<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 6)*
Foothill Independent Bancorp
----------------------------
(Name of Issuer)
Common Stock, par value $.01
----------------------------
(Title of Class of Securities)
344905104
---------
(CUSIP Number)
Thomas M. Cerabino, Esq., Willkie Farr & Gallagher,
787 Seventh Avenue, New York, New York 10019
(212) 728-8000
--------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 17, 1999
-----------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box .
Check the following box if a fee is being paid with the statement (A fee is not
required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-l(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 8 Pages
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SCHEDULE 13D
- ----------------------------- -----------------------------
CUSIP No. 344905104 Page 2 of 8 Pages
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORT PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Basswood Partners, L.L.C.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
553,421
NUMBER OF -------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY -------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 553,421
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
553,421
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.25 %
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 2 of 8 Pages
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SCHEDULE 13D
- ----------------------------- -----------------------------
CUSIP No. 344905104 Page 3 of 8 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORT PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Matthew Lindenbaum
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
553,421
NUMBER OF -------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY -------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 553,421
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
553,421
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.25 %
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 3 of 8 Pages
<PAGE>
SCHEDULE 13D
- ----------------------------- -----------------------------
CUSIP No. 344905104 Page 4 of 8 Pages
- ----------------------------- -----------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORT PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Bennett Lindenbaum
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
553,421
NUMBER OF -------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY -------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 553,421
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
553,421
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.25 %
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
Page 4 of 8 Pages
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The purpose of this Amendment No. 6 to the previously filed
Schedule 13D is to report a change in the disclosure set forth in Item 4
(Purpose of Transaction) as more fully described below.
Item 1. Security and Issuer
- ---------------------------
No change.
Item 2. Identity and Background
- -------------------------------
This Statement has been filed on behalf of the Reporting Persons,
namely Basswood, a Delaware limited liability company, Matthew Lindenbaum and
Bennett Lindenbaum, the managing members of Basswood. The principal business
address of each of the Reporting Persons is 645 Madison Avenue, 10th Floor, New
York, New York 10022. Basswood is the general partner of Basswood Financial
Partners, L.P. (the "Partnership"), and advises Basswood International Fund,
Inc., a Cayman Islands exempted company ("Basswood International"), Whitewood
Financial Partners, L.P., a Delaware limited partnership ("Whitewood"), and
certain managed accounts (including 1994 Garden State L.P., a Delaware limited
partnership ("Garden State") and Jet I, L.P., a Delaware limited partnership
("Jet I")), which may from time to time acquire Shares. The Partnership,
Basswood International, Whitewood, Garden State and Jet I are referred to
collectively as the "Accounts." As of the date hereof, 553,321 Shares are owned
by one or more of the Accounts and 100 Shares are owned of record by Bennett
Lindenbaum. From time to time, Shares may be sold between Accounts in the
ordinary course of investment business.
Messrs. Matthew Lindenbaum and Bennett Lindenbaum also have
investment discretion over certain other managed accounts which do not currently
own Shares but which may in the future buy and sell Shares from time to time.
During the last five years, none of the Reporting Persons nor any of
the Accounts has been (i) convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, United
States federal or state securities laws or finding any violations with respect
to such laws.
Each of Messrs. Matthew Lindenbaum and Bennett Lindenbaum is a citizen
of the United States.
Item 3. Source and Amount of Funds or Other Considerations
- ----------------------------------------------------------
As of the date hereof, each of the Reporting Persons may be deemed to
beneficially own 553,421 Shares, all of which Shares are held by the Accounts
(other than 100 Shares which are owned of record by Bennett Lindenbaum). The
Shares have been purchased in open market transactions at an aggregate cost of
$5,312,088.82. The funds for the purchase of the Shares held by the Accounts
and Mr. Lindenbaum have come from the various Accounts' respective working
capital. No leverage was used to purchase any of the Shares. However, one or
more of the Accounts' working capital may include the proceeds of margin loans
entered into in the ordinary course of business with Goldman, Sachs & Co., such
loans being secured by the securities owned by such Accounts.
