<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission Only
/X/ Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
ORANGE NATIONAL BANCORP
- --------------------------------------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
- --------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
---------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------------
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------
(3) Filing Party:
--------------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------------
DEFINITIVE PROXY MATERIALS WILL BE FORWARDED TO SHAREHOLDERS ON APRIL 22, 1996.
<PAGE> 2
LOGO
1201 EAST KATELLA AVENUE
ORANGE, CALIFORNIA 92667
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 20, 1996
TO THE SHAREHOLDERS OF ORANGE NATIONAL BANCORP:
NOTICE IS HEREBY GIVEN that, pursuant to the call of its board of
directors, the Annual Meeting of Shareholders (the "Meeting") of Orange National
Bancorp (the "Bancorp") will be held at the Bancorp's main office located at
1201 East Katella Avenue, Orange, California, on Monday, May 20, 1996 at 7:30
a.m. for the purpose of considering and voting upon the following matters:
1. Election of Directors. To elect thirteen (13) persons to the board
of directors to serve until the 1997 Annual Meeting of Shareholders and
until their successors are elected and have been qualified. The persons
nominated by management to serve as directors are:
Michael W. Abdalla, M.D. William S. Frantz
Fred L. Barrera Gerald R. Holte
Michael J. Christianson James E. Mahoney
Kenneth J. Cosgrove Wayne F. Miller
Robert W. Creighton Harlan A. Smith, O.D.
Armand Durante San E. Vaccaro
Charles R. Foulger
2. Ratification of Appointment of Accountants. To ratify the
appointment of McGladrey & Pullen, LLP as the Bancorp's independent
certified public accountants for the year 1996.
3. Transaction of Other Business. To transact such other business as
may properly come before the Meeting or any adjournment thereof.
The board of directors has fixed the close of business on April 5, 1996 as
the record date for determination of shareholders entitled to notice of, and to
vote at, the Meeting or any adjournment thereof.
The Bylaws of the Bancorp set forth the following procedures for
nominations to the board of directors:
Nominations for election of members of the Board of Directors may be
made by the Board of Directors or by any holder of any outstanding
class of capital stock of the Company entitled to vote for the
election of Directors. Notice of Intention to make any nominations
(other than for persons named in the Notice of any meeting called for
the election of Directors) are required to be made in writing and to
be delivered or mailed to the President of the Company by the later
of: (i) the close of business 21 days prior to any meeting of
stockholders called for the election of Directors or (ii) 10 days
after the date of mailing of notice of the meeting to stockholders.
Such notification must contain the following information to the extent
known to the notifying stockholder: (a) the name and address of each
proposed nominee; (b) the principal occupation of each proposed
nominee; (c) the number of shares of capital stock of the Company
owned by each proposed nominee; (d) the name and residence address of
the notifying stockholder; (e) the number of shares of capital stock
of the Company owned by the notifying stockholder; (f) the number of
shares of capital stock of any bank, bank holding company, savings and
loan association or other depository institution owned beneficially by
the nominee or by the notifying stockholder and the identities and
locations of any such institutions; and, (g) whether the proposed
nominee has ever been convicted of or pleaded nolo contendere to any
criminal offense involving dishonesty or
<PAGE> 3
breach of trust, filed a petition in bankruptcy or been adjudged
bankrupt. The notification shall be signed by the nominating
stockholder and by each nominee, and shall be accompanied by a written
consent to be named as a nominee for election as a Director from each
proposed nominee. Nominations not made in accordance with these
procedures shall be disregarded by the chairman of the meeting, and
upon his instructions, the inspectors of election shall disregard all
votes cast for each such nominee. The foregoing requirements do not
apply to the nomination of a person to replace a proposed nominee who
has become unable to serve as a Director between the last day for
giving notice in accordance with this paragraph and the date of
election of Directors if the procedure called for in this paragraph
was followed with respect to the nomination of the proposed nominee.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ ROBERT W. CREIGHTON
----------------------------------
Robert W. Creighton, Secretary
April 22, 1996
YOU ARE URGED TO VOTE IN FAVOR OF MANAGEMENT'S PROPOSALS BY SIGNING AND
RETURNING THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING IN PERSON. THE ENCLOSED PROXY IS SOLICITED BY THE BANCORP'S
BOARD OF DIRECTORS. ANY SHAREHOLDER GIVING A PROXY MAY REVOKE IT PRIOR TO THE
TIME IT IS VOTED BY NOTIFYING THE SECRETARY OF THE BANCORP IN WRITING OF
REVOCATION OF THE PROXY, BY FILING A DULY EXECUTED PROXY BEARING A LATER DATE,
OR BY ATTENDING THE MEETING AND VOTING IN PERSON. PLEASE INDICATE ON THE PROXY
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING SO THAT WE CAN ARRANGE FOR
ADEQUATE ACCOMMODATIONS.
<PAGE> 4
[LOGO]
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 20, 1996
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
Proxies for use at the 1996 Annual Meeting of Shareholders (the "Meeting") of
Orange National Bancorp (the "Bancorp") to be held at the Bancorp's main office
located at 1201 East Katella Avenue, Orange, California, on Monday, May 20, 1996
at 7:30 a.m., and at any and all adjournments thereof.
It is anticipated that this Proxy Statement and the accompanying Notice and
form of Proxy will be mailed on or about April 22, 1996 to shareholders eligible
to receive notice of, and to vote at, the Meeting.
REVOCABILITY OF PROXIES
A form of Proxy for voting your shares at the Meeting is enclosed. Any
shareholder who executes and delivers such Proxy has the right to and may revoke
it at any time before it is exercised by filing with the Secretary of the
Bancorp an instrument revoking it or a duly executed Proxy bearing a later date.
