<PAGE> 1
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:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission Only
/X/ Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
ELDORADO BANCORP
- --------------------------------------------------------------------------------
(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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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> 2
ELDORADO BANCORP
17752 EAST 17TH STREET
TUSTIN, CALIFORNIA 92680
March 29, 1996
To Our Shareholders:
You are cordially invited to attend the 1996 Annual Meeting of Shareholders
which will be held at the SHERATON NEWPORT HOTEL, 4545 MACARTHUR BOULEVARD,
NEWPORT BEACH, CALIFORNIA on Wednesday, April 17, 1996, at 9:00 A.M.
At the Annual Meeting, the shareholders will vote to elect eleven directors
for the ensuing year. Information regarding the nominees for election of
directors is set forth in the accompanying Proxy Statement.
Although you may presently plan to attend the Annual Meeting, please
indicate on the enclosed proxy card your vote on the election of directors, and
sign, date and return the proxy card. If you do attend the Annual Meeting and
wish to vote in person, your proxy can be withdrawn at that time. We urge you to
vote for the election of all of the nominees named in the Proxy Statement.
If you hold shares in more than one name, or if your stock is registered in
more than one way, you may receive more than one copy of the proxy material. If
so, please sign and return each of the proxy cards you receive so that all of
your shares may be voted. I look forward to seeing you at the Annual Meeting.
J. B. CROWELL SIG
-------------------------------------
J.B. Crowell
President and Chief Executive Officer
<PAGE> 3
ELDORADO BANCORP
17752 EAST 17TH STREET
TUSTIN, CALIFORNIA 92680
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 17, 1996
------------------------
TO THE SHAREHOLDERS OF ELDORADO BANCORP:
The 1996 Annual Meeting of Shareholders of Eldorado Bancorp (the "Company")
will be held at the SHERATON NEWPORT HOTEL, 4545 MACARTHUR BOULEVARD, NEWPORT
BEACH, CALIFORNIA on Wednesday, April 17, 1996, at 9:00 A.M. for the following
purposes:
(1) To elect eleven (11) nominees to serve as directors until the next
Annual Meeting and until their successors are elected and have been
qualified; and
(2) To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only shareholders of record at the close of business on February 26, 1996
will be entitled to notice of and to vote at the meeting or any adjournment or
postponement thereof.
The Bylaws of the Company set forth the following procedures for
nominations to the Board 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 Company entitled to vote for the election of directors.
Notice of intention to make any nominations (other than for persons named in the
Notice of any meeting called for the election of directors) are required to be
made in writing and to be delivered or mailed to the President of the Company by
the later of: (i) the close of business 21 days prior to any meeting of
shareholders called for the election of directors or (ii) 10 days after the date
of mailing of Notice of the meeting to shareholders. Such notification must
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 Company 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 Company owned by the notifying shareholder; (f) the number
of shares of capital stock of any bank, bank holding company, savings and loan
association or other depository institution owned beneficially by the nominee or
by the notifying shareholder and the identities and locations of any such
institutions; and (g) whether the proposed nominee has ever been convicted of or
pleaded nolo contendere to any criminal offense involving dishonesty or breach
of trust, filed a petition in bankruptcy or been adjudged bankrupt. The
notification shall be signed by the nominating shareholder and by each nominee,
and shall be accompanied by a written consent to be named as a nominee for
election as a director from each proposed nominee. Nominations not made in
accordance with these procedures shall be disregarded by the chairman of the
meeting, and upon his instructions, the inspector of election shall disregard
all votes cast for each such nominee. The foregoing requirements do not apply to
the nomination of a person to replace a proposed nominee who has become unable
to serve as a director between the last day for giving notice in accordance with
this paragraph and the date of election of directors if the proposed nominee was
named in this notice or if the procedure called for in this paragraph was
followed with respect to the nomination of the proposed nominee.
By Order of the Board of Directors
ELAINE P. CROUCH SIG
----------------------------------
Elaine P. Crouch
Secretary
March 29, 1996
------------------------
YOUR VOTE IS IMPORTANT. THEREFORE, WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING YOU SHOULD DATE, SIGN AND RETURN THE ENCLOSED PROXY. IF YOU ATTEND THE
MEETING, YOU WILL BE ENTITLED TO VOTE IN PERSON IF YOU WISH.
<PAGE> 4
------------------------
PROXY STATEMENT
OF
ELDORADO BANCORP
17752 EAST 17TH STREET
TUSTIN, CALIFORNIA 92680
------------------------
INTRODUCTION
This Proxy Statement is being furnished in connection with the solicitation
of proxies by the Board of Directors of Eldorado Bancorp, a California
corporation (the "Company"), for use at its 1996 Annual Meeting of Shareholders
to be held at 9:00 A.M. on Wednesday, April 17, 1996, at the SHERATON NEWPORT
HOTEL, 4545 MACARTHUR BOULEVARD, NEWPORT BEACH, CALIFORNIA, and at any
adjournment or postponement thereof (the "meeting"). It is contemplated that
this solicitation of proxies will be made exclusively by mail; however, if it
should appear desirable to do so to ensure adequate representation at the
meeting, directors, officers and employees of the Company or its wholly-owned
subsidiary, Eldorado Bank (the "Bank"), may communicate with shareholders,
brokerage houses and others by telephone, telegraph or in person, to request
that proxies be furnished and may reimburse banks, brokerage houses, custodians,
nominees and fiduciaries for their reasonable expenses in forwarding proxy
materials to the beneficial owners of the shares held by them. All expenses
incurred in connection with this solicitation will be borne by the Company.
Holders of shares of common stock of the Company ("shareholders") who
execute proxies retain the right to revoke them at any time before they are
voted. Any proxy given by a shareholder may be revoked or superseded by
executing and delivering a later proxy or a notice of revocation in writing
prior to or at the meeting to the Secretary of the Company, 19100 Von Karman,
Suite 550, Irvine, California 92715, or by attending the meeting and voting in
person. A proxy, when executed and not so revoked, will be voted in accordance
with the instructions given in the proxy. If a choice is not specified in the
proxy, the proxy will be voted "FOR" the election as directors of each of the
eleven nominees named in this Proxy Statement. This Proxy Statement is first
being mailed to shareholders on or about March 29, 1996.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
The shares of common stock constitute the only outstanding class of voting
securities of the Company. Only the shareholders of the Company of record as of
the close of business on February 26, 1996 (the "record date"), will be entitled
to vote at the meeting or any adjournment or postponement thereof. As of
February 26, 1996, there were 3,763,280 shares of common stock outstanding and
entitled to vote. A majority of the outstanding shares must be present, either
in person or represented by proxy, at the Annual Meeting to satisfy the quorum
requirements of California law. Each shareholder is entitled to one vote for
each share held as of the record date, except that shareholders may, on
compliance with certain requirements of applicable California law, cumulate
their votes for election of directors (see "Election of Directors").
