<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
/x/ Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
Vineyard 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):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------------------
<PAGE> 2
V I N E Y A R D N A T I O N A L B A N C O R P
9590 Foothill Boulevard
Rancho Cucamonga, CA 91730
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be Held October 29, 1996
The Annual Meeting of the shareholders of Vineyard National Bancorp, Inc.
will be held on Tuesday, October 29, 1996 at 4:00 P.M. at Red Hill Country Club,
8358 Red Hill Country Club Drive, Rancho Cucamonga, California 91730, to
consider and act upon the following matters:
1. To elect seven persons to the Board of Directors of the Bancorp to
serve until the next Annual Meeting of shareholders and until their successors
are elected and have qualified;
2. To approve extending the term of the 1987 Incentive Stock Option Plan
of Vineyard National Bancorp, a California corporation, for an additional ten
(10) years. The Plan is summarized more fully herein;
3. To ratify the appointment of the accounting firm of Vavrinek, Trine,
Day & Co. as auditors and as independent accountants for the year ending
December 31, 1996;
4. To transact any other business as may properly come before the meeting
and any adjournments of it.
Shares represented by properly executed proxies solicited by the Board of
Directors of the Bancorp will be voted in accordance with the instructions
specified in the following statement. It is the intention of the Board of
Directors that shares represented by proxies which are not limited to the
contrary will be voted in favor of electing the named persons as directors and
on other matters as recommended by the Board.
The Board of Directors has fixed the close of business on September 6,
1996 as the record date for determination of shareholders entitled to receive
notice of, and to vote at, the meeting and any adjournment of it.
By Order of the Board of Directors
/s/ Soule Claude
Soule Claude, Secretary
<PAGE> 3
V I N E Y A R D N A T I O N A L B A N C O R P
9590 Foothill Boulevard
Rancho Cucamonga, CA 91730
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Vineyard National Bancorp ("Bancorp"), a
California corporation, to be used in voting at the Annual Meeting of
shareholders to be held at 4:00 P.M., Tuesday, October 29, 1996 at the Red Hill
Country Club, 8358 Red Hill Country Club Drive, Rancho Cucamonga, California
91730 and at any adjournment of such meeting.
Mailing
It is anticipated that this Proxy Statement and Proxy will be mailed on or
about September 19, 1996.
Shareholder Proposals
Shareholder proposals for inclusion in this proxy statement for the Annual
Meeting of shareholders in 1996 must have been received by the Bancorp no later
than 5:00 P.M. on May 31, 1996.
Shareholder proposals to be considered for inclusion in the proxy
statement for the Annual Meeting of shareholders in 1997 must be received by the
Bancorp no later than 5:00 P.M. on May 31, 1997.
Revocability of Proxy
A proxy for use at the meeting is enclosed along with a return envelope
for your convenience. Any shareholder who executes and delivers such proxy has
the right to revoke it 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 proxy holders will be
suspended if the person executing the proxy is present at the meeting and
chooses to vote in person.
Unless revoked, all shares represented by a properly executed proxy which
is received in time for the meeting will be voted by the proxy holders in
accordance with the instructions on the proxy. If no instruction is specified
with respect to a matter to be acted upon, the shares represented by the proxy
will be voted in favor of the election of the nominees for directors set forth
herein and 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 STATEMENT IS FURNISHED IN CONNECTION WITH A SOLICITATION OF PROXIES
BY THE BOARD OF DIRECTORS OF THE BANCORP.
The expense of preparing, assembling, printing, and mailing this proxy
statement and the material used in this solicitation of proxies will be borne by
the Bancorp. It is contemplated that proxies will be solicited through the mail,
but officers and regular employees of the Bancorp and Bank may solicit proxies
personally.
1
<PAGE> 4
Voting Securities and Principal Holders
Only shareholders of record at the close of business on September 6, 1996
are entitled to receive notice of and to vote at the Annual Meeting of
shareholders. There were 1,862,643 shares of the Bancorp's no par value common
stock issued and outstanding on September 6, 1996 which was set as the record
date for the purpose of determining the shareholders entitled to receive notice
and to vote at the meeting.
Each holder of common stock will be entitled to one (1) vote in person or
by proxy for each share of common stock standing in his or her name on the books
of the Bancorp as of September 6, 1996, on any matter submitted to the vote of
the shareholders.
