<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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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 offsetting fee was
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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<PAGE> 2
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF SANTA BARBARA BANCORP
TO BE HELD APRIL 24, 1997
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 Thursday, April 24, 1997, at 2:00 P.M.,
for the purpose of considering and voting on the following matters:
1. Election of Directors. Electing nine (9) persons to the Board of
Directors to serve until the 1998 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, David W. Spainhour and
William S. Thomas, Jr.;
2. Selection of Auditors. To vote upon a recommendation of the Board
of Directors of the Company to approve the selection of Arthur
Andersen, LLP to serve as independent certified public accountants
for the Company for the 1997 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 7, 1997
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;
<PAGE> 3
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 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
______________________________________
Donald M. Anderson,
Chairman of the Board
Dated: March 19, 1997
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<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 24 , 1997
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 Thursday, April 24,
1997, 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 19, 1997.
The matters to be considered and voted upon at the Meeting will include:
1. Election of Directors. Electing nine (9) persons to the Board of
Directors to serve until the 1998 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, David W. Spainhour and
William S. Thomas, Jr.;
2. Selection of Auditors. To vote upon the recommendation of the
Board of Directors of the Company to approve the selection of
Arthur Andersen, LLP to serve as independent certified public
accountants for the Company for the 1997 calendar year; and
3. Other Business. Transacting such other business as may properly
come before the Meeting, and any adjournments thereof.
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.
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<PAGE> 5
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 19, 1997.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
There were issued and outstanding 7,551,499 shares of the Company's
common stock on March 7, 1997. March 7, 1997 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.
Proposals submitted for approval by the shareholders, other than the election
of Directors, will be deemed approved if they are approved by the affirmative
vote of a majority of the shares of common stock represented and voting at the
Meeting, either in person or by proxy, and the number of shares voting in favor
of the proposal constitutes at least a majority of the required quorum for the
Meeting. This practically means that a proposal will be deemed approved if it
is approved by a majority of the shares of common stock voting on the proposal
and the number of shares voting in favor of the proposal is more than 25% of
the total number of shares of common stock of the Company then issued and
outstanding. Directors shall be elected by a plurality of the votes cast.
Votes that are cast against a proposal will be counted for purposes of
determining the presence or absence of a quorum for the transaction of business
and the total number of votes cast with respect to any proposal. Under
California law, abstentions from voting on any proposal will be counted for
purposes of determining the presence or absence of a quorum for the transaction
of business, but otherwise will not be counted for purposes of determining the
votes cast for or against the proposal and the total number of votes cast with
respect to any proposal. Accordingly, abstentions will not have the same
effect as a vote against a proposal.
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.
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<PAGE> 6
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. The Board has fixed the number of directors at nine (9) by an
amendment to the By-laws.
At the Annual Meeting, nine (9) 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 individual nominee by striking through the nominee's name 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
3
<PAGE> 7
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.
The nine nominees for Director receiving the highest number of
affirmative votes shall be elected as Directors. Votes withheld from any
Director nominee are counted for purposes of determining the presence or
absence of a quorum and the total number of votes cast with respect to the
election of Directors. Broker non-votes will not be counted for purposes of
determining the number of votes cast for the election of Directors.
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 1996 Annual Meeting of
the Company's shareholders.
Persons nominated to serve on the Company's Board of Directors will
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 69 1971 Chairman of the Board of the Company and Vice Chairman
of the Bank. Mr. Anderson joined the Bank in October,
1969, as Vice President and Commercial Lending Officer.
He was elected President, CEO and Director in 1971 and
served in those capacities until elected Chairman of the
Board in February, 1989. He has served on numerous charitable,
civic and banking organizations.
Frank Barranco M.D. 66 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 58 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, the Santa Barbara Industry
Education Council, and the Santa Barbara Chamber of Commerce.
</TABLE>
4
<PAGE> 8
<TABLE>
<S> <C> <C> <C>
Richard M. Davis 62 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 77 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 65 1983 Mr. Hanst is currently of counsel to the law firm of Reicker,
Clough, Pfau & Pyle, LLP and was formerly 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 68 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.
