<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):
---------------------------------------------------------------------
(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 19, 1998
The Annual Meeting of the shareholders of Vineyard National Bancorp
("Bancorp") will be held on Thursday, November 19, 1998 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 nine 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 ratify the appointment of the accounting firm of Vavrinek, Trine,
Day & Co., LLP as auditors and as independent accountants for the
year ending December 31, 1998;
3. 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 23,
1998 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
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 19, 1998 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 2, 1998.
SHAREHOLDER PROPOSALS
Shareholder proposals for inclusion in this proxy statement for the
Annual Meeting of shareholders in 1998 must have been received by the Bancorp no
later than 5:00 P.M. on May 31, 1998.
Shareholder proposals to be considered for inclusion in the proxy
statement for the Annual Meeting of shareholders in 1999 must be received by the
Bancorp no later than 5:00 P.M. on May 31, 1999.
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.
VOTING SECURITIES AND PRINCIPAL HOLDERS
Only shareholders of record at the close of business on September 23,
1998 are entitled to receive notice of and to vote at the Annual Meeting of
shareholders. There were 1,862,643 shares of the
1
<PAGE> 4
Bancorp's no par value common stock issued and outstanding on September 23, 1998
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 23, 1998, 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 nine (9) 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 (12/31/97)
<TABLE>
<CAPTION>
============================ =========================== ============================ ==========================
Title of Class Name of Beneficial Owner Amount and Nature of Percent of Class
Beneficial Ownership
============================ =========================== ============================ ===========================
<S> <C> <C> <C>
Common Stock Frank S. Alvarez 109,065(1) 5.86%
1080 West 22nd St.
Upland, CA 91786
Common Stock Charles L. Keagle 105,120(2) 5.64%
2533 Vista Drive
Upland, CA 91886
</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 (12/31/97).
<TABLE>
<CAPTION>
====================== ================================ ============================ ======================
Title of Class Name of Beneficial Owner Amount and Nature of Percent of Class
Beneficial Ownership
====================== ================================ ============================ ======================
<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) 19,453(6) 1.04 %
Common Stock Jodie D. Smith (D) 15,403(7) .82 %
Common Stock Renny Thomas (D) 7,060(8) .37 %
Common Stock Sara Ahern (O) 1 negligible
Common Stock Soule Sensenbach (O) 134 .01 %
Common Stock Robert Schoeffler (O) 2 negligible
Directors & 291,978 15.67%
Offices of the
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) Steven R. Sensenbach owns 19,453 shares of which 575 are held in
street name.
(7) Jodie Smith owns 15,403 which are held in his account at a stock brokerage
firm.
(8) Renny Thomas owns 7,060 of which 5,380 are held in his account at a stock
brokerage firm, 1,080 in his name and 600 shares for his son.
(9) Officers including the four named officers, as of December 31, 1997,
hold options to purchase 76,279 shares in addition to the above, which
will equal 368,257 shares or 19.77% 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 nine
(9) 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>
- ----------------------------------------------------------------------------------------------------------------
Principal Occupation or Position Bancorp Current No.
Name and Other Directorships Director of Shares
Since (12/31/97)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Frank Alvarez, Certified Public Accountant. Retired from Bowen 1988 109,065
age 63 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.
A. Arthur Braeger, Mr. Braeger is the founding owner and President/CEO 1998 33,616
age 58 of Braeger Construction located in Upland,
California. In addition to general construction
work, the firm specializes in site development for
schools, colleges and the commercial sector. Mr.
Braeger has been a member of the Bank's Advisory
Board since August 1992 and now serves on various
committees of the Bank. He has been a Bank Director
since 1998. Mr. Braeger was appointed Bancorp
Director in 1998.
Charles L. Keagle, Founding owner, Chairman, CEO of The C & C 1998 105,120
age 58 Organization. C & C operates restaurants in southern
California known as The Cask 'n Cleaver, El Gato Gordo
and Charley's Grill. Mr. Keagle was an original
founding organizer and Director of Vineyard National
Bank. In addition to his community service
involvement, he is a member of the Board of Directors
of The California Restaurant Association, The
California Avocado Commission and The Advisory Board
for the Cal Poly Pomona School of Hotel and Restaurant
Management. He has been a Bank Director since 1998.
Mr. Keagle was appointed Bancorp Director in 1998.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Principal Occupation or Position Bancorp Current No.
Name and Other Directorships Director of Shares
Since (12/31/97)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Roland Noriega, Sole owner of Merchant's Electric, an electrical 1993 28,636
age 57 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, Chairman of the Board and CEO of Quincy Cass 1988 42,482
age 53 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 Officer of Vineyard 1988 19,453
age 55 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. Mr. Sensenbach is the 1998
Chairman of the Inland Empire American Heart Walk for
the American Heart Association. He has been a Bank
Director since 1981.
