SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 ss.240.14a-11(c) or ss.240.14a-12
PROFESSIONAL BANCORP, INC.
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(Name of Registrant as Specified in Its Charter)
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(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:_________________________________________
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):____________________________________________________________
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5) Total fee paid:_________________________________________________________
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:_________________________________________________
2) Form, Schedule or Registration Statement No.:___________________________
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4) Date Filed:_____________________________________________________________
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PROFESSIONAL BANCORP, INC.
606 BROADWAY
SANTA MONICA, CALIFORNIA 90401
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
---------------
Dear Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders
of PROFESSIONAL BANCORP, INC. (the "Company"). The meeting will be held on
Wednesday, June 23, 1999 at 5:00 p.m., Pacific Standard Time, at the Miramar
Sheraton Hotel, 101 Wilshire Boulevard, Santa Monica, California 90401. The
purpose of the meeting is to consider and vote upon the following matters:
1. ELECTION OF DIRECTORS. The election of seven persons to the
Board of Directors to serve until the 2000 Annual Meeting of
Shareholders and until their successors are elected and have
qualified.
2. OTHER BUSINESS. The transaction of such other business as may
properly come before the meeting and any adjournment(s)
thereof.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE OF "AUTHORITY GIVEN" ON PROPOSAL 1.
Shareholders of record at the close of business on May 10, 1999 are
entitled to notice of, and to vote at, the meeting and any adjournment(s)
thereof.
By Order of the Board of Directors
JULIE P. THOMPSON
Chairman of the Board
Dated: May 20, 1999
YOUR VOTE IS IMPORTANT
----------------------
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE BY SIGNING
AND DATING THE ENCLOSED PROXY CARD AND MAILING IT PROMPTLY IN THE PREPAID
ENVELOPE PROVIDED.
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The Bylaws of the Company provides for the nomination of directors in
the following manner:
"SECTION 3.3. NOMINATIONS OF DIRECTORS. Nominees for election
to the Board shall be selected by the Board or a committee of the Board
to which the Board has delegated the authority to make such selections
pursuant to Section 3.11 of these Bylaws. Effective May 1, 1990, the
Board or such committee, as the case may be, will consider written
recommendations from shareholders for nominees for election to the
Board provided such recommendations, together with (i) such information
regarding each nominee as would be required to be included in a proxy
statement filed pursuant to the Exchange Act, (ii) a description of all
arrangements or other understandings among the recommending
shareholders and each nominee and any other person with respect to such
nomination, and (iii) the consent of each nominee to serve as a
director are received by the Secretary of the Corporation, in the case
of an annual meeting of shareholders, not later than the date specified
in the most recent proxy statement of the Corporation as the date by
which shareholder proposals for consideration at the next annual
meeting of shareholders must be received, and, in the case of a special
meeting of shareholders, not later than the tenth day after the giving
of notice of such meeting. Only persons duly nominated for election to
the Board in accordance with this Section 3.3 and persons with respect
to whose nominations proxies have been solicited pursuant to the proxy
statement filed pursuant to the Exchange Act shall be eligible for
election to the Board. Each notice to shareholders of a meeting of
shareholders at which directors are to be elected shall contain a
statement to the effect set forth in this Section 3.3."
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PROFESSIONAL BANCORP, INC.
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1999 ANNUAL MEETING OF SHAREHOLDERS
PROXY STATEMENT
TABLE OF CONTENTS
INTRODUCTION ......................................................... 1
THE PROXY ............................................................ 1
Proxy .......................................................... 1
Revocability of Proxies ........................................ 1
Persons Making the Solicitation ................................ 2
VOTING SECURITIES AND VOTING ......................................... 2
Record Date .................................................... 2
Voting ......................................................... 2
Confidentiality of Voting ...................................... 2
Vote Required .................................................. 3
Quorum Requirement ............................................. 3
Method of Counting Votes ....................................... 3
Voting Results ................................................. 3
GOVERNANCE OF THE COMPANY ............................................ 3
PROPOSAL 1 - ELECTION OF DIRECTORS6
EXECUTIVE OFFICERS OF THE COMPANY .................................... 8
INDEPENDENT PUBLIC ACCOUNTANTS ....................................... 8
COMPENSATION COMMITTEE REPORT ........................................ 9
COMPENSATION TABLES .................................................. 10
BOARD OF DIRECTORS INFORMATION ....................................... 11
Board and Committee Membership ................................. 11
Audit Committee ................................................ 12
Compensation Committee ......................................... 12
Governance and Nominating Committee ............................ 13
Asset/Liability Management and Investment Committee ............ 14
Corporate Development Committee ................................ 14
NHFS Committee ................................................. 14
First Professional Bank Board Committees ....................... 14
Board Compensation ............................................. 14
Compensation Committee Interlocks and Insider Participation .... 15
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE .............. 15
COMMON STOCK PERFORMANCE GRAPH ....................................... 16
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ....... 17
Certain Beneficial Owners ...................................... 17
Management ..................................................... 18
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ....................... 19
SHAREHOLDER PROPOSALS ................................................ 19
OTHER MATTERS ........................................................ 19
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PROFESSIONAL BANCORP, INC.
606 BROADWAY
SANTA MONICA, CALIFORNIA 90401
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PROXY STATEMENT
--------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 23, 1999
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INTRODUCTION
These proxy materials are furnished in connection with the solicitation
by the Board of Directors of Professional Bancorp, Inc. (the "Company") of
proxies to be voted at the Company's Annual Meeting of Shareholders (the
"Meeting") and at any adjournment or postponement thereof. You are invited to
attend your Annual Meeting of Shareholders on Wednesday, June 23, 1999 at 5:00
p.m., Pacific Standard Time. The Meeting will be held at the Miramar Sheraton
Hotel, 101 Wilshire Boulevard, Santa Monica, California 90401. These proxy
materials are first being mailed to shareholders on or about May 20, 1999.
THE PROXY
PROXY
Your vote is important. The Board of Directors solicits proxies so that
each shareholder has the opportunity to vote on the proposal to be considered
at the Meeting. A form of proxy for voting your shares at the Meeting is
enclosed. When you properly execute and return your proxy, the shares it
represents will be voted at the Meeting in accordance with your instructions on
the proxy. If no instruction is specified on the proxy with respect to the
proposal to be acted upon, the shares represented by your executed proxy will be
voted in favor of the election of the seven director nominees set forth herein.
The proxy will be voted at the discretion of the holders of the proxy, in
accordance with the recommendations of the Board, on any other business matter
that may properly be presented at the Meeting, including (a) any matters which
the Company did not have notice of by February 28, 1999 or a reasonable time
before the mailing of this Proxy Statement and (b) shareholder proposals omitted
from the proxy pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as
amended.
REVOCABILITY OF PROXIES
You may revoke your proxy at any time before it is exercised by (i)
filing with the Secretary of the Company a written notice of revocation of your
proxy; (ii) submitting a duly executed proxy bearing a later date; or (iii)
voting in person at the Meeting.