In electing directors, the shares are entitled to be voted cumulatively if
a candidate's name has been properly placed in nomination prior to the voting
and any shareholder present at the meeting has given notice of his or her
intention to vote his or her shares cumulatively. If a shareholder has given
such notice, all shareholders may cumulate their votes for candidates in
nomination. Cumulative voting entitles a shareholder to give one (1) nominee as
many votes as is equal to the number of directors to be elected multiplied by
the number of shares owned by such shareholder, or to distribute his or her
votes on the same principle between two or more nominees as he or she sees fit.
The seven (7) candidates receiving the highest number of votes will be elected.
The Board knows of no person who beneficially owns more than five percent
(5%) of the outstanding common stock of the Bancorp except as set forth in the
following table which reflects information as of the end of the Bancorp's last
fiscal year:
(a) Security Ownership of Certain Beneficial Owners (12/31/95)
<TABLE>
<CAPTION>
===========================================================================================
Name and Address of Amount and Nature of
Title of Class Beneficial Owner Beneficial Ownership Percent of Class
===========================================================================================
<S> <C> <C> <C>
Common Stock Frank S. Alvarez 109,065(1) 5.86%
1080 West 22nd Street
Upland, CA 91786
Common Stock Charles L. Keagle 113,120(2) 6.07%
2533 Vista Drive
Upland, CA 91786
Common Stock Phillip Schlosser and 105,300 5.65%
Elaine M. Schlosser
Route 1, Box 117
Redmond, Oregon 97756
</TABLE>
- -------------------------
(1) 109,065 includes 107,625 shares held by Louis M. Alvarez and Frank S.
Alvarez as co-trustees of Emanuel Alvarez and Lorenza E. Alvarez trust and
1440 shares held as joint tenants by Frank S. and Encarnacion Alvarez.
(2) 113,120 includes 112,048 shares held by Charles L. Keagle and Linda J.
Keagle as their community property; and 1072 shares held for their
children with Charles L. Keagle as custodian, under the California Uniform
Gifts to Minors Act.
2
<PAGE> 5
(b) Security Ownership of Management (12/31/95).
<TABLE>
<CAPTION>
=============================================================================================
Amount and Nature of
Title of Class Name of Beneficial Owner Beneficial Ownership Percent of Class
=============================================================================================
<S> <C> <C> <C>
Common Stock Frank Alvarez (D) 109,065 5.86%
Common Stock Roland Noriega (D) 28,636(3) 1.54%
Common Stock Lester Stroh (D) 60,750(4) 3.26%
Common Stock Joel Ravitz (D) 42,482(5) 2.28%
Common Stock Steven Sensenbach (D,O) 38,053 2.04%
Common Stock Jodie D. Smith (D) 14,000(6) .75%
Common Stock Renny Thomas (D) 5,700(7) .31%
Common Stock Sara Ahern (O) None
Common Stock Soule Claude (O) 134 .01%
Common Stock Robert Schoeffler (O) 2 negligible
Directors & Officers 298,822 16.04%
of the Bank as a Group(8)
</TABLE>
- -------------------
(3) Roland Noriega owns 8,640 shares directly and 19,996 as Trustee of the R.
& F. Noriega Trust.
(4) Lester Stroh is the beneficial owner of 60,750 shares held in his account
at a stock brokerage firm.
(5) Of this total, 19,668 are held by Quincy Cass Associates over which Mr.
Ravitz exercises control.
(6) Jodie Smith owns 14,000 shares of which 11,327 are held in his account at
a stock brokerage firm.
(7) Renny Thomas owns 5,700 of which 4,020 are held in his account at a stock
brokerage firm and 600 shares for his son.
(8) Officers including the four named officers, as of December 31, 1995, hold
options to purchase 76,420 shares in addition to the above, which will
equal 375,242 shares or 20.15% if exercised.
(D) Director
(O) Officer
3
<PAGE> 6
Election of Directors
The Board of Directors has set the number of directors of the Bancorp at
seven (7) which is within the number authorized by the Bylaws of the Bancorp.
The directors who are elected will serve until the next Annual Meeting of
shareholders and until their respective successors have been duly elected and
qualified.
