<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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
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):
[X] No fee required.
[ ] 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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<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 November 13, 1997
The Annual Meeting of the shareholders of Vineyard National Bancorp,
Inc. will be held on Thursday, November 13, 1997 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 termination of the 1987 Incentive Stock Option Plan
as extended on October 29, 1996;
3. To approve the 1997 Incentive Stock Option Plan of Vineyard
National Bancorp;
4. 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, 1997;
5. 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
22, 1997 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 SENSENBACH, SECRETARY
Soule Sensenbach, 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., Thursday, November 13, 1997 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 October 3, 1997.
Shareholder Proposals
Shareholder proposals for inclusion in this proxy statement for the
Annual Meeting of shareholders in 1997 must have been received by the Bancorp
no later than 5:00 P.M. on May 31, 1997.
Shareholder proposals to be considered for inclusion in the proxy
statement for the Annual Meeting of shareholders in 1998 must be received by
the Bancorp no later than 5:00 P.M. on May 31, 1998.
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 22,
1997 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 22, 1997 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 22, 1997, 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 who are known to the
Bancorp (12/31/96)
<TABLE>
<CAPTION>
===========================================================================================================================
Title of Class Name and Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Ownership
===========================================================================================================================
<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 105,120(2) 5.64%
2533 Vista Drive
Upland, CA 91786
</TABLE>
_________________________
(1) 109,065 includes 107,625 shares held by Louis M. Alvarez and Frank S.
Alvarez as co-trustees of Manuel Alvarez and Lorenza E. Alvarez trust and
1440 shares held as joint tenants by Frank S. and Encarnacion Alvarez.
(2) 105,120 includes 104,048 shares held by Charles L. Keagle and Linda J.
Keagle as their community property; and 1,072 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 (12/31/96).
<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,0) 19,453(8) 1.04 %
Common Stock Jodie D. Smith (D) 15,000(6) .75 %
Common Stock Renny Thomas (D) 5,700(7) .31 %
Common Stock Sara Ahern (O) 1 negligible
Common Stock Soule Claude (Sensenbach) 134 .01 %
(O)
Common Stock Robert Schoeffler (O) 2 negligible
Directors & Officers of the 281,223 15.09 %
Bank as a Group(9)
- ----------------------------
</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 15,000 which 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 Steven R. Sensenbach owns 19,453 shares of which 575 are held in street
name.
9 Officers including the four named officers, as of December 31, 1996, hold
options to purchase 76,420 shares in addition to the above, which will equal
357,643 shares or 19.20% 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>
- -------------------------------------------------------------------------------------------------------------------------
Name Principal Occupation or Position Bancorp Current No.
and Other Directorships Director Since of Shares
(12/31/96)
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
Frank Alvarez, age 62 Certified Public Accountant. Retired from Bowen McBeth, Inc. 1988 109,065
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 56 Sole owner of Merchant's Electric, an electrical contracting 1993 28,636
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 52 Chairman of the Board and CEO of Quincy Cass Associates, Inc., 1988 42,482
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 Officer of Vineyard National 1988 19,453
age 54 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>
- ----------------------------------------------------------------------------------------------------------------------------
Name Principal Occupation or Position Bancorp Current No.
and Other Directorships Director Since of Shares
(12/31/96)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
Jodie D. Smith, age 55 Co-owner of J & J Enterprises of Ontario specializing in the 1994 15,000
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 79 Chairman of the Board of Vineyard National Bancorp. He is a 1988 60,750
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 59 Executive Vice President and managing underwriter of CAL/GROUP 1993 5,700
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 54, 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 49, 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 Sensenbach, age 43, is presently the Corporate
Secretary of Vineyard National Bancorp, holding this position since October,
1992. Mrs. Sensenbach joined Vineyard National Bank in 1988 as Administrative
Assistant to the President/CEO and is currently Executive Vice President/Chief
Financial Officer of the bank.
