<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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
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] 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):
---------------------------------------------------------------------
(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
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 21, 1997
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 21, 1997, 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 1998 Annual Meeting of Shareholders and
until their successors are elected and have qualified. The following persons are
the Board of Directors' nominees:
<TABLE>
<S> <C> <C>
Timothy Behunin Audrey J. Fimpler Robert J. Schiller
Howard M. Borris Hassan Izad Michael Wagner
Allan E. Dalshaug
</TABLE>
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.
<PAGE> 3
Nominations not made 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 31, 1997
shall be entitled to notice of and to vote at the Meeting.
Dated: April 25, 1997 BY ORDER OF THE BOARD OF DIRECTORS
By /s/ SHERRY G. ALEXANDER
-----------------------------------
SHERRY G. 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 21, 1997
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 21, 1997, 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 25, 1997.
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 1998 Annual Meeting of Shareholders and
until their successors are elected and have qualified. The following persons are
the Board of Directors' nominees:
<TABLE>
<S> <C> <C>
Timothy Behunin Audrey J. Fimpler Robert J. Schiller
Howard M. Borris Hassan Izad Michael Wagner
Allan E. Dalshaug
</TABLE>
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
director set forth herein. It is not anticipated that any matters
-1-
<PAGE> 5
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 31, 1997,
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 31,
1997, 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) 149,442 8.74%
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, NY 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 31,
1997, 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 9,975 (4) *
Director
Joseph C. Carona 24,333 (5) 1.40%
Executive Vice President and Chief Financial
Officer, Company; President, Sterling Bank
Allan E. Dalshaug 149,442 (6) 8.74%
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
Robert J. Schiller
Director 62,975 (8) 3.68%
Michael Wagner 39,346 2.30%
Director
Directors and Executive Officers 451,013 (9) 26.37%
as a Group (10 persons)
</TABLE>
- -------------
* Less than 1%
-4-
<PAGE> 8
<TABLE>
<S> <C>
(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 31, 1997 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 9,450 shares of Common Stock as to which Mr. Borris has
shared investment and voting power.
(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 31,
1997, or becoming exercisable within 60 days thereafter, pursuant to the
Company's Stock Option Plan.
(6) Includes 53,756 shares of Common Stock 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 and voting power.
(8) Includes 2,941 shares of Common Stock as to which Mr. Schiller has
shared investment and voting power
(9) Includes 16,826 shares of Common Stock which members of the group have
the right to acquire upon the exercise of stock options exercisable on
March 31, 1997, or becoming exercisable within 60 days thereafter,
pursuant to the Company's Stock Option Plan.
</TABLE>
-5-
<PAGE> 9
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 31,
1997, 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 45 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 54 1996
Director & Co. Inc. (an individual
financial management
company)
Allan E. Dalshaug Chairman of the Board, 65 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. 65 1982
Director (travel agency) (1989-
Present)
Hassan Izad President, Westown 53 1990
Director Development (1987-Present),
General Partner,
Ariana Development
(1990-Present) (real
estate developer),
President, Phoenix Electronics Inc.
(electronic products company)
(1992-Present)
</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, 78 1982
Director Guild Management
Corporation (an
individual financial
management company)
Michael Wagner President, Wagner/ 71 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.
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 1996, 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 eight meetings during 1996, 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 five meetings during
1996, is chaired by Ms. Fimpler, and Messrs. Schiller, Behunin and Dalshaug are
members. Mr. Dalshaug abstains
-8-
<PAGE> 12
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, 1996, 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 1996.
-9-
<PAGE> 13
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Overview
As of December 31, 1996, all compensation of executive officers of the
Company was paid by the company for which each executive officer had primary
responsibility.
Compensation Tables
SUMMARY COMPENSATION TABLE
The following table sets forth a comprehensive overview of the
compensation of the Company's Chief Executive Officer and the only other
executive officer at December 31, 1996 whose salary and bonus earned during 1996
exceeded $100,000. 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>
Annual Compensation Long Term All Other
------------------- Compensation Compensation
Name and Salary Bonus Payouts (1)
Principal Position Year $ $ $ $
- -------------------- ----- -------------------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
Allan E. Dalshaug (2) 1996 166,428 -- -- 6,106
President, Chief Executive Officer and
Chairman of the Board, Company; Chief 1995 169,428 -- -- 3,935
Executive Officer and Chairman of the Board,
Sterling Bank 1994 190,928 -- -- 6,089
Joseph C. Carona 1996 140,280 -- -- 836
Executive Vice President and Chief
Financial Officer, Company; 1995 141,580 -- -- 1,123
President, Sterling Bank
1994 155,880 -- -- 2,758
</TABLE>
(1) Includes for Messrs. Dalshaug and Carona respectively, $656 and $240 of
contributions in 1996 to the individuals' account within the Company's
Employee Stock Ownership Plan ("ESOP"). No contributions were made by
the Company to the ESOP in 1995 and 1994. Includes for Messrs. Dalshaug
and Carona respectively, $5,450 and $596 in 1996, $3,935 and $1,123 in
1995, and $6,089 and $2,758 in 1994 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) Mr. Dalshaug reimbursed $3,914 on March 21, 1996 to Sterling West
Bancorp in connection with balances due upon completion of his
employment contract in 1992.
-10-
<PAGE> 14
Stock Option Plan
During 1996, 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, 1996. 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, 1996. The Company
has never issued stock appreciation rights.
