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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
First Regional Bancorp 0-10232
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
---------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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FIRST REGIONAL BANCORP
1801 CENTURY PARK EAST
CENTURY CITY, CALIFORNIA 90067
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 21, 1998
NOTICE IS HEREBY GIVEN TO THE SHAREHOLDERS OF FIRST REGIONAL BANCORP (the
"Company") that, pursuant to the Bylaws of the Company and the call of its
Board of Directors, the Annual Meeting of Shareholders of First Regional Bancorp
will be held in the Cypress Room, Century Plaza Hotel and Tower, 2025 Avenue of
the Stars, Century City, California on Thursday, May 21, 1998, at 11:00 a.m.,
for the purpose of considering and voting upon the following matters:
1. Amendment of Bylaws - Range of Directors. Approving an amendment to
the Company's Bylaws to increase the current range of directors which is
five (5) to nine (9) to a range of six (6) to ten (10).
2. Amendment of Bylaws - Classified Board of Directors. Approving an
amendment to the Company's Bylaws providing for the Board of Directors to
be divided into two or three classes of directors, depending on the number
of directors, serving staggered terms.
3. Amendment to Articles of Incorporation - Serial Preferred Stock.
Approving a proposal to amend the Company's Articles of Incorporation to
add a class of Serial Preferred Stock.
4. Election of Directors. If Proposal 2 is approved, electing the
following nine (9) persons to the Board of Directors three of whom shall
serve until the 1999 Annual Meeting, three of whom shall serve until the
2000 Annual Meeting and three of whom shall serve until the 2001 Annual
Meeting and in all cases until their successors are elected and have
qualified. If Proposal 2 is not approved, electing the same nine (9)
persons to the Board of Directors all of whom shall serve until the 1999
Annual Meeting and until their successors are elected and have qualified:
Anthony Gartshore Thomas E. McCullough Lawrence J. Sherman
Gary M. Horgan Frank R. Moothart Jack A. Sweeney
Alexander S. Lowy Mark Rubin Carolyn Zarro
5. Other Business. Transacting such other business as may properly
come before the Annual Meeting and any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on March 31, 1998 as
the record date for determination of shareholders entitled to notice of, and to
vote at, the Meeting.
By Order of the Board of Directors
Thomas E. McCullough, Secretary
First Regional Bancorp
Dated: April 21, 1998
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The Bylaws of the Company provide for the nomination of directors in the
following matter:
"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 nominations are 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 of 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
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
the nomination of a person to replace a proposed nominee who had 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 URGED TO VOTE IN FAVOR OF THE PROPOSALS OF THE COMPANY'S BOARD OF
DIRECTORS BY SIGNING AND RETURNING THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE,
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON. THE ENCLOSED PROXY IS
SOLICITED BY THE COMPANY'S BOARD OF DIRECTORS. ANY SHAREHOLDER GIVING A PROXY
MAY REVOKE IT PRIOR TO THE TIME IT IS VOTED BY NOTIFYING THE SECRETARY OF THE
COMPANY IN WRITING OF REVOCATION OF YOUR PROXY, OR BY FILING A DULY EXECUTED
PROXY BEARING A LATER DATE, OR BY ATTENDING THE MEETING AND VOTING IN PERSON.
PLEASE INDICATE ON THE PROXY WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING.
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FIRST REGIONAL BANCORP
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 21, 1998
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
Proxies for use at the Annual Meeting of Shareholders (the "Meeting") of First
Regional Bancorp (the "Company") to be held in the Cypress Room, Century Plaza
Hotel and Tower, 2025 Avenue of the Stars, Century City, California, on
Thursday, May 21, 1998, at 11:00 a.m. and at any and all adjournments thereof.
It is anticipated that this Proxy Statement will be mailed to shareholders
eligible to receive notice of and vote at the Meeting on or about April 21,
1998.
The matters to be considered and voted upon at the Meeting will be:
1. Amendment of Bylaws - Range of Directors. Approving an amendment
to the Company's Bylaws to increase the current range of directors which is
five (5) to nine (9) to a range of six (6) to ten (10).
2. Amendment of Bylaws - Classified Board of Directors. Approving an
amendment to the Company's Bylaws providing for the Board of Directors to
be divided into two or three classes of directors, depending on the number
of directors, serving staggered terms.
3. Amendment to Articles of Incorporation - Serial Preferred Stock.
Approving a proposal to amend the Company's Articles of Incorporation to
add a class of Serial Preferred Stock.
4. Election of Directors. If Proposal 2 is approved, electing the
following nine (9) persons to the Board of Directors three of whom shall
serve until the 1999 Annual Meeting, three of whom shall serve until the
2000 Annual Meeting and three of whom shall serve until the 2001 Annual
Meeting and in all cases until their successors are elected and have
qualified. If Proposal 2 is not approved, electing the same nine (9)
persons to the Board of Directors all of whom shall serve until the 1999
Annual Meeting and until their successors are elected and have qualified:
H. Anthony Gartshore Thomas E. McCullough Lawrence J. Sherman
Gary M. Horgan Frank R. Moothart Jack A. Sweeney
Alexander S. Lowy Mark Rubin Carolyn Zarro
5. Other Business. Transacting such other business as may properly
come before the Meeting and any adjournment or adjournments thereof.
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REVOCABILITY OF PROXIES
A form of Proxy for voting your shares at the Meeting is enclosed. Any
shareholder who executes and delivers such a Proxy has the right to and may
revoke it at any time before it is exercised by filing with the Secretary of the
Company an instrument revoking it or a duly executed Proxy bearing a later date.
In addition, the powers of the Proxy Holders will be revoked if the person
executing the Proxy is present at the Meeting and elects to vote in person by
advising the Chairman of the Meeting of his/her election to vote in person, and
by voting in person at the Meeting. Subject to such revocation, all shares
represented by a properly executed Proxy received in time for the Meeting will
be voted by the Proxy Holders in accordance with the instructions on the Proxy.
