<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission Only
/X/ Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2)
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
</TABLE>
FOOTHILL INDEPENDENT BANCORP
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
FOOTHILL INDEPENDENT BANCORP
- --------------------------------------------------------------------------------
(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
[FOOTHILL INDEPENDENT BANCORP LETTERHEAD]
April 12, 1996
Dear Shareholder:
The Board of Directors joins me in extending to you a cordial invitation to
attend the Annual Meeting of Shareholders of Foothill Independent Bancorp which
will be held on Tuesday, May 14, 1996, at 4:30 P.M., at THE GRAND, 526 W.
FOOTHILL BOULEVARD, Glendora, California.
In addition to the matters to be acted on at the meeting, which are
described in detail in the attached Notice of Annual Meeting and Proxy
Statement, there will be a discussion of the operations of the Company and its
wholly-owned subsidiary, Foothill Independent Bank. Since your participation in
Company activities is important, I hope you will be able to attend.
Whether or not you plan to attend the meeting, please be sure to complete,
sign, date and return the proxy card enclosed with the Proxy Statement so that
your shares may be voted in accordance with your wishes.
Sincerely,
George E. Langley
President and Chief Executive Officer
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
510 South Grand Ave. / / Glendora, California 91741 / / (818) 963-8551 /
/ (714) 599-9351
<PAGE> 3
FOOTHILL INDEPENDENT BANCORP
510 SOUTH GRAND AVENUE
GLENDORA, CALIFORNIA 91741
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 14, 1996
TO THE SHAREHOLDERS OF FOOTHILL INDEPENDENT BANCORP:
The 1996 Annual Meeting of Shareholders of Foothill Independent Bancorp
(the "Company") will be held at THE GRAND, 526 W. FOOTHILL BOULEVARD, Glendora,
California, on Tuesday, May 14, 1996, at 4:30 P.M., for the following purposes
as more fully described in the accompanying Proxy Statement:
(1) To elect the three nominees named in the accompanying Proxy
Statement to serve as directors for a term of two years.
(2) To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Only shareholders of record at the close of business on April 3, 1996 will
be entitled to vote at the meeting or any adjournment or postponement thereof.
The Bylaws of the Company set forth the following procedures for
nominations to the Board of 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 capital stock of the corporation entitled to vote for the election
of directors. Notice of intention to make any nominations (other than for
persons named in the notice of the meeting at which such nomination is to
be made) shall be made in writing and shall be delivered or mailed to the
president of the corporation by the later of the close of business 21 days
prior to any meeting of shareholders called for the election of directors
or 10 days after the date of mailing of notice of the meeting to
shareholders. 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 capital stock of the corporation owned
by each proposed nominee; (d) the name and residence address of the
notifying shareholder; (e) the number of shares of capital stock of the
corporation owned by the notifying shareholder; (f) the number of shares of
capital stock of any bank, bank holding company, savings and loan
association or other depository institution owned beneficially by the
nominee or by the notifying shareholder and the identities and location of
any such institutions; and (g) whether the proposed nominee has ever been
convicted of or pleaded nolo contendere to any criminal offense involving
dishonesty or breach of trust, filed a petition in bankruptcy or been
adjudged bankrupt. The notice shall be signed by the nominating shareholder
and by the nominee. Nominations not made in accordance herewith shall be
disregarded by the chairman of the meeting, and upon his instructions, the
inspector of elections shall disregard all votes cast for each such
nominee. The restrictions set forth in this paragraph shall not apply to
nomination of a person to replace a proposed nominee who has died or
otherwise become unable to serve as a director between the last day for
giving notice in accordance with this paragraph and the date of election of
directors if the procedure called for in this paragraph was followed with
respect to the nomination of the proposed nominee.
By order of the Board of Directors
George E. Langley
President and Chief Executive Officer
April 12, 1996
YOUR VOTE IS IMPORTANT. THEREFORE, WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING YOU SHOULD DATE, SIGN AND RETURN THE ENCLOSED PROXY. IF YOU ATTEND THE
MEETING, YOU WILL BE ENTITLED TO VOTE IN PERSON IF YOU WISH.
<PAGE> 4
PROXY STATEMENT
OF
FOOTHILL INDEPENDENT BANCORP
510 SOUTH GRAND AVENUE
GLENDORA, CALIFORNIA 91741
INTRODUCTION
This Proxy Statement is being furnished in connection with the solicitation
of proxies by the Board of Directors of Foothill Independent Bancorp, a
California corporation (the "Company"), for use at its 1996 Annual Meeting of
Shareholders to be held on Tuesday, May 14, 1996, at 4:30 P.M., at The Grand,
526 W. Foothill Boulevard, Glendora, California, and at any adjournment or
postponement thereof (the "meeting"). It is contemplated that this solicitation
of proxies will be made exclusively by mail; however, if it should appear
desirable to do so to ensure adequate representation at the meeting, directors,
officers and employees of the Company or its wholly-owned subsidiary, Foothill
Independent Bank (the "Bank"), may communicate with shareholders, brokerage
houses and others by telephone, telegraph or in person, to request that proxies
be furnished and may reimburse banks, brokerage houses, custodians, nominees and
fiduciaries for their reasonable expenses in forwarding proxy materials to the
beneficial owners of the shares held by them. All expenses incurred in
connection with this solicitation will be borne by the Company.
