<PAGE> 1
<TABLE>
<CAPTION>
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:
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14-a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Santa Barbara Bancorp
- -----------------------------------------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- -----------------------------------------------------------------------------------------------------------------
(Name of Person(s) Filing proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(i)(ii), or 14a-6(i)(1), or 14a-6(i)(2) or Item 22(a)(2) of
Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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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):
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(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 offering 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:
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(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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</TABLE>
<PAGE> 2
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF SANTA BARBARA BANCORP
TO BE HELD APRIL 25, 1995
TO THE SHAREHOLDERS OF SANTA BARBARA BANCORP:
NOTICE IS HEREBY GIVEN that, pursuant to the call of its Board of
Directors, an annual Meeting of Shareholders (the "Meeting") of Santa Barbara
Bancorp (the "Company") will be held at the Lobero Theater, 33 E. Canon
Perdido, Santa Barbara, California, on Tuesday, April 25, 1995, at 2:00 P.M.,
for the purpose of considering and voting on the following matters:
1. Election of Directors. Electing eight (8) persons to the
Board of Directors to serve until the 1996 Annual Meeting or
until their successors are elected and have qualified. The
persons nominated by Management to serve as Directors are:
Donald M. Anderson, Frank Barranco, M.D., Edward E. Birch,
Richard M. Davis, Anthony Guntermann, Dale E. Hanst, Harry B.
Powell and David W. Spainhour;
2. Selection of Auditors. To vote upon a recommendation of the
Board of Directors of the Company to approve the selection of
Arthur Andersen & Co. to serve as independent certified public
accountants for the Company for the 1995 calendar year; and
3. Other Business. Transacting such other business as may
properly come before the Meeting, and any adjournments
thereof.
The Board of Directors has fixed the close of business on March 8,
1995 as the record date for determination of shareholders entitled to notice
of, and the right to vote at, the Meeting.
Section 3.6 of the By-laws sets forth the procedure for nomination of
Directors. That Section provides:
"Section 3.6 Nomination of Directors.
3.6.1 Authority to Make Nominations. Nominations for
Directors may be made by the Board of Directors or by any holder of record of
any outstanding class of capital stock of the Corporation entitled to vote for
the election of Directors.
3.6.2 Nomination Procedures. At annual meetings and
special meetings of the shareholders called by the Board of Directors,
nominations for Directors, other than those approved by the Board of Directors
of the Corporation, shall be made in writing and shall be delivered or mailed
to the Secretary of the Corporation at its principal place of business not less
than fourteen (14) days nor more than fifty (50) days prior to scheduled date
of the meeting; provided, however, that if less than twenty-one (21) days'
notice of the meeting is given to the shareholders, such nominations shall be
mailed or delivered to the Secretary of the Corporation not later than the
close of business on the seventh (7th) day following the day on which notice of
the meeting was mailed to the shareholders. Any such notification shall (a) be
accompanied by a written statement signed and acknowledged by the nominee
consenting to his or her nomination and agreeing to serve as director if
elected by the shareholders, and (b) shall contain the following information,
to the extent known to the nominating shareholder:
A. The name and address of each proposed nominee;
B. The total number of shares of capital stock of the
Corporation expected to be voted for each
proposed nominee;
C. The principal occupation of each proposed nominee;
D. The name and residence address of the nominating
shareholder; and
<PAGE> 3
E. The number of shares of capital stock of the Corporation
owned by the nominating shareholder.
3.6.3 Defective Nominations. Nominations not made in
accordance with this Section 3.6 may be disregarded by the Chairperson of the
meeting, at his or her discretion, and upon the instructions of the
Chairperson, the inspectors of the election may disregard any votes cast for
any such nominee.
3.6.4 Exceptions. The provisions of this Section 3.6 shall
apply only to nominations for Directors who are to be elected at the annual
meeting or any special meeting of shareholders called by the Board of
Directors, and this Section shall not apply to (a) nominations for Directors
who are to be elected at a special meeting of shareholders properly called by
the shareholders at which Directors are to be elected pursuant to Section 305
of the California Corporations Code to fill a vacancy on the Board of
Directors, or (b) the election of Directors by the written consent of the
shareholders pursuant to Section 603 of the California Corporations Code."
You are urged to vote in favor of each of the proposals by so indicating
on the enclosed proxy and 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, in writing, to that effect, by filing with him a later
dated proxy, or by voting in person at the Meeting.
By Order of the Board of Directors
/s/ DONALD M. ANDERSON
--------------------------------------
Donald M. Anderson,
Chairman of the Board
Dated: March 16, 1995
2
<PAGE> 4
PROXY STATEMENT
FOR AN
ANNUAL MEETING OF SHAREHOLDERS
OF
SANTA BARBARA BANCORP
1021 ANACAPA STREET
SANTA BARBARA, CA 93101
TO BE HELD APRIL 25, 1995
INTRODUCTION
This proxy statement is furnished in connection with the solicitation of
proxies for use at the Annual Meeting of Shareholders (the "Meeting") of Santa
Barbara Bancorp (the "Company"), to be held at the Lobero Theater, 33 E. Canon
Perdido, Santa Barbara, California, 93101, at 2:00 P.M. on Tuesday, April 25,
1995, and at all adjournments thereof.
It is expected that this proxy statement and accompanying Notice and form
of proxy will be mailed to shareholders on or about March 16, 1995.
The matters to be considered and voted upon at the Meeting will include:
1. Election of Directors. Electing eight (8) persons to the Board of
Directors to serve until the 1996 Annual Meeting or until their
successors are elected and have qualified. The persons nominated
by Management to serve as Directors are: Donald M. Anderson,
Frank Barranco, M.D., Edward E. Birch, Richard M. Davis, Anthony
Guntermann, Dale E. Hanst, Harry B. Powell and David W.
Spainhour;
2. Selection of Auditors. To vote upon the recommendation of the
Board of Directors of the Company to approve the selection of
Arthur Andersen & Co. to serve as independent certified public
accountants for the Company for the 1995 calendar year; and
3. Other Business. Transacting such other business as may properly
come before the Meeting, and any adjournments thereof.
1
<PAGE> 5
REVOCABILITY OF PROXIES
A proxy for use at the Meeting is enclosed. Any shareholder who executes
and delivers such proxy has the right to revoke it at any time before it is
exercised, (a) by filing with the Secretary of the Company an instrument
revoking it, or (b) by executing a proxy bearing a later date, or (c) by
attending the Meeting and voting in person. Subject to such revocation or
suspension, 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 REGARD TO A
MATTER TO BE ACTED UPON, THE SHARES REPRESENTED BY THE PROXY WILL BE VOTED IN
ACCORDANCE WITH THE RECOMMENDATIONS OF MANAGEMENT.