<PAGE> 5
PRINCIPAL SHAREHOLDERS
Set forth below is certain information regarding the beneficial ownership
of the Company's common stock, as of February 26, 1996, by each person who was
known by the Company to own more than 5% of the outstanding shares of common
stock of the Company, by each executive officer named in the Compensation Table
and by all directors and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(1) OF CLASS
------------------------------------ ------------ --------
<S> <C> <C>
J.B. Crowell.............................................. 290,744(2)(3) 7.7%
1371 Treasure Lane
Santa Ana, CA 92705
Raymond E. Dellerba....................................... 39,781(4) 1.0%
Richard Korsgaard......................................... 47,617(5) 1.3%
David R. Brown............................................ 11,459(6) *
John J. McCauley.......................................... 13,527(7) *
William J. Lewis.......................................... 7,113(8) *
All Directors and Executive Officers of the Company
as a Group (14 in number)............................... 872,808(9) 22.4%
</TABLE>
- ---------------
* Less than 1%
(1) Except as otherwise noted below, the persons named in the table have sole
voting and investment power with respect to all shares shown as beneficially
owned by them, subject to community property laws where applicable. All
shares are owned of record and beneficially except as otherwise indicated.
(2) Includes 16,500 shares which may be purchased on exercise of options during
the 60-day period ending April 26, 1996; and 26,553 shares held in Mr.
Crowell's account by the Company's Employee Stock Ownership Plans.
(3) Includes 2,866 shares which are held by Mrs. Crowell as custodian for their
children, as to which Mr. Crowell may have shared voting and/or investment
power.
(4) Includes 35,200 shares which may be purchased on exercise of stock options
during the 60-day period ending April 26, 1996.
(5) Includes 1,100 shares which may be purchased on exercise of stock options
during the 60-day period ending April 26, 1996.
(6) Includes 7,699 shares which may be purchased on exercise of stock options
during the 60-day period ending April 26, 1996; and 3,672 shares held in Mr.
Brown's account by the Company's Employee Stock Ownership Plans.
(7) Includes 12,319 shares which may be purchased on exercise of stock options
during the 60-day period ending April 26, 1996; and 744 shares held in Mr.
McCauley's account by the Company's Employee Stock Ownership Plans.
(8) Includes 6,930 shares which may be purchased on exercise of stock options
during the 60-day period ending April 26, 1996.
(9) Includes an aggregate of 141,888 shares of common stock which may be
purchased on exercise of stock options during the 60-day period ending April
26, 1996.
2
<PAGE> 6
PROPOSAL ONE
ELECTION OF DIRECTORS
The purpose of the 1996 Annual Meeting is to elect directors to serve on
the Board of Directors of the Company until the next Annual Meeting and until
their successors are elected and have been qualified. The enclosed proxy will be
voted in favor of the election to the Board of Directors of all of the eleven
nominees named below, unless a contrary instruction is given in the proxy. Nine
of the nominees named below were elected as directors of the Company at the last
Annual Meeting and also serve as directors of the Bank. The other nominees were
elected in October 1995, to serve on the Board of Directors of the Company and
the Bank by vote of the other members of the Boards of Directors of the Company
and the Bank, in connection with the acquisition of Mariner's Bank which was
completed on October 20, 1995.
Under California law, the eleven nominees who receive the highest number of
affirmative votes in the election of Directors will be elected to serve on the
Board of Directors for the ensuing year. As a result, proxies that "withhold
authority" to vote for the nominees named below, which will be counted, and
broker non-votes, which will not be counted, will have no practical effect on
the outcome of the election. Also, in accordance with California law, each
shareholder may cumulate his or her votes and give any one nominee a number of
votes equal to the number of directors to be elected (which is eleven)
multiplied by the number of shares which the shareholder is entitled to vote at
the meeting or to distribute the votes on the same principle among as many
candidates as the shareholder may elect, if (i) the name of the candidate for
whom such votes are cast has been properly placed in nomination prior to the
voting, and (ii) a shareholder has given notice at the meeting prior to voting
of that shareholder's intention to cumulate his or her votes. If any one
shareholder has given such notice, all shareholders may cumulate their votes for
candidates who have properly been placed in nomination.
The Board of Directors is soliciting discretionary authority to cumulate
votes represented by proxies and (unless authority to do so is withheld) to
distribute the total of such votes among the nominees in such numbers as may be
determined by the named proxies, because, in the event nominations are made in
opposition to the nominees of the Board of Directors, it is the intention of the
persons named in the enclosed proxy to cumulate votes represented by proxies for
individual nominees in accordance with their best judgment in order to assure
the election of as many of the nominees to the Board of Directors as possible.
All of the nominees have consented to serve as directors. If, however, any
nominee becomes unavailable for any reason before the election (which is not
anticipated), the shares represented by the enclosed proxy may be voted for such
other person as may be determined by the holders of such proxy.
3
<PAGE> 7
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE ELECTION OF
EACH OF THE NOMINEES NAMED BELOW.
NOMINEES
<TABLE>
<CAPTION>
SHARES OF
COMMON
STOCK OF
THE COMPANY
DIRECTOR OF OWNED AS OF
THE COMPANY FEBRUARY 26, PERCENT PRINCIPAL OCCUPATION
NAME AND POSITIONS AGE SINCE 1996(1)(2) OF CLASS AND BUSINESS EXPERIENCE
- ------------------------- --- ----------- ------------ -------- -----------------------------------------------
<S> <C> <C> <C> <C> <C>
Michael B. Burns......... 55 1982 48,635 1.0% Mr. Burns is, and for more than the past five
Director of the Company years has been, owner and President of Fiesta
and a Director of the Ford Lincoln- Mercury (auto dealership).
Bank
J.B. Crowell............. 62 1981 290,744(3) 7.7% Mr. Crowell is, and for more than the past five
President, Chief Execu- years has been, President and Chief Executive
tive Officer and Officer of the Company. Mr. Crowell also has
Director of the Company been Chief Executive Officer of the Bank since
and Chairman and Chief its inception in 1972. In addition, Mr. Crowell
Executive Officer and a was President of the Bank from 1972 to February
Director of the Bank 16, 1993, when he was appointed Chairman of the
Bank.
Raymond E. Dellerba...... 48 1993 39,781 1.0% Mr. Dellerba is, and since February 1993 has
Executive Vice been, the President and Chief Operating Officer
President and Director of the Bank. In April 1993 Mr. Dellerba was
of the Company and appointed Executive Vice President of the
President and Chief Company. From December 1990 until his
Operating Officer and a employment by the Bank, Mr. Dellerba was Presi-
Director of the Bank dent of CommerceBank, and became President of
its parent, CommerceBancorp, beginning in
January 1992. Mr. Dellerba also served as a
director of CommerceBank and CommerceBancorp,
beginning in March 1989. In August 1994,
approximately 18 months after Mr. Dellerba
terminated his employment with CommerceBancorp
and CommerceBank, CommerceBancorp filed a
petition in bankruptcy following the closing of
CommerceBank by the FDIC in July 1994.