Holders of shares of common stock of the Company ("shareholders") who
execute proxies retain the right to revoke them at any time before they are
voted. Any proxy given by a shareholder may be revoked or superseded by
executing a later dated proxy, or by giving notice of revocation to the
Secretary of the Company, 510 South Grand Avenue, Glendora, California 91741, in
writing prior to or at the meeting or by attending the meeting and voting in
person. A proxy, when executed and not so revoked, will be voted in accordance
with the instructions given in the proxy. If a choice is not specified in the
proxy, the proxy will be voted "FOR" the nominees for election of directors
named in this Proxy Statement. This Proxy Statement is first being mailed to
shareholders on or about April 12, 1996.
VOTING SECURITIES
The shares of common stock constitute the only outstanding class of voting
securities of the Company. Only the shareholders of the Company of record as of
the close of business on April 3, 1996 (the "Record Date"), will be entitled to
vote at the meeting or any adjournment or postponement thereof. As of April 3,
1996, there were 3,973,427 shares of common stock outstanding and entitled to
vote. A majority of the outstanding shares will constitute a quorum at the
Annual Meeting. Shareholders who abstain on any proposal or withhold authority
to vote on the election of directors will be counted in determining the presence
of a quorum; whereas broker non-votes will not be counted in determining the
presence of a quorum. Each shareholder is entitled to one vote for each share
held as of the Record Date, except that in the election of directors each
shareholder may cumulate his or her votes and give any one nominee a number of
votes equal to the number of directors to be elected multiplied by the number of
shares which the shareholder is entitled to vote at the meeting, or to
distribute the votes on the same principle among as many candidates as the
shareholder may choose, if (i) the name of the candidate for whom such votes are
cast has been properly placed in nomination prior to the voting, and (ii) any
shareholder has given notice at the meeting prior to voting of that
shareholder's intention to cumulate his or her votes.
<PAGE> 5
PRINCIPAL SHAREHOLDERS
Set forth below is certain information as of April 3, 1996 regarding the
number of shares of the Company's common stock owned by any person who was known
by the Company to own more than 5% of the voting securities of the Company, by
each of the executive officers of the Company named in the Summary Compensation
Table and by all directors and executive officers as a group:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS BENEFICIAL PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP OF CLASS
- --------------------------- ----------------------------- ---------- --------
<S> <C> <C> <C>
Common Stock, no par value William V. Landecena(1) 251,155(2) 6.27%
510 South Grand Avenue
Glendora, CA 91741
Common Stock, no par value George E. Langley(3) 129,916(4) 3.23%
Common Stock, no par value Tom Kramer(5) 76,409(6) 1.90%
Common Stock, no par value Donna Miltenberger(7) 33,356(8) *
Common Stock, no par value All Directors and Executive 832,901(9) 19.67%
Officers of the Company
as a group (11 in number)
</TABLE>
- ---------------
* Less than 1%.
(1) Mr. Landecena is Chairman of the Board of Directors and is a director of the
Company and the Bank.
(2) Includes 34,835 shares of common stock subject to outstanding stock options
exercisable during the 60-day period ending June 3, 1996.
(3) Mr. Langley is President, Chief Executive Officer and a director of the
Company and the Bank.
(4) Includes 55,425 shares of common stock subject to outstanding stock options
exercisable during the 60-day period ending June 3, 1996.
(5) Mr. Kramer is Executive Vice President and Secretary of the Company and the
Bank.
(6) Includes 38,875 shares of common stock subject to outstanding options
exercisable during the 60-day period ending June 3, 1996.
(7) Ms. Miltenberger is Executive Vice President and Chief Administrative
Officer of the Bank.
(8) Includes 27,325 shares of common stock subject to outstanding stock options
exercisable during the 60-day period ending June 3, 1996.
(9) Includes an aggregate of 262,205 shares of common stock subject to
outstanding stock options exercisable during the 60-day period ending June
3, 1996.
ELECTION OF DIRECTORS
At the 1996 Annual Meeting, shareholders will vote on the election of three
Class I directors to serve on the Board of Directors for a two-year term ending
in 1998 and until their successors are elected and have been qualified. The
enclosed proxy will be voted in favor of the election to the Board of Directors
of all of the three nominees named below, unless a contrary instruction is given
in the proxy. All three of the nominees named below are incumbent directors of
the Company. Messrs. Tessitor and Williams were elected as directors of the
Company by vote of the Board of Directors of the Company to fill two vacancies
on the Board of Directors, the remaining terms of which expire in 1996, and Mr.
Langley was elected by the shareholders of the Company for a term that expires
in 1996. Each of the nominees named below also serve as a director of the Bank,
a wholly-owned subsidiary of the Company.
