<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
STERLING WEST BANCORP
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(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:
/ / 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> 2
STERLING WEST BANCORP
LOS ANGELES, CALIFORNIA
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 22, 1996
TO THE SHAREHOLDERS OF STERLING WEST BANCORP:
NOTICE IS HEREBY GIVEN that, pursuant to its Bylaws and the call of its
Board of Directors, the Annual Meeting of Shareholders (the "Meeting") of
Sterling West Bancorp (the "Company") will be held at the Wilshire Country Club,
Crystal Room, 301 North Rossmore Avenue, Los Angeles, California 90004, on
Wednesday, May 22, 1996, at 10:00 a.m., for the following purposes, all as set
forth in the attached Proxy Statement.
1. Election of Directors. To elect seven (7) persons to the Board of
Directors to serve until the 1997 Annual Meeting of Shareholders and until their
successors are elected and have qualified. The following persons are the Board
of Directors' nominees:
Timothy Behunin Audrey J. Fimpler Robert J. Schiller
Howard M. Borris Hassan Izad Michael Wagner
Allan E. Dalshaug
2. Other Business. To transact such other business as may properly come
before the Meeting and at any and all adjournments thereof.
The Bylaws of the Company provide for the nomination of directors in
the following manner:
"Section 2.11. Nomination for Directors. Nominations for
election of members of the Board of Directors may be made by the Board
of Directors or by any shareholder of any outstanding class of voting
stock of the corporation entitled to vote for the election of
directors. Notice of intention to make any nominations, other than by
the Board of Directors, shall be made in writing and shall be received
by the President of the corporation no more than 60 days prior to any
meeting of shareholders called for the election of directors, and no
more than 10 days after the date the notice of such meeting is sent to
shareholders pursuant to Section 2.2 of these bylaws; provided,
however, that if only 10 days' notice of the meeting is given to
shareholders, such notice of intention to nominate shall be received by
the President of the corporation not later than the time fixed in the
notice of the meeting for the opening of the meeting. Such notification
shall contain the following information to the extent known to the
notifying shareholder: (a) the name and address of each proposed
nominee; (b) the principal occupation of each proposed nominee; (c) the
number of shares of voting stock of the corporation owned by each
proposed nominee; (d) the name and residence address of the notifying
shareholder; and (e) the number of shares of voting stock of the
corporation owned by the notifying shareholder. Nominations not made
<PAGE> 3
in accordance herewith shall be disregarded by the then chairman of the
meeting, and the inspectors of election shall then disregard all votes
cast for each nominee."
Only those shareholders of record at the close of business on March 29,
1996 shall be entitled to notice of and to vote at the Meeting.
Dated: April 26, 1996 BY ORDER OF THE BOARD OF DIRECTORS
By /s/Sherry G. Alexander
-----------------------
SHERRY ALEXANDER,
Secretary
YOUR VOTE IS IMPORTANT AND, THEREFORE, WE URGE YOU TO SIGN AND RETURN
THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE, REGARDLESS OF WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING IN PERSON. IF YOU DO ATTEND THE MEETING, YOU MAY THEN
WITHDRAW YOUR PROXY AND VOTE IN PERSON. THE PROXY MAY BE REVOKED AT ANY TIME
PRIOR TO ITS EXERCISE. IN ORDER TO FACILITATE PROVISIONS FOR ADEQUATE
ACCOMMODATIONS, PLEASE INDICATE ON THE PROXY CARD WHETHER OR NOT YOU WILL ATTEND
THE MEETING.
<PAGE> 4
STERLING WEST BANCORP
3287 WILSHIRE BOULEVARD
LOS ANGELES, CALIFORNIA 90010
(213) 384-4444
--------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 22, 1996
--------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Sterling West Bancorp (the "Company")
for use at its Annual Meeting of Shareholders (the "Meeting") to be held at the
Wilshire Country Club, Crystal Room, 301 North Rossmore Avenue, Los Angeles,
California 90004, on Wednesday, May 22, 1996, at 10:00 a.m., and at any and all
adjournments thereof. It is expected that this Proxy Statement and enclosed form
of Proxy will be mailed to shareholders of record on or about April 26, 1996.
Matters To Be Considered
The matters to be considered and voted upon at the Meeting will be:
1. Election of Directors. To elect seven (7) persons to the Board of
Directors to serve until the 1997 Annual Meeting of Shareholders and until their
successors are elected and have qualified. The following persons are the Board
of Directors' nominees:
Timothy Behunin Audrey J. Fimpler Robert J. Schiller
Howard M. Borris Hassan Izad Michael Wagner
Allan E. Dalshaug
2. Other Business. To transact such other business as may properly come
before the Meeting and at any and all adjournments thereof.
Revocability of Proxies
A Proxy for use at the Meeting is enclosed. Any shareholder who
executes and delivers such Proxy has the right to revoke it at any time before
it is voted by filing with the Secretary of the Company an instrument revoking
it or a duly executed Proxy bearing a later date. It may also be revoked by
attendance at the Meeting and election to vote thereat. Subject to such
revocation, all shares represented by a properly executed proxy received in time
for the Meeting will be voted by the proxy holders whose names are set forth in
the accompanying Proxy (the "Proxy Holders") in accordance with the instructions
on the Proxy. If no instruction is specified in respect to a matter to be acted
upon, the shares represented by the Proxy will be voted "FOR" the election of
the nominees for
-1-
<PAGE> 5
director set forth herein. It is not anticipated that any matters will be
presented at the Meeting other than as set forth in the accompanying Notice of
the Meeting. If, however, any other matters are properly presented at the
Meeting, the Proxy will be voted in accordance with the best judgment and in the
discretion of the Proxy Holders.
