SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. )
Filed by the Registrant [x ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
CU BANCORP
................................................................................
(Name of Registrant as Specified In Its Charter)
ANITA Y. WOLMAN, ESQ.
................................................................................
(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), 14a-6(i)(1), or 14a(6(j)(2).
[ ] $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:(1)
................................................................................
(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
<PAGE>1
10-11(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 of Registration Statement No.:
.......................................................................
3) Filing Party:
.......................................................................
4) Date Filed:
.......................................................................
April __, 1995
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders
of CU Bancorp (the "Company") which will be held at the Warner Center Marriott
Hotel, 21850 Oxnard Street, Woodland Hills, California on Thursday, June 29,
1995 at 8:30 a.m.
At the meeting, you will be asked to elect as directors the seven
individuals nominated by the Board of Directors. You will also be asked to
approve the 1995 CU Bancorp-Restricted Stock Plan. More detailed information
about the nominees, the specified proposals and other matters regarding the
Annual Meeting is included in the attached Proxy Statement.
Whether or not you plan to attend, please sign and return the
accompanying proxy card in the postage-paid envelope as soon as possible so that
your shares will be represented at the meeting. The Board of Directors suggests
that you vote "FOR" each proposal listed on the proxy card. If you attend the
meeting and ask to vote in person, you may withdraw your proxy then. It is
important that your stock be represented.
<PAGE> 2
Paul W. Glass
Chairman of the Board
<PAGE> 3
CU BANCORP
16030 VENTURA BOULEVARD
ENCINO, CALIFORNIA 91436
(818) 907-9122
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of CU Bancorp (the "Company") will
be held at the Warner Center Marriott Hotel, 21850 Oxnard Street, Woodland
Hills, California on Thursday, June 29, 1995 at 8:30 a.m., for the following
purposes:
1. Election of Directors. To elect seven persons to serve as
directors of the Company until the next Annual Meeting of Shareholders and until
their respective successors shall be elected and qualified. The following
persons are the Board of Directors' nominees:
Kenneth L. Bernstein
Stephen G. Carpenter
Richard H. Close
Paul W. Glass
David Nathanson
Ronald S. Parker
David I. Rainer
2. To approve the CU Bancorp 1995 Restricted Stock Plan.
3. Other Business. To consider and transact such other business as
may properly be brought before the meeting and any adjournment or adjournments
thereof.
Shareholders of record at the close of business on May 8, 1995 are
entitled to notice of and to vote at the meeting.
________________________________________________________________________________
Provisions of the Bylaws of CU Bancorp govern nominations for election
of members of the Board of Directors as follows:
Section 2.11. Nomination of Directors. Nominations for election of members of
the board of directors may be made by the board of directors or by any
shareholder of any outstanding class of capital stock of the corporation
entitled to vote for the election of directors. Notice of intention to make any
nominations (other than for persons named in the notice of the meeting at which
such nomination is to be made) shall be made in writing and shall be delivered
or mailed to the president of the corporation by the later of the close of
business twenty-one (21) days prior to any meeting of shareholders called for
the election of directors or ten (10) days after the date of mailing notice of
the meeting to shareholders. Such notification shall contain the following
information to the extent known to the notifying shareholder: (a) the name and
address of each proposed nominee; (b) the principal occupation of each proposed
<PAGE> 4
nominee; (c) the number of shares of capital stock of the corporation owned by
each proposed nominee; (d) the name and residence address of the notifying
shareholder; (e) the number of shares of capital stock of the corporation owned
by the notifying shareholder; (f) with the written consent of the proposed
nominee, a copy of which shall be furnished with the notification, whether the
proposed nominee has ever been convicted of or pleaded nolo contendere to any
criminal offense involving dishonesty or breach of trust, filed a petition in
bankruptcy, or been adjudged bankrupt. The notice shall be signed by the
nominating shareholder and by the nominee. Nominations not made in accordance
herewith shall be disregarded by the chairman of the meeting, and upon his
instructions, the inspectors of election shall disregard all votes cast for each
such nominee. The restrictions set forth in this paragraph shall not apply to
nomination of a person to replace a proposed nominee who has died or otherwise
become incapacitated to serve as a director between the last day for giving
notice hereunder and the date of election of directors if the procedure called
for in this paragraph was followed with respect to the nomination of the
proposed nominee.
YOU ARE REQUESTED TO DATE, EXECUTE AND RETURN THE ENCLOSED PROXY WITHOUT
DELAY, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING. YOU MAY REVOKE YOUR PROXY
AT ANY TIME PRIOR TO THE TIME IT IS VOTED, EITHER BY ATTENDING THE MEETING AND
ELECTING TO VOTE IN PERSON, OR BY FILING WITH THE SECRETARY OF THE COMPANY,
PRIOR TO THE MEETING, A WRITTEN NOTICE OF REVOCATION OR A DULY EXECUTED PROXY
BEARING A LATER DATE.
BY ORDER OF THE BOARD OF DIRECTORS
Richard H. Close
Secretary
Dated: May _____, 1995
Encino, California<PAGE> 5
CU BANCORP
16030 VENTURA BOULEVARD
ENCINO, CALIFORNIA 91436
(818) 907-9122
PROXY STATEMENT
INTRODUCTION
This proxy statement is furnished in connection with the solicitation of
proxies to be used by the Board of Directors of CU Bancorp (the "Company") at
the Annual Meeting of Shareholders of the Company to be held at the Warner
Center Marriott Hotel, 21850 Oxnard Street, Woodland Hills, California on
Thursday, June 29, 1995 at 8:30 a.m., and at any adjournments thereof (the
"Meeting").
This Proxy Statement and the accompanying form of proxy are being mailed to
shareholders on or about May __, 1995.
Revocability of Proxies
A form of proxy for voting your shares at the Meeting is enclosed. Any
shareholder who executes and delivers a proxy has the right to revoke it at any
time before it is voted by filing with the Secretary of the Company an
instrument revoking it or a duly executed proxy bearing a later date. In
addition, the powers of the proxy holders will be revoked if the person
executing the proxy is present at the Meeting and advises the Chairman of his or
her election to vote in person. Unless revoked or the shareholder directs
otherwise, all shares represented by a properly executed proxy received prior to
the Meeting will be voted as provided therein.
The proxy also confers discretionary authority to vote the shares
represented thereby on any matter that was not known at the time this Proxy
Statement was mailed which may properly be presented for action at the Meeting.
Costs of Solicitations of Proxies
The enclosed proxy is being solicited by the Company's Board of Directors.
The principal solicitation of proxies is being made by mail, although additional
solicitation may be made by telephone, telegraph or personal visits by
directors, officers and employees of the Company and its subsidiary, California
United Bank (the "Bank"). The Company has engaged the services of D.F. King &
Company to assist in the solicitation of proxies. It is estimated that the
total fees paid in connection with this solicitation will be $5,000. The total
expense of this solicitation will be borne by the Company. Expenses may include
reimbursement paid to brokerage firms and others for their costs in forwarding
soliciting material and such expenses as may be paid to any proxy soliciting
firm engaged by the Company.
<PAGE> 6
VOTING SECURITIES
Outstanding Shares and Record Date
Only shareholders of record of the Company's Common Stock as of the close
of business on May 8, 1995 ("Record Date") will be entitled to notice of and to
vote at the Meeting. As of the Record Date, the Company had _________ shares of
Common Stock outstanding.
All Common Stock figures throughout this Proxy Statement have been adjusted
to reflect stock splits and dividends.
Voting Rights
Each shareholder of record is entitled to one vote, in person or by proxy,
for each share held on all matters to come before the Meeting, except that
shareholders may have cumulative voting rights with respect to the election of
directors. Pursuant to California law, no shareholder can cumulate votes unless
prior to the voting at the Meeting, a shareholder has given notice of the
shareholder's intention to cumulate the shareholder's votes at such Meeting. If
any shareholder has given such notice, all shareholders may cumulate their votes
for candidates in nomination. The Board of Directors does not, at this time,
intend to give such notice or to cumulate the votes it may hold pursuant to the
proxies solicited herein unless the required notice by a shareholder is given,
in which event votes represented by proxies delivered pursuant to this Proxy
Statement may be cumulated in the discretion of the proxy holders, in accordance
with the recommendations of the Board of Directors. Therefore, discretionary
authority to cumulate votes in such event is solicited in this Proxy Statement
and return of the proxy shall grant such authority, unless otherwise directed.
Cumulative voting allows a shareholder to cast a number of votes equal to
the number of directors to be elected multiplied by the number of votes held in
his or her name on the Record Date. This total number of votes may be cast for
one nominee or may be distributed among as many candidates as the shareholder
desires. The seven candidates receiving the highest number of votes are
elected.
<PAGE> 7
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of March 31, 1995
pertaining to beneficial ownership of Common Stock by persons known to the
Company to own five percent or more of such stock, current directors of the
Company, all nominees to be directors of the Company and all directors and
officers of the Company as a group. The information contained herein has been
obtained from the Company's records, from information furnished directly by the
individual or entity to the Company, or from various filings made by the named
individuals with the Securities and Exchange Commission.
The Company is of the opinion that there is no person who possesses,
directly or indirectly, the power to direct or cause to direct the management
and policies of the Company, nor is it aware of the existence of a group of
persons formed for such purpose, whether through the ownership of voting
securities, by contract, or otherwise.