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 material 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 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 expense in
forwarding these proxy materials to their principals. The proxy materials will
first be sent or given to shareholders on or about March 16, 1995.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
There were issued and outstanding 5,126,406 shares of the Company's
common stock on March 8, 1995. March 8, 1995 has been fixed as the record date
for the purpose of determining the shareholders entitled to notice of, and to
vote at, the Meeting (the "Record Date"). Each holder of the Company's 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,
on any matter submitted to the vote of the shareholders, except in the election
of directors, where cumulative voting is permitted. See "Cumulative Voting" on
page 3 below.
The presence in person or by proxy of the holders of a majority of the
outstanding shares of stock entitled to vote at the Annual Meeting will
constitute a quorum for the purpose of transacting business at the meeting.
If the enclosed proxy is completed in the appropriate spaces, signed,
dated and returned, the proxy will be voted as specified in the proxy. If no
specification is made on a signed, dated and returned proxy, it will be voted
at the discretion of the proxy holders on any matter described in this proxy
statement. The proxy also grants the proxy holders authority to vote as they
deem appropriate, in their sole discretion, on such other business as may
properly come before the Meeting or any adjournments thereof.
ELECTION OF DIRECTORS OF COMPANY (PROPOSAL 1)
The By-laws of the Company provide that the number of directors shall not
be less than seven (7) nor more than thirteen (13) until changed by an
amendment to the Articles of Incorporation or the By-laws duly adopted by the
Company's shareholders. The By-laws further provide that the exact number of
directors shall be fixed from time-to-time within the stated range by a by-law,
by-law amendment, or resolution adopted by the Company's shareholders or Board
of Directors. Accordingly, the Board of Directors has fixed the number of
directors at eight (8) by resolution.
B. Paul Blasingame, who was elected a Director at the 1994 Annual
Meeting, resigned in August, 1994 in accordance with Company policy. The Board
of Directors elected to reduce the number of directors from nine (9) to eight
(8) as a result of Mr. Blasingame's retirement.
At the Annual Meeting, eight (8) directors (the entire Board of
Directors) are to be elected to serve until the next Annual Meeting of
Shareholders or until their successors are elected and qualified.
A shareholder may withhold authority for the proxy holders to vote for
any or all of the nominees identified below by so indicating on the enclosed
proxy. Further, a shareholder may withhold authority for the proxy holders to
vote for an
2
<PAGE> 6
individual nominee by writing that nominee's name in the appropriate space
provided on the proxy. Unless authority to vote for the nominees is so
withheld, the proxy holders will vote the proxies received by them for the
election of the nominees identified below as Directors of the Company. Should
any shareholder vote for a nominee not identified below and who was properly
nominated, the proxy holders will vote such shareholder's shares in accordance
with his or her wishes. If any of the nominees identified below should be
unable or decline to serve, which is not now anticipated, the proxy holders
shall have discretionary authority to vote for a substitute at the meeting (or
any adjournment thereof), or alternatively, a substitute may be designated by
the present Board of Directors to fill the resulting vacancy. In the event
that additional persons are nominated for election as directors, the proxy
holders intend to vote all of the proxies received by them in such a manner, in
accordance with cumulative voting, as will assure the election of as many of
the nominees identified below as possible. In such event, the specific
nominees to be voted for will be determined by the proxy holders.
None of the Directors or Executive Officers of the Company or the Bank
was selected pursuant to any arrangement or understanding between themselves
and any other individual (other than arrangements or understandings with
Directors or officers acting solely in their capacities as such). There are no
family relationships between any of the Directors and Executive Officers, and
except as noted below, none 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.
VOTING RIGHTS--CUMULATIVE VOTING
All voting rights are vested in the holders of the common stock of the
Company, each share being entitled to one vote, except with respect to the
election of directors, as described below.
California State law provides that a shareholder of a California
corporation, or the shareholder's proxy, may cumulate votes in the election of
directors. That is, each shareholder has a number of votes equal to the number
of shares owned by that shareholder, multiplied by the number of directors to
be elected, and the shareholder may cumulate such votes for a single candidate
or distribute such votes among as many candidates as is deemed appropriate.
However, a shareholder may cumulate votes only for a candidate or candidates
whose names have been placed in nomination prior to the voting, and only if the
shareholder has given notice at the meeting prior to the voting of the
shareholder's intention to cumulate votes. If any one shareholder has given
such notice, all shareholders may cumulate votes for candidates in nomination.
Certain affirmative steps must be taken by the shareholders of the
Company in order to be entitled to vote their shares cumulatively in the
election of directors. At the shareholders' meeting at which directors are to
be elected, no shareholder shall be entitled to cumulate votes (i.e., cast for
any one or more candidates a number of votes greater than the number of the
shareholder's shares) unless the candidates' names have been placed in
nomination prior to the commencement of the voting and a shareholder has given
notice prior to commencement of the voting of the shareholder's intention to
cumulate votes. If any shareholder has given such a notice, then every
shareholder entitled to vote may cumulate votes for candidates in nomination
and give one candidate a number of votes equal to the number of directors to be
elected multiplied by the number of votes to which that shareholder's shares
are entitled, or distribute the shareholder's votes on the same principle among
any or all of the candidates, as the shareholder thinks fit; the candidates
receiving the highest number of votes, up to the number of directors to be
elected, shall be elected. It is intended that shares represented by proxies
in the accompanying form will be voted for the election of persons nominated by
Management. Although the Board of Directors does not know whether there will
be any nominations for directors other than those shown above, if any such
nomination is made, or if votes are cast for any candidates other than those
nominated by the Board of Directors, the persons authorized to vote shares
represented by executed proxies in the enclosed form (if authority to vote for
the election of directors or for any particular nominees is not withheld) will
have full discretion and authority to vote cumulatively and to allocate votes
among any or all of the nominees of the Board of Directors in such order as
they may determine, provided all the above-listed requirements are met.
3
<PAGE> 7
DIRECTORS AND NOMINEES
The following table sets forth as to each director and each of the
persons nominated for election as a director of the Company, such person's age,
such person's principal occupations during the past five years, and the period
during which such person has served as a director of the Company. All of the
nominees were elected as directors of the Company at the 1994 Annual Meeting of
the Company's shareholders.
Persons nominated to serve on the Company's Board of Directors would
simultaneously serve on the Board of Directors of Santa Barbara Bank & Trust
(the "Bank"), a wholly-owned subsidiary of the Company.
