<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.142-12
GUARDIAN BANCORP
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
JON D. VAN DEUREN
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(j)(1), or 14a-6(j)(2)
/ / $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:*
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / 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>
GUARDIAN BANCORP
800 SOUTH FIGUEROA STREET
LOS ANGELES, CALIFORNIA 90017
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
JUNE 1, 1994
---------------------
TO EACH SHAREHOLDER OF GUARDIAN BANCORP:
You are invited to attend the 1994 Annual Meeting of Shareholders of
Guardian Bancorp, which will be held at the Los Angeles Biltmore Hotel, 506
South Grand Avenue, Los Angeles, California, on Wednesday, June 1, 1994, at 9:00
o'clock a.m., Pacific time, for the following purposes:
1. To elect nine directors to serve until the next annual meeting of
shareholders and until their successors are duly elected and qualified.
The following nine persons are the Board of Directors' nominees:
<TABLE>
<S> <C>
Vincent A. Bell James F. Lewin
Marilyn M. Cohen Saul Socoloske
Paul M. Harris Jon D. Van Deuren
Howard C. Fletcher III Michael J. Welch
Robert D. Frandzel
</TABLE>
2. To approve the Company's new 1994 Long-Term Incentive Plan which (a)
provides that the aggregate number of shares of Common Stock authorized
for issuance under such plan shall be 600,000 shares initially plus 2% of
the total outstanding shares of the Company determined each year for the
first five years of the Plan, (b) replaces both the 1984 Stock Incentive
Plan, which expired on March 21, 1994, and the 1990 Stock Incentive Plan,
which has 97,377 remaining shares authorized, and (c) allows the Board to
grant nonqualified and incentive stock option grants, stock appreciation
rights, restricted stock and performance awards to executives and other
key employees of the Company and its subsidiaries.
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only shareholders of record at the close of business on April 4, 1994 are
entitled to notice of, and to vote at, the meeting.
By Order of the Board of Directors,
/s/ Vincent A. Bell
VINCENT A. BELL
SECRETARY
Los Angeles, California
April 28, 1994
TO ENSURE YOUR REPRESENTATION, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED
PROXY AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE ENCLOSED ENVELOPE. IF YOU
ATTEND THE MEETING AND WISH TO VOTE IN PERSON, YOUR PROXY WILL NOT BE USED.
<PAGE>
GUARDIAN BANCORP
800 SOUTH FIGUEROA STREET
LOS ANGELES, CALIFORNIA 90017
------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
JUNE 1, 1994
---------------------
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Guardian Bancorp, a California corporation
(the "Company"), for the 1994 Annual Meeting of Shareholders of the Company to
be held on Wednesday, June 1, 1994, at 9:00 o'clock a.m., Pacific time, at the
Los Angeles Biltmore Hotel, 506 South Grand Avenue, Los Angeles, California, and
any adjournment thereof (the "Annual Meeting"). The purposes of the Annual
Meeting as set forth in the Notice of Annual Meeting of Shareholders to which
this Proxy Statement is attached include: (1) the election of nine directors to
serve until the next annual meeting of shareholders and until their successors
are duly elected and qualified, (2) the approval of the Company's new 1994
Long-Term Incentive Plan, as more fully described herein, and (3) the
transaction of such other business as may properly come before the meeting or
adjournment thereof. The Company expects that this Proxy Statement and the form
of proxy will first be mailed to shareholders of record on or about April 29,
1994.
The cost of this solicitation will be paid by the Company. The solicitation
of proxies will be made primarily by use of the mails. In addition, directors,
officers and regular employees of the Company may make solicitations personally
or by telephone or telegraph. The Company will request banks, brokers,
fiduciaries and other persons holding stock in their names, or in the names of
their nominees, to forward proxies and proxy materials to their principals and
obtain authorization for the execution and return of such proxies to management.
The Company will reimburse such banks, brokers and fiduciaries for their
out-of-pocket expenses in connection therewith. The Company has retained
Corporate Investors Communications, Inc. to assist in the solicitation of
proxies for a fee of approximately $3,000.00 plus reimbursement of reasonable
out-of-pocket expenses.
A proxy for use at the Annual Meeting is enclosed. Any proxy given may be
revoked by a shareholder at any time before it is exercised by filing with the
Secretary of the Company a notice in writing revoking it or by duly executing
and delivering to the Secretary of the Company a proxy bearing a later date.
Proxies may also be revoked by any shareholder present at the Annual Meeting who
expresses a desire to vote such shares in person. Subject to such revocation and
except as otherwise stated herein or in the form of proxy, all proxies duly
executed and received prior to, or at the time of, the Annual Meeting will be
voted in accordance with the specifications on the proxies. If no specification
is made, proxies will be voted "For" the nominees for election of directors set
forth elsewhere herein (see "DIRECTORS AND EXECUTIVE OFFICERS -- Election of
Directors"), "For" approval of the 1994 Long-Term Incentive Plan and at the
discretion of the proxyholders on all other matters that may properly come
before the Annual Meeting or any adjournment thereof.
If you hold your shares of Company common stock in "street name" and you
fail to instruct your broker or nominee as to how to vote such shares of common
stock, your broker or nominee may, in its discretion, vote your shares of common
stock "For" the election of the nominees for director set forth herein and "For"
approval of the 1994 Long-Term Incentive Plan.
In the election of directors, if a quorum is present, the nine candidates
receiving the highest number of votes are elected; votes withheld and broker
nonvotes have no legal effect but will have the
<PAGE>
practical effect of voting against the nominees. With respect to any other
matter presented at the Annual Meeting, if a quorum is present, the approval of
such matter would require (i) the affirmative vote of the majority of the shares
represented and voting at the Annual Meeting and (ii) the affirmative vote of at
least a majority of the required quorum. Abstentions from voting and broker
nonvotes would have no effect on the outcome with respect to the first test
because they are not deemed to be shares represented and voting at the Annual
Meeting and would have the practical effect of a vote against the proposal with
respect to the second test as they would not constitute affirmative votes for
such matter.
OUTSTANDING SHARES AND VOTING RIGHTS
There were issued and outstanding 12,514,075 shares of the Company's common
stock, no par value (the "Common Stock"), on April 4, 1994, which has been set
as the record date for the purpose of determining shareholders entitled to
notice of, and to vote at, the Annual Meeting. On any matter submitted to a
shareholder vote, each holder of Common Stock will be entitled to one vote, in
person or by proxy, for each share of Common Stock registered in his or her name
on the books of the Company as of the record date. In the election of directors,
however, each shareholder has cumulative voting rights and is entitled to as
many votes as shall equal the number of shares held by him or her, multiplied by
the number of directors to be elected, and may cast all of his or her votes for
a single candidate or may distribute such votes among any or all of the
candidates as he or she sees fit. For a shareholder to cumulate votes, such
shareholder must give notice of his or her intention to cumulate votes prior to
the voting. If any shareholder gives such notice, all shareholders may cumulate
their votes. Discretionary authority to cumulate votes is hereby solicited by
the Board of Directors, and return of an executed proxy shall grant such
authority. Accordingly, if cumulative voting is invoked, and unless contrary
instructions are given by a shareholder who signs a proxy, all votes represented
by each proxy will be cast in such manner and in accordance with the discretion
of the proxyholders as will result in the election of as many of the Board of
Directors' nominees as is possible.
DIRECTORS AND EXECUTIVE OFFICERS
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the Board of Directors shall consist
of not fewer than seven nor more than 13 directors. The Board of Directors has
fixed the exact number of directors at nine and nominated the persons set forth
below for election as directors of the Company at the Annual Meeting. All of the
nominees are currently serving as directors of the Company and the Company's
wholly-owned subsidiary, Guardian Bank (the "Bank"). Each director elected will
serve until the next annual meeting of shareholders and until his or her
successor is elected and qualified.
According to the Bylaws of the Company, any shareholder may make nominations
for the election of directors if notice of such nominations is delivered to, or
mailed and received at, the principal executive office of the Company not fewer
than 30 calendar days prior to the date of the originally scheduled meeting;
provided, however, that, if fewer than 40 calendar days notice or prior public
disclosure of the date of the meeting is given or made by the Company, notice of
such nomination must be so received not later than the close of business on the
tenth calendar day following the earlier of the day on which notice of the
meeting was mailed or the day on which such public disclosure was made. If
nominations are not so made, only the nominations of the Board of Directors may
be voted upon at the meeting.
Votes will be cast according to the proxies in such a way as to effect the
election of the Board's nine nominees, or as many of them as is possible, under
applicable voting rules (see "OUTSTANDING SHARES AND VOTING RIGHTS"). If a
quorum is present, the nine nominees receiving the highest number of votes cast
will be elected regardless of whether any one of them receives the vote of a
majority of the shares represented at the meeting. If any nominee is unable to
serve, the proxies will be voted by the persons named in the form of proxy in
their discretion for another person.
2
<PAGE>
The following is a summary of certain information regarding the persons
nominated by the Board of Directors for election as directors.
<TABLE>
<CAPTION>
DIRECTOR
AGE SINCE PRINCIPAL OCCUPATION
--- -------- ------------------------------------------------------------
<S> <C> <C> <C>
Vincent A. Bell 70 1983 Mr. Bell has been Secretary of the Company and the Bank
since May 1983 and has recently served the Bank in a con-
sulting capacity and as Special Advisor to the President of
the Bank since July 1993. From January 1993 to June 1993,
Mr. Bell served as Executive Vice President and Chief Oper-
ating Officer of the Bank. From May 1983 to December 1993,
Mr. Bell served as Executive Vice President and Chief Finan-
cial Officer of the Bank. From May 1983 to January 1993, Mr.
Bell served as Executive Vice President and Chief Financial
Officer of the Company. Mr. Bell has served as a member of
the Bank's Board of Directors since 1983. Mr. Bell holds a
Bachelor of Arts Degree and a LL.B from the University of
Iowa.
Marilyn M. Cohen 44 1983 Ms. Cohen has held the position of Managing Director/Fixed
Income Securities at the investment advisory firm of L & S
Advisors, Inc. since October 1992. Prior thereto, she had
been President of Capital Insight Brokerage, Inc., a
privately-held securities brokerage firm, since February
1988. Ms. Cohen holds a Bachelor of Science degree in
Psychology from the University of California at Los Angeles
and a Master of Business Administration degree from
Pepperdine University, Los Angeles, California.
Paul M. Harris 53 1983 Mr. Harris has been Chairman of the Board and Chief Execu-
tive Officer of the Company and Chairman of the Board of the
Bank since their incorporation. Until May 3, 1993, Mr.
Harris had served as Chief Executive Officer of the Bank.
Mr. Harris holds a Bachelor of Science Degree in accounting
from Woodbury University, Los Angeles, California.
Howard C. Fletcher III 46 1993 Mr. Fletcher has been President of the Company since August
25, 1993 and has been President and Chief Executive Officer
of the Bank since May 3, 1993 and prior thereto had served
as acting President and Chief Executive Officer since March
22, 1993. Prior thereto, Mr. Fletcher was employed by
Security Pacific Corporation ("SPC") and Security Pacific
Bank ("SPB") between 1974 and 1992 in a variety of capaci-
ties, including President and Chief Executive Officer of
Bancwest Mortgage Corporation, a subsidiary of SPC; General
Auditor of SPB; Senior Vice President and Administrator, SPB
Retail Bank; Senior Vice President and Deputy Administrator,
International Banking Group; and as a director and Chief
Operating Officer of Bank of Canton, Ltd., a SPB subsidiary.
Mr. Fletcher holds a Bachelor of Science degree in Business
Administration and a Master of Business Administration from
the University of Southern California.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
AGE SINCE PRINCIPAL OCCUPATION
--- -------- ------------------------------------------------------------
<S> <C> <C> <C>
Robert D. Frandzel 51 1983 Mr. Frandzel has been Chairman of the Board of Frandzel &
Share, A Law Corporation, specializing in banking law, since
1979. He holds a Bachelor of Science degree from the Univer-
sity of California at Los Angeles and a Juris Doctorate
degree from the University of Southern California, Los
Angeles, California.
James F. Lewin 47 1994 Mr. Lewin has been President and Chief Executive Officer of
Freedom Surfaces Company, Inc., a manufacturer of table tops
and counter tops since April 1991. Prior thereto, Mr. Lewin
was with Security Pacific National Bank from 1975 to 1990
where he was a Senior Vice President. Mr. Lewin holds a
Bachelor of Arts degree in Political Science from the
University of Cincinnati.
Saul Socoloske 63 1983 Mr. Socoloske has been President of Cass Luis, Inc., a pri-
vately-held company, since 1978. Cass Luis, Inc. is a real
estate development and construction company located in
Woodland Hills, California. Mr. Socoloske is a licensed
civil and structural engineer and holds a Master of Science
degree in civil engineering from Lehigh University,
Bethlehem, Pennsylvania.
Jon D. Van Deuren 41 1994 Mr. Van Deuren has been Executive Vice President and Chief
Financial Officer of the Company and the Bank since Sep-
tember 1993. Prior thereto, he was Senior Vice President
since 1991 and Chief Financial Officer of the Bank and the
Company since December 1992 and January 1993, respectively.
Prior to joining the Company, from 1975 to 1991, he was most
recently a partner in the certified public accounting firm
of KPMG Peat Marwick. He holds a Bachelor of Science degree,
with distinction, in Business Administration from California
State University, Long Beach.
Michael J. Welch 41 1994 Mr. Welch has been employed by Mattel Corporation in vari-
ous capacities since 1988, most recently as Director of
Strategic Planning and Acquisitions. He has also served as
Assistant Treasurer of Mattel Corporation. Mr. Welch holds a
Bachelor of Science degree in Business Administration and a
Master of Business Administration from the University of
Southern California.
</TABLE>
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors has appointed various standing committees, including
an Executive Committee, an Audit and Compliance Committee and a Compensation
Committee. The Company does not have a Nominating Committee, and the procedures
for nominating directors, other than by the Board of Directors itself, are set
forth in the Company's Bylaws and this Proxy Statement (see "DIRECTORS AND
EXECUTIVE OFFICERS -- Election of Directors").
The Executive Committee, between meetings of the Board and while the Board
is not in session, possesses all the powers and may exercise all the duties of
the Board of Directors in the management of the affairs of the Company which by
law may be delegated to it by the Board of Directors. The Executive Committee
met seven times during 1993. The Executive Committee is chaired by Marilyn Cohen
and is currently composed of Messrs. Harris, Fletcher, Lewin, and Socoloske.
4
<PAGE>
The Audit and Compliance Committee is empowered to (i) meet with the
independent auditors of the Company and review the scope of their annual audit,
address any open questions as to the choice of acceptable accounting principles
to be applied and all other matters relating to the auditors' relationship with
the Company; (ii) advise and assist the Board in evaluating the auditors'
performance, including the scope and adequacy of the auditors' examination;
(iii) recommend the firm of independent auditors to be employed by the Company;
(iv) review the Company's annual financial statements and discuss such
statements with the auditors prior to their release; (v) receive and consider
the auditors' comments and suggestions as to the internal audit and control
procedures, adequacy of staff and other matters; (vi) perform such other
functions and undertake such investigations relating to the financial and
accounting aspects of the Company as the Board may direct; (vii) retain and
consult with counsel or such other experts as the committee may consider
necessary or appropriate in connection with the discharge of its duties; and
(viii) address the Company's and the Bank's compliance with regulatory matters.