Under California law, the three nominees receiving the highest number of
votes will be elected as directors at the Annual Meeting. As a result, proxies
voted to "Withhold Authority," which will be counted,
2
<PAGE> 6
and broker non-votes, which will not be counted, will have no practical effect.
Discretionary authority to cumulate votes represented by proxies is solicited by
the Board of Directors because, in the event nominations are made in opposition
to the nominees of the Board of Directors, it is the intention of the persons
named as proxy holders in the enclosed Proxy to cumulate votes represented by
proxies for individual nominees in accordance with their best judgment in order
to assure the election of as many of the nominees named below to the Board of
Directors as possible.
If any nominee becomes unavailable to serve on the Board of Directors of
the Company for any reason before the election, then the enclosed proxy will be
voted for the election of such substitute nominee or nominees, if any, as shall
be designated by the Board of Directors. The Board of Directors has no reason to
believe that any of the nominees will be unavailable to serve.
The names and certain information concerning the three nominees for
election as directors are set forth below. YOUR BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE "FOR" THE ELECTION OF EACH OF THE NOMINEES NAMED BELOW. Also set
forth below is information concerning each of the other current directors with
unexpired terms who will continue in office.
DIRECTORS AND NOMINEES
<TABLE>
<CAPTION>
SHARES OF
DIRECTOR COMMON STOCK
OF THE BENEFICIALLY
COMPANY OWNED AS OF PERCENT PRINCIPAL OCCUPATION
NAME AND POSITIONS AGE SINCE(1) APRIL 3, 1996 OF CLASS AND BUSINESS EXPERIENCE
- --------------------------- ---- ------- ------------- -------- -------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS I DIRECTORS-NOMINEES
George E. Langley 55 1980 129,916(2) 3.23% Mr. Langley was elected President and
President, Chief Chief Executive Officer of the
Executive Officer and a Company and the Bank effective April
Director of the Company 1, 1992. For more than the prior five
and the Bank years, Mr. Langley served as an
Executive Vice President, the Chief
Financial Officer and Secretary of
the Company and the Bank.
Douglas F. Tessitor 51 1995 8,500(3) * Mr. Tessitor is, and since 1976 has
Director of the Company been, engaged in the insurance and
and the Bank financial planning business,
marketing insurance products and
providing financial planning services
to individuals and closely held
businesses. Prior to 1976, he held
management positions with Union Bank
in Los Angeles, California and with
Chase Manhattan Bank in New York.
Max E. Williams 51 1995 11,700(3) * Mr. Williams is a licensed architect
Director of the Company with a Bachelor's degree in
and the Bank Architecture and a Master's degree in
Urban and Regional Planning. He is,
and since 1979 has been, the owner
and president of his own architec-
tural firm. Prior to 1979, Mr.
Williams was employed as an architect
by independent real estate
development and architectural firms,
including Lewis Development Company
and William L. Pereira Associates.
Mr. Williams also is a member, and
past president of the Inland
California Chapter, of the American
Institute of Architects.
CLASS II DIRECTORS
Richard H. Barker 61 1993 41,699(4) 1.04% For 24 years, until his retirement in
Director of the Company June 1992, Mr. Barker held various
and the Bank management positions with City
National Bank in Beverly Hills,
California. His most recent position
was Senior Vice President in charge
of sales and trading in the
Investment Department.
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
SHARES OF
DIRECTOR COMMON STOCK
OF THE BENEFICIALLY
COMPANY OWNED AS OF PERCENT PRINCIPAL OCCUPATION
NAME AND POSITIONS AGE SINCE(1) APRIL 3, 1996 OF CLASS AND BUSINESS EXPERIENCE
- --------------------------- ---- ------- ------------- -------- -------------------------------------
<S> <C> <C> <C> <C> <C>
Charles G. Boone 73 1973 123,125(5) 3.07% Mr. Boone is, and for more than the
Director of the Company past five years has been, a private
and the Bank engineering consultant in the area of
cryogenic engineering. Prior to 1984,
Mr. Boone was affiliated with the
engineering firm of Linhardt &
Associates.
William V. Landecena 71 1973 251,155(5) 6.27% Prior to his retirement in 1981, Mr.
Chairman of the Board Landecena had been a partner for a
of Directors and a number of years in the Arrow Meat
Director of the Company Company.
and the Bank
O.L. Mestad 73 1973 157,041(5) 3.92% Dr. Mestad is a private investor.
Director of the Company Prior to his retirement in 1983, Dr.
and the Bank Mestad had been engaged in the
private practice of dentistry for
more than twenty years. From May 1987
until May 1992, Dr. Mestad served as
Chairman of the Board of Directors of
the Company and the Bank, having been
elected to that position by the other
members of the Board of Directors.
</TABLE>
- ---------------
* Less than 1%.
(1) All dates are the dates when the named individuals first became directors of
the Bank, the Company's predecessor and wholly-owned subsidiary.
(2) Includes 55,425 shares of common stock subject to outstanding stock options
exercisable during the 60-day period ending June 3, 1996.