<TABLE>
<CAPTION>
Director Background, Business Experience, and
Director Age Since Position with the Company/Bank
-------- --- -------- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Donald M. Anderson 67 1971 Chairman of the Board of the Company and Chairman of the Board of the Bank. Mr. Anderson
joined the Bank in October, 1969, as Vice President and Commercial Lending Officer. He
was elected President and Director in 1971 and Chairman of the Board in February, 1989.
He has served on numerous charitable, civic and banking organizations.
Frank Barranco M.D. 64 1989 Dr. Barranco is a retired physician and was a founding director of the Community Bank of
Santa Ynez Valley. Prior to his retirement, he practiced family medicine in Solvang and
was a member of the teaching staffs at both UCLA and USC medical schools. He has been
Chief of Staff at Santa Ynez Community Hospital and has served on the Board of Trustees
of the Santa Ynez School District.
Edward E. Birch 56 1983 Dr. Birch was Vice-Chancellor of the University of California at Santa Barbara from 1976
until his retirement in 1993. He is currently Executive Vice President for Westmont
College in Santa Barbara, California. He has been involved in a number of civic and
community organizations, including the Cancer Foundation of Santa Barbara, Goleta Valley
Community Hospital, and the Santa Barbara Industry Education Council, and is a past
President of the Santa Barbara Chamber of Commerce.
Richard M. Davis 60 1984 Mr. Davis is a retired business executive. He is a past Chairman of the Board of Directors
of Santa Barbara Cottage Hospital, a past Chairman of the Santa Barbara Chamber of
Commerce, and a past Chairman of the Board of United Way of Santa Barbara.
Anthony Guntermann 75 1960 Mr. Guntermann, a Certified Public Accountant since 1954, recently retired from the
accounting firm of Guntermann, Thompson & Lanza, Accountants, Inc. (now McGowen-
Guntermann). He has served as a Director and President of the California State Board of
Accountancy and as a member of the Santa Barbara City Council, as well as on numerous
civic and community organizations. He was one of the organizers of the Bank. He also
was one of the organizers of Investors Research Fund, Inc.
Dale E. Hanst 63 1983 Mr. Hanst is currently a senior partner in the law firm of Schramm & Raddue, having
started with the firm in 1960. He was President of the State Bar of California in 1984
and served on the California Commission on Judicial Performance from 1984 to 1988.
Mr. Hanst is a past President of the Santa Barbara Zoological Society.
Harry B. Powell 66 1989 Mr. Powell is a retired businessman residing in Carpinteria. He is a past President of
Rexall Clubs International, the Carpinteria Business Association and the Carpinteria
Unified School District.
</TABLE>
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<PAGE> 8
<TABLE>
<CAPTION>
Director Background, Business Experience, and
Director Age Since Position with the Company/Bank
-------- --- -------- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
David W. Spainhour 63 1974 Mr. Spainhour is President and Chief Executive Officer of the Company and President and
Chief Executive Officer of the Bank. Mr. Spainhour joined the Bank in 1966 as Controller.
He became Cashier in 1969, Senior Vice President in 1972, was elected to the Board of
Directors in 1974, was named Executive Vice President in 1980, and elected President in
February, 1989. Mr. Spainhour serves on the boards of the Santa Barbara Industry
Education Council, Channel City Club, Westmont College, and United Way of Santa Barbara.
</TABLE>
COMMITTEES OF THE BOARD OF DIRECTORS
The Company had a standing Nominating Committee and Audit Committee
during 1994. The Bank had a standing Audit Committee and a Compensation
Committee during 1994.
During 1994 the Nominating Committee, which considers the qualifications
and the composition of the Board of Directors of the Company, was composed of
Messrs. Hanst, Guntermann, Anderson and Spainhour. The Committee met once in
1994. The Committee does not consider shareholder nominations for director's
positions.
Section 3.6 of the By-laws sets forth the procedure for nomination of
Directors. That Section provides:
"Section 3.6 Nomination of Directors.
3.6.1 Authority to Make Nominations. Nominations for
Directors may be made by the Board of Directors or by any holder of record of
any outstanding class of capital stock of the Corporation entitled to vote for
the election of Directors.
3.6.2 Nomination Procedures. At annual meetings and special
meetings of the shareholders called by the Board of Directors, nominations for
Directors, other than those approved by the Board of Directors of the
Corporation, shall be made in writing and shall be delivered or mailed to the
Secretary of the Corporation at its principal place of business not less than
fourteen (14) days nor more than fifty (50) days prior to scheduled date of the
meeting; provided, however, that if less than twenty-one (21) days' notice of
the meeting is given to the shareholders, such nominations shall be mailed or
delivered to the Secretary of the Corporation not later than the close of
business on the seventh (7th) day following the day on which notice of the
meeting was mailed to the shareholders. Any such notification shall (a) be
accompanied by a written statement signed and acknowledged by the nominee
consenting to his or her nomination and agreeing to serve as director if
elected by the shareholders, and (b) shall contain the following information,
to the extent known to the nominating shareholder:
A. The name and address of each proposed nominee;
B. The total number of shares of capital stock of the
Corporation expected to be voted for each proposed
nominee;
C. The principal occupation of each proposed nominee;
D. The name and residence address of the nominating
shareholder; and
E. The number of shares of capital stock of the Corporation
owned by the nominating shareholder.
3.6.3 Defective Nominations. Nominations not made in
accordance with this Section 3.6 may be disregarded by the Chairperson of the
meeting, at his or her discretion, and upon the instructions of the
Chairperson, the inspectors of the election may disregard any votes cast for
any such nominee.
3.6.4 Exceptions. The provisions of this Section 3.6
shall apply only to nominations for Directors who are to be elected at the
annual meeting or any special meeting of shareholders called by the Board of
Directors, and this Section shall not apply to (a) nominations for Directors
who are to be elected at a special meeting of shareholders properly called by
the shareholders at which Directors are to be elected pursuant to Section 305
of the California Corporations Code to
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<PAGE> 9
fill a vacancy on the Board of Directors, or (b) the election of Directors by
the written consent of the shareholders pursuant to Section 603 of the
California Corporations Code."
The Audit Committees of the Company and the Bank provide for suitable
annual examinations of each branch office and administrative division of the
Bank. The Committees are responsible for reporting the results of the
examinations and the adequacy of internal controls and procedures to the Board.
The Audit Committees are also responsible for recommending to the Board any
changes in doing business or corrective actions necessary for the soundness of
the Bank and the Company. The members of both the Audit Committee of the
Company and of the Bank during 1994 were Anthony Guntermann, Chairman, Dale E.
Hanst, Richard M. Davis, Frank Barranco, Edward Birch, and Harry B. Powell.
Each of the Committees met six (6) times during 1994.