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial Percent of
Name of Beneficial Relationship With Ownership(2)(3)(4) Class(1)
Owner Company
<S> <S> <C> <S>
Kenneth L. Bernstein Director, Nominee 29,114 to be
complet-ed
after
record
date
Stephen G. Carpenter Director, 72,953
Nominee,
President, Chief
Executive Officer
Richard H. Close Director, Nominee 116,486
Paul W. Glass Chairman, 100,028
Director Nominee
M. David Nathanson Director 97,145
Ronald S. Parker Director, Nominee 7,250
David I. Rainer Director, 52,179
Nominee, Chief
Operating Officer
Dimensional Fund Beneficial Owner 278,496
Advisors Inc. of More Than 5%
All current executive 491,636
officers and directors
as a group (8 in
number)(6)(9)
</TABLE>
<PAGE>8
________________________________________________________________________________
(1) Only Common Stock is outstanding.
(2) Includes shares beneficially owned, directly and indirectly, together
with associates. Subject to applicable community property laws and shared
voting and investment power with a spouse, the persons listed have sole
voting and investment power with respect to such shares unless otherwise
noted.
<PAGE> 9
(3) Includes as if currently outstanding the following shares subject to
options which are exercisable within 60 days.
<TABLE>
<CAPTION>
Director Options Exercisable Warrants Exercisable
<S> <C> <C>
Bernstein 1,250 0
Carpenter 67,453 0
Close 16,370 0
Glass 16,370 0
Parker 1,250 0
Nathanson 16,370 0
Rainer 34,370 0
</TABLE>
(4) Shares issuable pursuant to options which may be exercised within 60 days
of the Record Date are deemed to be issued and outstanding in calculating the
percentage ownership of those individuals possessing such interest, but not
for any other individuals.
(5) Includes __________ shares held by the Glass, and Rosen Profit Sharing
Plan of which Mr. Glass is a trustee.
(6) The listing of individuals as executive officers in this table or
elsewhere in this Proxy Statement should not be interpreted as an indication
that such individuals are considered to be executive officers of the Company
or the Bank for any other purposes.
(7) Includes as if currently outstanding 185,196 shares subject to options
held by directors and officers which are exercisable within 60 days from
March 31, 1995.
(8) Information is based on filing with Securities and Exchange Commission
(9) The address of all listed individuals, with the exception of Dimensional
Fund Advisers, Inc. is c/o CU Bancorp, 16030 Ventura Boulevard, Encino,
California 91436. The address of Dimensional Fund Advisers, Inc. is 1299
Ocean Avenue, 11th Floor, Santa Monica, California 90401.
________________________________________________________________________________
DIRECTORS AND EXECUTIVE OFFICERS
Board of Directors and Nominees
<PAGE> 10
The Bylaws of the Company provide that the number of directors of the
Company may be no less than seven and no more than thirteen, with the exact
number to be fixed by resolution of the Board of Directors or the shareholders.
The number of directors is presently fixed at seven.
The persons named below have been nominated for election as directors
to serve until the next Annual Meeting and until their successors are duly
elected and qualified. Votes will be cast in such a way as to effect the
election of all nominees or as many as possible under the rules of cumulative
voting. If any nominee should become unable or unwilling to serve as a
director, the proxies will be voted for such substitute nominee as shall be
designated by the Board of Directors or the number of nominees may be reduced.
The Board presently has no knowledge that any of the nominees will be unable or
unwilling to serve. The procedures for nominating directors, other than by the
Board, are set forth in the Bylaws and are included in the Notice of Annual
Meeting. This Bylaw provision is designed to give the Board of Directors
advance notice of competing nominations, if any, and the qualifications of
nominees, and may have the effect of precluding third-party nominations if not
followed. The seven nominees receiving the highest number of votes at the
Meeting shall be elected.
The following table provides information as of the Record Date with
respect to each person nominated and recommended to be elected by the current
Board of Directors of the Company. See "SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT" for information pertaining to stock ownership
<PAGE> 11
of the nominees.
<TABLE>
<CAPTION>
Position Position Director
and Office and Office of Company
Name Age with the with the and Bank
Company Bank since:
<S> <C> <S> <S> <C>
Kenneth L. Bernstein 51 Director Director 1994
Stephen G. Carpenter 54 Director, Chairman, 1992
President, Chief
Chief Executive
Executive Officer
Officer
Richard H. Close 49 Director, Director, 1981
Secretary Secretary
Paul W. Glass 48 Chairman Director 1984
M. David Nathanson 64 Director Director 1981
Ronald S. Parker 49 Director Director 1993*
David I. Rainer 37 Director, Director, 1992
Chief President,
Operating Chief
Officer Operating
Officer
</TABLE>
None of the directors or officers of the Company or the Bank were selected
pursuant to any arrangement or understanding other than with the directors and
officers of the Company and the Bank acting in their capacities as such. There
are no family relationships between any two or more of the directors, officers,
or persons nominated or chosen by the Board of Directors to become a director or
officer and none serve as directors of any company required to report under the
Securities Exchange Act of 1934, as amended, or any investment company
registered under the Investment Company Act of 1940, as amended.
Set forth below are brief summaries of the background and business
experience, including principal occupation, of the director nominees.
KENNETH L. BERNSTEIN, was elected to the Board of the Company and the Bank
in December 1993, and assumed the positions in February 1994. He is the
President of BFC Financial Corporation and has served in such capacity since
1965. BFC Financial Corporation performs a variety of service for both the
finance industry and clients of that industry.
STEPHEN G. CARPENTER, joined the Bank in 1992 from Security Pacific
National Bank where he was Vice Chairman in charge of middle market lending from
July 1989 to June 1992. Mr. Carpenter was previously employed at Wells Fargo
Bank from July 1980 to July 1989, where he was an Executive Vice President. He
assumed the role of Chairman of the Bank in February, 1994.
<PAGE> 12
RICHARD H. CLOSE has been a principal in the law firm of Shapiro, Posell,
Rosenfeld & Close, a Professional Corporation, in Los Angeles, California, since
1977.
PAUL W. GLASS is a certified public accountant and has been a principal in
the accountancy firm of Glass & Rosen, in Encino, California, since 1980.
M. DAVID NATHANSON was formerly President of Nathanson, Lewis & Harris
Advertising until 1989. He is currently retired.
RONALD S. PARKER has been the Chairman of Parker, Mulcahy & Associates, a
regional merchant banking firm, since May 1992. Prior to that he was the
Executive Vice President and Group Head of the Corporate Banking Group of
Security Pacific National Bank from March of 1991 to May of 1992. He held a
similar position at Wells Fargo National Bank from 1984 to 1991. *Mr. Parker
resigned from the Board in December 1993. He was reappointed in 1994.
DAVID I. RAINER was appointed Executive Vice President of the Bank in June
1992 and assumed the position of Chief Operating Officer in late 1992. He
assumed the title of President of the Bank in February, 1994. From July 1989 to
June 1992, Mr. Rainer was employed by Bank of America (Security Pacific
National Bank) where he held the position of Senior Vice President. From March
1989 to July 1989, Mr. Rainer was a Senior vice President at Faucet & Company,
where he co-managed a stock and bond portfolio. From July 1982 to March 1989,
Mr. Rainer was employed by Wells Fargo Bank, where he held the positions of Vice
President and Manager.
No director, officer or affiliate of the Company or of the Bank, no owner
of record or beneficially of more than five percent of any class of voting
securities of the Company or no associate of any such director, officer or
affiliate is a party adverse to the Company or the Bank in any material pending
legal proceedings to which the Company or the Bank is a party.
THE BOARD OF DIRECTORS INTENDS TO VOTE ALL PROXIES HELD BY IT IN FAVOR OF
ELECTION OF EACH OF THE NOMINEES. YOU ARE URGED TO VOTE FOR THE SEVEN NOMINEES
SET FORTH HEREIN TO SERVE UNTIL THE NEXT ANNUAL MEETING OF SHAREHOLDERS AND
UNTIL THEIR RESPECTIVE SUCCESSORS SHALL BE ELECTED AND QUALIFIED: KENNETH L.
BERNSTEIN, STEPHEN G. CARPENTER, RICHARD H. CLOSE, PAUL W. GLASS, M. DAVID
NATHANSON, RONALD S. PARKER AND DAVID I. RAINER.
Committees of the Board of Directors; Director Attendance
The Board of Directors maintains the following committees, which perform
the functions and were comprised during 1994 of the members listed below:
<TABLE>
<CAPTION>
Functions;
Name Number of Meetings Members
<S> <S> <S>
Audit Committee Monitors significant accounting policies; Glass (Chair)
approves services rendered by the auditors; Close
reviews audit and management reports;
makes recommendations regarding the
appointment of independent auditors
and the fees payable for their services.
Met ___ times during 1994.
<PAGE>13
Compensation Determines compensation of Glass
executive
Committee officers. See page 17 Parker
herein.
</TABLE>
The Company does not have a Nominating Committee. The Board of Directors
performs the functions of this committee. The Board of Directors will consider
nominees recommended by security holders, in accordance with the procedures set
forth in the Bylaws, which are set forth in this Proxy Statement. The Board of
Directors of the Bank maintains regular Audit, Executive, Loan, Compensation,
Investment and Community Reinvestment committees.
During 1994, the Company's Board of Directors held 12 regularly scheduled
meetings and ___ special meetings. Each director attended at least 75% of the
aggregate of (1) the total number of meetings of the Board of Directors and
(2) the total number of meetings of committees of the Board on which they served
(during the period for which they served).
Executive Officers
Set forth below is certain information as of the Record Date with respect
to each of the executive officers of the Company as of the Record Date.