AGGREGATED OPTION EXERCISES AND YEAR-END VALUES (FISCAL 1996)
<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> <C> <C>
Allan E. Dalshaug 0 / 0 $ 0 / 0
Joseph C. Carona 16,826 / 0 0 / 0
</TABLE>
Executive Officer Employment Agreement
Mr. Dalshaug. The Company entered into a new employment agreement with
Mr. Dalshaug dated January 2, 1997 which expires on January 2, 1998. Under the
agreement, Mr. Dalshaug is paid a base salary of $166,500 and incentive
compensation at the discretion of the Board of Directors of the Company. 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. 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. Carona. Sterling Bank entered into a new employment agreement with
Mr. Carona dated January 2, 1997 as the President of the Bank, which expires on
December 31, 1997. The agreement provides for salary at the annual rate of
$140,280. The agreement provides that Mr. Carona may receive incentive
compensation at the discretion of the Board of Directors 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.
Directors' Compensation
All non-officer directors of the Company received during 1996 and
currently receive a director's fee of $300 per month. Additionally, non-officer
directors of the Company who are also on the Board of
-11-
<PAGE> 15
Directors of Sterling Bank or Sterling Business Credit, Inc. received in 1996
and currently receive 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 1996 the Compensation Committee met five 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
1996 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.
Report of the Board on Executive Compensation
The following Report of the Board on Executive Compensation and the
performance graph 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
At various times 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 1996, the Company's compensation policies and
practices were implemented primarily based on the understanding that returning
the Company to profitability was key.
Base salaries for management employees are determined primarily by the
responsibilities of the position, the performance of the individuals, their
general experience and qualifications and the financial performance of the
Company. 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.
-12-
<PAGE> 16
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 other executive officers 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.
Chief Executive Officer Compensation
A significant portion of Mr. Dalshaug's compensation in past periods prior to
1996 was in the form of stock ownership due to a desire to emphasize shareholder
value in his incentive package. Mr. Dalshaug's compensation in 1996 was based on
the terms of a one year employment agreement executed on January 2, 1997, which
established a base salary of $166,500 and allowed for the possibility of an
incentive compensation bonus (although none was paid). The amount of base
compensation and other features of the employment contract reflected the
Company's poor financial performance in recent years but also provides
incentives for improvements in the Company's profitability. Mr. Dalshuag's large
stock ownership in the Company also provides similar incentives. The Company
returned to profitability in 1996.
Mr. Dalshaug's employment contract was renewed in 1997, and will expire
on January 2, 1998. In addition to the base salary provided during the
employment period, the Board of Directors may, in its sole and absolute
discretion, determine to pay incentive compensation to Mr. Dalshaug, in a form
and in an amount to be determined solely by the Board of Directors. However, the
Board of Directors is under no obligation to provide for any such incentive
compensation.
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:
<TABLE>
<S> <C> <C>
Timothy G. Behunin Audrey J. Fimpler Robert J. Schiller
</TABLE>
-13-
<PAGE> 17
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, 1996. 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, 1991 and that all
dividends received within a quarter were reinvested in that quarter.
The performance graph has a vertical axis ranging from 0 to 300 at 50
point intervals. the horizontal axis shows the years from 1991 to 1996. 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 1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
NASDAQ Stock
<S> <C> <C> <C> <C> <C> <C>
Market 100 116.38 133.60 130.59 184.57 227.16
Southern
Cal Proxy 100 99.53 121.69 138.83 176.08 265.81
SWBC 100 84.99 57.69 31.47 62.72 84.68
</TABLE>
-14-
<PAGE> 18
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 1996 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.
INDEPENDENT AUDITORS
The Company has selected KPMG Peat Marwick as the Company's independent
auditors for the fiscal year ending December 31, 1997. KPMG Peat Marwick has
served as the Company's independent auditors since October 30, 1991. KPMG Peat
Marwick performed audit services for fiscal 1996 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 1996 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.
-15-
<PAGE> 19
ANNUAL REPORT
Sterling West Bancorp's Annual Report for the fiscal year ended December
31, 1996 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, 1996, 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 1998 Annual Meeting of Shareholders must be
submitted by a shareholder prior to December 26, 1997 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 25, 1997
BY ORDER OF THE BOARD OF DIRECTORS
By /s/ SHERRY G. ALEXANDER
---------------------------------
SHERRY G. ALEXANDER,
Secretary
-16-
<PAGE> 20
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 the Shareholders of the Company to be
held on May 21, 1997 (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 25, 1997, 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> 21
(Continued from other side, which contains important information)
1. ELECTION OF DIRECTORS
<TABLE>
<S> <C>
[ ] FOR all nominees listed (except [ ] WITHHOLD AUTHORITY to vote
as marked to the contrary below) for all nominees listed below
</TABLE>
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: ____________, 1997
-------------------------
(Signature)
Please sign EXACTLY as
your name appears on this
card.
<PAGE> 22
PROXY
STERLING WEST BANCORP
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 21, 1997
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 and Sherry
G. Alexander ("Proxy Holders") and each of them, the attorney, agent and proxy
of the undersigned, with 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
21, 1997, 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> 23
Please mark
your votes as
indicated in /X/
this example.
1. ELECTION OF DIRECTORS FOR WITHHOLD
all nominees listed below AUTHORITY
(except as indicated to the to vote for all
contrary below). Discretionary nominees
authority to cumulate votes
is granted.
/ / / /
Nominees: Timothy Behunin, Howard M. Borris, Allan E. Dalshaug,
Hassan Izad, Audrey J. Fimpler, 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. OTHER BUSINESS. In their discretion, the Proxy Holders are authorized to
vote upon such other business at 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.
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 DIRECTORS.
Please sign and date below
The undersigned hereby ratifies and confirms 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)
(I) (WE) WILL / / WILL NOT / /
ATTEND THE MEETING IN PERSON.
Signature(s) ___________________ Print Name(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 title).
FOLD AND DETACH HERE
