<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1 TO FORM 10-K
MARK ONE:
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (Fee required) For the fiscal year ended DECEMBER
31, 1995
/ / TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (No Fee required)
For the transition period ______ to ______
Commission File No. 0-11160
HOME INTERSTATE BANCORP
(Exact Name of Registrant as Specified in its Charter)
CALIFORNIA 95-3657758
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2633 CHERRY AVENUE, SIGNAL HILL, CALIFORNIA 90806
(address of Principal Executive Offices) (ZIP Code)
Registrant's Telephone Number, Including Area Code: (310) 988-9600
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, NO PAR VALUE
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has ben subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of the Form 10-K or any
amendment to this Form 10-K. / /
As of APRIL 18, 1996, the aggregate market value of the voting shares
held by non-affiliates (all persons other than executive officers, directors or
greater than 10% shareholders) of the Registrant was approximately
$45,095,956
An aggregate of 4,213,280 shares of common stock were
outstanding at APRIL 18, 1996
<PAGE> 2
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Pursuant to the Agreement and Plan of Reorganization dated January 10,
1996, as amended March 29, 1996 (the "Merger Agreement") by and among CU
Bancorp, California United Bank, National Association ("CU Bank"), a national
banking association and wholly owned subsidiary of CU Bancorp, Home Interstate
Bancorp ("Home Bancorp") and Home Bank ("Home Bank"), a California state
chartered bank and wholly owned subsidiary of Home Bancorp, Home Bancorp will
merge with and into CU Bancorp (the "Merger"), with CU Bancorp surviving the
Merger (the "Surviving Company") and CU Bank will merge with and into Home Bank
under the name "California United Bank." Upon consummation of the Merger, each
outstanding share of Common Stock, no par value, of Home Bancorp ("Home Stock")
will be converted into the right to receive 1.409 shares of CU Bancorp Common
Stock, without par value. Upon consummation of the Merger, the Board of
Directors of the Surviving Company will be comprised of five members from each
of the current Boards of Directors of CU Bancorp and Home Bancorp. The five
members from the Board of Directors of Home Bancorp (the "Home Board") are
expected to be Donald A. Buschenfield, J. Richard Denham, Randall G. Elston,
Donald G. Martin and James P. Staes. The following table sets forth certain
information as of April 18, 1996, with respect to the directors, nominees for
election as directors and executive officers of Home Bancorp.
<TABLE>
<CAPTION>
Name Age Biographical Information
- ---- --- ------------------------
<S> <C> <C>
Keith W. Barnes 50 Keith W. Barnes has been Senior Vice President and Chief Financial Officer of
Home Bancorp from May 1988 to present and of Home Bank from July 1986
to present. He served as Vice President and Chief Financial Officer of Home
Bancorp from July 1986 to May 1988 and as Senior Vice President, Cashier of
Home Bank from July, 1982 to June 1986. Mr. Barnes has been with Home
Bank since 1974 and has been in banking industry for 27 years.
Donald A. Buschenfield 80 Donald A. Buschenfield has been a Vice President of Home Bancorp since 1982
and a director of Home Bancorp since 1981. Mr. Buschenfield is also the Vice
Chairman of Home Bank and a former Home Bank executive officer. He has
been a director of Home Bank since 1970. Mr. Buschenfield has served as a
consultant to Home Bank since 1985. (See "Director Compensation").
J. Richard Denham 63 J. Richard Denham has been a Vice President of Home Bancorp since 1982 and
has been a director of Home Bank and Home Bancorp since 1981. Mr. Denham
is the owner of Cement Tool Co./D & G Manufacturing Company, which is
engaged in industrial development. He served as Chief of Police for the City of
Signal Hill, California from 1967 to 1979. Mr. Denham became a rancher and
industrial developer after leaving the Signal Hill Police Department in 1979.
Since January, 1984, Mr. Denham has been breeding and training Andalusian
horses.
Randall G. Elston, MAI 42 Randall G. Elston has been a director of Home Bancorp since 1987, and of
Home Bank since March, 1992. He is a real estate appraiser and has, since 1982,
owned Elston Enterprises, Inc., a corporation doing business under the name
Pacific Real Estate Appraisal.
</TABLE>
2
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<TABLE>
<CAPTION>
Name Age Biographical Information
- ---- --- ------------------------
<S> <C> <C>
Roger K. Freeman, MD 61 Roger K. Freeman, MD, has been a director of Home Bancorp and Home Bank
since August 19, 1992. Dr. Freeman has been a Professor of Obstetrics and
Gynecology at UC Irvine since 1975. He was the Medical Director of Women's
Services at Long Beach Memorial Medical Center from 1975 to 1990, and has
been a Senior Fellow with Memorial Health Service since 1990. He also served
as Senior Vice President of Women's Services at Long Beach Memorial
Hospital from January 1992 through December 1992.
Donald G. Martin, CPA 48 Donald G. Martin has been a director of Home Bancorp since December, 1993
and of Home Bank since February, 1994. Since 1970, Mr. Martin has been
involved in the agricultural industry in South Dakota where he maintains an
interest in cattle ranching. He has also been a practicing Certified Public
Accountant since 1980. Mr. Martin is the son of Ruth A. Martin, Chairman of
the Board of Home Bancorp and Home Bank.