Item 4. Purpose of Transaction
- ------------------------------
All Shares beneficially owned by the Reporting Persons were acquired
for, and are being held for, investment purposes.
On February 17, 1999, Basswood filed a Verified Petition for Peremptory
Writ of Mandate in the Superior Court of California, Los Angeles County (the
"Petition"), against Foothill pursuant to Sections 1600 and 1601 of the
California General Corporation Law and Section 1085 of the California Code of
Civil Procedure. The Petition asserts that, among other things, Foothill has
wrongfully refused to provide the list of shareholders
Page 5 of 8 Pages
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and corporate records that Basswood requested in its letters to Foothill on
December 21, 1998 and January 26, 1999. The Petition seeks a Writ of Mandamus
commanding Foothill to, among other things, permit inspection and copying of the
shareholder and corporate records requested by Basswood in its December 21, 1998
and January 26, 1999 letters. A copy of the Petition is attached hereto as
Exhibit B and incorporated herein by reference.
Except as discussed above, the Reporting Persons otherwise have no plan
or proposal which relates to, or would result in, any of the actions enumerated
in Item 4 of the instructions to Schedule 13D.
Item 5. Interest in Securities of the Company
- ---------------------------------------------
(a)-(b) As of the date hereof, the Reporting Persons each may be deemed to be
the beneficial owners of 553,421 Shares. Based on a communication from the
Company dated October 19, 1998, the Company informed Basswood that there were a
total of 5,985,699 Shares of Common Stock outstanding as of September 30, 1998.
Therefore, the Reporting Persons collectively may be deemed to be the beneficial
owners of approximately 9.25% of the outstanding Shares as of such date. The
Reporting Persons collectively have the power to vote, direct the vote, dispose
of or direct the disposition of all the Shares of which they may be deemed to be
the beneficial owners.
(c) The trading date, number of Shares purchased and price per Share (excluding
commissions, if any) for all transactions by the Reporting Persons for the
60-day period preceding February 17, 1999 through the date hereof are set forth
in Exhibit C hereto.
(d) Other than the Reporting Persons and the Accounts, with respect to the
Shares beneficially owned by them, no other person is known to have the right to
receive or the power to direct the receipt of dividends from, or the proceeds of
sale of, such Shares.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
- -----------------------------------------------------------------------------
to Securities of the Company
- ----------------------------
No change.
Item 7. Material to be Filed as Exhibits
- -----------------------------------------
The following exhibits are filed hereto:
Exhibit A: An agreement relating to the filing of a joint statement as
required by Rule 13d-1(k) under the Securities Exchange Act of
1934
Exhibit B: A copy of the Verified Petition for Peremptory Writ of Mandate
filed by Basswood on February 17, 1999 in Superior Court, County
of Los Angeles, California
Exhibit C: A description of the transactions in the Shares that were
effected by the Reporting Persons during the 60-day period
preceding February 17, 1999 through the date hereof
Page 6 of 8 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of our knowledge and belief,
the undersigned certify that the information set forth in this statement is
true, complete and correct.
Dated: February 17, 1999
BASSWOOD PARTNERS, L.L.C.
By: /s/ Matthew Lindenbaum
--------------------------
Name: Matthew Lindenbaum
Title: Managing Member
By: /s/ Bennett Lindenbaum
--------------------------
Name: Bennett Lindenbaum
Title: Managing Member
Page 7 of 8 Pages
<PAGE>
EXHIBIT INDEX
Exhibit Title
- ------- -----
Exhibit A: An agreement relating to the filing of a joint
statement as required by Rule 13d-1(k) under the
Securities Exchange Act of 1934
Exhibit B: A copy of the Verified Petition for Peremptory
Writ of Mandate filed by Basswood on February 17,
1999 in Superior Court, County of Los Angeles,
California
Exhibit C: A description of the transactions in the Shares
Shares that were effected by the Reporting
Persons during the 60-day period preceding
February 17, 1999 through the date hereof.