In addition, the powers of the proxyholders will be suspended if the person
executing the Proxy is present at the Meeting and elects to vote in person by
advising the chairman of the Meeting of his or her election to vote in person,
and votes in person at the Meeting. Subject to such revocation or suspension,
all shares represented by a properly executed Proxy received in time for the
Meeting will be voted by the proxyholders in accordance with the instructions
specified on the Proxy. UNLESS OTHERWISE DIRECTED IN THE ACCOMPANYING PROXY, THE
SHARES REPRESENTED BY YOUR EXECUTED PROXY WILL BE VOTED "FOR" THE NOMINEES FOR
ELECTION OF DIRECTORS NAMED HEREIN AND "FOR" RATIFICATION OF THE APPOINTMENT OF
MCGLADREY & PULLEN, LLP AS THE BANCORP'S INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS FOR 1996. IF ANY OTHER BUSINESS IS PROPERLY PRESENTED AT THE
MEETING, THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF
MANAGEMENT.
PERSONS MAKING THE SOLICITATION
This solicitation of Proxies is being made by the board of directors of the
Bancorp. The expense of preparing, assembling, printing and mailing this Proxy
Statement and the materials used in the solicitation of Proxies for the Meeting
will be borne by the Bancorp. It is contemplated that Proxies will be solicited
principally through the use of the mail, but directors, officers and employees
of the Bancorp and its subsidiary, Orange National Bank (the "Bank") may solicit
Proxies personally or by telephone, without receiving special compensation
therefore. Although there is no formal agreement to do so, the Bancorp may
reimburse banks, brokerage houses and other custodians, nominees and fiduciaries
for their reasonable expenses in forwarding these Proxy materials to
shareholders whose stock in the Bancorp is held of record by such entities. In
addition, the Bancorp may use the services of individuals or companies it does
not regularly employ in connection with this solicitation of Proxies, if
management determines it to be advisable.
<PAGE> 5
VOTING SECURITIES
There were issued and outstanding 1,937,646 shares of the Bancorp's common
stock on April 5, 1996, which has been fixed as the record date for the purpose
of determining shareholders entitled to notice of, and to vote at, the Meeting
(the "Record Date"). On any matter submitted to the vote of the shareholders,
each holder of the Bancorp's common stock will be entitled to one vote, in
person or by Proxy, for each share of common stock he or she held of record on
the books of the Bancorp as of the Record Date. In connection with the election
of directors, shares may be voted cumulatively if a shareholder present at the
Meeting gives notice at the Meeting, prior to the voting for election of
directors, of his or her intention to vote cumulatively. If any shareholder of
the Bancorp gives such notice, then all shareholders eligible to vote will be
entitled to cumulate their shares in voting for election of directors.
Cumulative voting allows a shareholder to cast a number of votes equal to the
number of shares held in his or her name as of the Record Date, multiplied by
the number of directors to be elected. These votes may be cast for any one
nominee, or may be distributed among as many nominees as the shareholder sees
fit. If cumulative voting is declared at the Meeting, votes represented by
Proxies delivered pursuant to this Proxy Statement may be cumulated in the
discretion of the proxyholders, in accordance with management's recommendation.
The effect of broker nonvotes is that such votes are not counted as being voted;
however such votes are counted for purposes of determining a quorum. The effect
of a vote of abstention on any matter is that such vote is not counted as a vote
for or against the matter, but is counted as an abstention.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Management of the Bancorp knows of no person who owns, beneficially or of
record, either individually or together with associates, 5 percent or more of
the outstanding shares of the Bancorp's common stock, except as set forth in the
table below. The following table sets forth, as of February 8, 1996, the number
and percentage of shares of the Bancorp's outstanding common stock beneficially
owned, directly or indirectly, by each of the Bancorp's directors and named
officers and by the directors and named officers of the Bancorp as a group. The
shares "beneficially owned" are determined under Securities and Exchange
Commission rules, and do not necessarily indicate ownership for any other
purpose. In general, beneficial ownership includes shares over which a director
or named officer has sole or shared voting or investment power and shares which
such person has the right to acquire within 60 days of February 8, 1996. Unless
otherwise indicated, the persons listed below have sole voting and investment
powers. Management is not aware of any arrangements which may, at a subsequent
date, result in a change of control of the Bancorp.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS(1)
---------------------------------------------- --------------------- -----------
<S> <C> <C>
DIRECTORS AND NAMED OFFICERS:
Michael W. Abdalla, M.D....................... 97,391(2) 5.0%
Fred L. Barrera............................... 34,844(3) 1.8%
Michael J. Christianson....................... 48,987(4) 2.5%
Kenneth J. Cosgrove........................... 62,078(5) 3.2%
Robert W. Creighton........................... 31,085(6) 1.6%
Armand Durante................................ 33,865(7) 1.7%
Charles R. Foulger............................ 75,835 3.9%
William S. Frantz............................. 46,849(8) 2.4%
Gerald R. Holte............................... 25,421(9) 1.3%
James E. Mahoney.............................. 88,381(10) 4.6%
Wayne F. Miller............................... 67,398(11) 3.5%
Harlan A. Smith, O.D.......................... 26,583(12) 1.4%
San E. Vaccaro................................ 30,586(13) 1.6%
Frank A. Del Giorgio.......................... 15,429(14) *
Joan K. Earhart............................... 0 N/A
All Directors and Named Officers
as a Group (numbering 15)................... 684,732 35.2%
</TABLE>
(footnotes on following page)
2
<PAGE> 6
- ---------------
* Less than one percent.