Ruth A. Martin 81 Ruth A. Martin has been the Chairman of the Home Board since 1986 and
served as its President from 1986 to February, 1993. She has also been
Chairman of the Board of Home Bank since 1986. Mrs. Martin has been a
director of Home Bank and Home Bancorp since 1983. She formerly served as
Area Administrator for the State Department of Mental Health from which
position she retired in January, 1981. Mrs. Martin is the mother of Donald G.
Martin, a director of Home Bancorp and Home Bank.
Susan Monsoor 40 Susan Monsoor has been Vice President/Corporate Secretary of Home Bank
since February 1989 and Corporate Secretary of Home Bancorp and Home Bank
since April 1987. She was appointed Vice President/Corporate Secretary of
Home Bancorp in February 1993. Prior to joining Home Bank, Ms. Monsoor was
employed in the legal field for 12 years.
Bill Neal 65 Bill Neal has been a director of Home Bancorp since May, 1993, and of Home
Bank since August 1992. He has served as the Executive Vice President and
Chief Operating Officer of Home Bank since January 1989. He has been with
Home Bank since 1974 and has been in the banking industry for 36 years.
George W. Post 71 George W. Post retired as Executive Vice President of Home Bank in October
1992, a position he held from October 1990. He has been and continues to serve
as a director of Home Bancorp and Home Bank since October 1990. Prior to the
acquisition of The Torrance National Bank ("TTNB") by Home Bank, Mr. Post
had served as President and Chief Executive Officer of TTNB from 1973 to
October 1990. Mr. Post had also served as a director and Chairman of the
Board of TTNB from 1973 to October 1990.
James P. Staes 57 James P. Staes served as Home Bancorp's Chief Executive Officer and Vice
Chairman from 1985 to 1987. He served as Home Bancorp's President from
1986 to 1987 and from February 1993 to present. Mr. Staes served as a director
of Home Bancorp since 1985 (except from May 1987 to May 1988). Mr. Staes
has also served as a director of Home Bank and its President since 1984 and as
Chief Executive Officer of Home Bank since 1985. Previously, Mr. Staes
served as President and Chief Executive Officer of the Bank of Manhattan from
1982 to 1983. Mr. Staes has been in the banking industry for 28 years.
</TABLE>
COMPLIANCE WITH REPORTING REQUIREMENTS OF SECTION 16
Under Section 16(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), Home Bancorp's directors, executive officers and any
persons holding ten percent or more of Home Stock are required to report their
ownership of
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Home Stock and any changes in that ownership to the Securities and Exchange
Commission (the "Commission") and to furnish Home Bancorp with copies of such
reports. Specific due dates for these reports have been established and Home
Bancorp is required to report in this Amendment No. 1 to Home Bancorp's Annual
Report on Form 10-K ("Amendment No. 1") any failure to file on a timely basis by
such persons. Based solely upon a review of copies of reports filed with the
Commission during the fiscal year ended December 31, 1995, all persons subject
to the reporting requirements of Section 16(a) filed all required reports on a
timely basis, with the exception of one Form 5, which was filed on February 8,
1996 for Roger K. Freeman, MD.
ITEM 11. EXECUTIVE COMPENSATION.
No executive officer of Home Bancorp received cash compensation during
the year ended December 31, 1995, except in his or her capacity as an executive
officer of Home Bank, and except for directors' fees paid by Home Bancorp and
Home Bank to members of their respective Boards of Directors. The following
table sets forth the aggregate cash compensation that Home Bancorp and its
subsidiaries paid to or accrued on behalf of each of (i) the Chief Executive
Officer of Home Bank during 1995 (the principal executive officer of Home
Bancorp does not receive any compensation for serving in such capacity), and
(ii) the four most highly compensated individuals, other than the Chief
Executive Officer, whose aggregate cash compensation exceeded $100,000 (two
persons), ("named executive officers") in each case, for fiscal 1993, 1994 and
1995:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
--------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------------- --------------------------------------------
(a) (b) (c) (d) (e)(3) STOCK OPTIONS/ LTIP ALL OTHER
NAME & PRINCIPAL BONUS OTHER COMP
---------------- ----- ----- ----
POSITION YEAR SALARY ($) ($) COMP ($) AWARDS S A R'S PAYOUTS (5)
-------- ---- ---------- --- -------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
JAMES P. STAES 1995 201,066 3,820 21,154 N / A N / A N / A 11,792
(1)(2)(4)
PRESIDENT & CEO, 1994 201,066 30,000 20,959 N / A N / A N / A 9,560
HOME BANK
1993 187,923 12,000 21,378 N / A N / A N / A 4,220
BILL G. NEAL (1)(4) 1995 119,474 2,270 22,396 N / A N / A N / A 9,433
EVP & COO, 1994 119,474 5,496 22,398 N / A N / A N / A 8,612
HOME BANK
1993 107,508 10,000 21,692 N / A N / A N / A 2,486
KEITH W. BARNES 1995 92,926 1,766 4,993 N / A N / A N / A 7,382
(1)(4)
SR. V P & C F O, 1994 92,926 7,209 3,956 N / A N / A N / A 6,604
HOME BANCORP
1993 86,419 3,000 4,257 N / A N / A N / A 1,964
</TABLE>
- ------------------------------------
(FOOTNOTES ON FOLLOWING PAGE)
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(1) 1995 Bonus numbers represent compensation accrued in 1995 and paid in
1996.