Page 8 of 8 Pages
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EXHIBIT A
AGREEMENT
The undersigned agree that this Schedule 13D relating to the Common
Stock of Foothill Independent Bancorp shall be filed on behalf of each of the
undersigned.
Dated: February 17, 1999
BASSWOOD PARTNERS, L.L.C.
By:______________________________
Name: Matthew Lindenbaum
Title: Managing Member
By:_______________________________
Name: Bennett Lindenbaum
Title: Managing Member
<PAGE>
EXHIBIT B
LATHAM & WATKINS
Marc W. Rappel (Bar No. 097032)
Amos E. Hartston (Bar No. 186471)
633 West Fifth Street, Suite 4000
Los Angeles, California 90071-2007
Telephone: (213) 485-1234
Facsimile: (213) 891-8763
Of Counsel:
WILLKIE FARR & GALLAGHER 787 Seventh Avenue New York, New York 10019
(212) 728-8000
Attorneys for Petitioner
Basswood Partners, LLC
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
BASSWOOD PARTNERS, LLC, CASE NO. _____________________
Petitioner,
VERIFIED PETITION FOR
PEREMPTORY WRIT OF
MANDATE
v.
Petition Filed: February 17, 1999
Trial Date: None Set
FOOTHILL INDEPENDENT BANCORP.,
Respondent.
- --------------------------------
<PAGE>
VERIFIED PETITION FOR PEREMPTORY WRIT OF MANDATE
------------------------------------------------
For its verified petition against Respondent Foothill Independent
Bancorp ("Foothill" or the "Company"), Basswood Partners, LLC ("Basswood" or
"Petitioner") alleges as follows:
1. Pursuant to Section 1085 of the California Code of Civil Procedure and
Sections 1600 and 1601 of the California General Corporation Law (the "CGCL" or
"Act"), Basswood petitions for a peremptory writ of mandamus compelling Foothill
to produce for inspection and copying (a) its shareholder list and related
records and (b) its accounting books and records and minutes of meetings.
Despite Basswood's clear entitlement to such corporate records and two written
requests for their production, Foothill has without justification refused to
comply with Basswood's request in its entirety and has failed to comply with its
obligations under the Act. In fact, Foothill appears to be embarked on a scheme
to deprive Basswood of its valuable voting rights under California law.
Immediate relief is required to protect Basswood's rights as a Foothill
shareholder, including its right to communicate with other shareholders.
The Parties
- -----------
2. Basswood is a Delaware limited liability company with its principal place
of business at 645 Madison Avenue, 10th Floor, New York, NY 10022. Basswood,
through a number of investment partnerships, is the owner of 553,421 shares, or
approximately 9.25%, of common stock of Foothill (including 100 shares as record
owner). Basswood is Foothill's largest single shareholder. As a shareholder
owning greater than 5% of Foothill's common stock, Basswood is entitled to seek
shareholder records as a matter of right pursuant to ss. 1600(a) of the CGCL
rather than upon showing of proper purpose under ss. 1600(c) of the CGCL.
3. Foothill is a California corporation with its principal offices at 510
South Grand Avenue, Glendora, CA 91741. Foothill's principal operating
subsidiary is Foothill Independent Bank, which has branches throughout the Los
Angeles area.