Costs of Solicitation of Proxies
This Proxy solicitation is made by the Board of Directors of the
Company and the Company will bear the costs of this solicitation, including the
expense of preparing, assembling, printing and mailing this Proxy Statement and
the material used in this solicitation of Proxies. It is contemplated that
Proxies will be solicited principally through the mails, but directors, officers
and regular employees of the Company may solicit Proxies personally or by
telephone. 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 their
principals. In addition, the Company may pay for and utilize the services of
individuals or companies not regularly employed by the Company in connection
with the solicitation of Proxies if the Board of Directors of the Company
determines that this is advisable.
Outstanding Securities and Voting Rights
There were issued and outstanding 1,710,214 shares of the Company's
common stock, no par value per share (the "Common Stock"), on March 29, 1996,
which has been set as the record date ("Record Date") for the purpose of
determining the shareholders entitled to notice of and to vote at the Meeting.
Each holder of Common Stock will be entitled to one vote, in person or
by proxy, for each share of Common Stock standing in his or her name on the
books of the Company as of the Record Date on any matter submitted to the vote
of the shareholders, except that in connection with the election of directors,
the shares are entitled to be voted cumulatively only if the candidates' names
have been properly placed in nomination prior to the commencement of the voting
and a shareholder present at the Meeting has given notice at the Meeting prior
to the commencement of the voting of his or her intention to vote his or her
shares cumulatively. If any shareholder has given such notice, then every
shareholder entitled to vote may cumulate his or her votes for candidates in
nomination. Cumulative voting entitles a shareholder to give one nominee a
number of votes equal to the number of directors to be elected, multiplied by
the number of shares owned by such shareholder, or to distribute his or her
votes on the same principle between two or more nominees as he or she sees fit.
The authority granted to the Proxy Holders under the Proxy includes the
discretionary authority to cumulate votes. In the election of directors, the
seven candidates receiving the highest number of votes will be elected.
A majority of the outstanding shares of Common Stock entitled to vote
at the Meeting shall constitute a quorum. Abstentions and broker non-votes will
be treated as shares present and entitled to vote solely for purposes of
determining the presence of a quorum.
-2-
<PAGE> 6
VOTING SECURITIES
Principal Shareholders
The following table sets forth certain information, as of March 29,
1996, with respect to persons of whom the Board of Directors is aware who own
beneficially more than 5% of the Company's Common Stock outstanding as of such
date:
<TABLE>
<CAPTION>
Common Stock Owned
Beneficially
-----------------------------
Number of Percent of
Name and Address of Beneficial Owner Shares Class
- ------------------------------------ --------- ----------
<S> <C> <C>
Allan E. Dalshaug (1) 148,444 8.68%
3287 Wilshire Boulevard
Los Angeles, California 90010
Timothy Behunin (1) 107,854 6.31%
700 South Victory
Burbank, California 91506
Philip V. Oppenheimer 116,397 6.81%
119 W. 57th Street
New York, N.Y. 10019
</TABLE>
(1) See "VOTING SECURITIES -- Management" herein for a description of the
nature of the beneficial ownership and the method of calculating the
percentage of beneficial ownership.
-3-
<PAGE> 7
Management
The following table sets forth certain information, as of March 29,
1996, with respect to the number of shares of the Company's Common Stock owned
beneficially by each director of the Company, each of whom is also a nominee for
election as a director, by the Company's Chief Executive Officer, by each of the
other Named Executive Officers (as defined below), and by all directors and
executive officers, as a group.
<TABLE>
<CAPTION>
Common Stock Owned
Beneficially (1)
--------------------------
Number of Percent
Name and Title Shares of Class (2)
- -------------- --------- ------------
<S> <C> <C>
Timothy Behunin 107,854 (3) 6.31%
Director
Howard M. Borris 10,050 *
Director
Robert A. Brito 8,667 (4) *
Vice President, Company: Executive
Vice President, Chief Credit Officer,
Sterling Bank
Joseph C. Carona 22,883 (5) 1.32%
Executive Vice President, and Chief Financial
Officer Company and President Sterling Bank
Allan E. Dalshaug 148,444 (6) 8.68%
President, Chief Executive Officer
and Chairman of the Board,
Company; Chief Executive Officer
and Chairman of the Board,
Sterling Bank
Audrey J. Fimpler 36,096 (7) 2.11%
Director
Hassan Izad 20,992 1.23%
Director
Farhad Motia
Executive Vice President, (10) -- --
Company; President and
Chief Executive Officer,
Sterling Business Credit, Inc.
</TABLE>
-4-
<PAGE> 8
<TABLE>
<CAPTION>
Common Stock Owned
Beneficially (1)
--------------------------
Number of Percent
Name and Title Shares of Class (2)
- -------------- --------- ------------
<S> <C> <C>
Robert J. Schiller
Director 62,975 (8) 3.68%
Douglas B. Swets 48,881 (9) 2.83%
Chief Financial Officer and
Secretary, Company and
Sterling Bank(11)
Michael Wagner 39,346 2.30%
Director
Directors and Executive Officers 506,188 (12) 29.60%
as a Group (11 persons)
</TABLE>
- --------
* Less than 1%
(1) Except as otherwise noted below and as provided by community property
laws where applicable, each person directly or indirectly has sole
voting and investment power with respect to the shares listed.
(2) In computing the percentage of shares beneficially owned, the number of
shares which the person (or group) has a right to acquire within 60
days after March 29, 1996 are deemed outstanding for the purpose of
computing the percentage of Common Stock owned by such person (or
group), but are not deemed outstanding for the purpose of computing the
percentage of shares beneficially owned by any other person.
(3) Mr. Behunin has shared voting and investment power with respect to the
shares listed.