(1) Includes shares subject to options held by Messrs. Cosgrove, Creighton and
Del Giorgio that are exercisable within 60 days of February 8, 1996. These
are treated as issued and outstanding for the purpose of computing the
percentages of Messrs. Cosgrove, Creighton and Del Giorgio and the
directors and named officers as a group, but not for the purpose of
computing the percentage of class of any other person.
(2) Dr. Abdalla's address is c/o Orange National Bancorp, 1201 East Katella
Avenue, Orange, California 92667.
(3) Mr. Barrera has shared voting and investment powers as to 28,386 of these
shares.
(4) Mr. Christianson has shared voting and investment powers as to 34,923 of
these shares.
(5) Mr. Cosgrove has shared voting and investment powers as to 2,017 of these
shares, has shared voting and no investment powers as to 735 of these
shares and has 2,750 shares acquirable by exercise of stock options.
(6) Mr. Creighton has 1,666 shares acquirable by exercise of stock options.
(7) Mr. Durante has shared voting and investment powers as to 24,605 of these
shares.
(8) Mr. Frantz has shared voting and investment powers as to 40,138 of these
shares and has shared voting and no investment powers as to 2,618 of these
shares.
(9) Mr. Holte has shared voting and investment powers as to 15,253 of these
shares and has shared voting and no investment powers as to 1,314 of these
shares.
(10) Mr. Mahoney has shared voting and investment powers as to all of these
shares.
(11) Mr. Miller has shared voting and investment powers as to 59,093 of these
shares and has shared voting and no investment powers as to 2,971 of these
shares.
(12) Dr. Smith has shared voting and investment powers as to 25,335 of these
shares.
(13) Mr. Vaccaro has shared voting and investment powers as to 393 of these
shares.
(14) Mr. Del Giorgio has 3,500 shares acquirable by exercise of stock options.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Bancorp's
officers and directors, and persons who own more than ten percent of a
registered class of the Bancorp's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and more than ten-percent shareholders are required by
Securities and Exchange Commission regulation to furnish the Bancorp with copies
of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Bancorp believes that, during 1995 its officers,
directors and more than ten-percent shareholders complied with all filing
requirements applicable to them.
PROPOSAL 1:
ELECTION OF DIRECTORS
NOMINEES
The Bancorp's Bylaws presently provide that the number of directors of the
Bancorp shall not be less than nine (9) nor more than seventeen (17) until
changed by an amendment to the Bylaws adopted by the Bancorp's shareholders. The
Bylaws further provide that the exact number of directors shall be thirteen (13)
until changed by a Bylaw amendment duly adopted by the Bancorp's shareholders or
board of directors.
3
<PAGE> 7
The persons named below, all of whom are currently members of the board of
directors, have been nominated for election as directors to serve until the 1997
Annual Meeting of Shareholders and until their successors are elected and have
qualified. Unless otherwise instructed, the proxyholders will vote the Proxies
received by them for the election of the nominees named below. Votes of the
proxyholders will be cast in such a manner as to effect, if possible, the
election of all thirteen (13) nominees, as appropriate, (or as many thereof as
possible under the rules of cumulative voting). The thirteen nominees for
directors receiving the most votes will be elected directors. In the event that
any of the nominees should be unable to serve as a director, it is intended that
the Proxy will be voted for the election of such substitute nominee, if any, as
shall be designated by the board of directors. The board of directors has no
reason to believe that any of the nominees named below will be unable to serve
if elected. Additional nominations for directors may only be made by complying
with the nomination procedures which are included in the Notice of Annual
Meeting of Shareholders accompanying this Proxy Statement.
The following table sets forth as of February 8, 1996, the names of, and
certain information concerning, the persons nominated by the board of directors
for election as directors of the Bancorp.
<TABLE>
<CAPTION>
YEAR FIRST
NAME AND TITLE APPOINTED PRINCIPAL OCCUPATION DURING THE PAST FIVE
OTHER THAN DIRECTOR AGE DIRECTOR YEARS
- ---------------------------- ---- ---------- ---------------------------------------------
<S> <C> <C> <C>
Michael W. Abdalla, M.D..... 62 1986 Orthopedic Surgeon and Vice President of
Orange Orthopedic Medical Group, Inc.
Fred L. Barrera............. 73 1986 Mayor Pro Tem of the City of Orange.
Investor.
Michael J. Christianson..... 54 1986 Tax Attorney in the law firm of Michael J.
Christianson, Inc. and Consultant with
Christianson International, Inc.; Adventure
Travel & Mountain Climbing, Adventure Travel
Group.
Kenneth J. Cosgrove......... 48 1986 President and Chief Executive Officer of the
President, Chief Bancorp and the Bank. Former Executive Vice
Executive Officer President of the Bank.
Robert W. Creighton......... 57 1986 Chief Financial Officer of the Bancorp and
Secretary, Chief Executive Vice President and Chief Financial
Financial Officer Officer of the Bank.
Armand Durante, C.P.C.U..... 74 1986 Owner of Joe Greensleeves Restaurant. Partner
in DRH Enterprises. Former Account Executive
and Consultant with Grocers & Merchants
Insurance Service.
Charles R. Foulger.......... 62 1986 President and Owner of Foulger Acura and
Villa Honda, Mazda and Volkswagen. Former
principal of Fougler Ford.
William S. Frantz........... 74 1986 Retired. Former real estate broker and
Co-owner of William S. Frantz & Associates.
Gerald R. Holte............. 58 1986 Partner in G.R. Holte & Associate, floor
covering dealer/contractor.
James E. Mahoney............ 67 1986 President of Mahoney Enterprises, Inc.,
business development corporation.