(2) 1994 Bonus number includes $30,000 for Staes accrued in 1994 and paid in
1995.
(3) Represents personal compensation recognized for the use of vehicles
provided by Home Bancorp. Other compensation for Messrs. Staes and Neal
also includes $14,400 for 1995, 1994 and 1993 which represents Directors'
Fees paid in each of those years.
(4) 1993 Bonus numbers represent compensation accrued in 1993 and paid in
1994.
(5) Represents Annual Profit Sharing Contribution.
RETENTION AGREEMENTS
Effective June 30, 1995, Mr. Staes, President and Chief Executive
Officer of Home Bank, entered into an agreement (the "Staes Retention
Agreement") with Home Bank pursuant to which Mr. Staes would become entitled to
receive two years base annual salary (or $402,132) payable in 48 substantially
equal installments over a two-year period upon the occurrence of a "change of
control" of Home Bancorp or Home Bank (as defined in such agreement). Ten other
key employees of Home Bancorp or Home Bank, including Messrs. Neal and Barnes,
entered into similar agreements (the "Employee Retention Agreements" and
together with the Staes Retention Agreement, the "Original Retention
Agreements") with Home Bank effective June 30, 1995. Pursuant to the Employee
Retention Agreements, each of the ten employees would be entitled to receive the
equivalent of one year's base annual salary, payable in 24 substantially equal
installments over a one-year period, upon a "change of control" of Home Bancorp
or Home Bank. Accordingly, Messrs. Neal and Barnes would become entitled to
receive $119,474 and $92,926, respectively, under the Employee Retention
Agreements.
The purpose of the Original Retention Agreements was to (i) minimize
the distraction to senior managers occasioned by threats of abrupt changes in
control of Home Bancorp or Home Bank and to permit such managers to concentrate
on the business and operation of Home Bancorp and Home Bank and (ii) enhance
the ability of Home Bank to retain the services of such managers. The Original
Retention Agreements did not contemplate the Merger, and the payment terms set
forth in such agreements will not be triggered by the consummation of the
Merger. The spirit of the Original Retention Agreements, however, was to
compensate the aforementioned persons in the event of a substantial change of
control of Home Bancorp or Home Bank. As such, the Home Board believes the
parties to the Original Retention Agreements should be compensated upon the
consummation of the Merger on the terms set forth in such agreements. Based
on this belief, Home Bank intends to enter into new agreements (the "Retention
Agreements") with the aforementioned persons prior to the consummation of the
Merger. The Retention Agreements, when executed, will supersede the Original
Retention Agreements. The terms and provisions of the Retention Agreements are
substantially similar to those of the Original Retention Agreements, except that
the Retention Agreements are effective only upon the consummation of the Merger
or some similar transaction between CU Bancorp and Home Bancorp (rather than
upon a "change of control") and,
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with respect to Mr. Staes, his Retention Agreement includes provisions requiring
Mr. Staes to provide certain consulting services for a one-year period after the
48 month payment term and prohibits Mr. Staes for a three-year period after
the Effective Time from serving as a director or executive officer of another
bank, savings and loan association, credit union or thrift and loan which has an
office within five miles of a branch office of Home Bank. Total payments to be
made by the Surviving Company under the Retention Agreements are approximately
$1.2 million. Payments under the Retention Agreements will be made whether or
not the recipient is employed by the Surviving Company.
STOCK OPTION EXERCISES AND HOLDINGS
The following table contains information on stock option exercises in
fiscal 1995 by the named executive officers and the number and value of their
respective unexercised options at December 31, 1995:
AGGREGATED OPTION/SAR EXERCISES IN 1995
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money Options/
Acquired Value Options / SAR's at 12/31/95 SAR's at 12/31/95
-------------------------------- ------------------------------
Name On Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James P. Staes N / A N / A 13,785 N / A $40,390 N / A
President & CEO
Bill Neal 1,500 $1,470 9,655 N / A $28,289 N / A
EVP & COO
Keith W. Barnes N / A N / A 4,901 N / A $14,360 N / A
Sr. VP & CFO
</TABLE>
PENSION PLAN
Salaried employees of Home Bancorp and Home Bank over 21 years of age
are also eligible to participate in Home Bancorp's Pension Plan (the "Pension
Plan"). As of January 1, 1990, employees must complete one (1) consecutive year
of service to Home Bancorp with a minimum of 1,000 hours worked per
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year in order to become eligible to participate in the Pension Plan. (Between
January 1, 1989 and December 31, 1989 employees had to complete two (2) such
years of continuous service and prior to January 1, 1989 employees had to
complete three (3) such years of continuous service.)
