<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
(as permitted by Rule 14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
FOOTHILL INDEPENDENT BANCORP
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] $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
LOGO
FOOTHILL INDEPENDENT BANCORP
August 4, 2000
Dear Stockholder:
The Board of Directors joins me in extending to you a cordial invitation to
attend the Annual Meeting of Stockholders of Foothill Independent Bancorp (the
"Company") which will be held on Thursday, September 7, 2000, at 4:30 P.M., at
THE GLENDORA COUNTRY CLUB, 310 S. AMELIA AVENUE, Glendora, California.
The attached Notice of Annual Meeting and Proxy Statement describes in
detail the matters to be acted on at the meeting. We also will discuss the
operations of the Company and its wholly-owned subsidiary, Foothill Independent
Bank. Your participation in Company activities is important, and we hope you
will attend.
Whether or not you plan to attend the meeting, please be sure to complete,
sign, date and return the enclosed proxy card in the accompanying postage-paid
reply envelope so that your shares may be voted in accordance with your wishes.
Returning the enclosed proxy will not prevent you from voting in person if you
choose to attend the Annual Meeting.
Sincerely,
George E. Langley
President and Chief Executive Officer
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
510 South Grand Ave. [ ] Glendora, California 91741 [ ] (626) 963-8551 [
] (909) 599-9351
<PAGE> 3
FOOTHILL INDEPENDENT BANCORP
510 SOUTH GRAND AVENUE
GLENDORA, CALIFORNIA 91741
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 7, 2000
NOTICE TO THE STOCKHOLDERS OF FOOTHILL INDEPENDENT BANCORP:
The 2000 Annual Meeting of Stockholders of Foothill Independent Bancorp
(the "Company") will be held at THE GLENDORA COUNTRY CLUB, 310 S. AMELIA AVENUE,
Glendora, California, on Thursday, September 7, 2000, at 4:30 P.M., for the
following purposes:
1. To elect George E. Langley and Max Williams as the Class I
Directors of the Company for a term of two years ending at the Annual
Meeting of Stockholders to be held in 2002; and
2. To elect Donna Miltenberger and George Sellers as the Class II
Directors of the Company for a term of three years ending at the Annual
Meeting of Stockholders to be held in 2003; and
3. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Director Nominations. The Company's Bylaws provide that any stockholder
entitled to vote in the election of directors generally may nominate one or more
persons for election as directors at an Annual Meeting of Stockholders, but only
if written notice of the stockholder's intent to make the nomination(s) has been
received by the Secretary of the Company not less than sixty (60) nor more than
ninety (90) days prior to the first anniversary of the preceding year's annual
meeting of stockholders. However, due to the change in the date of the 2000
Annual Meeting, this year's notice of an intention to nominate candidates for
election to the Board may be given at any time up to August 14, 2000.
Any such notice must include the following information: (i) the name and
address of the nominating stockholder and of the person or persons to be
nominated; (ii) a representation that the stockholder is a holder of record of
stock of the Company entitled to vote and intends to appear in person or by
proxy at the Annual Meeting to nominate the person or persons specified in the
notice; (iii) a description of all arrangements or understandings between the
nominating stockholder or any person that directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control
with, such stockholder (an "Affiliate" of the nominating stockholder) or any
nominee and any other person or persons (naming such person or persons) relating
to the nomination or nominations proposed by that stockholder; (iv) the class,
series and number of the Company's shares that are owned by the nominating
stockholder and those owned by his or her proposed nominees and by any other
stockholders known by the nominating stockholder to be supporting such nominees
as of the date of such stockholder's notice; (v) such other information
regarding each nominee proposed by such stockholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission; and (vi) the written consent of each nominee
to serve as a director of the Company if so elected. Any stockholder who desires
to nominate one or more persons for election as directors at an Annual
Stockholders Meeting is also required to comply with all applicable requirements
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder.
The Bylaws further provide that the Chairman of the Annual Meeting may
disregard any nominations made other than in compliance with the above
requirements.