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PERSONS MAKING THE SOLICITATION
The Board of Directors of the Company is making this solicitation of
proxies. The expense of preparing, assembling, printing and mailing this Proxy
Statement and the materials used in the solicitation of proxies will be borne by
the Company. It is contemplated that proxies will be solicited principally
through the use of the mail, but officers, directors and employees of the
Company and its wholly-owned subsidiary, First Professional Bank, N.A. (the
"Bank"), may solicit proxies personally or by telephone or facsimile, for which
no compensation will be paid. Although there is no formal agreement to do so,
the Company may reimburse banks, brokerage houses and other custodians, nominees
and fiduciaries for their reasonable expenses in forwarding these proxy
materials to shareholders whose shares of the Company's Common Stock are held of
record by such entities.
VOTING SECURITIES AND VOTING
RECORD DATE
The Board of Directors has fixed the close of business on May 10, 1999
as the record date for determining the shareholders entitled to notice of and to
vote at the Meeting (the "Record Date"). There were 2,084,474 shares of the
Company's common stock (the "Common Stock") issued and outstanding on the Record
Date.
VOTING
You are entitled to one vote for each share of Common Stock you owned
of record on the books of the Company as of the Record Date on any matter
submitted to a shareholder vote at the Meeting. However, in connection with the
election of directors, shares may be voted cumulatively if a shareholder present
and voting at the Meeting gives notice at the Meeting prior to the voting of the
shareholder's intention to vote cumulatively. If any shareholder gives such
notice, all shareholders may cumulate their votes for director nominees.
Cumulative voting means that you have the right to vote the number of shares you
owned as of the Record Date, multiplied by the number of directors to be elected
(seven). You may cast this total number of votes for one nominee or the votes
may be distributed among nominees in any manner you see fit. If cumulative
voting is declared at the Meeting, votes represented by proxies delivered
pursuant to this Proxy Statement may be cumulated in the discretion of the proxy
holders, in accordance with the recommendations of the Board, and discretionary
authority to do so is included in the proxy.
CONFIDENTIALITY OF VOTING
The Company has adopted a policy of encouraging shareholder
participation in corporate governance by ensuring the confidentiality of
shareholder votes. Proxies, ballots and voting tabulations that identify the
vote of a shareholder shall be kept confidential from the directors, officers
and employees of the Company except in certain specific and limited
circumstances, such as a contested election, when required to meet legal
requirements or in cases where shareholders write comments or questions on their
proxy cards. The Company has designated an independent third party, U.S. Stock
Transfer, the Company's transfer agent, to be the inspector of election and to
receive and tabulate shareholder proxy and ballot votes.
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VOTE REQUIRED
At the Meeting, directors will be elected by a plurality of the votes
cast. Therefore, the seven nominees receiving the highest number of affirmative
votes shall be elected directors of the Company. The actual number of directors
elected may be less than seven in the event that fewer than seven nominees
receive any affirmative votes under the rules of cumulative voting. Each other
matter presented at the Meeting will be decided by a majority of the votes cast
on that matter.
QUORUM REQUIREMENT
The presence, in person or by proxy, of the holders of a majority of
the shares of Common Stock entitled to vote at the Meeting is necessary to
constitute a quorum at the Meeting.
METHOD OF COUNTING VOTES
Shares represented by proxies which are marked "authority withheld" 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 meeting, but will
not be considered as a vote for or against the respective nominee(s). Shares
voted on one proposal but not all proposals on the proxies returned by brokers
will be counted for the purpose of determining the number of shares represented
at the meeting, but will not be considered as a vote for or against any matter
not voted on. Abstentions will also be counted for the purpose of determining
the number of shares represented at the meeting, but will not be considered as a
vote for or against any matter as to which the abstention is effective.
VOTING RESULTS
U.S. Stock Transfer, the Inspector of Election duly appointed by the
Board, will count the votes on each matter and announce the results at the
Meeting. A transcript of the meeting will be available to any shareholder who
requests a copy. Requests for copies of the transcript should be made to Eric
Woodstrom, Acting Chief Financial Officer, 606 Broadway, Santa Monica,
California 90401.
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GOVERNANCE OF THE COMPANY
Your Board works continuously to maintain excellence in corporate
governance. We believe that the cornerstone of good governance is the integrity
and quality of the leadership - the Board of Directors and the individuals the
Board selects to manage the Company. To help advance this belief, the Board of
Directors has adopted the following Corporate Governance Principles for the
Company:
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I. ROLE AND COMPOSITION OF THE BOARD OF DIRECTORS
ROLE. The Board of Directors, which is elected by the shareholders, is
the ultimate decision-making body of the company except with respect to
those matters reserved to the shareholders. The Board serves as
trustees to the investment of shareholders in the Company. The Board
establishes its leadership independent of management, and Board
performance will be periodically evaluated with appropriate changes
made as necessary.
The Board selects the Company's senior management team, which is
charged with the conduct of the Company's business. Having selected the
senior management team, the Board acts as an advisor and counselor to
senior management and ultimately monitors its performance.
The Board also plans for succession to the position of the Chief
Executive Officer as well as certain other senior management positions.
To assist the Board, the Chairman and CEO are required to annually
provide the Governance and Nominating Committee and Compensation
Committee with an assessment of senior management and their potential
to succeed the Chief Executive Officer. They have also been directed to
provide these Committees with an assessment of persons considered
potential successors to certain senior management positions. The
Compensation and Governance Committees shall develop an integrated
Board and Management Succession Plan which will be reviewed at least
annually.
COMPOSITION. It is the policy of the Company that the Board be
comprised of a majority of independent directors. A director will be
considered "independent" if he or she:
-- is not a current employee of the company or any of its
subsidiaries;
-- is not a former employee of the company or any of its
subsidiaries who is receiving compensation for prior services
(other than benefits under a tax-qualified retirement or
savings plan);
-- is not a relative of any employee of the company;
-- is not a paid advisor or consultant to the company and does not
provide services (other than as a director) to the company;
-- is not a director, employee, officer or owner of any entity
providing significant services to the company; and
-- receives no compensation from the company, other than director
fees.
Board members should have good moral character, broad perspective,
experience and knowledge and independence of judgment. Each Board
member should know and understand the Company's philosophy, mission,
strategic plan and business plan and should reflect this understanding
throughout his or her tenure as a director.
It is the policy of the Company that the number of directors not exceed
a number that can function efficiently and effectively as a body. The
current number of directors is seven, which the Board believes works
effectively and efficiently at this time. The Governance and Nominating
Committee, in consultation with the Chairman and the CEO, considers and
makes recommendations to the Board considering the appropriate size and
needs of the Board.