David W. Spainhour 65 1974 Mr. Spainhour is President and Chief Executive Officer of the Company
and Chairman of the Board 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. He served
as President and CEO of the Bank until December, 1995. Mr. Spainhour
serves on the boards of the Santa Barbara Industry Education Council,
Channel City Club, Westmont College, and United Way of Santa Barbara.
William S. Thomas, Jr. 53 1995 Mr. Thomas is the Vice Chairman and Chief Operating Officer of the
Company and President and Chief Executive Officer of the Bank.
Mr. Thomas joined the Bank in 1994 as Manager of the Trust and
Investment Services Division. Prior to coming to the Bank, Mr. Thomas
was an Executive Vice President of Bank of America and Manager of the
Financial Institutions Group from 1992 to 1994. Prior to that
time he spent sixteen years with Security Pacific National Bank in
various capacities until its merger with Bank of America. His last
position with Security Pacific was as an Executive Vice President,
Manager Financial Institutions. He is a member of the Board of Directors
of the Santa Barbara Chamber of Commerce, Santa Barbara Symphony, C.A.L.M,
and El Adobe Corporation.
</TABLE>
COMMITTEES OF THE BOARD OF DIRECTORS
The Company had a standing Nominating Committee and Audit Committee
during 1996. The Bank had a standing Audit Committee and a Compensation
Committee during 1996.
During 1996 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
1996. The Committee does not consider shareholder nominations for Director's
positions.
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<PAGE> 9
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 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 1996 were Anthony Guntermann, Chairman, Dale E.
Hanst, Richard M. Davis, Frank Barranco, Edward Birch, and Harry B. Powell.
Each of the Committees met four (4) times during 1996.
The members of the Bank's Compensation and Stock Option Committee during
1996 were Dale E. Hanst, Anthony Guntermann, Richard M. Davis, and Harry B.
Powell. They met six (6) times during 1996 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
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<PAGE> 10
the objectives of the Salary Administration Program were being met. The
Committee also administers the Company's stock option plans.
The full Board of Directors met fourteen (14) times during 1996. 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, Spainhour and Thomas, 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, Spainhour and Thomas is
provided on pages 4 and 5 of this proxy statement.
<TABLE>
<CAPTION>
Position and Principal Occupations
Officer Age During the Past Five Year
------- --- ---------------------------------------------------------------------------
<S> <C> <C>
David A. Abts 52 Currently serves as Executive Vice President of the Company and Executive
Vice President, Retail Banking Manager 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.
Donald E. Barry 57 Currently serves as Executive Vice President of the Company and Executive Vice
President and Manager of the Trust and Investments Division of the Bank.
Before joining the Bank in July, 1995, he was a Regional Vice President of
Chase Manhattan from February, 1993 to July, 1995 in charge of private banking
and from 1987 to 1992 was a Senior Vice President of Security Pacific National
Bank in charge of private banking.
Donald E. Lafler 50 Currently serves as Senior Vice President and Chief Financial Officer of the
Company and the Bank. From 1987 to 1995 he served as Vice President and
Principal Accounting Officer.
John J. McGrath 54 Currently serves as a Senior Vice President of the Company and Senior Vice
President and Chief Credit Officer 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.
Jay D. Smith 56 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.
Catherine R. Steinke 43 Currently serves as a Senior Vice President and Director of the Human Resources
Division of the Bank. Before joining the Bank in March, 1993, she was Vice
President and Manager for the Teleservices Statewide Operations
Division at Bank of America and held the position of Human Resources Manager
for the same division with Security Pacific National Bank from October, 1990
until its merger with Bank of America in 1992. Prior to that time, she
was Vice President and Director of Human Resources for Security Pacific Auto Finance.
</TABLE>
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<PAGE> 11
<TABLE>
<S> <C> <C>
Kent M. Vining 49 Currently serves as Senior Vice President and Strategic Planning Officer of the
Company and the Bank. He served as Chief Financial Officer of the Bank from
April 1980 until July 1, 1995.