IF NO INSTRUCTION IS SPECIFIED WITH RESPECT TO A MATTER TO BE ACTED UPON, THE
SHARES REPRESENTED BY YOUR EXECUTED PROXY WILL BE VOTED IN FAVOR OF THE
PROPOSALS LISTED IN THE PROXY. IF ANY OTHER BUSINESS IS PROPERLY PRESENTED AT
THE MEETING, THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE COMPANY'S BOARD OF DIRECTORS.
PERSONS MAKING THE SOLICITATION
This solicitation of Proxies is being made by the Board of Directors of the
Company. The expense of preparing, assembling, printing and mailing this Proxy
Statement and the materials used in the solicitation of Proxies for the Meeting
will be borne by the Company. It is contemplated that Proxies will be solicited
principally through the use of the mail, but officers, directors and employees
of the Company and its subsidiary, First Regional Bank (the "Bank"), may
solicit Proxies personally or by telephone, without receiving special
compensation therefor. Although there is no formal agreement to do so, the
Company may reimburse banks, brokerage houses and other custodians, nominees and
fiduciaries for their reasonable expenses in forwarding these Proxy Materials to
shareholders whose stock in the Company is held of record by such entities. In
addition, the Company may use the services of individuals or companies it does
not regularly employ in connection with this solicitation of Proxies, if
Management determines it advisable.
VOTING SECURITIES
There were issued and outstanding 2,451,631 shares of the Company's Common
Stock on March 31, 1998, which has been fixed as the record date for the purpose
of determining the shareholders entitled to notice of and to vote at the
Meeting. Each holder of Common Stock will be entitled to one vote, in person or
by Proxy, for each share of Common Stock held of record on the books of the
Company as of the record date for the Meeting on any matter submitted to the
vote of the shareholders, except that in connection with the election of
directors, the shares may be voted cumulatively if a shareholder present and
voting at the Meeting gives notice at the Meeting and prior to the voting of his
or her intention to so vote. Cumulative voting means that a shareholder has the
right to vote the number of shares he or she owns as of the record date,
multiplied by the number of directors to be elected. Generally, this total
number of votes may be cast for one nominee or it may be distributed on the same
principle among nominees as the shareholder sees fit. However, if the proposed
amendment to the Company's Bylaws providing for the Board of Directors to be
divided into three classes is duly approved by the shareholders, votes may be
cumulated only for directors to be elected within each class. If cumulative
voting is declared at the Meeting, 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.
Directors are elected by plurality vote. Abstentions and broker non-votes
do not have the effect of a vote in opposition to the election of a director.
Abstentions are counted toward a quorum which requires a bare majority of
outstanding shares.
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SHAREHOLDINGS OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Management of the Company does not know of any persons other than Jack A.
Sweeney, the Company's Chairman of the Board and Chief Executive Officer; Steven
Sweeney as Trustee(1); Mark Rubin, the Company's President and Vice Chairman of
the Board; and Six Point Trust, who are the beneficial owners of more than 5% of
the Company's outstanding Common Stock as of March 31, 1998. Mr. Rubin's and Mr.
Sweeney's business address is 1801 Century Park East, 8th Floor, Century City,
California, 90067. Steven Sweeney's business address is c/o Regional Financial
Corporation, 1801 Century Park East, Suite 820, Century City, California 90067.
Six Point Trust's business address is 19456 Ventura Boulevard, Tarzana,
California 91356. The following table sets forth certain information, as of
March 31, 1998, concerning the beneficial ownership of the Company's outstanding
Common Stock by each of the directors and nominees for director of the Company
and by all directors and officers(2) of the Company as a group.
<TABLE>
<CAPTION>
NAME AND TITLE COMMON STOCK PERCENT
OTHER THAN DIRECTOR BENEFICIALLY OWNED(3)(4) OF CLASS(4)
------------------- ----------------------- -----------
<S> <C> <C>
H. Anthony Gartshore................................ 13,000(5) .53%
Gary M. Horgan...................................... 1,000(6) .04%
Alexander S. Lowy................................... 39,000(7) 1.58%
Thomas E. McCullough................................ 15,000(8) .61%
Chief Financial Officer, Secretary
Frank R. Moothart................................... 15,000(9) .61%
Mark Rubin.......................................... 472,304 19.26%
President and Vice Chairman of the Board
Lawrence J. Sherman................................. 61,300(10) 2.49%
Jack A. Sweeney..................................... 472,304(11) 19.26%
Chairman of the Board and Chief Executive Officer
Carolyn Zarro....................................... -0- -0-
All Directors and Officers as a Group (9 in Number).. 1,088,908(12) 43.36%
</TABLE>
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(1) Steven Sweeney has voting powers over 156,000 shares but disclaims
beneficial interest in all but 52,000 shares.
(2) The term "officer" means the Chairman of the Board and Chief Executive
Officer; and the President and Vice Chairman of the Board; and the Chief
Financial Officer and the Secretary.
(3) This figure includes shares beneficially owned, directly or indirectly,
together with associates or by or on behalf of minor children or children
living at the residence of the director or officer. Unless otherwise
indicated, the persons named herein have sole voting power over shares
reported.
(4) Shares subject to options held by directors and officers that were
exercisable within 60 days after the Record Date ("vested"), are treated
as outstanding for the purpose of computing the number and percentage of
outstanding securities of the class owned by such person but not for the
purpose of computing the percentage of the class owned by any other person.
(5) This figure, as well as percent of class, includes, as if currently
outstanding, 13,000 shares vested or which will vest within sixty (60) days
of the Record Date to Mr. Gartshore, but which have not been exercised
pursuant to the Company's Stock Option Plan.
(6) Mr. Horgan disclaims beneficial interest in 70 shares held by him which are
not included in this figure.
(7) This figure, as well as percent of class, includes, as if currently
outstanding, 15,000 shares vested or which will vest within sixty (60) days
of the Record Date to Mr. Lowy, but which have not been exercised pursuant
to the Company's Stock Option Plan.
3
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(8) This figure, as well as percent of class, includes, as if currently
outstanding, 15,000 shares vested or which will vest within sixty (60) days
of the Record Date to Mr. McCullough, but which have not been exercised
pursuant to the Company's Stock Option Plan.