The Audit Committee met eight times during 1993 to address audit related issues
and thirty-eight times in connection with regulatory compliance matters. In late
1993, due to the number of meetings, overlapping responsibilities with the Audit
Committee and duplication of committee members, the Compliance Committee was
formally merged with the Audit Committee to become the Audit and Compliance
Committee. The practice of merging these committees of the Board of Directors is
consistent with that of other financial institutions in response to a changed
regulatory environment. The Audit and Compliance Committee is currently chaired
by Mr. Frandzel and includes Mr. Socoloske and Ms. Cohen.
The Compensation Committee was established during the first quarter of 1993.
This Committee was formed to (i) prepare written annual reviews of senior
executive officers; (ii) consider the recommendations of outside consultants as
they relate to senior executive compensation; and (iii) analyze employee salary
grades within the Bank's peer group. During 1993, the Compensation Committee was
chaired by Ms. Cohen and included Messrs. Harris, Fletcher, Lewin, Socoloske and
Deborah Manning, an officer of the Bank. The Compensation Committee met seven
times in 1993, but all decisions and analysis regarding compensation were
generally made by the entire Board of Directors, based upon input provided by
the Executive Committee. As a result of changes to the Internal Revenue Code
(the "Code") that were made in 1993, the Board of Directors has reconstituted
the Compensation Committee so that, as the 1994 Long-Term Incentive Plan
requires, all members of the Compensation Committee are "outside directors" as
that term is specially defined in Section 162(m) of the Code. For these
purposes, an "outside director" is an individual who is (a) not a current
employee of the Company or certain affiliates, (b) not a former employee of the
Company or certain affiliates who is receiving currently compensation for prior
services (other than benefits under a tax-qualified retirement plan), (c) has
never been an officer of the Company or certain affiliates, and (d) does not
receive remuneration, either directly or indirectly, from the Company or certain
affiliates in any capacity (such as for goods or services) other than as a
director. The Compensation Committee has adopted and will administer the 1994
Long-Term Incentive Plan. It is intended that future decisions regarding
compensation, including those related to stock options, will be subject to
ratification by the full Board of Directors, based upon approval,
recommendations and analysis performed by the Compensation Committee.
During 1993, the Board of Directors held sixteen meetings. Except for Mr.
Bohana, no director attended fewer than 75 percent of the number of meetings of
the Board and of the committees on which he or she served during 1993. Mr.
Bohana resigned from the Company's and the Bank's Board of Directors effective
April 26, 1994.
5
<PAGE>
EXECUTIVE OFFICERS
The following is a summary of certain information regarding the persons who
serve as executive officers of the Company.
<TABLE>
<CAPTION>
AGE PRINCIPAL OCCUPATION
--- --------------------------------------------------------------------
<S> <C> <C>
Paul M. Harris 53 Mr. Harris has been Chairman of the Board and Chief Executive
Officer of the Company and the Bank since their incorporation. On
May 3, 1993, Mr. Harris ceased to serve as Chief Executive Officer
of the Bank. Mr. Harris holds a Bachelor of Science Degree in
accounting from Woodbury University, Los Angeles, California.
Howard C. Fletcher III 46 Mr. Howard C. Fletcher III has been President of the Company since
August 1993, President and Chief Executive Officer of the Bank since
May 3, 1993 and had served as acting President and Chief Executive
Officer of the Bank since March 22, 1993. Prior thereto, Mr.
Fletcher was employed by Security Pacific Corporation between 1974
and 1992 in a variety of capacities (see "DIRECTORS AND EXECUTIVE
OFFICERS -- Election of Directors"). He holds a Bachelor of Science
degree in Business Administration and a Master of Business Adminis-
tration from the University of Southern California.
Jon D. Van Deuren 41 Mr. Van Deuren has been Executive Vice President and Chief Finan-
cial Officer of the Company and the Bank since September 1993. Prior
thereto, he was Senior Vice President since November 1991 and Chief
Financial Officer of the Bank and the Company since December 1992
and January 1993, respectively. Prior to joining the Company, from
1975 to 1991, he was most recently a partner in the certified public
accounting firm of KPMG Peat Marwick. He holds a Bachelor of Science
degree, with distinction, in Business Administration from California
State University, Long Beach.
Howard A. Shields 56 Mr. Shields has been Executive Vice President and Chief Credit Of-
ficer of the Bank since November 1993. Mr. Shields was a consultant
to the Company from September 1993 through November 1993. From
February 1993 through September 1993, Mr. Shields was a Credit
Specialist, at the Federal Deposit Insurance Corporation, Division
of Liquidation. From February 1992 through February 1993, Mr.
Shields was a temporary FDIC employee in the Division of
Liquidation. From February 1992 through August 1992, Mr. Shields was
Senior Vice President/Manager of Problem Loan Administration,
Independence Bank. From May 1989 through August 1992, Mr. Shields
was an independent consultant working with banks and attorneys as an
advisor and expert witness.
Kenneth J. Meister 47 Mr. Meister has been President of Guardian Trust Company since No-
vember 1990. From August 1986 to October 1990 Mr. Meister was Vice
President and Manager of Union Bank of California's Labor Manage-
ment Division. Prior thereto, from October 1970 to August 1986 Mr.
Meister was with Crocker Bank and served as Vice President and
Manager of its Southern California Employee Benefit Trust Group.
</TABLE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock by each person nominated to serve as a
director of the Company, each person who is currently serving as a director of
the Company, each of the Named Executives and
6
<PAGE>
by all directors and executive officers of the Company as a group as of March
31, 1994. The Company knows of no person who is the beneficial owner of more
than five percent of the Company's Common Stock.
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY
OWNED AS OF 3/31/94 (1)
--------------------------
NUMBER OF
NAME OF BENEFICIAL OWNER SHARES PERCENT (2)
- - ------------------------------------------------------------------- ------------- ----------
<S> <C> <C>
DIRECTORS AND NOMINEES
Vincent A. Bell.................................................... 61,325(3) * %
Marilyn M. Cohen................................................... 179,438(4) 1.41
Paul M. Harris..................................................... 356,259(5) 2.77
Howard C. Fletcher III............................................. 32,200(6) *
Robert D. Frandzel................................................. 156,567(7) 1.24
James F. Lewin..................................................... 3,000 *
Saul Socoloske..................................................... 42,243(8) *
Jon D. Van Deuren.................................................. 14,211(9) *
Michael J. Welch................................................... -- --
NAMED EXECUTIVE OFFICERS
Paul M. Harris..................................................... 356,259(5) 2.77%
Howard C. Fletcher III............................................. 32,200(6) *
Jon D. Van Deuren.................................................. 14,211(9) *
Kenneth J. Meister................................................. 3,750(10) --
Howard A. Shields.................................................. 2,222 *
Arthur W. Tate..................................................... 2,856(11) *
Ronald W. Holloway................................................. 19,669(12) *
All directors and executive officers as a group (10 persons
including those named above excluding Messrs. Tate and
Holloway)......................................................... 851,215(13) 6.6
<FN>
- - ------------------------
* Less than 1%.
</TABLE>
7
<PAGE>
<TABLE>
<S> <C>
(1) Unless otherwise stated in the following notes or required by the community
property laws of the State of California, each person listed has sole
voting and dispositive power with respect to his or her shares. Does not
include shares held in trust for the account of the named individuals or
group under the Guardian Bancorp 1990 Deferred Compensation Plan.
(2) In computing the percentage of shares beneficially owned, the number of
shares which the person or group has a right to acquire within 60 days are
deemed outstanding for the purposes of computing the percentage of Common
Stock beneficially owned by such person or group, but are not deemed
outstanding for the purpose of computing the percentage of shares
beneficially owned by any other person.
(3) Includes 11,111 shares held by Mr. Bell's wife and 3,676 shares held in
trust under the ESOP and 37,889 shares which may be acquired within 60 days
through exercise of outstanding options. Mr. Bell disclaims any beneficial
interest in the shares held by his wife.
(4) Includes 61,753 shares which may be acquired within 60 days through the
exercise of outstanding options.
(5) Includes 10,690 shares held in trust under the Guardian Bancorp Employee
Stock Ownership Plan ("ESOP") and 187,966 shares which may be acquired
within 60 days through the exercise of outstanding options. Mr. Harris'
address is the same as that of the Company.
(6) Includes 8,000 shares which may be acquired within 60 days through the
exercise of outstanding options.
(7) Includes 5,858 shares held in trust for Mr. Frandzel's sister and 5,852
shares held in trust for certain minors, for which Mr. Frandzel serves as
trustee, and 57,233 shares which may be acquired within 60 days through the
exercise of outstanding options. Mr. Frandzel disclaims any beneficial
interest in the shares held in trust for his sister and certain minors.
(8) Includes 32,743 shares which may be acquired within 60 days through the
exercise of outstanding options.
(9) Includes 2,300 shares which may be acquired within 60 days through the
exercise of outstanding options.
(10) Includes 3,750 shares which may be acquired within 60 days through the
exercise of outstanding options.
(11) Includes 2,856 shares held in trust under the ESOP. On August 23, 1993, Mr.
Tate ceased to serve as an executive officer of the Company.
(12) Includes 2,831 shares held in trust under the ESOP. On August 23, 1993, Mr.
Holloway ceased to serve as an executive officer of the Bank.
(13) Includes 20,053 shares held in trust under the ESOP and 392,434 shares
which may be acquired by members of the group within 60 days through the
exercise of outstanding options.
</TABLE>
8
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the Company's
Chief Executive Officer and six other executive officers of the Company
(determined as of the end of the last fiscal year) whose annual salary in 1993
exceeded $100,000 (the "Named Executives") for each of the fiscal years ended
December 31, 1993, 1992 and 1991:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------
ANNUAL COMPENSATION PAYOUT
----------------------------------------------------------- AWARDS -------------
NAME AND PRINCIPAL OTHER ANNUAL ------------ LTIP ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION (1) OPTIONS PAYOUT COMPENSATION
- - -------------------------- ------------ -------------- ----------- ---------------- ------------ ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Paul M. Harris 1993(3) $ 239,220 $ -- $ 3,000 -- $ -- $ --
Chief Executive Officer 1992 338,560 -- 18,000 -- 21,975(2) --
of the Company and Bank 1991 294,400 -- 28,000 --
Howard C. Fletcher 1993(4) 113,557(5) -- -- 40,000(7) -- --
President of the Company 1992 -- -- -- -- -- --
and President and Chief 1991 -- -- -- -- --
Executive Officer of
the Bank
Jon D. Van Deuren 1993 119,230 -- -- 7,500(7) -- --
Executive Vice President 1992 110,000 -- -- 2,000(7) -- --
of the Company and Bank 1991(6) 17,086 -- -- -- --
Howard A. Shields 1993(9) 42,147(10) -- -- 30,000(7) -- --
Executive Vice President 1992 -- -- -- -- -- --
of the Bank 1991 -- -- -- -- -- --
Kenneth J. Meister 1993 145,547 -- -- 8,750(7) -- --
President of Guardian 1992 131,800 -- -- -- -- --
Trust Company 1991 117,228 -- -- -- -- --
Arthur W. Tate 1993 213,428 -- 12,750 -- -- 170,859(8)
President of the 1992 227,813 -- 18,000 -- -- --
Company 1991 216,211 -- 28,000 -- --
Ronald W. Holloway 1993 132,458 -- 7,500 -- -- 110,742(8)
Vice Chairman of the 1992 221,484 -- 18,000 -- -- --
Bank 1991 200,977 -- 28,000 -- --
<FN>
- - ------------------------
(1) Reflects fees earned as a director.
(2) Reflects the exercise of 7,500 units under the Company's 1985 Stock
Appreciation Rights Plan ("SAR Plan") and the resulting cash payment. Under
the SAR Plan, each unit entitled the holder to receive an amount equal to
the difference between the average market share of the Company's
</TABLE>
9
<PAGE>
<TABLE>
<S> <C>
common stock over the last 20 days preceding the date of exercise and the
book value of one share
of Common Stock as of the end of the fiscal quarter immediately preceding
the exercise. The SAR Plan and all remaining unexercised units thereunder
expired during 1992.
(3) On May 3, 1993, Mr. Harris ceased to serve as Chief Executive Officer of
the Bank.
(4) Employment commenced May 3, 1993.
(5) Includes $25,906 of compensation earned as a consultant to the Bank from
March 22, 1993 to May 2, 1993.
(6) Employment commenced November 7, 1991.
(7) Represents an award of stock options under the Company's 1984 Stock
Incentive Plan.
(8) Employment ceased August 23, 1993. Amount represents severance payments
made pursuant to terminated employment arrangements.
(9) Employment commenced November 3, 1993.
(10) Includes $21,455 of compensation earned as a consultant to the Bank from
September 7, 1993 to November 2, 1993.
</TABLE>
EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
During 1992, the Company and the Bank entered into an Employment Agreement
with Mr. Harris, which provides for a three year term commencing on October 20,
1992 and sets forth the compensation Mr. Harris will receive for his services as
Chief Executive Officer of the Company. This agreement provides for an annual
salary of $338,560. In the event the Company's profitability and overall
financial condition return to acceptable levels, as determined by the Board of
Directors, the annual salary shall be increased at the rate of 12 1/2% and
thereafter at the rate of 12 1/2% per annum on each anniversary date of the
agreement. Mr. Harris' Employment Agreement and the bases for compensation
thereunder are discussed in the Board of Directors' Report on Executive
Compensation.
The agreement provides for additional compensation to be paid to Mr. Harris,
if appropriate, in the form of a Senior Management Incentive Program to be
determined in the sole discretion of the Board of Directors. No Senior
Management Incentive Program exists. The executive is also eligible to
participate in any and all other employee benefits and plans that exist or may
be developed and adopted by the Company and the Bank. The agreement also
provides the executive with use of an automobile, life insurance and other
insurance benefits as provided by the group insurance program of the California
Bankers Association or equivalent coverage, expense reimbursement, vacation and
other customary employee benefits. The agreement stipulates specific grounds for
its termination by the Company or the Bank and authorizes set severance payments
to the executive, dependent upon the circumstances of the termination. The Board
of Directors has the authority to terminate Mr. Harris at any time if it
determines that his continued employment is detrimental to the best interests of
the shareholders. If this right is exercised at any time within two years from
the effective date of the agreement, Mr. Harris would be entitled to receive one
year's salary plus a pro rata share of any additional compensation based on the
actual time he was employed during the year of termination. If this right is
exercised at any time thereafter, the executive would be entitled to receive the
balance of his salary for the remainder of the third year plus a pro rata share
of any additional compensation provided for in the agreement based on the actual
time the executive was employed during the year.
Mr. Harris has voluntarily agreed to a reduction in his 1994 annual salary
to $175,000 and during 1993 voluntarily ceased using a Company automobile. The
Board of Directors has the authority to restore his salary to its original
level, in its sole discretion, based on the Company's profitability.