Julia M. DiGiovanni...... 76 1995 114,054 3.0% Mrs. DiGiovanni was elected to the Boards of
Director of the Company Directors of the Company and the Bank following
and a Director of the the acquisition, by merger, of Mariners Bancorp
Bank and Mariners Bank by Eldorado Bank on October
20, 1995, pursuant to the terms of a Merger
Agreement between the Company and Mariners
Bancorp. Mrs. DiGiovanni served on the Board of
Directors of Mariners Bancorp and Mariners Bank
from 1991 until October 1995, and is now, and
for more than the past five years has been, a
private investor and an officer, director and
shareholder of Cal-Coast Security, Inc., and a
director of Cal-Coast Alarm, Inc., privately
owned companies, the principal businesses of
which are commercial and residential security
and alarms.
Lynne Pierson Doti....... 48 1994 9,020 * Dr. Pierson Doti is, and for more than the past
Director of the Company five years has been, a Professor of Economics
and a Director of the at Chapman University, in Orange, California.
Bank Dr. Pierson Doti is a member of the Board of
Trustees of the Economic and Business
Historical Society and an author of three books
and numerous articles on banking.
Rolf J. Engen............ 66 1981 71,421 1.9% Mr. Engen is, and for more than the past five
Director of the Company years has been, owner and President of Rolf J.
and a Director of the Engen, Inc. (private investments).
Bank
</TABLE>
4
<PAGE> 8
<TABLE>
<CAPTION>
SHARES OF
COMMON
STOCK OF
THE COMPANY
DIRECTOR OF OWNED AS OF
THE COMPANY FEBRUARY 26, PERCENT PRINCIPAL OCCUPATION
NAME AND POSITIONS AGE SINCE 1996(1)(2) OF CLASS AND BUSINESS EXPERIENCE
- ------------------------- --- ----------- ------------ -------- -----------------------------------------------
<S> <C> <C> <C> <C> <C>
Warren Finley............ 64 1981 45,478 1.2% Mr. Finley is, and for more than the past five
Director of the Company years has been, an attorney engaged in the
and a Director and private practice of law.
Assistant Secretary of
the Bank
Warren D. Fix............ 57 1994 10,120 * Mr. Fix is, and since 1992 has been, a partner
Director of the Company in the Contrarian Group, a private investment
and a Director of the and management company and, since 1995, Mr. Fix
Bank also has been Executive Vice President of
Candlewood Hotel Company, L.L.C. From 1989 to
1992 Mr. Fix was the President and Chief
Operating Officer of Pacific Company, a real
estate company. He also serves as a director of
Alexander Haagen Properties, Inc.
Richard Korsgaard........ 55 1995 47,617 1.3% Mr. Korsgaard was appointed as an Executive
Director of the Company Vice President of Eldorado Bank and, pursuant
and Executive Vice to the Merger Agreement between the Company and
President and Director Mariners Bancorp, was elected as a member of
of the Bank the Boards of Directors of the Company and the
Bank, following the acquisition, by merger, of
Mariners Bancorp and Mariners Bank by Eldorado
Bank on October 20, 1995. For more than the
five years prior to his employment with the
Bank, Mr. Korsgaard held the position of
President, Chief Executive Officer and Director
of Mariners Bank, and President and Director of
Mariners Bancorp, and in 1991 was appointed
Chief Executive Officer of Mariners Bancorp.
Donald E. Sodaro......... 62 1993 46,346 1.2% Mr. Sodaro is, and since 1989 has been, owner
Vice Chairman of the of The Accord Group, Inc., an asset management
Board of Directors and company. For more than five years prior
Director of the Company thereto, Mr. Sodaro was President and Chief
and the Bank Executive Officer of Sixpence Inns, Inc., which
he founded in 1970.
George H. Wells.......... 61 1981 117,493 3.1% Mr. Wells is a private investor. For more than
Chairman of the Board five years prior to August 1987, Mr. Wells held
of Directors and various executive positions with Technology
Director of the Company Marketing Incorporated, a publicly owned
and a Director of the computer development services and software
Bank company, including Chairman, President,
Treasurer and Chief Financial Officer.
</TABLE>
- ---------------
* Less than 1%
(1) Except as otherwise noted below, the persons named in the table have sole
voting and investment power with respect to all shares shown as beneficially
owned by them, subject to community property laws where applicable. All
shares are owned of record and beneficially except as otherwise indicated.
(2) Includes shares which each of the directors has the right to purchase under
stock options during the 60-day period ending on April 26, 1996, as follows:
Burns -- 9,900 shares; Crowell -- 16,500 shares; Dellerba -- 35,200 shares;
Doti -- 5,720 shares; Engen -- 9,900 shares; Finley -- 9,900 shares;
Fix -- 5,720 shares; DiGiovanni -- 1,200 shares; Korsgaard -- 1,100 shares;
Sodaro -- 9,900 shares; and Wells -- 9,900 shares.
(3) The number of shares beneficially owned by Mr. Crowell includes 26,553
shares held in Mr. Crowell's account by the Company's Employee Stock
Ownership Plans and 2,866 shares held by his spouse as custodian for their
children.
5
<PAGE> 9
Directors are elected at each annual shareholders' meeting to serve for a
one-year term and until their successors are elected and qualified. The Board of
Directors of the Company held 17 meetings during the year ended December 31,
1995. Each incumbent director attended at least 75% of the aggregate of the
number of meetings of the Board and the number of meetings held by all
committees of the Board on which he/she served (during the periods that he/she
served).
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Bank has established an Audit Committee and a
Management and Incentive Committee (which functions essentially as a
Compensation Committee). The Board of Directors of the Company has established a
Nominating Committee.
The Audit Committee is currently comprised of four directors elected by the
Board of Directors of the Bank. The present members of the Audit Committee are
Warren Fix, Michael B. Burns, Warren Finley and Julia M. DiGiovanni. The Audit
Committee is authorized to handle all matters which it deems appropriate
regarding the Bank's independent accountants and independent auditors and to
otherwise communicate and act upon matters relating to the review and audit of
the Bank's books and records, including the scope of the annual audit and the
accounting methods and systems to be utilized by the Bank. The Audit Committee
also makes recommendations to the Board of Directors with respect to the
selection of the Company's independent accountants and the Bank's independent
auditors. The Audit Committee for the Bank held 14 meetings during the year
ended December 31, 1995.
The Management and Incentive Committee is comprised of four directors
elected by the Board of Directors of the Bank. The members of the Management and
Incentive Committee are Rolf Engen, Lynne Pierson Doti, Warren Fix and Donald E.
Sodaro. The Management and Incentive Committee makes decisions with respect to
compensation to be paid to executive officers of the Bank and is responsible for
evaluating and approving compensation and fringe benefit programs for the
employees of the Bank. The Management and Incentive Committee held seven
meetings during the year ended December 31, 1995.
The Nominating Committee is comprised of four directors who are elected by
the Board of Directors of the Company. The current members of the Nominating
Committee are Rolf Engen, J.B. Crowell, Lynne Pierson Doti and Warren Fix. The
principal responsibility of the Nominating Committee is to identify and screen
candidates for vacancies on the Board of Directors of the Company and the Bank.
The Nominating Committee did not hold any meetings during the year ended
December 31, 1995. The Nominating Committee will consider candidates for
nomination proposed by a shareholder if the shareholder provides the Nominating
Committee with the information specified in items (a) through (g) of the
nomination procedures set forth in the Notice of Annual Meeting of Shareholders
which accompanies this Proxy Statement, for each such candidate.