(9) This figure, as well as percent of class, includes, as if currently
outstanding, 15,000 shares vested or which will vest within sixty (60) days
of the Record Date to Mr. Moothart, but which have not been exercised
pursuant to the Company's Stock Option Plan.
(10) This figure, as well as percent of class, includes, as if currently
outstanding, 15,000 shares vested or which will vest within sixty (60) days
of the Record Date to Mr. Sherman, but which have not been exercised
pursuant to the Company's Stock Option Plan.
(11) This figure, as well as percent of class, includes 48,700 shares held by
the Sweeney Foundation.
(12) This figure, as well as percent of class, includes, as if currently
outstanding, 60,000 shares vested or which will vest within sixty (60) days
of the Record Date to all officers and directors as a group, but which have
not been exercised pursuant to the Company's Stock Option Plan.
PROPOSAL 1
AMENDMENT OF BYLAWS
RANGE OF DIRECTORS
The Bylaws of the Company provide that the authorized number of directors
shall be not less than five (5) nor more than nine (9). The Board of Directors
acting as a nominating committee has nominated the nine persons specified in the
Section entitled "ELECTION OF DIRECTORS" herein to serve as directors of the
Company for a period of either one, two or three years as designated by the
Board (see "Amendment to Bylaws - Classified Board"). In order to allow for
flexibility in the range of directors, the Board believes that the range should
be changed to not less than six (6) nor more than ten (10). Consequently, it is
proposed that Section 3.2 of the Bylaws be amended to read as follows:
"Section 3.2. Number of Directors. The affairs of the
-------------------
corporation shall be managed by a board of directors consisting of not
less than six (6) nor more than ten (10) directors. The exact number
of directors within the limits specified shall be fixed from time to
time, (i) by resolution duly adopted by the board of directors; or
(ii) by a bylaw or amendment thereof duly adopted by the vote of a
majority of the shares entitled to vote represented at a duly called
meeting at which a quorum is present, or by the written consent of the
holders of a majority of the outstanding shares entitled to vote or of
the board of directors; or (iii) by approval of the shareholders (as
defined in Section 153 of the General Corporation Law); provided,
however, that a bylaw reducing the minimum number of directors to a
number less than five cannot be adopted if the votes cast against its
adoption at a meeting or the shares not consenting in the case of
action by written consent are equal to more than 16-2/3 percent of the
outstanding shares entitled to vote. No amendment may change the
stated maximum number of authorized directors to a number greater than
two times the stated minimum number of directors minus one."
VOTE REQUIRED; BOARD RECOMMENDATION
- -----------------------------------
The favorable vote of a majority of the outstanding shares of the Company's
Common Stock is required to adopt this amendment. The Board of Directors
recommends a vote of "FOR" on the amendment designated as Proposal 1 on the
Proxy accompanying this Proxy Statement. This amendment to the Bylaws will be
effective as soon as the necessary shareholder approval has been obtained.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "FOR" ON THIS PROPOSAL 1.
4
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PROPOSAL 2
AMENDMENT TO BYLAWS
CLASSIFIED BOARD OF DIRECTORS
The Company's Bylaws presently provide that all directors shall be elected
at each annual meeting and until their respective successors are elected and
have qualified. The proposed amendment to the Company's Bylaws provides that
the Board of Directors shall be classified into two or three classes, depending
on the number of directors, and that directors shall be elected for staggered
terms. If this Amendment is adopted at the Meeting, the shareholders will be
asked to elect nine directors, three for an initial term of one year, three for
an initial term of two years and three for an initial term of three years.
Consequently, it is proposed that Section 3.3 of the Company's Bylaws be
amended to read as follows:
"Section 3.3 Election of Directors. In the event the
---------------------
authorized number of directors shall be fixed at nine (9) or more, the
Board of Directors shall be classified into three (3) classes, the
members of each class to serve for a term of three (3) years. In the
event the authorized number of directors shall be fixed at six (6) or
more, but less than nine (9), the Board of Directors shall be
classified into two (2) classes, the members of each class to serve
for a term of two (2) years. At the first annual meeting of
shareholders held upon shareholder approval of this Section 3.3,
nominees elected as directors will be classified according to the
recommendations of the Board of Directors. If there shall be three (3)
classes one-third (1/3) of the directors shall be elected for a term
of three (3) years, one-third (1/3) of the directors shall be elected
for a term of two (2) years, and one-third (1/3) of the directors
shall be elected for a term of one (1) year. If the number of
directors is not divisible by three (3), the first extra director
shall be elected for a term of three (3) years and a second extra
director, if any, shall be elected for a term of two (2) years; and if
there shall be two (2) classes, one-half ( 1/2) of the directors shall
be elected for a term of two (2) years and one-half (1/2) of the
directors shall be elected for a term of one (1) year. If the number
of directors is not divisible by two (2), the first extra director
shall be elected for a term of two (2) years. At subsequent annual
meetings of shareholders, a number of directors shall be elected equal
to the number of directors with terms expiring at that annual meeting.
If there shall be three (3) classes, at each subsequent annual meeting
the directors elected shall be elected for a term of three (3) years.
If there shall be two (2) classes, at each subsequent annual meeting
the directors elected shall be elected for a term of two (2) years. In
the event the authorized number of directors changes necessitating a
change in the number of classes, the directors of the corporation
shall be reclassified in accordance with California law and the
principles of this Section 3.3; provided, however, any change in the
number of classes shall not operate to shorten the term of any
director. If the number of directors is changed, any increase or
decrease shall be apportioned among the classes so as to maintain the
number of directors in each class as nearly equal as possible, and any
additional directors of any class elected to fill a vacancy resulting
from an increase in such class shall hold office for a term that shall
coincide with the remaining term of that class, but in no case will a
decrease in the number of directors shorten the term of any incumbent
director. A director shall hold office until the annual meeting for
the year in which his term expires and
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until his successor shall be elected and shall qualify, subject,
however, to prior death, resignation, retirement, disqualification or
removal from office. Any vacancy on the Board of Directors, howsoever
resulting, may be filled by a majority of the directors then in
office, even if less than a quorum, or by a sole remaining director.