(4) Includes 4,994 shares of Common Stock which Mr. Brito has the right to
acquire upon the exercise of stock options exercisable on March 29,
1996, or becoming exercisable within 60 days thereafter, pursuant to
the Company's Stock Option Plan.
(5) Includes 16,826 shares of Common Stock which Mr. Carona has the right
to acquire upon the exercise of stock options exercisable on March 29,
1996, or becoming exercisable within 60 days thereafter, pursuant to
the Company's Stock Option Plan.
(6) Includes 54,327 shares as to which Mr. Dalshaug has shared investment
and voting power.
(7) Includes 4,101 shares of Common Stock as to which Ms. Fimpler has
shared investment or voting power.
-5-
<PAGE> 9
(8) Includes 2,941 shares of Common Stock as to which Mr. Schiller has
shared investment and voting power.
(9) Includes 14,834 shares of Common Stock which Mr. Swets has the right to
acquire upon the exercise of stock options exercisable on March 29,
1996, or becoming exercisable within 60 days thereafter, pursuant to
the Company's Stock Option Plan.
(10) Farhad Motia, a Named Executive Officer, resigned from all positions
with the Company or its subsidiaries effective September 7, 1995.
(11) Douglas B. Swets, a Named Executive Officer, resigned from all
positions with the Company or its subsidiaries effective March 8, 1996.
(12) Includes 36,654 shares of Common Stock which members of the group have
the right to acquire upon the exercise of stock options exercisable on
March 29, 1996, or becoming exercisable within 60 days thereafter,
pursuant to the Company's Stock Option Plan.
ELECTION OF DIRECTORS
Board of Directors of the Company
The Bylaws of the Company provide that the number of directors shall be
not less than seven (7) nor more than thirteen (13) until changed by a bylaw
amending Section 3.3 of the Company's Bylaws duly adopted by the vote or written
consent of the Company's shareholders. The Bylaws further provide that the exact
number of directors shall be fixed from time to time, within the foregoing
range, by an amendment thereof duly adopted by the Company's Board of Directors.
Pursuant to the foregoing, the number of directors is presently fixed at seven
(7).
The persons named below, all of whom are present members of the Board
of Directors, have been nominated for election by the Board of Directors to
serve until the next Annual Meeting of Shareholders and until their successors
are elected and have qualified. Certain of the directors also serve on the
Boards of Directors of the Company's subsidiaries, Sterling Bank and Sterling
Business Credit, Inc. Votes will be cast pursuant to the enclosed Proxy in such
a way as to effect the election of said seven nominees, or as many thereof as
possible, under applicable voting rules. In the event that any of the nominees
should be unable or unwilling to accept nomination or election as a director, it
is intended that the Proxy Holders will vote for the election of such substitute
nominees, if any, as shall be designated by the Board of Directors. The Board of
Directors has no reason to believe that any nominee will be unable or unwilling
to serve if elected to office.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE BOARD OF
DIRECTORS' NOMINEES FOR DIRECTOR.
-6-
<PAGE> 10
The following table sets forth certain information, as of March 29,
1996, with respect to each director of the Company.
<TABLE>
<CAPTION>
Year First
Principal Elected or
Occupation for Appointed
Name and Title the Past Five Years Age Director
- -------------- ------------------- --- ----------
<S> <C> <C> <C>
Timothy Behunin President, Behunin 44 1985
Director Construction Co., Inc.
General Partner,
Del Rey Properties and
D&B Partnership (real
estate developers),
President, LAEC, Inc.
(operation of the L.A.
Equestrian Center)
Howard Borris President, Howard M. Borris 53 1996
Director & Co. Inc. (an individual
financial management
company)
Allan E. Dalshaug Chairman of the Board, 64 1982
Chairman of Chief Executive Officer
the Board and President, Company,
Chairman of the
Board and Chief
Executive Officer,
Sterling Bank (1)
Audrey J. Fimpler Owner, Flight Centers, Inc. 64 1982
Director (travel agency) (1989-
Present)
Hassan Izad President, Westown 52 1990
Director Development (1987-Present),
General Partner,
Ariana Development
(1990-Present) (real
estate developer),
President, Ferris Industrial
Products, Inc.(1980-1992),
President, Phoenix Electronics Inc.
(electronic products company)
(1992-Present) (2)
</TABLE>
-7-
<PAGE> 11
<TABLE>
<CAPTION>
Year First
Principal Elected or
Occupation for Appointed
Name and Title the Past Five Years Age Director
- -------------- ------------------- --- ----------
<S> <C> <C> <C>
Robert J. Schiller Chairman of the Board, 77 1982
Director Guild Management
Corporation (an
individual financial
management company)
Michael Wagner President, Wagner/ 70 1982
Director Jacobson Brokerage,
Inc., (realtors) (1983-
Present)
</TABLE>
- ---------
(1) Mr. Dalshaug is a director of L.A. Gear, Inc. and Jalate, Ltd., both
corporations with securities registered under the Securities Exchange
Act of 1934, as amended.
(2) Ferris Industrial Products, Inc., a company of which Mr. Izad was
President from 1981 until 1992, filed a petition for reorganization
under Chapter 11 of the United States Bankruptcy Code in 1992.
The Board of Directors and Committees
The Board of Directors has various standing committees, including an
Executive Committee, Audit Committee and a Compensation Committee. The Board has
no standing nominating committee, however, the procedures for nominating
directors, other than by the Board of Directors itself, are set forth in the
Company's Bylaws and in the Notice of Annual Meeting of Shareholders which
accompanies this Proxy Statement.
The Company's Executive Committee, which did not meet during 1995, is
chaired by Mr. Schiller, and Mr. Dalshaug is a member. The purpose of the
Executive Committee is to exercise the powers of the Board with respect to the
management of the business and affairs of the Company between Board meetings.