<TABLE>
<CAPTION>
Position and Position and
Offices with Offices with Officer
Name Age the the Bank Since
Company
<S> <C> <S> <S> <C>
STEPHEN G. CARPENTER 55 Director, Chairman, 1992
Chief Chief
Executive Executive
Officer Officer
DAVID I. RAINER 38 Director, Director, 1992
Chief President,
Operating Chief
Officer Operating
Officer
ANNE WILLIAMS 37 Chief Credit Chief Credit 1992
Officer Officer
PATRICK HARTMAN 45 Chief Chief 1992
Financial Financial
Officer Officer
</TABLE>
Set forth below are brief summaries of the background and business
experience, including principal occupation, of the executive officers of the
Company who have not previously been discussed herein.
PATRICK HARTMAN has been employed by the Bank since November, 1992. Prior
to assuming his present positions he was Senior Vice President/Chief Financial
<PAGE> 14
Officer for Cenfed Bank for a period during 1992. Mr. Hartman held the post of
Senior Vice President/Chief Financial Officer of Community Bank, Pasadena,
California, for thirteen years.
ANNE WILLIAMS joined the Bank in 1992 as Senior Loan Officer. She was
named to the position of Chief Credit Officer in July 1993. Prior to that time
she spent five years at Bank of America / Security Pacific National Bank, where
she was a credit administrator in asset based lending, for middle market in the
Los Angeles Area. Ms. Williams was trained at Chase Manhattan Bank in New York,
and was a commercial lender at Societe Generale in Los Angeles and Boston Five
Cents Savings Bank where she managed the corporate lending group.
Compensation of Directors and Executive Officers
The following information is furnished with respect to (i) the chief
executive officer of the Corporation and (ii) each of the other executive
officers of the Corporation (including officers of the Bank who may be deemed to
be executive officers of the Corporation), who were serving as executive
officers at December 31, 1994 (the "Named Officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation Awards
Name and Principal Year Salary Bonus Other Annual Options LTIP All Other
Position Compensation / Sar's Payouts Compensation
<S> <C> <C> <C> <C> <C> <C> <C>
Stephen G. Carpenter 1992 $144,872 $50,000(3) $ 7,000(2) 74,000 0 0
Chief Executive 1993 $250,000 $50,000(3) $12,000(2) 25,000 $1,882(5)
Officer / 1994 $256,250 $50,000 $13,440(2) 100,000 $2,250(5)
Chief Executive
Officer - California
United Bank
David I. Rainer 1992 $108,333 $ 50,000 $ 5,000(2) 55,000 0 0
Chief Operating 1993 $200,000 $ 100,000 $12,000(2) 25,000 $3,000(5)
Officer / President 1994 $205,000 $ 50,000 $12,330(2) 75,000 $2,250(5)
and Chief Operating
Officer - California
United Bank
Patrick Hartman 1993 $138,000 $ 0 $ 8,450(2) 20,000 0 $1,439
Senior Vice President 1994 $140,021 $13,000 $ 8,653(2) 10,000 $2,085(5)
Chief Financial
Officer / Chief
Financial Officer -
California
United Bank
Anne Williams 1993 $103,400 $25,000 $ 7,800(2) 5,000 0 $2,085(5)
Executive Vice 1994 $124,000 $15,000 $ 8,092(2) 10,000
President
Chief Credit Officer
/ Chief Credit Officer
- - California United
Bank
</TABLE>
<PAGE> 15
(1) The Company provides memberships in certain clubs for certain executives,
the use of which primarily relates to Company business. The value of the
personal use, if any, of all such benefits cannot be specifically determined and
is not reported in the table.
(2) Consists of amounts paid for automobile allowances and term life insurance.
(3)These amounts were signing bonuses, as more fully discussed herein in
the section entitled "Other Compensation".
(4) One half of this amount was a signing bonus, see above. The remainder was a
merit bonus.
(5) Consists of the Company's matching portion of 401-K Plan
contributions.
<PAGE> 16
STOCK OPTIONS
The table on the following page contains information concerning the grant of
stock options during the fiscal year ended December 31, 1994 to the Named
Executives:
<TABLE>
<CAPTION>
OPTION / SAR GRANTS IN THE LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
FOR THE OPTION TERM
Name OPTIONS/SARS % OF TOTAL EXERCISE EXPIRATION 5%($) 10%($)
GRANTED OPTIONS/SARS OR BASE DATE
#(1)(2)(3)(4) GRANTED TO PRICE
EMPLOYEES IN ($ / SH)
FISCAL YEAR
<S> <C> <C> <C> <C> <C> <C>
Stephen Carpenter 100,000 36.45% $6.625 3/29/04 $416,642.69 $1,055,854.38
David Rainer 75,000 28.09% $6.625 3/29/04 $312,482.02 $ 791,890.78
Patrick Hartman 10,000 3.75% $6.625 3/29/04 $ 41,664.27 $105,585.44
Anne Williams 10,000 3.75% $6.625 3/29/04 $ 41,664.27 $105,585.44
</TABLE>
(1) The options are exercisable in 20% increments commencing one year subsequent
to grant and are exercisable over a six year period, provided however, that the
options shall vest fully upon the occurrence of certain significant events that
include a merger or dissolution of the Company or sale of substantially all the
Company's assets. As of March 31, 1995 options equal to the amounts set forth
in the section herein entitled "Security Ownership of Certain Beneficial Owners
and Management", above were vested. The vested portion of each option may be
exercised at any time prior to its expiration by tendering the exercise price in
cash, check or in Shares of Common Stock, valued at fair market value on the
date of exercise. Each option will terminate three months after termination of
employment for any reason other than death or disability. In the event of
termination due to death or disability, the option will terminate no later than
one year after such termination. Each option is not transferable other than by
<PAGE> 17
will or the laws of distribution and is not exercisable by anyone other than the
optionee during his lifetime. If the outstanding shares of stock of the Company
are increased, decreased or changed into or exchanged for, a different number or
kind of shares or securities of the Company, without receipt of consideration by
the Company, a corresponding adjustment changing the number or kind of shares
and the exercise price per share allocated to unexercised options shall be made.
Subject to certain limitations in the Plan, each option may be amended by mutual
agreement of the optionee and the Company.
(2) The exercise price of all options is adjustable in connection with stock
dividends, stock splits and similar events.
(3) The Potential Realizable Value is the product of (a) the difference between
(i) and the product of the closing market price per share at the grant date
and the sum of (A) 1 plus (B) the assumed rate of appreciation of the Common
Stock compounded annually over the term of the option and (ii) the per share
exercise price of the option and (b) the number of shares of Common Stock
underlying the option at December 31, 1993. These amounts represent certain
assumed rates of appreciation only. Actual gains, if any, on stock option
exercises are dependent on a variety of factors, including market conditions and
the price performance of the Common Stock. There can be no assurance that the
rate of appreciation presented in this table will be achieved.
(4) Reflects the number of shares of Common Stock underlying the options
granted to the Named Executives during the year. Each of the options was
granted pursuant to the Company's 1983, 1985, or 1993 Stock Option Plans.
No options were exercised during 1994 by any of the named parties in the
Compensation Table. No exercise price of any option previously granted to any
executive officer was adjusted or amended ("repriced") during 1994.
<TABLE>
<CAPTION>
AGGREGATED FISCAL YEAR
END OPTION VALUES
Number of Unexercised Value of Unexercised
Options at 12/31/94 In-the-money Options
` at 12/31/94
Name Exercisable / Unexercisable Exercisable / Unexercisable
<S> <C> <C> <C> <C>
S. Carpenter 39,600 / 159,400 $66,850 / $112,775
D. Rainer 31,429 / 123,571 $ 55,111 / $ 92,044
Patrick Hartman 3,999 / 26,001 $ 750 / $ 5,000
Anne Williams 7,000 / 23,000 $ 12,375 / $ 20,750
</TABLE>
<PAGE> 18
DEFERRED COMPENSATION PLAN
In December of 1992, the Bank terminated its deferred compensation plan
whereby eligible senior officers and directors of the Bank were entitled to
defer certain amounts of compensation and received limited matching amounts from
the Bank. All participants were paid in full. No compensation was received by
the parties named in the Summary Compensation Table.
OTHER MATTERS RELATED TO COMPENSATION
Other Compensation / Golden Parachutes
Mr. Carpenter and Mr. Rainer do not have employment contracts, However, in
the event that there is a change in control ("Change of Control) of the Bank or
its parent company (including a change of more than 50% of the current
shareholders of the Company), Mr. Carpenter and Mr. Rainer will each be entitled
to any accrued but unpaid bonus at that time. Additionally, in the event of a
Change of Control, if a position commensurate with either of their current
positions with the Bank is not offered and either elects to resign, the Bank
will pay the resigning party, subject to non-disapproval by the regulators, 12
months' compensation.
During 1993, the Bank sold its mortgage origination network and certain
related loan production offices. In connection with that transaction,
compensation was required by prior agreement to be paid to the two officers who
had founded the mortgage banking division and who managed that business with
regard to the value of the mortgage servicing portfolio (which was retained by
the Bank) and related to the profitability of the division. As a result, each
of Messrs. Douglas Jones and Daniel LuVisi received total compensation of
$900,507 for the period January 1, 1993 through the sale date of November 10,
1993, including $714,126 related to bonuses and other payments based on
profitability and value of the mortgage servicing portfolio. Messrs. Jones and
LuVisi resigned from their positions with the Bank concurrently with the sale of
the mortgage origination network, to be employed by the purchaser of the
network.