The members of the Bank Compensation Committee during 1994 were Dale E.
Hanst, Anthony Guntermann, Richard M. Davis, and Harry B. Powell. They met
three (3) times during 1994 to determine what the Bank's salary philosophy
should be, set the objectives of the Bank's Salary Administration Program,
approve exempt salary ranges, determine Senior Officers' salaries and perform
the function of overseer to ensure that the objectives of the Salary
Administration Program were being met.
The full Board of Directors met twelve (12) times during 1994. No
director attended fewer than 75 percent of the total number of meetings of the
Board and of the committees of which he is a member.
EXECUTIVE OFFICERS
Except for Messrs. Anderson and Spainhour, the following table sets
forth as to each of the persons who currently serves as an Executive Officer of
the Company and the Bank, such person's age, such person's principal
occupations during the past five years, such person's current position with the
Company and the Bank, and the period during which the person has served in such
position. Each of the Executive Officers named herein serves at the pleasure
of the Board. The information for Messrs. Anderson and Spainhour is provided
on pages 4 and 5 of this proxy statement.
<TABLE>
<CAPTION>
Position and Principal Occupations
Officer Age During the Past Five Years
------- --- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
David Abts 50 Currently serves as Senior Vice President and Director of MIS/Operations for the Bank. Before joining
the Bank in July, 1989, he was President of Key Pacific Services, a data processing subsidiary of Key
Corp., a bank holding company, from November 1986 to June 1989. Prior to that time, he was Senior Vice
President and Director of MIS/Operations for Pacific Western Bank in Oregon.
John J. McGrath 52 Currently serves as Senior Vice President and Manager of the Credit Division of the Bank. From 1987 to
1994 he served as Chief Administrative Officer. During 1987, he served as Manager of the Trust Division
and from February 1982 to December 1986, he served as Loan Administrator of the Bank.
John F. Murphy 58 Currently serves as a Senior Vice President and Manager of the Business Banking Division, formerly the
Commercial Loan Division. From 1977 to 1993, he also served as Manager of the Bank's Main Office.
Jay D. Smith 54 Currently serves as Senior Vice President, General Counsel and Corporate Secretary of the Company and
the Bank. He has served as Legal Counsel of the Bank since July 1979.
William S. Thomas 51 Currently serves as Senior Vice President and Manager of the Trust and Investments Division. Before
joining the Bank in August, 1994, he served as Executive Vice President and Manager of the Financial
Institutions Group of Bank of America. Prior to that time he held various positions with Security
Pacific National Bank beginning in 1976.
Kent M. Vining 47 Currently serves as Senior Vice President and Chief Financial Officer of the Company and the Bank.
He has served as Chief Financial Officer of the Bank since April 1980.
</TABLE>
6
<PAGE> 10
COMMON STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN PRINCIPAL
SHAREHOLDERS
The following table sets forth information concerning the beneficial
ownership of the Company's common stock as of December 31, 1994, by each
Director, by each Named Officer (as defined on page 8), by the Directors and
Executive Officers as a group, and by beneficial owners of more than 5 percent
of the Company's outstanding common stock.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP (1) CLASS (2)
------------- ---------
<S> <C> <C> <C>
Santa Barbara Bank and Trust, Trustee of the Santa Barbara Bank
and Trust Employee Stock Ownership Trust
1021 Anacapa Street
Santa Barbara, CA 93101 552,872 10.45
DIRECTORS
Donald M. Anderson 215,816 (3) 4.08
Frank H. Barranco, M.D. 13,910 (4) .26
Edward E. Birch 16,275 (5) .31
Richard M. Davis 8,050 (6) .15
Anthony Guntermann 30,507 (7) .58
Dale E. Hanst 36,090 (8) .68
Harry B. Powell 9,967 (9) .19
David W. Spainhour 153,201 (10) 2.90
NAMED OFFICERS
John J. McGrath 44,066 (11) .83
John F. Murphy 46,634 (12) .88
Kent M. Vining 28,051 (13) .53
All Directors and Executive Officers as a Group (14 individuals) 685,343 (14) 12.95
</TABLE>
- ----------------
(1) Includes all shares beneficially owned, whether directly or
indirectly, together with known associates. Also includes any
shares owned, whether jointly or as community property, with a
spouse. Also includes any stock acquirable by exercise of stock
options exercisable within 60 days following December 31, 1994,
though not exercised on or before such date. All share data are
stated as of December 31, 1994.
(2) Percentages are stated to include exercisable stock options
accounted for in the column listing Amount and Nature of
Beneficial Ownership. See Footnote (1) above.
(3) Includes 16,057 shares acquirable by exercise of exercisable stock
options.
(4) Includes 3,750 shares acquirable by exercise of exercisable stock
options.
(5) Includes 11,087 shares acquirable by exercise of exercisable stock
options.
(6) Includes 1,000 shares acquirable by exercise of exercisable stock
options.
(7) Includes 12,039 shares acquirable by exercise of exercisable stock
options.
(8) Includes 16,516 shares acquirable by exercise of exercisable stock
options.
(9) Includes 5,000 shares acquirable by exercise of exercisable stock
options.
(10) Includes 14,335 shares acquirable by exercise of exercisable stock
options.
(11) Includes 14,229 shares acquirable by exercise of exercisable stock
options.
(12) Includes 20,692 shares acquirable by exercise of exercisable stock
options.
(13) Includes 16,057 shares acquirable by exercise of exercisable stock
options.
(14) Includes 165,841 shares acquirable by exercise of exercisable
stock options. Actual share ownership as of December 31, 1994 by
the Directors and Executive Officers was 519,502.