</TABLE>
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, 1996, by each
Director, by each Named Officer (as defined on page 9), 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>
Santa Barbara Bank and Trust, Trustee of the Santa Barbara Bank
and Trust Employee Stock Ownership Trust
1021 Anacapa Street
Santa Barbara, CA 93101 713,162 9.40%
DIRECTORS
Donald M. Anderson 338,417 (3) 4.46%
Frank H. Barranco, M.D. 17,157 (4) 0.23%
Edward E. Birch 17,767 (5) 0.23%
Richard M. Davis 18,974 (6) 0.25%
Anthony Guntermann 46,879 (7) 0.62%
Dale E. Hanst 49,879 (8) 0.66%
Harry B. Powell 13,273 (9) 0.17%
David W. Spainhour 233,949 (10) 3.08%
William S. Thomas, Jr. 27,020 (11) 0.36%
NAMED OFFICERS
David Abts 33,275 (12) 0.44%
Donald Barry 9,538 (13) 0.13%
Jay D. Smith 100,717 (14) 1.33%
All Directors and Executive Officers as a Group (16 individuals) 1,059,591 (15) 13.96%
- ---------------
</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 and shares allocated to Named Officers under the Bank's
Employee Stock Ownership Plan ("ESOP"). Also includes any
stock acquirable by exercise of stock options exercisable within
60 days following December 31, 1996. All share data are stated
as of December 31, 1996.
(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 38,363 shares acquirable by exercise of exercisable
stock options.
(4) Includes 6,899 shares acquirable by exercise of exercisable stock
options.
(5) Includes 7,377 shares acquirable by exercise of exercisable stock
options.
(6) Includes 1,399 shares acquirable by exercise of exercisable stock
options.
(7) Includes 14,544 shares acquirable by exercise of exercisable stock
options.
(8) Includes 15,619 shares acquirable by exercise of exercisable stock
options.
(9) Includes 900 shares acquirable by exercise of exercisable stock
options.
8
<PAGE> 12
(10) Includes 5,502 shares acquirable by exercise of exercisable stock
options.
(11) Includes 27,000 shares acquirable by exercise of exercisable stock
options.
(12) Includes 15,188 shares acquirable by exercise of exercisable stock
options.
(13) Includes 7,000 shares acquirable by exercise of exercisable stock
options.
(14) Includes 33,488 shares acquirable by exercise of exercisable stock
options.
(15) Includes 251,380 shares acquirable by exercise of exercisable stock
options. Actual share ownership as of December 31,1996, by the
Directors and Executive Officers was 808,211.
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, 1996, 1995, and 1994, of those persons who were, as of
December 31, 1996, (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
NAME AND PRINCIPAL POSITION SALARY BONUS (1) COMPENSATION (2) OPTIONS (3) COMPENSATION (4)
- --------------------------- YEAR (DOLLARS) (DOLLARS) (DOLLARS) (NUMBER) (DOLLARS)
---- --------- --------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
David W. Spainhour 1996 190,182 -0- 344,725 22,835 41,101
Chairman of the Board of the 1995 225,000 60,000 238,660 17,686 32,053
Bank 1994 220,833 130,000 8,897 -0- 36,537
William S. Thomas, Jr. 1996 247,469 -0- 2,938 30,000 20,769
President and Chief 1995 197,497 25,000 -0- 15,000 10,315
Executive Officer of the Bank 1994 61,844 -0- -0- 15,000 731
David A. Abts 1996 137,067 8,000 331,842 17,140 25,054
Executive Vice President and 1995 120,073 50,000 550 -0- 13,728
Director MIS/Operations 1994 118,333 65,000 -0- -0- 23,627
Donald E. Barry 1996 163,000 -0- 12,500 10,000 10,734
Executive Vice President, 1995 59,583 -0- -0- -0- -0-
Trust Manager 1994 -0- -0- -0- -0- -0-
Jay D. Smith 1996 120,104 15,000 142,805 10,197 34,706
Senior Vice President, General 1995 120,000 40,000 91,695 7,020 25,998
Counsel and Secretary 1994 118,333 65,000 51,561 4,921 21,694
- ----------------
</TABLE>
(1) Amounts in this column represent bonuses awarded by the Company's
Compensation Committee upon evaluation of performance during fiscal years
1995, 1994 and 1993, respectively, but paid during fiscal years 1996, 1995
and 1994, respectively. Please refer to the Report of the Compensation
Committee on page 15 for additional information.