During 1992, the Company and the Bank entered into separate employment
agreements with Messrs. Tate and Holloway, formerly President of the Company and
Vice Chairman of the Bank,
10
<PAGE>
respectively. On August 23, 1993, Messrs. Tate and Holloway ceased to serve as
executive officers of the Company. Each agreement stipulated specific grounds
for its termination by the Company and the Bank and authorized set severance
payments to the individual, dependent upon the circumstances of the termination.
Severance payments made in 1993 in connection with these terminated employment
arrangements aggregated $281,601.
DIRECTOR COMPENSATION
Each director of the Company currently receives a fixed monthly fee of
$1,500 for serving on the Company's Board of Directors. From January to July
1993 the monthly fee was $1,500; from August 1993 to January 1994 the monthly
fee was $750. However, if a director is absent from more than one meeting during
the calendar year, this fee is forfeited for each month during which such
director is absent from a meeting. No fees are paid for committee meetings. The
aggregate amount of directors' fees paid in 1993 was $116,250.
APPROVAL OF THE 1994 LONG-TERM INCENTIVE PLAN
In March 1984, and again in February 1990, the Board of Directors adopted
and the stockholders subsequently approved, the Company's 1984 and 1990 Stock
Incentive Plans (the "Plans"). The 1984 Plan was amended in 1987, resulting in
an aggregate number of shares authorized under the Plans of 1,001,719 and
187,500 as adjusted for stock splits.
At December 31, 1993, options (net of canceled or expired options) covering
an aggregate of 797,131 shares of the Company's Common Stock had been granted
under the Plans, and 127,379 shares remained available for future grant under
the 1990 Plan. Approximately 264,700 shares that remained under the 1984 Plan
were no longer available for issuance under the 1984 Plan as of March 21, 1994.
The Compensation Committee has adopted and the Board has ratified the new
1994 Long-Term Incentive Plan (the "LTIP" or "Plan"), as a replacement for the
Plans, subject to stockholder approval. The LTIP specifies an initial
authorization of 674,797 shares of the Company's Common Stock for issuance under
the LTIP. At March 31, 1994 the Company's Common Stock closed at $1 7/8 per
share. The number of available shares shall be adjusted in each of the
subsequent five (5) years following adoption of the LTIP by the Compensation
Committee and ratification by the Board by reference to the total outstanding
shares of the Company's Common Stock on January 1 of that year as provided in
the LTIP. The initial authorization is an increase of 674,797 shares over the
remaining unissued shares of the 1984 and 1990 Plans. The Compensation Committee
adopted and approved and the Board ratified and approved the LTIP to ensure that
the Company can continue to grant stock options and other incentive-based
compensation to employees at levels determined appropriate by the Compensation
Committee and the Board.
The Board's and the Compensation Committee's approval of the LTIP also
reflects a desire to change the eligibility and basis by which grants are made
to outside Directors who are on the Compensation Committee and administer the
Plan.
Stockholders are requested to approve the 1994 LTIP as summarized below and
stated in full in the LTIP document which is attached hereto as Appendix A.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF
APPROVAL OF THE 1994 LONG-TERM INCENTIVE PLAN
The essential features of the 1994 Long-Term Incentive Plan are outlined
below:
GENERAL
The LTIP provides for the grant of both incentive and nonstatutory
(nonqualified) stock options. Incentive stock options granted under the LTIP are
intended to qualify as "incentive stock options" within the meaning of Section
422 of the Code. Nonstatutory (nonqualified) stock options granted under the
LTIP are intended not to so qualify. The LTIP also provides for the granting of
stock
11
<PAGE>
appreciation rights, restricted stock and performance awards as described below.
See "Federal Income Tax Information" for a discussion of the tax treatment of
incentive stock options, nonstatutory stock options, and other awards.
PURPOSE
The LTIP was adopted to promote and advance the interests of the Company and
its shareholders by providing a means by which selected officers and employees
of and nonemployee Directors serving on behalf of the Company and its
subsidiaries could be given an opportunity to acquire stock in the Company and
other incentive-based awards, to assist in attracting and retaining the services
of employees holding key positions, and to provide incentives for such key
employees to exert maximum efforts toward results that are in the best interest
of all stockholders.
ADMINISTRATION
The LTIP is administered by the Compensation Committee of the Board of
Directors and subject to final ratification of the full Board of Directors of
the Company. The Committee has the power to construe and interpret the LTIP and,
subject to provisions of the LTIP, to determine the persons to whom and the
dates on which options or awards will be granted, the number of shares to be
subject to each option or award, the times during the term of each option or
award within which all or a portion of such option or award may be exercised,
the exercise price, the type of consideration and other terms and conditions of
such option or award. The Committee shall be composed solely of individuals who
are "outside directors" within the meaning of Section 162(m)(4)(C) of the Code.
ELIGIBILITY
Incentive stock options may be granted under the LTIP only to employees
(including Directors if they are also key employees) of the Company and its
subsidiaries. Selected employees and nonemployee Directors are eligible to
receive nonstatutory (nonqualified) stock options, stock appreciation rights,
restricted awards, performance awards and other awards under the LTIP. Awards
under the Plan may be made to directors of the Company or its subsidiaries, as
well as managerial and other key employees of the Company or its subsidiaries
who hold positions of significant responsibilities or whose performance or
potential contribution, in the judgment of the Compensation Committee, will
benefit the future success of the Company. Currently, approximately 30 employees
and Directors will be eligible to receive awards under the LTIP.
No option may be granted under the LTIP to any person who, at the time of
the grant, owns (or is deemed to own) stock possessing more than 10% of the
total combined voting power of the Company or any subsidiary of the Company,
unless the option exercise price is at least 110% of the fair market value of
the stock subject to the option on the date of the grant and the term of the
option does not exceed five years from the date of the grant. For incentive
stock options granted under the LTIP, the aggregate fair market value,
determined at the time of the grant, of the shares of Common Stock with respect
to which such options are exercisable for the first time by an optionee during
any calendar year (under all such plans of the Company and its subsidiaries) may
not exceed $100,000. As a result of enactment of Section 162(m) of the Code, and
to give the Compensation Committee flexibility in structuring awards, the LTIP
states that in the case of stock options and stock appreciation rights, no
person may receive in any year a stock option to purchase more than 300,000
shares or a stock appreciation right measured by more than 300,000 shares.
COMMON STOCK SUBJECT TO THE LTIP
Except in the case of incentive stock options (for which each share award
may be used only once), if options or awards granted under the LTIP expire, are
canceled, or otherwise terminate without being exercised, the Common Stock not
purchased pursuant to such option or award again becomes available for issuance
under the LTIP.
TERMS OF OPTIONS AND AWARDS
The following is a description of the types of grants and awards and the
permissible terms under the LTIP. Individual option grants and share awards may
be more restrictive as to any or all of the permissible terms described below.
12
<PAGE>
STOCK OPTIONS may be granted as incentive or nonstatutory (nonqualified)
grants.
STOCK APPRECIATION RIGHTS ("SARS") may be granted specifying a period of
time for which increases in share price shall be measured, with the grantee
eligible to receive stock or cash at the end of such period based upon increases
in such share price.
RESTRICTED AWARDS may be granted specifying a period of time (the
"Restriction Period") applicable to such award, which shall be not less than
three (3) years, but may be more than that and may vary at the discretion of the
Committee. Common Stock awarded pursuant to a restricted stock award shall
entitle the holder to enjoy all the stockholder rights during the restriction
period except that certain limitations with respect to disposition of such stock
shall prevail.
PERFORMANCE AWARDS may be granted specifying a number of performance shares
to be credited to an account on behalf of the recipient, each share of which is
deemed to be the equivalent of one share of Common Stock of the Company. Such
awards shall be subject to both time and Company performance objectives that are
specified at the time of such award at the discretion of the Committee. The
value of a performance share in a holder's account at the time of award or the
time of payment shall be the fair market value at any time of a share of the
Common Stock of the Company.
Other awards may be granted under the Plan that are not in the categories
discussed above because the Plan gives the Compensation Committee flexibility in
designing compensation programs.
EXERCISE PRICE; PAYMENT. The exercise price of stock options under the LTIP
may not be less than the fair market value of the Common Stock subject to the
option on the date of the option grant and in some cases (see "Eligibility") may
not be less than 110% of such fair market value. Similarly, stock appreciation
rights are based upon the fair market value of a share of Common Stock on the
date of the grant compared with the fair market value of a share at the end of
the measuring period. The sole basis for compensation under such awards is an
increase in the stock's fair market value.
Restricted stock awards are payable in stock upon satisfaction of the
restrictions imposed with respect to the award. The Compensation Committee has
the discretion to pay other awards in cash, in shares of Common Stock, or a
combination of both.
PERFORMANCE GOALS. The Plan is structured so that the Compensation
Committee may make awards that qualify as "performance-based compensation"
within the meaning of Section 162(m) of the Code, as such section was enacted in
1993. However, the Plan is flexible so that the Compensation Committee also has
the discretion to make awards that are not described in that section. Section
162(m) provides a limit of $1,000,000 on deductions for compensation paid to
certain corporate executives on a year-by-year basis. However,
"performance-based compensation" is excluded from that limitation. Whether any
particular award under the Plan will qualify as "performance-based compensation"
will depend upon the terms of the award and compliance with certain other
procedural requirements under Section 162(m). The Compensation Committee will
take into account the overall tax and business objectives of the Company in
structuring awards under the Plan.
TERM. The maximum term of the LTIP is ten (10) years, except that the Board
may terminate the Plan earlier. The term of each individual award will depend
upon the written agreement between the Company and the grantee setting forth the
terms of the awards. In certain circumstances, an award may remain outstanding
for a period that extends beyond the term of the Plan or the period of the
grantee's employment or directorship.
ADJUSTMENTS
If there is any change in the stock subject to the LTIP or subject to any
option grant or award made under the LTIP (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in kind, stock split,
liquidating dividend, combination or exchange of shares, change in corporate
structure or otherwise), the LTIP and shares outstanding thereunder will be
appropriately adjusted as to the class and the maximum number of shares subject
to the Plan and the class, number
13
<PAGE>
of shares and price per share of stock subject to such outstanding options as
determined by the Compensation Committee to be fair and equitable to the
holders, the Company and other shareholders.
AMENDMENT
The Board may amend the LTIP at any time and from time to time without
stockholder approval, except that such amendment may not, without stockholder
approval, (a) increase the number of shares authorized for issuance under the
LTIP except as a result of an adjustment, or (b) materially modify the
requirements as to eligibility for participation in the Plan, or (c) materially
increase the benefits accruing to participants under the Plan.
RESTRICTIONS ON TRANSFER
Under the LTIP, no option right or award shall be transferable by a holder
other than by laws of descent and distribution. Option rights shall be
exercisable during the holder's lifetime only by the holder or by his guardian
or legal representative.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion is only a summary of the principal federal income
tax consequences of the compensation awards to be granted under the LTIP, and is
based on existing federal law (including administrative regulations and rulings)
which is subject to change, in some cases retroactively. This discussion is also
qualified by the particular circumstances of individual participants, which may
substantially alter or modify the federal income tax consequences herein
discussed. Because of the wide range of awards that may be made under the LTIP,
the following discussion is confined to the most common forms of awards likely
to be made.
INCENTIVE STOCK OPTIONS. Generally under present law, when an option
qualifies as an incentive stock option under Section 422 of the Code: (i) an
optionee will not realize taxable income either upon the grant or the exercise
of the option, (ii) any gain or loss upon a qualifying disposition of the shares
acquired by the exercise of the option will be treated as capital gain or loss,
and (iii) no deduction will be allowed to the Company or the Bank (as the case
may be) for federal income tax purposes in connection with the grant or exercise
of an incentive stock option or a qualifying disposition of the shares. A
disposition by an optionee of stock acquired upon exercise of an incentive stock
option will constitute a qualifying disposition if it occurs more than two years
after the grant of the option, and one year after the transfer of the shares to
the optionee. If such stock is disposed of by the optionee before the expiration
of those time limits, the transfer would be a "disqualifying disposition" and
the optionee, in general, will recognize ordinary income equal to the lesser of
(i) the aggregate fair market value of the shares as of the date of exercise
less the option price, or (ii) the amount realized on the disqualifying
disposition less the option price. The Company or the Bank (as the case may be)
would become entitled to a corresponding deduction. Ordinary income from a
disqualifying disposition will constitute ordinary compensation income. Any gain
in addition to the amount reportable as ordinary income on a "disqualifying
disposition" generally will be capital gain.
Upon the exercise of an incentive stock option, the difference between the
fair market value of stock on the date of exercise and the option price
generally is treated as an adjustment to taxable income in that taxable year for
alternative minimum tax purposes, as are a number of other items specified by
the Code. Such adjustments (along with tax preference items) form the basis for
the alternative minimum tax (presently at a graduated rate for individuals),
which may apply depending on the amount of the computed "regular tax" of the
employee for that year. Under certain circumstances the amount of alternative
minimum tax is allowed as a carryforward credit against tax liability in
subsequent years.
NON-QUALIFIED STOCK OPTIONS. In the case of stock options which do not
qualify as an incentive stock option (non-qualified stock options), no income
generally is recognized by the optionee at the time of the grant of the option.
Under present law the optionee generally will recognize ordinary
14
<PAGE>
income at the time the non-qualified stock option is exercised equal to the
aggregate fair market value of the shares acquired less the option price.
Ordinary income from a non-qualified stock option will constitute compensation
for which withholding may be required under federal and state law.
Subject to special rules applicable when an optionee uses stock of the
Company to exercise an option, shares acquired upon exercise of a non-qualified
stock option will have a tax basis equal to their fair market value on the
exercise date or other relevant date on which ordinary income is recognized and
the holding period for the shares generally will begin on the date of exercise
or such other relevant date. Upon subsequent disposition of the shares, the
optionee generally will recognize capital gain or loss. Provided the shares are
held by the optionee for more than one year prior to disposition, such gain or
loss will be long-term capital gain or loss.
The Company or the Bank (as the case may be) will generally be entitled to a
deduction equal to the ordinary income (i.e., compensation) portion of the gain
recognized by the optionee in connection with the exercise of a non-qualified
stock option provided the Company or the Bank (as the case may be) complies with
any withholding requirements of federal and state law.
OPTIONS TO NON-EMPLOYEE DIRECTORS. These options would be non-qualified
stock options for tax purposes, and the tax rules applicable to them would
generally be the same as the rules for non-qualified stock options described
above. However, since the optionees are not employees, income tax withholding
would not be required in order for the Company to qualify for its income tax
deduction.
STOCK APPRECIATION RIGHTS. A SAR recipient will be taxed (and the Company
or the Bank will receive a corresponding deduction) when the recipient receives
payment under the SAR. Income generated by such exercise will be ordinary
compensation income and will be measured by the amount of cash received or the
then-current fair market value of the stock received upon such event. In the
case of a SAR granted to an employee, the Company or the Bank will have a
withholding obligation.
RESTRICTED STOCK. The income and deduction events in the case of restricted
stock grants generally are deferred until the restrictions on the stock lapse.