Each of the nominees named herein has consented to be named in this proxy
statement and has consented to serve as a director if elected. The following
table sets forth certain information with respect to those persons who are
nominees for election as directors.
<TABLE>
<CAPTION>
=========================================================================================
Current No.
Principal Occupation or Position Bancorp of Shares
Name and Other Directorships Director Since (12/31/95)
=========================================================================================
<S> <C> <C> <C>
Frank Alvarez, age 61 Certified Public Accountant. 1988 109,065
Retired from Bowen McBeth, Inc.
CPAs. He is also on the Board of
Directors of Casa Colina
Rehabilitation Hospital in
Pomona, California. He has been
a Bank Director since 1981.
Roland Noriega, age 55 Sole owner of Merchant's 1993 28,636
Electric, an electrical
contracting firm in the City of
Commerce. He is also a member of
the Board of Directors of PMI,
an investment company. He has
been a Bank Director since 1993.
Joel Ravitz, age 50 Chairman of the Board and CEO of 1988 42,482
Quincy Cass Associates, Inc., a
Los Angeles based securities
broker dealer and a member of
National Association of
Securities Dealers. He is a Past
President and Director of
Therapeutic Living Centers for
the Blind, a non-profit
corporation and a member of Town
Hall of California and the Bond
Club of Los Angeles. He has been
a Bank Director since 1983.
Steven R. Sensenbach, President and Chief Executive 1988 38,053
age 53 Officer of Vineyard National
Bancorp and President and Chief
Executive Officer of Vineyard
National Bank. Mr. Sensenbach is
a past director of the Federal
Reserve Bank of San Francisco,
Los Angeles Branch. He is a
member of the Advisory Council
for the A. Gary Anderson
Graduate School of Management at
the University of California,
Riverside, was appointed a
Fellow of the A. Gary Anderson
GSM for 1992-93, and most
recently received the Graduate
School's first "Outstanding
Executive Achievement" award. He
has been a bank director since
1981.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
=========================================================================================
Current No.
Principal Occupation or Position Bancorp of Shares
Name and Other Directorships Director Since (12/31/95)
=========================================================================================
<S> <C> <C> <C>
Jodie D. Smith, age 54 Co-owner of J & J Enterprises of 1994 14,000
Ontario specializing in the
manufacturing and sale of
stainless steel pickup truck
after market accessories. He is
also the owner of J & P
Developers, a building and
development company. Mr. Smith
is Vice President of Strait
Sound, Inc., a company dealing
with land planning and building
in the State of Washington. He
has been a Bank Director since
1994.
Lester Stroh, age 78 Chairman of the Board of 1988 60,750
Vineyard National Bancorp. He is
a licensed physician and retired
Chairman of the Department of
Allergy at Southern California
Permanente Medical Group, Kaiser
Foundation Hospital, Fontana,
California. He has been a Bank
Director since 1981.
Renny Thomas, age 58 Executive Vice President and 1993 5,700
managing underwriter of
CAL/GROUP Dentafits, a dental,
vision and prescription
insurance and stop/loss
reinsurance facility. He is a
Past President and Director of
Mass Marketing Insurance
Institute. He is also a Director
of the Eye Care Network/Medical
Eye Services. He has been a Bank
Director since 1993.
</TABLE>
Identification and Business Experience of Executive Officers of Vineyard
National Bank
1. Steven R. Sensenbach, age 53, is President and Chief Executive
Officer of Vineyard National Bancorp and President and Chief Executive Officer
of Vineyard National Bank. Mr. Sensenbach is a past director of the Federal
Reserve Bank of San Francisco, Los Angeles Branch. He is a member of the
Advisory Council for the A. Gary Anderson Graduate School of Management at the
University of California, Riverside, was appointed a Fellow of the A. Gary
Anderson GSM for 1992-93, and most recently received the Graduate School's first
"Outstanding Executive Achievement" award.
2. Robert Schoeffler, age 48, is the Executive Vice President/Senior
Credit Administrator of the Bank and has served in this capacity since January,
1993. Mr. Schoeffler joined Vineyard National Bank in April, 1991 as Vice
President/Manager of the Rancho Cucamonga branch and then became Senior Vice
President/Commercial Lending before his current position. Before joining
Vineyard National Bank Mr. Schoeffler worked in executive positions with other
independent banks.
