SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
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
PROFESSIONAL BANCORP, INC.
(Name of Registrant as Specified in Its Charter)
PROFESSIONAL BANCORP SHAREHOLDERS PROTECTIVE COMMITTEE
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 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:
_____________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_____________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
_____________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_____________________________________________________________________
5) Total fee paid:
_____________________________________________________________________
[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
_____________________________________________________________________
2) Form, Schedule or Registration Statement No.:
_____________________________________________________________________
3) Filing Party:
_____________________________________________________________________
4) Date Filed:
_____________________________________________________________________
<PAGE>
PROFESSIONAL BANCORP, INC.
_________________________________
ANNUAL MEETING OF SHAREHOLDERS
June 19, 1996
_________________________________
PROXY STATEMENT OF
PROFESSIONAL BANCORP SHAREHOLDERS PROTECTIVE COMMITTEE
IN OPPOSITION TO THE BOARD OF DIRECTORS OF PROFESSIONAL BANCORP, INC.
TO URGE SHAREHOLDERS TO VOTE FOR THE QUALIFIED, INDEPENDENT
DIRECTOR CANDIDATES NOMINATED BY THE COMMITTEE
Concerned shareholders of Professional Bancorp, Inc. (the "Company") have
formed a Professional Bancorp Shareholders Protective Committee (the
"Committee") to act in the best interests of the Company and the shareholders.
The Committee was formed because of certain information about the alleged
mismanagement of the Company which caused the Committee Members great concern.
The current Board of Directors are soliciting proxies for the Company's 1996
Annual Meeting of Shareholders in order to elect a slate of director candidates
of their choosing (the "Company Nominees"). The Committee Members believe that
it is not in the best interests of the Company or the Company's shareholders
("Shareholders") to elect the Company Nominees and, therefore, the Committee
Members are proposing an alternative slate of qualified, independent directors.
This Proxy Statement and YELLOW proxy card are first being mailed or
furnished to shareholders on or about June 10, 1996.
On Tuesday, May 28, 1996, Martin S. Goldfarb, M.D., a shareholder who is
a member of our Committee, filed a lawsuit against the directors of the Company,
including Mr. Kovner (the "Shareholder Litigation"). The Court is being asked in
the lawsuit to, among other things, declare illegal a section of the Company's
By-Laws that restricts the ability of Shareholders to nominate directors and
delay the Company's 1996 Annual Meeting of Shareholders until the Company has
corrected what the Plaintiff alleges to be false and misleading statements made
in the Company's Proxy Statement.
It is claimed in the lawsuit that the directors breached their fiduciary
duties by engaging in self-dealing and unlawful banking transactions, to the
detriment of shareholders of the Company. The lawsuit alleges that the directors
have neglected and abused their fiduciary duties and responsibilities by, among
other things:
(1) approving or acquiescing in improper loans to, and excessive
compensation for, Joel Kovner, the Chief Executive Officer and a
director of the Company ($448,500 salary and bonus in 1995, and a
$2,250,000 salary continuation agreement);
(2) approving excessive compensation for themselves as directors;
(3) failing to disclose to the shareholders that certain directors are
not independent and impartial because they have personally made
significant loans to Mr. Kovner;
(4) entrenching themselves in control of the Company by adopting unfair,
unreasonable and illegal By-Law provisions effectively eliminating
the shareholders' right to nominate director candidates;
<PAGE>
(5) approving significant loans to financially unqualified borrowers who
are friends or confederates of Mr. Kovner;
(6) allowing Mr. Kovner to manipulate the financial records of the
Company and engage in other inappropriate conduct; and
(7) failing to take corrective action in response to Mr. Kovner's
inappropriate conduct toward female employees, thereby condoning and
ratifying Mr. Kovner's conduct, to the detriment of the Company, its
business and the morale of its employees.
In pleadings filed in the Shareholder Litigation, Mr. Kovner has denied
that he engaged in any misconduct but has admitted, in part, to some of the
conduct toward female employees that the Committee believes is inappropriate.
When confronted by the Shareholder Litigation's challenge to the facially unfair
By-Law provisions, the Directors-Defendants now appear, only 15 days before the
Annual Meeting, to be willing to permit the nomination of an opposition slate of
directors. The Court has not yet made any determination on the merits of the
Shareholder Litigation. On June 3, 1996, the Company filed a lawsuit against the
Committee Members alleging that, among other things, the Committee Members are
not entitled to form a protective committee or solicit proxies. Five of the
six Committee members purchased shares of the Company in a December, 1992 and
January, 1993 private placement. The Company alleges that, due to contractual
restrictions in the subscription agreement, these five Committee members cannot
be members of a group which presently owns or has power to vote more than 5% of
the Company's outstanding stock after the offering. Those Committee members who
have been named as defendants in the Company litigation vigorously deny that
such restrictions are applicable to their membership on and activities relating
to the Committee. In a letter to the Federal Reserve Bank of San Francisco,
counsel to the Company has raised these alleged restrictions, and has also
claimed that the Committee was required to make a change of control filing with
the Federal Reserve Bank of San Francisco. The Committee believes that its
actions do not require a filing because of an exemption available when
conducting a proxy solicitation. Counsel to the Company also claims that an
election of the Committee's Nominees could cause the Company to violate certain
pre-notification provisions of the banking laws applicable if there has been
a change of control within the last two years. The Committee believes that
pre-notification is not required because there has been no such change of
control. The Committee has received a letter from the Federal Reserve Bank of
San Francisco requesting a response, before June 12, 1996, to the issues raised
by counsel to the Company.