(3) Includes 7,500 shares subject to outstanding stock options exercisable
during the 60-day period ending June 3, 1996.
(4) Includes 20,975 shares subject to outstanding stock options exercisable
during the 60-day period ending June 3, 1996.
(5) Includes 34,835 shares subject to outstanding stock options exercisable
during the 60-day period ending June 3, 1996.
The Board of Directors of the Company held thirteen meetings during the
year ended December 31, 1995. Each incumbent director attended at least 75% of
the aggregate of the number of meetings of the Board and the number of meetings
held by all committees of the Board on which he served, with the exception of
Mr. Boone, who attended 62% of such meetings.
There are no family relationships among any of the directors or executive
officers of the Company.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Based upon information made available to the Company, the Company believes
that all filing requirements under Section 16(a) of the Securities Exchange Act
of 1934 applicable to its directors, officers and any persons holding ten
percent or more of the Company's common stock were satisfied with respect to the
Company's fiscal year ended December 31, 1995, except that Tom Kramer, an
executive officer of the Company, was late in filing a report relating to an
acquisition of shares of common stock of the Company by a retirement plan
account over which he exercises investment authority.
4
<PAGE> 8
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Bank has established an Examining and Audit
Committee and a Personnel Committee (which functions essentially as a
compensation committee). The Board of Directors of the Company has not
established any such committees.
The Examining and Audit Committee is comprised of five directors selected
by the Board of Directors of the Bank. The members of the Examining and Audit
Committee are O. L. Mestad, Richard H. Baker, William V. Landecena, Douglas F.
Tessitor and Max E. Williams. The Examining and Audit Committee is authorized to
handle all matters which it deems appropriate regarding the independent
accountants for the Company and the Bank and to otherwise communicate and act
upon matters relating to the review and audit of their books and records,
including the scope of the annual audit and the accounting methods and systems
to be utilized by the Company and the Bank. In addition, the Examining and Audit
Committee also makes recommendations to the Board of Directors with respect to
the selection of the independent accountants for the Company and the Bank. The
Examining and Audit Committee held five meetings during the year ended December
31, 1995.
The Personnel Committee is comprised of six directors selected by the Board
of Directors of the Bank. The members of the Committee are William V. Landecena,
O. L. Mestad, Earl A. Musser, Richard H. Barker, Douglas F. Tessitor and Charles
G. Boone. The Personnel Committee makes determinations with respect to
compensation to be paid to the officers and other key employees of the Bank and
is responsible for establishing compensation and fringe benefit programs for the
employees of the Bank. The Personnel Committee held three meetings during the
year ended December 31, 1995.
The Company does not have a nominating committee. Instead, the Board of
Directors, as a whole, identifies and screens candidates for membership on the
Boards of Directors of the Company and the Bank.
5
<PAGE> 9
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth compensation received for the three fiscal
years ended December 31, 1995 by the Company's and the Bank's executive officers
(the "Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------------------------
AWARDS
ANNUAL COMPENSATION ------------- PAYOUTS
----------------------------- LONG-TERM --------------
NAME AND BONUS STOCK OPTIONS INCENTIVE PLAN ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) ($)(1) (SHARES) PAYMENTS COMPENSATION
- ----------------------------- ---- --------- ------- ------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
George E. Langley 1995 $ 220,983(2) $74,720 15,000 N/A $ 16,713(3)
President and Chief 1994 208,297(2) 82,306 -0- 12,648(3)
Executive Officer 1993 197,194(2) 58,685 20,000 11,589(3)
of Company & Bank
Tom Kramer 1995 149,936 57,573 10,000 N/A 12,081(4)
Executive Vice President, 1994 142,387 64,010 -0- 9,855(4)
Chief Credit Officer 1993 136,081 44,466 15,000 9,208(4)
and Secretary of
Company & Bank
Donna Miltenberger 1995 134,458 51,790 10,000 N/A 3,607(5)
Executive Vice President 1994 124,594 57,135 -0- 3,262(5)
and Chief Administrative 1993 104,875 36,450 5,000 3,038(5)
Officer of the Bank
</TABLE>
- ---------------
(1) Bonuses paid to the Named Officers are pursuant to annual incentive
compensation programs established each year for all employees of the Bank,
including the Bank's executive officers. Under this program, performance
goals, relating to such matters as deposit and loan growth, improvements in
loan quality and profitability were established each year. Incentive
compensation, in the form of cash bonuses, was awarded based on the extent
to which the Bank achieved or exceeded the performance goals.
(2) Salary figures for Mr. Langley include directors' fees paid to him by the
Company and the Bank in each year presented.
(3) Includes $13,186 in above-market earnings accrued in 1995, $9,273 in 1994
and $7,454 accrued in 1993, on compensation deferred in the years 1985
through 1988 under a deferred compensation plan in effect during that period
designed to provide retirement benefits for officers and other key
management employees (the "1985 Deferred Compensation Plan") and employer
contributions to the Company's 401(k) Plan (the "401k Plan") of $3,527 in
1995, $3,375 in 1994 and $4,135 in 1993.