4. Sara F. Ahern, age 42, 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, 1996, the end of the
fiscal year.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Name Relationship to Type of Amount of Interest Rate Balance as of
Bancorp or Bank Transaction Transaction Paid or 12/31/96
Charged
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
Frank Alvarez Director Personal
Reserve Line $ 6,300 18.00% $ 465
Loan to
Cucamonga $150,000 8.5 % $146,082
Investors
(commercial
real estate
loan)
Marc Alvarez Director's son Installment $ 11,100 7.25% $ 5,270
Loan
Louis Alvarez Director's son Installment $ 26,150 7.49% $ 23,977
Loan
Roland Noriega Director Commercial Loan
$125,000 8.75% $ 20,747
Personal
Reserve Line $ 10,000 18.00% $ 0
Commercial Loan
(Barclay Ltd)
$800,000 10.0 % $778,313
Installment
Loan $ 25,504 7.49% $ 23,689
Installment
Loan $ 25,297 7.49% $ 23,496
Installment
Loan $ 25,512 7.49% $ 23,696
Installment
Loan $ 25,484 7.49% $ 23,670
Installment
Loan $ 23,483 7.49% $ 23,689
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Name Relationship to Type of Amount of Interest Rate Balance as of
Bancorp or Bank Transaction Transaction Paid or 12/31/96
Charged
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
Joel Ravitz Director Commercial Loan
$ 23,000 11.50% $ 0
Commercial Loan
$ 80,000 11.50% $ 48,000
Personal
Reserve Line $ 15,000 18.00% $ 11,588
Personal
Reserve Line $ 25,000 18.00% $ 23,720
Commercial Loan
$ 17,583 10.5 % $ 17,583
Commercial Loan
$ 19,650 15.5 % $ 17,665
Steven R. Director/Officer 401(e) Loan $ 95,000 7.00(10) $ 95,000
Sensenbach
Personal
Reserve Line $ 4,000 18.00% $ 0
Jodie D. Smith Director Personal
Reserve Line $ 500 18.00% $ 0
Renny Smith Director Personal
Reserve Line $ 20,000 18.00% $ 0
Personal
Reserve Line $ 5,000 18.00% $ 185
Commercial Loan
$ 45,000 11.377% $ 45,000
Commercial Loan
$ 55,000 13.5 % $ 55,000
Commercial Loan
$ 53,000 9.0 % $ 3,903
Real Estate
Loan $183,200 7.625% $179,864
- ----------------------
</TABLE>
(10) Fully secured by Mr. Sensenbach's Deferred Compensation Plan.
7
<PAGE> 10
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 16 regularly
scheduled and special meetings. No director during the last full fiscal year
attended fewer than ninety-three percent (93%) 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 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, 1996 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 1996 $200,000 -0- 54,533
President/Chief Executive 1995 $200,000 $89,764 54,533(11)(12)
Officer/Director 1994 $200,000 -0- 40,500
Robert Schoeffler 1996 $ 84,000 $ 1,000 1,440
Executive Vice President 1995 $ 72,000 -0- 1,440(12)
1994 $ 96,100 $ -0-00 1,200
</TABLE>
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.
- -----------------------
(11) The number of options increased because Mr. Sensenbach received 5,000
options per his employment contract. The 1995 number reflects the 6 for 5
stock split of August 31, 1995.
(12) August 31, 1995 the 6 for 5 split is reflected.
8
<PAGE> 11
Approval of the Termination of the 1987 Plan and Approval of the 1997 Incentive
Stock Option Plan of Vineyard National Bancorp
The Board of Directors recommends voting as follows:
1. To approve termination of the 1987 Incentive Stock Option Plan
as extended on October 29, 1996; and
2. To approve the 1997 Incentive Stock Option Plan of Vineyard
National Bancorp.
This recommendation and the anticipated shareholder approval are
subject to obtaining the consent of the appropriate regulatory agencies, if
required by law. Accordingly, proxies given to mangement will be voted in
favor of items one and two above. A summary of the 1997 Plan 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 was
originally scheduled to terminate on September 30, 1997. At the Shareholders'
meeting of October 29, 1996, the shareholders voted to extend the term of Plan
for an additional ten years from the date of the Shareholders' meeting to about
October 28, 2006. 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 include Directors of Vineyard National Bancorp in the eligible class under
the Plan.
Subject to approval by the holders of the majority of the outstanding
shares of the Bancorp entitled to vote, the Bancorp's Board has approved a
resolution including the Directors as participants in the Plan. In addition,
the Board has approved a resolution authorizing the 1997 Plan to include
200,000 shares of the Bancorp's authorized but unissued common stock to be
combined with the 53,31613 shares which remain under the 1987 Plan. The
aggregate amount of stock to be delivered upon the exercise of all options
under the Plan shall not exceed 253,316.
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 December 31, 1996 the aggregate number of shares available to be
issued pursuant to options granted under the 1987 Plan was 53,316 shares of the
common stock of the corporation after making adjustments for stock splits. By
adding the additional options for 200,000 more shares of stock, the aggregate
number of shares available to be issued under the 1997 Plan is 253,316. 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 about 13.6% of the Bancorp's outstanding common stock. Increasing
the number of shares available for granting in the 1997 Plan will give the
Stock Option Committee more flexibility in offering options.
Summary of the Plan
The Plan shall be administered by a committee appointed by the Board
of Directors. Only full-time salaried officers, full-time salaried employees,
or Directors 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. However, for an individual
- -----------------------
(13) As of December 31, 1996, there were 53,316 available for granting per the
Annual Report
9
<PAGE> 12
who owns more than ten percent (10%) of the outstanding stock of the Bancorp,
the option price is to be 110% of the fair market value on the date of grant.
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 ten (10) years from
date of grant. However, for the individual who owns more than ten percent
(10%) of the outstanding stock of the Bancorp, the option(s) will not be
exercisable more than five (5) years from the date of granting.
Each person, not including directors, 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. In addition, to be
eligible to exercise the option and purchase stock, the option holder must be
an employee of the Bank and/or Bancorp for the entire time from the date of
granting of the option until three months before the date of exercise. This
period varies in the event of disability or death.
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 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.
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, stock dividends, stock
consolidation or otherwise, an appropriate and proportionate adjustment shall
be made in the number and kind of shares to which options may be granted. A
corresponding adjustment in the exercise price per share allocated to
unexercised options or portions thereof will be granted prior to such change.