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<PAGE>
The Statutory Framework
- -----------------------
4. Sections 1600 through 1605 of the CGCL govern the obligations of
California corporations to maintain corporate records, the rights of
shareholders to inspect and copy such records, and judicial proceedings to
enforce those shareholders' rights. Section 1600 of the CGCL provides (with
emphasis supplied) that:
(a) A shareholder or shareholders holding at least 5 percent in the
aggregate of the outstanding voting shares of a corporation or who hold at
least 1 percent of those voting shares and have filed a Schedule 14A with
the United States Securities and Exchange Commission (or in case the
corporation is a bank the deposits of which are insured in accordance with
the Federal Deposit Insurance Act, have filed a Form F-6 with the
appropriate federal bank regulatory agency) shall have an absolute right to
do either or both of the following: (1) inspect and copy the record of
shareholders' names and addresses and shareholdings during usual business
hours upon five business days' prior written demand upon the corporation, or
(2) obtain from the transfer agent for the corporation, upon written demand
and upon the tender of its usual charges for such a list (the amount of
which charges shall be stated to the shareholder by the transfer agent upon
request), a list of the shareholders' names and addresses, who are entitled
to vote for the election of directors, and their shareholdings, as of the
most recent record date for which it has been compiled or as of a date
specified by the shareholder subsequent to the date of demand. The list
shall be made available on or before the later of five business days after
the demand is received or the date specified therein as the date as of which
the list is to be compiled. A corporation shall have the responsibility to
cause its transfer agent to comply with this subdivision. (footnotes
omitted) (italics in original; emphasis added).
5. The official comment to Section 1600 explicitly states that the section
"expands inspection rights by providing a mandatory right to inspect the stock
list for shareholders who have a significant ownership interest in the
corporation or who, in addition to a certain specified ownership interest in the
corporation, have instituted a proxy contest with respect to the election of
directors." As a 9.25% stockholder of Foothill, Basswood clearly has a
"significant ownership interest" within the meaning of Section 1600(a).
6. Section 1601(a) of the Act, entitled "Inspection of Corporate Records,"
provides shareholders with a right to inspect the accounting books and records
and minutes of the corporation, and states as follows:
The accounting books and records and minutes of proceedings of the
shareholders and the board and committees of the board of any domestic
corporation, and of any foreign corporation keeping any such records in this
state or having its principal executive office in this state, shall be open
to inspection upon the written demand on the corporation of any shareholder
or holder of a voting trust certificate at any reasonable time during usual
business hours, for a purpose reasonably related to such
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holder's interest as a shareholder or as the holder of such voting
trust certificate. The right of inspection created by this subdivision
shall extend to the records of each subsidiary of a corporation subject
to this subdivision.
7. Section 1603 of the Act permits a shareholder who has been denied access
to corporate records identified in Sections 1600 and 1601 of the Act to seek
judicial relief, and states that:
Upon refusal of a lawful demand for inspection, the superior court of the
proper county, may enforce the right of inspection with just and proper
conditions . . .
8. Section 1604, which was enacted to discourage corporations from refusing
in bad faith to comply with the right of inspection, further provides that a
petitioner can seek expenses and reasonable attorneys' fees incurred as a result
of proceeding under Sections 1600 and 1601:
In any action or proceeding under section 1600 or Section 1601, if the court
finds the failure of the corporation to comply with a proper demand
thereunder was without justification, the court may award an amount
sufficient to reimburse the shareholder or holder of a voting trust
certificate for the reasonable expenses incurred by such holder, including
attorneys' fees, in connection with such action or proceeding.
Basswood Requests Foothill's Corporate Records.
- -----------------------------------------------
9. On December 21, 1998, Basswood wrote to Foothill's board of directors
(hereinafter, the "Foothill Board") requesting "the right to inspect and copy
the records of the Company described in Section 1600 (a)(1) and (2) and in
Section 1601 of the CGCL during regular business hours on the sixth business day
following the date of this letter or as promptly thereafter as possible." (A
copy of Basswood's December 21 letter and the accompanying Annex A (the
"December 21 Request") is attached hereto as Exhibit A). The December 21 Request
also asked Foothill to "provide to [Basswood] the other information and permit
us to take the other actions set forth in Annex A [specifying certain
stockholder list information in greater detail] as expeditiously as possible."
10. The December 21 Request stated that Basswood had been a Foothill
shareholder since October 1996, and had "become convinced that the best means of
maximizing value for all
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of the Company's shareholders is to sell the Company." The December 21 Request
also explained that, in Basswood's view, the Company's performance had been
disappointing:
The financial performance of the Company has been disappointing. The core
return on equity, core return on assets and earnings per share growth are
all significantly worse than the average performance of the "Western Banks"
as defined in the SNL Quarterly Bank Digest - December 1998. Moreover, we
are unaware of any meaningful prospects for improvement. Any effort to
improve earnings by an acquisition strategy would involve substantial, and
we believe unacceptable, dilution to current shareholders.