FAMILY RELATIONSHIPS
There are no family relationships among any of the Company's officers or
directors.
6
<PAGE> 10
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information regarding the compensation
received for the three fiscal years ended December 31, 1995 by the Chief
Executive Officer and the other executive officers of the Company or the Bank
(the "Named Officers"). All compensation was paid to the Named Officers by the
Bank.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------------
PAYOUTS
ANNUAL COMPENSATION AWARDS --------------
---------------------------- ------------- LONG-TERM
NAME AND SALARY BONUS STOCK OPTIONS INCENTIVE PLAN ALL OTHER
PRINCIPAL POSITION YEAR ($) ($)(1) (SHARES) PAYMENTS(2) COMPENSATION(3)
- --------------------------- ---- -------- -------- ------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
J.B. Crowell............... 1995 $200,000 $ 80,000 6,000 17,500 $18,505
President and Chief 1994 200,000 35,000 15,000 -0- 15,165
Executive Officer of 1993 196,562(4) -0- 6,000 -0- 13,696
the Company and Chairman
and Chief Executive
Officer of the Bank
Raymond E. Dellerba........ 1995 150,000 110,000 15,000 17,500 11,746
Executive Vice President 1994 150,000 35,000 20,000 -0- 2,875
of the Company and 1993 131,250 -0- 20,000 -0- N/A
President and Chief
Operating Officer of the
Bank
David R. Brown............. 1995 107,455 65,000 11,000 7,025 18,188
Executive Vice President 1994 99,151 14,050 6,000 -0- 10,108
and Chief Financial 1993 95,000 -0- -0- -0- 7,541
Officer of the Company
and the Bank
John J. McCauley........... 1995 125,000 65,000 7,000 6,275 11,080
Executive Vice President 1994 105,906 36,235(5) 5,000 -0- 4,640
of the Bank 1993 96,000 36,823(5) 9,000 -0- 3,400
William J. Lewis(6)........ 1995 110,000 65,000 7,000 3,800 400
Executive Vice President 1994 52,131 7,600 7,500 N/A N/A
and Chief Credit Officer 1993 N/A N/A N/A N/A N/A
of the Bank
Richard Korsgaard(7)....... 1995 23,638 7,500 5,000 -0- 1,933
Executive Vice President 1994 N/A N/A N/A N/A N/A
of the Bank 1993 N/A N/A N/A N/A N/A
</TABLE>
- ---------------
(1) Following the end of each fiscal year, the Management and Incentive
Committee of the Board of Directors of the Bank determines the bonuses, if
any, to be awarded to Mr. Crowell and Mr. Dellerba, the amounts of which are
subject to approval by the full Board of Directors of the Bank, and the cash
bonuses to be awarded to the other Named Officers under the Bank's Officers'
Incentive Plan (the "Officers' Incentive Plan"), in each case based on the
Bank's performance in such fiscal year. Mr. Crowell and Mr. Dellerba do not
participate in the Officers' Incentive Plan. Amounts shown in this column
are the portion of the bonuses awarded that either are paid on a current
basis to the Named Officers or are contributed to a deferred compensation
plan for the accounts of the Named Officers. Bonuses awarded and paid on a
current basis for 1995 were as follows: Mr. Crowell: $80,000; Mr. Dellerba:
$80,000; Mr. Brown: $45,000; Mr. McCauley: $45,000; Mr. Lewis: $45,000; and
Mr. Korsgaard: $7,500 (Mr. Korsgaard was first employed by the Bank in
October 1995). Bonuses contributed to the Deferred Compensation Plan for the
account of the Named Officers in 1995 were: Mr. Dellerba: $30,000; Mr.
Brown: $20,000; Mr. McCauley: $20,000; and Mr. Lewis: $20,000. No bonuses
were contributed to the Deferred Compensation Plan for the account of any of
the Named Officers in 1994 and no bonuses were awarded or paid on a current
basis or were contributed to the Deferred Compensation Plan in 1993 to or
for the account of any of the Named Officers. No contribution was made to
the Deferred Compensation Plan for the account of Mr. Korsgaard in 1995.
Amounts contributed to the Deferred Compensation Plan vest based on the
duration of the executive's employment with the Bank, at a rate of
7
<PAGE> 11
10% per annum for each full year that the executive has been employed with
the Bank. As a result, once an executive had been employed with the Bank for
ten years, 100% of the bonuses contributed to the Deferred Compensation Plan
for his account in prior years and in the current year would be fully
vested.
(2) In certain instances, the Management and Incentive Committee awards bonuses
which are subject to the approval of the Board of Directors, the payment of
which are contingent upon attainment by the Bank of earnings goals and the
continued employment of the participant over the next two succeeding fiscal
years. The contingent portion of such bonuses is not included in the
Compensation Table as part of annual compensation for the year for which the
contingent award is made. Instead, the contingent bonus award is shown as a
"long-term incentive plan payment" for the year in which the contingency is
satisfied and a payment is made to the Named Officer. For 1995 the Bank
awarded the following contingent bonuses which are not shown in the
Compensation Table above, because they will be paid in 1996 and 1997, as
indicated, but only if the Bank achieves or exceeds its earnings goals, and
if the named participant remains employed by the Bank, over the next two
fiscal years: Mr. Crowell: $40,000 for 1996 and $40,000 for 1997; Mr.
Dellerba: $40,000 for 1996 and $40,000 for 1997; Mr. Brown: $22,500 for 1996
and $22,500 for 1997; Mr. McCauley: $22,500 for 1996 and $22,500 for 1997;
Mr. Lewis: $22,500 for 1996 and $22,500 for 1997; and Mr. Korsgaard: $3,750
for 1996 and $3,750 for 1997. No such contingent bonuses were awarded for
1992 or 1993, and as a result, there were no long-term incentive plan
payments in 1993 or 1994. Contingent bonuses, awarded for the Bank's 1994
performance, were paid to the Named Officers in 1995 as a result of the
achievement of 1995 earnings goals. The amount of those contingent payments,
which are set forth in the Compensation Table, were: $17,500 to each of
Messrs. Crowell and Dellerba; $7,025 to Mr. Brown; $6,275 to Mr. McCauley;
and $3,800 to Mr. Lewis. Mr. Korsgaard received no bonus payment based on
the Bank's 1994 performance.
(3) All Other Compensation for 1995, 1994 and 1993 is comprised of (i) amounts
contributed to the Company's Stock Bonus Plan and to the Company's 401(k)
Plan (the "401k Plan") in 1995, 1994 or 1993 for the account of the Named
Officers, and (ii) earnings on contributions made to the Company's Deferred
Compensation Plan (the "Deferred Compensation Plan") for the accounts of the
Named Officers, as follows: Mr. Crowell: $3,750, $3,750 and $4,497
contributed to the 401k Plan in 1995, 1994 and 1993, respectively, and
$14,755, $11,415 and $9,199 of earnings in 1995, 1994 and 1993,
respectively, on amounts in the Deferred Compensation Plan (Mr. Crowell's
participation in the Deferred Compensation Plan ceased in 1993 and Mr.