7
<PAGE> 11
EXECUTIVE COMPENSATION
Shown below is information concerning the annual and long-term
compensation for services in all capacities to the Company for the fiscal years
ended December 31, 1994, 1993, and 1992, of those persons who were, as of said
date, (i) the chief Executive Officer and (ii) the other four most highly
compensated Executive Officers of the Company (the "Named Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------------------------------------- ------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
SALARY BONUS(2) COMPENSATION(1) OPTIONS COMPENSATION(3)
NAME AND PRINCIPAL POSITION YEAR (DOLLARS) (DOLLARS) (DOLLARS) (NUMBER) (DOLLARS)
- --------------------------- ---- --------- --------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Donald M. Anderson . . . . . . . . . . 1994 180,000 65,000 11,552 0 36,288
Chairman of the Board . . . . . . 1993 178,333 65,000 12,340 7,500 35,970
. . . . . . . . . . . . . . . . . . . 1992 170,000 60,000 10,333 10,000 39,400
David W. Spainhour . . . . . . . . . . 1994 220,833 130,000 8,897 0 36,537
President and . . . . . . . . . . . 1993 195,833 130,000 73,833 15,000 40,338
Chief Executive Officer . . . . . . 1992 175,000 120,000 8,604 20,000 37,410
John F. Murphy . . . . . . . . . . . . 1994 118,333 65,000 10,682 0 31,014
Senior Vice President and . . . . . 1993 108,400 65,000 11,145 7,500 31,255
Chief Lending Officer . . . . . . . 1992 100,273 60,000 41,012 14,635 29,453
John J. McGrath . . . . . . . . . . . . 1994 118,333 65,000 72,340 4,334 30,991
Senior Vice President and . . . . . 1993 108,333 65,000 40,447 14,229 32,304
Chief Credit Officer . . . . . . . 1992 100,006 60,000 8,891 10,000 28,762
Kent M. Vining . . . . . . . . . . . . 1994 118,333 65,000 10,981 0 29,787
Senior Vice President and . . . . . 1993 108,334 65,000 10,863 7,500 30,989
Chief Financial Officer . . . . . . 1992 100,003 60,000 10,749 10,000 27,636
- ----------------
</TABLE>
(1) Other Annual Compensation consists of insurance premiums (other than term
insurance) and dues and memberships paid on behalf of the Named Officers
for fiscal year 1994, 1993 and 1992. The amount stated for John J.
McGrath in 1994 includes $63,367 received in the form of the difference
between the price paid for stock of the Company purchased upon exercise of
employee stock options and the fair market value of such stock at the date
of purchase.
(2) Amounts in this column represent bonuses awarded by the Company's
Compensation Committee upon evaluation of performance during fiscal years
1993, 1992 and 1991, respectively, but paid during fiscal years 1994, 1993
and 1992, respectively.
(3) This column includes amounts contributed by the Company on behalf of the
Named Officers to the Company's Incentive & Investment and Salary Savings
Plan, which is a defined contribution profit sharing plan which includes a
401(k) savings feature. Under this Plan, the Company makes discretionary
contributions which are allocated among Plan participants ratably based on
participants' relative compensation levels. During the Company's last
fiscal year, the Company made discretionary contributions to the Plan on
behalf of the Named Officers in the amounts stated in the following Table
entitled "I & I Discretionary Contributions". Under the 401(k) savings
feature of the Plan during 1994, the Company matched $1.00 for every $1.00
of voluntary employee contributions up to 3% of employee compensation and
$.50 for every $1.00 of the next 3% of compensation up to a maximum of
4.5% of compensation. During the last fiscal year, the Company made
matching contributions on behalf of the Named Officers totaling $29,400,
in the respective amounts set forth in the following Table entitled
"401(k) Matching Contributions".
8
<PAGE> 12
I & I DISCRETIONARY CONTRIBUTIONS
<TABLE>
<S> <C>
Donald M. Anderson . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,318
David W. Spainhour . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,568
John F. Murphy . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,768
John J. McGrath . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,768
Kent M. Vining . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,768
401(K) MATCHING CONTRIBUTIONS
Donald M. Anderson . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,000
David W. Spainhour . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,750
John F. Murphy . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,550
John J. McGrath . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,550
Kent M. Vining . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,550
</TABLE>
All Other Compensation also includes contributions made by the Company,
if any, on behalf of the Named Officers under the Company's Employee
Stock Ownership Plan. During the last fiscal year, the Company made no
such contributions to the ESOP on behalf of the Named Officers except for
dividends paid on stock held in the Named Officers' accounts under the
Plan and forfeitures:
ESOP CASH CONTRIBUTIONS AND DIVIDENDS
<TABLE>
<S> <C>
Donald M. Anderson . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,295
David W. Spainhour . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,755
John F. Murphy . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,194
John J. McGrath . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,465
Kent M. Vining . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,221
</TABLE>
The specific number of shares allocated to the participant accounts of
each Named Officer for the last fiscal year of the Company from
forfeitures as of the date hereof, are as follows:
ESOP SHARE ALLOCATIONS
<TABLE>
<CAPTION>
TOTAL NUMBER
NUMBER OF SHARES ALLOCATED OF SHARES ALLOCATED
NAMED OFFICERS DURING 1994 AS OF 12/31/94
-------------- -------------------------- -------------------
<S> <C> <C>
Donald M. Anderson . . . . . . . . . . . . 51 16,022
David W. Spainhour . . . . . . . . . . . . 51 16,628
John F. Murphy . . . . . . . . . . . . . . 51 11,942
John J. McGrath . . . . . . . . . . . . . 51 12,298
Kent M. Vining . . . . . . . . . . . . . . 51 11,978
</TABLE>
The dollar value of these shares allocated to these Named Officers'
accounts are represented in the table "ESOP Cash Contributions and
Dividends" above, and are thus included in the above Summary Compensation
Table.
All Other Compensation also includes the dollar value of any premiums
paid by the Company during its last fiscal year with respect to term life
insurance for the benefit of the Named Officers. During the last fiscal
year, the dollar value of such premiums paid on behalf of the Named
Officers were as follows:
TERM LIFE INSURANCE PREMIUMS
<TABLE>
<S> <C>
Donald M. Anderson . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,675
David W. Spainhour . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,464
John F. Murphy . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,502
John J. McGrath . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,208
Kent M. Vining . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,248
</TABLE>
9
<PAGE> 13
The Company also maintains for the benefit of the Named Officers and
other "key" employees, its Key Employee Retiree Health Plan, which was
adopted by the Company effective December 29, 1992. This Plan is an
unfunded plan which pays a portion of health insurance coverage for
retired key employees and their spouses (but not dependents). While the
Named Officers may be eligible for coverage under this Plan when they
retire, no amounts were paid by the Company during the last fiscal year
for coverage for any Named Officers, nor were any amounts contributed to
the Plan during the last fiscal year.