The 2001 Annual Meeting of Stockholders is scheduled to be held on May 8,
2001. Accordingly, stockholders desiring to nominate candidates for election at
that Meeting will be required to provide the Company with the notice and
information required by the above procedures by no later than March 9, 2001 and
no earlier than February 7, 2001.
<PAGE> 4
Only stockholders of record at the close of business on July 27, 2000 are
entitled to notice of and to vote at the Annual Meeting or any adjournment or
postponement thereof.
By order of the Board of Directors
George E. Langley
President and Chief Executive Officer
August 4, 2000
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING, YOU SHOULD COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY.
Returning the enclosed proxy will not prevent you from voting in person if you
choose to attend the Annual Meeting.
<PAGE> 5
FOOTHILL INDEPENDENT BANCORP
510 SOUTH GRAND AVENUE
GLENDORA, CALIFORNIA 91741
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 7, 2000
------------------------
INTRODUCTION
This Proxy Statement is furnished to you in connection with the
solicitation of proxies by the Board of Directors of Foothill Independent
Bancorp, a Delaware corporation (the "Company"), for use at the 2000 Annual
Meeting of Stockholders to be held on Thursday, September 7, 2000, at 4:30 P.M.,
at The Glendora Country Club, 310 S. Amelia Avenue, Glendora, California, and at
any adjournment or postponement thereof (the "Annual Meeting"). This Proxy
Statement and the accompanying proxy card are first being mailed to stockholders
on or about August 4, 2000.
Any stockholder who executes a proxy retains the right to revoke it at any
time before it is voted. You may revoke or supersede your proxy by signing a
proxy with a later date, or by giving written notice of revocation to the
Secretary of the Company, 510 South Grand Avenue, Glendora, California 91741,
prior to or at the Annual Meeting, or by attending the Annual Meeting and voting
in person. A proxy, when executed and not revoked, will be voted in accordance
with the instructions given in the proxy. If you do not specify a choice in the
proxy, the proxy will be voted "FOR" the nominees for election of directors
named in this Proxy Statement.
VOTING SECURITIES
The shares of common stock constitute the only class of outstanding voting
securities of the Company. Only the stockholders of the Company of record as of
the close of business on July 27, 2000 (the "Record Date") are entitled to
notice of and to vote at the Annual Meeting or any adjournment or postponement
thereof. As of July 27, 2000, there were 5,341,817 shares of common stock
outstanding and entitled to vote. A majority of the outstanding shares will
constitute a quorum at the Annual Meeting. Stockholders who withhold authority
to vote on the election of directors or abstain on any proposal, and broker
non-votes, will be counted in determining the presence of a quorum. You are
entitled to one vote for each share held as of the Record Date; and in the
election of directors you will be entitled, for each share of common stock that
you own, to cast one vote for a single nominee for each of the positions on the
Board of Directors standing for election.
SOLICITATION
We will pay the costs of soliciting proxies from our stockholders, and plan
on soliciting proxies by mail. In order to ensure adequate representation at the
Annual Meeting, directors, officers and employees (who will not receive any
additional compensation) of the Company or its wholly-owned subsidiary, Foothill
Independent Bank (the "Bank"), may communicate with stockholders, brokerage
houses and others by telephone, telegraph or in person, to request that proxies
be furnished. We will reimburse banks, brokerage houses, custodians, nominees
and fiduciaries for their reasonable expenses in forwarding proxy materials to
the beneficial owners of the Company's shares.