Wayne F. Miller............. 62 1986 Consultant to the Bank. Former President and
Chief Executive Officer of the Bancorp and
the Bank.
Harlan A. Smith, O.D........ 72 1986 Optometry Consultant and former Optometrist.
Investor.
San E. Vaccaro.............. 62 1986 Sole proprietor of the Law Offices of San E.
Chairman of the Vaccaro. Former Partner in the law firm of
Board of Directors Curtis & Vaccaro.
</TABLE>
4
<PAGE> 8
All of the nominees named above have served as members of the Bancorp's
board of directors since its inception. All nominees will continue to serve if
elected at the Meeting until the 1997 Annual Meeting of Shareholders and until
their successors are elected and have qualified. None of the directors were
selected pursuant to any arrangement or understanding other than with the
directors and executive officers(1) of the Bancorp acting within their
capacities as such. There are no family relationships among any of the directors
and executive officers of the Bancorp. No director or executive officer of the
Bancorp serves as a director of any company which has a class of securities
registered under, or which is subject to the periodic reporting requirements of,
the Securities Exchange Act of 1934, or of any company registered as an
investment company under the Investment Company Act of 1940.
THE BOARD OF DIRECTORS AND COMMITTEES
The Bancorp's board of directors held thirteen (13) meetings during 1995.
None of the directors attended less than 75 percent of all board of directors
meetings and committee meetings (of which they were a member) that were held in
1995.
There were no standing committees of the Bancorp's board of directors in
1995. However, in 1995, the Bank had a standing Audit Committee and a standing
Directors Review Committee.
The Bank's Audit Committee, which consisted of Messrs. Christianson and
Durante and Dr. Smith met five (5) times in 1995. The Audit Committee's
functions include making recommendations to the board of directors on the
selection of the Bancorp's and the Bank's independent certified public
accountants, reviewing the arrangements for the independent certified public
accountants' examination, review of internal accounting controls and reporting,
and any other duties assigned by the board of directors.
The Bank's Directors Review Committee, which consisted of Messrs.
Christianson, Durante, Holte, Mahoney and Vaccaro met ten (10) times in 1995.
The Directors Review Committee's function is to evaluate and recommend to the
board of directors policies regarding the Bank's officers' compensation,
employee benefits, retirement and other internal administrative matters.
COMPENSATION OF DIRECTORS
The directors of the Bancorp who are not employees of the Bank received a
fee of $300 per meeting for attendance at the Bancorp's board of directors
meetings and $235 per meeting for up to two meetings if such director did not
attend the meeting. The Chairman of the Bancorp's board of directors received a
fee of $450 per meeting for attendance at the Bancorp's board of directors
meetings. In addition, the directors of the Bancorp who are not employees of the
Bank received a fee of $900 per meeting for attendance at the Bank's board of
directors meetings and $700 per meeting for up to two meetings if such director
did not attend the meeting. The Chairman of the Bank's board of directors
received a fee of $1,350 per meeting for attendance at the Bank's board of
directors meetings and an automobile allowance of $300 per month. Directors of
the Bancorp who are employees of the Bank received a fee of $500 per month for
attendance at the Bank's board of directors meetings. In addition, directors who
were members of the Bank's Directors Review Committee and Audit Committee
received a fee of $300 per meeting for each meeting they attended. The Chairmen
of the Bank's Directors Review Committee and Audit Committee received a fee of
$500 per meeting for each meeting they attended. In 1996, the directors will
receive the same compensation as that received during 1995.
Directors of the Bancorp and the Bank also have the option of participating
in the Bank's Deferred Fee Program. Pursuant to the Deferred Fee Program,
directors make an initial deferral election by filing with the Bank a signed
Election Form which sets forth the amount of the director's fees to be deferred.
The Bank then establishes a Deferral Account on its books for the director and
credits to the Deferral Account the fees deferred by the director and interest
on the account balance at an annual rate determined prospectively by the Bank's
board of directors on December 31 of each year. The Deferral Account is not a
trust fund of any kind
- ---------------
(1) As used throughout this Proxy Statement, the term "executive officer"
includes the President/Chief Executive Officer and the Chief Financial
Officer.
5
<PAGE> 9
and the director is a general unsecured creditor of the Bank for the payment of
the benefits. Benefits under the Deferred Fee Program are payable upon the
director's termination of service. If termination of service occurs after the
director attains the age of 65, the amount of benefit payable is the Deferral
Account balance at the date of termination of service. This amount may be paid
by the Bank in either one lump sum within 60 days of termination of service or
in 120 monthly installments commencing on the first day of the month following
the director's termination of service. If termination of service occurs before
the director attains the age of 65, the amount of benefit payable is also the
Deferral Account balance at the date of termination of service. This amount may
be paid by the Bank in either one lump sum within 60 days of termination of
service or in 120 monthly instalments commencing on the first day of the month
following the director's termination of service. If termination of service
occurs due to disability before the director attains the age of 65 or due to a
change in control of the Bank, the amount of benefit payable is also the
Deferral Account balance at the date of termination of service. This amount
shall be paid by the Bank in one lump sum within 60 days of termination of
service. Finally, if termination of service occurs due to the death of the
director, the amount of benefit payable is the greater of the Deferral Account
balance at the date of termination of service or the amount set forth in the
individual Deferral Fee Agreement. This amount shall also be paid by the Bank in
one lump sum within 60 days of termination of service.