Any director elected to fill a vacancy shall hold office for a term
that shall coincide with the term of the class to which such director
shall have been elected."
ANALYSIS OF SECTION 3.3
- -----------------------
Section 3.3, by providing for the classification of directors, provides
that if the number of directors shall be fixed at nine or more, the Board shall
be divided into three classes of directors serving staggered three-year terms,
with each class being as nearly equal in number as possible. In the event the
number of directors shall be fixed at six or more, but less than nine, the Board
shall be divided into two classes of directors serving staggered two-year terms
with each class being as nearly equal in number as possible. As a result, if
there are three classes of directors, approximately one-third of the Board of
Directors would be elected each year, and if there are two classes of directors,
approximately one-half of the Board of Directors would be elected each year.
Section 3.3 further provides that at the first annual meeting of shareholders
held after Section 3.3 becomes effective, which the Board anticipates will be
this Meeting, nominees elected as directors will be classified according to the
recommendations of the Board of Directors. Thus, because nine directors are to
be elected, there will be three classes of directors, with one class serving
until the 1999 annual meeting of shareholders, the second class serving until
the 2000 annual meeting of shareholders, and the third class serving until the
2001 annual meeting of shareholders. Thereafter, each class of directors will
be elected for staggered three-year terms. In the event of a vacancy on the
Board, any director elected by the shareholders or the Board to fill the vacancy
would hold office for the balance of the term of the class in which the vacancy
occurred.
REASONS FOR AND AGAINST THE PROPOSAL
- ------------------------------------
The Board of Directors believes that the classification of directors will
reduce the possibility that a third party could effect a sudden or surprise
change in the composition of the Board of Directors without the support of the
incumbent Board. Thus, the classification of directors will affect the ability
of shareholders of the Company to effect immediate changes in the composition of
the Board of Directors.
Because the classification of directors will make more difficult or deter a
proxy contest or the assumption of control of the Board by a holder of a
substantial block of the Company's Common Stock, it will increase the likelihood
that incumbent members of Management will retain their position. The
classification of directors will apply to every election of directors whether or
not a change in the composition of the Board would be beneficial and whether or
not the holders of a majority of the Company's Common Stock believe that such a
change wold be desirable. As a result of the classification of directors it
would require shareholders who do not favor the policies of the Board at least
two annual meetings of shareholders to replace a majority of the Board.
In addition, the classification of directors could have the effect of
deterring a third party from making a tender offer for or otherwise acquiring
significant blocks of the Company's shares, even though such an action might
increase, at least temporarily, market prices for the Company's shares, and even
though a number of shareholders of the Company might be willing to sell their
shares at the price offered. Because the deterrence of such acquisitions could
tend to reduce such temporary fluctuations in the market price of the Company's
shares, shareholders could be denied certain opportunities to sell their shares
at temporarily higher market prices. However, the Board believes that the
benefits in protecting the ability of a Board of Directors to negotiate with a
proponent of an unfriendly or unsolicited proposal to take over or restructure a
corporation outweigh the disadvantage of discouraging such proposals.
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In recent years, accumulations by third parties of substantial stock
positions in publicly held corporations frequently have been preludes to hostile
attempts to take over or restructure such corporations or to sell all or part of
such corporations' assets or to take other similar extraordinary corporate
actions. Such actions are often undertaken by third parties without advance
notice to or consultation with management. In many cases, such third parties
position themselves through stock ownership to seek representation on boards of
directors in order to increase the likelihood that they will be able to
implement proposed transactions opposed by the corporation's management. If a
corporation resists the efforts of a third party to obtain representation on its
board, the third party may commence a proxy contest to have its nominees elected
to the board in place of certain directors or the entire board. In some cases,
a third party may not truly be interested in taking over the corporation, but
uses the threat of a proxy fight or a bid to take over the corporation, or both,
as a means of obtaining for itself a special benefit which might not be
available to all of the corporation's shareholders.
The Board believes that the imminent threat of removal of the Company's
Management in such a situation, through a change in the composition of the
Board, could severally curtail Management's ability to negotiate effectively
with such a party. Management could be deprived of the time and information
necessary to evaluate a particular takeover or other proposal, to seek and study
alternative proposals that may better serve the interests of the Company's
shareholders and, in an appropriate case, to help achieve a better price in any
transaction involving the Company that may ultimately be undertaken.
Takeovers or changes in management of a corporation which are proposed and
effected without prior consultation and negotiation with its Board of Directors
are not necessarily detrimental to the corporation and its shareholders.
However, the Board believes that the benefits in protecting the ability of a
Board of Directors to negotiate with a proponent of an unfriendly or unsolicited
proposal to take over or restructure a corporation outweigh the disadvantages of
discouraging such proposals.
Section 3.3, is designed, in part, to encourage a third party seeking to
acquire control of the Company to consult first with the Company's Board of
Directors regarding any proposed business combination or other transaction
involving the Company, so that it may be studied by the Board and so that the
Company's shareholders can have the benefit of the Board's recommendations in
cases where shareholder approval is required. Although a takeover bid may be
made at prices representing premiums over the then current market price of the
shares being sought, the Board believes that, in a situation where a third party
seeks Management's cooperation, the Company's Board of Directors will be in a
better position to promote consideration of a broader range of relevant factors,
such as the structuring of a proposed transaction and its tax consequences and
the underlying value and prospects of the Company. These issues may not
otherwise adequately be addressed by such a third party.
VOTE REQUIRED; BOARD RECOMMENDATION
- -----------------------------------
A favorable vote by the holders of a majority of the Company's outstanding
Common Stock entitled to vote is required to adopt the proposed amendment to
Section 3.3. If shareholders approve the proposed amendment to Section 3.3,
the provision will become effective immediately and the Election of Directors at
this Meeting shall be conducted on a classified board basis (see Election of
Directors).
THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "FOR" ON THIS PROPOSAL 2.