This Proxy Statement and YELLOW proxy card are being furnished to holders
of the common stock, $.008 par value, (the "Common Stock") of Professional
Bancorp, Inc., a Pennsylvania corporation (the "Company"), in connection with
the solicitation of proxies (the "Proxy Solicitation") by the Committee, for use
at the Annual Meeting of Shareholders of the Company, scheduled to be held on
Wednesday, June 19, 1996, at 5:30 p.m., at First Professional Bank, N.A.,
606 Broadway, Santa Monica, California 90401, and at any and all adjournments
or postponements thereof (the "Annual Meeting"). The Company's principal
executive offices are located at 606 Broadway, Santa Monica, California 90401.
At the Annual Meeting, seven (7) directors are to be elected to hold
office until the next annual meeting and until their successors have been
elected and qualified. IF YOU WISH TO VOTE FOR THE COMMITTEE NOMINEES, YOU MUST
SUBMIT THE ENCLOSED YELLOW PROXY CARD AND MUST NOT SUBMIT THE COMPANY'S WHITE
PROXY CARD, EVEN IF YOU WISH TO VOTE FOR ANY OF THE COMPANY NOMINEES. The
Committee is soliciting your proxy in support of the election of the seven (7)
nominees named below (collectively, the "Committee Nominees" and individually a
"Committee Nominee") to the Company's Board of Directors. If, as a result of the
Shareholder Litigation or otherwise, the Company agrees to recognize the
Committee Nominees, the proxies obtained by the Committee will be used to elect
the Committee Nominees. If cumulative voting is declared at the Annual Meeting,
votes represented by Proxies delivered pursuant to this Proxy Statement will be
cumulated by the Proxy Holders to elect as many of the Committee's Nominees as
possible in the preference order set forth in the Proxy. If any Company Nominees
are elected to the Board of Directors and decline to serve, it is anticipated
that the Committee Nominees, if they constitute a majority of the remaining
Board of Directors, will fill the vacant positions with the remaining Committee
Nominees.
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YOUR VOTE IS IMPORTANT. If you agree with the reasons for the Committee's
solicitation set forth herein and believe that the election of the qualified,
independent Committee Nominees to the Board of Directors can make a difference,
WE URGE YOU TO VOTE FOR THE ELECTION OF THE COMMITTEE NOMINEES, no matter how
many or how few shares you own, by signing, dating and mailing the enclosed
YELLOW proxy card.
The Committee urges you NOT to sign the white proxy card or any other
proxy card sent to you by the Company. If you have already voted the Board of
Directors' white proxy card, you have every right to change your vote by signing
and returning the enclosed YELLOW proxy card. ONLY YOUR LATEST DATED PROXY WILL
COUNT AT THE ANNUAL MEETING.
If your shares are held in the name of a brokerage firm, bank or nominee,
only they can vote such shares and only upon receipt of your specific
instructions. Accordingly, please contact the person responsible for your
account and instruct that person to sign and return the enclosed YELLOW proxy
card.
If your shares are registered in more than one name, the YELLOW proxy
card must be signed by all such persons to ensure that all shares are voted for
the Committee Nominees.
Holders of record of shares of Common Stock as of April 26, 1996, the
record date for the Annual Meeting, are urged to submit a proxy even if such
shares have been sold after that date. See "Voting Securities and Proxy
Procedures."
THE COMMITTEE
The Committee was formed on May 10, 1996. The Committee Members
beneficially own in the aggregate 153,745 shares of Common Stock, representing
approximately 11.81% of the shares outstanding. The following sets forth the
name, business address and the number of shares of Common Stock of the Company
beneficially owned by each of the Committee Members.
<TABLE>
<S> <C> <C> <C>
Number of Shares
Name and Principal of Common Stock Percent of
Business Address Occupation Beneficially Owned Class
Milton J. Schloss Sr. Trustee Retired; Chief 21,000 1.61%
Milton J. Schloss Trust Executive Officer,
U/A DTD 1/3/84 John Morrell & Company,
c/o Star Bank Trust Dept. until 1991
425 Walnut Street
Cincinnati, Ohio 45229
George E. Fern Co. Ohio corporation; 60,270 (1) 4.63%
Mr. George J. Budig, President Convention and
1100 Gest Street exposition contractors
Cincinnati, Ohio 45203 and decorators
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<PAGE>
Martin S. Goldfarb, M.D. Physician, private 22,050 1.70%
2080 Century Park East practice
Suite 1806
Los Angeles, California 90067
Herbert B. Weiss, Esq. Attorney, Senior Partner 10,500 0.81%
Delaware Charter Guarantee, and Chairman of the Real
& Trust, FBO Herbert Weiss IRA Estate Dept., Keating,
1800 Provident Tower Muething & Klekamp
1 East Fourth Street
Cincinnati, Ohio 45202
Joel S. Moskowitz, Esq. Attorney, Moskowitz 3,675 0.28%
4300 Carew Tower & Moskowitz
441 Vine Street
Cincinnati, Ohio 45202
Mark B. Kuby, M.D. Physician, private 26,250 2.02%
8014 Plainfield practice
Cincinnati, Ohio 45236
Ray T. Oyakawa, M.D. Physician, private (2) 10,000 (3) 0.76%
5670 Wilshire Blvd., #2350 practice
Los Angeles, California 90036
- -------------------------------
<FN>
1 On June 14, 1994, George E. Fern Co. purchased 4,000 shares at $9.50 per
share through Leshner Financial Services, Inc.