Crowell does not participate in the Stock Bonus Plan); Mr. Dellerba: $7,996
and $1,000 contributed to the Stock Bonus Plan, and $3,750 and $1,875
contributed to the 401k Plan in 1995 and 1994, respectively; Mr. Brown:
$7,189 and $1,200 contributed to the Stock Bonus Plan in 1995 and 1994,
respectively, and $2,688, $2,478 and $2,375 contributed to the 401k Plan,
and $8,313, $6,430 and $5,166 of earnings on amounts in the Deferred
Compensation Plan, in 1995, 1994 and 1993, respectively; Mr. McCauley:
$7,781 and $1,400 contributed to the Stock Bonus Plan in 1995 and 1994,
respectively, and $3,300, $3,240 and $3,400 contributed to the 401k Plan in
1995, 1994 and 1993, respectively; and Mr. Korsgaard: $1,333 contributed to
the Stock Bonus Plan and $600 contributed to the 401k Plan in 1995. Except
for Mr. McCauley's participation in the 401k Plan, neither Mr. Dellerba nor
Mr. McCauley were eligible to participate in any of these Plans in 1993, and
Mr. Lewis was not eligible to participate in these Plans in 1994.
(4) Salary figures for Mr. Crowell for 1993 include directors' fees paid to him
by the Company and the Bank from January to March 1993, when the payment of
directors' fees to him ceased.
(5) Mr. McCauley's bonus for 1994 includes, and bonuses for 1993 consist of,
commissions paid by the Bank to him in connection with the production of SBA
loans, as follows: $23,685 in 1994 and $36,823 in 1993. Effective September
1, 1994, this commission program was discontinued and Mr. McCauley became a
participant in the Officers' Incentive Plan.
(6) Mr. Lewis was first employed by the Bank, and was designated as an Executive
Officer, in July 1994. As a result, Mr. Lewis received no compensation from
the Bank in 1993.
(7) Mr. Korsgaard was first employed by the Bank, and was designated as an
Executive Officer, in October 1995. As a result, Mr. Korsgaard received no
compensation in the years prior to 1995. Mr. Korsgaard's base annual salary
is $125,000.
8
<PAGE> 12
OPTION GRANTS
The following table provides information on option grants in fiscal year
1995 to the Named Officers.
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE OF OPTIONS
AT ASSUMED ANNUAL
RATES OF STOCK
PERCENT OF PRICE APPRECIATION
OPTIONS TOTAL OPTIONS FOR OPTION TERM(4)
GRANTED IN IN FISCAL EXERCISE PRICE EXPIRATION -------------------
NAME 1995(1) YEAR 1995(2) ($/SHARE)(3) DATE 5% 10%
- ---------------------------- ----------- ------------- -------------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
J.B. Crowell................ 6,000 4.4% $14.50 10-18-00 $54,810 $138,330
Raymond E. Dellerba......... 10,000 11.00 2-15-00 69,300 174,900
5,000 11.0% 14.50 10-18-00 45,675 115,275
David R. Brown.............. 6,000 11.00 2-15-00 41,580 104,940
5,000 8.1% 14.50 10-18-00 45,675 115,275
John J. McCauley............ 2,000 11.00 2-15-00 13,860 34,980
5,000 5.1% 14.50 10-18-00 45,675 115,275
William J. Lewis............ 2,000 11.00 2-15-00 13,860 34,980
5,000 5.1% 14.50 10-18-00 45,675 115,275
Richard Korsgaard........... 5,000 4.0% 15.00 11-15-00 47,250 119,250
</TABLE>
- ---------------
(1) Options generally become exercisable in cumulative annual installments equal
to 20% of the option shares commencing as of the date of grant. Each option
has a maximum term of five years, subject to earlier termination in the
event of the optionee's cessation of employment with the Company and/or the
Bank.
(2) Options to purchase an aggregate of 136,500 shares were granted to employees
and non-employee directors in fiscal 1995.
(3) The exercise price may be paid in cash, in shares of the Company's Common
Stock valued at fair market value on the date of exercise, or through a
cashless exercise procedure.
(4) There is no assurance that the values that may be realized on exercise of
such options will be at or near the values estimated in the table, which
utilizes arbitrary compounded rates of growth of the price of the Company's
Common Stock of 5% and 10% per year.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table provides information on option exercises in fiscal 1995
by the Named Officers and the value of the unexercised options held by the Named
Officers as of December 31, 1995.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
SHARES DECEMBER 31, 1995 AT DECEMBER 31, 1995
ACQUIRED VALUE ---------------------------- ------------------------------
NAME ON EXERCISE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE(1)
- ----------------------- ----------- ----------- ----------- ------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
J.B. Crowell........... -0- $-0- 11,880 17,820 $ 114,136 $116,464
Raymond E. Dellerba.... -0- -0- 25,300 35,200 210,318 227,812
David R. Brown......... -0- -0- 5,060 13,640 34,064 79,009
John J. McCauley....... -0- -0- 10,780 13,420 89,876 89,902
William J. Lewis....... -0- -0- 4,840 11,110 29,580 58,952
Richard Korsgaard...... -0- -0- 1,100 4,400 2,666 10,664
</TABLE>
- ---------------
(1) The average of the high and low prices of the Company's common stock on
December 31, 1995 on the American Stock Exchange was $16.06.
EMPLOYMENT AGREEMENTS
Mr. Crowell is employed as Chairman and Chief Executive Officer of the Bank
under an Employment Agreement that was entered into in 1993 and was amended in
February 1996 to extend the term of the
9
<PAGE> 13
Agreement from December 31, 1996 to June 15, 1998 (the "Crowell Agreement"). The
Crowell Agreement establishes a minimum annual base salary of $200,000 for all
services to be rendered by Mr. Crowell to the Company and the Bank, including in
his capacity as a member of the Board of Directors of the Company and the Bank.
In addition, Mr. Crowell is entitled to earn a bonus, for each fiscal year that
he is employed, the amount of which will be determined according to a formula
based on the net income of the Bank or other measures of Bank performance for
that year. If Mr. Crowell is terminated by the Company or the Bank without
cause, he would become entitled to receive a lump sum payment equal to the
lesser of twelve months' salary or the balance of the salary payments that would
otherwise have been made during the remaining term of the Crowell Agreement (a
"termination payment"). In the event of a merger or reorganization where the
Company or the Bank is not the surviving party or more than fifty percent of the
stock of the Company or the Bank is converted into cash or securities, or a sale
of all or substantially all of the assets of the Company or the Bank, or the
dissolution or liquidation of the Company or the Bank (collectively, a
"reorganization"), the Crowell Agreement will be binding on the surviving entity
in such reorganization; however, all outstanding options granted to Mr. Crowell
will vest immediately. If Mr. Crowell's employment is terminated subsequent to a
reorganization and prior to the end of the term of his Employment Agreement, the
surviving entity in such reorganization must pay Mr. Crowell $200,000 per year
for the lesser of one year or to age 65, but in either event not less than the
termination payment payable to Mr. Crowell discussed above. Notwithstanding the
foregoing, in the event that proceedings for the liquidation of the Company or
the Bank are commenced by regulatory authorities, the Crowell Agreement will be
terminated and Mr. Crowell will be entitled to receive an amount equal to the
termination payment discussed above.