11. Basswood further informed the Foothill Board that "a failure by the
[Foothill] Board to explore seriously the sale option would be inconsistent with
its fiduciary obligations to the shareholders." Although Basswood's entitlement
to shareholder records under Section 1600(a) of the Act was automatic, Basswood
set forth its purpose in seeking the records identified in the December 21
Request:
Because we believe that the board does not share our view, we intend to
communicate with other shareholders of the Company on matters relating to
our mutual interests as shareholders, including but not limited to
communicating with the Company's shareholders regarding the financial
underperformance by the Company in the recent past and methods to improve
the Company's future financial performance and the Company's value to its
shareholders.
12. Basswood identified in detail -- in Annex A to the December 21 letter --
the shareholder information that it sought. Basswood believes that the
information identified in Annex A to the December 21 letter is in the Company's
possession or can readily be obtained from outside sources. (Basswood is, of
course, willing to reimburse the Company's reasonable costs of obtaining the
information). For example, upon information and belief, the Company has recently
obtained a list of non objecting beneficial holders ("NOBO" list). This is a
record of Foothill's beneficial shareholders that do not object to their
identities being disclosed.
13. The information identified in Annex A to the December 21 letter included
the following:
o magnetic computer tape list of the shareholders showing the name,
address and number of shareholders held by each shareholder;
o daily transfer sheets showing changes in names and addresses of,
and number of shares held by, shareholders of record;
-4-
<PAGE>
the list of shareholders held in the name of Cede & Co., and
other similar nominees;
o information relating to the names of Non-Objecting Beneficial
Owners of shares in the form of a print-out and magnetic tape.
Upon information and belief, the Company has recently obtained a
NOBO list;
o stop lists relating to any shares and any changes, any
corrections, addition or deletions to the requested shareholder
lists; and
o lists of all holders of record owning 1,000 or more shares
arranged in descending order as of a recent date.
14. The shareholder records identified in Annex A are the type of records
that virtually all publicly-traded corporations have in their possession or can
readily obtain from their agents. As stated above, Basswood believes that the
NOBO list is already in the Company's possession.
Foothill Fails to Comply with Basswood's Request.
- -------------------------------------------------
15. On December 28, 1998, Foothill's President and Chief Executive Officer,
George E. Langley, replied to the December 21 Request. Mr. Langley's letter
(hereinafter, the "December 28 Response") (annexed hereto as Exhibit B) allowed
Basswood to inspect "a record of the Company's shareholders, containing the
names and addresses of all shareholders of record and the number and class of
the Company's shares held by each." However, rather than comply with its
obligations under the Act, the Company merely instructed its transfer agent,
ChaseMellon Shareholder Services, to provide limited information to Basswood,
namely a list of record holders of the Company's common stock and the number of
shares held by such shareholders. The list of shareholders provided by Foothill
was woefully inadequate because it identified "Cede & Co." as the holder of
approximately 50% of shares and, thus, allowed Basswood to identify only
approximately 50% of Foothill's outstanding shares. Furthermore, many of these
shareholders are directors and/or officers of Foothill. Foothill thus failed to
provide information described in Section 1600(a) of the Act and Annex A to the
December 21 Request, and therefore denied Basswood access to Foothill's list of
beneficial shareholders -- information critical to Basswood's ability to
communicate with Foothill's shareholder base.
-5-
<PAGE>
16. The December 28 Response also conclusorily stated that Basswood was not
entitled to inspect the records listed is Section 1601--that is, the books and
records of the Company -- and stated as follows:
[W]e do not believe that you have demonstrated that you are entitled
under California Law to inspect or copy the books or records of the
Company, as requested in your letter, and that, in the interests of all
shareholders of the Company, we must decline to make those books and
records available to you and your representatives.