The normal annual retirement benefit under the Pension Plan at age 65
is based upon an annual accrued amount over the career of the participant. The
annual amount accrued for individuals for each year after 1988 is calculated as
the sum of (i) 1.15% of annual pay over $10,000; (ii) l.75% of annual pay over
$10,000 for each year of benefit service through 35 years; (iii) l.50% of annual
pay for each year of benefit service over 35 years; and (iv) any earned benefit
under the Pension Plan on December 30, 1988.
Effective January 31, 1994, Home Bancorp terminated the accrual of
pension benefits for Pension Plan participants, and all funding for the Pension
Plan was terminated effective on such date. In December, 1994, the Home Board
voted to terminate the Pension Plan effective April 3, 1995. Accrued benefits
will be transferred to employees participating in the Pension Plan in the form
of either an annuity or a rollover into the employee's 401(k) savings account,
at the option of the employee.
<TABLE>
<CAPTION>
PENSION PLAN TABLE
Pension Benefits Available At
Normal Retirement Age
-----------------------------------------
<S> <C>
James P. Staes
President & CEO $26,923
Bill Neal
EVP & COO $21,332
Keith W. Barnes
Sr. VP & CFO $16,951
</TABLE>
DIRECTOR COMPENSATION
Directors of Home Bancorp are currently paid fees of $300 for monthly
Home Board meetings, with the exception of the Chairman of the Board who is paid
$900. Directors also receive $200 for attending any special meetings of the Home
Board. In addition, non-salaried directors receive $200 for attendance at each
meeting of a joint Board committee of which they are a member. The Chairman of
the Board receives the use of an automobile. No other agreements or arrangements
exist with respect to remuneration for services as a director of Home Bancorp.
Home Bancorp paid aggregate compensation of $46,000 to its directors during 1995
pursuant to the foregoing arrangements.
Directors of Home Bank are currently paid fees of $900 for monthly Home
Bank Board meetings, with the exception of the Chairman of the Board who is paid
$1,500. Directors also receive $200 for attending any special meetings of the
Home Board. In addition, non-salaried
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directors receive $200 for attendance at each meeting of a joint Board committee
of which they are a member. The Vice Chairman of the Board receives the use of
an automobile. No other agreements or arrangements exist with respect to
remuneration for services as a director of Home Bank. Home Bank paid aggregate
compensation of $117,400 to its directors during 1995 pursuant to the foregoing
arrangements.
During 1995, Home Bank contracted with Donald A. Buschenfield, Vice
Chairman of Home Bank and a Director of Home Bancorp, to act as a consultant to
Home Bank. Under the terms of the Consulting Agreement, Mr. Buschenfield advises
Home Bank on insurance, loan, investment and shareholder matters. Mr.
Buschenfield was paid a sum of $2,000 per month, for an aggregate of $24,000
during 1995.
THE BOARD OF DIRECTORS AND COMMITTEES
In July 1994, the Boards of Directors of Home Bancorp and Home Bank
formed joint committees of their respective Boards of Directors. Therefore, Home
Bancorp and Home Bank have a Joint Executive Committee, Joint Long Term Planning
Committee, Joint Audit Committee and Joint Personnel/Compensation Committee.
The Joint Personnel/Compensation Committee consists of Roger K.
Freeman, MD, (Chairman), Donald A. Buschenfield, J. Richard Denham, Donald G.
Martin, Ruth A. Martin and James P. Staes (as an ex-officio, non-voting member).
This committee reviews the performance of all executive officers of Home Bank
and makes compensation recommendations to the Board of Directors of Home Bank.
REPORT OF THE PERSONNEL/COMPENSATION COMMITTEE OF HOME BANK
The executive officers of Home Bancorp do not receive compensation
except in their capacities as employees of Home Bank or as directors of Home
Bancorp or Home Bank.
Home Bank applies a consistent philosophy to compensation for all
employees, including senior management. This philosophy is based on the premise
that the achievements of Home Bank result from the coordinated efforts of all
individuals working toward common objectives. Home Bank strives to achieve those
objectives through teamwork that is focused on meeting the expectations of
customers and shareholders.
COMPENSATION PHILOSOPHY
The goals of the executive compensation program are to align
compensation with business objectives and performance and to enable Home Bank to
attract, retain and reward executive officers who contribute to the long-term
success of Home Bank. Home Bank's compensation program for executive officers is
based on the same four principles applicable to compensation decisions for all
of Home Bank's employees:
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Home Bank pays competitively. Home Bank is committed to providing a pay
program that helps attract and retain the best people in the industry. To ensure
that pay is competitive, Home Bank regularly compares its pay practices with
those of other banks and sets its pay parameters based on this review. Home
Bank's primary source for competitive pay rates is the California Bankers
Association yearly Compensation Survey.
Home Bank pays for relative sustained performance. Executive officers
are rewarded based upon both corporate performance and individual performance.
Corporate performance is evaluated by reviewing the extent to which strategic
and business plan goals are met, including such factors as operating profits and
performance relative to competitors. Individual performance is evaluated by
reviewing progress in organizational and management areas against set objectives
and the degree to which teamwork and Bank values are fostered.