3. Soule Claude, age 42, is presently the Corporate Secretary of
Vineyard National Bancorp, holding this position since October, 1992. Mrs.
Claude joined Vineyard National Bank in 1988 as Administrative Assistant to the
President/CEO and is currently Executive Vice President/Chief Financial Officer.
4. Sara Ahern, age 41, is the Senior Vice President and Cashier of
Vineyard National Bank and has held this position since June, 1995. Mrs. Ahern
joined Vineyard National Bank in June, 1993, as Vice President/Director of
Operations and currently is its Senior Vice President/Cashier and Director of
Operations.
All of the above officers hold office at the pleasure of the Board of
Directors.
5
<PAGE> 8
Loans to Directors and Officers
In the ordinary course of business the Bank has granted loans to certain
directors and officers and the companies in which they are associated. Loans
were made under the terms which are consistent with the Bank's normal lending
policies. The following is information concerning the indebtedness of management
in amounts exceeding $60,000 as of December 31, 1995, the end of the fiscal
year.
<TABLE>
<CAPTION>
=======================================================================================================
Relationship to Interest Rate
Bancorp or Type of Amount of Paid or Balance as of
Name Bank Transaction Transaction Charged 12/31/95
=======================================================================================================
<S> <C> <C> <C> <C> <C>
Frank Alvarez Director Personal
Reserve Line $ 6,300 18.00% $ -0-
Commercial
Loan to Bowen
McBeth $100,000 11.00% $ 56,538
Loan to
Cucamonga $150,000 8.5% $148,226
Investors
(commercial
real estate loan)
Marc Alvarez Director's son Installment $ 11,100 7.25% $ 7,925
Loan
Roland Noriega Director Commercial $125,000 8.75% $ 50,891
Loan
Personal
Reserve Line $ 5,000 18.00% $ 0
Commercial
Loan $800,000 10.0 % $787,843
Joel Ravitz Director Commercial
Loan $ 25,592 11.50% $ 25,592
Commercial
Loan $ 80,000 11.5 % $ 67,078
Personal
Reserve Line $ 15,000 18.00% $ 13,940
Personal
Reserve Line $ 25,000 18.00% $ 23,274
Steven R. Director/Officer 401(e) Loan $ 95,000 7.00%(9) $ 95,000
Sensenbach
Personal
Reserve Line $ 4,000 18.00% $ 0
Personal
Reserve Line $ 1,000 18.00% $ 22.34
</TABLE>
- --------------
(9) Fully secured by Mr. Sensenbach's Deferred Compensation Plan.
6
<PAGE> 9
<TABLE>
<CAPTION>
=======================================================================================================
Relationship to Balance as of
Bancorp or Type of Amount of Interest Rate 12/31/95
Name Bank Transaction Transaction Paid or Charged
=======================================================================================================
<S> <C> <C> <C> <C> <C>
Jodie D. Smith Director Personal
Reserve Line $ 500 18.00% $ 0
Installment
Loan $ 14,050 6.25% $ 2,527
Commercial
Real Estate
Loan $300,000 10.75% $124,050
</TABLE>
Committees of the Board of Directors
The Bank, which is a subsidiary of the Bancorp, has a standing Audit
Committee which has met quarterly during the previous fiscal year. The members
of the Audit Committee are Frank Alvarez, Roland Noriega and Lester Stroh. The
function of this Committee is to monitor the Bank's financial operations,
receive reports from the Bank's independent certified public accountants, and to
select outside auditors and accountants when necessary. Neither the Bancorp nor
the Bank has a nominating committee or a compensation committee of the Board of
Directors.
Meetings of the Board of Directors
The total number of meetings of the Board of Directors of the Bancorp
including regularly scheduled and special meetings during the last full fiscal
year was 12. In addition, the Board of Directors of the Bank had 13 regularly
scheduled and special meetings. No director during the last full fiscal year
attended fewer than eighty-eight percent (88%) of the total number of meetings
of the Board of Directors and the total number of meetings held by all
committees of the board on which that director served.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth compensation information for the executive
officers of the Bank, which is the sole subsidiary of the Bancorp, for the last
three (3) year period ending December 31, 1995 for those executive officers with
compensation in excess of sixty thousand dollars ($60,000) a year.