17. The December 28 Response asserted that Basswood's purpose was not proper
by virtue of Basswood's interest in other California-based banking institutions
and that access to Foothill's books and records would not further the purpose
for which the records were sought. The December 28 Response further asserted
that even if Basswood's purpose was proper, records would not be made available
until Basswood executed a confidentiality agreement. The December 28 Response
also took issue with Basswood's statements regarding the financial
underperformance of the Company.
18. The Company's failure to provide its accounting books and records and
minutes available for inspection and copying pursuant to ss. 1601 of the CGCL
was especially disturbing because the Company had recently taken a number of
corporate actions that Basswood believes were designed to interfere with
Basswood's voting rights under California law. For example, on October 19, 1998,
the Company announced that it had expanded its board of directors and appointed
three new members to Foothill's classified board. However, there has been no
public disclosure as to which of the new directors will be up for reelection at
the annual meeting in 1999 or as to which class of directors such three new
directors were elected. On January 29, 1999, the Company announced that its
board of directors had amended the Company's bylaws to delete the section of the
bylaws addressing the nomination by shareholders of candidates to Foothill's
board of directors. Furthermore, the Company has recently made statements --
both to Basswood in correspondence and to the public in the form of press
releases -- regarding its financial performance; Basswood believes those
statements inaccurately portray Foothill's financial performance. As Foothill's
largest single shareholder, Basswood is entitled to access the Company's
accounting records and minutes to determine the basis for the Foothill Board's
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<PAGE>
conduct and Foothill's statements regarding its financial performance.
Basswood's purpose in seeking records under ss. 1601 of the CGCL is
unquestionably proper under California law.
Basswood Renews its December 21 Request on January 27, 1999.
- ------------------------------------------------------------
19. On January 27, 1999, Basswood renewed its request for shareholder
records (the "January 27 Request") (annexed hereto as Exhibit C). The January 27
Request acknowledged the Company's disagreement with Basswood's view regarding
the underperformance of the Company, but stated that Basswood "remain[ed]
interested in communicating with other shareholders of the Company on matters
relating to our mutual interests as shareholders." Furthermore, the January 27
Request reiterated that the Company had failed to provide information that was
critical to allowing Basswood to communicate with Foothill's other shareholders.
Foothill Again Rejects Basswood's Requests.
- -------------------------------------------
20. On February 8, 1999, Foothill again rejected Basswood's request for
corporate records under Sections 1600 and 1601 (the "February 8 Response")
(annexed hereto as Exhibit D). The Company stated that the information requested
in Annex A to the December 21 Request "goes well beyond the requirements of that
Section [1600]" and further stated that "we are also concerned that the
furnishing of the additional information that you have requested would establish
a precedent that could jeopardize the privacy rights of our shareholders." These
purported concerns were disingenuous because the NOBO list is, by definition, a
list of shareholders who do not object to the disclosure of their identities.
The February 8 Response again disagreed with Basswood's views regarding the
performance of the Company. The Company's apparent belief that it is performing
adequately is, however, irrelevant to whether it should provide the shareholder
records that Basswood seeks.
FIRST CAUSE OF ACTION
(For Shareholder Records under ss. 1600(a) of the CGCL)
-------------------------------------------------------
21. Petitioner incorporates by reference the allegations of paragraphs 1
through 20 above.
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<PAGE>
22. Petitioner's December 21 Request and January 27 Request constitute
lawful demands for corporate records identified in Sections 1600(a) of the Act.
23. Petitioner's purpose in seeking the shareholder list and other records
identified in Section 1600(a) and Annex A to the December 21 Request is to
communicate with other shareholders regarding, inter alia, the maximizing of
value to Foothill's shareholders, the financial performance of Foothill, and
Foothill's future financial performance.
24. Basswood owns approximately 9.25% of Foothill's outstanding shares and
constitutes Foothill's single largest shareholder. Basswood believes that
discussion of Foothill's performance with other shareholders and communication
with such shareholders regarding potential options to increase the value to
shareholders will be beneficial to all shareholders.