Messrs. Cosgrove, Creighton, Foulger, Holte, Mahoney and Vaccaro have all
entered into Deferred Fee Agreements with the Bank. Mr. Cosgrove's agreement
provides for a minimum death benefit of $227,315; Mr. Creighton's agreement
provides for a minimum death benefit of $68,411; Mr. Foulger's agreement
provides for a minimum death benefit of $191,901; Mr. Holte's agreement provides
for a minimum death benefit of $224,035; Mr. Mahoney's agreement provides for a
minimum death benefit of $56,442; and Mr. Vaccaro's agreement provides for a
minimum death benefit of $774,146.
EXECUTIVE OFFICERS
The following table sets forth information, as of February 8, 1996,
concerning executive officers of the Bancorp and certain officers of the Bank:
<TABLE>
<CAPTION>
NAME AGE POSITION AND PRINCIPAL OCCUPAITON FOR THE PAST FIVE YEARS
- ------------------------- ---- -----------------------------------------------------------
<S> <C> <C>
Kenneth J. Cosgrove...... 48 President and Chief Executive Officer of the Bancorp and
the Bank. Former Executive Vice President of the Bank.
Robert W. Creighton...... 57 Chief Financial Officer of the Bancorp and Executive Vice
President and Chief Financial Officer of the Bank.
Frank A. Del Giorgio..... 51 Senior Vice President of the Bank.
Joan K. Earhart.......... 41 1st Vice President and Manager of the Bank's Small Business
Administration Loan Department. Former Vice President and
Manager of Eldorado Bank's Small Business Administration
Loan Department.
</TABLE>
6
<PAGE> 10
EXECUTIVE COMPENSATION
During 1995, the Bancorp did not pay any cash compensation to its executive
officers and no such cash compensation is expected to be paid during 1996.
However, the persons serving as the executive officers of the Bancorp received
during 1995, and are expected to receive in 1996, cash compensation in their
capacities as executive officers of the Bank.
The following Summary Compensation Table indicates the compensation of the
Bancorp's executive officers, and certain of the Bank's officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
- -------------------------------------------------------------------- --------------------- -------
(E) (F)
------------- ---------- (H) (I)
(C) (D) OTHER RESTRICTED (G) ------- ------------
(A) (B) ------- ------ ANNUAL STOCK -------- LTIP ALL OTHER
- --------------------------- ---- SALARY BONUS COMPENSATION AWARD(S) OPTIONS/ PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) SARS ($) ($)(1)
- --------------------------- ---- ------- ------ ------------- ---------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Wayne F. Miller............ 1995 156,000 64,436 0 0 0 0 1,800
President and Chief 1994 156,000 15,195 0 0 0 0 1,800
Executive Officer of the 1993 156,000 0 0 0 0 0 1,800
Bancorp
Kenneth J. Cosgrove........ 1995 140,050 62,041 0 0 15,750 0 1,800
Vice President of the 1994 128,000 18,671 0 0 0 0 1,800
Bancorp and President 1993 119,667 0 0 0 0 0 1,800
and Chief Executive
Officer of the Bank
Robert W. Creighton........ 1995 118,000 38,217 0 0 0 0 1,800
Chief Financial Officer 1994 118,000 7,598 0 0 0 0 1,800
of the Bancorp; Executive 1993 118,000 0 0 0 0 0 1,800
Vice President and CFO
of the Bank
Frank A. Del Giorgio....... 1995 92,100 35,033 0 0 0 0 1,800
Senior Vice President 1994 88,500 9,335 0 0 5,250 0 1,800
of the Bank 1993 88,500 0 0 0 0 0 1,800
Joan K. Earhart............ 1995 68,000 45,000 0 0 0 0 1,800
1st Vice President and 1994 68,000 55,100 0 0 0 0 1,800
Manager of the Bank's 1993 67,002 52,500 0 0 0 0 1,800
SBA Loan Department
</TABLE>
- ---------------
(1) The Bank's contribution to its 401(k) plan for employees of 3% of salary to
a maximum of $1,800.
OPTION/SAR GRANTS TABLE
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- -------------------------------------------------------------------------------------------------------
(C)
------------
(B) % OF TOTAL (D)
-------------- OPTIONS/SARS ----------- (E)
(A) OPTIONS/SARS GRANTED TO EXERCISE OR ------------
- ------------------------------------------- GRANTED EMPLOYEES IN BASE PRICE EXPIRATION
NAME (#) FISCAL YEAR ($/SHARE) DATE
- ------------------------------------------- -------------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Kenneth J. Cosgrove........................ 15,750 Options 75% $6.29 July 1, 2000
</TABLE>
7
<PAGE> 11
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
YEAR-END OPTION/SAR VALUE
<TABLE>
<CAPTION>
(E)
(D) ----------------
--------------- VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
(B) (C) OPTIONS/SARS AT OPTIONS/SARS AT
(A) ------------------ -------------- YEAR-END(#) YEAR-END($)
- ---------------------------------- SHARES ACQUIRED VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE
- ---------------------------------- ------------------ -------------- --------------- ----------------
<S> <C> <C> <C> <C>
Kenneth J. Cosgrove............... 2,500 $5,525 Options Only Options Only
2,750/10,500 $10,890/$41,580
Frank A. Del Giorgio.............. 0 N/A Options Only Options Only
3,500/1,750 $15,610/$7,805
</TABLE>
- ---------------
N/A - means not applicable.
EMPLOYMENT CONTRACTS
The executive officers of the Bank have, or had during 1995, employment
contracts with the Bank as described below.