Upon the dissolution or liquidation of the Corporation, or upon a
reorganization, merger, or consolidation of the Corporation with one or more
other corporations where the Corporation is not the surviving corporation, or
upon a sale of substantially all the property of the Corporation to another
corporation or association, this Plan shall terminate, and any options granted
under it shall terminate, unless other provisions are made by the Board of
Directors in connection with the transaction.
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 are intended to be incentive
stock options as defined in Section 422 and other applicable sections of the
Internal Revenue Code.
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 1987 Plan as extended will be terminated and the 1997 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, subject to obtaining
the consent of the appropriate regulatory agencies if required by law. By
approving the 1997 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 new Plan.
10
<PAGE> 13
AGGREGATED OPTION EXERCISES DURING 1996
AND OPTION VALUES AT DECEMBER 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Number of Unexercised Value of Unexercised
Shares Acquired Options at 12/31/96 (#) In-the-Money Options
Name on Exercise (#) Value Realized ($) Exercisable/Unexercisable at 12/31/96
Exercisable/Unexercisable
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Steven R. 0 None 54,533 (48,544 at $2.92)(14) Option price is not less
Sensenbach (600 at $2.60) than fair market value on
the date of granting of
the option.(15)
Robert Schoeffler 0 None 1,400 ( 1,400 at $6.25)
Sara Ahern 0 None -0-
Soule Sensenbach 0 None 1,869 ( 1,869 at $2.92)
</TABLE>
Deferred Compensation
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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(16) of titled officers' deferrals up to a
maximum of 10% and 50%(17) of senior vice president and above officers'
deferrals to a maximum of 10% of participants' annual salary. 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 $84,535
($66,815 net of income tax); $138,833 ($81,911 net of income tax); and $107,057
($81,214 net of income tax); for the years ended December 31, 1996, 1995 and
1994, respectively. This information is not included in the prior table.
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(18) of their compensation with a maximum of
$9,500(19) annually. The Bank's contributions to the plan are based upon an
amount equal to 25%(20) of each participant's eligible contribution for the plan
year not to exceed 1% 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 $14,862 ($11,747 net of income tax); $36,070 ($21,281
net of income taxes); and $34,533 ($26,197 net of income tax) for the years
ended December 31, 1996, 1995, and 1994, respectively. This information is not
included in the prior table.
- -----------------------
(14) 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).
(15) 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).
(16) Reduced from 50% to 25% on June 30, 1995.
(17) Reduced from 100% to 50% on June 30, 1995.
(18) Increased from 12% to 15% on June 30, 1995.
(19) Increased from $9,240 to $9,500 based on IRS ruling.
(20) Reduced from 50% to 25% on June 30, 1995.
11
<PAGE> 14
Compensation of Directors
Members of the Board of Directors were paid compensation worth
$750.00 for monthly meetings of the Bank. No additional payments have been
made to the Directors for attending meetings of the Bancorp. Directors who
were members of special committees were paid $300.00 per meeting for attending
those committee meetings.
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, 1997. 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 1996 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, 1997.
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.
Financial Information and Incorporation by Reference
The 1996 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, 1996, 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.
12
<PAGE> 15
WITHOUT CHARGE TO ANY SHAREHOLDER, THE BANCORP WILL PROVIDE A COPY OF
ITS 1996 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
SENSENBACH, 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: 9/30/97
--------------------------- Vineyard National Bancorp
------------------------------------
Soule Sensenbach, 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.
13
<PAGE> 16
<TABLE>
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 22, 1997, at the Annual Meeting of
the shareholders on November 13, 1997 or any adjournment, including all powers the undersigned would possess if personally present,
as follows:
<S> <C> <C>
[ ] Authorize to vote [ ] Withhold authority 1 To elect as a group the seven (7) persons nominated to the Board of
for the nominees to vote for the Directors to serve until the next annual meeting of shareholders as
as a group nominees as a group proposed by management in the Proxy Statement OR if you choose to
withhold or not grant 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 termination of the 1987 Incentive Stock Option as extended
on October 29, 1996.
[ ] FOR [ ] AGAINST 3 To approve the 1997 Incentive Stock Option Plan of Vineyard National
Bancorp.
[ ] FOR [ ] AGAINST 4 To ratify the appointment of the accounting firm of Vavrinck, Trine,
Day & Co. as auditors and as independent accountants for the year
ending December 31, 1997.
Authorize to vote Withhold authority to vote
for this nominee vote for this nominee
[ ] [ ] Frank Alvarez
[ ] [ ] Roland Noriega
[ ] [ ] Joel Ravitz
[ ] [ ] Steven Sensenbach
[ ] [ ] Jodie D. Smith
[ ] [ ] Lester Stroh
[ ] [ ] Renny Thomas
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 termination of
the 1987 Incentive Stock Option Plan as extended on 10-29-96, approval of the 1997 Incentive Stock Option Plan of Vineyard National
Bancorp 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: _________________________________, 1997 ______________________________________________________________
(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
</TABLE>