At that time, the recipient would report as ordinary compensation income the
difference between the then-current fair market value of the stock and the
amount (if any) paid for the stock. Subject to withholding obligations, the
Company or the Bank is entitled to a corresponding deduction. The recipient may
elect to report the income with respect to the restricted stock upon its receipt
rather than at the time of the lapse of the restrictions. In such case, the
valuation used for income and deduction purposes is the value of the restricted
stock at the time of receipt, disregarding any restrictions other than those
that will never lapse.
RESTRICTED UNITS. A recipient of a restricted unit grant will be taxed (and
the Company or the Bank will receive a corresponding deduction) when the
recipient receives payment at the time the restrictions lapse. Income generated
by such lapse and payment will be ordinary compensation income and will be
measured by the amount of cash received or the then-current fair market value of
the stock received upon such event. In the case of a restricted unit granted to
an employee, the Company or the Bank will have a withholding obligation.
PERFORMANCE SHARES AND PERFORMANCE UNITS. A recipient of a performance
share or performance unit will be taxed (and the Company or the Bank will
receive a corresponding deduction) when the recipient receives payout at the end
of the performance period. The recipient will have ordinary compensation income
measured by the cash received and/or the then-current fair market value of the
stock received upon such event. In the case of a performance share or
performance unit granted to an employee, the Company or the Bank will have a
withholding obligation.
OTHER AWARDS. The LTIP grants the Compensation Committee considerable
flexibility to design incentive-based compensation programs for employees and
directors. The tax consequences of such programs cannot be determined at this
time because the characteristics of such awards will depend upon future
decisions by the Compensation Committee.
15
<PAGE>
RESTRICTION ON DEDUCTIONS. Not every amount paid as compensation for
services is currently deductible. For example, depending upon the services
rendered, some compensation payments must be capitalized or added to inventory
costs. Two other restrictions potentially applicable to deductions for executive
compensation payments are the restriction on deduction of so-called "excess
parachute payments" and the deduction limit of $1,000,000 per year for certain
executive compensation. Whether any such restrictions will apply to specific
payments of compensation by the Company cannot be predicted at this time.
The LTIP provides a limitation on benefits when compensation under the LTIP
(alone or in conjunction with other payments) would result in deduction
disallowance or the imposition of the golden parachute excise tax. The
Compensation Committee has the discretion to reduce or eliminate payments under
the LTIP if it determines that such reduction or elimination is necessary to
avoid deduction disallowance or imposition of the excise tax.
The LTIP has been designed with the intent of giving the Compensation
Committee flexibility to structure awards that either do or do not qualify as
"performance-based compensation" under Section 162(m). The Compensation
Committee will exercise this discretion by taking into account the overall tax
and business objectives of the Company.
One requirement for qualification as "performance-based compensation" is
that the arrangement must be disclosed to the shareholders and approved by them.
At the annual meeting, the shareholders of the Company will be asked to vote to
approve the LTIP and the material terms under which awards of stock options and
stock appreciation rights will be made under the LTIP.
The material terms of the stock options and stock appreciation rights are as
follows:
(a) Eligible individual recipients are directors of the Company or its
subsidiaries, as well as managerial and other key employees of the Company
or its subsidiaries.
(b) The business criterion on which performance goals are based is
increases in value of the Company's stock because all options will have an
exercise price equal to the stock's fair market value on the date of grant
and all stock appreciation rights will require increases in the value of the
Company's stock (based upon its value at the date of grant of the stock
appreciation right) in order for there to be payment under the right.
(c) The formula for determining compensation equals the shares covered
by the option or SAR (up to the maximum number of shares for which a
recipient may receive an option grant or stock appreciation right grant per
calendar year in this case, 300,000 shares) times the price per share on the
date of option exercise or payout under an appreciation right, minus the
fair market value of a share on the date of the award.
16
<PAGE>
STOCK OPTION GRANTS
Stock options were granted during the fiscal year ended December 31, 1993 to
the Named Executives, as follows:
OPTION GRANTS IN 1993
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION
% OF TOTAL OPTIONS FOR OPTION TERM(1)
OPTIONS GRANTED TO EMPLOYEE EXERCISE EXPIRATION ------------------
NAME GRANTED(2) IN FISCAL YEAR PRICE DATE 5% 10%
- - ---------------------------- ---------- ------------------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Paul M. Harris -- -- $ -- -- $ -- $ --
Howard C. Fletcher III 40,000(3) 24.2% 4.875 5-03-2003 122,634 310,780
Jon D. Van Deuren 7,500(4) 4.5 6.00 4-16-2003 28,300 71,718
Kenneth J. Meister 8,750(5) 5.3 2.875 10-26-03 15,820 40,093
Howard A. Shields 30,000(6) 18.1 2.875 11-23-03 54,242 137,460
Arthur W. Tate -- -- -- -- -- --
Ronald W. Holloway -- -- -- -- -- --
<FN>
- - ------------------------
(1) The Potential Realizable Value is the product of (a) the difference
between (i) the product of the closing market price per share at the grant
date and the sum of (A) 1 plus (B) the assumed rate of appreciation of the
Common Stock compounded annually over the term of the option and (ii) the
per share exercise price of the option and (b) the number of shares of
Common Stock underlying the option at December 31, 1993. These amounts
represent certain assumed rates of appreciation only. Actual gains, if
any, on stock option exercises are dependent on a variety of factors,
including market conditions and the price performance of the Common Stock.
There can be no assurances that the rate of appreciation presented in this
table will be achieved.
(2) The option was granted under the Company's 1984 Stock Incentive Plan and
has a per share exercise price that is equal to Fair Market Value of the
Common Stock on the date of the grant.
(3) The option vests in 20% increments on May 3, 1994, 1995, 1996, 1997 and
1998.
(4) The option vests in 20% increments on April 16, 1994, 1995, 1996, 1997 and
1998.
(5) The option vests in 20% increments on October 26, 1994, 1995, 1996, 1997
and 1998.
(6) The option vests in 20% increments on November 23, 1994, 1995, 1996, 1997
and 1998.
</TABLE>
STOCK OPTION EXERCISES AND HOLDINGS
The following table provides information with respect to the Named
Executives concerning the exercise of options during the fiscal year ended
December 31, 1993 and unexercised options held by the Named Executives as of
December 31, 1993.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1993
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT 12/31/93 OPTIONS AT 12/31/93
ACQUIRED ON VALUE -------------------------- --------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ----------------------------------- ----------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Paul M. Harris -- $ -- 187,966 -- $ -- $ --
Howard C. Fletcher III -- -- -- 40,000 -- --
Jon D. Van Deuren -- -- 1,600 9,900 -- --
Kenneth J. Meister -- -- 3,750 11,250 -- --
Howard A. Shields -- -- -- 30,000 -- --
Arthur W. Tate -- -- -- -- -- --
Ronald W. Holloway -- -- -- -- -- --
</TABLE>
17
<PAGE>
BOARD OF DIRECTORS' REPORT ON EXECUTIVE COMPENSATION
THE REPORT OF THE BOARD OF DIRECTORS SHALL NOT BE DEEMED INCORPORATED BY
REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY
STATEMENT INTO ANY FILING UNDER THE SECURITIES ACT OF 1933 OR UNDER THE
SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT THAT THE COMPANY
SPECIFICALLY INCORPORATES THE INFORMATION CONTAINED IN THE REPORT BY REFERENCE,
AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
Although the Compensation Committee was formed in the first quarter of 1993,
decisions on the compensation of the Company's executives have generally been
made by the entire Board of Directors, based upon input provided by the
Executive Committee whose members currently include Marilyn M. Cohen, Paul M.
Harris, Howard C. Fletcher III, James F. Lewin and Saul Socoloske. It is the
Company's intention that future decisions regarding executive compensation,
including those related to the LTIP, will be made by the Compensation Committee
subject to ratification by the full Board of Directors.
The Company maintains the philosophy that executive compensation levels
should be competitive and consistent with that provided to others within the
financial services industry to assist the Company in attracting and retaining
qualified executives critical to the Company's long-term success.
The Company's general approach to compensating executive officers is to pay
cash salaries which are competitive with salaries paid to executives of other
companies in the Company's industry based upon the individual's experience and
past and potential contribution to the Company. In determining compensation
levels, the Company obtains information regarding executive salary levels for
comparable companies through various sources, including compensation surveys
conducted by banking industry associations. In addition, the Board of Directors
commissioned a compensation review by an independent consulting firm in fourth
quarter 1992 in order to evaluate employment agreements in effect as of the
fourth quarter of 1992 and the level of compensation paid to executive officers
and directors during calendar years 1991 and 1992. As Chief Executive Officer of
the Company, Mr. Harris' base salary for 1992 was based on his rights under his
three year Employment Agreement with the Company dated October 20, 1989 (the
"Old Employment Agreement"). In light of the previous decisions of the Board of
Directors, the Old Employment Agreement established Mr. Harris' minimum base
salary at $338,560 for 1992. During 1992, the Company entered into a new three
year Employment Agreement with Mr. Harris that commenced October 20, 1992 (the
"Employment Agreement"). This Employment Agreement provides for an annual salary
of $338,560, which Mr. Harris has agreed to reduce to $175,000 until such time
as the Company's profitability and overall condition returns to levels deemed
acceptable by the Board of Directors. However, in the event the Company's
profitability and overall financial condition return to acceptable levels, as
determined by the Board of Directors, pursuant to the Employment Agreement, Mr.
Harris' annual salary shall be increased at a rate of 12 1/2% and thereafter at
the rate of 12 1/2% per annum on each anniversary date of the agreement. The
level of Mr. Harris' salary and the fixed but discretionary increases reflect
the Board's decision to provide compensation that it believes to be not only
competitive with that offered by comparable institutions but also tied to the
financial performance of the Company.
Since 1990, none of the Company's executive officers, including Mr. Harris,
received a bonus in addition to salary due to the Company's profitability.
Should the Board of Directors pay bonus compensation to its executive officers,
Mr. Harris would be eligible to participate in such compensation at the sole
discretion of the Board of Directors.
The executive officers are permitted to participate in the Company's other
employee benefits and plans, including the Company's Employee Stock Ownership
Plan ("ESOP") and the Company's 401(k) Savings Plan; however, Named Executives
are not eligible under the ESOP for matching contributions by the Company.
In addition, the Company believes that stock ownership by key employees,
including the Named Executives, provides valuable incentives for such persons
who will benefit as the stock price increases and that stock-based performance
compensation arrangements are beneficial in aligning employees'
18
<PAGE>
and stockholders' interests. To facilitate these objectives, the Company has
granted stock options to key employees through its stock option plans. The
Company had in the past granted unit awards under the Company's 1987 Stock
Appreciation Rights Plan that the Company believed built further ties between
the employees long-term interests and those of the Company. All outstanding
units under the SAR Plan expired in 1992.
As a general matter, the Company endorses the philosophy that executive
compensation should reflect Company performance. Except for the Company's stock
option plans, the Company's executive compensation programs are not directly or
indirectly tied to the Company's performance. During 1994, the Board of
Directors may consider alternative compensation arrangements for senior
executives, whereby compensation would be linked to the maximization of
shareholder value.
Dated: April 28, 1994.
THE BOARD OF DIRECTORS
VINCENT A. BELL
MARILYN M. COHEN
HOWARD C. FLETCHER III
ROBERT D. FRANDZEL
PAUL M. HARRIS
JAMES F. LEWIN
SAUL SOCOLOSKE
JON D. VAN DEUREN
MICHAEL J. WELCH
EXECUTIVE COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Although the Compensation Committee met seven times in 1993, during 1993,
the Executive Committee and the full Board of Directors performed all
compensation functions. The Executive Committee is currently chaired by Ms.
Cohen with Messrs. Harris, Fletcher, Lewin and Socoloske serving as members.
With the exceptions of Mr. Harris, Chief Executive Officer of the Company, Mr.
Fletcher, President of the Company and President and Chief Executive Officer of
the Bank and Mr. Vincent A. Bell who served as Executive Vice President of the
Company and the Bank in 1993, none of the persons who served as members of the
Executive Committee or the Board of Directors during the 1993 fiscal year has
ever been an officer or employee of the Company or its subsidiary. Deborah
Manning, an officer of the Company, participated in meetings of the Compensation
Committee, but did not participate in deliberations regarding executive officer
compensation.
PERFORMANCE GRAPH
The following graph compares, for the period from December 31, 1988 through
December 31, 1993, the yearly percentage change in the cumulative total
shareholder return on the Common Stock with (i) the cumulative total return of
the AMEX market index and (ii) the cumulative total return of an index comprised
of banks and bank holding companies headquartered in Southern California and
selected by Montgomery Securities. The graph assumes an initial investment of
$100 and reinvestment of dividends. The graph is not necessarily indicative of
future price performance.
19
<PAGE>
THE GRAPH SHALL NOT BE DEEMED INCORPORATED BY REFERENCE BY ANY GENERAL
STATEMENT INCORPORATING BY REFERENCE THIS PROXY STATEMENT INTO ANY FILING UNDER
THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES EXCHANGE ACT OF 1934, EXCEPT
TO THE EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY
REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG GUARDIAN BANCORP, AMEX MARKET INDEX AND PEER GROUP INDEX
[GRAPHIC]
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------------------------
1988 1989 1990 1991 1992 1993
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Guardian Bancorp...................................... 100 130.01 107.96 87.51 54.55 20.46
AMEX Market Index..................................... 100 123.53 100.69 129.10 130.46 155.93
Peer Group Index*..................................... 100 134.71 106.73 99.79 91.84 100.61
<FN>
- - ------------------------
* Source: Montgomery Securities "WESTERN BANK MONITOR", Southern California
proxy
</TABLE>
TRANSACTIONS WITH MANAGEMENT
Certain executive officers and directors of the Company and the entities
with which they are associated are customers of the Bank and have had banking
transactions with the Bank in the ordinary course of its business during 1993.
At December 31, 1993, the outstanding balance of all loans to all persons who
served as directors and executive officers of the Company at any time during
1993 and the entities with which they are associated was approximately
$6,175,000, or 29%, of the Company's shareholders' equity at that date. Although
the Bank may have banking transactions with such persons in the future, the
Board of Directors of the Bank adopted a policy during the first quarter of 1992
to limit such transactions to the fulfillment of existing commitments and the
renewal or extension of outstanding credits. Except as described in the
subsequent paragraphs, all extensions of credit included in such transactions
were made in compliance with applicable laws and on substantially the same
terms, including interest rates, collateral and repayment terms, as those
prevailing at
20
<PAGE>
the time for comparable transactions with other persons of similar
creditworthiness and, in the opinion of the Board of Directors of the Bank, did
not involve more than a normal risk of collectability or default or present any
other unfavorable features.
Management has identified certain loans to three former directors or
entities with which they are associated that are nonaccrual, past due or
potential problem loans. Such loans were outstanding during 1993 and, in
management's opinion, involve more than a normal risk of default or present
other unfavorable features, principally as a result of deteriorating economic
conditions in Southern California.