<PAGE> 19
Compensation of Directors
Directors of the Company receive no compensation for attending meetings of
the Board of Directors. However, the directors of the Company also serve as
directors of the Bank. The Bank paid the sum of between $3,800 and $1,600 per
month during 1993 to each director of the Bank, depending on the number and type
of meetings attended by the director. The Director Compensation Plan ties
director compensation to board and committee meeting attendance and is also
designed to be substantially similar in total compensation to similar banking
institutions. Directors who are also salaried employees of the Bank do not
receive any additional compensation for activities as directors. Eligible
directors receive: (i) $1,000 per board meeting; and (ii) $200 per committee
meeting (for committees for which they are members). During 1994, director
compensation ranged from $22,600 at the highest to $15,600 at the least, for
the entire year, and totalled $130,200 in the aggregate for the year 1994.
Special Stock Option Plan
On October 20, 1987, the shareholders of the Company approved the 1987
Special Stock Option Plan ("Special Plan") for the Company's directors, to
encourage them to continue as directors, give them additional incentive as
directors and reward them for past services. This Special Plan is limited to
directors of the Company and the Bank and provides for the issuance of 120,960
authorized but previously unissued shares of Common Stock. Only options which
do not qualify as "incentive stock options" ("Nonstatutory Stock Options") under
Section 422A of the Internal Revenue Code of 1986, as amended (the "Code"), may
be issued. Pursuant to the shareholders' approval of the Special Plan, each
then current director received options to purchase 15,120 shares. There are no
additional options currently available for grant under the Special Plan. The
majority of the current directors do not have any special options, although
Messrs. Carpenter and Rainer have employee stock options. Options terminate 90
days after a director ceases being a director.
The Special Plan provides that the exercise price shall not be less than
100% of the fair market value of the shares on the day the options are granted.
On October 20, 1987, when the shareholders approved the Special Plan, the
directors received such options with an exercise price of $5.791 per share. The
options have an exercise period of ten years and are currently fully vested.
Options granted under the Special Plan are nontransferable (other than by
the laws of descent and distribution) and may not be exercised more than three
months after termination of directorship, except in the case of the death or
disability of an optionee. In such event, the option remains exercisable for
one year to the extent it was exercisable at the date of death or disability.
Pursuant to the Special Plan, payment for the exercise of options must be
received in full prior to the issuance of shares. Payment may be made (a) in
cash, (b) by delivery of shares of Common Stock previously owned by the optionee
(to the extent legally permissible), or (c) in a combination of common Stock and
cash. The Special Plan also enables an optionee the possibility to satisfy tax
withholding amounts due upon exercise with shares of Common Stock rather than
cash, by either delivering already owned shares of Common Stock or withholding
from the shares of Common Stock to be issued upon exercise that number of shares
<PAGE> 20
which, based on the value of the Common Stock, would satisfy the tax withholding
amounts due. Since the Common Stock is listed on NASDAQ, the value of the
Common Stock delivered as payment or withheld is deemed to be the closing price
of the stock on the date of exercise or, if no sale occurred on such date, the
nearest preceding day on which a sale of Common Stock occurred.
Director Warrants
In May 1985, the shareholders ratified the grant to certain directors at
that time, of warrants to purchase 30,006 shares each, a total of 330,066 shares
of Common Stock, over a ten-year period as compensation for the personal
guarantees of a capital note of the Company in the amount of $1,250,000 from
First Interstate Bank of California. Director Glass received an identical
warrant to purchase 30,006 shares, at a later date. To comply with regulatory
capital requirements by supporting the Company's additional asset growth, the
Company issued the capital note, for which the lender required the guarantees by
the directors in connection with the purchase of such capital note. The
exercise price of such warrants of $4.17 per share was the weighted average
price of the Common Stock for the 60 days prior to April 2, 1984, the date on
which First Interstate Bank of California approved the purchase of the capital
note. The purchase price of each warrant to purchase 30,006 shares was $750.
As of March 31, 1995, all of the warrants had been exercised and there are no
warrants outstanding.
In January 1994, the board of directors awarded former chairman of the
board Dr. Jon P. Goodman warrants to purchase 7,500 shares of stock at fair
market value on date of grant which was $7.00, in recognition of her services to
the Company, in view of the fact that she was the only long term director
without such incentive, and in connection with her resignation. Dr. Goodman
also received special compensation of $30,000 at the same time.
Employee Stock Option Plan (1983)
In April 1983, the Company adopted the Employee Stock Option Plan (1983)
("1983 Plan") which the shareholders approved in May 1983. The 1983 Plan
provided for the issuance of both "incentive stock options" within the meaning
of Section 422A of the Code ("Incentive Stock Options") and Nonstatutory Stock
Options. The number of shares of Common Stock reserved for issuance under the
1983 Plan was 400,075. As of April 1, 1995, there were 49,030 shares subject
to outstanding options. No shares remain available for future grants. The 1983
Plan has expired by its terms, although outstanding options remain and are
exercisable over the period designated in the 1983 Plan.
Only full time employees of the Company or the Bank were eligible to
participate in the 1983 Plan. No director of the Company who is not an officer
was eligible for a grant of options under the 1983 Plan. Options are
exercisable in installments as provided in individual stock option agreements.
The exercise price of options under the 1983 Plan was equal to at least
100% of the fair market value of the Common Stock as of the date of grant. The
exercise price is due in full upon exercise and may be paid (a) in cash, (b) by
delivering shares of Common Stock equal in value to the exercise price, subject
to certain limitations for shares of stock previously acquired upon exercise of
an incentive stock option, or (c) by a combination of cash and Common Stock.
<PAGE> 21
Since the Common Stock is listed on NASDAQ, the value of the Common Stock
delivered as payment is deemed to be the closing price of such stock as the date
of exercise or, if no sale occurred on such date, the nearest preceding day on
which a sale of Common Stock occurred.
No option granted under the 1983 Plan is transferable by the optionee other
than by will or the laws of descent and distribution. Each option is
exercisable only while the optionee is employed by the Company, except that if
the optionee's employment is terminated for any reason, the option is
exercisable for a period of three months thereafter. Upon the disability or
death of an optionee, such option is exercisable within one year from the date
of disability or death. Information as to grants of options under the 1983 Plan
during 1992 is set forth in the section entitled "Compensation of Executive
Officers and Directors".
First Amended and Restated 1985 Employee Stock Option Plan
In October 1985 the shareholders approved the adoption of, and in October
1987 the shareholders approved the amendment to, the First Amended and Restated
1985 Employee Stock Option Plan ("1985 Plan") which provides for the issuance of
incentive or nonstatutory stock options. The 1985 Plan provides for the
issuance of options to purchase 350,000 shares of Common Stock. As of March 31,
1995, there were 248,440 shares subject to outstanding options, 62,828 shares
had been issued upon exercise of options, and 38,732 shares were available for
future grants.
As the 1985 Plan is presently drafted, the Board of Directors, or a Stock
Option Committee appointed by the Board of Directors, may administer the plan.
<PAGE> 22
Only full time employees and directors are eligible to participate in the
1985 Plan. However, no options have been issued to any director who is not a
full-time employee under the 1985 Plan and there is no intention to do so.
Options are exercisable in installments as provided in individual stock option
agreements. The 1985 Plan terminates in 1995.
The Board of Directors has the authority to determine the exercise price
for all stock options granted under the 1985 Plan; provided, however, such
exercise price must be equal to at least 100% of the fair market value of the
Common Stock as of the date of grant, and provided further, the exercise price
for an incentive stock option granted to a Ten Percent Shareholder may not be
less than 110% of the fair market value of the Common Stock on the date of
grant. The exercise price is due in full upon exercise and may be paid (a) in
cash, (b) by delivering shares of Common Stock equal in value to the exercise
price, subject to certain limitations for shares of stock previously acquired
upon exercise of an incentive stock option, or (c) a combination of cash and
Common Stock. Since the Common Stock is listed on NASDAQ, the value of the
Common Stock delivered as payment is deemed to be the closing price of such
stock as the date of exercise or, if no sale occurred on such date, the nearest
preceding day on which a sale of Common Stock occurred.
The term during which an option granted under the 1985 Plan is exercisable
may not exceed ten years from the date of grant; provided, however, an option
granted to a Ten Percent Shareholder may not have a term in excess of five
years. The aggregate fair market value of the Common Stock (determined at the
date of grant) for which any employee may be granted incentive stock options to
be first exercisable in any fiscal year may not exceed $100,000. No option
granted under the 1985 Plan is transferable by the optionee other than by will
or the laws of descent and distribution. Each option is exercisable only while
the optionee is employed by the Company, except that if the optionee's employ
ment is terminated for any reason, the option is exercisable for a period of
three months thereafter. Upon the disability or death of an optionee, such
option is exercisable within one year from the date of disability or death.
Information as to options granted pursuant to the 1985 Plan to executive
officers is contained in the section "Compensation of Executive Officers and
Directors".
1993 Employee Stock Option Plan
In November, 1993, the Board of Directors adopted and approved, subject to
shareholder approval, the CU Bancorp 1993 Employee Stock Option Plan (the " 1993
Plan"). The 1993 Plan was approved by requisite vote of the shareholders on
December 17, 1993. There were 400,000 shares reserves for option issuances
under the 1993 Plan. At March 31, 1995 options for 262,000 shares had been
granted under the 1993 Plan, there were 258,000 shares outstanding under the
1993 Plan and there were 142,000 shares available for grant under the 1993 Plan.
All full time employees of the Company and its subsidiary are eligible to
participate.
The 1993 Plan supplements the Company's other stock option plans and
provides an additional vehicle through which the Company can continue to grant
<PAGE> 23
options to key employees. The Board of Directors believes that the Company's
long-standing policy of encouraging stock ownership by its key employees in part
through the granting of stock options has enhanced the Company's ability to
retain and attract such persons.
Options issued under the 1993 Employee Plan shall, in the discretion of a
committee appointed by the Board of Directors (as described below), be either
incentive stock options ("Incentive Stock Options") as that term is used in
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
any successor thereto, or options which do not qualify as incentive stock
options ("Non-Qualified Stock Options").