25. Petitioner's purpose is clearly proper and lawful under the Act and
Petitioner's request for the corporate records under ss. 1600(a) of the Act to
further such purpose is proper.
26. The December 21 Request and the January 27 Request described in detail
and with particularity the purpose for which Petitioner seeks the records
identified therein and the records that Petitioners desire to inspect -- even
though Section 1600(a) does not require that a shareholder such as Basswood have
a proper purpose for seeking access to the Company's shareholder list.
27. The records identified in Section 1600(a) of the Act and detailed in
Annex A to the December 21 Request are obviously and directly related to
Basswood's purpose. In fact, without access to Foothill's shareholder list,
including the list of non-objecting beneficial holders, Basswood will be unable
to communicate with other shareholders regarding their mutual interest
concerning Foothill and the maximization of shareholder value.
28. Foothill's responses to the December 21 Request and January 27 Request
have made it clear that Foothill disagrees with Basswood's belief regarding the
financial performance of the Company. However, such a disagreement does not
constitute a proper, reasonable or lawful basis to deny Petitioner access to the
records described in Section 1600(a) of the Act and detailed in Annex A to the
December 21 letter. If Foothill and the Foothill Board believe that Basswood is
mistaken in its views about the past and future performance of the Company and
the proper
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<PAGE>
means to maximize shareholder value, then the appropriate remedy is to put their
case to Foothill's shareholders; it is not lawful, justifiable or proper under
the Act to quash the debate by denying Petitioner the right to communicate with
other Foothill shareholders.
29. Petitioner has no plain, speedy or adequate remedy at law.
30. Foothill's refusal to provide Petitioner access to the shareholder list
and other records identified in ss. 1600(a) of the CGCL has no reasonable
factual or legal basis; rather, such conduct amounts to a bad faith effort to
prevent Petitioner from communicating with other Foothill shareholders.
31. Pursuant to Section 1604 of the Act, in addition to being compelled to
produce the shareholder records requested in the December 21 Request and January
27 Request, Foothill should also be ordered to pay costs incurred by Petitioner
in bringing these proceedings, including reasonable attorney's fees.
SECOND CAUSE OF ACTION
(For Corporate Records Pursuant to ss. 1601 of the CGCL)
--------------------------------------------------------
32. Petitioner incorporates by reference the allegations of paragraphs 1
through 31 above.
33. Petitioner's December 21 Request and January 27 Request made it clear
that Basswood sought access to Foothill's accounting books and records and
minutes within the meaning of Section 1601 of the CGCL.
34. Basswood's access to the records identified in Section 1601 of the CGCL
is clearly lawful and proper and is reasonably related to Basswood's interests
as a shareholder. The Company's accounting books and records and minutes will,
inter alia, disclose the basis for, and reasons behind, the board's recent
appointment of three new members to the Foothill's classified board and the
recent amendments to the Company's bylaws. In addition, the records will
disclose the basis for the Company's statements regarding its financial
performance. Basswood has an approximate 9.25% ownership interest in the Company
and is clearly entitled to such information.
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<PAGE>
35. Petitioner has no plain, speedy or adequate remedy at law.
36. Foothill's refusal to provide access to corporate records under ss. 1601
has no reasonable factual or legal basis; rather, such conduct amounts to a bad
faith effort to prevent Petitioner from communicating with other Foothill
shareholders and investigating conduct that Basswood believes is designed to
interfere with its voting rights.
37. Pursuant to Section 1604 of the Act, in addition to being compelled to
produce the corporate records requested (and identified in ss. 1601 of the Act),
Foothill should also be ordered to pay costs incurred by Petitioner in bringing
these proceedings, including reasonable attorney's fees.