7
<PAGE>
================================================================================
PROPOSAL 3
AMENDMENT TO ARTICLES OF INCORPORATION
SERIAL PREFERRED STOCK
Article Four of the Articles of Incorporation, as amended, of the Company
(the "Articles") presently provides for one class of shares of stock called
"Common Stock." The total number of shares of common stock authorized is
50,000,000. The Board of Directors has approved and recommends that the
shareholders of the Company approve an amendment to Article Four of the Articles
to authorize 25,000,000 shares of a new class of stock, to be known as "Serial
Preferred Stock," and to authorize the Board of Directors, by resolution and
upon filing of an appropriate certificate with the Secretary of State, to
thereafter specify the terms and conditions of a class or classes of the Serial
Preferred Stock.
Shareholders are being asked to approve the proposed amendment in order to
provide the Board of Directors with the maximum flexibility to fix the terms and
conditions of the Serial Preferred Stock in the event the Board seeks to raise
additional equity capital through the issuance of a class of equity securities
with preference over the common stock. The Board of Directors believes that
this authorization will provide the Company with flexibility of action for
possible future financing transactions, acquisitions and other corporate
purposes. Elimination of the delay occasioned by the necessity of obtaining
shareholder approval will better enable the Company to engage in financing
transactions, and acquisitions which take full advantage of changing market
conditions. Upon approval of this proposal by the shareholders, the Board of
Directors may designate the Serial Preferred Stock with rights, preferences,
privileges and restrictions which have priority over the Common Stock, including
but not limited to dividend and liquidation rights. The shareholders will be
able to obtain, upon request and without charge, a statement of the rights,
preferences, privileges and restrictions granted to or imposed upon the Serial
Preferred Stock from the office of the Secretary of the Company. A legend will
be added to the Common Stock certificates which sets forth this right to obtain
such statement.
Article Four of the Company's Articles of Incorporation currently reads:
"This corporation is authorized to issue one class of shares of
stock; and the total number of said shares is fifty million
(50,000,000)."
If Proposal 3 is approved by the shareholders of the Company, then
Article Four will be amended to read as follows:
"This corporation is authorized to issue two classes of shares
designated "Serial Preferred Stock" and "Common Stock," respectively.
The number of shares of Serial Preferred Stock authorized to be issued
is 25,000,000 and the number of shares of Common Stock, no par value
per share, authorized to be issued is 50,000,000.
The designations and the powers, preferences and rights and
qualifications, limitations or restrictions thereof, of each class of
stock of the corporation shall be as follows:
(A) Serial Preferred Stock
----------------------
Serial Preferred Stock may be issued from time to
time in one or more series. The Board of Directors is hereby
8
<PAGE>
===============================================================
authorized to fix or alter the dividend rights, dividend rate,
conversion rights, voting rights, rights and terms of redemption
(including sinking fund provisions), the redemption price or
prices, and the liquidation preferences of wholly unissued series
of preferred shares, and the number of shares constituting any
such series and the designation thereof, or any of them; and to
increase or decrease the number of shares of any series
subsequent to the issue of shares of that series but not below
the number of shares of such series then outstanding. In case
the number of shares of any series shall be so decreased, the
shares constituting such decrease shall resume the status which
they had prior to the adoption of the resolution originally
fixing the number of shares of such series.
(B) Common Stock
------------
(1) After the requirements with respect to preferential
dividends upon all classes and series of stock entitled thereto
shall have been paid or declared and set apart for payment and
after the corporation shall have complied with all requirements,
if any, with respect to the setting aside of sums as a sinking
fund or for a redemption account on any class of stock, then and
not otherwise, the holders of Common Stock shall be entitled to
receive such dividends as may be declared from time to time by
the Board of Directors.
(2) After distribution in full of the preferential
amounts to be distributed to the holders of all classes and
series of stock entitled thereto in the event of a voluntary or
involuntary liquidation, dissolution, or winding up of the
corporation, the holders of the Common Stock shall be entitled to
receive all the remaining assets of the corporation.
(3) Each holder of common Stock shall have one vote in
respect of each share of such stock held by him, subject,
however, to such special voting rights by class as are or may be
granted to holders of Serial Preferred Stock."
The Board of Directors is required to make any determination to issue
shares of Serial Preferred Stock based on its judgment as to the best interests
of the shareholders and the Company. Although the Board of Directors has no
present intention of doing so, it could issue shares of Serial Preferred Stock
that could, depending on the terms of such series, make more difficult or
discourage an attempt to obtain control of the Company by means of a merger,
tender offer, proxy contest or other means. When, in the judgment of the Board
of Directors, the action will be in the best interest of the shareholders and
the Company, such shares could used to create voting or other impediments or to
discourage persons seeking control of the Company. Such shares could be
privately placed with purchasers favorable to the Board of Directors in opposing
such action. In addition, the Board of Directors could authorize holders of a
series of Serial Preferred Stock to vote either separately as a class or with
the holders of the Company's Common Stock, on any merger, sale or exchange of
assets by the Company or any other extraordinary corporate transaction. The
existence of the additional authorized shares could have the effect of
discouraging unsolicited takeover attempts.
9
<PAGE>
================================================================================
The issuance of new shares also could be issued to dilute the stock ownership of
a person or entity seeking to obtain control of the Company should the Board of
Directors consider the action of such entity or person not to be in the best
interest of the shareholders and the Company.
It is not possible to state the actual effect of the authorization of the
Serial Preferred Stock upon the rights of holders of Common Stock until the
Board of Directors determines the respective rights of the holder of one or more
series of the Serial Preferred Stock. The Company is not presently engaged in
any negotiations concerning the issuance of any shares of Serial Preferred
Stock, nor are there any present arrangements, understandings or plans
concerning the issuance of such shares. The Board of Directors is not aware of
any present effort by any person to accumulate the Company's securities or to
obtain control of the Company.
There are no provisions in the Company's Articles of Incorporation which
are intended to have an anti-takeover effect. The proposed amendment to the
Company's Bylaws providing for a classified board of directors is considered an
anti-takeover provision however (see Proposal 2 - Amendment to Bylaws -
Classification of Board of Directors).