OPTION GRANTS
Shown below is information on grants of stock options to the Named
Officers pursuant to the Company's various employee stock option plans during
the fiscal year ended December 31, 1994, which are reflected in the Summary
Compensation Table on page 8.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
------------------------------------------------------------------------
NUMBER OF
SECURITIES PERCENT OF
UNDERLYING TOTAL OPTIONS
OPTIONS GRANTED TO EXERCISE GRANT DATE
GRANTED IN EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME FISCAL 1994(1) FISCAL 1994 (PER SHARE) DATE VALUE(2)
---- -------------- --------------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Donald M. Anderson . . . . . . . . . . . -0-
David W. Spainhour . . . . . . . . . . . -0-
John F. Murphy . . . . . . . . . . . . . -0-
John J. McGrath . . . . . . . . . . . . . 3,790 8.56% 28.50 10/20/99 $ 34,362
544 1.23% 28.50 05/01/02 $ 4,932
Kent M. Vining . . . . . . . . . . . . . -0-
- ---------------
</TABLE>
(1) Options granted under the Company's Stock Option Plan and Restricted Stock
Option Plan are administered by the Company's Compensation Committee. All
of the above options granted during 1994 were pursuant to the Restricted
Stock Option Plan and contained the following terms, in addition to those
terms set forth above: (a) they vest over a period of five years at the
rate of 20% per year; and (b) options granted under the Restricted Stock
Option Plan are subject to the restrictions that the shares issued may not
be transferred without the approval of the Committee for five years
following the option grant or two years following the exercise of the
option, whichever is later. The 4,334 shares granted to Mr. McGrath were
reload options which are granted under the Plan when someone exercises a
stock option by tendering stock already owned (a so-called stock for stock
exercise).
(2) Values are based on Black-Scholes option pricing model adapted for use in
valuing executive stock options. The actual value, if any, a Named
Officer may realize will depend on the excess of the stock price over the
exercise price on the date the option is exercised, and there is no
assurance that the value realized by a Named Officer will be at or near
the value estimated by the Black-Scholes model. The estimated values
under this model are based on certain assumptions as to variables such as
interest rates, stock price volatility and future dividend yield. The
above calculations for the reload options are based on the expected term
of 5 years, a risk-free rate of return of 8.65%, an annual dividend yield
of 2.81%, and stock price volatility of 29%.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
Shown below is information with respect to the unexercised options to
purchase the Company's Common Stock granted to the Named Officers in fiscal
1994 and prior years under the Company's Stock Option Plan, and Restricted
Stock Option Plan and held by them at December 31, 1994.
10
<PAGE> 14
AGGREGATE OPTION EXERCISES LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS EXERCISED OPTIONS HELD AT IN-THE-MONEY OPTIONS AT
DURING FISCAL YEAR 1994 DECEMBER 31, 1994 DECEMBER 31, 1994(1)
--------------------------- ----------------------- --------------------------
SHARES
ACQUIRED VALUE
ON EXERCISE REALIZED(1)
NAME (NUMBER) (DOLLARS) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Donald M. Anderson . . . . . -0- -0- 14,557 12,204 $ 105,917 $ 85,608
David W. Spainhour . . . . . -0- -0- 11,335 22,557 $ 80,118 $ 160,915
John F. Murphy . . . . . . . -0- -0- 19,192 12,204 $ 157,782 $ 85,608
John J. McGrath . . . . . . . 6,557 $63,367 12,729 16,538 $ 86,874 $ 85,608
Kent M. Vining . . . . . . . -0- -0- 14,557 12,204 $ 105,917 $ 85,608
- ---------------
</TABLE>
(1) The value realized from options exercised during Fiscal Year 1994 and the
value of unexercised in-the-money options at December 31, 1994 are
calculated by determining the difference between the estimated fair market
value of the stock underlying the options, based on third-party
transactions reported to the Company ($25.00 per share at year end), and
the exercise price of the options as of the exercise date or as of
year-end, respectively.
EXECUTIVE EMPLOYMENT CONTRACTS
The Company has no contract of employment with any Named Officer, nor
does it have any compensatory plan or arrangement with any Named Officer
concerning termination of employment or change in control of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee is composed of four of the Company's
"outside" directors: Dale E. Hanst, Chairman, Anthony Guntermann, Richard M.
Davis and Harry B. Powell. None of these Directors has ever been employed by
the Company in any position, other than as a director. Mr. Hanst is a senior
partner in the law firm of Schramm & Raddue, Santa Barbara, California. During
the past fiscal year, Schramm & Raddue served as outside corporate and
litigation counsel to the Company.
No Executive Officer of the Company had any interlocking relationship
with any other for-profit entity during the last fiscal year, including (a)
serving on the compensation committee of any other such entity, or (b) serving
as a director of any other such entity.
EXTENT OF PARTICIPATION IN THE COMPANY'S STOCK PLANS
As of the date of this proxy statement, the following number of employees
of the Company and/or the Bank were eligible to participate and were
participating in each of the employee plans of the Company:
<TABLE>
<CAPTION>
NUMBER NUMBER
PLAN ELIGIBLE PARTICIPATING
---- -------- -------------
<S> <C> <C>
Employee Stock Ownership Plan . . . . . . . . . 417 417
Stock Option Plan . . . . . . . . . . . . . . . 103 100
Restricted Stock Option Plan . . . . . . . . . . 68 64
Director Stock Option Plan . . . . . . . . . . . 6 6
</TABLE>
11
<PAGE> 15
SECURITIES SUBJECT TO OPTION PLANS
The following tables set forth information, as of December 31, 1994 (as
adjusted to reflect subsequent stock splits and stock dividends), regarding
options under the various employee and director stock option plans of the
Company:
STOCK OPTION PLAN
<TABLE>
<CAPTION>
NUMBER OF
SHARES REMAINING
RESERVED FOR
ISSUANCE NUMBER OF SHARES NUMBER OF SHARES
(EXCLUSIVE OF ISSUED PURSUANT SUBJECT TO WEIGHTED AVERAGE RANGE OF
OUTSTANDING TO EXERCISES OF OUTSTANDING EXERCISE PRICE EXPIRATION
OPTIONS) OPTIONS OPTIONS PER SHARE DATES
- -------------------- ------------------- --------------------- --------------------- -------------
<S> <C> <C> <C> <C>
-0- 712,630 96,238 $18.72 05/01/95
to 07/01/99
</TABLE>
RESTRICTED STOCK OPTION PLAN
<TABLE>
<CAPTION>
NUMBER OF
SHARES REMAINING
RESERVED FOR
ISSUANCE NUMBER OF SHARES NUMBER OF SHARES
(EXCLUSIVE OF ISSUED PURSUANT SUBJECT TO WEIGHTED AVERAGE RANGE OF
OUTSTANDING TO EXERCISES OF OUTSTANDING EXERCISE PRICE EXPIRATION
OPTIONS) OPTIONS OPTIONS PER SHARE DATES
- -------------------- ------------------- --------------------- --------------------- -------------
<S> <C> <C> <C> <C>
174,311 30,659 295,030 $18.41 05/01/97
to 05/01/02
</TABLE>
DIRECTOR STOCK OPTION PLAN
<TABLE>
<CAPTION>
NUMBER OF
SHARES REMAINING
RESERVED FOR
ISSUANCE NUMBER OF SHARES NUMBER OF SHARES
(EXCLUSIVE OF ISSUED PURSUANT SUBJECT TO WEIGHTED AVERAGE RANGE OF
OUTSTANDING TO EXERCISES OF OUTSTANDING EXERCISE PRICE EXPIRATION
OPTIONS) OPTIONS OPTIONS PER SHARE DATES
- -------------------- ------------------- --------------------- --------------------- -------------
<S> <C> <C> <C> <C>
39,691 130,870 41,825 $19.15 07/02/96
to 07/01/99
</TABLE>
COMPENSATION OF DIRECTORS
The Company has a policy of paying non-employee directors an annual
retainer of $6,000 plus $500 per board meeting attended and $250 per committee
meeting attended, except for the Executive Committee and the Loan Policy and
Review Committee. Each outside director who is a member of the Executive
Committee is paid $1,000 per month and each member of the Loan Policy and
Review Committee is paid $400 per meeting. Total directors' fees paid in 1994
were $216,032.