Wayne F. Miller had a three-year employment contract with the Bank which
began on January 1, 1993 and expired on December 31, 1995. Mr. Miller's annual
salary was fixed at $150,000 per year. Under the contract, Mr. Miller was
entitled to a two-part bonus: Part 1 was 1% of the Bancorp's pre-tax earnings
above $500,000; Part 2 was 8% to 20% of his annual salary calculated on the
Bancorp's Return on Equity as described below. On December 20, 1995, Mr. Miller
entered into a Separation and Consulting Agreement with the Bank and the
Bancorp. This agreement provides that Mr. Miller will terminate his employment
with the Bank effective December 31, 1995 and will provide marketing, business
development, planning and banking advisory services to the Bank for a period of
123 months, commencing January 1, 1996 and continuing until March 31, 2006.
Pursuant to the agreement, Mr. Miller will receive (i) consulting fees of
$4,166.66 per month for 123 months; (ii) the Bank-owned 1995 Cadillac; (iii)
group medical and health insurance for Mr. Miller and his wife for a period of
36 months; and (iv) group life insurance for a period of 36 months, provided Mr.
Miller is eligible to continue to be included in such plan. In the event Mr.
Miller predeceases the total payout of the consulting fee, the remaining unpaid
monthly payments shall continue to be paid monthly to Mr. Miller's beneficiary.
In addition, if the Bancorp or Bank is merged, sold or acquired, the group
medical and health insurance, group life insurance and the consulting fees shall
survive and shall be binding upon any successor corporation. The agreement also
provides that Mr. Miller shall not compete with the Bank within the boundaries
of the counties of Los Angeles, Orange, San Bernardino, Riverside and San Diego.
Kenneth J. Cosgrove has a three year employment contract with the Bank
beginning July 1, 1995 and expiring June 30, 1998. In addition, unless the
contract is otherwise terminated, the term of the contract shall automatically
extend in annual increments of one year so as to always remain a three year
contract. Mr. Cosgrove's annual salary is fixed at $140,000 for the first year
of the contract and shall be renegotiated each subsequent year. Under the
contract, Mr. Cosgrove is entitled to a two-part bonus: Part 1 is 8% to 20% of
his annual salary calculated on the Bancorp's Return on Equity as described
below; and Part 2 is 1% of the Bancorp's pre-tax earnings above $500,000. Mr.
Cosgrove's contract provides that in the event he becomes disabled, he shall be
entitled to 100% of his salary for ninety days and after such ninety day period,
he shall be entitled to 100% of his salary, less any disability benefits
received under any income continuation/disability plans sponsored by the Bank,
for a period not to exceed 730 days, but in no event beyond the term of the
contract. In addition, if the Bank or Bancorp is merged, sold or acquired and
the merging, purchasing or acquiring entity elects not to employ Mr. Cosgrove
under the terms of an agreement acceptable to Mr. Cosgrove, he shall have the
right to continue to receive his base salary plus certain other employee
benefits for a period of two years following the merger, sale or acquisition.
8
<PAGE> 12
In addition Mr. Cosgrove has a salary continuation agreement with the Bank
which provides that the Bank will pay him $154,056 per year for 15 years
following his retirement from the Bank at age 65 or later . In the event of
earlier retirement before age 60, Mr. Cosgrove will receive salary continuation
payments beginning at age 65 with the amount of the salary continuation payment
being based on years of service and up to a maximum of $8,556 per month for 180
months. In the event of earlier retirement after age 60 and before age 65, Mr.
Cosgrove will receive salary continuation payments beginning at the time of such
early retirement with the amount of the salary continuation payment based on
years of service up to a maximum of $12,838 per month for 180 months. In the
event of disability of Mr. Cosgrove prior to February 21, 2001, Mr. Cosgrove
would receive a one time lump sum disability benefit based on years of service
and up to a maximum of $133,125. In the event of disability of Mr. Cosgrove
after February 21, 2001, Mr. Cosgrove would receive salary continuation benefits
based on years of service up to a maximum of $12,838 per month for 180 months or
until the time Mr. Cosgrove recovered and returned to active service. In the
event Mr. Cosgrove dies while in active service of the Bank, his beneficiary
will receive from the Bank a benefit amount of $154,056 per year for 15 years
beginning one month after his death. In the event of termination with cause, Mr.
Cosgrove will forfeit any benefits from the salary continuation agreement. In
the event of a change of control of the Bank whereby Mr. Cosgrove's employment
is terminated or adversely affected, Mr. Cosgrove will receive salary
continuation benefits up to a maximum of $12,838 per month for 180 months
beginning after the change of control. The benefits under the salary
continuation agreement for Mr. Cosgrove will also be reduced in the event such
payments are not deductible under Section 280G of the Internal Revenue Code of
1986, as amended (the "Code").
Robert W. Creighton has a one year employment contract with the Bank
beginning April 1, 1996 and expiring March 31, 1997. Mr. Creighton's annual
salary is fixed at $117,000. Under the contract, Mr. Creighton is entitled to a
two-part bonus: Part 1 is 8% to 20% of his annual salary calculated on the
Bancorp's Return on Equity as described below; and Part 2 is one-half of 1% of
the Bancorp's pre-tax earnings above $750,000. Mr. Creighton's contract provides
that in the event he becomes disabled, he shall be entitled to 100% of his
salary for ninety days and after such ninety day period, he shall be entitled to
100% of his salary, less any disability benefits received under any income
continuation/disability plans sponsored by the Bank, for a period not to exceed
275 days, but in no event beyond the term of the contract. In addition, if the
Bancorp is merged, sold or acquired and the merging, purchasing or acquiring
entity elects not to employ Mr. Creighton under the terms of an agreement
acceptable to Mr. Creighton, he shall be entitled to receive his base salary
plus certain other employee benefits for the remaining period of the agreement,
less any payments received from the Salary Continuation Agreement between Mr.