The Board of Directors believes that the proposed amendment is in the best
interest of the Company and its shareholders. Proposal 3 provides increased
flexibility in meeting corporate needs which might arise. Additionally, the
Board of Directors believes that the delay occasioned by seeking shareholder
approval of a specific issuance could be to the detriment of the Company and its
shareholders.
VOTE REQUIRED; BOARD RECOMMENDATIONS
- ------------------------------------
A favorable vote by the holders of a majority of the Company's outstanding
Common Stock entitled to vote is required to adopt the proposed amendment to
Article Four. If shareholders approve proposed Article Four, the provision
shall become effective upon the filing of a Certificate of Amendment with the
Secretary of State. The Board of Directors has instructed Management to file
proposed Article Four as soon as possible.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "FOR" ON THIS PROPOSAL 3.
PROPOSAL 4
ELECTION OF DIRECTORS
NOMINEES
The Company's Bylaws currently provide for a range of five (5) to nine (9)
directors, and permit the exact number of directors of the Company to be fixed
by Board or shareholder action. The Board of Directors has fixed the number of
directors at nine (9). If the proposed amendment to the Company's Bylaws
providing for a classified board of directors (Proposal 2) is approved by the
shareholders, votes will be cast in such a way as to effect the election of all
nine (9) nominees, including electing the following three directors for an
initial one-year term: Thomas E. McCullough, Lawrence J. Sherman and Carolyn
Zarro; electing the following three directors for an initial two-year term:
Frank R. Moothart, Mark Rubin and Jack A. Sweeney and the following three
directors for an initial three-year term: H. Anthony Gartshore, Gary M. Horgan
and Alexander S. Lowy. If Proposal 2 is not approved, all nine (9) persons named
above will be nominated for election as directors to serve until the 1999 Annual
meeting of Shareholders and until their successors are elected and have
qualified. Votes will be cast in such a way as to effect the election of all
nine (9) nominees in either case.
In the event that any of the nominees should be unable to serve as a director,
it is intended that the Proxy will be voted for the election of such substitute
nominees, if any, as shall be designated by the Board of Directors. The Board
10
<PAGE>
================================================================================
of Directors has no reason to believe that any of the nominees will be
unavailable to serve if elected. Additional nominations can only be made by
complying with the notice provision set forth in the Bylaws of the Company, an
extract of which is included in the Notice of Annual Meeting of Shareholders
accompanying this Proxy Statement. This Bylaw provision is designed to give the
Board of Directors advance notice of competing nominations, if any, and the
qualifications of competing nominees, and may have the effect of precluding
third-party nominations if the notice provisions are not followed.
None of the directors or officers of the Company were selected pursuant to any
arrangement or understanding, other than with the directors and officers of the
Company and the Bank, acting within their capacities as such. There are no
family relationships between the directors and officers of the Company, and none
of the directors or officers of the Company serve as directors of any company
which has a class of securities registered under, or which is subject to the
periodic reporting requirements of, the Securities Exchange Act of 1934 or any
investment company registered under the Investment Company Act of 1940.
The following table sets forth the names and certain information as of March
31, 1998, concerning the persons to be nominated by the Board of Directors for
election as directors of the Company and the officers of the Company:
<TABLE>
<CAPTION>
YEAR FIRST YEAR FIRST
APPOINTED APPOINTED
OR ELECTED OR ELECTED
NAME AND TITLE BUSINESS EXPERIENCE DIRECTOR DIRECTOR OF
(OTHER THAN DURING THE PAST OF THE FIRST
DIRECTOR) AGE FIVE YEARS COMPANY REGIONAL BANK
- --------------- --- ------------------------- ---------- -------------
<S> <C> <C> <C> <C>
H. Anthony Gartshore..................... 54 President, First Regional Bank 1996 1996
Gary M. Horgan........................... 50 Attorney, Horgan, Rosen, Beckham & Coren, L.L.P. 1997 1997
Alexander S. Lowy........................ 59 President, Jamco Holdings Corporation 1988 1988
Thomas E. McCullough..................... 45 Chief Financial Officer and Secretary, First Regional 1993 1993
Bancorp; Executive Vice President and Chief Operating
Officer, First Regional Bank
Frank R. Moothart........................ 79 Consultant, formerly Vice President, City Investing 1981 1979
Company, (diversified conglomerate) and President,
Southern California Financial Corporation
Mark Rubin............................... 61 President and Vice Chairman of the Board of First 1981 1979
President and Vice Chairman Regional Bancorp; Vice Chairman of the Board, First
of the Board and Chief Regional Bank; Real Estate Developer
Executive Officer
Lawrence J. Sherman...................... 74 President, Sherman Industries, Inc. 1981 1979
Jack A. Sweeney.......................... 68 Chairman of the Board and Chief Executive Officer, 1981 1979
Chairman of the Board and First Regional Bancorp; Chairman of the Board and
Chief Executive Officer Chief Executive Officer, First Regional Bank; Real
Estate Developer
Carolyn Zarro............................ 46 Executive Vice President, Real Estate Loan Department, 1996 1996
First Regional Bank
</TABLE>
11
<PAGE>
================================================================================
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
During 1997, the Board of Directors of the Company held twelve (12)
regular meetings and the Board of Directors of the Bank held twelve (12)
regular meetings.
The Boards of Directors of the Company and of the Bank have a joint Audit
Committee composed of Messrs. Lowy, Moothart and Sherman. This committee is
responsible for overseeing internal audit functions and for interfacing with the
Company's and the Bank's independent certified public accountants, Deloitte &
Touche LLP. The Audit Committee met twelve (12) times during 1997.
The Company and the Bank have a joint Compensation Committee, which
consists of Messrs. Lowy, Moothart and Sherman. The Compensation Committee
reviews Management's recommendations regarding the granting of stock options,
authorizes specific grants and establishes the terms and conditions upon which
stock options can be exercised and advises the Board regarding executive
compensation and personnel policies.
The Company's Board of Directors does not have a standing nominating
committee.
During 1997, no director of the Company attended less than 75% of the
aggregate meetings of the Company's Board of Directors and its Committees on
which such director served.