<PAGE> 6
PRINCIPAL STOCKHOLDERS
Set forth below is certain information as of July 27, 2000 regarding the
number of shares of the Company's common stock owned by (i) each person who we
know owns more than 5% of the outstanding shares of common stock of the Company,
(ii) each director and nominee for director, (iii) each of the executive
officers of the Company named in the Summary Compensation Table (the "Named
Officers"), and (iv) all directors and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME BENEFICIAL OWNERSHIP PERCENT OF CLASS
---- -------------------- ----------------
<S> <C> <C>
William V. Landecena............................. 369,673(1)(2)(3) 6.8%
O. L. Mestad..................................... 277,403(2)(3) 5.1%
George E. Langley................................ 207,905(2)(3) 3.8%
Richard Galich................................... 136,512(2)(3) 2.6%
Donna Miltenberger............................... 121,253(2)(3) 2.2%
Tom Kramer....................................... 120,627(3) 2.2%
Max Williams..................................... 82,764(2)(3) 1.5%
George Sellers................................... 33,953(2)(3) *
All Directors and Executive Officers of the
Company as a group (9 in number)............... 1,384,238(4) 23.7%
</TABLE>
---------------
(1) The shares beneficially owned by Mr. Landecena include shares held in
several trusts established by Mr. Landecena.
(2) Each of the Directors is a partner in a partnership that owns of record
100,000 shares of the Company's common stock . Included in each Director's
beneficial ownership total is 11,111 of such shares and each Director
disclaims beneficial ownership of the other shares held by the partnership.
(3) Includes shares of common stock subject to outstanding stock options
exercisable during the 60-day period ending September 25, 2000, as follows:
Mr. Landecena -- 81,488 shares; Dr. Mestad -- 84,703 shares; Mr. Langley
-93,520; Mr. Galich -- 14,500 shares; Ms. Miltenberger -- 66,789; Mr.
Kramer -- 58,976; Mr. Williams -- 64,071 shares; and Mr. Sellers -- 14,500
shares.
(4) Includes an aggregate of 494,901 shares of common stock subject to
outstanding stock options exercisable during the 60-day period ending
September 25, 2000.
ELECTION OF DIRECTORS
(PROPOSALS 1 AND 2)
At the Annual Meeting, stockholders will vote on the election of:
1. George E. Langley and Max Williams as the Class I Directors of the
Company for a term of two years ending at the Annual Meeting of
Stockholders to be held in 2002 until their successors are elected and
qualified, or until their earlier death, resignation or removal; and
2. Donna Miltenberger and George Sellers as the Class II Directors of the
Company for a term of three years ending at the Annual Meeting of
Stockholders to be held in 2003 until their successors are elected and
qualified, or until their earlier death, resignation or removal.
The Class I and the Class II Directors will be elected separately at the
Annual Meeting, so that stockholders will be voting on the election of the Class
I Directors (Proposal 1) and then, separately, on the election of the Class II
Directors (Proposal 2). The Board of Directors will vote all proxies received by
them FOR the election of the two Class I Nominees named above and FOR the
election of the two Class II Nominees, also named above, unless a contrary
instruction is given in the proxy. All of the nominees and directors named below
are incumbent directors of the Company. All of the nominees were previously
elected to the Board of Directors by the stockholders, except Donna Miltenberger
and George Sellers who were
2
<PAGE> 7
appointed by the Board of Directors to fill vacancies on the Board. Each of the
nominees named below also serves as a director of the Bank.
Under Delaware law, the two nominees in each Class 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, and broker
non-votes, which will not be counted, will have no practical effect.
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 four nominees and the
current directors are set forth below. YOUR BOARD OF DIRECTORS RECOMMENDS THAT
YOU VOTE "FOR" THE ELECTION OF EACH OF THE CLASS I NOMINEES AND EACH OF THE
CLASS II NOMINEES NAMED BELOW.
<TABLE>
<CAPTION>
DIRECTOR
NAME AND POSITION AGE SINCE(1) PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
----------------- --- -------- -------------------------------------------------
<S> <C> <C> <C>
CLASS I DIRECTOR-NOMINEES
George E. Langley 59 1980 Mr. Langley has served as President and Chief
President, Chief Executive Executive Officer of the Company and the Bank
Officer and a Director of since 1992. From 1976 when he joined the Bank
the Company and the Bank until 1992, Mr. Langley served as an Executive
Vice President, Chief Financial Officer and
Secretary of the Company and the Bank. Mr.