2 Dr. Oyakawa served as a director of the Company from 1987 until March 8,
1995. As a result of his continued dissatisfaction with management and his
inability to effect Company changes that he believed to be necessary,
Dr. Oyakawa resigned from the Board.
3 Since January 31, 1995, Dr. Oyakawa has sold 22,704 shares at $8.62 to
$11.50 per share through Smith Barney.
</FN>
</TABLE>
Except as set forth in this Proxy Statement or in the Appendices hereto,
to the best knowledge of the Committee, none of the Committee Members, none of
the persons participating in this solicitation on behalf of the Committee, none
of the Committee Nominees, and no associate of any of the foregoing persons
(i) owns beneficially, directly or indirectly, or has the right to acquire,
any securities of the Company or any parent or subsidiary of the Company,
(ii) owns any securities of the Company of record but not beneficially,
(iii) has purchased or sold any securities of the Company within the past two
years, (iv) has incurred indebtedness for the purpose of acquiring or holding
securities of the Company, (v) is or has been a party to any contract,
arrangement or understanding with respect to any securities of the Company
within the past year, (vi) has been indebted to the Company or any of its
subsidiaries since the beginning of the Company's last fiscal year, (vii) has
any arrangement or understanding with respect to future employment by the
Company
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<PAGE>
or with respect to any future transactions to which the Company or any
of its affiliates will or may be a party, or (viii) has, during the past ten
years been convicted in any criminal proceeding (excluding traffic violations or
similar misdemeanors). In addition, except as set forth in this Proxy Statement
or in the Appendices hereto, to the best knowledge of the Committee, none of the
Committee Members, none of the persons participating in this solicitation on
behalf of the Committee, none of the Committee Nominees, and no associate or
immediate family member of any of the foregoing persons has had or is to have a
direct or indirect material interest in any transaction with the Company since
the beginning of the Company's last fiscal year, or any proposed transaction, to
which the Company or any of its affiliates was or is a party.
None of the corporations or organizations to which any of the Committee
Members or Committee Nominees has conducted his principal occupation or
employment was a parent, subsidiary or other affiliate of the Company and none
of the Committee Members or Committee Nominees holds any position or office with
the Company, has any family relationship with any executive officer or director
of the Company or each other, or has been involved in any legal proceeding of
the type required to be disclosed by the rules governing this solicitation.
NOMINEES FOR ELECTION AS DIRECTORS
According to publicly available information, seven (7) directors are to
be elected at the Annual Meeting. The current Board of Directors has proposed a
slate of director candidates to fill all seven (7) positions. The directors
elected at the annual meeting will serve in such capacity until the 1997
Annual Meeting of Shareholders and until their successors are elected and
qualified.
The Committee Nominees
The Committee is proposing the election of the seven (7) Committee
Nominees to the Board of Directors which, if elected, will constitute the entire
Board of Directors. The Committee does not expect that any of the Committee
Nominees will be unable to stand for election, but, in the event that a vacancy
in the slate of the Committee Nominees should occur unexpectedly, the shares of
Common Stock represented by the enclosed YELLOW proxy card will be voted for a
substitute candidate selected by the Committee. IF YOU WISH TO VOTE FOR THE
COMMITTEE NOMINEES, YOU MUST SUBMIT THE ENCLOSED YELLOW PROXY CARD AND MUST NOT
SUBMIT THE COMPANY'S WHITE PROXY CARD.
The By-Laws of the Company provide that the Board shall consist of one or
more directors as determined by the Board. According to the Company's Proxy
Statement, the Board has fixed the number at seven (7). Each director so chosen
shall hold office until the next annual election and until his successor shall
be duly elected and qualified, unless sooner displaced.
The following information concerning age, principal occupation and
business experience of the Committee Nominees during the last five (5) years and
directorships has been furnished to the Committee by the Committee Nominees, who
have all expressed their willingness to serve on the Board of Directors of the
Company. In the event cumulative voting is in effect, the shares represented by
the Committee's proxies will be voted to elect as many of the Committee Nominees
as possible in the order that the Nominees are listed below.
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<PAGE>
<TABLE>
<S> <C> <C>
Business Experience
Name Age During the Past Five Years
1. Julie P. Thompson 38 President and Chief Executive Officer,
Health Research Association 1640
Marango Street, 7th Floor, Los Angeles,
California 90033, a biomedical research
company.
2. Ray T. Oyakawa, M.D.* 48 Ophthalmologist, Chairman, President and
Chief Executive Officer of Pacific EyeNet,
Inc., 5750 Wilshire Blvd., #2350, Los
Angeles, California 90036; Director of
Professional Bancorp, Inc., 1987 to 1995.
3. Joel Moskowitz* 56 Attorney - Moskowitz & Moskowitz, 4300
Carew Tower, 441 Vine Street, Cincinnati,
Ohio 45202.
4. Alan S. Borstein 60 Borstein Enterprises and Albor Properties
I, L.P., 2730 Wilshire Blvd, #300, Santa
Monica, California 90403, industrial and
residential real estate development.
5. John S. Buchanan 51 President of Buchanan Associates, 10120
Angelo Circle, Beverly Hills, California
90220, firm providing corporate finance
services to the financial industry, 1992 to
Present. Presently fulfilling appointment
by Superintendent of Banks of New York
State Banking Department. Executive
Vice President of Pacific First Bank, 1420
Fifth Avenue, Seattle, Washington 98111,
1989 to 1992. He previously served
(1981-1983) as Executive Staff Director
and Chief of Staff, Federal Home Loan
Board.
6. Jon E. Cobain 53 Financial institution strategic planner and
management audit consultant, Cobain &
Associates, Inc./Fomento, Ltd., 18200 Von
Karman, Suite 200, Irvine, California
92715.