(2) 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 1996, 1995 and 1994. The amount stated for David W.
Spainhour, David A. Abts and Jay D. Smith in 1996 includes $342,806,
$331,002 and $140,271,
9
<PAGE> 13
respectively, 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.
(3) Please see the table on page 11 for a detailed explanation.
(4) This column includes the amount of ESOP cash contributions and dividends
paid on ESOP shares allocated to the Named Officers, term life insurance
premiums, 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, and the 401(k) matching contribution. 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 1996, 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 $33,566, in the
respective amounts set forth in the following Table entitled "401(k)
Matching Contributions".
I & I DISCRETIONARY CONTRIBUTIONS
<TABLE>
<S> <C>
David W. Spainhour . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,859
William S. Thomas, Jr. . . . . . . . . . . . . . . . . . . . . . . . . $ 3,989
David A. Abts . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,741
Donald E. Barry . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,553
Jay D. Smith . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,345
</TABLE>
401(K) MATCHING CONTRIBUTIONS
<TABLE>
<S> <C>
David W. Spainhour . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,362
William S. Thomas, Jr. . . . . . . . . . . . . . . . . . . . . . . . . $ 7,232
David A. Abts . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,581
Donald E. Barry . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,410
Jay D. Smith . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,981
</TABLE>
All Other Compensation also includes contributions, if any, made by the
Company on behalf of the Named Officers under the Company's Employee
Stock Ownership Plan ("ESOP"). During the last fiscal year, the Company
made contributions to the ESOP totaling $39,241 on behalf of the Named
Officers.
ESOP CASH CONTRIBUTIONS AND DIVIDENDS
<TABLE>
<S> <C>
David W. Spainhour . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,704
William S. Thomas, Jr. . . . . . . . . . . . . . . . . . . . . . . . . $ 9,290
David A. Abts . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,474
Donald E. Barry . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,351
Jay D. Smith . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 18,020
</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 are as follows:
10
<PAGE> 14
ESOP SHARE ALLOCATIONS
<TABLE>
<S> <C> <C>
NUMBER OF TOTAL
SHARES ALLOCATED SHARES ALLOCATED
NAMED OFFICERS DURING 1996 AS OF 12/31/96
-------------- --------------------- ---------------------
David W. Spainhour . . . . . . . . . . . . 0 25,019
William S. Thomas, Jr. . . . . . . . . . . 0 20
David A. Abts . . . . . . . . . . . . . . 0 5,333
Donald E. Barry . . . . . . . . . . . . . 38 38
Jay D. Smith . . . . . . . . . . . . . . . 7 14,726
</TABLE>
The dollar value of these shares allocated to the Named Officers'
accounts during 1996 are represented in the table "ESOP Cash
Contributions and Dividends" above, and are 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 was as follows:
TERM LIFE INSURANCE PREMIUMS
<TABLE>
<S> <C>
David W. Spainhour . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,176
William S. Thomas, Jr. . . . . . . . . . . . . . . . . . . . . . . . . $ 258
David A. Abts . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 258
Donald E. Barry . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 420
Jay D. Smith . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,360
</TABLE>
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. The
Company also maintains a similar program for all of its other employees.
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, 1996, which are reflected in the Summary
Compensation Table on page 9 as long-term compensation awards.