A salary continuation program also has been established for Mr. Crowell
under which Mr. Crowell (or, in the event of his death, his heirs) will receive
$94,000 per year from the Bank for 15 years following his reaching age 65 or his
death or disability, whichever first occurs.
Mr. Dellerba is employed by the Bank as President and Chief Operating
Officer pursuant to an employment agreement that was entered into in 1993 and
was amended in December 1995 (the "Dellerba Agreement"). The Dellerba Agreement,
as amended, provides for Mr. Dellerba to receive a minimum annual salary of
$162,000 beginning March 1, 1996, for all services rendered by Mr. Dellerba to
the Company and the Bank, including in his capacity as a member of the Board of
Directors of the Company and the Bank. Mr. Dellerba is also entitled to earn an
annual bonus, the amount of which will be determined according to a formula
based on the Bank's earnings or other measures of Bank performance. The term of
the Dellerba Agreement, as amended, automatically extends each year for one
additional year, unless either party gives written notice of non-renewal, in
which case the Dellerba Agreement will terminate on December 31 of the second
calendar year following the calendar year in which such written notice was
given. However, the Bank has the right to terminate the Dellerba Agreement at
any time prior to its expiration, with or without cause. If Mr. Dellerba's
employment is terminated by the Bank without cause, he will be entitled to
receive a termination payment equal to one year's annual base salary then in
effect. In the event of a reorganization, the Dellerba Agreement is binding on
the surviving entity in the reorganization; however, if following a
reorganization, but prior to the expiration of Dellerba Agreement, Mr.
Dellerba's employment is terminated, or he elects to terminate his employment
due to the taking by the surviving entity of any of certain actions, specified
in the Dellerba Agreement, that adversely affects his compensation or his
conditions of employment, Mr. Dellerba would be entitled to receive a lump sum
payment equal to one year of his base salary then in effect. Notwithstanding the
foregoing, in the event that proceedings for the liquidation of the Company or
the Bank are commenced by regulatory authorities, the Dellerba Agreement will be
terminated, and Mr. Dellerba would be entitled to receive an amount equal to the
lesser of six months' base salary at the then-applicable rate, or the remaining
balance payable to Mr. Dellerba under the Dellerba Employment Agreement.
Mr. Brown, Mr. McCauley and Mr. Lewis are presently employed with the Bank
pursuant to Employment Agreements (the "Brown Agreement", the "McCauley
Agreement", and the "Lewis Agreement", respectively), that were approved by the
Bank's Board of Directors in December 1995. The Brown Agreement provides for a
minimum annual base salary of $118,000, beginning March 1, 1996; the McCauley
Agreement provides for a minimum annual base salary of $125,000; and the Lewis
Agreement provides for a minimum annual base salary of $118,000 beginning March
1, 1996. These Employment Agreements also
10
<PAGE> 14
provide that Messrs. Brown, McCauley and Lewis will be entitled to earn annual
bonuses pursuant to the Officers' Incentive Plan. The term of each of these
Employment Agreements automatically extends each year for one additional year,
unless either of the parties to any such Employment Agreement gives written
notice of non-renewal to the other, in which event the term of the Employment
Agreement would end on December 31 of the second calendar year following the
calendar year in which such written notice was given. However, the Bank has the
right to terminate any of these Employment Agreements at any time prior to their
expiration, with or without cause. If the Bank terminates any such Employment
Agreement without cause, the terminated officer will be entitled to receive a
termination payment equal to six months of his base salary then in effect. In
the event of a reorganization of the Bank, the Brown, McCauley and Lewis
Agreements will be binding on the surviving entity in such reorganization. If,
however, any of them is terminated without cause following a reorganization, or
any of them elects to terminate his employment because the surviving entity has
taken any of certain actions, specified in their Employment Agreements, that
adversely affect his compensation or conditions of employment, he would become
entitled to receive a termination payment equal to one year's base salary then
in effect. Notwithstanding the foregoing, in the event that proceedings for the
liquidation of the Company or the Bank are commenced by regulatory authorities,
the Brown, McCauley and Lewis Agreements would be terminated by the Bank, in
which case Messrs. Brown, McCauley and Lewis would each become entitled to
receive an amount equal to the lesser of six months base salary at the then-
applicable rate, or the remaining balance payable to Messrs. Brown, McCauley and
Lewis under the Brown, McCauley and Lewis Agreements, respectively.
Mr. Korsgaard is employed by the Bank as Executive Vice President pursuant
to a three year employment agreement (the "Korsgaard Agreement") that became
effective October 20, 1995, following consummation of the acquisition of
Mariners Bancorp/Mariners Bank. The Korsgaard Agreement establishes a minimum
base salary of $125,000. In addition, Mr. Korsgaard is entitled to receive an
annual bonus pursuant to the Officers' Incentive Plan. In the event Mr.
Korsgaard is terminated by the Bank or any successor to the Bank without cause,
he is entitled to receive a termination payment in an amount equal to the
greater of the balance payable under the Korsgaard Agreement or twelve months of
his then current base salary. The Korsgaard Agreement may not be terminated by
an acquisition or dissolution of the Bank or the Company except in the event
that proceedings for the liquidation of the Company or the Bank are commenced by
regulatory authorities, in which case the Korsgaard Agreement, and all rights
and benefits thereunder, would be terminated.
A salary continuation program has been established for Mr. Korsgaard, under
which Mr. Korsgaard (or, in the event of his death, his heirs) will receive
$65,000 per year from the Bank for 15 years following his reaching age 65 or his
death or disability, whichever first occurs.
COMPENSATION OF DIRECTORS
Each non-employee director, other than the Chairman of the Board, receives
monthly director's fees of $1,100 and $200 for each committee meeting attended,
up to an aggregate of $2,300 per month. The Chairman of the Board of Directors
of the Company receives fees of $2,300 per month and is entitled to the use of a
Company-owned automobile.
CERTAIN TRANSACTIONS
The Bank has had, and expects to have in the future, banking transactions
in the ordinary course of its business with directors, principal shareholders
and their associates on substantially the same terms, including interest rates
and collateral securing the loans, as those prevailing at the same time for
comparable transactions with unaffiliated persons, and which do not involve more
than the normal risk of collectability, nor present other unfavorable features.
The largest aggregate amount of loans which the Bank had outstanding to
directors of the Bank and their associates during the year ended December 31,
1995 was $2,492,217, which represented 8.4% of the Bank's equity capital at the
time such loans were outstanding and includes $301,553 of unused borrowing
capacity under lines of credit established by the Bank.
11
<PAGE> 15
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Management and Incentive Committee of the Bank, which functions as a
compensation committee, is comprised of four directors, Rolf J. Engen, Lynne
Pierson Doti, Warren Fix and Donald E. Sodaro.
REPORT OF MANAGEMENT AND INCENTIVE COMMITTEE
The Management and Incentive Committee is a standing committee of the Board
of Directors of the Bank. The Management and Incentive Committee is responsible
for evaluating and approving compensation policies and programs for the Bank,
which employs all of the Company's executive officers, and for making
determinations regarding the compensation of the Company's executive officers,
subject to review by the full Board of Directors. In fiscal 1995 the members of
the Management and Incentive Committee were Messrs. Engen, Fix, Sodaro and Dr.