Home Bank strives for fairness in the administration of pay. Home Bank
strives to achieve a balance with respect to the compensation paid to a
particular individual and the compensation paid to other executives both inside
Home Bank and by others employed within the banking industry and performing
similar functions.
Home Bank believes that employees should understand the performance
evaluation and pay administration process. The process of assessing performance
is as follows:
1. At the beginning of the performance cycle, the
evaluating manager sets objectives and key goals.
2. The evaluating manager gives the employee ongoing
feedback on performance.
3. At the end of the performance cycle, the manager
evaluates the accomplishments of the objectives/key
goals.
4. The manager compares the results to the results of
peers within Home Bank.
5. The manager communicates the comparative results to
the employee.
6. The comparative results affect decisions on salary
options.
COMPENSATION PROGRAMS
Home Bank has had a long and successful history employing a simple
total compensation program that consists of cash and equity-based compensation.
Having a compensation program that allows Home Bank to successfully attract and
retain key employees permits Home Bank to provide useful products and services
to customers, enhance shareholder value, foster teamwork and adequately reward
employees. The programs are:
Salary. Home Bank sets the base salary for employees.
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Home Bank Profit Sharing and Retirement Savings Plan. Home Bank has a
profit-sharing plan (the "Profit Sharing Plan") under which it distributes to
all employees, including executive officers, a percentage of profits before
taxes and other adjustments. Home Bank believes that all employees share the
responsibility of achieving profits. Accordingly, it shares a portion of these
profits with all eligible employees. The same profit-sharing percentage applies
to each employee, with the payment determined by applying this percentage to the
individual's salary level. Contributions to the profit-sharing plan are
discretionary on the part of the Home Board. For 1995, the Home Board committed
to contributing 10% of pre-tax profits to the Profit Sharing Plan. The dollar
amount contributed for 1995 was $496,585.
In addition to the Profit Sharing Plan, Home Bank has a 401(k) savings
plan for employees. This retirement savings plan allows eligible employees to
set aside pre-tax salary dollars toward their retirement. To increase employee
participation in the plan, in 1994 the Home Board voted to contribute a matching
dollar amount up to $200 for each $l that an employee contributed to their
individual 401(k) plan. For the 1995 plan year, this match equaled $35,763 which
was deducted from the overall profit sharing contribution prior to the year end
allocation of profit sharing.
Home Bank Stakeholders (R) Incentive Compensation Plan. One of the
components of Home Bank's mission statement is the focus on long-term
shareholder value. Home Bank has adopted a Stakeholders (R) Incentive
Compensation Plan, hereinafter referred to as "Plan", to reward employees for
increases in long-term shareholder value. The goal is to balance profit and
growth with productivity and quality. The incentive program consists of
incentive payments tied to specific goals established and communicated to
participants before the start of the performance period. At the outset, Home
Bank and team budget goals are established then rewards are linked to the
success at meeting and exceeding these goals at the end of the performance
period.
Plan rewards initially consist of funding Home Bank's Profit Sharing
Plan based on meeting an established bankwide budget goal. Additional cash
bonuses are rewarded for any profits generated by performance levels above those
specified for in Home Bank's and the individual team's budgeted goals. All
employees of Home Bank are eligible to participate in the Plan, and rewards are
linked not only to Home Bank's overall results, but the team contributions to
those results. The total cash incentive pay earned for 1995 was $209,065.
Stock Option Program. Home Bank believes that stock-based performance
compensation arrangements are beneficial in aligning employees' and
shareholders' interest. The stock option program is also utilized to encourage
employees to continue in the employ of Home Bank. To facilitate these
objectives, Home Bank has, since 1950, granted stock options to employees
through various stock option plans. Stock options have been granted at the
discretion of the Board of Directors based on the recommendations of the
Personnel/Compensation Committee. Home Bancorp's Stock Option Plan expired on
March 12, 1995; however, options already granted and outstanding may still be
exercised in the future in accordance with their terms.
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CEO COMPENSATION
As with each of the other executive officers, the compensation paid to
Mr. Staes as Chief Executive Officer of Home Bank is a combination of salary and
equity-based incentive compensation. To determine his salary, the
Personnel/Compensation Committee considered information regarding the salaries
paid to CEOs of banks and thrift institutions with assets of between
$250,000,000 and $500,000,000, both in and outside the State of California. To
determine incentive compensation, the Personnel/Compensation Committee measured
Mr. Staes' performance against the goals set for him by the Board. The Committee
evaluated Mr. Staes' performance on factors which focused on the long-term
health and growth of Home Bank. The continued attention given to Home Bancorp's
quality of service, including actions taken under Mr. Staes' leadership were
also considered by the Personnel/Compensation Committee in determining Mr.
Staes' compensation.