The Company's Audit Committee, which held five meetings during 1995, is
chaired by Mr. Reed Robinson, a director of Sterling Bank, and Mr. Schiller and
Ms. Fimpler are members. The purpose of the Audit Committee is to direct the
activities of the internal auditors, to make certain that the internal auditors
have the necessary freedom and independence to fully examine all the records of
the Company and its subsidiaries, to review the audit reports prepared by the
internal auditors and management, and to review the reports of the Company's
independent auditors and regulators.
The Company's Compensation Committee, which held three meetings during
1995, is chaired by Ms. Fimpler, and Messrs. Schiller, Behunin and Dalshaug are
members. Mr. Dalshaug
-8-
<PAGE> 12
abstains from voting on all matters affecting his employment. The purpose of the
Compensation Committee is to administer the employee stock ownership and the
stock option plans of the Company and to provide oversight for the personnel
employment and compensation matters of the Company, including the authority to
negotiate and execute, subject to final approval of the Board, employment
contracts with key executive officers of the Company and its subsidiaries.
During the fiscal year ended December 31, 1995, the Board of Directors
of the Company held a total of eleven meetings. All of the present directors of
the Company attended at least 75% of the aggregate of (i) the total number of
such meetings and (ii) the total number of meetings held by all committees of
the Board on which he or she served during 1995.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Overview
As of December 31, 1995, all compensation of executive officers of the
Company was paid by the company for which each executive officer had primary
responsibility except for Mr. Dalshaug, with respect to whom Sterling Bank paid
80% thereof and Sterling Business Credit, Inc. paid 20% thereof.
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<PAGE> 13
Compensation Tables
SUMMARY COMPENSATION TABLE
The following table sets forth a comprehensive overview of the
compensation of the Company's Chief Executive Officer, the three executive
officers at December 31, 1995 whose salary and bonus earned during 1995 exceeded
$100,000 and one executive officer (Farhad Motia) who resigned from all
positions with the Company or its subsidiaries effective September 7, 1995.
Comparative data for the previous two fiscal years is also provided in
accordance with the rules and regulations of the Securities and Exchange
Commission (the "Commission").
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compen- All Other
------------------- sation Compen-
Name and Salary Bonus Payouts sation(1)
Principal Position Year $ $ $ $
- ------------------ ---- ------- ------- --------- ---------
<S> <C> <C> <C> <C> <C>
Allan E. Dalshaug 1995 169,428 -- -- 3,935
President, Chief Executive Officer and
Chairman of the Board, Company; Chief 1994 190,928 -- -- 6,089
Executive Officer and Chairman
of the Board, Sterling Bank (2) 1993 208,428 -- -- 11,879
Farhad Motia (3) 1995 135,430 16,600 110,000 50,333
President and Chief Executive
Officer, Sterling Business 1994 148,315 134,216 -- 812
Credit, Inc.
1993 158,315 107,177 -- 5,262
Joseph C. Carona 1995 141,580 -- -- 1,123
Executive Vice President, Company;
President, Sterling Bank 1994 155,880 -- -- 2,758
1993 155,880 -- -- 2,382
Robert A. Brito 1995 131,020 -- -- 1,700
Vice President, Company;
Executive Vice President, 1994 140,040 -- -- 1,720
Sterling Bank
1993 140,040 -- -- 4,221
Douglas B. Swets (4) 1995 114,071 -- -- --
Chief Financial Officer,
Company, Sterling Bank and 1994 125,856 -- -- --
Sterling Business Credit, Inc.
1993 125,856 -- -- 2,517
</TABLE>
-10-
<PAGE> 14
(1) Includes for Messrs. Dalshaug, Motia, Carona, Brito and Swets
respectively, $4,169, $4,475, $1,200, $1,200 and $2,517 of
contributions in 1993 to the individuals' accounts within the Company's
Employee Stock Ownership Plan ("ESOP"). No contributions were made by
the Company to the ESOP in 1995 or 1994. Includes for Messrs. Dalshaug,
Motia, Carona and Brito, respectively, $3,935, $680, $1,123, and $1,734
in 1995, $6,089, $812, $2,758, and $1,720 in 1994 and $7,708, $785,
$1,181, and $3,020 in 1993 of premiums paid by the Company (or the
subsidiary for which the executive officer had primary responsibility)
for term life insurance for their respective benefits.
(2) As of December 31, 1995, Mr. Dalshaug held 15,748 incentive
compensation shares having a value of $39,370. Dividends are paid on
the incentive compensation shares at the same rate as those paid to all
other shareholders. See "COMPENSATION OF DIRECTORS AND EXECUTIVE
OFFICERS -- Executive Officer Employment Agreements -- Mr. Dalshaug."
(3) Mr. Motia resigned from his position with Sterling Business Credit,
Inc. effective September 7, 1995. Under the terms of Mr. Motia's
employment agreement he was entitled to all of his incentive
compensation at the termination of his employment. The amount shown
under "Bonus" for 1995 includes $55,867 which would normally have been
used to purchase stock in the Company on behalf of Mr. Motia but which
was paid to him in cash under the terms of a settlement agreement. The
amount listed under "Long Term Compensation Payouts" includes $52,500
awarded in 1993 and $57,500 awarded in 1994. These amounts would
normally have been used to purchase stock in the Company on behalf of
Mr. Motia but were paid to him in cash in 1995 under the terms of a
settlement agreement. The amount listed under "All Other Compensation"
includes severance pay of $40,854, accrued vacation pay of $8,799 and
$680 of premiums paid by Sterling Business Credit, Inc. for term life
insurance for Mr. Motia's benefit. See "COMPENSATION OF DIRECTORS AND
EXECUTIVE OFFICERS -- Executive Officer Employment Agreements -- Mr.