Langley has served on numerous community and
professional boards throughout his career and
currently serves as Treasurer on the Board of the
Glendora Public Library Friends Foundation, and
is a board member of Casa Colina, Inc.
Max Williams 56 1995 Mr. Williams is a licensed architect with a
Director of the Company Bachelor's degree in Architecture and a Master's
and the Bank degree in Urban and Regional Planning. He is, and
since 1979 has been, the owner and president of
his own architectural 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 a past president
of the Inland California Chapter, of the American
Institute of Architects.
CLASS II DIRECTOR-NOMINEES
Donna Miltenberger 44 1998 Ms. Miltenberger has served as Executive Vice
Executive Vice President, President and Chief Operating Officer of the
Chief Operating Officer Company and the Bank since 1997. From 1992 to
and Director of the 1997, Ms. Miltenberger served in various
Company and the Bank executive capacities, including Executive Vice
President and Chief Administrative Officer, with
the Company and the Bank. Prior to joining
Foothill, Ms. Miltenberger served as Executive
Vice President for CVB Bancorp and Chino Valley
Bank, and President of a data processing
subsidiary of CVB Bancorp. During Ms.
Miltenberger's 26-year career, she has served on
boards of various community and professional
organizations, and is currently President of
Chino Commerce Center.
</TABLE>
3
<PAGE> 8
<TABLE>
<CAPTION>
DIRECTOR
NAME AND POSITION AGE SINCE(1) PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
----------------- --- -------- -------------------------------------------------
<S> <C> <C> <C>
George Sellers 60 1998 Mr. Sellers is an Accountant and Enrolled Agent
Director of the Company licensed by the Internal Revenue Service to
and the Bank represent tax payers. Mr. Sellers has owned
Merchants Bookkeeping since 1974 which provides
various accounting and tax services to local
businesses, non-profit organizations, and
individuals located primarily in the greater San
Gabriel Valley and the Inland Empire. Mr. Sellers
has served on several community boards during the
past 30 years, including the American Youth
Soccer Organization, and currently is a member in
the West End Service Club and Upland Foothill
Kiwanis.
CLASS III DIRECTORS
Richard Galich 61 1998 Dr. Galich is a doctor of Otolaryngology -- Head
Director of the Company and Neck Surgery with a Bachelors degree from
and the Bank Indiana University and Doctor of Medicine from
Loyola University/Chicago, Illinois. Since 1972,
Dr. Galich has been in private practice in the
east San Gabriel Valley in Southern California.
Dr. Galich served as Chairman of the Board at San
Dimas Community Hospital and Chief of Medical
Staff for Foothill Presbyterian Hospital. He is a
Fellow, American College of Surgeons and American
Academy of Otolaryngology -- Head and Neck
Surgery.
William V. Landecena 75 1973 Mr. Landecena has been a director of the Bank
Chairman of the Board of since its inception. Prior to 1981, Mr. Landecena
Directors and a Director owned and operated Arrow Meat Company located in
of the Company and the Upland, California. Since 1981, Mr. Landecena has
Bank been a private investor and manager, primarily in
the Inland Empire area. Mr. Landecena is active
in the Upland YMCA where he serves on the Board
and is Chairman of the building committee. He is
a charter member (1965) of the Upland Foothill
Kiwanis and has been a volunteer SCORE (Service
Corp of Retired Executives) Counselor for the U.
S. Small Business Administration for 7 years.
O. L. Mestad 77 1973 Dr. Mestad has been a director since the Bank's
Director of the Company inception and served as Chairman of the Board for
and the Bank eight of those years. Dr. Mestad was engaged in
the private practice of dentistry for 30 years,
retiring in 1983. During that time, Dr. Mestad
served on numerous community and professional
boards. Currently, Dr. Mestad is Chairman of the
Board at Foothill Presbyterian Hospital, a member
of the board of directors of Citrus Valley Health
Partners, and a trustee of the Governance Forum
of the California Hospital Association.