(4) Includes $8,766 in above-market earnings accrued in 1995, $6,480 in 1994 and
$5,153 in 1993, on compensation deferred in 1985 through 1989 by Mr. Kramer
under the 1985 Deferred Compensation Plan and employer contributions to the
401k Plan of $3,315 in 1995, $3,375 in 1994 and $4,055 in 1993.
(5) Includes employer contributions to the 401k Plan of $3,607 in 1995, $3,262
in 1994 and $3,038 1993.
6
<PAGE> 10
OPTION GRANTS
The following table provides information on option grants in fiscal 1995 to
the Named Officers.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE OF OPTIONS
PERCENT OF AT ASSUMED ANNUAL
TOTAL OPTIONS RATES OF STOCK
OPTIONS GRANTED TO PRICE APPRECIATION
GRANTED IN ALL EMPLOYEES EXERCISE FOR OPTION TERM(4)
FISCAL IN FISCAL PRICE EXPIRATION --------------------
NAME 1995(1) 1995(2) ($/SHARE)(3) DATES 5% 10%
- ------------------------ ---------- ------------- ------------ ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
George E. Langley 15,000 9.23% $ 7.90 5/31/05 $74,550 $188,850
Tom Kramer 10,000 6.15% $ 7.90 5/31/05 $49,700 $125,900
Donna Miltenberger 10,000 6.15% $ 7.90 5/31/05 $49,700 $125,900
</TABLE>
- ---------------
(1) Shares covered by each option grant are exercisable at any time in whole, or
from time to time in part, prior to the termination of the option.
(2) Options to purchase an aggregate of 162,500 shares were granted to all
employees in fiscal 1995, including the Named Officers.
(3) The exercise price may be paid by delivery of already-owned shares.
(4) There is no assurance that the values that may be realized upon exercise of
such options will be at or near the values estimated in the table, which
utilizes arbitrary compounded rates of growth of stock price of 5% and 10%
per year.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table provides information on option exercises in fiscal 1995
by the Named Officers and the value of unexercised in-the-money options held by
the Named Officers as of December 31, 1995.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT FY-END(#) OPTIONS AT FY-END($)(1)
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ --------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
George E. Langley 0 0 55,425 0 $48,525 0
Tom Kramer 0 0 38,875 0 $33,000 0
Donna Miltenberger 0 0 27,325 0 $25,350 0
</TABLE>
- ---------------
(1) The average of the high and low prices of the Company's common stock on
December 31, 1995 on the NASDAQ National Market was $8.00.
Employment Agreements. Under an employment agreement which became effective
April 1, 1995 and replaces a prior employment agreement that expired on March
31, 1995, Mr. Langley is employed as the Bank's President and Chief Executive
Officer for a three-year term expiring March 31, 1998. Under that agreement, Mr.
Langley receives a base annual salary of $200,000 and is entitled to participate
in any bonus or incentive compensation programs and other employee benefit plans
generally made available to executives and key employees of the Bank. The Bank
also has agreed to furnish Mr. Langley with the use of an automobile and to
provide him with certain supplemental insurance benefits. Under the employment
agreement, the Bank may terminate Mr. Langley's employment at any time without
cause. In the event of such a termination, or a termination by Mr. Langley of
his employment due to a reduction in his compensation or the scope of his
authority or duties following a merger or consolidation of the Company or the
Bank with another bank or other entity in which the Company or the Bank is not
the surviving entity or the sale of substantially all of the assets of the
Company or the Bank, Mr. Langley's salary, bonuses and other benefits would be
continued for a period of three years measured from the March 31 immediately
preceding such termination. If, on the other hand, Mr. Langley voluntarily
resigns his employment within 12 months following such a change in ownership,
although there has been no change in his compensation or scope of this authority
or duties, his salary, bonuses and benefits would be continued for a period of
twelve months following such resignation. In the event of
7
<PAGE> 11
Mr. Langley's death while employed as the Bank's President and Chief Executive
Officer, salary and bonuses shall cease, but the Bank will be obligated to
continue the dependent health and dental insurance coverage for Mr. Langley's
wife and children for a period of three years thereafter. If Mr. Langley's
employment is terminated due to a medical disability, all life, medical, dental
and disability insurance programs in which Mr. Langley was participating at that
time will be continued for a period of one year from the date of such
termination of employment or until March 31, 1998, whichever period is shorter.
The Bank also has an agreement with Mr. Kramer and Ms. Miltenberger which
entitles them each to receive a full year's compensation if they are terminated
or their compensation or job responsibilities are reduced following a merger or
consolidation of the Company or the Bank with another bank or other entity in
which the Company or the Bank is not the surviving entity or the sale of
substantially all of the assets of the Company or the Bank.
Directors' Fees. During fiscal 1995 the Bank paid the Chairman of the Board
of Directors $1,950 per month and each other director, including Mr. Langley,
$1,550 per month in directors' fees for services and attendance at Board and
committee meetings, and each director received $454 per month as reimbursement
for health insurance premiums.