WHEREFORE, Petitioner request judgment as follows:
(a) That respondent be cited to appear to answer this Petition;
(b) That a Writ of Mandamus issue forthwith commanding Foothill to
permit Petitioner, and its agents and attorneys, to inspect and copy, within
5 business days, records requested in Petitioner's December 21 Request and
Annex A thereto, including the following:
(1) Magnetic computer tape lists of the shareholders of Foothill of a
recent date showing the name and address of, and number of shares held
by, each shareholder of record, together with such computer processing
data as is necessary to make use of such magnetic computer tape, and
printouts of such magnetic computer tape for verification purposes;
(2) All daily transfer sheets showing changes in the names and
addresses of, and number of shares held by, shareholders of record of
Foothill which are in or come into the possession or control of
Foothill or its transfer agent, or which can reasonably be obtained
from brokers, dealers, banks, clearing agencies or voting trustees or
their nominees, from the date of the shareholder lists referred to in
paragraph (1) above through the date of the Court's order;
(3) All information in or which comes into the possession or control of
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<PAGE>
Foothill or its transfer agent, or which can reasonably be obtained
from brokers, dealers, banks, clearing agencies or voting trustees or
their nominees, concerning the names and addresses, and number of
shares held by, the participating brokers and banks name in the
individual nominee names of Cede & Co., and other similar nominees,
including omnibus proxies and all "Weekly Security Position Listing
Daily Closing Balances" reports issued by The Depository Trust Company,
and a list or lists containing the name and address of, and the number
of shares attributable to, any participant in the Company employee
stock ownership, dividend reinvestment, stock purchase or comparable
plan in which the decision how to vote or whether to dispose of shares
held by such plan is made, directly or indirectly, individually or
collectively, by the participants in the plan;
(4) All information in or which comes into the possession or control of
Foothill or its transfer agent, or which can reasonably be obtained
from brokers, dealers, banks, clearing agencies or voting trustees or
their nominees, relating to the names of the Non-Objecting Beneficial
Owners of shares in the format of a printout and magnetic tape in
descending order balance;
(5) A stop list or lists relating to any shares and any changes,
corrections, additions or deletions from the date of the shareholder
lists referred to in paragraph (1) above through the date of the
Court's order; and
(6) Lists of all holders of record of shares owning 1,000 or more
shares arranged in descending order as of a recent date.
(c) An order compelling Foothill to pay costs, including reasonable
attorney's fees, incurred by Petitioner in prosecuting this action pursuant
to ss. 1604 of the CGCL; and
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<PAGE>
(d) Any other relief that the Court deems just and proper.
Respectfully submitted,
LATHAM & WATKINS
Marc W. Rappel
Amos E. Hartston
By:______________________________
Marc W. Rappel
Attorneys for Petitioner
BASSWOOD PARTNERS, LLC.
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<PAGE>
VERIFICATION
------------
I am a managing member of Basswood Partners, LLC, a party to this
action, and am authorized to make this verification for and on its behalf, and I
make this verification for that reason. I have read the foregoing document. I am
informed and believe and on that ground allege that the matters stated in it are
true.
------------------------------
Matthew Lindenbaum
Subscribed and sworn to before me
this ___ day of February 1999
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<PAGE>
EXHIBIT C
<TABLE>
<CAPTION>
TRANSACTIONS IN SHARES DURING THE PERIOD COMMENCING FROM THE 60-DAY PERIOD
PRECEDING FEBRUARY 17, 1999 THROUGH THE DATE HEREOF
# of Shares Price per Transaction place Person Causing
Date Purchased Share and manner Transaction
- -------- ---------- --------- ----------------- --------------
<S> <C> <C> <C> <C>
12-18-98 100 $ 14.625 NASDAQ National Market Bennett Lindenbaum
(open market purchase)
12-31-98 1,185 $ 15.000 NASDAQ National Market Basswood Financial Partners, L.P.
(open market purchase)
12-31-98 52 $ 15.000 NASDAQ National Market 1994 Garden State, L.P.
(open market purchase)
12-31-98 251 $ 15.000 NASDAQ National Market Basswood International Fund, Inc.
(open market purchase)
12-31-98 12 $ 15.000 NASDAQ National Market Whitewood Financial Partners, L.P.
(open market purchase)
</TABLE>