The foregoing report shall not be deemed incorporated by reference by
any general statement incorporating by reference this Amendment No. 1 into any
filing under the Securities Act of 1933,as amended (the "Securities Act"), or
the Exchange Act, except to the extent that Home Bancorp specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
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JOINT PERSONNEL/COMPENSATION COMMITTEE
Roger Freeman, MD, Chairman
Donald A. Buschenfield
J. Richard Denham
Donald G. Martin
Ruth A. Martin
James P. Staes (ex-officio, non-voting)
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of Home Bank's Personnel/Compensation Committee served as an
officer or employee of Home Bank in 1995, except James P. Staes (who became an
ex-officio member of the Committee in January 1993, with no voting rights.) Each
member of the Personnel/Compensation Committee, other than Messrs. Donald G.
Martin and Roger K. Freeman, MD, served as an officer of Home Bancorp during
1995. However, none of such individuals received any compensation from Home
Bancorp or Home Bank for serving in such capacities, other than Committee fees.
PERFORMANCE GRAPH
Set forth on the following page is a line graph comparing the yearly
percentage in cumulative total shareholder return on Home Stock since December
31, 1990 with the cumulative total return of the Standard & Poor's 500 Stock
Index and of a selected financial peer group index consisting of Southern
California banks and bank holding companies ranging in asset size from
$140,000,000 to $2,050,000,000.
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[GRAPH 1]
Source: Montgomery Securities WESTERN BANK MONITOR
The following table sets forth the data points for the above graph.
<TABLE>
<CAPTION>
DECEMBER 31,
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
HOME BANCORP 100 105.22 62.70 74.65 76.44 109.66
S&P 500 100 130.37 140.30 154.46 156.50 215.32
SO. CA PROXY 100 100.98 100.50 122.83 140.19 177.81
</TABLE>
The graph shall not be deemed incorporated by reference by any general
statement incorporating by reference this Amendment No. 1 into any filing under
the Securities Act or the Exchange Act, except to the extent that Home Bancorp
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
Management knows of no person who, as of April 18, 1996, owned
beneficially more than five percent (5%) of the outstanding Home Stock, except
for Ruth A. Martin, who is a nominee for director.
The following table sets forth certain information, as of April 18,
1996, with respect to the persons to be nominated by the Home Board for election
as directors, the named executive officers(1) and for the directors and
executive officers(2) of Home Bancorp as a group:
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED PERCENT
NAME ON APRIL 18, 1996(3) OF CLASS (4)
- ---- -------------------- ------------
<S> <C> <C>
Keith W. Barnes 8,978(5) *
Donald A. Buschenfield 103,339(6) 2.37%
J. Richard Denham 11,422(7) *
Randall G. Elston 28,725(8) *
Roger K. Freeman, MD 12,664 *
Donald G. Martin (9) 130,027 2.90%
Ruth A. Martin(10) (11) 370,917 8.51%
Susan Monsoor 6,000(12) *
Bill Neal 20,661(13) *
George W. Post 60,026(14) 1.37%
James P. Staes 56,631(15) 1.30%
Directors and Executive Officers as a
Group (10 persons) 809,500(16) 19.21%
</TABLE>
- ---------------------------------------
* Less than 1%
(1) As used throughout this Amendment No. 1, the term "named executive
officers" means the Chief Executive Officer of Home Bank and the two
most highly compensated executive officers of Home Bancorp or Home
Bank, other than the Chief Executive Officer, who received salary and
bonus compensation of more than $100,000 during 1995. The principal
executive officer of Home Bancorp does not receive any compensation for
serving in such capacity and she is, therefore, not treated herein as a
named executive officer. Home Bancorp's named executive officers are
James P. Staes, Bill Neal and Keith W. Barnes.
(2) As used throughout this Amendment No. 1, the term "executive officer"
means, with respect to Home Bancorp, the Chairman of the Board,
President, Senior Vice President/Chief Financial Officer and Vice
President/Corporate Secretary of Home Bancorp and the Executive Vice
President/Chief Operating Officer of Home Bank.
(3) Except as otherwise noted, includes shares held by such person's spouse
(except where legally separated) and minor children, and by any other
relative of such person who has the same home, shares held in a family
trust and shares held in Individual Retirement Accounts. Such persons
have sole voting and investment power with respect to all shares shown
as beneficially owned by them, subject to community property laws where
applicable and the information set forth in the other footnotes to this
table.
(4) Percentage ownership figures are computed by dividing the total number
of shares beneficially owned (including shares which the individual (or
group) has the right to acquire within 60 days of April 18, 1996) by
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<PAGE> 15
the sum of the total number of shares outstanding on April 18, 1996
plus the number of shares the individual (or group) has the right to
acquire within 60 days of April 18, 1996.
(5) Includes 4,901 shares which Mr. Barnes has the right to acquire within
sixty (60) days of April 18, 1996 by the exercise of stock options
vested pursuant to Home Bancorp's stock option plans (the "Stock Option
Plans").
(6) Includes 1,106 shares which Mr. Buschenfield has the right to acquire
within sixty (60) days of April 18, 1996 by the exercise of stock
options vested pursuant to the Stock Option Plans.
(7) Includes 5,106 shares which Mr. Denham has the right to acquire within
sixty (60) days of April 18, 1996 by the exercise of stock options
vested pursuant to the Stock Option Plans.