The Governance and Nominating Committee also recommends candidates to
fill new Board positions created by expansion and vacancies that occur
by resignation, retirement or for any other reason. Candidates are
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selected, among other reasons, for their character, judgment, business
experience and acumen. Final approval of a candidate is determined by
the full Board. Directors whose circumstances change substantially from
the time they joined the Board, are expected to offer to submit a
resignation to be responded to at the option of the Board. In addition,
no Director shall serve past the age of 72 (with current Directors
exempted until the completion of their term in 2001).
All Directors, by the end of 2001 or within one to two years of joining
the Board, are expected to own Company stock having a minimum value of
$25,000, with a minimum amount of $1,000 worth of stock owned as soon
as practicable after joining the Board.
2. CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER POSITIONS
It is the policy of the Company that the positions of the Chairman of
the Board and the Chief Executive Officer are separate positions which
shall at all times be held by different people. The Board is free to
decide on the selection of the Chairman and/or CEO at any time based on
the needs of the Company.
3. BOARD COMMITTEES
It is the general policy of the Company that all major decisions be
considered by the Board as a whole. However, certain Board committees
are designated from time to time to assist the Board in functioning as
efficiently and effectively as possible. Currently, these committees
are the Audit Committee, Compensation Committee, Asset/Liability
Management and Investment Committee, Corporate Development Committee,
Governance and Nominating Committee and NHFS Committee.
All Board committees are comprised of not less than three directors.
The Audit Committee and Compensation Committee are comprised solely of
independent directors. All other Board Committees are comprised of at
least a majority of independent directors.
The chair of the committee determines the frequency, length and agenda
of meetings of each committee. Sufficient time to consider the agenda
items is provided. Materials related to agenda items are sought to be
provided to the committee members sufficiently in advance of the
meeting where necessary to allow the members to prepare for discussion
of the items at the meeting.
The Board determines the responsibilities of each of the committees
from time to time, based upon recommendations from the Governance and
Nominating Committee.
4. BOARD ACCESS TO SENIOR MANAGEMENT. Board members have complete access
to company management, but it is expected that they will advise, in
advance, the Chief Executive Officer or Chairman of the Board of the
subject matter of any specific inquiry that relates to the business
operations of the company.
5. FUNCTIONING OF THE BOARD
The Chairman and the CEO are responsible for setting and following
procedures for effective Board meetings, with the goal that Board
meetings be conducted in a manner that ensures open communication,
meaningful participation and timely resolution of issues.
The Chairman and CEO set the agenda for Board meetings with the
understanding that certain items pertinent to the advisory and
monitoring functions of the Board must be brought periodically to it by
the Chairman and the CEO, i.e. annual corporate budget, quarterly and
annual financial statements, compensation of senior management, etc.
Any member of the Board may request that an item be included on the
agenda.
The Chairman and CEO shall ensure that the Board receives a meeting
agenda and the necessary background material related to the agenda
items sufficiently in advance of a meeting to allow the directors to
prepare for discussion of the items at the meeting. Each Board member
is responsible for reviewing and understanding the agenda and other
materials provided prior to a meeting and must be prepared to
meaningfully discuss the materials at the Board meeting.
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Directors are obligated to make every effort to attend all Board
meetings and must be willing to respond to requests of management
outside of Board meetings for advice and support relative to the
director's contacts, knowledge or experience of potential benefit to
the Company.
At the invitation of the Board, members of senior management
recommended by the Chairman and CEO attend Board meetings or portions
thereof for the purpose of providing information and participating in
discussions. Generally, presentations of matters to be considered by
the Board are made by the manager responsible for that area of the
Company's operations.
Executive sessions without management present are held at least
annually to review the report of the outside auditors, the criteria
upon which the performance of the CEO and other senior management is
based, the performance of the CEO and senior managers against such
performance criteria, and the compensation of the CEO and senior
managers. Other executive sessions are held as necessary. Each Board
member is free to request an executive session of the Board whenever
the Board member deems it appropriate.
6. CORPORATE COMMUNICATIONS
The Chairman and the CEO are responsible for establishing effective
communications with the Company's stakeholder groups, i.e.
shareholders, customers, associates, communities, suppliers, creditors,
governmental agencies and corporate partners. It is the policy of the
Company that management speaks for the Company. This policy does not
preclude outside directors from meeting with shareholders, but
management should be advised of any such meetings in advance and should
be present, if possible.
7. CORPORATE GOVERNANCE PRINCIPLES. The Board reviews and evaluates these
corporate governance principles on an annual basis and updates or
revises them as appropriate.
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PROPOSAL 1 - ELECTION OF DIRECTORS
The Company's Board of Directors consists of seven members. The
directors serve for one-year terms and are elected each year by the shareholders
at the Annual Meeting. The seven persons named below have been nominated by the
Board for election as directors to serve until the 2000 Annual Meeting of
Shareholders and until their successors are elected and have qualified.
All of the director nominees are independent, meaning that they are not
executive officers, employees or consultants of the Company or First
Professional Bank, N.A., the Company's wholly-owned subsidiary (the "Bank"). All
of the nominees are currently directors of the Company and the Bank. The
principal occupations and certain other information about the nominees are set
forth below.
The Board of Directors recommends a vote of "AUTHORITY GIVEN" for all
Director nominees.'
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<TABLE>
<CAPTION>
DIRECTOR NOMINEES
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BUSINESS EXPERIENCE YEAR ELECTED
DURING THE PAST DIRECTOR
NAME AND ADDRESS AGE FIVE YEARS
----------------- --- -------------------- -----------
<S> <C> <C> <C>
Richard A. Berger 67 President, Richard A. Berger & Assoc. (Real Estate 1982
45495 Osage Court Investments); Realtor, Fred Sands Desert Realty
Indian Wells, CA 92210
Ronald L. Katz, M.D. 67 Chairman and Professor of Anesthesiology, USC Medical 1982
1200 N. State Street Center (since June, 1995); Former Professor (until
Suite 14901 June, 1995) and Former Chairman (until June, 1990) of
Los Angeles, CA 90033 Anesthesiology, UCLA Medical Center
Terry O. Hartshorn 54 Vice-Chairman, Chairman (until 1998) and CEO (1976 - January, 1999
3120 W. Lake Center Dr. 1993), PacifiCare Health Systems, Inc. (HMO);
Santa Ana, CA 92704 Director, Aracadian Health Management; Director, Red
Cross of Orange County; President and CEO, UniHealth
(1993 - 1997)
Robert J. Margolis, M.D. 53 Managing Partner, CEO and Chairman of the Board, May, 1999
19191 S. Vermont Avenue HealthCare Partners; Chairman of the Board,
Suite 200 California Hospital Medical Center - Los Angeles;
Torrance, CA 90502 Director, Catholic HealthCare West; Director,
National Committee for Quality Assurance; Director,
California HealthCare Association; Director,
HealthCare Association of Southern California
Walter T. Mullikin, M.D. 81 Director of MedPartners Inc.; Director of Health Net 1997
MedPartners/Mullikin (HMO); former Chairman of the Board and President of
5000 Airport Plaza Drive Mullikin Medical Enterprises (until November, 1995)
Long Beach, CA 90815
Lynn O. Poulson 61 Secretary, Professional Bancorp, Inc. and First 1982
10880 Wilshire Blvd. Professional Bank, N.A. (since May, 1997); President
Suite 1100 of Johnson, Poulson, Coons & Slater (law firm)
Los Angeles, CA 90024
Julie P. Thompson 41 Chairman of the Board, Professional Bancorp, Inc. and 1996
27281 Las Ramblas First Professional Bank, N.A. (since July, 1996);
#200 President and Chief Executive Officer, Health
Mission Viejo, CA 92691 Research Network (Medical Research)
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</TABLE>
Votes will be cast by the proxy holders in such a way as to effect the
election of all seven nominees, or as many thereof as possible under the rules
of cumulative voting. In the event that any of the nominees should be unable to
serve as a director, it is intended that the proxy will be voted for the
election of such substitute nominees, if any, as shall be designated by the
Board. The Board has no reason to believe that any of the nominees will be
unavailable to serve if elected. Additional nominations can only be made by
complying with the notice provision set forth in the Bylaws of the Company, an
extract of which is included in the Notice of Annual Meeting of Shareholders
accompanying this Proxy Statement. This Bylaw provision is designed to give the
Board advance notice of competing nominations, if any, and the qualifications of
competing nominees, and may have the effect of precluding third-party
nominations if the notice provisions are not followed.