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<PAGE>
7. Larry E. Cushing 57 Certified public accountant, independent
consulting, 24 Mateo Drive, Tiburon,
California 94920. Prior to June, 1993, he
was a partner with KPMG Peat Marwick,
LLP, 3 Embarcardero Center, San
Francisco, California 94111.
<FN>
* Members of the Committee.
</FN>
</TABLE>
The Committee has agreed to bear all costs and expenses of, and indemnify
against any and all liability incurred by, each Committee Nominee in connection
with the Committee Nominee being a candidate and a "participant in a
solicitation" (as defined in the rules and regulations under the Securities
Exchange Act of 1934, as amended). Each Committee Nominee will receive
directors' fees upon his election as a director of the Company. The Committee
Nominees, if elected, will review the Company's current practices regarding
director fees and will establish a reasonable fee structure. The Committee
Members have also agreed to indemnify one another for all costs and expenses of,
and indemnify against any liability by, each Committee Member in connection with
the Committee.
The Committee urges you to vote for the Committee Nominees, who possess
the qualifications and independence to effectively lead and manage the Nompany.
Additional information concerning the Committee Nominees' holdings of
Common Stock is set forth in Appendix A hereto.
Removal of Chief Executive Officer, Appointment of Interim Chief Executive
Officer, and Replacement of Bank Directors
Upon election as a director, it is anticipated that the Committee
Nominees, in the exercise of their business judgement, will take such action as
may be appropriate and necessary to secure the removal of Mr. Joel Kovner as an
employee, officer and director of the Company and First Professional Bank, N.A.,
the Company's wholly-owned subsidiary (the "Bank") and will seek the termination
of his employment for cause pursuant to Article 5.1 of Mr. Kovner's Executive
Salary Continuation Agreement with the Company (the "Salary Agreement"). A "for
cause" termination relieves the Company of salary continuation obligations
under the Salary Agreement.
Immediately upon such resignation or termination, the Committee expects
its Nominees to appoint Committee Nominee John S. Buchanan as the Company's and
the Bank's Interim Chief Executive Officer. Mr. Buchanan's qualifications are
described above. If the Committee Nominees constitute a majority, they intend to
offer Mr. Buchanan a three (3) to six (6) month employment contract at a rate of
$20,833 per month, plus other customary Company benefits, and a bonus based upon
the achievement of goals set by the Board of Directors for the performance of
the Bank during the period. Also upon such interim appointment, the Committee
Nominees expect to begin a search for a new Chief Executive Officer.
The current Board of Directors of the Company are also the directors of
the Bank and it is anticipated that, upon election as a majority of the Board of
Directors, the Committee Nominees will take such action as is necessary to
replace the current Bank directors with Committee Nominees.
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<PAGE>
The Company Nominees
One of the Directors nominated by the current Board of Directors is Mr.
Kovner's brother, Anthony R. Kovner, Ph.D., who is a professor at the Wagner
Graduate School of Public Service in New York. It is not apparent from the
Company's Proxy Statement that Mr. Anthony Kovner has any business experience or
other qualifications that would be beneficial to the Company.
It is the opinion of the Committee that the current members of the Board
of Directors are not independent and disinterested and therefore the Committee
believes it is in the best interest of the Company that they not be reelected.
The Committee believes that the Directors have not effectively supervised the
management of the Company and Bank. Further, it is the opinion of the Committee
that the compensation, in both Directors' fees and stock options, that the
current Board of Directors has approved for themselves is inappropriate and
excessive. Moreover, it is the opinion of the Committee that the Directors have
also improperly approved excessive compensation for Mr. Kovner, in the form of
salary, bonuses, stock options and the Executive Salary Continuation Agreement,
even though several Directors are not independent and disinterested because
they and their family members have or have had significant financial
transactions with Mr. Kovner, including personal loans to Mr. Kovner.
According to the Company's Proxy Statement, the outside Directors
received the following fees during 1995:
<TABLE>
<S> <C> <C> <C>
Director Director Fees Committee Fees Committees
Ronald L. Katz, M.D. $12,000 $3,000 Audit; Compensation
Richard A. Berger $12,000 $4,800 Chairman, Audit; Compensation
Lynn Poulson $12,000 $9,000 Loan; Compensation
James B. Jacobson $12,000 $9,000 Loan; Compensation
Richard A. Berger $12,000 $8,400 Chairman, Community
Total: $60,000 $34,200 Reinvestment Act Oversight;
Compensation
</TABLE>
In addition, the outside Directors now propose that they be issued up to
50,000 shares of Common Stock pursuant to the 1996 Stock Option Plan.
DISAPPROVAL OF THE 1996 NON-EMPLOYEE DIRECTOR
STOCK OPTION PLAN
According to the Company's 1996 Proxy Statement, at the Annual Meeting
shareholders will be asked to approve the 1996 Non-Employee Director Stock
Option Plan. The Committee believes the stock options and Director and committee
fees paid to the outside Directors are inappropriate and excessive. The proposed
1996 Non-Employee Stock Option Plan, which has already been approved by the
Board of Directors, is an example of excessive compensation to the outside
Directors. The Stock Option Plan would grant up to 50,000 shares of the
Company's common stock to non-employee Directors. According to the Company's
Proxy Statement, non-employee Directors are already paid a monthly retainer of
$1,000, regardless of whether or not there are any Board meetings or whether
they attend any Board meetings. In addition, outside Directors are also paid
monthly committee fees ranging from $250 to $750, regardless of whether there
are any meetings
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<PAGE>
held or whether the Directors attend the meetings. The total fees paid
to the outside Directors in 1995 was $94,200. The Committee believes that these
fees are excessive in light of the Company's performance (measured by net
interest income, charge-off percentage for loan losses, percentage of
non-performing loans and all loan loss allowance ratios) in the last two fiscal
years. Approval of the proposed Stock Option Plan in addition to the fee would
in the Committee's opinion exacerbate the inappropriateness of Director
compensation.