Creighton and the Bank.
In addition Mr. Creighton has a salary continuation agreement with the Bank
which provides that the Bank will pay him $60,000 per year for 15 years
following his retirement from the Bank at age 65 or later . In the event of
earlier retirement before age 60, Mr. Creighton will receive salary continuation
payments beginning at age 65 with the amount of the salary continuation payment
being based on years of service and up to a maximum of $2,304 per month for 180
months. In the event of earlier retirement after age 60 and before age 65, Mr.
Creighton will receive salary continuation payments beginning at the time of
such early retirement with the amount of the salary continuation payment based
on years of service up to a maximum of $5,000 per month for 180 months. In the
event of disability of Mr. Creighton prior to February 21, 2001, Mr. Creighton
would receive a one time lump sum disability benefit based on years of service
and up to a maximum of $492,967. In the event of disability of Mr. Creighton
after February 21, 2001, Mr. Creighton would receive salary continuation
benefits based on years of service up to a maximum of $5,000 per month for 180
months or until the time Mr. Creighton recovered and returned to active service.
In the event Mr. Creighton dies while in active service of the Bank, his
beneficiary will receive from the Bank a benefit amount of $60,000 per year for
15 years beginning after his death. In the event of termination with cause, Mr.
Creighton will forfeit any benefits from the salary continuation agreement. In
the event of a change of control of the Bank whereby Mr. Creighton's employment
is terminated or adversely affected, Mr. Creighton will receive salary
continuation benefits up to a maximum of $5,000 per month for 180 months
beginning after the change of control. The benefits under the salary
continuation agreement for Mr. Creighton will also be reduced in the event such
payments are not deductible under Section 280G of the Code.
9
<PAGE> 13
Frank A. Del Giorgio has a one year employment contract with the Bank
beginning April 1, 1996 and expiring March 31, 1997. Mr. Del Giorgio's annual
salary is fixed at $92,100. Under the contract, Mr. Del Giorgio is entitled to a
two-part bonus: Part 1 is 8% to 20% of his annual salary calculated on the
Bancorp's Return on Equity as described below; and Part 2 is 0.35% of the
Bancorp's pre-tax earnings above $750,000. Mr. Del Giorgio's contract provides
that in the event he becomes disabled, he shall be entitled to 100% of his
salary for ninety days and after such ninety day period, he shall be entitled to
100% of his salary, less any disability benefits received under any income
continuation/disability plans sponsored by the Bank, for a period not to exceed
275 days, but in no event beyond the term of the contract. In addition, if the
Bancorp is merged, sold or acquired and the merging, purchasing or acquiring
entity elects not to employ Mr. Del Giorgio under the terms of an agreement
acceptable to Mr. Del Giorgio, he shall be entitled to receive his base salary
plus certain other employee benefits for the remaining period of the agreement.
The earnings bonus is the officer's specified percentage of the amount of
the Bancorp's pre-tax earnings after allowances for the Bank's loan loss
reserves. No bonus is paid unless the applicable pre-tax earnings amount is more
than $500,000 for Mr. Cosgrove and $750,000 for Messrs. Creighton and Del
Giorgio.
The Return on Equity bonus is paid only if the Bancorp realizes at least
10% Return on Equity. Return on Equity is the Bancorp's net income divided by
shareholders' equity at the end of the fiscal year. The bonus amount is a scaled
percentage of the officer's salary from 8% to 20%, varying with the amount of
Return on Equity, as follows:
<TABLE>
<CAPTION>
PERCENT BONUS PERCENT BONUS
RETURN PERCENT RETURN PERCENT
ON EQUITY OF SALARY ON EQUITY OF SALARY
---------- ---------- ---------- ----------
<S> <C> <C> <C>
10 8 16.1 14
11.1 9 17.1 15
12.1 10 18.1 16
13.1 11 19.1 18
14.1 12 20.1 20
15.1 13
</TABLE>
Each executive officer is entitled to employee benefits made available by
the Bank to all its employees plus, use of an automobile supplied by the Bank,
life, health and disability insurance fully paid by the Bank, and participation
in the Bank's deferred compensation plan. Each executive officer is also
entitled to participate in the Bancorp's 1993 Stock Option Plan.
The Small Business Administration ("SBA") Loan Department of the Bank
maintained a goals and objectives bonus program for all employees of the SBA
Loan Department. The pool available for distribution under this bonus program
was 20% of the SBA Loan Department's fee income less referral fees, employment
expenses and certain other operating expenses. In 1995, the total amount paid
under this program to members of the SBA Loan Department was $110,000. Joan K.
Earhart, 1st Vice President and Manager of the SBA Loan Department of the Bank,
received a $45,000 bonus under the SBA Loan Department goals and objectives
bonus program.
10
<PAGE> 14
PROPOSAL 2:
RATIFICATION OF APPOINTMENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The firm of McGladrey & Pullen, LLP Anaheim, California, served as
independent certified public accountants for the Bancorp and the Bank through
the year 1995. The Bancorp has selected McGladrey & Pullen, LLP to serve as the
Bancorp's independent certified public accountants for the year 1996. All
services rendered by McGladrey & Pullen, LLP were approved by the board of
directors, which has determined the firm of McGladrey & Pullen, LLP to be
independent. It is expected that one or more representatives of McGladrey &
Pullen, LLP will be present at the Meeting and will be given the opportunity to
make a statement, if desired, and to respond to appropriate questions.
In the event shareholders do not ratify the appointment of McGladrey &
Pullen, LLP as the Bancorp's independent certified public accountants for the
forthcoming fiscal year, such appointment will be reconsidered by the Bank's
Audit Committee and the board of directors.