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EXECUTIVE OFFICERS OF THE COMPANY
The following persons are the executive officers of the Company and/or
the Bank:
<TABLE>
<CAPTION>
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NAME AGE BUSINESS EXPERIENCE DURING THE PAST FIVE YEARS
---- --- ----------------------------------------------
<S> <C> <C>
Melinda McIntyre-Kolpin 43 President, Chief Executive Officer and a Director, First Professional
Bank, N.A. (since September, 1996); Chief Executive Officer of Network
Health Financial Services, Inc. (since February, 1996); Director,
Molina Medical Centers (since 1996); Director, Pediatric & Family
Medical Center (since 1997); Former President and a Director, First
Professional Bank, N.A. (from January, 1989 until February, 1996);
Former Director, Professional Bancorp, Inc. (from January, 1989 until
February, 1996).
Eric J. Woodstrom 41 Acting Chief Financial Officer of the Company (since December, 1998);
Executive Vice President, First Professional Bank, N.A. (since
January, 1997); Manager, The Secura
Group (Bank Consulting) (from January,
1993 until January, 1997).
Gary W. Mounce 35 Senior Vice President and Senior Loan Officer (since January, 1997),
formerly Vice President/Manager of Tarzana Regional Office (until
December, 1996), First Professional Bank, N.A.; Bank Examiner, Dept.
of Treasury, Office of the Comptroller of the Currency (until August,
1995); Manager, Great Western Bank (until June, 1993).
Janet L. Peevey 41 Senior Vice President, Credit Administration (since September, 1998)
and Vice President (March, 1990 until January, 1996), First
Professional Bank, N.A.; Senior Vice President, Pacific EyeNet, Inc.
(from January, 1996 until September, 1998).
Sharon A. Schmidt 42 Senior Vice President, Chief Operations Officer (since February,
5525 Etiwanda Avenue 1998), formerly Vice President, Operations Administration of First
Suite 110 Professional Bank, N.A. (until February, 1998).
Tarzana, CA 91356
Nancy Ferretti-Foster 39 Senior Vice President, Chief Information Officer (since February,
9900 Norwalk Blvd. 1998), formerly Vice President, Information Systems of First
Suite 150 Professional Bank, N.A. (until February, 1998); Co-Owner, Time
Santa Fe Springs, CA 90670 Traveler Antique Toys (since October, 1996), Vice President and
Secretary, 7-W Investigations, Inc. (since June, 1997).
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</TABLE>
The business address of all executive officers is 606 Broadway, Santa
Monica, California 90401, unless otherwise indicated.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of KPMG Peat Marwick LLP served as independent public
accountants for the Company and the Bank for the 1998 fiscal year. The Audit
Committee of the Board has not yet made a recommendation regarding the choice of
an independent accounting firm for the Company and the Bank for 1999. The Audit
Committee is in the process of evaluating the relationship between the fees
charged by various firms, including KPMG Peat Marwick LLP, and the capabilities
and level of service provided by these firms. Since this is an ongoing process,
and the Committee has not yet made its recommendation to the Board of Directors,
the Company is not seeking shareholder ratification of the selection of
independent public accountants at the 1999 Annual Meeting of Shareholders.
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It is anticipated that representatives of KPMG Peat Marwick LLP will be
present at the Meeting, will have an opportunity to make a statement if so
desired, and will be available to respond to appropriate questions from
shareholders.
COMPENSATION COMMITTEE REPORT
The Compensation Committee is charged with the duty of determining the
compensation of the Company's senior management. It also administers and grants
options under the Company's stock option plans and administers the Company's
Incentive Compensation Plan, including granting performance bonuses to senior
management.
It is the policy of the Committee that senior management of the Company
should receive compensation which will accomplish the following:
- -- Attract and retain quality personnel.
- -- Reinforce the attainment of the Company's performance objectives.
- -- Align the interests of senior management with those of the Company's
shareholders.
- -- Encourage the members of senior management to acquire and
retain the Company's stock.
- -- Retain status for such compensation as an
expense deductible by the Company for tax purposes.
A portion of total compensation is paid in the form of a fixed annual
salary in an amount which the Committee feels sufficient to retain top quality
executives. In determining the levels of compensation necessary to be
competitive, the Committee reviews compensation paid by the Company's peers.
Senior management salaries are reviewed on an annual basis. In determining
salary levels, the Committee considers changes in general economic conditions,
including inflation and changes in compensation paid by the Company's peers. The
Committee also seeks input from the Company's chief executive officer in setting
salaries for senior management other than the CEO.
A second component of compensation is paid in the form of a bonus,
determined in light of the executive's and the Company's performance during the
year. Performance is measured by objective and subjective criteria, including
the profit of the Company, stock price, total expenses, and combined ratios of
the Company's subsidiaries. Bonuses are established at the end of the year.
The third component of compensation is awarded through the grant of
stock options. The Compensation Committee considers the value attributable to
the grant of options to be an integral part of the total compensation. In
addition, options are the primary mechanism for encouraging the ownership of the
Company's shares, aligning the interests of senior management with those of
shareholders and for providing long-term rewards to employees for overall
corporate performance. In granting options to senior management, it is the
Committee's intent not only to reward senior management for services to the
Company but to provide incentive for individual options holders to remain in the
employ of the Company. Members of senior management are reviewed for stock
option grants each year. In determining the appropriate value of options to be
granted to senior management, the Committee reviews grants by the Company's
peers with the objective of providing the opportunity for competitive long-term
compensation.