In July 1987, the Bank originated a $275,000 loan to Mr. Donald J. Bohana, a
former director of the Company and the Bank, to pay off and consolidate
previously existing obligations at an unaffiliated financial institution. The
loan is secured by a first trust deed on residential real estate, various junior
deeds of trust on real estate and certain personal property and matured in
November 1993. The highest principal amount outstanding on the loan during 1993
was $240,000, and it had a principal balance of $233,200 at March 31, 1994,
which represents approximately 28% of the current market value of the real
estate collateral. In October 1988, the Bank originated a $115,000 loan to Mr.
Bohana to pay off a previously existing obligation at an unaffiliated financial
institution. This loan is secured by a first deed of trust on a developed
residential lot and pledged cash and matured in November 1993. The highest
principal amount outstanding on this loan during 1993 was $46,000, and the
principal balance at March 31, 1994 was $44,800, which represents approximately
32% of the current market value of the real estate collateral. These loans have
a stated interest rate based on the Bank's prime plus 2%, were extended or
renewed several times since origination and both loans are on nonaccrual at
March 31, 1994.
In October 1991, the Bank originated a $395,000 loan to an entity affiliated
with John Gullesserian. Mr. Gullesserian resigned as a director of the Company
and the Bank during the second quarter of 1993. That loan has a stated interest
rate at the Bank's prime plus 1.5% and has a maturity date of October 15, 1995.
The purpose of the loan was to finance tenant improvements and to provide
working capital for the entity's general business needs. The credit is
collateralized by a security interest in all of the entity's business assets, a
junior lien on certain real estate and further is guaranteed personally by Mr.
Gullesserian and other principals affiliated with that entity. The highest
principal amount outstanding during 1993 was $369,524, and the principal balance
outstanding at March 31, 1994 was $332,494. At March 31, 1994, the loan was on
nonaccrual.
In August 1991, the Bank originated a $295,000 loan to an entity affiliated
with Mr. Gullesserian, and on March 19, 1992 the Bank advanced an additional
$200,000, for a total of $495,000, for the purpose of financing tenant
improvements and providing that entity working capital for its general business
needs. The loan is collateralized by a security interest in all of the entity's
business assets, a junior lien on certain real estate, has a stated interest
rate at the Bank's prime rate plus 1.5%, matured February 5, 1994 and is
guaranteed personally by Mr. Gullesserian and other principals affiliated with
the entity. The highest principal amount outstanding in 1993 was $441,000, the
principal balance outstanding at March 31, 1994 was $406,425 and such amount
outstanding was on nonaccrual.
On May 22, 1992, the Bank originated a $250,000 unsecured loan to Mr.
Gullesserian and other individuals to fund that group's business cash flow
needs. The loan has been renewed once, has a stated interest rate at the Bank's
prime rate plus 1.5% and matures on August 15, 1995. The highest principal
amount outstanding during 1993 and the principal balance outstanding at March
31, 1994 were $234,000 and $202,000, respectively. At March 31, 1994, this loan
was on nonaccrual.
In August 1988, the Bank funded a $225,000 loan and in June 1990 advanced an
additional $320,000, for a total of $545,000, to Mr. Gullesserian and other
individuals for the purpose of purchasing a 16 acre residential parcel of raw
land. The loan has been renewed twice, has a stated interest rate at the Bank's
prime rate plus 1% and matures on March 5, 1995. The highest principal amount
outstanding during 1993 was $401,973, and the principal balance at March 31,
1994 was $259,723.
21
<PAGE>
Based upon a recent appraisal on the property, the Bank's overall advance on
this loan is approximately 65% of the current market value of the real estate
collateral. This loan was on nonaccrual at March 31, 1994.
In October 1983, the Bank began providing a line of credit, the most recent
in the amount of $800,000, to any entity affiliated with Mr. Gullesserian. The
purpose of the credit line was to finance the purchase of automobiles that are
subsequently leased by the entity. In turn, the leases are assigned to the Bank
as collateral for the Bank's loan. Amounts outstanding under the line have a
stated interest rate at the Bank's prime rate plus 1%. The line matured in March
1993 and was not renewed. The highest amount outstanding during 1993 was
approximately $619,405. Amounts outstanding at March 31, 1994 aggregated
$388,985 and were on nonaccrual.
In April 1991, the Bank originated a $300,000 loan to an entity affiliated
with Mr. Gullesserian to assist in the purchase of a commercial building used to
house the entity's business operations. The loan is collateralized by a first
trust deed on the property, has a stated interest rate at the Bank's prime rate
plus 1.5% and matures on April 5, 1996. The highest principal amount outstanding
during 1993 was $297,340, and the principal balance outstanding at March 31,
1994 was $291,534, which represents approximately 78% of the appraised value of
the collateral. At March 31, 1994, this loan was on nonaccrual.
In March 1987, the Bank originated a $200,000 loan to an entity affiliated
with Mr. Gullesserian to provide funds for long-term, limited partnership real
estate investments. The loan is collateralized by a junior trust deed on a
single family residence, has a stated interest rate at the Bank's prime plus
1.75% and matures on April 15, 1994. The highest principal amount outstanding
during 1993 was $138,660, and the principal balance outstanding at March 3, 1994
was $134,317, which when combined with existing senior liens, represents
approximately 46% of the estimated market value of the underlying real estate
collateral. At March 31, 1994, this loan was on nonaccrual.
In March 1993, the Bank extended an $87,000 unsecured loan to Mr.
Gullesserian to consolidate two previously existing loans which, in turn, had
been made to assist in the purchase of real estate investments. The loan has a
stated interest rate at the Bank's prime rate plus 1% and matures on March 5,
1995. The highest principal amount outstanding during 1993 was $87,000, the
principal balance outstanding on March 31, 1994 was $74,000 and the principal
balance was subsequently reduced to $53,300. At March 31, 1994, this loan was on
nonaccrual.
In June 1989, the Bank originated a loan in the amount of $185,000 to Mr.
Gullesserian to assist in the purchase of a multifamily residential project. The
loan is collateralized by a first trust deed on a 16 unit apartment building,
has a stated interest rate at the Bank's prime rate plus 1% and matures on June
5, 1995. The highest principal amount outstanding during 1993 was $180,530 and
the principal balance outstanding at March 31, 1994 was $178,000, which
approximates 66% of the estimated market value of the underlying real estate
collateral. At March 31, 1994, this loan was on nonaccrual.
In February 1990, the Bank originated a loan in the amount of $206,500 to
Mr. Gullesserian to assist in the purchase of a secondary residence. This loan
was collateralized by a first trust deed on the property, bore interest at a
fixed rate of 9% and was paid off in full on April 1, 1994. The highest
principal amount outstanding during 1993 was $202,961, the principal balance
outstanding at March 31, 1994 was $193,147 and the loan was subsequently paid
off in full.
In June 1988, the Bank originated a $500,000 unsecured loan to John
Sullivan, who resigned as a director of the Company and the Bank during the
first quarter of 1994, to assist in the purchase of real estate for eventual
development and syndication. The loan has been renewed several times, has a
stated interest rate at the Bank's prime rate plus 1% and matured on July 5,
1993. The highest principal amount outstanding during 1993 was $440,000, and the
principal balance outstanding at March 31, 1994 was $420,000. At March 31, 1994,
this loan was on nonaccrual.
22
<PAGE>
In May 1989, the Bank originated a $2,200,000 loan to Mr. Sullivan to fund
the purchase of a 5.9 acre parcel of industrial zoned land. The loan has been
renewed several times, has a stated interest rate at the Bank's prime rate plus
1% and matured on July 5, 1993. The highest principal amount outstanding during
1993 was $2,185,000, and the principal balance outstanding at March 31, 1994 was
$2,183,681. At March 31, 1994, this loan was on nonaccrual. This loan is secured
by a first trust deed on the aforementioned real estate and an assignment of a
general partner's beneficial interest in an unrelated entity whose principal
asset is real estate. Based upon currently available appraisal information on
both parcels, the Bank's loan represents approximately 74% of such value. Mr.
Sullivan is actively pursuing a change in the zoning applicable to the primary
collateral from industrial to retail, which should enhance its salability.
During 1993, Frandzel & Share, a Law Corporation, of which Mr. Frandzel, a
director of the Company and the Bank, is Chairman of the Board, provided various
legal services to the Company and the Bank. Management is of the opinion that
the fees paid to Mr. Frandzel's law firm in 1993 were comparable to those fees
that would have been paid for comparable legal services from a law firm not
affiliated with the Company.
REGULATORY MATTERS
In October 1992, each of the Company and the Bank entered into a written
agreement with the Federal Reserve Bank. Among other things, the agreements
require the Company and the Bank to: a) maintain an allowance for loan losses
that is equal to or greater than 1.7% of the Bank's outstanding loans; b)
develop formalized strategic, operating and capital plans, including a plan to
maintain adequate capital; c) develop a plan and take steps to monitor and
decrease its level of nonperforming or otherwise classified assets; d) establish
policies designed to monitor the type, growth and amounts of credit
concentration; e) refrain from incurring any debt at the Company level without
prior FRB approval, other than in the ordinary course of business; f) develop or
update, as necessary, various operating policies and procedures; and g) refrain
from declaring or paying any cash dividends without prior Federal Reserve Bank
approval.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities Exchange Commission and
the American Stock Exchange. Executive officers, directors and greater than 10%
shareholders are required by regulation to furnish the Company with copies of
all Section 16(a) forms they file.
Based solely on review of the copies of such forms furnished to the Company,
or written representation that no Form 5 was required, the Company believes that
during the year ended December 31, 1993 all Section 16(a) filing requirements
applicable to its executive officers, directors and greater than 10% beneficial
owners were complied with by such reporting persons.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed KPMG Peat Marwick as the Company's
independent public accountants for the year ended December 31, 1994. KPMG Peat
Marwick served as the Company's independent certified public accountants for the
year ended December 31, 1993. A representative of KPMG Peat Marwick is expected
to be present at the Annual Meeting and will have an opportunity to make a
statement and to respond to appropriate questions.
23
<PAGE>
ANNUAL REPORT
Guardian Bancorp's annual report for the year ended December 31, 1993
accompanies this proxy statement. The annual report contains consolidated
financial statements of the Company and its subsidiary and the report thereon of
KPMG Peat Marwick, the Company's independent public accountants.
UPON WRITTEN REQUEST OF ANY PERSON ENTITLED TO VOTE AT THE MEETING,
ADDRESSED TO HARRIET A. YANAGISAKO, ASSISTANT SECRETARY OF THE COMPANY, AT 800
SOUTH FIGUEROA STREET, LOS ANGELES, CALIFORNIA 90017, THE COMPANY WILL PROVIDE,
WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT ON FORM 10-K FOR 1993, INCLUDING THE
FINANCIAL STATEMENTS AND SCHEDULES THERETO, FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934.
SHAREHOLDERS' PROPOSALS FOR 1995 ANNUAL MEETING
Any shareholder who intends to present a proposal for action at the
Company's 1995 Annual Meeting of Shareholders and to have the Company include
such proposal in its proxy soliciting materials pursuant to Rule 14a-8 under the
Securities Exchange Act of 1934 must deliver a copy of the proposal to the
Company not later than December 30, 1994 in a form that complies with applicable
rules.
OTHER MATTERS
Management knows of no other matters to be voted upon at the Annual Meeting.
If any other matter properly comes before the Annual Meeting, it is the
intention of the persons named in the form of proxy to vote in their discretion
upon such matters in accordance with their judgment.
You are urged to sign, date and return the enclosed proxy in the envelope
provided. No postage is required if the envelope is mailed from within the
United States. If you subsequently decide to attend the Annual Meeting and wish
to vote your shares in person, you may do so. Your cooperation in giving this
matter your prompt attention is appreciated.
By Order of the Board of Directors,
/s/ Vincent A. Bell
Vincent A. Bell
SECRETARY
Los Angeles, California
April 28, 1994
24
<PAGE>
APPENDIX A
GUARDIAN BANCORP
1994 LONG TERM INCENTIVE PLAN
Guardian Bancorp, a California corporation (the "Company"), by action of
both its Compensation Committee and its Board as a whole, hereby adopts the
Guardian Bancorp 1994 Long Term Incentive Plan (the "Plan") with the following
provisions:
1. PURPOSE. The purpose of the Plan is to promote and advance the
interests of the Company and its shareholders by enabling the Company and its
Subsidiaries to attract, retain and reward managerial and other key employees
and directors (including non-employee directors), and to strengthen the
mutuality of interests between such employees and directors and the Company's
shareholders. The Plan is designed to meet this intent by offering
performance-based stock and cash incentives and other equity-based incentive
awards, thereby providing a proprietary interest in pursuing the long-term
growth, profitability and financial success of the Company.
2. DEFINITIONS. For purposes of this Plan, the following terms shall have
the meanings set forth below:
(a) "Award" or "Awards" means an award or grant made to a Participant
under Sections 6 through 10, inclusive, of the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as in effect from
time to time or any successor thereto, together with rules, regulations and
authoritative interpretations promulgated thereunder.
(d) "Committee" means the Compensation Committee of the Board that is
provided for in Section 3 of the Plan.
(e) "Common Stock" means the Common Stock, without par value, of the
Company or any security of the Company issued in substitution, exchange or
lieu thereof.
(f) "Company" means Guardian Bancorp, a California corporation, or
Subsidiary or successor corporation.
(g) "Date of Grant" means the date the Committee (or the Board, as the
case may be) takes formal action designating that a Participant shall
receive an Award, notwithstanding the date the Participant accepts the
Award, the date the Company and the Participant enter into a written
agreement with respect to the Award, or any other date.
(h) "Disability" means permanent and total disability as determined by
the Committee in accordance with the standards under Section 22(e)(3) of the
Code.
(i) "Effective Date" means the date the Plan is approved by the holders
of a majority of the shares of Common Stock represented and voting and
entitled to vote at a meeting of the shareholders of the Company or by
written consent of a majority of the outstanding shares of Common Stock,
provided such approval of the shareholders of the Company occurs within
twelve (12) months before or after the Committee and the Board both adopt
the Plan. Awards may be granted prior to the Effective Date, but payment
under such Awards is contingent upon shareholder approval as provided above
in this definition. In the event the Company does not obtain shareholder
approval of the Plan, any Awards granted pursuant to the Plan shall be
rescinded automatically.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended and in effect from time to time, or any successor statute.
A-1
<PAGE>
(k) "Fair Market Value" means on any given date, the closing price for
the Common Stock on such date, or, if the Common Stock was not traded on
such date, on the next preceding day on which the Common Stock was traded,
determined in accordance with the following rules.
(i) If the Common Stock is admitted to trading or listing on a
national securities exchange registered under the Exchange Act, the
closing price for any day shall be the last reported sale price regular
way, or in the case no such reported sale takes place on such date, the
average of the last reported bid and ask prices regular way, in either
case on the principal national securities exchange on which the Common
Stock is admitted to trading or listed, or
(ii) If not listed or admitted to trading on any national securities
exchange, the last sale price of the Common Stock on the National
Association of Securities Dealers Automated Quotation National Market
System ("NMS") or, in case no such reported sale takes place, the average
of the closing bid and ask prices on such date, or
(iii) If not quoted on the NMS, the average of the closing bid and ask
prices of the Common Stock on the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") or any comparable system,
or
(iv) If the Common Stock is not listed on NASDAQ or any comparable
system, the closing bid and ask prices as furnished by any member of the
National Association of Securities Dealers, Inc., selected from time to
time by the Company for that purpose.