The Committee is NOT in favor of the Company's proposal and urges the
Shareholders to vote against the Plan. See "Voting Securities and Proxy
Procedures."
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
According to the Company's 1996 Proxy Statement, at the Annual Meeting,
shareholders will be asked to ratify the appointment by the Company of KPMG
Peat Marwick, LLP as the Company's independent accountants in 1996. The
Committee is in favor of this proposal. See "Voting Securities and Proxy
Procedures."
SOLICITATION; EXPENSES
Proxies may be solicited by the Committee and Committee Nominees by mail,
advertisement, telephone, facsimile, telegraph and personal solicitation, for
which no compensation will be paid. Banks, brokerage houses and other
custodians, nominees and fiduciaries will be requested to forward the
Committee's solicitation material to their customers for whom they hold shares
and the Committee will reimburse them for their reasonable out-of-pocket
expenses.
The entire expense of preparing, assembling, printing and mailing this
Proxy Statement and related materials and the cost of soliciting proxies will be
borne by the Committee.
Although no precise estimate can be made at the present time, the
Committee currently estimates that the total expenditures relating to the Proxy
Solicitation incurred by the Committee will be approximately Fifty Thousand
Dollars ($50,000), approximately Five Thousand Dollars ($5,000) of which has
been incurred to date. The funds to pay these expenses will be generated by
contributions from the Committee Members. The Committee intends to seek
reimbursement from the Company for those expenses incurred by the Committee if
the Committee Nominees are elected to the Board of Directors, but does not
intend to submit the question of such reimbursement to a vote of the
Shareholders.
The Committee has engaged McCormick & Pryor Ltd., 26 Broadway, Suite
1640, New York, New York to assist the Committee with the proxy solicitation by
distributing proxy materials and by providing other services, including
identifying and locating shareholders and soliciting shareholders. It is
estimated that the fee for this engagement will be $4,500 plus reasonable out-
of-pocket expenses. It is expected that McCormick & Pryor Ltd. will utilize
approximately 10 persons to provide these services.
VOTING SECURITIES AND PROXY PROCEDURES
Only holders of Common Stock of record at the close of business on April
26, 1996, the record date for the Annual Meeting (the "Record Date"), will be
entitled to vote at the Annual Meeting. Holders of record of shares of Common
Stock on the Record Date are urged to submit the YELLOW proxy card even if
their shares have been sold after the Record Date. According to the
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<PAGE>
Company's 1996 Proxy Statement dated April 29, 1996 (the "Company's Proxy
Statement"), as of the Record Date there were outstanding and entitled to vote
1,300,650 shares of Common Stock, constituting the only class of outstanding
voting securities. Each holder of Common Stock will be entitled to one vote,
in person or by Proxy, for each share of Common Stock held of record on the
books of the Company as of the Record Date for the Annual Meeting on any matter
submitted to the vote of the shareholders, except that in connection with the
election of directors, the shares may be voted cumulatively if a shareholder
present and voting at the Annual Meeting gives notice at the Annual
Meeting and prior to the voting of his or her intention to so vote. If any
shareholder gives such notice, all shareholders may cumulate their votes for
nominees. Cumulative voting means that a shareholder has the right to vote the
number of shares he or she owns as of the Record Date, multiplied by the number
of directors to be elected. This total number of votes may be cast for one
nominee or it may be distributed among nominees in any manner as the shareholder
sets fit. If cumulative voting is declared at the Annual Meeting, votes
represented by Proxies delivered pursuant to this Proxy Statement will be
cumulated by the Proxy Holders to elect as many of the Committee's Nominees as
possible in the preference order set forth in the Proxy. No Member of the
Committee presently intends to invoke cumulative voting.
The presence, in person or by proxy, of the holders of at least a
majority of the total number of outstanding shares of Common Stock is necessary
to constitute a quorum at the Annual
Meeting.
At the Annual Meeting, directors will be elected by a plurality of the votes
cast. Therefore, the seven (7) nominees receiving the highest number of
affirmative votes shall be elected directors of the Company at the conclusion of
the tabulation of the votes. The actual number of directors elected may be less
than seven (7) in the event that fewer than seven (7) nominees receive any
affirmative votes under the rules of cumulative voting, as set forth in the
preceding paragraph. Shares represented by proxies which are marked "withhold
authority" or proxies marked to deny discretionary authority with respect to the
election of any one or more nominees for election as directors will be counted
for the purpose of determining the number of shares represented at the Annual
Meeting, but will not be considered as a vote for or as a vote against the
respective nominee or nominees and thus will have no effect on the election of
such nominee or nominees as director. In addition, shares voted on one proposal
but not the other on the proxies returned by brokers will be counted for the
purpose of determining the number of shares represented at the Annual Meeting,
but will not be considered as a vote for or against the matter not voted on.
Abstentions will have the same effect as a negative vote on matters other than
election of directors because approval by a majority of the shares represented
in person or by proxy at the Annual Meeting and entitled to vote is required
for shareholder approval of matters other than election of directors.
See Appendix B and Appendix C for information regarding persons who
beneficially own more than 5% of the Common Stock and the ownership of the
Common Stock by the management of the
Company.