</TABLE>
---------------
(1) All dates are the dates when the named individuals first became directors of
the Bank, the Company's predecessor and wholly owned subsidiary.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors of the Company held 14 meetings during the year
ended December 31, 1999. 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.
There are no family relationships among any of the directors or executive
officers of the Company.
4
<PAGE> 9
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 10 percent
or more of the Company's common stock were satisfied with respect to the
Company's fiscal year ended December 31, 1999.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Bank has established an Examining and Audit
Committee and 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, William V. Landecena, Richard Galich, George Sellers
and Douglas Tessitor. 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, 1999.
The Compensation Committee is comprised of five directors selected by the
Board of Directors of the Bank. The members of the Committee are William V.
Landecena, O. L. Mestad, Richard Galich, George Sellers and George E. Langley.
The Compensation 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 Compensation Committee held four meetings during the year ended
December 31, 1999.
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.
Any stockholder who desires the Board of Directors to consider any person
for nomination as a candidate for election to the Board of Directors at the 2001
Annual Meeting may send a written notice to the Secretary of the Company by no
later than March 9, 2001, at the Company's principal executive offices, that
identifies the proposed nominee or nominees and contains the information set
forth in the description of the Nomination Procedures contained in the Notice of
Annual Meeting of Stockholders that accompanies this Proxy Statement. The Notice
of Annual Meeting of Stockholders also contains a description of the procedures
by which stockholders may make nominations at an Annual Meeting of Stockholders,
which includes the giving of prior written notice to the Company of an intention
to do so, together with information called for by those procedures.
5
<PAGE> 10
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth compensation received for the three fiscal
years ended December 31, 1999, by the Company's Chief Executive Officer, and the
other executive officers whose aggregate cash compensation for services rendered
to the Company in all capacities in 1999 exceeded $100,000 (collectively, the
"Named Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION -------------
------------------------------- STOCK OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) (SHARES) COMPENSATION
--------------------------- ---- --------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C>
George E. Langley....................... 1999 $269,939(2) $135,785 25 $29,017(3)
President and Chief Executive Officer
of 1998 269,695(2) 124,242 -0- 26,688(3)
the Company and the Bank 1997 235,048(2) 120,975 20,000 17,714(3)
Donna Miltenberger...................... 1999 191,114(4) 86,160 10,025 5,966(5)
Executive Vice President and Chief 1998 166,012(4) 79,328 10,000 4,300(5)
Operating Officer of the Company &
Bank 1997 146,969 79,328 15,000 3,268(5)
Tom Kramer.............................. 1999 167,101 28,771 25 20,301(6)
Executive Vice President, 1998 158,303 76,404 -0- 17,061(6)
Chief Credit Officer and Secretary of
the 1997 154,103 76,404 5,000 13,259(6)
Company and Bank
</TABLE>
---------------
(1) Bonuses were paid 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) Includes directors' fees paid to Mr. Langley by the Company and the Bank in
each year presented.
(3) Includes above-market earnings of $20,749, $18,508 and $14,381 accrued in
1999, 1998 and 1997, respectively, 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 $8,268 in
1999, $8,180 in 1998 and $3,333 in 1997.
(4) Includes director's fees paid to Ms. Miltenberger by the Company and the
Bank in 1999 and in the last three months of 1998.
(5) Includes employer contributions to the 401k Plan of $5,966 in 1999, $4,300
in 1998 and $3,268 in 1997.
(6) Includes above-market earnings of $14,555, $12,920 and $10,048 accrued in
1999, 1998 and 1997, respectively, on compensation deferred in 1985 through
1989 by Mr. Kramer under the 1985 Deferred Compensation Plan and employer
contributions to the 401k Plan of $5,746 in 1999, $4,141 in 1998 and $3,210
in 1997.