Administration
The 1993 Plan is administered by a committee (the "Committee") appointed by
the Board of Directors, which shall consist of not less than two members of the
Board of Directors. Each member of the Committee shall be a disinterested
person as provided in Rule 16b-3(c)(2) promulgated pursuant to the Securities
Exchange Act of 1934, as amended. The Committee shall have full power and
authority in its discretion to take any and all action required or permitted to
be taken under the 1993 Plan. At the present time the Compensation Committee
serves as the Stock Option Committee.
Grants, Vesting and Exercise Price of Options Under the 1993 Employee Plan
Under the 1993 Employee Plan, the Committee shall select the eligible
participants to whom options will be granted, the type of option to be granted,
the exercise price of each option, the number of shares covered by such option
and the other terms and conditions of each option. The eligible employees are
able to receive Incentive and Non-Qualified Stock Options; provided, however,
that the aggregate fair market value (determined at the time the Incentive Stock
Option is granted) of the stock with respect to which Incentive Stock Options
are exercisable for the first time by the optionee during any calendar year
(under all Incentive Stock Option plans of the Company) shall not exceed One
Hundred Thousand Dollars ($100,000). Should it be determined that any Incentive
Stock Option granted exceeds such maximum, such Incentive Stock Option shall be
considered to be a Non-Qualified Stock Option to the extent, but only to the
extent, of such excess.
None of the options will be exercisable within the first 12 months from the
date of the grant. Each option shall become exercisable in the following four
cumulative annual installments: 25% on the first anniversary date of the grant;
an additional 25% on the second anniversary date of the grant; an additional 25%
on the third anniversary date of the grant; and the last 25% on the fourth
anniversary date of the grant. From time to time during each of such
installment periods, the option may be exercised with respect to some or all of
the shares allotted to that period and/or with respect to some or all of the
shares allotted to any prior period as to which the option was not fully
exercised. During the remainder of the term of the option (if its term extends
beyond the end of the installment periods), the option may be exercised from
time to time with respect to any shares then remaining subject to the option.
The exercise price of Common Stock acquired pursuant to an option granted
under the 1993 Employee Plan shall be paid in cash or check payable at the time
<PAGE> 24
the option is exercised, in whole shares of stock of the Company owned by the
optionee having a fair market value on the exercise date (determined by the
Committee in accordance with any reasonable evaluation method including the
evaluation method) equal to the option price of the shares being purchased, or a
combination of stock and cash or check, equal in the aggregate to the option
price of the shares being purchased.
Adjustments Upon Changes In Stock
If the outstanding shares of the stock of the Company are increased,
decreased or changed into, or exchanged for a different number or kind of shares
or securities of the Company, without receipt of consideration by the Company,
through reorganization, merger, recapitalization, reclassification, stock split,
stock dividend, stock consolidation, or otherwise, an appropriate and
proportionate adjustment shall be made in the number and kind of shares as to
which options may be granted. A corresponding adjustment changing the number or
kind of shares and the exercise price per share allocated to unexercised
options, or portions thereof, which shall have been granted prior to any such
change shall likewise be made. Any such adjustment, however, in an outstanding
option shall be made without change in the total price application to the
unexercised portion of the option but with a corresponding adjustment in the
price for each share subject to the option. Adjustments under this section
shall be made by the Committee whose determination as to what adjustments shall
be made, and the extent thereof, shall be final and conclusive. No fractional
shares of stock shall be issued under the 1993 Plan on account of any such
adjustment.
Expiration, Termination and Transfer of Options
Under the 1993 Employee Plan, no option may extend more than ten (10) years
from the date of grant. For purposes of the 1993 Plan, the date of grant of
an option shall be the date on which the Committee takes final action approving
the award of the option, notwithstanding the date the optionee accepts the
option, the date of execution of the option agreement, or any other date with
respect to such option. Except in the event of termination of employment due to
death, disability or termination for cause, options will terminate three (3)
months after an employee optionee ceases to be employed by the Company or its
subsidiaries, unless the options by their terms were scheduled to terminate
earlier. During that three (3) month period after the employee optionee ceases
to be employed by the Company or its subsidiaries, such options shall be
exercisable only as to those shares with respect to which installments, if any,
had accrued as of the date of which the optionee ceased to be employed by the
Company or its subsidiaries. If such termination was due to such optionee's
permanent and total disability, or such optionee's death, the option, by its
terms, may be exercisable for one year after such termination of employment. If
the employee optionee's employment is terminated for cause, the option
terminates immediately, unless such termination is waived by the Committee. An
option by its terms may only be transferred by will or by laws of descent and
distribution upon the death of the optionee, shall not be transferable during
the optionee's lifetime and shall be exercisable during the lifetime of the
person to whom the option is granted only by such person.
Termination and Amendment of the 1993 Plan
<PAGE> 25
The 1993 Plan will terminate upon the occurrence of a terminating event,
including, but not limited to, liquidation, reorganization, merger or
consolidation of the Company with another corporation in which the Company is
not the surviving corporation or resulting corporation, or a sale of
substantially all the assets of the Company to another person, or a reverse
merger in which the Company is the surviving corporation but the shares of the
Company's stock outstanding immediately preceding the merger are converted by
virtue of the merger into other property (a "Terminating Event"). The Committee
shall notify each optionee not less than thirty (30) days prior thereto of the
pendency of a Terminating Event. Upon delivery of such notice, any option
outstanding shall be exercisable in full and not only as to those shares with
respect to which installments, if any, have then accrued, subject, however, to
earlier expiration or termination as provided elsewhere in each of the 1993
Plan. The Committee may also suspend or terminate the 1993 Plan at any time.
Unless sooner terminated, the 1993 Plan shall terminate ten (10) years from the
effective date, October 27, 1993, of the 1993 Plan. No options may be granted
under the 1993 Plan while the 1993 Plan is suspended or after the 1993 Plan is
terminated. Rights and obligations under any option granted pursuant to the
1993 Plan, while in effect, shall not be altered or impaired by suspension or
termination of the 1993 Plan, except with the consent of the person to whom the
stock option was granted.
The 1993 Plan may be amended by the Committee at any time. However, except
as otherwise provided in the 1993 Plan relating to adjustments upon changes in
stock (e.g., stock splits or stock dividends), no amendment shall be effective
unless approved by the affirmative vote of a majority of the shares of the
Company present, or represented, and entitled to vote at a duly held meeting at
which a quorum is present or by the unanimous written consent of the holders of
all outstanding shares of the Company entitled to vote, if the amendment will:
(a) increase the number of shares reserved for options under the 1993 Plan; (b)
materially modify the requirements as to eligibility for participation in the
1993 Plan; or (c) materially increase the benefits accruing to participants
under the 1993 Plan. Notwithstanding the foregoing, shareholder approval need
not be obtained to effect any such amendment if the Committee determines that
such approval is not otherwise required under applicable law and that the
failure to obtain such approval will not adversely affect the 1993 Plan under
the Code.
1994 Non Employee Director Stock Option Plan
On April 27, 1994, the Board of Directors adopted and approved, subject to
shareholder approval, the CU Bancorp 1994 Non-Employee Director Stock Option
Plan (the "1994 Non-Employee Director Plan"), which was approved by the
shareholders of the Company at the 1994 Annual Meeting of Shareholders. 200,000
shares were reserved for options under the 1994 Non-Employee Director Plan. All
non-employee directors of the Company are eligible to participate in the 1994
Non-Employee Director Plan.
The Plan is intended to provide a vehicle through which the Company can
reward directors for the risks of directorship, encourage their continued
service and encourage their stock ownership in the Company. The following
discussion summarizes the principal features of the Plan. This description is
qualified in its entirety by reference to the full text of the Plan, copies of
<PAGE> 26
which are available for review at the Company's principal office.
The Company intends that options issued under the 1994 Non-Employee
Directors plan shall be Non-Qualified Stock Options.
The 1994 Non-Employee Director Plan is administered by a Committee, to the
extent possible under applicable law. The Committee will not have any
discretion in the amount of options to be granted to any party, the price of any
option or the term and exercisability of any option. Option grants shall be
automatic as described herein and shall not be variable by the Committee. Each
member of a Committee shall be a disinterested person as provided in Rule 16b-
3(c)(2) promulgated pursuant to the Securities Exchange Act of 1934, as amended.
The Board of Directors or the Committee (as the case shall be) shall have full
power and authority in its discretion to take any and all action required or
permitted to be taken under the Plan.
Grants, Vesting and Exercise Price of Options Under the 1994 Non-Employee
Director Plan
Under the 1994 Non-Employee Director Plan, the non-employee directors of
the Company are eligible to receive Non-Qualified Stock Options. The 1994 Non-
Employee Director Plan provides for the grant of options to non-employee
directors, without any action on the part of the Committee, only upon the
following terms and conditions:
Each such person who was a director of the Company on July 1, 1994
(the "Effective Date") received Non-Qualified Stock Options to acquire 5,000
shares of stock of the Company, subject to adjustment, on the Effective Date,
and such options shall be deemed to have been granted on the Effective Date.
The Chairman of the Board on the Effective Date received options to purchase an
additional 2,500 shares of the Company's Common Stock.
Each such person who is a director of the Company on the day following
an Annual Meeting of Shareholders in years commencing in 1995, shall receive non
qualified options to acquire 5,000 shares of stock of the Company, subject to
adjustment, provided that the person who is then the Chairman of the Board shall
receive additional nonqualified options to acquire 2,500 shares of stock of the
Company, subject to adjustment; provided, however, that in the event the shares
available under the 1994 Non-Employee Director Plan are insufficient to make any
such grant, all grants made thereunder on such date shall be prorated.