(l) "Incentive Stock Option" means any Stock Option granted pursuant to
the provisions of Section 6 of the Plan that is intended to be and is
specifically designated as an "incentive stock option" within the meaning of
Section 422 of the Code.
(m) "Non-Qualified Stock Option" means any Stock Option granted pursuant
to the provisions of Section 6 of the Plan that is not an Incentive Stock
Option.
(n) "Participant" means a key employee or director of the Company or a
Subsidiary who is granted an Award under the Plan. All salaried employees of
the Company or a Subsidiary are included in the class of key employees.
(o) "Performance Award" means an Award granted pursuant to the
provisions of Section 9 of the Plan, the vesting of which is contingent on
the attainment of specified performance criteria.
(p) "Performance Share Grant" means an Award of units representing
shares of Common Stock granted pursuant to the provisions of Section 9 of
the Plan.
(q) "Performance Unit Grant" means an Award of monetary units granted
pursuant to the provisions of Section 9 of the Plan.
(r) "Plan" means this Guardian Bancorp 1994 Long Term Incentive Plan, as
set forth herein and as it may be hereafter amendedand from time to time in
effect.
(s) "Restricted Award" means an Award granted pursuant to the provisions
of Section 8 of the Plan.
(t) "Restricted Stock Grant" means an Award of shares of Common Stock
granted pursuant to the provisions of Section 8 of the Plan.
(u) "Restricted Unit Grant" means an Award of units representing shares
of Common Stock granted pursuant to the provisions of Section 8 of the Plan.
(v) "Retirement" means retirement from active employment with the
Company and its Subsidiaries on or after the normal retirement date
specified in the Company's retirement plan or such earlier retirement date
as approved by the Committee for purposes of this Plan.
(w) "Stock Appreciation Right" means an Award to benefit from the
appreciation of Common Stock granted pursuant to the provisions of Section 7
of the Plan.
A-2
<PAGE>
(x) "Stock Option" means an Award to purchase shares of Common Stock
granted pursuant to the provisions of Section 6 of the Plan.
(y) "Subsidiary" means any corporation or entity which is a subsidiary
of the Company within the meaning of Section 424(f) of the Code (or
successor sections).
(z) "Ten Percent Shareholder" means a person who owns (after taking into
account the constructive ownership rules of Section 424(d) of the Code or
successor sections) more than ten percent (10%) of the stock of the Company.
3. ADMINISTRATION.
(a) The Plan is being established and shall be administered by the
Compensation Committee to be appointed from time to time by the Board. The
Committee shall be comprised solely of not less than two persons who are
"outside directors" within the meaning of Section 162(m)(4)(C) of the Code
and not less than the minimum number (if any) of members of the Board
required by Rule 16b-3 of the Exchange Act (or any successor rule). Members
of the Committee shall serve at the pleasure of the Board and the Board may
from time to time remove members from, or add members to, the Committee. No
person who is not an "outside director" within the meaning of Section
162(m)(4)(C) of the Code may serve on the Committee. Appointment to the
Committee of any person who is not an "outside director" shall automatically
be null and void, and any person on the Committee who ceases to be an
"outside director" for purposes of Section 162(m)(4) (C) of the Code shall
automatically and without further action cease to be a member of the
Committee.
(b) A majority of the members of the Committee shall constitute a quorum
for the transaction of business. Action approved in writing by a majority of
the members of the Committee then serving shall be as effective as if the
action had been taken by unanimous vote at a meeting duly called and held.
Two Committee members have signed the original Plan document below
signifying that the Committee, as well as the Board as a whole, has adopted
and established this Plan.
(c) The Committee is authorized to construe and interpret the Plan, to
promulgate, amend, and rescind rules and procedures relating to the
implementation of the Plan, and to make all other determinations necessary
or advisable for the administration of the Plan. Any determination,
decision, or action of the Committee in connection with the construction,
interpretation, administration, or application of the Plan shall be binding
upon all Participants and any person claiming under or through any
Participant. Although the Committee is anticipated to make certain Awards
that constitute "performance-based compensation" within the meaning of
Section 162(m)(4)(C) of the Code, the Committee is also expressly authorized
to make Awards that do not constitute "performance-based compensation"
within the meaning of that provision. By way of example, and not by way of
limitation, the Committee, in its sole and absolute discretion, may issue an
Award that is not based on a performance goal, as set forth in (g) below,
but is based solely on continued service to the Company.
(d) The Committee may employ or retain persons other than members of the
Committee to assist the Committee to carry out its responsibilities under
such conditions and limitations as it may prescribe, except that the
Committee may not delegate its authority with regard to selection for
participation of and the granting of Awards to persons subject to Section 16
of the Exchange Act or with regard to any of the duties of the Committee
under Section 162(m) of the Code necessary for awards under this Plan to
qualify as "performance-based compensation" for purposes of Section
162(m)(4) (C) of the Code.
(e) The Committee is expressly authorized to make such modifications to
the Plan as are necessary to effectuate the intent of the Plan as a result
of any changes in the income tax, accounting, or securities laws treatment
of Participants and the Plan.
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(f) The Company shall effect the granting of Awards under the Plan in
accordance with the determinations made by the Committee, by execution of
instruments in writing in such form as approved by the Committee.
(g) The Committee, in the case of each Award, shall establish in writing
at the time of making the Award the business criterion or criteria (if any)
that must be satisfied for payment pursuant to the Award and the amount
payable upon satisfaction of those standards. Those standards are also
referred to herein as performance goals. Such criterion or criteria (if any)
shall be established prior to the Participant rendering the services to
which they relate and while the outcome is substantially uncertain. In
carrying out these duties, the Committee shall use objective written
standards for establishing both the performance goal and the amount of
compensation such that a third party with knowledge of the relevant facts
would be able to determine whether and to what extent the goal has been
satisfied and the amount of compensation payable. The Committee shall
provide a copy of the document setting forth such standards to the affected
Participant and shall retain such written material in its permanent books
and records.
(h) The Committee may not increase an Award once granted, although it
may grant additional Awards to the same Participant. The Committee may
reduce an award once granted if the Committee determines, in its sole and
absolute discretion, that a Participant who has received such Award has not
contributed to the success of the Company as contemplated by the Award even
though the stated performance goals were otherwise achieved.
(i) The Committee shall keep the Board informed as to its actions and
make available to the Board its books and records. Although the Compensation
Committee has the authority to establish and administer the Plan, the Board
reserves the right at any time to abolish the Committee and administer the
Plan itself.
(j) In the case of remuneration that is intended to qualify as
performance-based compensation for purposes of Code Section 162(m)(4) (C),
the Committee and the Board shall disclose to the shareholders of the
Company the material terms under which such remuneration is to be paid under
the Plan, and shall seek approval of the shareholders by a majority vote in
a separate shareholder vote before payment of such remuneration. For these
purposes, the material terms include the individuals (or class of
individuals) eligible to receive such compensation, a description of the
business criterion or criteria on which the performance goal is based,
either the maximum amount of the compensation to be paid thereunder or the
formula used to calculate the amount of compensation if the performance goal
is attained, and such other terms as required under Code Section
162(m)(4)(C) and the Treasury Regulations thereunder determined from time to
time. The foregoing actions shall be undertaken in conformity with the rules
of Code Section 162(m)(4)(C)(ii) and Treasury Regulations promulgated there
under. Such remuneration shall not be payable under this Plan in the absence
of such an approving shareholder vote. In the case of remuneration that is
not intended to qualify as performance-based compensation under Code Section
162(m)(4) (C), the Committee and the Board shall make such disclosures to
and seek such approval from the shareholders of the Company as they
reasonably determine are required by law.
(k) To the extent required under Code Section 162(m)(4) (C), before any
payment of remuneration under this Plan, the Committee must certify in
writing that the performance goals and any other material terms of the Award
were in fact satisfied. Such certification shall be kept with the permanent
books and records of the Committee, and the Committee shall provide the
affected Participant with a copy of such certification.
(l) The Committee shall use its good faith best efforts to comply with
the requirements of Section 162(m)(4)(C) of the Code for Awards that are
intended to qualify under that section as "performance-based compensation,"
but shall have no liability to the Company or any recipient in the event one
or more Awards do not so qualify.
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4. DURATION OF AND COMMON STOCK SUBJECT TO THE PLAN.
(a) TERM. The Plan shall terminate automatically on the tenth (10th)
anniversary date of the date of adoption of the Plan by the Committee, the
date of adoption of the Plan by the Board, or the tenth (10th) anniversary
date of the date of shareholder approval of the Plan, whichever is earlier
(subject to earlier termination by action of the Board), except with respect
to Awards then outstanding.
(b) SHARES OF COMMON STOCK SUBJECT TO THE PLAN. The maximum number of
shares of Common Stock with respect to which Awards may be granted under the
Plan shall be six hundred thousand (600,000). However, commencing on the
date of the adoption of this Plan by the Committee and the Board, and
continuing until the fifth (5th) anniversary date of the adoption of this
Plan by the Committee and the Board, there shall be added to the fixed
number of shares for which Awards may be granted each year an amount of
shares equal to two percent (2%) of the total issued and outstanding shares
of the Common Stock of the Company on the preceding January 1. By way of
example, if the Committee and the Board approve the Plan during the calendar
year 1994, until the 1995 anniversary date of such action by the Committee
and the Board there shall be a number of shares of Common Stock available
for Awards in an amount equal to six hundred thousand (600,000) shares plus
two percent (2%) of the shares of Common Stock of the Company issued and
outstanding on January 1, 1994. On the 1995 anniversary date, the amount of
shares available shall be six hundred thousand (600,000) shares, plus 2% of
the shares of Common Stock issued and outstanding on January 1, 1995.
Similar additions to (or subtractions from) the number of shares available
for Awards are to be computed on each such anniversary date to and including
the 1999 anniversary date.
(i) Notwithstanding the percentage increases in available shares
provided for above, except as provided in Section 16, in no event shall
more than five hundred thousand (500,000) shares of Common Stock be
available for Awards of Incentive Stock Options under the Plan.
(ii) All of the amounts stated in this Paragraph (b) are subject to
adjustment as provided in Section 16 below.
(iii) For the purpose of computing the total number of shares of
Common Stock available for Awards under the Plan, there shall be counted
against the foregoing limitations the number of shares of Common Stock
subject to issuance upon exercise, payment, or settlement of Awards and
the number of shares of Common Stock which equal the value of Restricted
Unit Grants and Performance Share Grants and other Stock-Based Awards,
determined as at the dates on which such Awards are granted. For purposes
of administering the foregoing sentence, shares subject to Incentive
Stock Options shall reduce the maximum number of shares available for
Incentive Stock Options on a share for share basis, but shares subject to
other types of Awards shall first reduce the maximum number of shares
without affecting the Incentive Stock Option portion until the amount
available for Awards other than Incentive Stock Options is reduced to
zero, and only then shall reduce the amount reserved for Incentive Stock
Options.
(iv) Except in the case of Incentive Stock Options granted under the
Plan (for which each share Award may be used only once), if any Awards
are forfeited, terminated, expire unexercised, settled or paid in cash in
lieu of stock or exchanged for other Awards, the shares of Common Stock
which were theretofore subject to such Awards shall again be available
for Awards under the Plan to the extent of such forfeiture or expiration
of such Awards.
(v) Except in the case of shares acquired through exercise of an
Incentive Stock Option granted under the Plan, any shares of Common Stock
which are used as full or partial payment to the Company by a Participant
of the purchase price of shares of Common Stock
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upon exercise of a Stock Option shall again be available for Awards under
the Plan, as shall any shares covered by Stock Appreciation Rights which
are not issued as payment upon exercise.
(c) SOURCE OF COMMON STOCK. Common Stock which may be issued under the
plan may be either authorized and unissued shares or issued shares which
have been reacquired by the Company. No fractional shares of Common Stock
shall be issued under the Plan.
5. ELIGIBILITY. Persons eligible for Awards under the Plan shall consist
of directors of the Company or its Subsidiaries, as well as managerial and other
key employees of the Company or its Subsidiaries who hold positions of
significant responsibilities or whose performance or potential contribution, in
the judgement of the Committee, will benefit the future success of the Company.
6. STOCK OPTIONS. Stock Options granted under the Plan may be in the form
of Incentive Stock Options or Non-Qualified Stock Options (collectively referred
to as "Stock Options"). Stock Options shall be subject to the terms and
conditions set forth below. Each written Stock Option agreement shall contain
such additional terms and conditions, not inconsistent with the express
provisions of the Plan, as the Committee shall deem desirable.
(a) GRANT. Stock Options shall be granted under the Plan on such terms
and conditions not inconsistent with the provisions of the Plan and pursuant
to written agreements with the optionee in such form as the Committee may
from time to time approve in its sole and absolute discretion. The terms of
individual Stock Option agreements need not be identical. Each option
agreement shall state specifically whether it is intended to be an Incentive
Stock Option or a Non-Qualified Stock Option. Stock Options may be granted
alone or in addition to other Awards under the Plan. Only common law
employees may receive grants of Incentive Stock Options. No person may be
granted (in any calendar year) options to purchase more than three hundred
thousand (300,000 ) shares of Common Stock (subject to adjustment pursuant
to Section 16). The foregoing sentence is an annual limitation on grants and
not a cumulative limitation. Any Stock Options repriced during a year shall
count against this annual limitation.
(b) STOCK OPTION PRICE. The exercise price per share of Common Stock
purchasable under a Stock Option shall be determined by the Committee at the
time of grant. In no event shall the exercise price of a Stock Option be
less than one hundred percent (100%) of the Fair Market Value of the Common
Stock on the date of the grant of such Stock Option. In the case of a Ten
Percent Shareholder, the exercise price shall be not less than one hundred
ten percent (110%) of the Fair Market Value of the Common Stock on the date
of its grant.
(c) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee. However, the term of any Stock Option shall not exceed ten (10)
years after the date such Stock Option is granted. Furthermore, the term of
an Incentive Stock Option granted to a Ten Percent Shareholder shall not
exceed five (5) years after the date of its grant.
(d) EXERCISABILITY. A Stock Option shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Committee at the date of grant and set forth in the written Stock Option
agreement. However, no Stock Option shall be exercisable during the first
six (6) months after the date such Stock Option is granted. A written Stock
Option agreement may, if permitted pursuant to its terms, become exercisable
in full upon the occurrence of events selected by the Committee that are
beyond the control of the Participant (including, but not limited to, a
Change in Control of the Company asset forth in Section 17 below). In the
case of a person who is both a common law employee and a director of the
Company or its subsidiaries on the date of grant of an Incentive Stock
Option to such person, if such person continues service as a director but
ceases service as a common law employee, such Stock Option shall remain
exercisable according to its terms, but as a Non-Qualified Stock Option.