12
<PAGE> 16
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Bank is composed of the undersigned
independent outside directors. The Committee meets after the end of each year
to review the performance of the Bank's Chief Executive Officer and its other
Executive Officers, including those named in the Summary Compensation Table set
forth above, during the just-completed calendar year and to make
recommendations to the Board on executive salaries for the ensuing year,
bonuses for the past year, and grants of stock options. The Committee met in
February, 1994, to make its compensation recommendations for calendar year
1994. The Committee met again in January 1995 to review the Bank's 1994
performance and recommend bonuses for the Bank's Executive Officers which are
actually paid in 1995.
The Committee makes this report to the Shareholders so that they may be
fully informed as to the factors utilized by the Committee in making its
recommendations to the Board of Directors concerning compensation levels for
the Bank's senior executives for calendar year 1994. The discretionary
components of executive compensation (excluding those benefits which are
generally available to all employees, such as ESOP contributions, insurance,
etc.) are salary, bonus, and stock options.
In considering salary levels of the Chief Executive Officer and other
Executive Officers, the Committee's recommendations, while subjective, are
intended to be competitive within the industry to ensure retention of the
Bank's high quality Executive Officers, and to maintain the "team approach" to
Management of the Bank. In making these recommendations, the Committee
considers the compensation levels of peer group companies (which are other
California independent community banks) through reference to information
available in the industry such as the State Banking Department's Executive
Officer Compensation Survey, the Survey of Executive Compensation of California
Independent Banks, and the survey prepared by Hay Management Consultants for
the Bank of Stockton dated November 22, 1993. The Committee attempts to set a
salary level which is approximately the median range for peer group companies
which have a comparable performance.
Another component of executive compensation is the bonus which is
available to the Bank's Executive Officers. Again, the bonus recommendations
of the Committee are subjective but every effort is made to relate the
recommended bonuses to the Bank's overall performance for the period in
question as measured by its profitability and its capital levels. In addition,
the Bank's past performance relative to the industry is an important factor,
e.g. 29 consecutive years of increased earnings and return on assets and equity
that are consistently in the top quartile of California banks. The Committee
also considers the Bank's problem asset levels, its loan production, the
quality of its asset-liability management and its regulatory compliance. The
overall value of the Bank and shareholder equity levels are also important
factors considered by the Committee in making its recommendations.
A final component of executive compensation is stock options which are
granted from time-to-time to members of the executive group. Stock options are
primarily utilized to provide longer range incentives to the executives to
insure their long-range commitment to the Bank.
SANTA BARBARA BANK & TRUST
COMPENSATION COMMITTEE
Dale E. Hanst, Committee Chairman
Richard M. Davis, Committee Member
Anthony Guntermann, Committee Member
Harry B. Powell, Committee Member
13
<PAGE> 17
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the
Company's cumulative total shareholder return on its outstanding common stock,
stated as if a $100 initial investment had been made at the beginning of the
period, including reinvestment of dividends, utilizing a measurement period
beginning on December 31, 1989 through December 31, 1994, measured against (i)
the Standard & Poor's 500 Stock Index and (ii) Montgomery Securities' Southern
California Bank Proxy Index as published in its Western Bank Monitor.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
Santa Barbara Bancorp $100.00 $81.74 $69.26 $101.72 $121.91 $143.46
S&P 500 $100.00 $93.44 $118.02 $123.29 $131.99 $129.96
Montgomery Securities $100.00 $87.13 $72.95 $71.41 $84.59 $95.48
</TABLE>
SELECTION OF INDEPENDENT ACCOUNTANTS
(PROPOSAL 2)
The firm of Arthur Andersen & Co. served as independent certified public
accountants for the Company and the Bank with respect to the year 1994, and has
been recommended by the Board to be the Company's and the Bank's accountants
for calendar year 1995. It is expected that one or more representatives of
Arthur Andersen & Co. will be present at the meeting, and will be given the
opportunity to make a statement, if desired, and to respond to all appropriate
questions.
Audit services performed by Arthur Andersen & Co. for the year ended
December 31, 1994 consisted of examination of the financial statements of the
Company, the Bank and its employee benefit plans, certain services related to
filings with the Securities and Exchange Commission, and consultation on
matters related to accounting and financial reporting. In addition to these
services, Arthur Andersen & Co. performed certain non-audit services
consisting primarily of consultation on matters relating to the preparation of
tax returns, the total fees for which amounted to approximately 17.8% of the
total fees for services paid to Arthur Andersen & Co. for the year ended
December 31, 1994. All such services were approved by the Company's Audit
Committee, which has determined the firm of Arthur Andersen & Co. to be fully
independent of the operations of the Company.
14
<PAGE> 18
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Company's Board of Directors recommends that the shareholders approve
Arthur Andersen & Co. to serve as certified independent public accountants for
the Company for the calendar year 1995. The affirmative vote of a majority of
the shares present or represented and entitled to vote at the meeting will be
required to approve this action.
CERTAIN TRANSACTIONS
Some of the Directors of the Company and the 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 the ordinary course of the Company's business and in compliance with
applicable laws on substantially the same terms, including interest rates and
collateral, as those prevailing for comparable transactions with other persons
of similar creditworthiness and, in the opinion of Management, did not involve
more than a normal risk of collectability or present other unfavorable
features. The aggregate amount of all such loans and credit extensions
outstanding as of December 31, 1994, to all Directors and Executive Officers,
together with their associates and members of their immediate family, was
approximately $1,238,000, constituting approximately 1.32% of Company's
stockholders' equity. The Company has a very strong policy regarding review of
the adequacy and fairness to the Bank of loans to its Directors and officers.
Mr. Dale Hanst, a director of the Company, is a senior partner in the law
firm of Schramm & Raddue. The firm of Schramm & Raddue represented the Bank in
corporate and certain litigation matters in 1994.