<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 1996(1) FISCAL 1996 (PER SHARE) DATE VALUE(2)
---- -------------- --------------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
David W. Spainhour . . . . . . . . . . . 5,000 1.98% $26.00 07/11/01 $ 23,500
" " . . . . . . . . . . . . . 991 * 0.39% $27.25 09/20/01 $ 4,896
" " . . . . . . . . . . . . . 2,276 * 0.90% $27.25 09/20/01 $ 11243
" " . . . . . . . . . . . . . 2,092 * 0.83% $27.25 09/20/01 $ 10,334
" " . . . . . . . . . . . . . 3,974 * 1.57% $28.00 12/13/01 $ 19,393
" " . . . . . . . . . . . . . 4,429 * 1.75% $28.00 05/01/02 $ 21,614
" " . . . . . . . . . . . . . 4,073 * 1.61% $28.00 12/13/01 $ 19,876
</TABLE>
(continued on next page)
11
<PAGE> 15
(continued from previous page)
<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 1996(1) FISCAL 1996 (PER SHARE) DATE VALUE(2)
---- -------------- --------------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
William S. Thomas, Jr. . . . . . . . . . 15,000 5.94% $19.75 01/03/01 $ 45,150
" " . . . . . . . . . . . . . 15,000 5.94% $23.00 03/01/01 $ 57,450
David A. Abts . . . . . . . . . . . . . 10,000 3.96% $23.00 03/01/01 $ 38,300
" . . . . . . . . . . . . . 4,223 * 1.67% $27.00 06/20/01 $ 22,255
" . . . . . . . . . . . . . 917 * 1.16% $27.00 06/20/01 $ 15,373
Donald E. Barry . . . . . . . . . . . . . 10,000 0.31% $27.00 06/20/01 $ 38,300
Jay D. Smith . . . . . . . . . . . . . 5,000 1.98% $23.00 03/01/01 $ 19,150
" . . . . . . . . . . . . . 1,667 * 0.66% $27.00 06/20/01 $ 8,785
" . . . . . . . . . . . . . 106 * 0.04% $27.00 06/20/01 $ 559
" . . . . . . . . . . . . . 1,758 * 0.70% $27.00 06/20/01 $ 9,265
" . . . . . . . . . . . . . 698 * 0.28% $27.00 06/20/01 $ 3,678
" . . . . . . . . . . . . . 193 * 0.08% $27.00 06/20/01 $ 1,017
" . . . . . . . . . . . . . 775 * 0.31% $27.00 06/20/01 $ 4,084
</TABLE>
*RELOAD GRANTS
_______________
(1) Options granted under the Company's Stock Option Plan and Restricted Stock
Option Plan are administered by the Company's Stock Option Committee and
the Board of Directors. All of the above options granted during 1996 were
pursuant to the Restricted Stock Option Plan and, except for reload
options, 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. A "reload" option is granted when someone exercises a
stock option by tendering stock already owned. The number of shares
granted is equal to the number of shares tendered in payment of the option
exercise price and the exercise price is the fair market value of the
Company's stock as of the date the shares are tendered. Reload options
vest and first become exercisable one (1) year followng grant. There are
also certain restrictions on reload options which are described in the
Company's stock option plans. Of the total number of options granted to
Messrs. Spainhour, Abts and Smith in 1996, 17,835, 7,140 and 5,197,
respectively, were reload options.
(2) Values are based on a binomial 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 binomial 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 ranging from 5.35% to 6.64%, an annual dividend
yield ranging from 2.22% to 3.04%, and stock price volatility of 16.7%.
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
1996 and prior years under the Company's Stock Option Plan and Restricted Stock
Option Plan and held by them at December 31, 1996.
12
<PAGE> 16
<TABLE>
<CAPTION>
AGGREGATE OPTION EXERCISES LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
-------------------------------------------------------------------------------------------
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS EXERCISED OPTIONS HELD AT IN-THE-MONEY OPTIONS AT
DURING FISCAL YEAR 1996 DECEMBER 31, 1996 DECEMBER 31, 1996(1)
--------------------------- ----------------------- --------------------------
SHARES
ACQUIRED VALUE
ON EXERCISE REALIZED(1)
NAME (NUMBER) (DOLLARS) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David W. Spainhour . . . . . 30,269 342,806 2 31,502 $ 16 $145,708
William S. Thomas, Jr. . . . -0- -0- 21,000 39,000 $200,760 $318,039
David A. Abts . . . . . . . . 22,077 331,002 10,868 19,126 $164,402 $107,760
Donald E. Barry . . . . . . . -0- -0- 5,000 12,500 $ 41,000 $ 86,500
Jay D. Smith . . . . . . . . 10,389 140,271 30,238 14,225 $402,617 $101,485
- ---------------
</TABLE>
(1) The value realized from options exercised during Fiscal Year 1996 and the
value of unexercised in-the-money options at December 31, 1996 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 ($28 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 written 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 Bank's Compensation Committee is composed of four of the Bank'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 or the Bank in any position, other than as a Director. Mr. Hanst
was a senior partner in the law firm of Schramm & Raddue, Santa Barbara,
California and is current Of Counsel to Reicker, Clough, Pfau & Pyle, LLP which
serves as outside corporate and litigation counsel to the Company and the
Bank. During a portion of the past fiscal year, Schramm & Raddue served as
outside corporate and litigation counsel to the Company and the Bank.