(e) METHOD OF EXERCISE. A Stock Option may be exercised, in whole or in
part, by giving written notice of exercise to the Company specifying the
number of shares to be purchased. Such
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notice shall be accompanied by payment in full of the purchase price (i) in
cash or (ii) if acceptable to the Committee, in shares of Common Stock
already owned by the Participant. The Committee may also permit
Participants, either on a selective or aggregate basis, to simultaneously
exercise Options and sell the shares of Common Stock thereby acquired,
pursuant to a brokerage or similar arrangement, approved in advance by the
Committee, and use the proceeds from such sale as payment of part or all of
the purchase price of such shares.
(f) SPECIAL RULE FOR INCENTIVE STOCK OPTIONS. With respect to Incentive
Stock Options granted under the Plan, the aggregate Fair Market Value
(determined as of the date the Incentive Stock Option is granted) of the
number of shares with respect to which Incentive Stock Options are
exercisable for the first time by a Participant during any calendar year
(under this Plan and all other incentive stock option plans of this Company
or its Subsidiaries) shall not exceed one hundred thousand dollars
($100,000) or such other limit as may be required by the Code.
7. STOCK APPRECIATION RIGHTS. The grant of Stock Appreciation Rights under
the Plan shall be subject to the following terms and conditions. Furthermore,
the Stock Appreciation Rights shall contain such additional terms and
conditions, not inconsistent with the express terms of the Plan, as the
Committee shall deem desirable. The terms of each Stock Appreciation Right
granted shall be set forth in a written agreement between the Company and the
Participant receiving such grant. The terms of such agreements need not be
identical.
(a) STOCK APPRECIATION RIGHTS. A Stock Appreciation Right is an Award
determined by the Committee entitling a Participant to receive an amount
equal to the excess of the Fair Market Value of a share of Common Stock on a
fixed date, which shall be the date concluding a measuring period set by the
Committee upon granting the Stock Appreciation Right, over the Fair Market
Value of a share of Common Stock on the date of grant of the Stock
Appreciation Right, multiplied by the number of shares of Common Stock
subject to the Stock Appreciation Right. No Stock Appreciation Rights
granted in any year may be measured by an amount of shares of Common Stock
in excess of three hundred thousand (300,000) shares, subject to adjustment
under Section 16 below.
(b) GRANT. A Stock Appreciation Right may be granted in addition to or
completely independent of a Stock Option or any other Award under the Plan.
Upon grant of a Stock Appreciation Right, the Committee shall select and
inform the Participant regarding the number of shares of Common Stock
subject to the Stock Appreciation Right and the date that constitutes the
close of the measuring period.
(c) MEASURING PERIOD. A Stock Appreciation Right shall accrue in value
from the date of grant over a time period established by the Committee,
except that in no event shall a Stock Appreciation Right be payable within
the first six (6) months after the date of grant. In the written Stock
Appreciation Right agreement, the Committee may also provide (but is not
required to provide) that a Stock Appreciation Right shall be automatically
payable on one or more specified dates prior to the normal end of the
measuring period upon the occurrence of events selected by the Committee
(including, but not limited to, a Change in Control of the Company as set
forth in Section 17 below) that are beyond the control of the Participant.
The Committee may provide (but is not required to provide) in the Stock
Appreciation Right agreement that in the case of a cash payment such
acceleration in payment shall also be subject to discounting of the payment
to reasonably reflect the time value of money using any reasonable discount
rate selected by the Committee in accordance with Treasury Regulations under
Code Section 162(m).
(d) FORM OF PAYMENT. Payment pursuant to a Stock Appreciation Right may
be made (i) in cash, (ii) in shares of Common Stock, or (iii) any
combination of the above, as the Committee shall determine in its sole and
absolute discretion. The Committee may elect to make this determination
either at the time the Stock Appreciation Right is granted, at the time of
payment or at any time in between such dates. However, any Stock
Appreciation Right paid upon or subsequent to the occurrence of a Change in
Control (as defined in Section 17) shall be paid in cash.
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(e) CERTAIN LIMITATIONS. Payment pursuant to a Stock Appreciation Right
may not exceed two hundred percent (200%) of the Fair Market Value of the
Common Stock subject to the Stock Appreciation Right as of the date of the
grant of such Stock Appreciation Right. In addition to the restriction in
(a) above regarding numbers of shares, no single Participant under the Plan
may receive, pursuant to one or more Stock Appreciation Rights granted under
the Plan, compensation under such Stock Appreciation Rights measured by
shares representing more than thirty percent (30%) of the shares of Common
Stock subject to the Plan (as of the date of adoption of the Plan by the
Board, and as adjusted pursuant to Section 16). The limitations in this Plan
on benefits under Stock Appreciation Rights are integral parts of the Plan
and are absolute; no Participant shall be entitled to receive alternative
payments from the Company or its Subsidiaries in the event the Participant's
benefits under such Stock Appreciation Rights are limited pursuant to this
Plan.
8. RESTRICTED AWARDS. Restricted Awards granted under the Plan may be in
the form of either Restricted Stock Grants or Restricted Unit Grants. Restricted
Awards shall be subject to the following terms and conditions. Furthermore, the
Restricted Awards shall be pursuant to a written agreement executed both by the
Company and the Participant, which agreement shall contain such additional terms
and conditions, not inconsistent with the express provisions of the Plan, as the
Committee shall deem desirable in its sole and absolute discretion. The terms of
such written agreements need not be identical.
(a) RESTRICTED STOCK GRANTS. A Restricted Stock Grant is an Award of
shares of Common Stock transferred to a Participant subject to such terms
and conditions as the Committee deems appropriate, as set forth in Paragraph
(d) below.
(b) RESTRICTED UNIT GRANTS. A Restricted Unit Grant is an Award of units
(with each unit having a value equivalent to one share of Common Stock)
granted to a Participant subject to such terms and conditions as the
Committee deems appropriate, including, without limitation, the requirement
that the Participant forfeit all or a portion of such units upon termination
of employment for specified reasons within a specified period of time, and
restrictions on the sale, assignment, transfer or other disposition of such
units.
(c) GRANTS OF AWARDS. Restricted Awards may be granted under the Plan in
such form and on such terms and conditions as the Committee may from time to
time approve. Restricted Awards may be granted alone or in addition to other
Awards under the Plan. Subject to the terms of the Plan, the Committee shall
determine the number of Restricted Awards to be granted to a Participant and
the Committee may impose different terms and conditions (including
performance goals) on any particular Restricted Award made to any
Participant. Each Participant receiving a Restricted Stock Grant shall be
issued a stock certificate in respect of such shares of Common Stock. Such
certificate shall be registered in the name of such Participant, shall be
accompanied by a stock power duly executed by such Participant, and shall
bear an appropriate legend referring to the terms, conditions and
restrictions applicable to such Award. The certificate evidencing the shares
shall be held in custody by the Company until the restrictions imposed
thereon shall have lapsed or been removed.
(d) RESTRICTION PERIOD. Restricted Awards shall provide that in order
for a Participant to vest in such Awards, the Participant must continuously
provide services to the Company or its Subsidiaries, subject to relief for
specified reasons, for a period of not less than three (3) years commencing
on the date of the Award and ending on such later date or dates, subject to
the three (3) year minimum, as the Committee may designate at the time of
the Award ("Restriction Period"). If the Committee so provides in the
written agreement with the Participant, a Restricted Award may also be
subject to satisfaction of such performance goals as are set forth in such
agreement. During the Restriction Period, a Participant may not sell,
assign, transfer, pledge, encumber, or otherwise dispose of shares of Common
Stock received under a Restricted Stock Grant. The Committee, in its sole
discretion, may provide for the lapse of restrictions
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during the Restriction Period upon the occurrence of events selected by the
Committee that are beyond the control of the Participant (including, but not
limited to, a Change in Control of the Company under Section 17). The
Committee may provide (but is not required to provide) in the written
agreement with the recipient that in the case of a cash payment such
acceleration in payment shall also be subject to discounting of the payment
to reasonably reflect the time value of money using any reasonable discount
rate selected by the Committee in accordance with Treasury Regulations under
Code Section 162(m). Upon expiration of the applicable Restriction Period
(or lapse of restrictions during the Restriction Period where the
restrictions lapse in installments or by action of the Committee), the
Participant shall be entitled to receive his or her Restricted Award or
portion thereof, as the case may be.
(e) PAYMENT OF AWARDS. A Participant who receives a Restricted Stock
Grant shall be paid solely by release of the restricted shares at the
termination of the Restriction Period (whether in one payment, in
installments or otherwise). A Participant shall be entitled to receive
payment for a Restricted Unit Grant (or portion thereof) in an amount equal
to the aggregate Fair Market Value of the shares of Common Stock covered by
such Award upon the expiration of the applicable Restriction Period. Payment
in settlement of a Restricted Unit Grant shall be made as soon as
practicable following the conclusion of the specified Restriction Period (i)
in cash, (ii) in shares of Common Stock equal to the number of units granted
under the Restricted Unit Grant with respect to which such payment is made,
or (iii) in any combination of the above, as the Committee shall determine
in its sole and absolute discretion. The Committee may elect to make this
determination either at the time the Award is granted, at the time of
payment or at any time in between such dates.
(f) RIGHTS AS A SHAREHOLDER. A Participant shall have, with respect to
the shares of Common Stock received under a Restricted Stock Grant, all of
the rights of a shareholder of the Company, including the right to vote the
shares, and the right to receive any cash dividends. Stock dividends issued
with respect to the shares covered by a Restricted Grant shall be treated as
additional shares under the Restricted Grant and shall be subject to the
same restrictions and other terms and conditions that apply to shares under
the Restricted Grant with respect to which the dividends are issued.
9. PERFORMANCE AWARDS. Performance Awards granted under the Plan may be in
the form of either Performance Share Grants or Performance Unit Grants.
Performance Awards shall be subject to the terms and conditions set forth below.
Furthermore, the Performance Awards shall be subject to written agreements which
shall contain such additional terms and conditions, not inconsistent with the
express provisions of the Plan, as the Committee shall deem desirable in its
sole and absolute discretion. Such agreements need not be identical.
(a) PERFORMANCE SHARE GRANTS. A Performance Share Grant is an Award of
units (with each unit equivalent in value to one share of Common Stock)
granted to a Participant subject to such terms and conditions as the
Committee deems appropriate, including, without limitation, the requirement
that the Participant forfeit such units (or a portion of such units) in the
event certain performance criteria are not met within a designated period of
time.
(b) PERFORMANCE UNIT GRANTS. A Performance Unit Grant is an Award of
units (with each unit representing such monetary amount as designated by the
Committee) granted to a Participant subject to such terms and conditions as
the Committee deems appropriate, including, without limitation, the
requirement that the Participant forfeit such units (or a portion of such
units) in the event certain performance criteria are not met within a
designated period of time.
(c) GRANTS OF AWARDS. Performance Awards shall be granted under the Plan
pursuant to written agreements with the Participant in such form as the
Committee may from time to time approve. Performance Awards may be granted
alone or in addition to other Awards under the
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Plan. Subject to the terms of the Plan, the Committee shall determine the
number of Performance Awards to be granted to a Participant and the
Committee may impose different terms and conditions on any particular
Performance Award made to any Participant.
(d) PERFORMANCE GOALS AND PERFORMANCE PERIODS. Performance Awards shall
provide that, in order for a Participant to vest in such Awards, the Company
must achieve certain performance goals ("Performance Goals") over a
designated performance period ("Performance Period") having a minimum
duration of two years. The Performance Goals and Performance Period shall be
established by the Committee, in its sole and absolute discretion. The
Committee shall establish Performance Goals for each Performance Period
before the commencement of the Performance Period and while the outcome is
substantially uncertain. The Committee shall also establish a schedule or
schedules for such Performance Period setting forth the portion of the
Performance Award which will be earned or forfeited based on the degree of
achievement of the Performance Goals actually achieved or exceeded. In
setting Performance Goals, the Committee may use such measures as return on
equity, earnings growth, revenue growth, comparisons to peer companies, or
such other measure or measures of performance in such manner as it deems
appropriate .
(e) PAYMENT OF AWARDS. In the case of a Performance Share Grant, the
Participant shall be entitled to receive payment for each unit earned in an
amount equal to the aggregate Fair Market Value of the shares of Common
Stock covered by such Award as of the end of the Performance Period. In the
case of a Performance Unit Grant, the Participant shall be entitled to
receive payment for each unit earned in an amount equal to the dollar value
of each unit times the number of units earned. The Committee, pursuant to
the written agreement with the Participant, may make such Performance Awards
payable in whole or in part upon the occurrence of events selected by the
Committee that are beyond the control of the Participant (including, but not
limited to, a Change in Control of the Company as set forth in Section 17
below). The Committee may provide (but is not required to provide) in the
written agreement with the recipient that in the case of a cash payment
acceleration in payment of a Performance Award shall also be subject to
discounting to reasonably reflect the time value of money using any
reasonable discount rate selected by the Committee in accordance with
Treasury Regulations under Code Section 162(m). Payment in settlement of a
Performance Award shall be made as soon as practicable following the
conclusion of the Performance Period (i) in cash, (ii) in shares of Common
Stock, or (iii) in any combination of the above, as the Committee may
determine in its sole and absolute discretion. The Committee may elect to
make this determination either at the time the Award is granted, at the time
of payment, or at any time in between such dates.
10. OTHER STOCK-BASED AND COMBINATION AWARDS.
(a) The Committee may grant other Awards under the Plan pursuant to
which Common Stock is or may in the future be acquired, or Awards
denominated in stock units, including ones valued using measures other than
market value. Such Other Stock-Based Grants may be granted either alone or
in addition to any other type of Award granted under the Plan.
(b) The Committee may also grant Awards under the Plan in combination
with other Awards or in exchange of Awards, or in combination with or as
alternatives to grants or rights under any other employee plan of the
Company, including the plan of any acquired entity.
(c) Subject to the provisions of the Plan, the Committee shall have
authority to determine the individuals to whom and the time or times at
which the Awards shall be made, the number of shares of Common Stock to be
granted or covered pursuant to such Awards, and any and all other conditions
and/or terms of the Awards.
11. NON-EMPLOYEE DIRECTORS. Directors of the Company who are not employees
of the Company ("Non-Employee Directors") may receive Non-Qualified Stock
Options as set forth in this Section 11 as a result of action by the Board of
Directors or by the Committee (as the case may be). Such Stock Options shall be
awarded in the sole and absolute discretion of the Board or the Committee.
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(a) Each Non-Qualified Stock Option granted hereunder shall become
exercisable as to 25% of the shares of Common Stock subject to the Option on
the first, second, third, and fourth anniversary dates of the grant.
(b) Each Non-Qualified Stock Option granted under this Section 11 shall
expire upon the earliest of the following events:
(i) Ten (10) years from the date the Option was granted;
(ii) The termination of the Plan;
(iii) Three (3) months after the date on which the person ceases to be
a Non-Employee Director, except that if the cessation of services was
caused by the person's death or becoming disabled (within the meaning of
Section 22(e)(3) of the Code), the expiration of one (1) year after the
cessation of such services.