Deferred Compensation Plans. Effective January 1, 1985, the Bank adopted
the 1985 Deferred Compensation Plan, a voluntary unfunded deferred compensation
plan, which permitted selected key, salaried employees of the Bank to defer
receipt of a portion of their annual salaries and bonuses that would otherwise
have been paid during a four-year period ended December 31, 1988. The 1985
Deferred Compensation Plan was established to attract and retain key employees
and directors by providing them with a supplemental retirement benefit in an
amount determined on the basis of the amount of salary deferred annually over
that four-year period and the participant's age at the time of participation.
The supplemental retirement benefits will be payable over ten years commencing
on the participant's retirement date, except that if the participant dies prior
thereto, his or her beneficiaries would receive a death benefit, in lieu of the
retirement benefit, over a ten year period. The benefit payments are not subject
to any reduction for Social Security benefits or other offset amounts. A total
of 19 employees, including Messrs. Langley and Kramer participated in the 1985
Deferred Compensation Plan. The 1985 Deferred Compensation Plan is administered
by a committee of the Board of Directors of the Bank.
The Bank has purchased life insurance on employees participating in the
1985 Deferred Compensation Plan in amounts that, in the aggregate, are expected,
on an actuarial basis, to fund all of its future obligations under this plan.
The Bank is the owner and sole beneficiary of all such life insurance. Thus, no
direct allocation of cost is made to any one employee and no amount attributable
to the expenses of the 1985 Deferred Compensation Plan is included in the
Summary Compensation Table set forth above. Earnings on amounts in each
participant's account accrue at an annual fixed rate. It is estimated that,
under this Plan, Mr. Langley will receive approximately $127,500 per year over
the ten-year period following his retirement and Mr. Kramer will receive
approximately $140,000 per year for ten years following his retirement.
Under a deferred compensation plan presently in effect, officers and other
key employees are entitled, prior to the beginning of each fiscal year, to elect
to defer a portion of their annual salary in the upcoming year under annually
established unfunded deferred compensation programs designed to provide for each
participating employee a supplemental retirement benefit in an amount based on
the salary deferred and earnings thereon.
Certain Transactions. The Bank has had, and in the future expects to have,
banking transactions in the ordinary course of its business with directors,
principal shareholders and their associates, including the making of loans to
directors and their associates. Such loans and other banking transactions are
made on the same terms, including interest rates and collateral securing the
loans, as those prevailing at the time for comparable transactions with
unaffiliated persons. In addition, such loans are made only if they do not
involve more than the normal risk of collectibility and do not present other
unfavorable features. The largest aggregate amount of loans which the Bank had
outstanding to directors and executive officers of the Company and their
associates at any one time during the fiscal year ended December 31, 1995 was
approximately $1,975,800, which represented 6.36% of the Bank's equity capital
at December 31, 1995.
8
<PAGE> 12
REPORT OF PERSONNEL COMMITTEE
The Personnel Committee is responsible for approving, and evaluating the
efficacy of, compensation policies and programs for the Bank, which employs all
of the Company's executive officers, and for making determinations regarding the
compensation of the Company's executive officers, subject to review by the full
Board of Directors. In fiscal 1995 the members of the Personnel Committee were
William V. Landecena, O.L. Mestad, Earl A. Musser, Richard H. Barker, Douglas F.
Tessitor, and Charles G. Boone, all of whom are non-employee Directors of the
Company and the Bank.
The following report is submitted by the Personnel Committee members with
respect to the executive compensation policies established by the Personnel
Committee and approved by the Board of Directors of the Bank and the
compensation of executive officers in fiscal 1995.
COMPENSATION POLICIES AND OBJECTIVES
In adopting, and also evaluating the effectiveness of, compensation
programs for executive officers, as well as other employees of the Bank, the
Personnel Committee is guided by three basic principles:
- The Company and the Bank must be able to attract and retain
highly-qualified and experienced banking professionals with proven
performance records.
- A substantial portion of annual executive compensation should be tied to
the Bank's performance, measured in terms of profitability, asset growth
and asset quality.
- The financial interests of the Company's senior executives should be
aligned with the financial interests of the shareholders, primarily
through stock option grants which reward executives for improvements in
the market performance of the Company's common stock.
Attracting and Retaining Executives and Other Key Employees. There is
substantial competition among banks and other financial institutions and service
organizations for qualified banking professionals. In order to retain executives
and other key employees, and to attract additional well-qualified banking
professionals when the need arises, the Company strives to offer salaries and
health care, retirement and other employee benefit programs to its executives
and other key employees which are competitive with those offered by other
financial institutions and service organizations in California.
In establishing salaries for executive officers, the Personnel Committee
reviews (i) the historical performance of the executives; and (ii) available
information regarding prevailing salaries and compensation programs at banks and
other financial organizations which are comparable, in terms of asset-size,
capitalization and performance, to the Bank. Another factor which is considered
in establishing salaries of executive officers is the cost of living in Southern
California, which generally is higher than in other parts of the country. During
1995, the salaries of Messrs. Langley and Kramer and Ms. Miltenberger were
increased by 7.5%, 7.0% and 7.8%, respectively, to bring their salaries in line
with prevailing salaries of executive officers at comparable banking
institutions and to adjust for increases that had occurred in the consumer price
index in Southern California.