6
<PAGE> 11
STOCK OPTIONS
Option Grants in 1999. The following table provides information on option
grants in fiscal 1999 to the Named Officers.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE OF
OPTIONS AT ASSUMED
PERCENT OF ANNUAL
TOTAL OPTIONS RATES OF STOCK PRICE
GRANTED TO APPRECIATION FOR
OPTIONS ALL EMPLOYEES EXERCISE OPTION TERMS(5)
GRANTED IN IN FISCAL PRICE EXPIRATION ---------------------
NAME 1999 1999(3) ($/SHARE)(4) DATE 5% 10%
---- ---------- ------------- ------------ ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
George Langley............ 25(1) * $14.75 3/30/09 $ 161 $ 474
Donna Miltenberger........ 25(1) * 14.75 3/30/09 161 474
10,000(2) 32.65% 12.875 9/9/09 83,050 208,450
Tom Kramer................ 25(1) * 14.75 3/30/09 161 474
</TABLE>
---------------
* Less than 1%
(1) Shares become exercisable immediately.
(2) A total of 2,384 of these shares became exercisable on January 1, 2000. The
remaining 7,616 shares will become exercisable on January 1, 2001.
(3) Options to purchase an aggregate of 30,700 shares were granted to all
employees in fiscal 1999, including the named officers.
(4) The exercise price may be paid by delivery of already-owned shares.
(5) There is no assurance that the values that may be realized by an executive
on exercise of his options will be at or near the value estimated in the
table, which utilizes arbitrary compounded rates of growth of stock price of
5% and 10% per year.
FISCAL YEAR-END OPTION VALUES. None of the Named Officers exercised any
options in 1999. The following table provides information with respect to the
value of unexercised "in-the-money" options held by the Named Officers as of
December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT FY-END (#) OPTIONS AT FY-END ($)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
George E. Langley.......................... 93,520 0 $587,935 $ 0
Donna Miltenberger......................... 64,405 10,000 273,565 1,250
Tom Kramer................................. 58,976 0 377,863 0
</TABLE>
---------------
(1) The average of the high and low prices of the Company's common stock on
December 31, 1999 on the NASDAQ National Market System was $13.00.
EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL AGREEMENTS
Mr. Langley is employed as the Bank's President and Chief Executive Officer
pursuant to an employment agreement which became effective October 1, 1997 and
expires September 30, 2000. Under that agreement, Mr. Langley receives a base
annual salary of $244,000 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 that Mr. Langley's employment is terminated without cause prior to
September 30, 2000, Mr. Langley's salary, bonuses and other benefits would be
continued for a period of three years measured from the September 30 immediately
following such termination. In the event of 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
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Mr. Langley's employment is terminated for cause, by reason of resignation or
disability, and Mr. Langley, during the period ending on the later of September
30, 2000 or the first anniversary of the effective date of such termination,
refrains from accepting employment from, and from providing consulting or
advisory services to, any competing banking or depository institution, then for
such period all life, medical, dental and disability insurance programs in which
Mr. Langley was participating at that time will be continued.
In October 1997, Mr. Langley and the Bank entered into a severance
compensation agreement. The agreement provides that if there is a change in
ownership of the Company or the Bank, whether by acquisition of shares, merger
or sale of assets, and following such change in control, Mr. Langley's
employment is terminated without cause, or if Mr. Langley terminates his
employment due to a reduction in his compensation or the scope of his authority
or duties, Mr. Langley shall receive a payment equal to the sum of (i) an amount
equal to three times the highest base salary paid to Mr. Langley during the
twelve month period prior to such termination, (ii) an amount equal to the
bonuses that would have been paid to Mr. Langley under any applicable incentive
compensation plans, assuming all performance goals established under such plans
had been met and (iii) an amount equal to the difference between the exercise
price and the fair market value of all shares subject to vested and unvested
stock options held by Mr. Langley. In addition, upon such termination following
a change in control of the Bank or the Company, Mr. Langley's benefits would be
continued for a period of three years from the date of termination.
The Bank also has a severance compensation agreement with Ms. Miltenberger
that is substantially similar to the Langley severance compensation agreement
and an agreement with Mr. Kramer which entitles him to receive two full years'
compensation if he is terminated or his compensation or job responsibilities are
reduced following a change in control of the Company or the Bank, whether by
acquisition of shares, merger or sale of assets.