COMPENSATION AND OTHER TRANSACTIONS WITH MANAGEMENT
Directors who are also officers of the Bank or the Company do not receive
fees for service on the Board or the Committees. During 1997, each outside
director received $400 for each regular meeting of the Board of Directors of the
Bank attended; $100 for each meeting of the Company's Board attended; and $300
for each meeting of the Loan Committee attended. On this basis, the directors
received the following aggregate fees during 1997: Gary M. Horgan, $500;
Alexander S. Lowy, $18,900; Frank R. Moothart, $13,500; and Lawrence J. Sherman,
$18,900.
The following table sets forth a summary of annual and long term
compensation for the Chief Executive Officer of the Company and all executive
officers with compensation, paid or accrued, in excess of $100,000.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(13) AWARDS PAYOUTS
---------------------------------------- -------------------- --------------------------
OTHER RESTRICTED OPTION ALL
ANNUAL STOCK SHARES LTIP OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION AWARDS SAR'S PAYOUTS COMPENSATION(14)
- --------------------------- ---- -------- ------- ------------ ---------- ------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jack A. Sweeney 1997 $175,000 $15,000 N/A None None N/A N/A
Chairman of the Board and 1996 $192,100 $15,000 N/A None None N/A N/A
Chief Executive of the 1995 $140,000 $15,000 N/A None None N/A N/A
Company and the Bank
Mark Rubin 1997 $175,000 $15,000 N/A None None N/A N/A
Vice Chairman of the Board of 1996 $177,650 $15,000 N/A None None N/A N/A
the Company and the Bank, 1995 $140,000 $15,000 N/A None None N/A N/A
President of the Company
Thomas E. McCullough 1997 $128,000 $10,000 N/A None None N/A N/A
Chief Financial Officer and 1996 $122,610 $10,000 N/A None None N/A N/A
Secretary of the Company, 1995 $ 95,000 $10,000 N/A None None N/A N/A
Executive Vice President and
</TABLE>
Chief Operating Officer
of the Bank
- --------------------------------------
(13) Does not include director fees but does include monies deferred pursuant to
the Bank's 401(k) Plan and Income Deferral Plans.
(14) The Bank furnishes and plans to continue to furnish to certain officers the
use of Bank-owned automobiles which are used primarily for Bank business
purposes. In past years, the Bank provided certain of its officers with
memberships in various clubs, which were used primarily for bank business.
The Bank has provided and plans to continue to provide certain of its
officers with specified life and medical insurance benefits. Since portions
of the automobile expenses, club membership fees and insurance premiums
attributable to personal use are not believed to exceed $25,000 or ten
percent (10%) of the compensation reported in the table per individual,
such amounts have not been included in the foregoing figures. The "cash
compensation" figures include monies deferred pursuant to the Bank 401(k)
Plan and the Bank's Income Deferral Plans.
(15) Option shares only; the Company has not issued any Stock Appreciation
Rights ("SARs").
12
<PAGE>
===============================================================================
STOCK OPTIONS
The following table sets forth certain information regarding stock options
granted during 1997 to the Chief Executive Officer and all executive officers
with compensation in excess of $100,000. The Company has not issued Stock
Appreciation Rights ("SARs").
<TABLE>
<CAPTION>
PERCENTAGE
OF TOTAL OPTIONS
OPTIONS GRANTED GRANTED TO EMPLOYEES EXERCISE EXPIRATION
NAME DURING 1997 DURING 1997 PRICE DATE
-------------------- -------- ----------
<S> <C> <C> <C> <C>
Jack A. Sweeney........ -0- -0- N/A N/A
Mark Rubin............. -0- -0- N/A N/A
Thomas E. McCullough... -0- -0- N/A N/A
</TABLE>
The following table sets forth certain information regarding stock options
exercised during 1997 by the Chief Executive Officer and all executive officers
with compensation in excess of $100,000.
<TABLE>
<CAPTION>
SHARES NUMBER OF
ACQUIRED VALUE UNEXERCISED VALUE OF UNEXERCISED
NAME ON EXERCISE REALIZATION OPTIONS OPTIONS AT 12/31/97
---- ----------- --------------- -------------- ------------------------
EXERCISABLE/ EXERCISABLE/
UNEXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C>
Jack A. Sweeney........ 30,000 $123,750(16) -0-/45,000 N/A/$360,000(18)
Mark Rubin............. 30,000 $123,750(17) -0-/45,000 N/A/$360,000(18)
Thomas E. McCullough... -0- -0- 10,000/15,000 $80,000/$120,000(18)
</TABLE>
- ------------------------------------
(16) Based on a fair market price of $6.125 per share at time of exercise.
(17) Based on a fair market price of $6.125 per share at time of exercise.
(18) Based on a closing price on December 31, 1997 of $10.00 per share.
CERTAIN TRANSACTIONS
Some of the directors, officers and principal shareholders of the Company and
companies with which they are associated 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 banking transactions with such persons in the future.
In Management's opinion, all loans and commitments to lend included in such
transactions were made in compliance with applicable laws on substantially the
same terms, including interest rates, collateral and repayment schedule, as
those prevailing for comparable transactions with other persons of similar
creditworthiness and did not involve more than a normal risk of collectibility
nor contained terms unfavorable to the Bank.
Starting on February 8, 1988, Jamco Holdings Corporation entered into a
sublease with the Bank covering certain unused portions of the Bank's lease for
Suite 800, 1801 Century Park East, Los Angeles, California. During 1997, Jamco
paid the Bank $1,640 per month for its share of Suite 800, equal to the fair
market value of the sublet space as determined by an independent appraisal.
Messrs. Sweeney, Rubin and Lowy are each principal shareholders in Jamco.
13
<PAGE>
===============================================================================
INDEPENDENT ACCOUNTANTS
The firm of Deloitte & Touche LLP served as independent public accountants for
the Company and the Bank for 1997 and will continue in those capacities in 1998.
It is anticipated that a representative of Deloitte & Touche LLP will be
present at the Meeting to respond to appropriate questions from shareholders.