In addition, the Bank has followed the practice of entering into multi-year
employment agreements with its Chief Executive Officer. Such agreements serve to
assure continuity in that position and to deter competing banks from attempting
to hire away the Bank's Chief Executive Officer.
In March 1995, the Bank entered into a new three year employment agreement
with George Langley, the Company's Chief Executive Officer, which extends his
employment for three years to March 31, 1998. Under that employment agreement,
Mr. Langley's base annual salary is $200,000 (which includes the 7.5% salary
increase referred to above). The decision to enter into a three year employment
agreement with Mr. Langley was based on a number of factors, including the
Bank's performance during his tenure as Chief Executive Officer, Mr. Langley's
long tenure with the Bank for which he has served as an executive officer since
1976, and the continuity and stability of management that Mr. Langley's
retention as Chief Executive Officer provides to both the Company and the Bank.
9
<PAGE> 13
Performance-Based Compensation. The Personnel Committee believes that
payment of compensation in excess of a senior executive's base salary should be
made dependent on the level of profitability achieved by the Bank and its
comparative performance as measured against the performance of other banking
institutions of comparable size in Northern and Southern California ("Peer-Group
Banks").
The Personnel Committee has identified several performance factors which
affect a bank's profitability and which the Personnel Committee believes are
important to the enhancement of shareholder values. These include asset growth;
the quality and collectibility of the Bank's assets, which consist primarily of
loans and investment securities; the volume and mix of deposits, which affect
the Company's net interest margin or "spread" and also its fee income; and the
level of non-interest expense. On the basis of evaluations of the prior year's
operations, economic and market conditions in the Bank's service areas and
management and outside consultant reports, at the beginning of each fiscal year
the Board of Directors establishes annual performance goals for the Bank in each
of these areas, and weights these performance factors in terms of their
anticipated impact on the Bank's earnings, and also establishes an earnings goal
for the year. As a general rule, the performance goals that are established
require that the Bank achieve a level of profitability in excess of at least the
average profitability achieved by the Peer-Group Banks as a condition to the
payment of any bonuses to senior executives. If that condition is satisfied, a
percentage (determined by the Personnel Committee at the beginning of the fiscal
year) of the higher-than-average earnings achieved by the Bank are set aside as
a pool from which bonuses are paid. The amount of the bonuses that are paid from
that pool, in turn, is based on the extent to which the Bank has achieved or
exceeded the goals in each of the performance areas described above.
As a result of these performance-based bonus programs, as a general rule
executive compensation will be higher and the proportion of each executive's
total cash compensation that is represented by incentive or bonus compensation
will increase in those years when performance goals are exceeded. In 1995, the
Bank's performance, in terms of several measures, did not exceed the Bank's
performance in 1994. As a result, in 1995 bonus compensation represented 25.3%
of Mr. Langley's total cash compensation, as compared to 28.3% in 1994, 27.7% of
Mr. Kramer's total compensation as compared to 31.0% in 1994 and 27.8% of Ms.
Miltenberger's total cash compensation as compared to 31.4% in 1994.
Stock Programs. In order to align the financial interests of senior
executives and other key employees with those of the shareholders, the Company
grants stock options to its senior executives and other key employees on a
periodic basis. Stock option grants reward senior executives and other key
employees for performance that results in improved market performance of the
Company's stock, which directly benefits all shareholders. Generally, the number
of shares included in each stock option grant is determined based on an
evaluation of the executive's importance to the future performance of the Bank.
As a result, as a general rule, the more senior the executive, the greater the
number of option shares that are awarded. In addition, in 1993 the Bank
established a 401(k) Plan in which all employees, including executive officers,
may participate. Under this plan, employees may make contributions which they
may elect to have invested in Company common stock. In addition, the Company
makes matching contributions of up to 4% of amounts contributed by participants,
with shares of Company common stock. Each of the named officers participated in
this plan in 1995.
William V. Landecena
O.L. Mestad
Earl A. Musser
Richard H. Barker
Douglas F. Tessitor
Charles G. Boone
Notwithstanding anything to the contrary set forth in the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the foregoing Report, and
the performance graph on page 11 shall not be incorporated by reference into any
such filings.
10
<PAGE> 14
COMPANY PERFORMANCE
The following graph shows a five-year comparison of cumulative total
returns for the Company, the S&P 500 composite index and an index of peer group
companies published in the Montgomery Securities Western Bank Monitor.