Donald M. Anderson, Chairman of the Board and Director of the Company, is
a general partner in Pueblo Associates, from which the Company leases space at
1021 Anacapa Street for its executive headquarters and the housing of
administrative functions of the Bank. The lease, covering 28,957 square feet
of space, was restated in 1994 for a term of five (5) years with four (4) five
(5) year options to renew. The lease payments to Pueblo Associates totaled
$522,819 during 1994. In the Company's opinion the lease is comparable to an
"arms length" negotiated lease.
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's Directors and Executive Officers, and persons who own
more than ten percent of a registered class of the Company's equity securities,
to file with the Securities and Exchange Commission initial reports of
ownership and reports of changes in ownership of Common Stock of the Company.
Officers, Directors and greater than ten-percent stockholders are required by
Securities and Exchange Commission regulation to furnish the Company with
copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required during the fiscal year ended December 31, 1994, all
Section 16(a) filing requirements applicable to its officers, Directors and
greater than ten-percent beneficial owners were completed.
SHAREHOLDER PROPOSALS
The deadline for shareholders to submit proposals to be considered for
inclusion in the proxy statement for the Company at the Company's 1996 Annual
Meeting of Shareholders is November 10, 1995. No such proposals were submitted
with respect to the 1995 Annual Meeting.
LEGAL MATTERS
There are no pending or threatened legal proceedings to which the Company
or Bank is or may become a party, which may materially affect its property or
proposed business, other than ordinary routine litigation incidental to the
Company's business.
15
<PAGE> 19
OTHER MATTERS
Management 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 Management on such
matters, and discretionary authority to do so is included in the proxy.
FINANCIAL STATEMENTS OF THE COMPANY
Shareholders of the Company are advised that they may, upon request made
to the Company's Head Office located at 1021 Anacapa, Santa Barbara, California
93101, obtain copies (free of charge) of the Company's Financial Statements or
additional copies of the Company's Annual Report for 1994 by requesting them
from the Secretary of the Corporation. Pursuant to regulations of the
Securities and Exchange Commission, shareholders of the Company will receive
the 1994 Annual Report of the Company together with this proxy statement. If
for any reason any shareholder does not receive a copy of the 1994 Annual
Report of the Company together with this proxy statement, please advise the
Company, and a copy will be provided without any delay or inconvenience.
NOTICE OF AVAILABILITY OF MATERIAL
THE BANK WILL PROVIDE WITHOUT CHARGE TO THE SHAREHOLDERS OF RECORD ON
MARCH 8, 1995 (THE RECORD DATE FOR ELIGIBILITY TO VOTE AT THE ANNUAL MEETING) A
COPY OF THE COMPANY'S 1994 FORM 10-K AND ANNUAL REPORT, WHICH WILL BE FILED
UNDER THE SECURITIES AND EXCHANGE ACT OF 1934.
All written requests for this report should be addressed to:
Dr. Clare McGivney
Assistant Vice President
Santa Barbara Bank & Trust
Post Office Box 1119
Santa Barbara, California 93102
SHAREHOLDERS ARE REQUESTED TO VOTE, DATE, SIGN AND RETURN PROMPTLY
THE ENCLOSED PROXY WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING. A RETURN,
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED IF MAILED WITHIN THE UNITED STATES. PROMPT RESPONSE IS HELPFUL AND
YOUR COOPERATION WILL BE APPRECIATED. YOU MAY, WITHOUT AFFECTING ANY VOTE
PREVIOUSLY TAKEN, REVOKE YOUR PROXY BY A LATER PROXY FILED WITH THE SECRETARY
OF THE COMPANY OR BY FILING WRITTEN NOTICE OF REVOCATION WITH THE SECRETARY OF
THE COMPANY. ATTENDANCE AT THE MEETING WILL NOT IN AND OF ITSELF REVOKE A
PROXY. IF YOU ATTEND THE MEETING, YOU MAY REVOKE THE PROXY BY ADVISING THE
INSPECTOR OF ELECTIONS THAT YOU ELECT TO VOTE IN PERSON.
SANTA BARBARA BANCORP
By: /s/ DONALD M. ANDERSON
----------------------
Donald M. Anderson
Chairman of the Board
Dated: March 16, 1995
16
<PAGE> 20
PRELIMINARY COPY
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PROXY SANTA BARBARA BANCORP
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
The undersigned hereby appoints Donald M. Anderson,
David W. Spainhour and Jay Donald Smith, and each of them,
as Proxies, each with the power to appoint his substitute,
and hereby authorizes them to represent and to vote, as
designated below, all the shares of common stock of Santa
Barbara Bancorp held of record by the undersigned on March
8, 1995 at the Annual Meeting of Shareholders to be held
on April 25, 1995 or any adjournment thereof.
1. ELECTION OF DIRECTORS
<TABLE>
<S> <C>
/ / FOR all nominees listed below
(except as marked to the contrary below)
<CAPTION>
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
<CAPTION>
(except as marked to the contrary below) to vote for all nominees listed below
</TABLE>
Donald M. Anderson, Frank Barranco, M.D., Edward E.
Birch, Richard M. Davis, Anthony Guntermann, Dale E.
Hanst, Harry B. Powell, David W. Spainhour.
(INSTRUCTION: To withhold authority to vote for any
individual nominee write that nominee's
name in the space provided below.)
2. PROPOSAL TO APPROVE SELECTION OF ARTHUR ANDERSEN &
CO. TO SERVE AS INDEPENDENT PUBLIC ACCOUNTANTS FOR
SANTA BARBARA BANCORP FOR THE YEAR 1995.
/ / FOR / / AGAINST / / ABSTAIN
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3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO
VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.
THIS PROXY WHEN PROPERLY EXECUTED AND RETURNED WILL BE
VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 AND 2. IF ANY OTHER BUSINESS IS
PRESENTED AT THE MEETING, THIS PROXY CONFERS AUTHORITY TO
AND SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATION
OF THE BOARD OF DIRECTORS. THIS PROXY CONFERS THE POWER OF
CUMULATIVE VOTING AND THE POWER TO VOTE CUMULATIVELY FOR
LESS THAN ALL OF THE NOMINEES AS DESCRIBED IN THE PROXY
STATEMENT.
Dated: , 1995
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Signature
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Signature if held
jointly
Please date this
Proxy and sign
exactly as the name
appears on this card.
When shares are held
by joint tenants,
both should sign.
When signing as
attorney, as
executor,
administrator,
trustee, or guardian,
please give full
title as such. If a
corporation, please
sign in full
corporate name by
President or other
authorized officer.
If a partnership,
please sign in
partnership name by
authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
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