The Board of Directors has granted Julie P. Thompson, Chairman of the
Board, operational authority for the Company during the period while there is no
acting chief executive officer of the Company. Ms. Thompson receives $125 per
hour for the service she performs in this capacity, which the Compensation
Committee believes is consistent with industry standards.
9
<PAGE>
Melinda McIntyre-Kolpin acts as the Chief Executive Officer and
President of the Bank pursuant to a Consulting Agreement between the Company,
the Bank and Network Health Financial Services, Inc. ("NHFS"). The Bank pays
NHFS a flat monthly rate of $25,000 for Ms. McIntyre-Kolpin's full time services
as President and Chief Executive Officer of the Bank and reimburses NHFS for the
reasonable out-of-pocket expenses incurred by Ms. McIntyre-Kolpin in the
performance of her services. The Compensation Committee believes this fee is
consistent with industry standards for similarly - sized banks.
Compensation Committee
Lynn O. Poulson, Chair
Julie P. Thompson
Terry O. Hartshorn
COMPENSATION TABLES
The following table lists information on compensation received for
services by any person who served as the chief executive officer or functioned
in a similar capacity of the Company, and the four highest compensated executive
officers of the Company and/or the Bank for services in all capacities to the
Company and the Bank, during the year ended December 31, 1998.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION
----------------------------------------
OTHER
ANNUAL
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION
- --------------------------- ---- ------ ----- ------------
<S> <C> <C> <C> <C>
Julie P. Thompson, Chairman of the Board 1998 -0- -0- 31,000(1)
1997 -0- -0- 26,000(1)
1996 -0- -0- 24,002(1)
Melinda McIntyre-Kolpin, President and Chief Executive 1998 -0- -0- -0-(2)
Officer of the Bank 1997 -0- -0- -0-(2)
1996 31,667 22,500(2) 43,115(2)
Eric J. Woodstrom, Acting Chief Financial Officer of the 1998 125,000 -0- 6,000(3)
Company and Executive Vice President of the Bank 1997 118,903 20,000 -0-
1996 -0- -0- -0-
Gary W. Mounce, Senior Vice President and Senior Loan 1998 115,000 -0- 6,000(4)
Officer of the Bank 1997 99,999 50,000(5) 6,000(4)
1996 55,008 25,101(6) -0-
Janet L. Peevey, Senior Vice President of the Bank 1998 95,000 -0- 6,000(7)
1997 28,958(8) 4,000 -0-
1996 9,399(8) -0- -0-
- ------------------------------------------------------------------------------------------------------------
10
<PAGE>
- ------------------------------------------------------------------------------------------------------------
Sharon A. Schmidt, Senior Vice President and Chief 1998 90,000 -0- 4,800(9)
Operations Officer of the Bank 1997 76,992 40,000(10) 2,000(11)
1996 70,000 7,855(12) -0-
Nancy Ferretti-Foster, Senior Vice President and Chief 1998 90,000 -0- 12,069(13)
Information Officer of the Bank 1997 76,992 40,000(14) 2,000(15)
1996 70,000 8,240(16) -0-
- ------------------------------------------------------------------------------------------------------------
<FN>
1 Represents an annual fee of $5,000 for serving as Chairman of the
Board, Board meeting and committee fees, and a fee of $125 per hour for
the time she exercised operational authority for the Company while
there was no acting chief executive officer.
2 Ms. McIntyre-Kolpin resigned as a Director of the Company and as
President and a Director of the Bank effective February 9, 1996, at
which time she was paid $22,500 for a bonus accrued in 1995 and $43,115
for accrued vacation time, $37,000 of which Ms. McIntyre-Kolpin paid
back to the Bank to purchase her Bank vehicle for its then current
market value. In September, 1996, Ms. McIntyre-Kolpin was appointed
Interim Chief Executive Officer and President and a Director of the
Bank. Ms. McIntyre-Kolpin is also Chief Executive Officer and the
principal shareholder of Network Health Financial Services, Inc., a
Delaware corporation which receives consulting fees from the Company
and Bank pursuant to the terms of a Consulting Agreement. Effective
March 11, 1997, Bancorp and the Bank paid NHFS a flat monthly fee of
$25,000 for Ms. McIntyre-Kolpin's full-time services as President and
Chief Executive Officer of the Bank and reimbursed NHFS for the
reasonable out-of-pocket expenses incurred by Ms. McIntyre-Kolpin in
the performance of her services. Prior to March 11, 1997, Bancorp and
the Bank paid NHFS a flat monthly rate of $19,000 for Ms.
McIntyre-Kolpin's part-time services as Interim President and Chief
Executive Officer of the Bank. See also, "Certain Relationships and
Related Transactions."
3 Reflects a $500 per month car allowance.
4 Reflects a $500 per month car allowance.
5 Reflects bonus earned in 1997 and paid in 1998.
6 Reflects bonus earned in 1996, $25,000 of which was paid in 1997.
7 Reflects a $500 per month car allowance.
8 Ms. Peevey resigned from the Bank on January 18, 1996 and began
employment again with the Bank on September 15, 1997.
9 Reflects a $400 per month car allowance.
10 Reflects bonus earned in 1997, $20,000 of which was paid in 1998.
11 Reflects $400 per month car allowance which began in October, 1997.
12 Reflects bonus earned in 1996, $7,500 of which was paid in 1997.
13 Reflects a payout of $7,268 for previously accrued but unused vacation
and a $400 per month car allowance.
14 Reflects bonus earned in 1997, $20,000 of which was paid in 1998.
15 Reflects a $400 per month car allowance which began in October, 1997.
16 Reflects bonus earned in 1996, $7,500 of which was paid in 1997.
- ------------------------------------------------------------------------------------------------------------
</FN>
</TABLE>
11
<PAGE>
BOARD OF DIRECTORS INFORMATION
BOARD AND COMMITTEE MEMBERSHIP
During 1998, the Board of Directors held 11 meetings. All directors of
the Company who are standing for election at the Annual Meeting attended at
least 75% of the aggregate number of regular and special meetings of the Board
held during 1998 (during the period he or she was a director) and all committees
of the Board on which the director served (during the period he or she was a
committee member) during the 1998 calendar year.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
NAME Board Audit Compensation Asset/Liability Corporate Governance and
Management and Development Nominating
Investment
- ---------------------------- ------ ---- ----------- ----------------- --------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Richard A. Berger X X* X
- ---------------------------- ------ ---- ----------- ----------------- --------------- ---------------------
Terry Hartshorn X X X* X*
- ---------------------------- ------ ---- ----------- ----------------- --------------- ---------------------
Ronald L. Katz, M.D. X X X X
- ---------------------------- ------ ---- ----------- ----------------- --------------- ---------------------
Walter T. Mullikin, M.D. X X
- ---------------------------- ------ ---- ----------- ----------------- --------------- ---------------------
Robert J. Margolis, M.D. X
- ---------------------------- ------ ---- ----------- ----------------- --------------- ---------------------
Lynn O. Poulson X X* X
- ---------------------------- ------ ---- ----------- ----------------- --------------- ---------------------
Julie P. Thompson X X X* X
- ---------------------------- ------ ---- ----------- ----------------- --------------- ---------------------
1998 Meetings 11 6 2 4 3 0**
- ---------------------------- ------ ---- ----------- ----------------- --------------- ---------------------