For the proxy solicited hereby to be voted, the enclosed YELLOW proxy
card must be signed, dated and returned to the Committee in the enclosed
envelope in time to be voted at the Annual Meeting. If you wish to vote for the
Committee Nominees, you must submit the enclosed YELLOW proxy card and must NOT
submit the Company's white proxy card. If you have already returned the Board of
Directors' white proxy card to the Company, you have the right to revoke it as
to all matters covered thereby and may do so by subsequently signing, dating and
mailing the enclosed YELLOW proxy card. ONLY YOUR LATEST DATED PROXY WILL COUNT
AT THE ANNUAL MEETING.
- 10 -
<PAGE>
Execution of a YELLOW proxy card will not affect your right to attend the
Annual Meeting and to vote in person. Any proxy may be revoked as to all matters
covered thereby at any time prior to the time a vote is taken by (i) filing with
the Secretary of the Company a later dated written revocation, (ii) submitting a
duly executed proxy bearing a later date to the Secretary of the Company, or
(iii) attending and voting at the Annual Meeting in person. Attendance at the
Annual Meeting will not in and of itself constitute a revocation.
Election of the Committee Nominees requires the affirmative vote of a
plurality of the votes cast on the matter at the Annual Meeting, assuming a
quorum is present or otherwise represented at the Annual Meeting. Consequently,
only shares of Common Stock that are voted in favor of a particular nominee
will be counted toward such nominee's attaining a plurality of votes. Shares of
Common Stock present at the meeting that are not voted for a particular nominee
(including broker non-votes) and shares of Common Stock present by proxy where
the Shareholder properly withheld authority to vote for such nominee will not
be counted toward such nominee's attainment of a plurality.
Shares of Common Stock represented by a valid, unrevoked YELLOW proxy
card will be voted as specified. You may vote FOR the election of the Committee
Nominees or withhold authority to vote for the election of the Committee
Nominees by marking the proper box on the YELLOW proxy card. You may also
withhold your vote from any of the Committee Nominees by writing the name of
such nominee in the space provided on the YELLOW proxy card. If no specification
is made, such shares will be voted FOR the election of all of the Committee
Nominees.
If your shares are held in the name of a brokerage firm, bank or nominee,
only they can vote your shares and only upon receipt of your specific
instructions. Accordingly, please contact the person responsible for your
account and instruct that person to execute and mail on your behalf the
YELLOW proxy card.
If you are a shareholder of record on the April 26, 1996 Record Date, you
retain the voting rights in connection with the Annual Meeting even if you sold
your shares after the Record Date. Accordingly, it is important that you grant
a proxy to vote those shares on the YELLOW proxy card, even if you sold the
shares after such date.
Except as set forth in this Proxy Statement, the Committee is not aware
of any other matter to be considered at the Annual Meeting.
If you have any questions or need assistance in voting your shares,
please call:
Shareholders Protective Committee
c/o Brown, Cummins & Brown Co., L.P.A.
3500 Carew Tower, 441 Vine Street
Cincinnati, Ohio 45202
(513) 381-2122
OR
Call the Committee's Solicitors
TOLL FREE 1-800-326-9653
- 11 -
<PAGE>
The Committee believes that it is in your best interest to elect the
Committee Nominees at the Annual Meeting. THE COMMITTEE STRONGLY RECOMMENDS A
VOTE FOR THE ELECTION OF THE COMMITTEE NOMINEES.
PROFESSIONAL BANCORP SHAREHOLDERS
PROTECTIVE COMMITTEE
By: /s/ Milton J. Schloss, Sr.
Milton J. Schloss, Sr., Trustee,
Chairman of the Committee
June 10, 1996
- 12 -
<PAGE>
APPENDIX A
INFORMATION CONCERNING DIRECTOR NOMINEES
The following sets forth the name, business address and the number of
shares of Common Stock of the Company beneficially owned by each of the
Committee Nominees.
<TABLE>
<S> <C> <C>
Number of Shares
Name and of Common Stock Percent of
Business Address Beneficially Owned Class
1. Julie P. Thompson 0 0
Health Research Association
1640 Marango Street, 7th Floor
Los Angeles, California 90033
2. Ray T. Oyakawa, M.D. 10,000 0.76%
Pacific EyeNet, Inc.
5750 Wilshire Blvd., #2350
Los Angeles, California 90036
3. Joel Moskowitz 3,675 0.28%
Moskowitz & Moskowitz
4300 Carew Tower, 441 Vine Street
Cincinnati, Ohio 45202
4. Alan S. Borstein 0 0
Borstein Enterprises
2730 Wilshire Blvd, #300
Santa Monica, California 90403
5. John S. Buchanan 0 0
Buchanan Associates
10120 Angelo Circle
Beverly Hills, California 90220
6. Jon E. Cobain 0 0
Cobain & Associates, Inc./Fomento, Ltd.
18200 Von Karman, Suite 200
Irvine, California 92715
7. Larry E. Cushing 0 0
24 Mateo Drive
Tiburon, California 94920
</TABLE>
A-1
<PAGE>
APPENDIX B
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, to the knowledge of the Committee based
on a review of publicly available information, each person reported to own
beneficially more than 5% of the Company's outstanding Common Stock since the
beginning of the Company's last fiscal year.