DIRECTORS' FEES
During fiscal 1999 the Bank paid the Chairman of the Board of Directors
$1,950 per month and each other director, including Mr. Langley and Ms.
Miltenberger, $1,550 per month in directors' fees for services and attendance at
Board and committee meetings, and each director received $540 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 will 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 the
Compensation Committee.
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.
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<PAGE> 13
Under another 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 may have, banking transactions in the
ordinary course of its business with directors, principal stockholders 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.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Members of the Compensation Committee of the Board of Directors in 1999
were O. L. Mestad, William V. Landecena, Richard Galich, George Sellers, all of
whom are non-employee Directors of the Company and the Bank, and George E.
Langley, the President and Chief Executive Officer of the Company and the Bank.
Mr. Langley's primary role on the Compensation Committee is to provide
input on the performance of the Company's executive officers and other key
management employees, and Mr. Langley does not participate in the deliberations,
and he does not vote on decisions, regarding his compensation.
No executive officer of the Company served on the board of directors or
compensation committee of any entity which has one or more executive officers
serving as members of the Company's Board of Directors or Compensation
Committee.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation 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.
The following report is submitted by the Compensation Committee members
with respect to the executive compensation policies established by the
Compensation Committee and approved by the Board of Directors of the Bank and
the compensation of executive officers in fiscal 1999.
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
Compensation 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 stockholders, primarily
through stock option grants which reward executives for improvements in
the market performance of the Company's common stock.
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<PAGE> 14
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 Compensation 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.
CEO COMPENSATION
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 October 1997, the Bank entered into an employment agreement with George
Langley, the Company's Chief Executive Officer, which extends his employment
until September 30, 2000. See "COMPENSATION OF EXECUTIVE OFFICERS -- Employment
Agreements and Change of Control Agreements for a description of Mr. Langley's
compensation under that Agreement. The decision to enter into a multi-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.
PERFORMANCE-BASED COMPENSATION
The Compensation 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 Compensation Committee has identified several performance factors which
affect a bank's profitability and which the Compensation Committee believes are
important to the enhancement of stockholder value. 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. The Board of Directors also
establishes an earnings goal for the year. A percentage (determined by the
Compensation Committee and approved by the Board 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 and the
allocation of the bonuses among Executive Officers and other management
employees depends on an assessment by the Compensation Committee of the
contribution that they made to the Company's achievement of the performance
goals established for the year in question.
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 1999, the
Bank's
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<PAGE> 15
performance met or exceeded the performance goals established by the
Compensation Committee for that year and, as a result, bonuses awarded for 1999
performance were generally somewhat higher than those awarded in 1998.
The Board of Directors has established an incentive plan for the year
ending December 31, 1999, which raises even further the standards of performance
that must be met by the Company, before any of the Named Officers can receive
bonuses in amounts exceeding the bonuses earned in 1999.
STOCK PROGRAMS
In order to align the financial interests of senior executives and other
key employees with those of the stockholders, 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 stockholders. 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 1999.
William V. Landecena
O.L. Mestad
Richard Galich
George Sellers
George E. Langley
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 12 shall not be incorporated by reference into any
such filings.
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<PAGE> 16
COMPANY PERFORMANCE
The following graph shows a five-year comparison of cumulative total
returns for the Company, the Russell 2000 index and an index of peer group
companies published by SNL Securities LC.
COMPARISON OF CUMULATIVE TOTAL RETURN
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
FOOTHILL INDEPENDENT
BANCORP RUSSELL 2000 SNL
-------------------- ------------ ---
<S> <C> <C> <C>
12/31/94 100.00 100.00 100.00
12/31/95 101.85 98.18 136.80
12/31/96 161.04 126.11 176.08
12/31/97 258.00 146.91 300.16
12/31/98 265.71 179.76 274.07
12/31/99 235.76 216.37 253.69
</TABLE>
The graph above compares the performance of the Company with that of (i)
the companies included in the Russell 2000 Index, and (ii) an index, published
by SNL Securities LC, which is made up of banks and bank holding companies with
assets of up to $500 million, the shares of which are traded on the NASDAQ Stock
Market.