No Executive Officer of the Company or the Bank 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 December 31, 1996, the following number of employees/Directors of
the Company and/or the Bank were eligible to participate and were participating
in each of the stock plans of the Company:
<TABLE>
<CAPTION>
NUMBER NUMBER
PLAN ELIGIBLE PARTICIPATING
---- -------- -------------
<S> <C> <C>
Employee Stock Ownership Plan . . . . . . . . . 465 465
Stock Option Plan . . . . . . . . . . . . . . . 22 22
Restricted Stock Option Plan . . . . . . . . . . 130 67
1985 Directors Stock Option Plan . . . . . . . . 5 5
1996 Directors Stock Option Plan . . . . . . . . 6 6
</TABLE>
13
<PAGE> 17
SECURITIES SUBJECT TO OPTION PLANS
The following tables set forth information, as of December 31, 1996 (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- 1,130,774 79,290 $12.63 06/01/97
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>
191,848 211,111 597,041 $18.19 05/01/97
to 05/20/02
</TABLE>
1985 DIRECTORS 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- 261,575 58,967 $12.85 02/01/97
to 07/03/00
</TABLE>
1996 DIRECTORS 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>
112,298 -0- 37,702 $26.58 06/20/01
to 12/13/01
</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
14
<PAGE> 18
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
1996 were $158,333.
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 and
bonuses for the past year. The Committee met in January, 1997 to make its
compensation recommendations for calendar year 1997 and to recommend bonuses
for the Bank's Executive Officers based on performance in 1996.
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 1996 and bonus awards for 1996.
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 other relevant surveys prepared by industry consultants.
Other components of executive compensation are the bonuses which are
awarded to the Bank's Executive Officers. The bonus recommendations of the
Committee are based upon performance against individual goals as well as the
Bank's overall performance for the period in question as measured by its
profitability and its capital levels. In addition, the Bank's performance
relative to the industry in terms of returns on assets and equity is an
important factor. 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. The importance of the Bank's performance in the setting
of bonus and compensation levels is highlighted by considering the Bank's
performance and executive officers' bonuses paid for 1995 and 1996. 1995 was a
year of substandard performance and total executive officers' bonuses paid in
1996 for 1995 were $43,000. On the other hand, 1996 was a year of exceptional
performance resulting in the award of substantial executive officers' bonuses
in the total amount of $635,000 to be paid in 1997.
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. Grants of stock options are
determined by the Compensation Committee which also acts as the Stock Option
Committee under the Company's stock option plans.
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
15
<PAGE> 19
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, 1991 through December 31, 1996, measured against (i)
the Standard & Poor's 500 Stock Index and (ii) SNL Banks (Western) Index as
obtained from SNL Securities LP.