Motia."
(4) Mr. Swets resigned from all positions with the Company and its
subsidiaries effective March 8, 1996.
-11-
<PAGE> 15
LONG-TERM INCENTIVE PLAN AWARDS (FISCAL 1995)
The following table provides information concerning compensation
intending to serve as an incentive for performance to occur over a period longer
than one fiscal year awarded during 1995 to Mr. Motia, the only Named Executive
Officer who received such type of compensation. Under the terms of his
employment agreement, Mr. Motia was entitled to receive certain incentive
compensation based on the performance of Sterling Business Credit, Inc. for the
period through January 2, 1996, or the termination of his employment whichever
occurred first. A portion of the incentive compensation was to have been used to
purchase incentive compensation shares, subject to possible forfeiture. During
1995 Sterling Business Credit, Inc. entered into a settlement agreement with Mr.
Motia which provided for the termination of his employment, and payment of all
of the previously deferred compensation and the portion of incentive
compensation which would otherwise have been used to purchase incentive
compensation shares as set forth in the below table. For a description of the
terms of such settlement agreement, see "COMPENSATION OF DIRECTORS AND EXECUTIVE
OFFICERS -- Executive Officer Employment Agreements --Mr. Motia."
<TABLE>
<CAPTION>
Payouts
under Non-Stock Price-Based Plans (1)
-------------------------------------
Payout or
Number of Maturation
Name Shares Period Threshold Target Maximum
- ---- --------- ---------- --------- ------- -------
<S> <C> <C> <C> <C> <C>
Farhad Motia (1) 1/2/96 $0 $57,500 $57,500
</TABLE>
- --------
(1) Pursuant to Mr. Motia's employment agreement, during 1994 and 1993 the
Company allocated $57,500 and $52,500, respectively, in incentive
compensation for the purchase of incentive compensation shares, which
were not purchased by the Company. Based on the value of the Company's
Common Stock as of December 31, 1994, such amounts would have resulted
in the purchase of 38,333 shares and 35,000 shares, respectively.
-12-
<PAGE> 16
STOCK OPTION PLAN
During 1995, no options were granted or exercised under the Company's
Stock Option Plan. The following table presents the amount and value of certain
options held by each Named Executive Officer at December 31, 1995. All options
listed in the table were out-of-the-money (the exercise price exceeded the
market price of the Company's Common Stock) at December 31, 1995. The Company
has never issued stock appreciation rights.
AGGREGATED OPTION EXERCISES AND YEAR-END VALUES (FISCAL 1995)
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised In-the-Money
Options at Year-End Options at Year-End
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ------------------------- -------------------------
<S> <C> <C>
Joseph C. Carona 16,826 / 0 $0 / 0
Robert A. Brito 4,994 / 0 0 / 0
Douglas B. Swets 14,834 / 0 0 / 0
</TABLE>
Executive Officer Employment Agreement
Mr. Dalshaug. The Company entered into a new employment agreement with
Mr. Dalshaug dated March 1, 1996 which expires on January 2, 1997. Under the
agreement, Mr. Dalshaug is paid a base salary of $166,500. The agreement
provides that upon termination of the agreement before expiration of the term,
for any reason other than cause, voluntary termination or commission of a
dishonest act in the course of his employment, Mr. Dalshaug will receive a lump
sum payment equal to 4 months of his then-current salary, plus any accrued and
unpaid incentive compensation.
Mr. Motia. On September 7, 1995, effective with the sale of most of the
assets of Sterling Business Credit, Inc., the Company entered into a Settlement
Agreement with Mr. Motia. Under the terms of the Settlement Agreement Mr. Motia
terminated his employment with Sterling Business Credit, Inc. and received the
43,861 shares of Sterling West Bancorp held as incentive compensation shares,
payment in cash of $277,600 representing all of his deferred compensation,
including the portion not yet used to purchase incentive compensation shares,
severance pay, as called for under the contract, of $40,854 and vacation pay of
$8,799. See "Long -Term Incentive Plan Awards."
Mr. Carona. Effective as of January 1, 1994, Sterling Bank entered into
an employment agreement with Joseph C. Carona, as the President, pursuant to
which Mr. Carona will receive an annual salary of $155,880. Mr. Carona
voluntarily reduced his salary for 1995 to $$141,580. He is currently being paid
at the annual rate of $140,280. The agreement expires December 31, 1996, unless
sooner terminated as provided therein. The agreement provides that Mr. Carona
will receive incentive compensation at the discretion of Sterling Bank. The
agreement also provides for certain benefits including an automobile allowance,
reimbursement of business expenses, vacation time, life insurance premium
payments and certain club membership dues.
-13-
<PAGE> 17
Directors' Compensation
All non-officer directors of the Company received during 1995 and
currently receive, as of January 1, 1996, a director's fee of $300 per month.
Additionally, non-officer directors of the Company who are also on the Board of
Directors of Sterling Bank or Sterling Business Credit, Inc. received in 1995
and will receive in 1996 a director's fee of $200 per meeting. Non-officer
directors serving on Sterling Bank's Loan Committee received $75 per meeting.
Non-officer directors serving on the Company's Audit Committee received $75 per
meeting while the Chairman of the Audit Committee received $125 per meeting.
Non-officer directors of the Company serving on the Asset-Liability and
Community Reinvestment Act Committees of Sterling Bank received $75 per meeting.
Non-officer directors of the Company and its subsidiaries were eligible
to participate in the Company's Stock Option Plan, as amended. The ability of
the Company to grant options under that Plan expired in 1992 and no directors
currently have outstanding options under that Plan.