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
Russell 2000 Index and the Peer Group Companies is based on the stock price or
index at the end of fiscal 1994.
INDEPENDENT PUBLIC ACCOUNTANTS
Vavrinek, Trine, Day & Co., LLP, who were the Company's independent
accountants for the fiscal year ended December 31, 1999, have been selected by
the Board of Directors as the Company's independent accountants for the fiscal
year ending December 31, 2000. A representative of Vavrinek, Trine, Day & Co.,
LLP will attend the meeting, will have an opportunity to make a statement and
will be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
The next Annual Meeting of Stockholders of the Company is scheduled to be
held on May 8, 2001. In accordance with the Bylaws of the Company, any
stockholder desiring to submit a proposal for action at the 2001 Annual Meeting
of Stockholders and inclusion in the Company's Proxy Statement for that Meeting
must
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<PAGE> 17
provide the Company with written notice of that proposal by no later than March
9, 2001 and no earlier than February 7, 2001. 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, the Rules and Regulations of the Securities and
Exchange Commission and other laws and regulations to which interested persons
should refer.
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
August 4, 2000
The Annual Report to Stockholders of the Company for the fiscal year ended
December 31, 1999 has previously been mailed or is being mailed concurrently
with this Proxy Statement to all stockholders of record as of July 27, 2000. 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, 1999 WILL BE
PROVIDED TO STOCKHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST TO THE SECRETARY,
FOOTHILL INDEPENDENT BANCORP, 510 SOUTH GRAND AVENUE, GLENDORA, CALIFORNIA
91741.
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<PAGE> 18
PROXY
FOOTHILL INDEPENDENT BANCORP
PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF THE STOCKHOLDERS
September 7, 2000
The undersigned hereby nominates, constitutes and appoints William V. Landecena,
O.L. Mestad and Richard Galich, 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 2000 Annual Meeting of Stockholders of the Company to
be held at The Glendora Country Club, 310 So. Amelia Avenue, Glendora,
California, on September 7, 2000, at 4:30 p.m., and at any and all adjournments
and postponements 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 COMPLETE,
SIGN, DATE 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
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FOLD AND DETACH HERE
<PAGE> 19
Please mark
your votes as [X]
this.
THE DIRECTORS RECOMMEND A VOTE FOR THE ELECTION OF THE DIRECTORS NAMED BELOW
1. ELECTION OF CLASS I DIRECTORS FOR A TWO YEAR TERM
FOR all nominees listed below (except WITHHOLD AUTHORITY to
as marked to the contrary below) vote for all nominees listed below
[ ] [ ]
George E. Langley and Max Williams
(INSTRUCTIONS: To withhold authority to vote for any nominee, print that
nominee's name in the space provided below.)
--------------------------------------------
2. ELECTION OF CLASS II DIRECTORS FOR A THREE YEAR TERM
FOR all nominees listed below (except WITHHOLD AUTHORITY to
as marked to the contrary below) vote for all nominees listed below
[ ] [ ]
Donna Miltenberger and George Sellers
(INSTRUCTIONS: To withhold authority to vote for any nominee, print that
nominee's name in the space provided below.)
-------------------------------------------
3. IN THEIR DISCRETION, ON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ADJOURNMENT THEREOF.
I will attend the Annual Meeting: [ ]
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 AS DIRECTORS OF THE NOMINEES NAMED ABOVE ON THIS PROXY.
THIS PROXY CONFERS DISCRETIONARY AUTHORITY TO VOTE ON ALL OTHER MATTERS WHICH
MAY COME BEFORE THE ANNUAL MEETING.
Signature(s) ________________________________________ Date ______________ , 2000
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.
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