<TABLE>
<S> <C> <C>
Amount and Nature of
Name and Address of Beneficial Ownership of the
Beneficial Owner Company's Common Stock Percent of Class
Joel W. Kovner 423,749 (1) 27.9%
606 Broadway
Santa Monica, CA 90401
Heartland Advisors, Inc. 138,082 (2) 10.5%
790 North Milwaukee St.
Milwaukee, WI 53202
Robert H. Leshner 101,100 (3) 8.0%
312 Walnut Street
21st Floor
Cincinnati, OH 45202
Kennedy Capital Management 100,000 (4) 5.8%
Gerald Kennedy, President
425 N. Ballas Rd., Suite 181
St. Louis, MO 63141
In addition to the persons named in the above table, the Committee may
be deemed to beneficially own 153,745 shares of the Company's Common Stock,
representing 11.8% of the class of common stock. The Committee filed a
Schedule 13D with the Securities and Exchange Commission on May 20, 1996.
For purposes of Schedule 13D, the Committee is deemed to have acquired
beneficial ownership of the reported shares when the Committee formed on May 10,
1996. A description of the shares owned by each Committee Member is found in
this Proxy Statement under the heading "The Committee."
- --------------------------
<FN>
(1) As of March 17, 1995, as reported in Amendment No. 1 to a Schedule 13D
filed with the Securities and Exchange Commission (the "SEC") on April 4,
1995. Such Amendment reported that (i) Joel W. Kovner, Dr., P.H. was the
beneficial owner of 423,749 shares of common stock; (ii) such shares
include 385,500 shares of common stock which are the subject of currently
exercisable options granted to Dr. Kovner under the Company's 1982, 1990
and 1992 Stock Option Plans; and (iii) Dr. Kovner has no voting or
disposition powers with respect to the stock subject to the options until
the options are exercised, but has sole voting and dispositive power as to
the remaining 38,249 shares.
B-1
<PAGE>
(2) As of February 9, 1996, as reported in Amendment No. 1 to a Schedule 13G
filed with the SEC on February 13, 1996. Such Amendment reported that
Heartland Advisors, Inc. ("Heartland") has sole dispositive power as to
138,082 shares which are held in various investment advisory accounts of
customers of Heartland. Of these shares, Heartland has sole voting power
as to 130,282 shares.
(3) As of October 28, 1994, as reported in a Schedule 13D filed with the SEC
on November 1, 1994. The Schedule 13D reported that (i) Robert H. Leshner
may be deemed to have sole voting and sole dispositive power as to 1,100
shares which are owned by his family members; (ii) that Mr. Leshner owns a
warrant for 100,000 shares, first exercisable on January 1, 1995, and Mr.
Leshner will have sole voting and sole dispositive power over these 100,000
shares when the warrant is exercised; and (iii) the filing of the Schedule
13D is not intended as, and should not be deemed, an acknowledgment of
beneficial ownership or shared voting power or shared dispositive power by
Robert H. Leshner of the 1,100 shares of common stock, such beneficial
ownership or shared voting power or shared dispositive power being
disclaimed.
(4) As of February 8, 1996, as reported in a Schedule 13G filed with the SEC
on February 14, 1996. The Schedule 13G reported that Kennedy Capital
Management, Inc. holds 100,000 shares for discretionary investment accounts
managed by it, and has shared voting power and shared dispositive power as
to the 100,000 shares.
</FN>
</TABLE>
B-2
<PAGE>
APPENDIX C
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of April 10, 1996 with
respect to the beneficial ownership of shares of the Company's Common Stock by
the Company's directors and the executive officers named in the Company's
Summary Compensation Table, individually, and by all directors and executive
officers as a group: (1)
<TABLE>
<S> <C> <C>
Common Stock Beneficially
Name and Office Held Owned and Nature of
(Other Than Director)(2) Ownership (3) Percent of Class (4)
Richard A. Berger 23,402 (5) 1.80%
James B. Jacobson 12,021 (6) 0.92%
Ronald L. Katz, M.D. 17,824 (7) 1.37%
Anthony R. Kovner, Ph.D. 1,200 (8) 0.09%
Joel W. Kovner, Dr., P.H., MPH 403,064 (9) 24.60%
Chairman of the Board of Directors
and Chief Executive Officer
Lynn O. Poulson, J.D. 21,154 (10) 1.62%
Daniel S. Rader 34,274 (11) 2.58%
David G. Rodeffer, MPH 54,242 (12) 4.10%
All Directors and Executive 567,181 (13) 33.46%
Officers (8 in number)
Robert H. Leshner (14) 111,825 (15) 7.96%
(holds no office)
- ------------------------------
<FN>
(1) Such information was obtained from the Company's 1996 Proxy Statement.
(2) Addresses for all individuals other than Mr. Leshner and Dr. A. Kovner is
c/o Professional Bancorp, Inc., 606 Broadway, Santa Monica, California
90407.
(3) Unless otherwise indicated, the persons named herein have sole and/or joint
voting power over shares reported and such shares are owned directly.
(4) Options and Warrants to purchase shares of Common Stock held by directors,
officers and other individuals that were exercisable within 60 days after
April 26, 1996 ("Exercisable Option Shares" or "Exercisable Warrant
Shares"), are treated as outstanding for the purpose of computing the
number and percentage of outstanding securities of the class owned by such
person, but not for the purpose of computing the percentage of the class
owned by any other person.
(5) Includes 1,785 Exercisable Option Shares.
(6) Includes 595 Exercisable Option Shares.
(7) Includes 1,785 Exercisable Option Shares.
(8) Anthony R. Kovner, Ph.D. is the brother of Joel W. Kovner, Dr., P.H., MPH.
Dr. A. Kovner's business address is 40 West Fourth Street, 600 Tisch Hall,
New York, New York 10012.