<FN>
- ---------------
* Chair
** This Committee was not established until February, 1999.
</FN>
</TABLE>
AUDIT COMMITTEE
The Audit Committee is comprised entirely of outside, independent
directors. The Audit Committee is responsible for assisting the Board of
Directors in fulfilling its statutory and fiduciary responsibilities for the
audit function of the Company and it subsidiary and in monitoring the accounting
and financial reporting practices of the Company and its subsidiary. The
Committee:
-- Recommends the annual appointment of the public accounting firm to
be the Company's outside auditors, subject to approval of the Board.
-- Reviews with the outside auditors the scope of the audit, the
auditors' fees and related matters;
-- Receives copies of the annual comments from the outside auditors on
accounting procedures and systems of control;
-- Reviews with the outside auditors any questions, comments or
suggestions they may have relating to the Company's internal
control, accounting practices or procedures or those of the
Company's subsidiary;
-- Reviews with management and the outside auditors the Company's
annual and quarterly financial statements and any material changes
in accounting principles or practices used in preparing the
statements;
-- Reviews the programs of the Company's internal audit department,
including procedures for assuring implementation of accepted
recommendations made by the outside auditors, and receives summaries
of all audit reports issues by the internal audit department; and
-- Reviews compliance with laws, regulations and internal procedures,
and contingent liabilities and risks that may be material to the
Company.
12
<PAGE>
Mr. James Markley and Dr. Ray Oyakawa served on the Audit Committee during the
period in which they were directors of the Company.
COMPENSATION COMMITTEE
The Compensation Committee is comprised entirely of outside,
independent directors. The Compensation Committee is responsible for monitoring
the Company's management resources, structure, development and selection process
and for establishing the annual and long-term performance goals for our elected
officers. The Committee's responsibilities and functions include:
-- Recommending to the Board the salaries and any bonus awards for the
Company's executive officers.
-- Considering and making recommendations on the Company's compensation
and benefit plans.
-- Monitoring the performance of the Chief Executive Officer and other
executive officers.
-- Reviewing with the Chairman and Chief Executive Officer the
succession planning for the Chief Executive Officer and other senior
executives.
-- Reviewing the functions of the senior officers and making
recommendations on changes.
-- Administering the Company's incentive and stock option plans and
making recommendations to the Board on grants of stock options under
the Company's stock option plans.
-- Reviewing and making recommendations to the Board with respect to
compensation of Directors.
-- Publishing an annual Compensation Committee Report for the
shareholders in the Company's Proxy Statement.
GOVERNANCE AND NOMINATING COMMITTEE
The Governance and Nominating Committee was established in February,
1999. The duties of the Governance and Nominating Committee are as follows:
-- To review the performance and contributions of each Board member,
Board Committee and the Board as a whole, at least annually. Part of
this process will be one on one interviews and evaluations with each
Board member, including the Governance and Nominating Committee
members.
-- To determine annually the need for any change in Board
representation and/or Committee structure based solely on the best
interests of the Company.
-- To recommend to the Board the slate of Board nominees to be
presented at the annual shareholder meeting for election to the
Board.
-- To put in place a selection and orientation process for new Board
members.
-- To appoint committees, members and chairs after consultation with
the CEO.
13
<PAGE>
-- Through the Governance and Nominating Committee and the Compensation
Committee, an integrated Board and Management Succession Plan should
be developed and reviewed at least annually.
-- To recommend to the Board corporate governance principles for
adoption and to review and revise these principles, as necessary, at
least annually.
The Governance and Nominating Committee considers director nominees recommended
by shareholders of the Company. Shareholders should submit any such
recommendations in writing to Mr. Terry Hartshorn c/o Professional Bancorp,
Inc., 606 Broadway, Santa Monica, California 90401, no later than December 31,
1999 for consideration for next year's annual shareholders meeting. Any
recommendation should include the name, age, address, phone number,
qualifications and directorships and other positions held by the proposed
nominee in business, charitable and community organizations.
ASSET/LIABILITY MANAGEMENT AND INVESTMENT COMMITTEE
The Asset/Liability Management and Investment Committee is responsible
for the management of the Company's financial affairs, including managing the
investment securities and assets and liabilities of the Company. The Committee
is also primarily responsible for monitoring the Company's interest rate and
liquidity risks. In performing this function, the Committee reviews and approves
(when appropriate) key asset and liability policies regarding interest rate
sensitivity, financial derivatives and funding needs and reviews management
reports regarding these policies and activities related thereto. The Committee's
responsibilities also include oversight of the Company's capital management
activities and trading activities, including related market risk management
policies and risk limits.
CORPORATE DEVELOPMENT COMMITTEE
The Corporate Development Committee is responsible for investigating,
considering and making recommendations to the Board concerning the long-term
business goals and various strategic options for the Company.
NHFS COMMITTEE
The Board has established a committee comprised of Mr. Hartshorn
(Chair) and Dr. Mullikin to negotiate the Company's and the Bank's strategic
relationship with NHFS.
FIRST PROFESSIONAL BANK BOARD COMMITTEES
In addition to the Committees described above, the Bank also has an
Executive Loan Committee comprised of Mr. Poulson, Ms. Thompson and Ms.
McIntyre-Kolpin. The Loan Committee is responsible for reviewing and approving
loan policies and reports of compliance therewith and loans in excess of
management's internal lending authority and reviewing reports regarding lending
and credit activities, as well as the Company's credit quality.
Mr. Berger serves as the Board's representative on the Bank's Community
Reinvestment Act Committee. The Community Reinvestment Act Committee is
responsible for establishing and monitoring policies and procedures to ensure
the Bank's compliance with the Community Reinvestment Act, as amended.
14
<PAGE>
BOARD COMPENSATION
Compensation is paid only to outside directors. Each outside director
receives a fee of $1,000 for each quarterly joint Company/ Bank Board meeting
attended, and $500 for each other monthly Bank and/or Company Board meeting
attended. Board members also receive $200 for any telephonic Board meetings
held. A three-day Strategic Planning Retreat for the directors and officers of
the Company was held in July, 1998. Each outside Board member who attended the
Retreat was paid $2,500.
For Committee Meetings other than the Bank Executive Loan Committee,
each Board member receives $500 per meeting attended. The Executive Loan
Committee meets weekly and each member thereof receives a monthly fee of $1,000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The joint Company/Bank Compensation Committee is currently comprised of
Mr. Poulson (Chair), Ms. Thompson, Mr. Hartshorn. Dr. Ray Oyakawa, a former
director of the Company, also served on the Compensation Committee from May 21,
1997 until February 24, 1999.