Compensation Committee Interlocks and Insider Participation
During 1995 the Compensation Committee met four times to determine or
establish executive officer compensation. Mr. Dalshaug, an officer of the
Company and its subsidiaries, was a member of the Compensation Committee during
1995 and currently. No other current or former officers serve as members of the
Compensation Committee. None of the executive officers of the Company serve on
the board of directors of another entity whose executive officers or directors
serve on the Company's Board. Mr. Dalshaug abstains from voting on all matters
affecting his employment.
The Company issued during 1995, commercial paper notes in amounts of
$25,000 or larger with maturity dates ranging from 30 to 270 days to certain
qualified purchasers, including directors, executive officers and/or their
affiliates. The following table sets forth, with respect to commercial paper
notes issued to directors, executive officers and/or their affiliates, the
largest amount of commercial paper notes outstanding at any time during 1995
through March 31, 1996 and the amount outstanding at March 31, 1996. It is the
intention of the Board of Directors that the terms of such commercial paper
notes issued to such persons shall be no more favorable to such persons than
terms that would be offered to unaffiliated persons.
<TABLE>
<CAPTION>
Largest Principal
Amount Outstanding From
January 1, 1995 Amount
Through Outstanding at
Lender March 31, 1996 March 31, 1996
- ------ -------------- --------------
<S> <C> <C>
Affiliates of Farhad Motia,
a Named Executive officer $520,000 $0
</TABLE>
-14-
<PAGE> 18
Report of the Board on Executive Compensation
The following Report of the Board on Executive Compensation and the
performance graphs in the next section shall not be deemed to be "soliciting
material" or to be "filed" with the Commission or subject to Regulations 14A or
14C of the Commission or to the liabilities of Section 18 of the Securities
Exchange Act of 1934 (the "Exchange Act") and shall not be deemed incorporated
by reference into any filing under the Securities Act of 1933 or the Exchange
Act, notwithstanding any general incorporation by reference of this Proxy
Statement into any other document.
Allan E. Dalshaug, as Chairman and Chief Executive Officer of the
Company, periodically submits to the Board recommendations respecting the
salary, bonus and/or bonus formula and other compensation provisions to be
provided to the Company's executive officers.
Executive Officer Compensation Philosophy
In the past the Company's executive compensation policies and specific
executive compensation programs were based on the understanding that maximizing
return on shareholders' equity was a key measure of performance. However, in
1995, the Company's compensation policies and practices were implemented
primarily based on the understanding that returning the Company to profitability
was key. In either case, the Company has consistently maintained a policy of
fostering stock ownership in order to closely align the interests of the
executive officers with those of the shareholders.
Base salaries for management employees are determined primarily by the
responsibilities of the position, the performance of the individuals and their
general experience and qualifications. The Company believes that the competitive
arena in which it operates requires management of the highest caliber, and that
to attract and retain such individuals will require payment of competitive
salaries. Based on the knowledge and experience of its members, the Compensation
Committee believes the Company's salaries are competitive.
With respect to the Company's nonbanking subsidiaries (the operations
of both of which have been substantially discontinued), individuals with direct
responsibility for company performance had a substantial portion of their
compensation in the form of incentive compensation based on the results of the
relevant company. Incentive compensation for the president of Sterling Business
Credit, Inc. was determined according to a contractual formula based on pretax
earnings with forfeiture provisions applying if cumulative results during the
contract period result in losses. The president of Sterling Business Credit,
Inc. received a base salary plus incentive compensation of 15% of pretax income
of Sterling Business Credit, Inc. over the term of his contract with a
substantial portion of that to paid in Company stock.
The president of Sterling Bank receives a base salary according to the
terms of his employment agreement. Cash incentives for this individual are
determined at the discretion of the board of directors of Sterling Bank and are
based primarily on the performance of Sterling Bank (including return on
shareholders' equity and loan quality) and, secondarily, the president's
individual performance. Cash incentives for executive officers other than those
described above are determined at the discretion of the board of directors of
the company which is their primary employer and are based primarily on the
performance of that company and, secondarily, the performance of the individual.
-15-
<PAGE> 19
Chief Executive Officer Compensation
A significant portion of Mr. Dalshaug's compensation in past periods
has been in the form of stock ownership. This has been partly the result of his
personal desire to emphasize shareholder value in his incentive package and
partly the result of the policy described above of fostering ownership of stock.
Mr. Dalshaug's compensation in 1995 was based on the terms of a three year
employment agreement originally executed in 1989, extended for a second three
year period in 1992, and subsequently amended on May 15, 1995. Mr. Dalshaug's
employment agreement established a base salary with automatic annual increases
of six percent (6%). In response to the Company's poor financial performance,
Mr. Dalshaug has since January 1, 1994 voluntarily foregone $94,767 in salary
called for by the employment agreement.
Under the terms of the agreement, Mr. Dalshaug was entitled to an
incentive bonus equal to 5.8% of adjusted pre-tax income, but only if the return
on shareholders' equity exceeded 12.5%. The first $100,000 of incentive
compensation awarded was payable in Company stock which was subject to
forfeiture to the extent of 5.8% of the Company's cumulative losses during the
initial three-year term of the employment agreement, unless such amount was
otherwise provided for by Mr. Dalshaug. Following the first quarter of 1992, Mr.
Dalshaug received a quarterly payment of approximately $96,000 as incentive
compensation due him under the agreement. Final 1992 results, however, did not
qualify Mr. Dalshaug to receive any incentive compensation. In connection with
the extension of Mr. Dalshaug's employment agreement in 1992, the Board of
Directors made the decision to recover the overpayment through a reduction in
the next incentive compensation earned by Mr. Dalshaug. However, since 1992
there has been no incentive compensation earned. In May 1995, acting on the
recommendation of the Compensation Committee, the Board of Directors entered
into an amendment to the employment agreement that provides for the recoupment
of the 1992 overpayment from the salary reductions taken and to be taken by Mr.