None of the options will be exercisable until the March 31 next
following the date of grant. Each option shall become exercisable in the
following four cumulative annual installments: 25% on the first March 31
following the date of the grant; an additional 25% on the second March 31
following the date of the grant; an additional 25% on the third March 31
following the date of the grant; and the last 25% on the fourth March 31
following the date of the grant. From time to time during each of such
installment periods, the option may be exercised with respect to some or all of
the shares allotted to that period, and/or with respect to some or all of the
shares allotted to any prior period as to which the option was not fully
exercised. During the remainder of the term of the option (if its term extends
beyond the end of the installment periods), the option may be exercised from
time to time with respect to any shares then remaining subject to the option.
<PAGE> 27
Subject to earlier termination as provided elsewhere in the 1994 Non-
Employee Director Plan, each option shall expire ten (10) years from the date
the option was granted.
The exercise price of each option shall be equal to one hundred
percent (100%) of the fair market value of the stock subject to the option on
the date the option is granted, which shall be the closing price for the stock
of the Company on the date of such grant or if the date of such grant is not a
trading day, the first immediately preceding trading day. The closing price for
any day shall be the last reported sale price regular way or, in case no such
reported sale takes place on such date, the average of the last reported bid and
asked prices regular way, in either case on the principal national securities
exchange registered under the 1934 Act on which the stock of the Company is
admitted to trading or listed, or if not listed or admitted to trading on any
national securities exchange, the last sale price of the stock of the Company on
the National Association of Securities Dealers National Market System ("NMS")
or, if not quoted in the NMS, the average of the closing bid and asked prices of
the stock of the Company on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or any comparable system, or if the stock
of the Company is not listed on NASDAQ or any comparable system, the closing bid
and asked prices as furnished by any member of the National Association of
Securities Dealers, Inc. selected from time to time by the Company for that
purpose.
The exercise price of Common Stock acquired pursuant to an option shall be
paid in cash or check payable to the order of the Company at the time the option
is exercised, in whole shares of stock of the Company owned by the optionee
having a fair market value on the exercise date (determined by the Committee in
accordance with any reasonable evaluation method) equal to the option price of
the shares being purchased, or a combination of stock and cash or check payable
to the order to the Company, equal in the aggregate to the option price of the
shares being purchased.
Adjustments Upon Changes In Stock
If the outstanding shares of the stock of the Company are increased,
decreased or changed into, or exchanged for a different number or kind of shares
or securities of the Company, without receipt of consideration by the Company,
through reorganization, merger, recapitalization, reclassification, stock split,
stock dividend, stock consolidation, or otherwise, an appropriate and
proportionate adjustment shall be made in the number and kind of shares as to
which options may be granted. A corresponding adjustment changing the number or
kind of shares and the exercise price per share allocated to unexercised
options, or portions thereof, which shall have been granted prior to any such
change shall likewise be made. Any such adjustment, however, in an outstanding
option shall be made without change in the total price application to the
unexercised portion of the option but with a corresponding adjustment in the
price for each share subject to the option. Adjustments under this section
shall be made by the Committee whose determination as to what adjustments shall
be made, and the extent thereof, shall be final and conclusive. No fractional
shares of stock shall be issued under the Plan on account of any such
adjustment.
<PAGE> 28
Expiration, Termination and Transfer of Options
Each option granted under the 1994 Non-Employee Director Plan shall, except
as discussed below, expire ten (10) years from the date of the grant. Except
in the event of termination of directorship due to death, or termination for
cause, options will terminate twelve (12) months after an optionee ceases to be
a director of the Company, unless the options by their terms were scheduled to
terminate earlier. During that twelve (12) month period after the non-employee
director optionee ceases to serve as a director of the Company, such options
shall be exercisable only as to those shares with respect to which installments,
if any, had accrued as of the date of which the optionee ceased to be a director
of the Company or its subsidiaries. If such termination was due to such
optionee's death while a director or in the twelve month period following
termination of the directorship, the option, by its terms, may be exercisable
for one year after death. If the non-employee director optionee is removed
from the Board of Directors of the Company for cause, the option terminates
immediately on the date of such removal. Removal for cause shall include
removal of a director who has been declared of unsound mind by an order of court
or convicted of a felony. An option by its terms may only be transferred by
will or by laws of descent and distribution upon the death of the optionee,
shall not be transferable during the optionee's lifetime, and shall be
exercisable during the lifetime of the person to whom the option is granted only
by such person.
Termination and Amendment of the Plan
The Plan will terminate upon the occurrence of a terminating event,
including, but not limited to, liquidation, reorganization, merger or
consolidation of the Company with another corporation in which the Company is
not the surviving corporation or resulting corporation, or a sale of
substantially all the assets of the Company to another person, or a reverse
merger in which the Company is the surviving corporation but the shares of the
Company's stock outstanding immediately preceding the merger are converted by
virtue of the merger into other property (a "Terminating Event"). The Board of
Directors or the Committee (as the case may be) shall notify each optionee not
less than thirty (30) days prior thereto of the pendency of a Terminating Event.
Upon delivery of such notice, any option outstanding shall be exercisable in
full and not only as to those shares with respect to which installments, if any,
have then accrued, subject, however, to earlier expiration or termination as
provided elsewhere in the Plan. The Board of Directors or the Committee (as the
case may be) may also suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate ten (10) years from the effective date, of
the Plan. No options may be granted under the Plan while the Plan is suspended
or after the Plan is terminated. Rights and obligations under any option
granted pursuant to the Plan, while in effect, shall not be altered or impaired
by suspension or termination of the Plan, except with the consent of the person
to whom the stock option was granted.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee"), which consists solely of non-
officer directors, determines and administers the compensation of the Bank's
executive officers. The present membership of the Committee consists of Paul
Glass and Ronald Parker. The Company does not pay any direct compensation to its
<PAGE> 29
executive officers, except pursuant to the stock option plans. The executive
officers of the Corporation are compensated by the Bank for their services to
the Bank, and receive benefits under various Bank employee benefit plans. The
Compensation Committee oversees the compensation programs of the officers of the
Bank and also serves as a Compensation Committee for the Bank. This report is
presented by the Committee as the Compensation Committee for the Company and the
Bank. None of the members of the committee is an employee of the Bank or the
Corporation. The Committee provides the following report on executive
compensation.
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 following Report, and
the performance graph on page 20, shall not be incorporated by reference into
any such filings.
Overall Philosophy
In view of the recent history of the Company and the resulting changes at
the Company over the past three years, the compensation committee has reviewed
the emphasis of the program to distinguish the current policies from those of
the prior periods, and to accentuate long term profitability over short term
compensation. As a result, the executive compensation program has gone through
redevelopment over the past three years and it is expected that development of a
compensation strategy is a dynamic process that will continue. The Committee
views the executive compensation program as a major factor in the competitive
strategy of the Bank. The program's goal is to attract, provide incentive to and
retain competent managers whose goals are aligned with those of the Bank's
shareholders. To this end, it is the ongoing responsibility of the Committee to
establish and administer an executive compensation program that fosters
competency in management, provides high caliber executive talent and both
recognizes and motivates performance.
The Compensation Policy of the Company is threefold. First it seeks to
align compensation with profitability of the Company and enhancement of
shareholder value. Second, it seeks to serve to attract, motivate and retain
the most qualified professionals to the Company as employees by providing
competitive compensation packages and seeking employees with diverse and
sophisticated experience. Finally, it is designed to put a substantial portion
of employee compensation "at risk", by designing long term compensation and
option plans the value of which is dependent on long term profitability of the
Company.
Recruitment of Management Personnel
In seeking executive officers, it is the Company's strategy to seek highly
credentialed, experienced bankers and other professionals, with proven skills.
The Committee acknowledges that these requirements may result in recruitment of
individuals whose primary experience is in much larger and more sophisticated
institutions, with concomitant compensation requirements. It is the philosophy
of the Company to command the best talent available at all levels, to position
the Company to take advantage of growth, strategic acquisition and other
opportunities in the future, which may require such a sophisticated management
<PAGE> 30
group. The Committee believes that the Bank's current Chief Executive Officer
(CEO) and top executive group reflects the successful satisfaction of the
Board's recruitment objectives.
Base Salary
The Committee believes it has in place a performance-driven executive
incentive plan to reflect the philosophy set forth above, in tandem with an
executive performance evaluation system. The Company's goal is to be
competitive with those financial institutions which the Committee deems to be
similar, and in this manner to attract and retain top financial institution
executives. Surveys of such institutions will be conducted or reviewed on a
periodic basis.
The philosophy of the Compensation Committee is oriented toward
compensation and performance systems that merge the interests of the
shareholders and management by placing emphasis on rewards tied to various
financial measures. The goal of all compensation and the evaluation system is
to motivate and monitor the exceptional executive performances that will be
required for the Bank to achieve its strategic business objectives.
The compensation and performance system rewards employees based on the
achievement of corporate and individual objectives. The corporate objectives
are outlined, in part, in the strategic plan of the Company, and include the
attainment of specific levels or return on equity and return on assets which are
for future periods. While the Company may not have reached all the specific
levels targeted for future performance, the Committee believes that the CEO base
salary (and total compensation package) is in line with both the goals of the
Company discussed above and is in the top quartile of similarly situated
executive salaries. The Committee believes that such level of compensation is
acceptable based on the background, experience and sophistication of the CEO,
which is in line with the standards discussed above. Based on this information,
and providing no substantial change in the data, the Committee would expect base
salary increases for the CEO and executive officers to be related primarily to
changes in the cost of living and changes in duties or responsibilities, unless
the survey material suggests adjustments are in order.