(8) Includes 5,106 shares which Mr. Elston has the right to acquire within
sixty (60) days of April 18, 1996 by the exercise of stock options
vested pursuant to the Stock Option Plans.
(9) Donald G. Martin is the son of Home Bancorp's Chairman Ruth A. Martin.
(10) Mrs. Martin's business address is 2633 Cherry Avenue, Signal Hill,
California 90806.
(11) Mrs. Martin is the mother of director Donald G. Martin.
(12) Includes 6,000 shares which Mrs. Monsoor has the right to acquire
within sixty (60) days of April 18, 1996 by the exercise of stock
options vested pursuant to the Stock Option Plans.
(13) Includes 7,655 shares which Mr. Neal has the right to acquire within
sixty (60) days of April 18, 1996 by the exercise of stock options
vested pursuant to the Stock Option Plans.
(14) Includes 4,863 shares which Mr. Post has the right to acquire within
sixty (60) days of April 18, 1996 by the exercise of stock options
vested pursuant to the Stock Option Plans.
(15) Includes 13,785 shares which Mr. Staes has the right to acquire within
sixty (60) days of April 18, 1996 by the exercise of stock options
vested pursuant to the Stock Option Plans
(16) Includes 48,522 shares which the directors and executive officers of
Home Bancorp have the right to acquire within sixty (60) days of April
18, 1996 by the exercise of stock options vested pursuant to the Stock
Option Plans.
ITEM 13. CERTAIN TRANSACTIONS.
Some of the directors and officers of Home Bancorp and Home Bank and
the companies with which they are associated have financial dealings with, or
customers of, and have banking transactions with Home Bank in the ordinary
course of Home Bank's business. Home Bank expects to have banking transactions
with such persons in the future. All loans and commitments to lend included in
such transactions were made on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with other persons of similar creditworthiness and, in the opinion
of management of Home Bank, did not involve more than a normal risk of repayment
or present other unfavorable features.
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<PAGE> 16
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K.
(a)(1) FINANCIAL STATEMENTS
The following consolidated financial statements of Home Bancorp, the
accompanying notes and the Report of Independent Public Accountants are included
in Item 8 of Home Bancorp's Annual Report on Form 10-K, filed on March 27, 1996,
at the pages referenced below:
<TABLE>
<CAPTION>
PAGE
ITEM NO.
- ---- ----
<S> <C>
1. Report of Independent Public Accountants....................... 42
2. Consolidated Statements of Financial Condition................. 43
3. Consolidated Statements of Income for the Years Ended
December 31, 1995, 1994 and 1993............................... 44
4. Consolidated Statements of Changes in Shareholders' Equity
for the Years Ended December 31, 1995, 1994 and 1993........... 45
5. Consolidated Statement of Cash Flows for the Years Ended
December 31, 1995, 1994 and 1993............................... 46
6. Notes to Consolidated Financial Statements..................... 48
</TABLE>
(a)(2) SCHEDULES.
No Schedules are listed because they are not applicable, not material
or because the information required by such schedules is included in the
consolidated financial statements or the notes thereto.
(b) REPORTS ON FORM 8-K.
There were no reports on Form 8-K filed by Home Bancorp during the last
quarter of Home Bancorp's fiscal year ended December 31, 1995.
(c) EXHIBITS.
Exhibits required to be filed hereunder are indexed on sequentially
numbered page 18 hereof.
The following is a list of management contracts and compensatory plans
and arrangements required to be filed hereunder:
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<PAGE> 17
1. Home Bancorp's 1985 Stock Option Plan, as amended; form of Incentive
Stock Option Agreement; and form of Non-Qualified Stock Option Agreement, at
Exhibit 4 to Home Bancorp's Registration Statement on Form S-8, Registration No.
33-30573.
2. Change of Control Agreement, James P. Staes, at Exhibit 10.10 to
Home Bancorp's June 30, 1995 Quarterly Report on Form 10-Q, File No. 0-11160.
3. Change of Control Agreement, Bill Neal, at Exhibit 10.11 to Home
Bancorp's June 30, 1995 Quarterly Report on Form 10-Q, File No. 0-11160.
4. Change of Control Agreement, Keith W. Barnes, at Exhibit 10.12 to
Home Bancorp's June 30, 1995 Quarterly Report on Form 10-Q, File No. 0-11160.
5. Form of Agreements between Home Bank and certain senior officers of
Home Bancorp or Home Bank regarding retention of said officers, at Exhibit 10.5
to CU Bancorp's Registration Statement on Form S-4, Registration No. 333-02777.