Pierson Doti.
The following report is submitted by the members of the Management and
Incentive Committee (the "Committee"), with respect to the executive
compensation policies established by the Committee and approved by the Board of
Directors of the Bank.
In establishing, and also evaluating the effectiveness of, compensation
programs for executive officers, as well as other employees of the Bank, the
Committee is guided by three basic principles:
- The Company and the Bank must be able to attract and retain
highly-qualified and experienced banking professionals with proven
performance records.
- Bonus compensation for executive officers should be tied to the Bank's
performance and financial condition, measured in terms of the Bank's
profitability, return-on-equity, return-on-assets, and asset quality.
- The financial interests of the Company's senior executives should be
aligned with the financial interests of the shareholders, primarily
through stock option grants and other equity-based compensation programs
which reward executives for improvements in operating results and in the
market performance of the Company's common stock.
Attracting and Retaining Executives and Other Key Employees. There is
substantial competition among banks and other financial institutions and service
organizations for qualified banking professionals. In order to retain executives
and other key employees, and to attract additional well-qualified banking
professionals when the need arises, the Company strives to offer salaries and
health care, retirement and other employee benefit programs to its executives
and other key employees which are competitive with those offered by other
financial institutions and service organizations in California.
In establishing salaries for executive officers, the Committee reviews (i)
the historical performance of the executives, and (ii) available information
regarding prevailing salaries and compensation programs at banks and other
financial organizations which are comparable, in terms of asset size,
capitalization and performance, to the Company. Another factor which is
considered in establishing salaries of executive officers is the cost of living
in Southern California where the Company operates, as such cost generally is
higher than in other parts of the country.
In order to attract and retain highly-qualified banking professionals in
the face of competition for their services from other financial institutions,
the Committee believes that it is sometimes prudent, if not necessary, to enter
into multi-year employment contracts with senior executives. The Committee
believes that such contracts benefit the Company because, among other things,
they operate to preclude competing financial institutions from seeking to hire
away valued executives from the Company. In order to mitigate potential adverse
consequences to the Bank of multi-year contracts, the Company utilizes
performance-based compensation programs to provide incentives to such executives
for extraordinary efforts that contribute to improved operating results for the
Company. In addition, the contracts contain provisions that permit the Company
to terminate an executive's employment, at any time, without cause, subject to
the payment of a severance benefit equal to between six and twelve months'
salary, with the exception of Richard Korsgaard's
12
<PAGE> 16
employment agreement which provides that Mr. Korsgaard will receive a severance
benefit equal to his salary otherwise payable under the agreement through
October 20, 1998, or twelve month's salary, whichever is greater.
In accordance with the practice of offering multi-year contracts to retain
the services of senior executives, in 1993 the Bank entered into a multi-year
employment agreement with J.B. Crowell, who has served as the Bank's Chief
Executive Officer since the founding of the Bank in 1972, and amended that
agreement in February 1996, primarily to extend the term of that agreement to
June 15, 1998. Under that employment agreement, Mr. Crowell's base annual salary
is $200,000, the amount of which was determined based on prevailing salaries
being paid by financial institutions in Southern California to chief executives
with experience comparable to Mr. Crowell's, Mr. Crowell's long tenure with the
Bank and the continuity and stability of management that Mr. Crowell's retention
as Chief Executive Officer provides to both the Company and the Bank.
Since February 1993 Raymond E. Dellerba has been employed by the Bank as
its President and Chief Operating Officer under a multi-year employment
agreement, which was amended in December 1995, and which is consistent, in its
terms and operation, with the employment agreements that the Bank has with other
executives. The annual salary established for Mr. Dellerba was based on a review
of prevailing compensation rates in Southern California for banking executives
with Mr. Dellerba's experience.
Performance-Based Compensation. The Committee believes that a senior
executive's annual bonus compensation should be made dependent on the Bank's
profitability and performance measured against annual performance goals
established for the Bank by the Board of Directors. As a result, an Officers'
Incentive Plan has been established under which the annual compensation, in
excess of annual salaries, that is payable to the Named Officers, other than Mr.
Crowell and Mr. Dellerba, is made dependent on the achievement by the Bank of
annual profitability and other performance goals. In addition, although Mr.
Crowell and Mr. Dellerba do not participate in that Plan, the Committee's policy
is to award compensation to them, in excess of their annual salary, if the Bank
achieves or exceeds the annual performance goals established under the Officers'
Incentive Plan.
The Committee has identified several performance factors which affect a
bank's profitability and long term performance, including asset growth, the
quality of the Bank's assets, which consist primarily of loans, and the volume
and mix of deposits which affect the Bank's net interest margin or "spread."
Annual performance goals in each of these areas, as well as goals for
profitability, measured in terms of net earnings, return on equity and return on
assets, are established and weighted, in terms of their importance to the Bank's
performance and financial condition, and if the performance goals are achieved
or exceeded, a percentage of the Bank's earnings in excess of the minimum
earnings goal established for the year is set aside as a pool from which bonuses
are paid. Generally, the more senior the position held by an executive, the
greater the allocation that is made to him or her because, generally, his or her
performance has a greater impact on the Bank's performance.
As a result of the Committee's policy to award bonus compensation to
executive officers when the Bank achieves or exceeds annual performance goals
and the performance-based bonus programs that have been adopted to implement
that policy, executive compensation generally will be higher in those years in
which the Bank achieves or exceeds annual performance goals. On the other hand,
in years in which the Bank has experienced lower than anticipated profit growth,
bonuses and, as a result, total executive compensation tend to be lower. In
1995, cash and deferred bonuses, together with contingent incentives, the
payment of which is dependent on the Bank's performance in 1996 and 1997, were
awarded by action of the Committee to Messrs. Crowell and Dellerba based on the
Bank's performance in 1995. Cash and deferred bonuses, and contingent
incentives, also were awarded to the other executive officers under the
Officers' Incentive Plan as a result of the Bank's performance in 1995. By
comparison in 1993, during which performance goals were not achieved, no cash or
deferred bonuses or contingent incentives were awarded to Mr. Crowell or any
other of the Named Officers, with the exception of Mr. McCauley who received
bonus compensation in the form of commissions related to the production of SBA
loans.
13
<PAGE> 17
Stock Options and Equity-Based Programs. In order to align the financial
interests of senior executives and other key employees with those of the
shareholders, the Company grants stock options to its senior executives and
other key employees on a periodic basis and makes contributions, for the account
of its officers and other employees, to an Employee Stock Ownership Plan (the
"ESOP"). Stock option grants reward senior executives and other key employees
for performance that results in improved market performance of the Company's
stock, which directly benefits all shareholders. Moreover, generally, options
become exercisable in cumulative annual installments, usually over a five-year
period. The Committee believes that this feature of the option grants not only
provides an incentive for senior executives to remain in the employ of the
Company or the Bank, but also makes longer term growth in share prices important
for the executives who receive stock options.