Mr. Berger, Mr. Poulson, Mr. Hartshorn, Ms. McIntyre, Mr. Mounce, Ms.
Foster, Ms. Schmidt and/or companies with which the foregoing are associated are
customers of and have had banking transactions with the Bank, some of which have
included extensions of credit, during 1998. Dr. Oyakawa, a former Director of
the Company, and a company with which he is associated had extensions of credit
totaling approximately $1,761,218, with interest at the current Wall Street
Journal rate plus 1%, that were on nonaccrual status as of March 31, 1998. In
management's opinion, all loans and commitments to lend included in such
transactions were made in the ordinary course of business and in compliance with
applicable laws on substantially the same terms, including interest rates,
collateral and repayment terms, as those prevailing for comparable transactions
with other persons of similar creditworthiness and did not involve more than the
normal risk of collectibility or present other unfavorable terms when originally
underwritten. As of March 31, 1998, other than as described above, all such
loans were current.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent of the Company's Common Stock, to file with the Securities and Exchange
Commission ("SEC") and the American Stock Exchange initial reports of ownership
and reports of changes in ownership of Common Stock of the Company. Officers,
directors and greater than ten percent shareholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) reports they
file.
To the Company's knowledge, based solely upon review of the copies of
such reports furnished to the Company and written representations that no other
reports were required, during the year ended December 31, 1998, all Section
16(a) filing requirements applicable to its officers, directors and greater than
ten percent beneficial owners were fulfilled in a timely manner, except one
report, covering one transaction reporting the purchase of 200 shares, was filed
late by Julie P. Thompson.
15
<PAGE>
COMMON STOCK PERFORMANCE GRAPH
The Comparison Stock Performance Graph below shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933 or under
the Securities Exchange Act of 1934, except to the extent the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
The following graph shows a five-year comparison of cumulative total
returns for the Company, S&P 500 Index and SNL AMEX Bank Index. The SNL AMEX
Bank Index consists of commercial banks listed on the American Stock Exchange
(AMSE) and was provided to the Company by SNL Securities LC.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
PROFESSIONAL BANCORP, INC., S&P 500 INDEX AND
SNL AMEX BANK INDEX
<TABLE>
<CAPTION>
PERIOD ENDING
- ------------------------------------------------------------------------------------------
INDEX 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
<S> <C> <C> <C> <C> <C> <C>
Professional Bancorp, Inc. 100.00 58.50 99.06 84.25 129.50 146.40
S&P 500 100.00 101.32 139.39 171.26 228.42 293.69
SNL AMEX Bank Index 100.00 108.21 159.05 205.64 350.99 365.04
- -----------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
<FN>
* Assumes that the value of the investment in Company Common Stock and each
index was $100.00 on December 31, 1993 and that all dividends were reinvested.
</FN>
</TABLE>
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
CERTAIN BENEFICIAL OWNERS
The following table lists the holdings of the only persons (including
any "group" as that term is used in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended) known by the Company to be the beneficial owners of
more than five percent (5%) of the Company's outstanding Common Stock as of
March 1, 1999, based upon 2,015,007 shares outstanding on that date.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
------------------- -------------------- --------
<S> <C> <C>
Franklin Mutual Advisers, Inc. 155,616(1) 7.7%
51 John F. Kennedy Parkway
Short Hills, New Jersey 07078
Basswood Partners, L.P. 150,211(2) 7.5%
Basswood Management, Inc.
Matthew Lindenbaum
Bennett Lindenbaum
645 Madison Avenue
10th Floor
New York, New York 10022
Banc Fund III L.P. 137,650(3) 6.8%
Bank Fund III Trust
Banc Fund IV L.P.
Banc Fund IV Trust
Banc Fund V L.P.
208 S. LaSalle Street
Chicago, Illinois 60604
Jay Spellman 127,188(4) 6.3%
Redwood Asset Management, L.P.
200 Park Avenue
Suite 3900
New York, New York 10166
Robert H. Leshner 117,416(5) 5.5%(6)
312 Walnut Street
Suite 2100
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
<FN>
1 As reported in a Schedule 13G filed with the Securities and Exchange
Commission ("SEC") on January 29, 1999.
2 As reported in Amendment No. 1 to a Schedule D filed with the SEC on
January 5, 1999.
3 As reported in Amendment No. 1 to a Schedule 13D filed with the SEC on
November 5, 1998
4 As reported in a Schedule 13D filed with the SEC on November 3, 1998.
5 As reported in Amendment No. 3 to Schedule 13D filed with the SEC on
November 15, 1996. 110,250 of the reported shares are related to a
presently exercisable Warrant.
6 Warrants convertible into shares of Common Stock held by Mr. Leshner which
are exercisable within 60 days after March 1, 1999, are treated as
outstanding for the purpose of computing the percentage of outstanding
Common Stock owned by Mr. Leshner, but not for the purpose of computing the
percentage of Common Stock owned by any other person.
- --------------------------------------------------------------------------------
</FN>
</TABLE>
17
<PAGE>
MANAGEMENT
The following table sets forth certain information concerning the
beneficial ownership of the Company's outstanding Common Stock as of March 1,
1999, by each director and executive officer of the Company and the Bank, and by
all directors and executive officers of the Company and the Bank as a group.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AMOUNT AND NATURE PERCENT
OF BENEFICIAL OF
NAME/TITLE OWNERSHIP(1) CLASS(2)
- ---------- --------------- --------
<S> <C> <C>
Richard A. Berger, Director 22,697(3) 1.1%
Ronald L. Katz, M.D., Director 16,836(4) *
Lynn O. Poulson, Director and Secretary 11,084(5) *
Julie P. Thompson, Chairman of the
Board and Director 900 *
Walter T. Mullikin, M.D., Director 600 *
Robert J. Margolis, M.D., Director 49 *
Terry O. Hartshorn, Director 0 *
Melinda McIntyre-Kolpin, Chief Executive Officer
and President of the Bank 250 *
Eric J. Woodstrom, Acting Chief Financial 0 *
Officer of the Company and
Executive Vice President of the Bank
Gary W. Mounce, Senior Vice President and 935 *
Senior Loan Officer of the Bank
Janet L. Peevey, Senior Vice President of the Bank 0 *
Sharon A. Schmidt, Senior Vice President and 0 *
Chief Operations Officer of the Bank
Nancy Ferretti-Foster, Senior Vice President 10 *
and Chief Information Officer of the Bank
All Directors and Executive Officers 53,361(6) 2.65%
- --------------------------------------------------------------------------------
<FN>
* Less than 1% of the shares outstanding.
1 Unless otherwise indicated, the persons named herein have sole voting and
investment power over the shares reported.