(c) The exercise price of the Non-Qualified Stock Options granted under
this Section 11 shall be one hundred percent (100%) of the Fair Market Value
of the Common Stock on the date of the Grant.
12. DEFERRAL ELECTIONS. The Committee may permit a Participant to elect to
defer his or her receipt of the payment of cash or the delivery of shares of
Common Stock that would otherwise be due to such Participant by virtue of the
exercise, earn out or vesting of an Award made under the Plan. If any such
election is permitted, the Committee shall establish rules and procedures for
such payment deferrals, including the possible (a) payment or crediting of
reasonable interest on such deferred amounts credited in cash, and (b) the
payment or crediting of dividend equivalents in respect of deferrals credited in
units of Common Stock. The Company and the Committee shall not be responsible to
any person in the event that the payment deferral does not result in deferral of
income for tax purposes.
13. DIVIDEND EQUIVALENTS. Awards of Stock Options, Stock Appreciation
Rights, Restricted Unit Grants, Performance Share Grants, and other Stock-Based
Awards may, in the sole and absolute discretion of the Committee, earn dividend
equivalents. In respect of any such Award which is outstanding on a dividend
record date for Common Stock, the Participant may be credited with an amount
equal to the amount of cash or stock dividends that would have been paid on the
shares of Common Stock covered by such Award had such shares been issued and
outstanding on such dividend record date. The Committee shall establish such
rules and procedures governing the crediting of dividend equivalents, including
the timing, form of payment, and payment contingencies of such dividend
equivalents, as it deems appropriate or necessary.
14. TERMINATION OF EMPLOYMENT. The terms and conditions under which an
Award may be exercised after a Participant's termination of employment shall be
determined by the Committee and reflected in the written agreement with the
Participant concerning the Award, except that in the event a Participant's
employment with the Company or a Subsidiary terminates for any reason within six
(6) months of the date of grant of any Award held by the Participant, the Award
shall expire as of the date of such termination of employment and the
Participant and the Participant's legal representative or beneficiary shall
forfeit any and all rights pertaining to such Award.
15. NON-TRANSFERABILITY OF AWARDS. No Award under the Plan, and no rights
or interest therein, shall be assignable or transferable by a Participant except
by will or the laws of descent and distribution. During the lifetime of a
Participant, Awards are exercisable only by, and payments in settlement of
Awards will be payable only to, the Participant or his or her legal
representative.
16. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, ETC.
(a) The existence of the Plan and the Awards granted hereunder shall not
affect or restrict in any way the right or power of the Board or the
shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's
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capital structure or its business, any merger or consolidation of the
Company, any issue of bonds, debentures, preferred or prior preference
stocks ahead of or affecting the Company's Common Stock or the rights
thereof, the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other
corporate act or proceeding.
(b) In the event of any change in capitalization affecting the Common
Stock of the Company after the Effective Date, such as a stock dividend,
stock split, recapitalization, merger, consolidation, split-up, combination,
exchange of shares, other form of reorganization, or any other change
affecting the Common Stock, such proportionate adjustments, if any, as the
Board in its discretion may deem appropriate to reflect such change shall be
made with respect to (i) the aggregate number of shares of Common Stock for
which Awards in respect thereof may be granted under the Plan, (ii) the
maximum number of shares of Common Stock which may be sold or awarded to any
Participant, (iii) the number of shares of Common Stock covered by each
outstanding Award, and (iv) the price per share in respect of outstanding
Awards.
(c) The Committee may also make such adjustments in the number of shares
covered by, and the price or other value of any outstanding Awards in the
event of a spin-off or other distribution (other than normal cash dividends)
of Company assets to shareholders. In the event that another corporation or
business entity is being acquired by the Company, and the Company agrees to
assume outstanding employee stock options and/or stock appreciation rights
and/or the obligation to make future grants of options or rights to
employees of the acquired entity, the aggregate number of shares of Common
Stock available for Awards under Section 4 of the Plan may be increased
accordingly, except that no change shall be made to the maximum number of
shares eligible for Incentive Stock Options under Section 4(b)(i) based
solely upon such an event.
17. CHANGE IN CONTROL.
(a) In the event of a Change in Control (as defined in Paragraph (b)
below) of the Company, and except as otherwise provided in Award agreements:
(i) All Stock Options or Stock Appreciation Rights then outstanding
shall become fully exercisable as of the date of the Change in Control;
(ii) All restrictions and conditions of all Restricted Stock Grants
and Restricted Unit Grants then outstanding shall be deemed satisfied as
of the date of the Change in Control; and
(iii) All Performance Share Grants and Performance Unit Grants shall
be deemed to have been fully earned as of the date of the Change in
Control; subject to the limitation that any Award which has been
outstanding less than six (6) months on the date of the Change in Control
shall not be afforded such treatment.
(b) A "Change in Control" shall be deemed to have occurred upon the
occurrence of any one (or more) of the following events:
(i) Any person, including a group as defined in Section 13(d)(3) of
the Exchange Act, becomes the beneficial owner of shares of the Company
with respect to which 20% or more of the total number of votes for the
election of the Board may be cast;
(ii) As a result of, or in connection with, any cash tender offer,
exchange offer, merger or other business combination, sale of assets or
contested election, or combination of the foregoing, persons who were
directors of the Company just prior to such event shall cease to
constitute a majority of the Board;
(iii) The stockholders of the Company shall approve an agreement
providing either for a transaction in which the Company will cease to be
an independent publicly owned corporation or for a sale or other
disposition of all or substantially all the assets of the Company; or
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<PAGE>
(iv) A tender offer or exchange offer is made for shares of the
Company's Common Stock (other than one made by the Company) and shares of
Common Stock are acquired thereunder ("Offer"). However, the acceleration
of the exercisability of outstanding options upon the occurrence of an
Offer shall be within the discretion of the Committee.
(c) In the event that any payment under this Plan (alone or in
conjunction with other payments) would otherwise constitute an "excess
parachute payment" under Section 280G of the Code (in the sole judgment of
the Company), such payment shall be reduced or eliminated to the extent the
Company determines necessary to avoid deduction disallowance under Section
280G of the Code or the imposition of excise tax under Section 4999 of the
Code. The Company may consult with a Participant regarding the application
of Section 280G and/or Section 4999 to payments otherwise due to such
Participant under the Plan, but the judgment of the Company as to
applicability of those provisions, the degree to which a payment must be
reduced to avoid those provisions, and which Awards shall be reduced, is
final. The Compensation Committee shall act on behalf of the Company in
interpreting and administering this limitation.
18. AMENDMENT AND TERMINATION. Without further approval of the
stockholders, the Board may at any time terminate the Plan, or may amend it from
time to time in such respects as the Board may deem advisable. However, the
Board may not, without approval of the shareholders, make any amendment which
would (a) increase the aggregate number of shares of Common Stock which may be
issued under the Plan (except for adjustments pursuant to Section 16 of the
Plan), (b) materially modify the requirements as to eligibility for
participation in the Plan, or (c) materially increase the benefits accruing to
Participants under the Plan. Notwithstanding the above, the Board may amend the
Plan to take into account changes in applicable securities, federal income tax
laws and other applicable laws. Further, should the provisions of Rule 16b-3, or
any successor rule, under the Exchange Act be amended, the Board may amend the
Plan in accordance with any modifications to that rule without the need for
shareholder approval. Notwithstanding the foregoing, the provisions of Section
11 may not be amended more than once every six months other than to comply with
the changes in the Code or the Employee Retirement Income Security Act of 1974
("ERISA").
19. MISCELLANEOUS MATTERS.
(a) TAX WITHHOLDING. The Company shall have the right to deduct from any
payment, including the delivery of shares, made under the Plan any federal,
state, or local taxes of any kind required by law to be withheld with
respect to such payments or to take such other action as may be necessary in
the opinion of the Company to satisfy all obligation for the payment of such
taxes. If Common Stock is used to satisfy tax withholding, such stock shall
be valued based on the Fair Market Value when the tax withholding is
required to be made.
(b) NO RIGHT TO EMPLOYMENT OR DIRECTORSHIP. Neither the adoption of the
Plan nor the granting of any Award shall confer upon any employee or
director of the Company or any Subsidiary any right to continued employment
or directorship with the Company or any Subsidiary, as the case may be, nor
shall it interfere in any way with the right of the Company or a Subsidiary
to terminate the employment of any of its employees or the directorship of
any director at any time, with or without cause.
(c) UNFUNDED PLAN. The Plan shall be unfunded and the Company shall not
be required to segregate any assets that may at any time be represented by
Awards under the Plan. Any liability of the Company to any person with
respect to any Award under the Plan shall be based solely upon any written
contractual obligations that may be effected pursuant to the Plan. No such
obligation of the Company shall be deemed to be secured by any pledge of, or
other encumbrance on, any property of the Company.
(d) ANNULMENT OF AWARDS. The grant of any Award under the Plan payable
in cash is provisional until cash is paid in settlement thereof. The grant
of any Award payable in Common Stock is provisional until the Participant
becomes entitled to the certificate in settlement thereof.
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<PAGE>
Payment under any Awards granted pursuant to the Plan is wholly contingent
upon shareholder approval of the Plan. Where approval for an award sought
pursuant to Section 162(m)(4)(C)(ii) is not granted by the Company's
shareholders, the Award shall be annulled automatically. In the event the
employment of a Participant is terminated for cause (as defined below), any
Award which is provisional shall be annulled as of the date of such
termination for cause. For the purpose of this Section 19(d), the term
"terminated for cause" means any discharge for violation of the policies and
procedures of the Company or for other job performance or conduct which is
detrimental to the best interests of the Company.
(e) OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS. Payments and other
benefits received by a Participant under an Award made pursuant to the Plan
shall not be deemed a part of a Participant's regular, recurring
compensation for purposes of the termination indemnity or severance pay law
of any state. Furthermore, such benefits shall not be included in, nor have
any effect on, the determination of benefits under any other employee
benefit plan or similar arrangement provided by the Company or a Subsidiary
unless expressly so provided by such other plan or arrangement, or except
where the Committee expressly determines that inclusion of an Award or
portion of an Award should be included. Awards under the Plan may be made in
combination with or in addition to, or as alternatives to, grants, awards or
payments under any other Company or Subsidiary plans. The Company or any
Subsidiary may adopt such other compensation programs and additional
compensation arrangements (in addition to this Plan) as it deems necessary
to attract, retain, and reward employees for their service with the Company
and its Subsidiaries.
(f) SECURITIES LAW RESTRICTIONS. No shares of Common Stock shall be
issued under the Plan unless counsel for the Company shall be satisfied that
such issuance will be in compliance with applicable federal and state
securities laws. Certificates for shares of Common Stock delivered under the
Plan may be subject to such stock-transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange
upon which the Common Stock is then listed, and any applicable federal or
state securities law. The Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such restrictions.
(g) AWARD AGREEMENT. Each Participant receiving an Award under the Plan
shall enter into an agreement with the Company in a form specified by the
Committee agreeing to the terms and conditions of the Award and such related
matters as the Committee shall, in its sole and absolute discretion,
determine.
(h) COSTS OF PLAN. The costs and expenses of administering the Plan
shall be borne by the Company.
(i) GOVERNING LAW. The Plan and all actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of
California.
GUARDIAN BANCORP,
A CALIFORNIA CORPORATION
Date: --------------------- By: -------------------------------
Chairman, Board of Directors
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<PAGE>
CERTIFICATE OF COMPENSATION COMMITTEE
The undersigned two persons, being members of the Compensation Committee and
"outside directors" within the meaning of Section 162(m)(4)(C)(i) of the
Internal Revenue Code of 1986, hereby certify that the foregoing Guardian
Bancorp 1994 Long Term Incentive Plan was adopted and established by the
Compensation Committee on April , 1994.
Date: --------------------- --------------------------------
Compensation Committee Member
Date: ---------------------
--------------------------------
Compensation Committee Member
CERTIFICATE OF SECRETARY
The undersigned, being the Corporate Secretary of Guardian Bancorp, a
California corporation, hereby certifies that the foregoing Guardian Bancorp
1994 Long Term Incentive Plan was, pursuant to the Articles and Bylaws of the
Corporation, duly adopted by the Compensation Committee on April , 1994, and
by the Board of Directors as a whole on April , 1994, and approved by the
shareholders of the Corporation on , 1994.
Date: --------------------- --------------------------------
Corporate Secretary
[Seal of Guardian Bancorp]
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<PAGE>
PROXY GUARDIAN BANCORP PROXY
800 SOUTH FIGUEROA STREET, LOS ANGELES, CA 90017
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby nominates, constitutes and appoints Paul M. Harris
and Robert D. Frandzel, and each of them, the attorneys, agents and proxies of
the undersigned, with full powers of substitution to each, and hereby authorizes
them to represent, and to vote as designated below, all shares of Common Stock
of Guardian Bancorp held of record by the undersigned at the close of business
on April 4, 1994 at the Annual Meeting of Shareholders to be held on June 1,
1994 or any adjournment thereof.
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS FOR all nominees listed below WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE CONTRARY BELOW). TO VOTE FOR ALL NOMINEES LISTED BELOW. / /
DISCRETIONARY AUTHORITY TO CUMULATE VOTES
IS GRANTED. / /
</TABLE>
Paul M. Harris, Marilyn M. Cohen, Howard C. Fletcher III, Robert D. Frandzel,
Saul Socoloske, Vincent A. Bell, James F. Lewin, Jon Van Deuren, Michael J.
Welch.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
- - --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
2. APPROVAL OF 1994 LONG-TERM INCENTIVE FOR the approval of the 1994 Long-Term WITHHOLD AUTHORITY
PLAN Incentive Plan. / / to approve the 1994 Long-Term Incentive
Plan. / /
</TABLE>
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS
NOMINATED BY THE BOARD OF DIRECTORS AND "FOR" THE APPROVAL OF THE 1994 LONG-TERM
INCENTIVE PLAN. THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER, UNLESS ANY SHAREHOLDER ELECTS TO
CUMULATE VOTES. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE
ELECTION OF DIRECTORS NOMINATED BY THE BOARD OF DIRECTORS AND, IN THE CASE OF A
CUMULATIVE VOTING ELECTION, IN THE MANNER SELECTED BY THE PROXY HOLDERS, AND
"FOR" THE APPROVAL OF THE 1994 LONG-TERM INCENTIVE PLAN.
(PLEASE SIGN AND DATE ON REVERSE SIDE)
<PAGE>
(CONTINUED FROM OTHER SIDE)
The undersigned hereby ratifies and confirms all that said attorneys and
proxies, or any of them, or their substitutes, shall lawfully do or cause to be
done by virtue hereof and hereby revokes any and all proxies heretofore given by
the undersigned to vote at said meeting. The undersigned acknowledges receipt of
notice of the Annual Meeting of Shareholders and the Proxy Statement
accompanying the notice.
Dated: _________________________ , 1994
_______________________________________
(Signature)
_______________________________________
(Signature)
Please sign exactly as your names
appear on this card. When shares are
held by joint tenants, both should
sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full titles as
such. If a corporation, please sign in
full corporate name by President or
other authorized officer. If a
partnership, please sign in partnership
name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE