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
Name and
Principal Position Year Salary Bonus Stock Options (#)
- ------------------ ---- -------- ------- -----------------
<S> <C> <C> <C> <C>
Steven R. Sensenbach 1995 $200,000 $89,764 54,533(10,11)
President/Chief Executive 1994 $200,000 -0- 40,500
Officer/Director 1993 $200,000 $85,961 35,500
Robert Schoeffler 1995 $ 72,000 -0- 1,440(11)
Executive Vice President 1994 $ 96,100 -0- 1,200
1993 $ 80,520 $30,000 1,200
</TABLE>
- ---------------
(10) The number of options increased because Mr. Sensenbach receives 5,000
options per year per his employment contract. The 1995 number reflects the
6 for 5 stock split of August 31, 1995.
(11) August 31, 1995 the 6 for 5 split is reflected.
7
<PAGE> 10
Termination of Employment and Change of Control Arrangement
At any time during the term of Mr. Sensenbach's employment agreement, the
Board of Directors may terminate his employment with or without cause. However,
if the termination is without cause, then Mr. Sensenbach is entitled to
severance pay equal to one year's salary or if the remaining term is less than
one year, the amount will be prorated.
Approval of Extending Term of the 1987 Incentive Stock Option Plan
The Board of Directors recommends extending the term of the 1987 Incentive
Stock Option Plan for an additional ten (10) years. Accordingly, proxies given
to management will be voted in favor of extending the term of the 1987 Incentive
Stock Option Plan, a summary of which follows:
Introduction
The existing stock option plan was approved by the shareholders in 1987
for a term of ten (10) years (the "Plan"). Therefore, the Plan is scheduled to
terminate on September 30, 1997. The purpose of the Plan is to strengthen
Vineyard National Bancorp by providing incentive stock options as a means of
retaining and attracting key employees and certain officers in today's
competitive market. Accordingly, the Board believes it is in the best interest
of the corporation to extend the term of the 1987 Plan for an additional ten
(10) years.
Subject to approval by the holders of the majority of the outstanding
shares of the Bancorp entitled to vote, the Directors have approved a resolution
extending the term of the 1987 Incentive Stock Option Plan for an additional ten
(10) years. The Plan provides for granting of options to purchase shares of the
Bancorp's common stock at an option price per share which is not less than one
hundred percent (100%) of the fair market value of the stock at the time the
option is granted.
As of September 6, 1996 the aggregate number of shares available to be
issued pursuant to options granted under the 1987 Plan was 53,303 shares of the
common stock of the corporation after making adjustments for stock splits. If
all options subject to grant under the Plan are granted and the options are
exercised to purchase stock, the shares of stock so issued would constitute no
more than ten percent (10%) of the Bancorp's outstanding common stock. Extending
the term of the 1987 plan will not change the number of shares available to be
issued pursuant to options under this Plan.
Summary of the Plan
The Plan shall be administered by a committee appointed from time to time
by the Board of Directors. None of the committee members may participate in the
Plan. Only full-time salaried officers or full-time salaried employees of the
Bancorp and/or the Bank are eligible for participation in the Plan. No member of
the Committee or of the Board of Directors shall be liable for any action or
determination made in good faith, and the members shall be entitled to
indemnification and reimbursement in the manner provided under applicable law.
The purchase price of stock subject to each option shall be not less than
one hundred percent (100%) of the fair market value (determined by the Board
under any reasonable valuation method) of the stock at the time the option is
granted. Options shall be exercisable in such installments and upon other
conditions as the Stock Option Committee shall determine. Options will expire on
a date as the Board of Directors may determine, but not later than six (6) years
from date of grant.
Each person to whom an option is granted must agree at the request of the
Bancorp and/or Bank to remain in the continuous employ of the Bancorp and/or
Bank following the date of the granting of the option for a period of not less
than two (2) years.
Options under the plan shall not be assignable by the optionee during the
optionee's lifetime. In the event of the death of the optionee, the option may
be exercised within one (1) year after the date of the death by the person or
persons to whom his or her rights under the option shall have passed by will or
by the laws of descent and distribution. If an optionee's employment with the
Bancorp and/or Bank ceases for any reason other than the optionee's death or
discharge for cause, his or her option shall expire not later than thirty (30)
days thereafter. During this thirty (30) day period, the option is exercisable
only as to those installments, if any, which had accrued as of
8
<PAGE> 11
the date the optionee ceased to be employed by the Bank and/or Bancorp. If an
optionee's employment by the Bank and/or Bancorp is terminated for cause, his or
her option shall expire concurrently with the discharge for cause.
Upon the dissolution or liquidation of the Bancorp or upon reorganization,
merger or consolidation with one or more corporations as a result of which the
corporation is not the surviving corporation, or upon a sale of substantially
all of the property of the corporation, this Plan shall terminate and any option
granted under it shall terminate unless provision is made in connection with the
transaction for the assumption of the options granted or the substitution of new
options covering the stock of a successor corporation or a parent or subsidiary
with appropriate adjustments as to number and kind of shares and prices.
Adjustments under these conditions shall be made by the Board whose
determination as to the adjustments shall be final, binding and conclusive.
If the outstanding shares of the stock of the corporation are increased,
decreased or changed into or exchanged for a different number of kind of shares
or securities of the corporation through reorganization, merger,
recapitalization, reclassification, stock split up, stock dividends, stock
consolidation or otherwise, an appropriate and proportionate adjustment shall be
made in the number and kind of shares as to which options may be granted. A
corresponding adjustment changing the number or kind of shares in the exercise
price per share allocated to unexercised options or portions thereof which shall
have been granted prior to such change shall likewise be made.
The Board of Directors shall have the right of first refusal to purchase
any shares of stock of an optionee who desires to sell or transfer his or her
shares which were purchased as a result of any option granted. The price shall
be at the then current fair market value of the shares as determined by the
Board of Directors.
The Board of Directors of the Bancorp reserves the right to suspend,
amend, or terminate the Plan and, with the consent of the optionee, make any
modifications to the terms and conditions of each option as it deems advisable,
with certain exceptions which may be amended only with the consent of a majority
of the outstanding shareholders.
Options to be granted under the Plan will not be "qualified stock options"
within the meaning of Section 422 and other sections of the Internal Revenue
Code, as amended and optionees will not be entitled to the favorable tax
treatment allowed in connection with the exercise of "qualified stock options."
This description is intended to highlight and summarize the principal
terms of the Plan. For further information, shareholders are referred to the
copy of the Plan which is available for inspection at the Bank.
The extension of the term of the 1987 Incentive Stock Option Plan shall
become effective when approved by the holders of a majority of the outstanding
shares of common stock of the Bancorp entitled to vote and shall terminate upon
the end of the extension which will be October 28, 2006, which is about ten
years after the present date of the meeting of shareholders at which time the
Board believes the shareholders will approve the extension.
By approving the extension of the term of the 1987 Incentive Stock Option
Plan, the shareholders authorize the officers and directors to execute and file
documents and to do acts required of them to carry out and perform the Plan as
approved.
9
<PAGE> 12
AGGREGATED OPTION EXERCISES DURING 1995
AND OPTION VALUES AT DECEMBER 31, 1995
<TABLE>
<CAPTION>
=======================================================================================================================
Value of Unexercised
Number of Unexercised In-the-Money Options
Shares Acquired Options at 12/31/95 (#) at 12/31/95
Name on Exercise (#) Value Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
=======================================================================================================================
<S> <C> <C> <C> <C>
Steven R. 0 None 54,533 (48,544 at $2.92)(12) Option price is not less
Sensenbach (600 at $2.60) than fair market value on
the date of granting of
the option.(13)
Robert Schoeffler 0 None 1,400 (1,400 at $6.25)
Sara Ahern 0 None -0-
Soule Claude 0 None 1,869 (1,869 at $2.92)
</TABLE>
Deferred Compensation
During 1987, the Bank established a non-qualified, unfunded deferred
compensation plan for certain key management personnel and non employee
directors whereby they may defer compensation which will then provide for
certain payments upon retirement, death or disability. The plan provides for
payments for fifteen years commencing upon retirement, death or disability. The
plan provides for reduced benefits upon early retirement, disability or
termination of employment.
Effective September 1, 1990 the Bank adopted a new deferred compensation
plan with similar provisions of the 1987 plan except that the Bank may make
matching contributions of 25%14 of officers' deferrals up to a maximum of 5% and
50%15 of senior officers' deferrals to a maximum of 10%. The Bank's
contribution, in the aggregate, for all Participants shall not exceed 4% of
compensation of all Bank employees. Each Participant contributes a minimum of
$1,000 annually to the plan. The deferred compensation expense was $138,833
($81,911 net of income taxes); $107,057 ($81,214 net of income tax); and $90,883
($53,621 net of income taxes) for the years ended December 31, 1995, 1994 and
1993, respectively.
Defined Contribution Plan
Effective August 1, 1990, the Bank established a qualified defined
contribution plan (401(k) Retirement Savings Plan) for all eligible employees.
Employees contribute from 1% to 15%16 of their compensation with a maximum of
$9,50017 annually. The Bank's contributions to the plan are based upon an amount
equal to 25%18 of each participant's eligible contribution for the plan year not
to exceed 2% of the employee's compensation. The Bank's matching contribution
will become vested at 20% per year with full vesting after five years. The
expense was $36,070 ($21,281 net of income taxes); $34,533 ($26,197 net of
income taxes); and $35,509 ($20,950 net of income taxes) for the years ended
December 31, 1995, 1994, and 1993, respectively.
- ---------------------
(12) On January 20, 1994, the Board of Directors elected to cancel existing
stock options, at the holders request, and reissue new stock options at a
price of $3.50 per share, ($2.92 after giving retroactive effect for the
six for five stock split).
(13) The price of Bancorp's common stock as of December, 1995 ranged from a low
of $2.60 to a high of $3.88 (See Annual Report).
(14) Reduced from 50% to 25% on June 30, 1995.
(15) Reduced from 100% to 50% on June 30, 1995.
(16) Increased from 12% to 15% on June 30, 1995.
(17) Increased from $9,240 to $9,500 based on IRS ruling.
(18) Reduced from 50% to 25% on June 30, 1995.
10
<PAGE> 13
Compensation of Directors
(1) Standard Arrangements.
All members of the Board of Directors have been paid $750 for
monthly meetings of the bank. No additional payments have been made to the
Directors for attending meetings of the Bancorp. Directors who are members of
special committees are paid $300 per meeting for attending those committee
meetings.
(2) Other Arrangements.
Lester Stroh, as Chairman of the Board of Directors of the Bank, has
use of a company car. However, a percentage of personal use is reported as
income to Dr. Stroh. There are no other arrangements.
Independent Accountants
Vavrinek, Trine, Day and Company has served as the Bancorp's independent
accountants since their appointment from the inception of the Bancorp. The Board
of Directors has selected Vavrinek, Trine, Day and Company ("VTD") as the
Bancorp's independent accountants for the year ending December 31, 1996. Ron
White, who will be representing VTD, will be present at the meeting to respond
to questions and will have an opportunity to make a statement if he desires to
do so.
Audit services of VTD for 1995 included the examination of the
consolidated financial statements, services related to filings with the
Securities and Exchange Commission, and the performance of limited reviews of
the Bancorp's quarterly unaudited financial information.
The Bancorp's Board of Directors recommends a vote FOR the proposal to
ratify the selection of Vavrinek, Trine, Day and Company as the Bancorp's
independent accountants for the year ending December 31, 1996.
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 directors and certain of its officers and persons owning more than 10
percent of a registered class of the Company's stock to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC").
Based on a review of copies of forms furnished to the Company or a
representation that no reports were required, the Company believes that there
was compliance with this requirement.
Attorneys
Buxbaum & Chakmak, a law corporation, of Claremont and Newport Beach,
California has been appointed as the general counsel for the Bank and Bancorp.
11
<PAGE> 14
Financial Information and Incorporation by Reference
The 1995 Annual Report to shareholders of Vineyard National Bancorp for
Vineyard National Bank, the wholly owned subsidiary of the Bancorp, for the year
ended December 31, 1995, including the financial statements and related
statements of income attached as part of those financial statements prepared in
conformity with generally accepted accounting principles has previously been
furnished to shareholders. The information from the Annual Report is
incorporated herein by reference.
WITHOUT CHARGE TO ANY SHAREHOLDER, THE BANCORP WILL PROVIDE A COPY OF ITS
1995 ANNUAL REPORT UPON THE WRITTEN REQUEST OF THE SHAREHOLDER. IN ADDITION, A
SHAREHOLDER MAY REQUEST FROM THE BANCORP WITHOUT CHARGE A COPY OF THE FORM 10-K
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. ATTACHED EXHIBITS
ARE LENGTHY SO COPIES OF THE EXHIBITS WILL BE PROVIDED ONLY UPON PAYMENT OF
COPYING COSTS. THE REQUEST SHOULD BE DIRECTED TO SOULE CLAUDE, SECRETARY OF
VINEYARD NATIONAL BANCORP, POST OFFICE BOX 727, RANCHO CUCAMONGA, CALIFORNIA
91729.
Other Matters
The Board of Directors knows of no other matters to be presented to the
meeting other than those set forth above. However, if other matters properly
come before the meeting, it is the intention of the persons named in the
accompanying proxy to vote said proxy in accordance with the recommendations of
the Board of Directors, and authority to do so is included in the proxy.
Dated:_______________________ Vineyard National Bancorp
/s/ Soule Claude
----------------------------------
Soule Claude, Secretary
IMPORTANT
EVEN THOUGH YOU EXPECT TO ATTEND THE ANNUAL MEETING, IT IS URGENTLY
REQUESTED THAT WHETHER YOUR SHAREHOLDINGS ARE LARGE OR SMALL, YOU PROMPTLY FILL
IN, DATE, SIGN, AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED. THIS
WILL SAVE THE COMPANY THE EXPENSE OF FOLLOW-UP NOTICES.
12
<PAGE> 15
VINEYARD NATIONAL BANCORP PROXY
9590 Foothill Blvd., Rancho Cucamonga, CA 91730
THIS PROXY IS SOLICITED ON BEHALF OF THE BANCORP'S BOARD OF DIRECTORS.
The undersigned appoints Lester Stroh and Frank S. Alvarez, or either
of them, as proxies with full power of substitution, to vote and act with
respect to all shares of Vineyard National Bancorp held of record September 6,
1996, at the Annual Meeting of the shareholders on October 29, 1996 or any
adjournment, including all powers the undersigned would possess if personally
present, as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
[ ] Authorize to vote for [ ] Withhold authority to 1. To elect as a group the seven (7) persons nominated to the Board
the nominees as a vote for the nominees of Directors to serve until the next annual meeting of shareholders
group as a group as proposed by management in the Proxy Statement OR if you choose
not to grant or withhold authority to vote for the nominees as a
group, you may indicate next to the name of each nominee below
whether you would grant or withhold authority to vote for the
individual nominee.
[ ] FOR [ ] AGAINST 2. To approve extending the term of the 1987 Incentive Stock Option
Plan of Vineyard National Bancorp, a California corporation,
for an additional ten (10) years.
[ ] FOR [ ] AGAINST 3. To ratify the appointment of the accounting firm of Vavrinek,
Trinc, Day & Co. as auditors and as independent accountants for
the year ending December 31, 1996.
Authorize to vote Withhold authority to
for the nominee vote for the nominee
[ ] [ ] Frank Alvarez
[ ] [ ] Roland Noriega
[ ] [ ] Joel Ravitz
[ ] [ ] Steven Sensenbach
[ ] [ ] Jodie D. Smith
[ ] [ ] Lester Stroh
[ ] [ ] Renny Thomas
</TABLE>
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY IN THE POSTAGE PREPAID
ENVELOPE PROVIDED.
This proxy when properly executed will be voted in the manner
directed herein by the undersigned shareholder(s). If no direction is made,
this proxy will be voted for the seven (7) nominees for the Board of Directors,
approval of the extension of the 1987 Incentive Stock Option Plan and for the
ratification of the accounting firm.
If any other business is presented at the meeting, this Proxy shall
be voted in accordance with recommendations of the Board of Directors.
When signing as an attorney, executor, administrator, trustee, or
guardian, please give full title. If more than one trustee, all should sign.
When shares are held by joint tenants, both should sign.
Dated:________________, 1996 ___________________________________________
(Signature of Shareholder)
Number of Shares:___________ ___________________________________________
(Please print name)
___________________________________________
(Signature of Shareholder)
___________________________________________
(Please print name)
I (We) ________ plan to attend the Annual Meeting of the shareholders.
(number)
IMPORTANT -- PLEASE SIGN