2 Convertible Notes and Options and Warrants to purchase shares of Common
Stock held by directors, executive officers and other persons that were
exercisable or convertible within 60 days after March 1, 1999 are
treated as outstanding for the purpose of computing the number and
percentage of outstanding securities of the class owned by such
persons, but not for the purpose of computing the percentage of the
class owned by any other person.
3 Includes 1,874 exercisable option shares.
4 Includes 1,874 exercisable option shares.
5 Includes 1,874 exercisable option shares. Mr. Poulson has shared voting and
investment power over these shares.
6 Includes the shares owned by the current directors and named executive
officers (13 in number) as a group, and includes 5,622 exercisable option
shares.
- --------------------------------------------------------------------------------
</FN>
</TABLE>
18
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company and the Bank entered into a Consulting Agreement dated
August 12, 1996, as amended November 19, 1997, with Network Health Financial
Services, Inc. ("NHFS"), a Delaware corporation. Melinda McIntyre-Kolpin,
President, Chief Executive Officer and a Director of the Bank, is the Chief
Executive Officer and principal shareholder of NHFS. Pursuant to the Consulting
Agreement, NHFS provides consulting services to the Company and the Bank with
respect to personnel matters, operational procedures and client development and
retention. NHFS is paid its actual costs incurred in the performance of its
duties under the Consulting Agreement (including hourly rates for certain
specified NHFS personnel while they are performing consulting services), plus an
additional 25% of such costs. In addition, the Company and Bank pay flat monthly
rates for the services of Ms. McIntyre-Kolpin, in her capacity as Chief
Executive Officer and President of the Bank, and Patti Derry. During 1998, the
Company and the Bank paid NHFS the total amount of $693,257 pursuant to the
Consulting Agreement. Any party may terminate the Consulting Agreement by giving
30 days' notice to the other parties.
See also "Compensation Committee Interlocks and Insider Participation"
for discussion about director and executive officer banking transactions.
SHAREHOLDER PROPOSALS
Any shareholder who wishes a proposal to be considered for inclusion in
the Company's Proxy Statement for the 2000 Annual Meeting of Shareholders, which
is currently scheduled for May 10, 2000, must submit the proposal to the Company
on or before December 16, 1999. Proposals should be addressed to Julie P.
Thompson, Chairman of the Board, Professional Bancorp, Inc., 606 Broadway, Santa
Monica, California 90401. Any such proposal must satisfy the conditions for
shareholder proposals established by the Securities and Exchange Commission in
Rule 14a-8 of the Securities Exchange Act of 1934, as amended.
Any shareholder who intends to directly present a proposal at the 2000
Annual Meeting of Shareholders (outside of the Rule 14a-8 process) must notify
the Company of the proposal on or before February 28, 2000. If the Company is
not notified by such date, the Company will have the right to exercise
discretionary voting authority with respect to such proposal, if presented at
the meeting, without including information regarding such proposal in its proxy
materials. Notices of intention to present proposals at the 2000 Annual
Shareholders meeting should be addressed to Julie P. Thompson, Chairman of the
Board, Professional Bancorp, Inc., 606 Broadway, Santa Monica, California 90401.
OTHER MATTERS
The Company's Board of Directors does not know of any matters to be
presented at the Meeting other than those set forth herein. However, if other
matters come before the Meeting, it is the intention of the persons named in the
accompanying proxy to vote said proxy in accordance with the recommendations of
the Company's Board of Directors on such matters, and discretionary authority to
do so is included in the proxy.
BY ORDER OF THE BOARD OF DIRECTORS
Dated: May 20, 1999 JULIE P. THOMPSON
Chairman of the Board
19
<PAGE>
THE COMPANY WILL SUPPLY WITHOUT CHARGE, UPON WRITTEN REQUEST, A COPY OF THE
COMPANY'S MOST RECENT ANNUAL REPORT ON FORM 10K, INCLUDING THE FINANCIAL
STATEMENTS AND FINANCIAL STATEMENT SCHEDULES. SUCH REQUEST SHOULD BE DIRECTED TO
MR. ERIC WOODSTROM, ACTING CHIEF FINANCIAL OFFICER, PROFESSIONAL BANCORP, INC.,
606 BROADWAY, SANTA MONICA, CALIFORNIA 90401
20
<PAGE>
PROXY
PROFESSIONAL BANCORP, INC.
ANNUAL MEETING OF SHAREHOLDERS
JUNE 23, 1999
The undersigned shareholder of Professional Bancorp, Inc. (the
"Company") hereby nominates, constitutes and appoints Julie P. Thompson and Lynn
O. Poulson, and each of them, the attorney, agent and proxy of the undersigned,
with full powers of substitution, to vote all the stock of the Company which the
undersigned is entitled to vote at the Annual Meeting of Shareholders of the
Company to be held at the Miramar Sheraton Hotel, 101 Wilshire Boulevard, Santa
Monica, CA 90401, on Wednesday, June 23, 1999 at 5:00 p.m. and at any and all
adjournments thereof, as fully and with the same force and effect as the
undersigned might or could do if personally present as follows:
1. ELECTION OF DIRECTORS
To elect the seven persons named below to serve until the 2000 Annual
Meeting of Shareholders and until their successors are elected and have
qualified:
Richard A. Berger, Terry O. Hartshorn, Ronald L. Katz, M.D.,
Robert J. Margolis, M.D., Walter T. Mullikin, M.D.,
Lynn O. Poulson, Julie P. Thompson
|_| AUTHORITY GIVEN |_| AUTHORITY WITHHELD
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR SOME BUT NOT ALL OF THE
NOMINEES NAMED ABOVE, YOU SHOULD CHECK THE BOX MARKED "AUTHORITY GIVEN" AND YOU
SHOULD ENTER THE NAME(S) OF THE NOMINEE(S) WITH RESPECT TO WHOM YOU WISH TO
WITHHOLD AUTHORITY TO VOTE IN THE SPACE PROVIDED BELOW:
- --------------------------------------------------------------------------------
PLEASE SIGN AND DATE ON THE REVERSE SIDE
----------------------------------------
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF "AUTHORITY GIVEN" ON PROPOSAL 1.
THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
DIRECTORS UNLESS A CONTRARY INSTRUCTION IS INDICATED, IN WHICH CASE THE PROXY
SHALL BE VOTED IN ACCORDANCE WITH SUCH INSTRUCTIONS. IN ALL OTHER MATTERS
PRESENTED AT THE MEETING, IF ANY, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH
THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS.
___________________ ___________________________________
(Number of Shares) (Please Print Your Name)
-----------------------------------
DATED:______________, 1999 (Signature of Shareholder)
-----------------------------------
(Please Print Your Name)
-----------------------------------
(Signature of Shareholder)
(Please date this proxy and sign your
name as it appears on the stock
certificates. Executors, administrators,
trustees, etc. should give their full
titles. All joint owners should sign.)
THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY'S BOARD OF DIRECTORS 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.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY.