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<PAGE> 18
Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Home Interstate Bancorp
/s/ Keith W. Barnes April 29, 1996
- -------------------------------------------------
Keith W. Barnes, Senior Vice President
Chief Financial Officer, Controller and Principal
Accounting Officer
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<PAGE> 19
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
PAGE NUMBER IN
SEQUENTIALLY
EXHIBIT DESCRIPTION OF DOCUMENT NUMBERED SYSTEM
------- ----------------------- ---------------
<S> <C> <C>
1.1 Agreement and Plan of Reorganization by and among Home Bancorp, Home Bank, CU
Bancorp and California united Bank, National Association dated January 10, 1996, as
amended on March 29, 1996 by amendment No. 1, and Exhibits thereto. (1)
3.1 Articles of Incorporation of Home Bancorp filed with the Secretary
of State of the State of California on September 17, 1979, as
amended by Certificate of Amendment of Articles of Incorporation
filed May 20, 1988 (2). In addition, Certificate of Amendment of
Articles of Incorporation of the Bancorp filed with the Secretary of
State of the State of California on November 9, 1981. (2)
3.2 Bylaws of Home Bancorp, adopted November 17, 1987 (amended and restated). (3)
4. Specimen of Common Stock Certificate. (4)
10.1 Home Bancorp's 1985 Stock Option Plan, as amended, form of Incentive Stock Option
Agreement, and form of Non-Qualified Stock Option Agreement. (5)
10.2 Ground Lease dated February 9, 1976, by and between Brea Plaza Development Company,
a partnership, and Home Bank, for the land upon which the Brea Branch Office of Home
Bank is located. (3)
10.3 Ground Lease dated May 16, 1980, by and between Manhattan Beach
Commercial Properties, a California general partnership, and Bank of
Manhattan, for the land upon which the Manhattan Beach Branch Office
of Home Bank is located. (3)
10.4 Lease dated December 13, 1979, by and between Margaret Hills Land
and Expiration Company, as Lessor, and Irvine National Bank, as
Lessee, assigned in February 1980 to Heritage Bank, as Lessee, and
assigned on March 9, 1984 to Home Bank, as lessee, for the lease of
office facilities for the Irvine Branch Office. (3)
10.5 Lease dated December 10, 1979, by and between Margaret Hills Land
and Exploration Company, as Lessor, and Irvine National Bank, as
Lessee, assigned in February 1980 to Heritage Bank, as Lessee, and
assigned on March 9, 1984 to Home Bank, as Lessee, for the lease of
office facilities for the Irvine Branch Office. (3)
10.6 Reserved.
10.7 Remote Outsourcing Agreement dated September 14, 1993, by and between Systematics, Inc.,
an Arkansas corporation and Home Bank. (6)
10.8 Item Processing Agreement dated March 9, 1992, by and between Systematics, Inc., an
Arkansas corporation, and Home Bank. (6)
10.9 Lease, proposed to be assigned to Home Bank, dated July 1, 1978, by
and between Lanikai Investment Company, LTD., as Lessor, and Bank of
San Pedro, as Lessee, and assumed on July 15, 1994 by the FDIC, as
Lessee, for the lease of office facilities for the North San Pedro
Branch Office. (7)
10.10 Change of Control Agreement, James P. Staes. (8)
10.11 Change of Control Agreement, Bill Neal. (8)
10.12 Change of Control Agreement, Keith W. Barnes. (8)
10.13 Form of Agreements between Home Bank and certain senior officers of Home Bancorp or
Home Bank regarding retention of said officers. (9)
</TABLE>
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<PAGE> 20
21.0 Subsidiary of the Registrant. (7)
23.0 Consent of Arthur Andersen LLP. (10)
27.0 Financial Data Schedule. (11)
- ---------------------------
(1) Incorporated by reference to Exhibit 2.0 to CU Bancorp's Registration
Statement on Form S-4, Registration No. 333-02777, as filed with the
Commission on April 24, 1996.
(2) Incorporated by reference to the Exhibits to the Registrant's S-4
Registration Statement, Registration No. 38-35622, as filed with the
Commission on June 28, 1990.
(3) Incorporated by reference to the Registrant's 1989 Annual Report on Form
10-K, File No. 0-11160, as filed with the Commission on March 31, 1990.
(4) Incorporated by reference to Exhibit 7 to the Registrant's Registration
Statement on Form S-14, Registration No. 2-75660, as filed with the
Commission on January 12, 1982 and amended on August 6, 1982.
(5) Incorporated by reference to Exhibit 4 to the Registrant's Registration
Statement on Form S-8 Registration No. 33-30573, as filed with the
Commission on August 17, 1989.
(6) Incorporated by reference to the Registrant's 1993 Annual Report on Form
10-K, File No. 0-11160, as filed with the Commission on March 29, 1994.
(7) Incorporated by reference to the Registrant's 1994 Annual Report on Form
10-K, File No. 0-11160, as filed with the Commission on March 31, 1995.
(8) Incorporated by reference to Exhibits 10.10, 10.11 and 10.12 to
Registrant's June 30, 1995 Quarterly Report on Form 10-Q, File No.
0-11160, as filed with the Commission on July 31, 1995.
(9) Incorporated by reference to Exhibit 10.5 to CU Bancorp's Registration
Statement on Form S-4, Registration No. 333-02777, as filed with the
Commission on April 24, 1996.
(10) Incorporated by Reference to Exhibit 23.0 to the Registrant's 1995 Annual
Report on Form 10-K, File No. 0-11160, as filed with the Commission on
March 27, 1996.
(11) Incorporated by Reference to Exhibit 27.0 to the Registrant's 1995 Annual
Report on Form 10-K, File No. 0-11160, as filed with the Commission on
March 27, 1996.
20