Bonuses
Bonuses will be related to achievement of corporate and individual goals,
some of which will be established as part of the review process and some of
which will relate to the Company's strategic planning. The goal of bonuses is
to motivate the exceptional executive performances which will be required in
order for the Bank to achieve its strategic business objectives, to monitor the
achievement of these objectives, and to reward extraordinary effort. The
general pool available for bonuses will be determined after review of the
Company's profitability, and thereafter the individual benchmarks will be
reviewed. It is expected that bonuses will constitute the primary cash
compensation increases in the near term.
Long Term Compensation / Stock Options
The long-term plan will make awards based upon the achievement of corporate
and individual objectives which will enable the Bank to reach the financial
<PAGE> 31
goals set forth in its Strategic Plan dated June 22, 1993. The financial goals
include the return to profitability, the attainment of specific levels of return
on equity and return on assets. The magnitude of awards under the plan will be
determined by increases in the value of the Bank's common stock, thus increasing
the plan participants' incentive to achieve the goals of shareholders. It is
the philosophy of the Committee to provide the potential for long term
incentives to all employees of the Bank.
Stock Options will also be utilized to encourage executive officers to have
a stake in the Company, encourage them remain with the Company and to align
their interests more fully with those of the other stockholders.
Special Deduction Limit
Section 162 (m) of the Internal Revenue Code limits federal income tax
deductions for compensation paid after 1993 to the Company's Chief Executive
Officer and its four other most highly compensated officers to $1 Million per
year per individual, but includes an exception for performance based
compensation that satisfies certain conditions. Because final regulations have
not yet been adopted interpreting Section 162 (m) the Company has not taken
steps to review its compensation programs in light of the new provisions. It is
the intent of the Company to retain the deduction for compensation, to the
extent possible. Based on the current level of compensation to executives of
the Company and the level contemplated for the immediate future, it is believed
that this limitation will not materially affect the Company, except for some
unforeseen circumstance.
<PAGE> 32
SHAREHOLDER RETURN GRAPH
The following line graph compares the total cumulative shareholder return on the
Corporation's common stock, based upon quarterly reinvestment of all dividends,
to the cumulative total returns of the Standard & Poors 500, and the Montgomery
Securities Western Bank Monitor Southern California Proxy Index of selected bank
stocks. The graph assumes $100 invested on December 31, 1989, in the
Corporation's common stock and each of the indices.
<TABLE>
<CAPTION>
Source: Montgomery Securities Western Bank Monitor
The following table sets forth the data points for the performance graph.
DECEMBER 31,
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
CU BANCORP 100 65.12 36.18 23.93 47.86 49.70
S&P 500 100 93.44 118.02 123.29 131.99 129.96
SO. CALIF. 100 87.13 72.95 71.41 84.59 95.48
PROXY
</TABLE>
SOURCE: Montgomery Securities Western Bank Monitor
<PAGE> 33
Indebtedness of Management
Some of the Company's directors and executive officers, as well as their
immediate family and associates, are customers of, and have had banking
transactions with, the Bank in the ordinary course of the Bank's business, and
the Bank expects to have limited such ordinary banking transactions with such
persons in the future. The Bank has adopted a policy that it generally will not
make new loans to Directors, with the exception of loans fully secured by cash.
In the opinion of the management of the Bank and except as provided below, all
loans and commitments to lend included in such transactions were made in
compliance with applicable laws, and on substantially the same terms, including
interest rates and collateral, as those prevailing for comparable transactions
with other persons of similar credit worthiness, and did not involve more than a
normal risk of collectibility or present other unfavorable features. Although
the Bank does not have any limits on the aggregate amount it would be willing to
lend to directors and officers as a group, loans to individual directors and
officers must comply with the Bank's respective lending policies and statutory
lending limits, and prior approval of the Board of Directors is required for
these loans.
There were no related party loans as of December 31, 1994.
During 1992, the Bank charged off loans, and a letter of credit totalling
$1,300,000 and $650,000 respectively, to a former director and another party.
As a result of Bank initiated legal actions against the obligors and certain
former officers and directors of the Bank settlements were entered into which
resulted in recovery of approximately $1.1 Million. In addition, the settlement
included potential long term payments of additional amounts. The Collateral for
this long term obligation which was not given specific value by the Bank, has
been substantially diminished or extinguished by the exercise of foreclosure
powers under a deed of trust by an unaffiliated financial institution. The Bank
has charged off all amounts related to these transactions and there is no
assurance of further recovery.
Other Material Transactions
Except as set forth below, there are no other existing or proposed material
transactions between the Company and the Bank and any of the Company's
directors, executive officers, or beneficial owners of five percent or more of
the Common Stock, or the immediate family or associates of any of the foregoing
persons.
In 1993, prior to his election as a director of the Company, Kenneth
Bernstein entered into an agreement with the Bank to assist in collection of a
large charged off credit. In exchange for Mr. Bernstein's assistance, the Bank
agreed to pay him 50% of amounts recovered on such credit (after deduction of
legal fees). Although the Bank, with Mr. Bernstein's assistance, located the
debtor, the debtor subsequently filed bankruptcy and no amounts have been
recovered.
<PAGE> 34
Regulatory Agreement
In November 1993, the Bank was informed by the Office of the Comptroller of
the Currency ("OCC"), that the OCC had terminated the formal written agreement
(the "Agreement") with the OCC entered into in June 1992, based upon the Bank's
compliance with the provisions of the Agreement.
In November 1993, the Federal Reserve Bank of San Francisco terminated a
Memorandum of Understanding with the Company, originally entered into In August,
1992. The termination of the MOU was taken in recognition of the Company's
compliance with these requirements.
PROPOSAL 2. APPROVAL OF THE CU BANCORP 1995 RESTRICTED STOCK PLAN
Existing Restricted Stock Plans
The Company does not currently have any restricted stock.
Summary of the Restricted Stock Plan
On March 28, 1995, the Board of Directors adopted and approved, subject to
shareholder approval, the CU Bancorp 1995 Restricted Stock Plan (the "Plan").
The Plan is being submitted for shareholder approval. Approval of the Plan
requires the affirmative vote of a majority of the shares of the Company
present, or represented, and entitled to vote at a duly held meeting at which a
quorum is present.
The Plan is intended to provide a vehicle through which the Company can
reward employees for their past service and encourage their continued service
and their stock ownership in the Company. The following discussion summarizes
the principal features of the Plan. This description is qualified in its
entirety by reference to the full text of the Plan, copies of which are
available for review at the Company's principal office.
Restricted Stock is common stock issued by the Company, subject to
restrictions on sale or transfer (more fully described below) which continue
until such time as may be specified. An employee holding Restricted Stock is
entitled to receive cash dividends and vote the shares. At such time as the
conditions are satisfied, the restrictions lapse. If the employee's employment
terminated before the restrictions lapse, or if any conditions are not
fulfilled, the restricted stock ( or that portion of it as to which the
restrictions have not lapsed) must be returned to the Company.
<PAGE> 35
Purpose
The purpose of the Plan is to strengthen the Company by providing to
employees added incentives for high levels of performance and to encourage
stock ownership in the Company. The Plan seeks to accomplish these goals by
providing a means whereby such employee of the Company may be given an
opportunity to benefit from increase of stock value and growth in the value of
the Common Stock of the Company. The Plan is also intended to enable the
Company and its subsidiaries to compete effectively for and retain the services
of such persons and to provide incentives for such persons to exert maximum
efforts for the success of the Company and its subsidiaries.
Administration
The Plan will be administered by a Committee, to the extent possible under
applicable law. The Committee will have discretion in the amount of shares to
be granted to any party, the restrictions applicable to the shares and other
matters under the Plan. Each member of a Committee shall be a disinterested
person as provided in Rule 16b-3(c)(2) promulgated pursuant to the Securities
Exchange Act of 1934, as amended. The Board of Directors or the Committee (as
the case shall be) shall have full power and authority in its discretion to take
any and all action required or permitted to be taken under the Plan.
Shares Reserved
The number of shares of Common Stock reserved for issuance under the Plan
is 75,000. If any an employee is required under the terms of the Plan to return
the Restricted Shares to the Company (or if such shares automatically are
cancelled ), such shares shall again become available for the Plan.
Eligibility
All employees of the Company are eligible to participate in the Plan.
Grants, Vesting and Restrictions Under the Restricted Stock Plan
Under the Plan, the employees of the Company are eligible to receive
Restricted Stock. The Committee will determine which employees and the amount
of Restricted Stock to be granted to each. Subject to the rights of the
Committee to vary the restrictions under the Plan, each grant shall conform to
the following:
Restrictions with regard to 25% shall expire and terminated upon the
second anniversary of the grant. Thereafter restrictions shall expire and
terminate as to an additional 25% of such award on each anniversary of the grant
thereof.
<PAGE> 36
If a Participant ceases to be an employee of the Company (for any reason
other than death disability or retirement (as defined in the Company's 401-K
Plan) prior to the expiration and termination of any restrictions on a grant of
Restricted Stock, such Restricted Stock shall be automatically forfeited and
returned to the Company. In the event of death, retirement or disability of an
employee then any Restricted Shares shall become free and clear of any
restrictions and all restrictions shall automatically expire and terminate. In
the event that a Participant elects to retire before the normal retirement age
(as defined in the Company's 401-K Plan) the Committee, in its discretion, shall
determine whether all or any portion of the Restricted Stock then owned by such
Participant shall be forfeited or become free of such restrictions.