SANTA BARBARA BANCORP
<TABLE>
<CAPTION>
Period Ending
-------------
Index 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
- ----- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Santa Barbara Bancorp 100.00 147.28 174.25 206.46 252.91 366.27
S&P 500 100.00 107.62 116.47 120.03 165.13 202.89
SNl Banks (Western) Index 100.00 134.30 153.87 152.34 255.47 363.20
</TABLE>
16
<PAGE> 20
SELECTION OF INDEPENDENT ACCOUNTANTS
(PROPOSAL 2)
The firm of Arthur Andersen, LLP served as independent certified public
accountants for the Company and the Bank with respect to the year 1996, and has
been recommended by the Board to be the Company's and the Bank's accountants
for calendar year 1997. It is expected that one or more representatives of
Arthur Andersen, LLP 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, LLP for the year ended
December 31, 1996 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, LLP 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 32.1% of the total
fees for services paid to Arthur Andersen, LLP for the year ended December 31,
1996. All such services were approved by the Company's Audit Committee, which
has determined the firm of Arthur Andersen, LLP to be fully independent of the
operations of the Company.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Company's Board of Directors recommends that the shareholders approve
Arthur Andersen, LLP to serve as independent certified public accountants for
the Company for the calendar year 1997. 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.
(BALANCE OF PAGE INTENTIONALLY LEFT BLANK)
17
<PAGE> 21
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, 1996, to all Directors and Executive Officers,
together with their associates and members of their immediate family, was
approximately $719,791, constituting approximately .67% 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.
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
$508,598 during 1996. In the Company's opinion the lease is comparable to an
"arms length" negotiated lease.
SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
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 on review of the copies of such reports
furnished to the Company, written representations that no other reports were
required during the fiscal year ended December 31, 1996 and other information
available to the Company, all Section 16(a) filing requirements applicable to
its officers, Directors and greater than ten-percent beneficial owners were
timely filed.
SHAREHOLDER PROPOSALS
The deadline for shareholders to submit proposals to be considered for
inclusion in the Company's proxy statement for the Company's 1998 Annual
Meeting of Shareholders is November 15, 1997. No such proposals were submitted
with respect to the 1997 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.
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 the Board of
Directors of the Company on such matters, and discretionary authority to do so
is included in the proxy.
18
<PAGE> 22
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 1996 by requesting them
from the Secretary of the Company. Pursuant to regulations of the Securities
and Exchange Commission, shareholders of the Company will receive the 1996
Annual Report of the Company together with this proxy statement. If for any
reason any shareholder does not receive a copy of the 1996 Annual Report of the
Company together with this proxy statement, please advise the Company, and a
copy will be provided promptly.
NOTICE OF AVAILABILITY OF MATERIAL
THE BANK WILL PROVIDE WITHOUT CHARGE TO THE SHAREHOLDERS OF RECORD ON
MARCH 7, 1997 (THE RECORD DATE FOR ELIGIBILITY TO VOTE AT THE ANNUAL MEETING) A
COPY OF THE COMPANY'S 1996 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:__________________________________
Donald M. Anderson,
Chairman of the Board
Dated: March 19, 1997
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<PAGE> 23
FOLD AND DETACH HERE
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 Proxy Holders, 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 7, 1997 at the Annual Meeting of
Shareholders to be held on April 24, 1997 or any adjournment thereof.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
<PAGE> 24
FOLD AND DETACH HERE
Please mark
your votes as
indicated in [X]
this example.
<TABLE>
<S> <C> <C>
FOR
all nominees WITHHOLD
listed below AUTHORITY
(except as to vote for all
marked to the nominees
1. ELECTION OF DIRECTORS contrary below) listed below
(INSTRUCTION: To withhold authority to [ ] [ ]
vote for any individual nominee strike
through that nominee's name below.)
Nominees: Donald M. Anderson Dale E. Hanst
Frank Barranco, M.D. Harry B. Powell
Edward E. Birch David W. Spainhour
Richard M. Davis William S. Thomas, Jr.
Anthony Guntermann
</TABLE>
- ----------
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
FOR AGAINST ABSTAIN
2. PROPOSAL TO APPROVE SELECTION [ ] [ ] [ ]
OF ARTHUR ANDERSEN & CO. TO
SERVE AS INDEPENDENT PUBLIC
ACCOUNTANTS FOR SANTA BARBARA
BANCORP FOR THE YEAR 1997.
3. IN THEIR DISCRETION, THE PROXY HOLDERS 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.
_________________________________
Signature
_________________________________
Signature
Dated___________________1997 _________________________________
Signature
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.