Dalshaug prior to the termination of the employment agreement. In making that
determination, the Compensation Committee and the Board of Directors considered
the Company's poor financial performance over the prior four-year period. It
also considered that Mr. Dalshaug's vision and leadership would be necessary to
return the Company to profitability.
The Board believes that Mr. Dalshaug's compensation has resulted in an
appropriate alignment of his rewards from the Company with the interest of
shareholders.
Members of the Compensation Committee of the Board of Directors:
Timothy G. Behunin Audrey J. Fimpler Robert J. Schiller
-16-
<PAGE> 20
PERFORMANCE GRAPH
Set forth below is a graph comparing the yearly percentage change in
cumulative total shareholder return of the Company's Common Stock (SWBC) with
the cumulative total return of the Nasdaq Stock Market Index and that of the
Montgomery Securities Western Bank Monitor Southern California Proxy for the
five years ending December 31, 1995. It is assumed in the graph that $100 was
invested in the Common Stock, in the stock of the companies in the Nasdaq Stock
Market Index and in the stocks of the Montgomery Securities Western Bank Monitor
Southern California Proxy companies just prior to December 31, 1990 and that all
dividends received within a quarter were reinvested in that quarter.
The performance graph has a vertical axis ranging from 0 to 240 at 20
point intervals. the horizontal axis shows the years from 1990 to 1995. The
graph contains three lines depicting the performance of the NASDAQ Stock Market,
the Montgomery Securities Western Bank Monitor Southern California Proxy and
Sterling West Bancorp common stock (SWBC). The points on the graph are as
follows:
<TABLE>
<CAPTION>
Year 1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NASDAQ Stock
Market 100 156.86 181.08 207.79 201.15 281.44
Southern
Cal Proxy 100 100.98 100.50 122.83 140.19 177.81
SWBC 100 110.85 94.21 63.95 34.88 69.53
</TABLE>
-17-
<PAGE> 21
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Some of the directors and executive officers of the Company and its
subsidiaries, and the companies with which they are associated, were customers
of, and had banking transactions with, Sterling Bank in the ordinary course of
Sterling Bank's business during the 1995 fiscal year, and Sterling Bank expects
to have such banking transactions in the future. All loans and commitments
included in such transactions were made on substantially the same terms,
including interest rates, collateral and repayment terms, as those prevailing at
the time for comparable transactions with other persons of similar
creditworthiness and, in the opinion of management of Sterling Bank, did not and
do not involve more than a normal risk of collectibility or present other
unfavorable features.
For information relating to commercial paper notes issued by the
Company to certain directors and executive officers of the Company and its
subsidiaries, see "COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS --
Compensation Committee Interlocks and Insider Participation."
INDEPENDENT AUDITORS
The Company has selected KPMG Peat Marwick as the Company's independent
auditors for the fiscal year ending December 31, 1996. KPMG Peat Marwick has
served as the Company's independent auditors since October 30, 1991. KPMG Peat
Marwick performed audit services for fiscal 1995 which included the examination
of the consolidated financial statements and services relating to filings with
the Securities and Exchange Commission. All professional services rendered by
KPMG Peat Marwick during 1995 were furnished at customary rates and terms.
Representatives of KPMG Peat Marwick will be present at the Meeting, will have
the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions from shareholders.
-18-
<PAGE> 22
ANNUAL REPORT
Sterling West Bancorp's Annual Report for the fiscal year ended
December 31, 1995 accompanies this Proxy Statement. The Annual Report contains
consolidated financial statements of the Company and its subsidiaries and the
report thereon of KPMG Peat Marwick, independent auditors.
UPON WRITTEN REQUEST OF ANY PERSON ENTITLED TO VOTE AT THE MEETING,
ADDRESSED TO SHERRY ALEXANDER, SECRETARY, AT 3287 WILSHIRE BOULEVARD, LOS
ANGELES, CALIFORNIA 90010, THE COMPANY WILL PROVIDE WITHOUT CHARGE A COPY OF ITS
ANNUAL REPORT ON FORM 10-K FOR FISCAL YEAR ENDED DECEMBER 31, 1995, INCLUDING
THE FINANCIAL STATEMENTS, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934.
PROPOSALS OF SHAREHOLDERS
Under certain circumstances, shareholders are entitled to present
proposals at shareholder meetings. Any such proposal to be included in the Proxy
Statement for the Company's 1997 Annual Meeting of Shareholders must be
submitted by a shareholder prior to December 28, 1996 in a form that complies
with applicable regulations.
OTHER BUSINESS
The Board of Directors knows of no other business which will be
presented for consideration at the Meeting other than as stated in the
accompanying Notice of Annual Meeting of Shareholders. If, however, other
matters are properly brought before the Meeting, it is the intention of the
persons named in the accompanying form of Proxy to vote the shares represented
thereby on such matters in accordance with their best judgment and in their
discretion, and authority to do so is included in the Proxy.
Dated: April 26, 1996
BY ORDER OF THE BOARD OF DIRECTORS
By /s/Sherry G. Alexander
----------------------
SHERRY ALEXANDER,
Secretary
-19-
<PAGE> 23
PROXY
STERLING WEST BANCORP
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 22, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder(s) of Sterling West Bancorp (the "Company") hereby
nominate(s), constitute(s) and appoint(s) Allan E. Dalshaug, Joseph C. Carona,
and Sherry G. Alexander ("Proxy Holders"), and each of them, the attorney,
agent and proxy of the undersigned, will full powers of substitution to each,
to attend and act as proxy or proxies of the undersigned at the Annual Meeting
of Shareholders (the "Meeting") of the Company to be held at the Wilshire
Country Club, Crystal Room, 301 Rossmore Avenue, Los Angeles, California 90004,
on Wednesday, May 22, 1996, at 10:00 a.m., and at any and all adjournments
thereof, and to vote as specified herein the number of shares which the
undersigned, if personally present, would be entitled to vote.