SHAREHOLDER PROPOSALS
The deadline for shareholders to submit proposals to be considered for
inclusion in the Proxy Statement for the Company's 1999 Annual meeting of
Shareholders is December 31, 1998.
SECTION 16 (a) COMPLIANCE
Pursuant to Section 16 (a) of the Securities Exchange Act of 1934 and
Securities and Exchange Commission ("SEC") regulations, the Company's
directors, certain officers, and greater than 10 percent shareholders are
required to file reports of ownership and changes in ownership with the SEC and
to furnish the Company with copies of all such reports they file.
Based solely on its review of copies of such reports received or written
representations from certain reporting persons, the Company believes that all
filing requirements applicable to its directors, officers and 10 percent
shareholders were satisfied.
OTHER MATTERS
The Company's Board of Directors does not know of any matters to be presented
at the Meeting other than those set forth above. However, if other matters come
before the Meeting, it is the intention of the persons named in the accompanying
Proxy to vote said Proxy in accordance with the recommendations of the Company's
Board of Directors on such matters, and discretionary authority to do so is
included in the Proxy.
MANAGEMENT OF THE BANCORP WILL SUPPLY WITHOUT COST, UPON WRITTEN REQUEST, A
COPY OF THE BANCORP'S MOST RECENT ANNUAL REPORT ON FORM 10-K INCLUDING FINANCIAL
STATEMENTS AND SCHEDULES BUT WITHOUT EXHIBITS. SAID REQUEST SHOULD BE DIRECTED
TO JACK A. SWEENEY, CHAIRMAN, FIRST REGIONAL BANCORP, 1801 CENTURY PARKEAST, 8TH
FLOOR, CENTURY CITY, CALIFORNIA 90067.
First Regional Bancorp
Mark Rubin, President
First Regional Bancorp
Dated: April 21, 1998
14
<PAGE>
PROXY
FIRST REGIONAL BANCORP
ANNUAL MEETING OF SHAREHOLDERS
MAY 21, 1998
The undersigned shareholder of First Regional Bancorp (the "Company")
hereby nominates, constitutes and appoints Jack A. Sweeney and Mark Rubin, and
each of them, the attorney, agent, and proxy of the undersigned, with full
powers of substitution, to vote all stock of the Company which the undersigned
is entitled to vote at the Annual Meeting of Shareholders of the Company to be
held on Thursday, May 21, 1998, at 11:00 a.m. in the Cypress Room, Century Plaza
Hotel and Tower, 2025 Avenue of the Stars, Century City, California, and at any
and all adjournments thereof, as fully and with the same force and effect as the
undersigned might or could do if personally present there at, as follows:
1. Amendment of Bylaws - Range of Directors. Approving an amendment to the
----------------------------------------
Company's Bylaws to increase the current range of directors which is five
(5) to nine (9) to a range of six (6) to ten (10).
FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. Amendment of Bylaws - Classified Board of Directors. Approving an
---------------------------------------------------
amendment to the Company's Bylaws providing for the Board of Directors to
be divided into two or three classes of directors, depending on the number
of directors, serving staggered terms.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Amendment to Articles of Incorporation - Serial Preferred Stock.
---------------------------------------------------------------
Approving proposal to amend the Company's Articles of Incorporation to add
a class of Serial Preferred Stock.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. Election of Directors. Electing the following nine persons named below
---------------------
and in the Proxy Statement dated April 21, 1998, accompanying the Notice of
said Meeting, to serve and until their successors are elected and have
qualified, including the authority to elect the following nine persons to
the initial terms indicated below:
One-Year Term: Two-Year Term: Three-Year Term:
-------------- -------------- ----------------
Thomas E. McCullough Frank R. Moothart H. Anthony Gartshore
Lawrence J. Sherman Mark Rubin Gary M. Horgan
Carolyn Zarro Jack A. Sweeney Alexander S. Lowy
AUTHORITY GIVEN [ ] AUTHORITY WITHHELD [ ]
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR SOME, BUT NOT ALL OF THE
NOMINEES NAMED ABOVE, YOU SHOULD CHECK THE BOX "AUTHORITY GIVEN" AND YOU
SHOULD ENTER THE NAME(S) OF THE NOMINEE(S) WITH RESPECT TO WHOM YOU WISH TO
WITHHOLD AUTHORITY TO VOTE IN THE SPACE PROVIDED BELOW:
------------------------------------------------------
5. Other Business. To transact such other business as may properly come
--------------
before the Meeting and any adjournment or adjournments thereof.
PLEASE SIGN AND DATE THE OTHER SIDE
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ON PROPOSALS 1, 2 AND 3 AND
"AUTHORITY GIVEN" ON PROPOSAL 4. THE PROXY CONFERS AUTHORITY AND SHALL BE VOTED
IN ACCORDANCE WITH THE RECOMMENDATION OF THE BOARD OF DIRECTORS, UNLESS A
CONTRARY INSTRUCTION IS INDICATED, IN WHICH CASE THE PROXY SHALL BE VOTED IN
ACCORDANCE WITH SUCH INSTRUCTION. IN ALL OTHER MATTERS, IF ANY, PRESENTED AT
THE MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS.
PLEASE SIGN AND DATE BELOW
__________________________ Dated: __________________, 1998
(Number of Shares)
__________________________ __________________________
(Please Print Your Name) (Signature of Shareholder)
__________________________ __________________________
(Please Print Your Name) (Signature of Shareholder)
(Please date this Proxy and sign your name as it appears on the stock
certificates. Executors, administrators, trustees, etc., should give their full
titles. All joint owners should sign.)
I do [ ] do not [ ] expect to attend the Meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS, AND MAY
BE REVOKED BY THE SHAREHOLDER DELIVERING IT PRIOR TO ITS EXERCISE BY FILING WITH
THE CORPORATE SECRETARY OF THE COMPANY AN INSTRUMENT REVOKING THIS PROXY OR A
DULY EXECUTED PROXY BEARING A LATER DATE OR BY APPEARING AND VOTING IN PERSON AT
THE MEETING.