Rolf J. Engen
Lynne Pierson Doti
Warren Fix
Donald E. Sodaro
Notwithstanding anything to the contrary set forth in the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the foregoing Report, and
the Performance Graph on page 15, shall not be incorporated by reference into
any such filings.
14
<PAGE> 18
COMPANY PERFORMANCE
The following graph shows a five-year comparison of cumulative total
returns for the Company, the S&P 500 composite index and an index of peer group
companies published in the Montgomery Securities Western Bank Monitor.
COMPARISON OF CUMULATIVE TOTAL RETURN
(ELDORADO BANCORP, S&P 500, PEER GROUP)
<TABLE>
<CAPTION>
SOUTHERN
MEASUREMENT PERIOD ELDORADO CALIFORNIA LOS ANGELES &
(FISCAL YEAR COVERED) BANCORP PROXY S&P 500 SOUTH
<S> <C> <C> <C> <C>
1990 100 100 100 100
1991 112 101 130 98
1992 116 101 140 87
1993 92 123 154 105
1994 129 140 156 116
1995 218 178 215 166
</TABLE>
Source: Montgomery Securities Western Bank Monitor
The total cumulative return on investment (change in the period-end stock
price plus reinvested dividends) for each of the periods for the Company, the
S&P Composite and the peer group companies is based on the stock price or
composite index at the end of fiscal 1990.
The graph above compares the performance of the Company with that of (i)
the S&P 500 Composite Index; (ii) an index, published in the Montgomery
Securities Western Bank Monitor, which is made up of 13 banks and bank holding
companies, including the Company, that are based and conduct business entirely
or primarily in Southern California; and (iii) an index of banks listed in the
Montgomery Securities Western Bank Monitor, made up of 10 banks and bank holding
companies, including the Company, that are based and conduct business entirely
or primarily in Los Angeles and Southern California.
15
<PAGE> 19
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Based upon its review of the copies of reporting forms furnished to the
Company, or written representations that no annual Form 5 reports were required,
the Company believes that all filing requirements under Section 16(a) of the
Securities Exchange Act of 1934 applicable to its directors, officers and any
persons holding ten percent or more of the Company's Common Stock with respect
to the Company's fiscal year ended December 31, 1995, were satisfied.
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick was selected by the Board of Directors as the Company's
independent public accountants for the fiscal year ended December 31, 1995. The
Company has not yet selected auditors for the fiscal year ending December 31,
1996. It is anticipated that a representative of KPMG Peat Marwick will attend
the meeting, will have an opportunity to make a statement and will be available
to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Any shareholder desiring to submit a proposal for action at the 1997 Annual
Meeting of Shareholders which is desired to be presented in the Company's Proxy
Statement with respect to such meeting should arrange for such proposal to be
delivered to the Company at its principal place of business no later than
November 24, 1996. Matters pertaining to such proposals, including the number
and length thereof, the eligibility of persons entitled to have such proposals
included and other aspects are regulated by the Securities Exchange Act of 1934,
Rules and Regulations of the Securities and Exchange Commission and other laws
and regulations to which interested persons should refer.
OTHER MATTERS
Management is not aware of any other matters to come before the meeting. If
any other matter not mentioned in this Proxy Statement is brought before the
meeting, the person named in the enclosed form of proxy will have discretionary
authority to vote all proxies with respect thereto in accordance with their
judgment.
By Order of the Board of Directors
ELAINE P. CROUCH SIG
----------------------------------
Elaine P. Crouch
Secretary
March 29, 1996
The Annual Report to Shareholders of the Company for the fiscal year ended
December 31, 1995, is being mailed concurrently with this Proxy Statement to all
shareholders of record as of February 26, 1996. The Annual Report is not to be
regarded as proxy soliciting material or as a communication by means of which
any solicitation is to be made.
COPIES OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K, TO BE FILED ON OR BEFORE APRIL 1, 1996, WILL BE
PROVIDED TO SHAREHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST TO THE SECRETARY,
ELDORADO BANCORP, C/O ELDORADO BANK ADMINISTRATION, 19100 VON KARMAN AVENUE,
SUITE 550, IRVINE, CALIFORNIA 92715.
16
<PAGE> 20
THE DIRECTORS RECOMMEND A VOTE "FOR" PROPOSAL NO. 1
1. ELECTION OF DIRECTORS:
Nominees: Michael B. Burns, J.B. Crowell, Raymond E. Dellerba, Julia M.
DiGiovanni, Lynne Pierson Doti, Rolf J. Engen, Warren Finley, Warren D. Fix,
Richard Korsgaard, Donald E. Sodaro and George H. Wells.
FOR WITHHOLD
all nominees AUTHORITY
listed in 1 (except to vote for
as marked to the all nominees
contrary below) listed in 1.
/ / / /
(INSTRUCTION: To withhold authority to vote for any nominee, print that
nominee's name in the space provided below.)
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2. IN THEIR DISCRETION, ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
SHAREHOLDER LISTED BELOW, WHERE NO DIRECTION IS GIVEN, SUCH SHARES WILL BE
VOTED "FOR" THE ELECTION OF THE DIRECTORS NAMED ON THIS PROXY. THIS PROXY
CONFERS DISCRETIONARY AUTHORITY TO CUMULATE VOTES FOR ANY OR ALL OF THE
NOMINEES FOR ELECTION OF DIRECTORS FOR WHICH AUTHORITY TO VOTE HAS NOT BEEN
WITHHELD.
Date: , 1996
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(Signature of Stockholder)
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Please sign your name exactly as it appears
hereon. Executors, administrators, guardians,
officers of corporations, and others signing
in a fiduciary capacity should state their full
titles as such.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING,
YOU ARE URGED TO SIGN AND RETURN THIS PROXY,
WHICH MAY BE REVOKED AT ANY TIME PRIOR TO ITS
USE.
IMPORTANT -- PLEASE SIGN AND DATE AND RETURN PROMPTLY
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FOLD AND DETACH HERE
[LOGO]
ELDORADO BANCORP
ANNUAL MEETING OF SHAREHOLDERS
APRIL 17, 1996
9:00am
To be Held at:
Sheraton Newport Hotel
(MacArthur & Birch)
4545 MacArthur Boulevard
Newport Beach, California
If you plan to attend the Annual Meeting, would you please RSVP to
Cindy Harrison at (714) 798-1133, extension 240
<PAGE> 21
PROXY CARD
ELDORADO BANCORP
PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS
APRIL 17, 1996
The undersigned hereby nominates, constitutes and appoints George H. Wells,
Donald E. Sodaro and J.B. Crowell, and each of them, individually, the
attorney, agent and proxy of the undersigned, with full power of substitution,
to vote all stock of ELDORADO BANCORP ("the Company") which the undersigned is
entitled to represent and vote at the 1996 Annual Meeting of Shareholders of
the Company to be held at Sheraton Newport Hotel, 4545 MacArthur Boulevard,
Newport Beach, California, on April 17, 1996 at 9:00 A.M., and at any and all
adjournments or postponements thereof, as fully as if the undersigned were
present and voting at the meeting, as follows:
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FOLD AND DETACH HERE