Adjustments Upon Changes In Stock
If the outstanding shares of the stock of the Company are increased,
decreased or changed into, or exchanged for a different number or kind of shares
or securities of the Company, without receipt of consideration by the Company,
through reorganization, merger, recapitalization, reclassification, stock split,
stock dividend, stock consolidation, or otherwise, an appropriate and
proportionate adjustment shall be made in the number and kind of shares of
Restricted Stock available under the Plan or previously granted. Adjustments
under this section shall be made by the Committee whose determination as to what
adjustments shall be made, and the extent thereof, shall be final and
conclusive. No fractional shares of stock shall be issued under the Plan on
account of any such adjustment.
Transfer of Restricted Stock
Restricted Stock by its terms may only be transferred by will or by laws of
descent and distribution upon the death of the optionee, and shall not be
transferable during the optionee's lifetime.
Termination and Amendment of the Plan
The restrictions on the common stock issued pursuant to the Plan will
terminate upon the occurrence of a terminating event, including, but not limited
to, liquidation, reorganization, merger or consolidation of the Company (or its
principal subsidiary) with another corporation in which the Company (or its
principal subsidiary) is not the surviving corporation or resulting corporation,
or a sale of substantially all the assets of the Company to another person, or a
reverse merger in which the Company is the surviving corporation but the shares
of the Company's stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property or any other transaction
in which more than 50% of the ownership of the Corporation is transferred (a
"Terminating Event"). The Board of Directors or the Committee (as the case may
be) may also suspend or terminate the Plan at any time. No grants may be made
under the Plan after the third anniversary of the date of adoption of the Plan.
Rights and obligations under any Restricted Stock granted pursuant to the Plan,
while in effect, shall not be altered or impaired by suspension or termination
of the Plan, except with the consent of the person to whom the Restricted Stock
was granted.
The Plan may be amended by the Board of Directors or the Committee (as the
<PAGE> 37
case may be) at any time. However, except as otherwise provided in the Plan
relating to adjustments upon changes in stock (e.g., stock splits or stock
dividends), no amendment shall be effective unless approved by the affirmative
vote of a majority of the shares of the Company present, or represented, and
entitled to vote at a duly held meeting at which a quorum is present or by the
unanimous written consent of the holders of all outstanding shares of the
Company entitled to vote, if the amendment will: (a) increase the number of
shares reserved under the Plan; (b) materially modify the requirements as to
eligibility for participation in the Plan; or (c) materially increase the
benefits accruing to participants under the Plan. Notwithstanding the
foregoing, shareholder approval need not be obtained to effect any such
amendment if the Board of Directors or the Committee (as the case may be)
determines that such approval is not otherwise required under applicable law and
that the failure to obtain such approval will not adversely affect the Plan
under the Code.
Federal Income Tax Consequences
The following discussion is only a summary of the principal federal income
tax consequences of the options and rights to be granted under the Plan, and is
based on existing federal law (including administrative regulations and rulings)
which is subject to change, in some cases retroactively. This discussion is
also qualified by the particular circumstances of individual Participants, which
may substantially alter or modify the federal income tax consequences herein
discussed.
During the period of restrictions, and as long as Restricted Stock remains
both nontransferable and subject to a substantial risk of forfeiture, there are
generally no tax consequences resulting from the award of Restricted Stock for
either the recipient or the Company. At such time as the Restricted Stock
either becomes transferable or is no longer subject to a substantial risk of
forfeiture, the recipient will recognize ordinary income in an amount equal to
the excess of the fair market value of the stock over the amount the recipient
paid for it, if any. However the recipient may elect, within 30 days after
receipt of the award of Restricted Stock, to report the fair market value of the
restricted stock subject to the award (valued as if it were unrestricted) as
ordinary income at the time of receipt.
The Company will receive a compensation deduction equal to the ordinary income
recognized by the recipient when so recognized. If such an election is made and
the restrictions on the stock fail to lapse for any reason, the recipient will
not be entitled to a deduction. For accounting purposes, the company recognizes
a compensation expense during the period of vesting according the rules of
FASB.
When stock that was formerly restricted stock is sold or otherwise disposed of,
the tax treatment will depend on whether the recipient made the election
described above. If the recipient did not make the elections, disposition of
the stock will result in a long or short term capital gain or loss, depending on
the length of time from the date the restrictions lapsed tot he date of the sale
or other disposition, in an amount equal to the difference between the amount
received on disposition and the greater of the amount the recipient paid for the
stock or the fair market value of the stock on the date the restrictions lapsed.
If the recipient made the election, disposition of the stock will result in a
<PAGE> 38
long or short term capital gain or loss, depending on the length of time from
the Award to the date of disposition, in an amount equal to the difference
between the amount received on disposition and the sum of any amount paid by the
recipient for the restricted stock and the amount recognized by the recipient as
ordinary income at the time of the Award.
If, as a result of a Terminating Event (see above) an employee's Restricted
Stock Vests free of restrictions, the additional economic value attributable to
the acceleration, if any, may be deemed a "parachute payment" if such value,
when combined with all other payments resulting from the change of control (if
any), equals or exceeds 300% of the employee's average annual taxable
compensation over the five preceding calendar years. In such case, the excess
of the total parachute payment over such average annual taxable compensation is
subject to a 20% non deductible excise tax, in addition to any income tax
payable and the Company is not entitled to deduct the portion of the parachute
payment this is subject to such excise tax. In such an event or in the event of
changes in applicable law, if the aggregate compensation of the executive
officer would exceed such limit, the deductibility of awards of Restricted Stock
cannot be assured.
Required Vote
Shareholders are being asked to approve the CU Bancorp 1995 Restricted
Stock Directors Plan. Approval of the Plan requires the affirmative vote of a
majority of the shares of the Company present, or represented, and entitled to
vote at a duly held meeting (at which a quorum is present). Under applicable
California law, an abstention will be counted in determining the presence of a
quorum and will have the same effect as a vote against the proposal and a broker
non vote will not be counted in determining the presence of a quorum and will
have no effect on the outcome of the proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE CU BANCORP 1995
RESTRICTED STOCK PLAN. Proxies solicited by the Board of Directors will be
voted "FOR" unless a vote against the proposal or an abstention is specifically
indicated.
INDEPENDENT ACCOUNTANTS
The Audit Committee of the Board of Directors of the Corporation selected
Arthur Andersen & Co. to serve as independent accountants of the Corporation for
its fiscal year ending December 31, 1993 and 1994. Arthur Andersen & Co. has no
direct or material financial interest in the Corporation. Arthur Andersen & Co.
has served as the Corporation's independent accountants for more than five years
prior to this date. A representative of Arthur Andersen & Co. is expected to
attend the 1995 Annual Meeting of Shareholders, with the opportunity to make a
statement and respond to appropriate questions.
SHAREHOLDER PROPOSALS
Any shareholder desiring to submit a proposal for action at the 1996 Annual
Meeting of Shareholders which is desired to be presented in the Company's Proxy
Statement with respect to such meeting, should submit such proposal to the
Company at its principal place of business no later than December 15, 1995,
which is 120 days prior to the anticipated mailing date of the proxy materials
<PAGE> 39
for the 1996 Annual Meeting.
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 persons named in the enclosed form of proxy will have discretionary
authority to vote all proxies with respect thereto in accordance with their
judgment.
THE COMPANY WILL SUPPLY TO SHAREHOLDERS WITHOUT COST, UPON WRITTEN REQUEST,
A COPY OF THE COMPANY'S MOST RECENT ANNUAL REPORT ON FORM 10-K INCLUDING
FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES. EXHIBITS TO THE FORM
10-K WILL BE FURNISHED UPON PAYMENT
<PAGE> 40
OF REASONABLE CHARGES. WRITTEN REQUESTS SHOULD BE DIRECTED TO PATRICK HARTMAN,
CHIEF FINANCIAL OFFICER, CU BANCORP, 16030 VENTURA BOULEVARD, ENCINO, CALIFORNIA
91436.
CU Bancorp
Paul Glass, Chairman of the Board
Dated: May ____, 1995
Encino, California
<PAGE> 41
PROXY CU BANCORP
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned appoints Stephen G. Carpenter, Ronald Parker and Paul
Glass, as proxies, each with the power to appoint his substitute, and authorizes
them to represent and to vote as designated below, all the shares of common
stock of CU Bancorp held of record by the undersigned as of ________, 1995, at
the 1995 Annual Meeting of Shareholders of CU Bancorp (the "Meeting") to be held
on June 29, 1995, and any adjournment thereof.
1. To elect as directors the nominees set forth below:
FOR ALL NOMINEES LISTED WITHHOLD AUTHORITY
(except as marked to the contrary). Discretionary to vote for all
nominees.
authority to cumulate votes is granted.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
cross out the nominee's name).
Kenneth L. Bernstein, Stephen G. Carpenter, Richard H. Close, Paul W.
Glass, M. David Nathanson, Ronald S. Parker and David I. Rainer.
2. To approve the CU Bancorp 1995 Restricted Stock Plan
FOR AGAINST ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
<PAGE> 42
(REVERSE OF CARD)
The undersigned hereby ratifies and confirms all that said proxies, or any
of them, or their substitutes, shall lawfully do or cause to be done by virtue
hereof, and hereby revokes any and all proxies heretofore given by the
undersigned to vote at the Meeting. The undersigned acknowledges receipt of the
notice of the Meeting and the proxy statement accompanying said notice.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy will
be voted FOR proposals 1 and 2.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign.
Dated: , 1995
Number of Shares
(Signature of Shareholder(s)
(Signature of Shareholder(s)
When signing as attorney, executor,
administrator, trustee, or guardian,
please give full title as such. If a
corporation, please sign in full
corporate name by president or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
<PAGE> 43