversion of any of the Company's preferred stock.
<TABLE>
<CAPTION>
Directors and
Mr. Putra Executive All
Masagung Mr. Latief Officers Others
-------- ---------- ------------- ------
<S> <C> <C> <C> <C>
Class A Common Shares 5,076,126 525,000 2,938 160,914
Percentage ownership 88.0% 9.1% 0.0% 2.9%
</TABLE>
The following sets forth information regarding the beneficial ownership
of the Series D Preferred Stock by Mr. Putra Masagung as December 31, 1995.
<TABLE>
<CAPTION>
Mr. Putra All
Masagung Mr. Latief Others
-------- ---------- ------
<S> <C> <C> <C>
Series D Preferred Shares 215,000 - -
Percentage ownership 100.0% - -
</TABLE>
The following sets forth information regarding the beneficial ownership
of the Series B Preferred Stock as December 31, 1995.
<TABLE>
<CAPTION>
Number of Shares Percentage
of Beneficially of
Owned Class
---------------- ----------
<S> <C> <C>
Gordon Swanson 7,200 44.2%
John A. Beal 2,143 13.2
John Volckman 3,500 21.5
All directors and current executive officers
as a group 7,200 44.2
</TABLE>
The address of Mr. Beal is 101 Rock Cove Court, Folsom, California
95630 and Mr. Volckman is 127 Alta Vista, Atherton, California 94027, and the
address of Mr. Swanson for the purpose of his ownership of the Series B
Preferred stock is the principal executive office of the Company.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CERTAIN TRANSACTIONS
The Bank has had and expects to continue to have banking transactions
with many of the directors and executive officers of the Company and the Bank
(and their associates). Loans by the Bank to any director or executive officer
of the Company or any of its subsidiaries (or any associate of such persons)
have been made in the ordinary course of business on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with other persons, and, except as set forth in the
following
9
<PAGE> 12
paragraph, have not involved more than the normal risk of collection or
presented other unfavorable features. Loans by the Bank to any director,
executive officer or principal stockholder of the Company or any of its
subsidiaries (as such persons are defined by regulation) are subject to
limitations under California and federal law. Among other things, a loan by the
Bank to a director, executive officer, or principal stockholder of the Company
or any of its subsidiaries must be on non-preferential terms and, if all loans
to a given person exceed $25,000, such loans must be approved in advance by the
Bank's Board of Directors. The aggregate balance of such loans at December 31,
1995 was zero.
The Company and the Bank have engaged the law firm of Graham & James,
LLP to perform the function of General Counsel. Total fees paid to Graham &
James, LLP in 1995 for legal services rendered were $38,600. Mr. Unkovic, a
director of the Company, is a partner with Graham & James, LLP.
The Company entered into an indemnification agreement with Mr. Unkovic
and Graham & James, LLP dated December 16, 1994. The indemnification agreement
provides that Mr. Unkovic is indemnified from and against any and all
liabilities or expenses arising with respect to any action or inaction taken in
the course of his duties as a director of the Company, and that Graham & James,
LLP is indemnified against any and all liabilities and expenses against Graham &
James, LLP arising by reason of Mr. Unkovic serving as a director of the
Company. The indemnification does not include legal services Mr. Unkovic or
Graham & James, LLP may render to the Company or its subsidiaries, affiliates,
directors, officers or stockholders.
Under their employment agreements, Messrs. Gilleran and McGrath would
be indemnified by the Company and/or the Bank from any liability or expense
arising as a result of actions taken by the Company or the Bank, or events
relating to the business of the Company or the Bank, occurring prior to the
execution of the employment agreements. See "Employment Contracts and
Termination of Employment and Change-in-Control Arrangements" for additional
information on indemnification agreements.
The Bank entered into an indemnification agreement with Mr. Thayer
Prentice, former Chairman of the Board, President and Chief Executive Officer of
the Company and the Bank. The Bank obtained an irrevocable standby letter of
credit in the amount of $300,000 issued by Transpacific National Bank on
December 30, 1995 on behalf of Thayer T. Prentice as collateral for the Bank's
obligations under its indemnification agreement. The indemnification agreement
expires August 31, 1997.
10
<PAGE> 13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
THE SAN FRANCISCO COMPANY
<TABLE>
<S> <C> <C>
/s/ James E. Gilleran Chairman of the Board and April 29, 1996
- - ----------------------------- Chief Executive Officer ------------------
James E. Gilleran (Principal Executive Officer)
/s/ Keary L. Colwell Senior Vice President April 29, 1996
- - ----------------------------- (Principal Accounting Officer) ------------------
Keary L. Colwell
</TABLE>
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