Please sign and date on reverse side.
- -------------------------------------------------------------------------------
-FOLD AND DETACH HERE-
<PAGE> 24
Please mark
your votes as
indicated in
this example. / X /
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS
NOMINATED BY THE BOARD OF DIRECTORS. THIS PROXY WHEN PROPERLY EXECUTED WILL BE
VOTED AS DIRECTED. IF NO DIRECTION IS MADE, THE PROXY WILL BE VOTED "FOR" THE
ELECTION OF DIRECTORS NOMINATED BY THE BOARD OF DIRECTORS.
FOR WITHHOLD
all nominees listed below AUTHORITY
(except as indicated to the contrary to vote for
below). Discretionary authority to all nominees
cumulate votes is granted.
1. ELECTION OF DIRECTORS / / / /
Nominees: Timothy Behunin Hassan Izad
Howard M. Borris Robert J. Schiller
Allan E. Dalshaug Michael Wagner
Audrey J. Fimpler
(INSTRUCTION: TO WITHHOLD AUTHORITY to vote for any individual nominee write
that nominee's name in the space below.)
____________________________________________________________________________
2. OTHER BUSINESS. In their discretion, the Proxy Holders are authorized to vote
upon such other business as may properly come before the Meeting and at any
and all adjournments thereof. The Board of Directors at present knows of no
other business to be presented by or on behalf of the Company or the Board of
Directors at the Meeting.
Please sign and date below
The undersigned hereby ratifies and conforms all that the Proxy Holders, or any
of them, or their substitutes, shall lawfully do or cause to be done by virtue
hereof, and hereby revokes any and all proxies heretofore given by the
undersigned to vote at said Meeting. The undersigned acknowledges receipt of
the Notice of Annual Meeting of Shareholders and the Proxy Statement
accompanying said Notice.
______________________________________________________________
(Number of Shares)
______________________________________________________________
(Please Print Name)
______________________________________________________________
(Please Print Name)
(I) (WE) WILL
WILL NOT
/ / / /
ATTEND THE MEETING IN PERSON.
Signature(s)____________________________________________________ Dated_________
(Please date this proxy and sign above as your name(s) appear(s) on this card.
Joint owners should each sign personally. Corporate proxies should be signed by
an authorized officer. Executors, administrators, trustees, etc., should give
their full titles).
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE> 25
________________________________________________________________________________
STERLING WEST BANCORP EMPLOYEE STOCK OWNERSHIP PLAN
PARTICIPANT VOTING INSTRUCTION CARD
For use in connection with the voting of allocated shares of STERLING
WEST BANCORP at the Annual Meeting of Shareholders.
This card is furnished by the Plan's Administrator. It is not being
furnished by or on behalf of the Board of Directors of STERLING WEST BANCORP
and is not intended to constitute the solicitation of a proxy.
The undersigned participant in the STERLING WEST BANCORP Employee Stock
Ownership Plan (the "ESOP") hereby directs the ESOP's Trustee that all of
those shares of the Common Stock, no par value, of STERLING WEST BANCORP
(the "Company") allocated to the ESOP account(s) of the undersigned (the
aggregate number of which shares is set forth below the undersigned's name
on the reverse hereof) be voted at the Annual Meeting of Shareholders of the
Company to be held on May 22, 1996 (the "Annual Meeting"), and at any and
all adjournments thereof, as indicated on the reverse hereof with respect
to each proposal therein set forth, and in the discretion of the Trustee
upon such other business as may be properly brought before the Annual
Meeting or any such adjournment. In giving this direction, the undersigned
hereby acknowledges (i) receipt of the Proxy Statement, dated April 26,
1996, and (ii) that more complete information with respect to the proposals
set forth on the reverse hereof is contained in the Proxy Statement.
Please complete, date, sign and promptly return this card to the
Trustee. IF THE TRUSTEE DOES NOT RECEIVE TIMELY A PROPERLY COMPLETED, DATED
AND SIGNED CARD, ALL OF THE SHARES REFERRED TO ABOVE WILL BE VOTED FOR OR
AGAINST EACH PROPOSAL IN THE SAME PROPORTION AS THOSE SHARES FOR WHICH
VOTING INSTRUCTIONS HAVE BEEN RECEIVED TIMELY BY THE TRUSTEE. The directions
set forth on the reverse hereof with respect to any such proposal may be
revoked by a subsequently dated and properly completed and signed card which
is RECEIVED TIMELY BY THE TRUSTEE, giving directions as to ALL such
proposals.
(Please specify your choice on each proposal, date and sign
(all on the reverse hereof) and return in the enclosed envelope.)
(Continued on reverse side)
________________________________________________________________________________
<PAGE> 26
(Continued from other side, which contains important information)
1. ELECTION OF DIRECTORS
/ / FOR all nominees listed (except / / WITHHOLD AUTHORITY to vote
as marked to the contrary below) for all nominees listed below
Nominees: Timothy Behunin, Howard M. Borris, Allan E. Dalshaug, Audrey J.
Fimpler, Hassan Izad, Robert J. Schiller and Michael Wagner
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name in the space below.)
- -------------------------------------------------------------------------------
2. In its discretion, the Trustee or its proxy is authorized to vote upon such
other business as may properly come before the meeting.
Dated: _____________________ 1996
- --------------------------------
(Signature)
Please sign EXACTLY as your
name appears on this card.