COMPARISON OF CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
FOOTHILL SOUTHERN
MEASUREMENT PERIOD INDEPENDENT CALIFORNIA
(FISCAL YEAR COVERED) BANCORP S&P 500 PROXY
<S> <C> <C> <C>
1990 100.00 100.00 100.00
1991 121.33 130.37 100.98
1992 147.18 140.30 100.50
1993 217.83 154.46 122.83
1994 216.11 156.50 140.19
1995 219.76 215.32 177.81
</TABLE>
SOURCE: MONTGOMERY SECURITIES Western Bank Monitor
The total cumulative return on investment (change in the period-end stock
price plus reinvested dividends) for each of the periods for the Company, the
S&P composite index and the peer group companies is based on the stock price or
composite index at the end of fiscal 1990.
The graph above compares the performance of the Company with that of (i)
the S&P 500 composite index and (ii) an index, published in the Montgomery
Securities Western Bank Monitor, which is made up of 13 independent banks and
bank holding companies, including the Company, that are based and conduct
business entirely or primarily in Southern California.
INDEPENDENT PUBLIC ACCOUNTANTS
Vavrinek, Trine, Day & Company, who were the Company's independent
accountants for the fiscal year ended December 31, 1995, have been selected by
the Board of Directors as the Company's independent accountants for the fiscal
year ending December 31, 1996. A representative of Vavrinek, Trine, Day &
Company will attend the meeting, will have an opportunity to make a statement
and will be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Any shareholder desiring to submit a proposal for action at the 1996 Annual
Meeting of Shareholders and presentation in the Company's Proxy Statement with
respect to such meeting should arrange for such proposal to be delivered to the
Company at its principal place of business no later than December 13, 1996.
Matters pertaining to such proposals, including the number and length thereof,
eligibility of persons entitled to have such proposals included and other
aspects are regulated by the Securities Exchange Act of 1934, Rules and
Regulations of the Securities and Exchange Commission and other laws and
regulations to which interested persons should refer.
11
<PAGE> 15
OTHER MATTERS
Management is not aware of any other matters to come before the meeting. If
any other matter not mentioned in this Proxy Statement is brought before the
meeting, the proxy holders named in the enclosed Proxy will have discretionary
authority to vote all proxies with respect thereto in accordance with their
judgment.
By Order of the Board of Directors
George E. Langley
President
April 12, 1996
The Annual Report to Shareholders of the Company for the fiscal year ended
December 31, 1995 is being mailed to all shareholders of record as of April 3,
1996 concurrently with this Proxy Statement. The Annual Report is not to be
regarded as proxy soliciting material or as a communication by means of which
any solicitation is to be made.
COPIES OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 WILL BE
PROVIDED TO SHAREHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST TO THE SECRETARY,
FOOTHILL INDEPENDENT BANCORP, 510 SOUTH GRAND AVENUE, GLENDORA, CALIFORNIA
91741.
12
<PAGE> 16
Please mark
your votes /X/
as this
THE DIRECTORS RECOMMEND A VOTE "FOR" ITEM 1
1. ELECTION OF DIRECTORS
Election of the following nominees as Class I directors for a two year term:
George E. Langley, Douglas F. Tessitor and Max E. Williams
FOR all
nominees WITHHOLD
listed below AUTHORITY
(except as to vote for
marked to the all nominees
contrary below) listed below
/ / / /
(INSTRUCTIONS: To withhold authority to vote for any nominee, print that
nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
I will attend meeting / /
2. IN THEIR DISCRETION, ON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
SHAREHOLDER ON THIS PROXY. WHERE NO DIRECTION IS GIVEN, SUCH SHARES WILL BE
VOTED "FOR" THE ELECTION OF THE DIRECTORS NAMED ABOVE ON THIS PROXY. THIS PROXY
CONFERS DISCRETIONARY AUTHORITY TO CUMULATE VOTES FOR ANY AND ALL OF THE
NOMINEES FOR ELECTION OF DIRECTORS FOR WHICH AUTHORITY TO VOTE HAS NOT BEEN
WITHHELD.
Date , 1996
------------------------------------------
- ----------------------------------------------------
(Signature of shareholder)
Please sign your name exactly as it appears hereon. Executors, administrators,
guardians, officers of corporations, and others signing in a fiduciary capacity
should state their full titles as such.
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE> 17
PROXY
FOOTHILL INDEPENDENT BANCORP
PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF THE SHAREHOLDERS
MAY 14, 1996
The undersigned hereby nominates, constitutes and appoints William V. Landecena,
O.L. Mestad and George E. Langley, and each of them individually, the attorney,
agent and proxy of the undersigned, with full power of substitution, to vote all
stock of FOOTHILL INDEPENDENT BANCORP which the undersigned is entitled to
represent and vote at the 1996 Annual Meeting of Shareholders of the Company to
be held at The Grand, 526 W. Foothill Boulevard, Glendora, California, on May
14, 1996, at 4:30 p.m., and at any and all adjournments thereof, as fully as if
the undersigned were present and voting at the meeting, as follows:
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO SIGN AND RETURN
THIS PROXY, WHICH MAY BE REVOKED AT ANY TIME PRIOR TO ITS USE.
IMPORTANT - PLEASE SIGN AND DATE ON OTHER SIDE AND RETURN PROMPTLY
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