(9) Includes 337,695 Exercisable Option Shares.
(10) Includes 1,785 Exercisable Option Shares.
C-1
<PAGE>
(11) Includes 30,000 Exercisable Option Shares.
(12) Includes 21,000 Exercisable Option Shares.
(13) Includes 394,645 Exercisable Option Shares.
(14) Mr. Leshner is not an officer or employee of the Company, and this
information is being reported only because it was included in the
Company's 1996 Proxy Statement. Mr. Leshner's business address is
312 Walnut Street, Suite 2100, Cincinnati, OH 45202.
(15) Includes 105,000 Exercisable Warrant Shares.
</FN>
</TABLE>
C-2
<PAGE>
YOUR VOTE IS EXTREMELY IMPORTANT
1. Please SIGN, MARK, DATE and MAIL your YELLOW proxy card in the enclosed
postage-paid envelope. IF YOU WISH TO VOTE FOR THE COMMITTEE NOMINEES,
YOU MUST SUBMIT THE ENCLOSED YELLOW PROXY CARD AND MUST NOT SUBMIT THE
COMPANY'S WHITE PROXY CARD. If you have already submitted the Company's
proxy, you have every right to change your vote by signing and
returning the enclosed YELLOW proxy card. ONLY YOUR LATEST DATED PROXY
WILL COUNT AT THE ANNUAL MEETING.
2. If you have already voted on the Company's white proxy card, you have
every legal right to change your mind and vote FOR the Committee Nominees
on the YELLOW proxy card. Only your latest dated proxy card will count.
3. If your shares are held for you by a bank or brokerage firm, only your
bank or broker can vote your shares and only after receiving your
instructions. Please call your bank or broker and instruct your
representative to vote FOR the Committee Nominees on the YELLOW proxy
card.
4. Time is short. Please vote today!
If you have questions or need assistance in voting your shares or in changing
your vote, please contact:
Shareholders Protective Committee
c/o Brown, Cummins & Brown Co., L.P.A.
3500 Carew Tower, 441 Vine Street
Cincinnati, Ohio 45202
513-381-2122
OR
Call the Committee's Solicitors
Toll-Free (800) 326-9653
<PAGE>
PROFESSIONAL BANCORP, INC.
ANNUAL MEETING OF SHAREHOLDERS - JUNE 19, 1996
THIS PROXY IS SOLICITED BY THE PROFESSIONAL BANCORP
SHAREHOLDERS PROTECTIVE COMMITTEE
IN OPPOSITION TO THE BOARD OF DIRECTORS
The undersigned hereby appoints James R. Cummins and Stephen D. Silbert,
and each of them, with full power of substitution and resubstitution, the
attorney(s) and the proxy(ies) of the undersigned, to vote all shares the
undersigned may be entitled to vote, with all powers the undersigned would
possess if personally present at the Annual Meeting of Shareholders of
Professional Bancorp, Inc., to be held on June 19, 1996, and at any adjournment
or postponement thereof on the following matters, as instructed below.
A vote "FOR" the Nominees listed below is recommended:
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below or, if cumulative voting is in
effect, to elect as many of the Committee's Nominees as possible
in the preference order listed below. (except as indicated to
the contrary below)
1. Julie P. Thompson
2. Ray T. Oyakawa, M.D.
3. Joel S. Moskowitz
4. Alan S. Borstein
5. John S. Buchanan
6. Jon E. Cobain
7. Larry E. Cushing
Instruction: If you wish to withhold authority and preclude the proxy
from voting for any individual nominees, write the name(s) in the
space provided:
_____________________________________________________________________
[ ] WITHHOLD AUTHORITY to vote for all nominees
(Continued and to be SIGNED on the reverse side)
<PAGE>
A vote "DISAPPROVING" the Director Stock Option Plan is recommended:
2. DISAPPROVING THE 1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN.
Disapproving the Company's 1996 Non-Employee Director Stock Option Plan
covering 50,000 shares of the Company's Common Stock.
[ ] DISAPPROVE THE PLAN [ ] APPROVE THE PLAN [ ] ABSTAIN
A vote "FOR" proposal No. 3 is recommended:
3. RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS.
Ratifying the appointment of the firm of KPMG Peat Marwick LLP as
independent public accountants of the Company for 1996.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. Unless otherwise specified, this proxy
will be voted "FOR" the election of the Committee Nominees as directors, to
"DISAPPROVE" the Director Stock Option Plan, and "FOR" ratification of the
appointment of the accountants. This proxy revokes all prior proxies given by
the undersigned.
If shares are registered in more than one name, all such persons should
sign. A corporation should sign in its full corporate name by a duly authorized
officer, stating full title. Trustees, guardians, executors and administrators
should sign in their official capacity, giving their full title as such. If a
partnership, please sign in the partnership name by authorized persons. This
Proxy Card votes all shares held in all capacities.
Dated: __________________________________, 1996
Number of Shares: ___________ _______________________________________________
(Signature)
_______________________________________________
(Please Print Name)
_______________________________________________
(Signature if Held Jointly)
_______________________________________________
(Please Print Name)
_______________________________________________
(Title or Authority (if applicable))
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY.
THIS PROXY IS SOLICITED ON BEHALF OF THE SHAREHOLDERS PROTECTIVE COMMITTEE, AND
MAY BE REVOKED PRIOR TO ITS EXERCISE BY FILING WITH THE CORPORATE SECRETARY OF
THE COMPANY AN INSTRUMENT REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A
LATER DATE, OR BY APPEARING IN PERSON AND VOTING AT THE MEETING.