Ratification of the appointment of McGladrey & Pullen, LLP as the Bancorp's
independent certified public accountants for fiscal year 1996 requires the
affirmative vote of a majority of the outstanding shares of the Bancorp's common
stock represented and voting at the meeting.
MANAGEMENT RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF MCGLADREY & PULLEN, LLP AS THE BANCORP'S INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS FOR 1996.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Some of the Bancorp's directors and executive officers and their immediate
families as well as the companies with which they are associated are customers
of, or have had banking transactions with, the Bank in the ordinary course of
the Bank's business, and the Bank expects to have banking transactions with such
persons in the future. In management's opinion, all loans and commitments to
lend included in such transactions were made in compliance with applicable laws
on substantially the same terms, including interest rates and collateral, as
those prevailing for comparable transactions with other persons of similar
creditworthiness and, in the opinion of management, did not involve more than a
normal risk of collectibility or present other unfavorable features.
San E. Vaccaro, a director and nominee, is the sole proprietor of the Law
Offices of San E. Vaccaro. The Bank retained the Law Offices of San E. Vaccaro
to perform legal services for the Bank in connection with a variety of banking,
operational and loan matters. Services of the Law Offices of San E. Vaccaro are
expected to continue in 1996. The total amount of fees paid to the Law Offices
of San E. Vaccaro in 1995 was $107,120.
SHAREHOLDER PROPOSALS
The deadline for shareholders to submit proposals to be considered for
inclusion in the Proxy Statement for the Bancorp's 1997 Annual Meeting of
Shareholders is December 31, 1996.
11
<PAGE> 15
OTHER MATTERS
Management does not know of any matters to be presented at the Meeting
other than those set forth above. However, if other matters come before the
Meeting, it is the intention of the persons named in the accompanying Proxy as
proxyholders to vote the shares represented by the Proxy in accordance with the
recommendations of management on such matters, and discretionary authority to do
so is included in the Proxy.
ORANGE NATIONAL BANCORP
/s/ ROBERT W. CREIGHTON
------------------------------------
Robert W. Creighton, Secretary
Dated: April 22, 1996
The Annual Report to Shareholders for the fiscal year ended December 31,
1995 has been previously mailed to the Bancorp's shareholders.
A COPY OF THE BANCORP'S 1995 ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K WILL BE PROVIDED TO THE BANCORP'S SHAREHOLDERS WITHOUT
CHARGE UPON WRITTEN REQUEST TO THE SECRETARY, ORANGE NATIONAL BANCORP, 1201 EAST
KATELLA AVENUE, ORANGE, CALIFORNIA 92667.
12
<PAGE> 16
PROXY
ORANGE NATIONAL BANCORP
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Messrs. Fred L. Barrera, Armand Durante and
Gerald R. Holte as proxyholders, with full power of substitution, to represent,
vote and act with respect to all shares of common stock of Orange National
Bancorp (the "Bancorp") which the undersigned would be entitled to vote at the
meeting of shareholders to be held on May 20, 1996 at 7:30 a.m. at the
Bancorp's main office located at 1201 East Katella Avenue, Orange, California
or any adjournments thereof, with all the powers the undersigned would possess
if personally present as follows:
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 17
PLEASE MARK
YOUR VOTE AS
INDICATED IN /X/
THIS EXAMPLE
1. Election of thirteen (13) persons to be directors.
FOR ALL NOMINEES
LISTED IN 1.
(EXCEPT AS MARKED TO WITHHOLD
THE CONTRARY BELOW AUTHORITY
/ / / /
Nominees: Michael W. Abdalla, M.D. William S. Frantz
Fred L. Barrera Gerald R. Holte
Michael J. Christianson James E. Mahoney
Kenneth J. Cosgrove Wayne F. Miller
Robert W. Creighton Harlan A. Smith, O.D.
Armand Durante San E. Vaccaro
Charles R. Foulger
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the space below:)
- ------------------------------------------------------------------------------
2. Ratification of the appointment of McGladrey & Pullen, LLP as the Bancorp's
independent certified public accountants for 1996.
FOR AGAINST ABSTAIN
/ / / / / /
3. Transaction of such other business as may properly come before the meeting
and any adjournment or adjournments thereof.
PLEASE SIGN AND DATE BELOW
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE MATTERS LISTED. The
Proxy confers authority to vote and shall be voted in accordance with such
recommendation unless a contrary instruction is indicated, in which case, the
shares represented by the Proxy will be voted in accordance with such
instruction. IF NO INSTRUCTION IS SPECIFIED WITH RESPECT TO A MATTER TO BE
ACTED UPON, THE SHARES REPRESENTED BY THE PROXY WILL BE VOTED IN ACCORDANCE
WITH THE RECOMMENDATIONS OF MANAGEMENT. IF ANY OTHER BUSINESS IS PRESENTED AT
THE MEETING, THIS PROXY CONFERS AUTHORITY TO AND SHALL BE VOTED IN ACCORDANCE
WITH THE RECOMMENDATIONS OF MANAGEMENT.
I DO I DO NOT
/ / / / EXPECT TO ATTEND THE MEETING
--------------------------------------------
(Number of Shares)
--------------------------------------------
(Please Print Your Name)
--------------------------------------------
(Please Print Your Name)
Signature(s) Date
---------------------------------- ------------------------
(Please date this Proxy and sign your name exactly as it appears on your stock
certificates. Executors, administrators, trustees, etc., should give their full
title. If a corporation, please sign in full corporate name by the president or
other authorized officer. If a partnership, please sign in partnership name by
an authorized person. All joint owners should sign.)
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