Jodie D. Smith, Co-owner of J & J Enterprises of Ontario specializing 1994 15,403
age 56 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. He has been a Bank Director since 1994.
Lester Stroh, Chairman of the Board of Vineyard National Bancorp. 1988 60,750
age 80 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.
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Principal Occupation or Position Bancorp Current No.
Name and Other Directorships Director of Shares
Since (12/31/97)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Renny Thomas, Executive Vice President and managing underwriter of 1993 7,060
age 60 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 55, 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. Currently he is the 1998 Chairman of
the Inland Empire American Heart Walk for the American Heart Association.
2. Robert Schoeffler, age 50, 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 44, 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 43, is the Executive 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.
CERTAIN TRANSACTIONS
Some of the directors and executive officers of the Bancorp and its
subsidiary, the Bank, and the companies with which the directors and executive
officers are associated were customers of, and had banking transactions with,
the Bank during 1997. Such transactions were in the ordinary couse of business
and the Bank expects to have similar banking transactions in the future. All the
loans and commitments included in such transactions were made on substantially
the same terms, including interest rates, collateral and repayment terms, as
those prevailing at the time for comparable transactions with other persons of
similar creditworthiness and, in the opinion of the Board of Directors of the
Bancorp and the Bank, did not involve more than a normal risk of collectibility
or involve other unfavorable features.
6
<PAGE> 9
COMMITTEES OF THE BOARD OF DIRECTORS
The Bank, which is a subsidiary of the Bancorp, has a standing Audit Committee
which met three times 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 13. In addition, the Board of Directors of the Bank had 12 regularly
scheduled and special meetings. No director during the last full fiscal year
attended fewer than eighty-five percent (85%) 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, 1997, 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 1997 $200,000 $76,407 64,553(10)
President/Chief Executive 1996 $200,000 $ -0- 54,533
Officer/Director 1995 $200,000 $89,764 54,533(10,11)
Robert Schoeffler 1997 $ 84,000 $ 3,440 1,440
Executive Vice President 1996 $ 84,000 $ 1,000 1,440
1995 $ 72,000 $ -0- 1,440(11)
M. Soule Sensenbach 1997 $ 66,000 $ 2,647 1,869
Executive Vice President
Sara Ahern 1997 $ 66,000 $ 2,647 -0-
Executive Vice President
</TABLE>
- -------------------------
(10) The number of options increased because Mr. Sensenbach receives 5,000
options per year per his employment contract.
(11) The 1995 number reflects the 6 for 5 stock split of August 31, 1995.
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.
STOCK OPTION PLAN
As of December 31, 1997, the Company has in effect the 1997 Incentive Stock
Option Plan.
Previously in 1981, an incentive stock option plan for certain officers and
key employees was approved by shareholders at prices not less than 100% of the
fair market value of such stock at the date of grant. The 1981 Plan expired in
1987 and no more options may be granted under that plan.
A subsequent incentive stock option plan was approved by shareholders in 1987
in which the remaining ungranted shares from the 1981 Plan were added to the
shares of the 1987 Plan. The 1987 Plan provided that options of the Company's
unissued common stock were to be granted to officers and key employees at prices
not less than 100% of the fair market value of such shares at dates of grant.
In 1996, the shareholders voted to extend the 1987 Plan another ten years.
Then in 1997, the shareholders decided to terminate the 1987 Plan. As a result,
no further grants can be made under this plan. Although no more options can be
granted under this plan, the options granted under it will remain outstanding
until they are exercised or canceled pursuant to their terms.
In 1997, the shareholders approved the 1997 Incentive Stock Option Plan which
is currently in effect. The 1997 Plan made Directors eligible to participate in
the Plan as well as officers and certain key employees. In addition, the 1997
Plan authorized the issuance of 200,000 shares to be combined with 53,316 shares
which remained from the 1987 Plan for a total of 253,316 shares.
Option prices are to be determined at the fair market value of such shares on
the date of grant, and options are exercisable in such installments as
determined by the Board of Directors. Each option shall expire no later than ten
years from the grant date or as the Stock Option Committee or Board of Directors
may determine.
8
<PAGE> 11
AGGREGATED OPTION EXERCISES DURING 1997
AND OPTION VALUES AT DECEMBER 31, 1997
<TABLE>
<CAPTION>
========================== ========================= ====================== ====================== ========================
NUMBER OF VALUE OF UNEXERCISED
SHARES ACQUIRED UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
NAME ON EXERCISE (#) VALUE REALIZED ($) AT 12/31/97 (#) AT 12/31/97
EXERCISABLE/ EXERCISABLE/
UNEXERCISABLE UNEXERCISABLE
========================== ========================= ====================== ====================== ========================
<S> <C> <C> <C> <C> <C>
- -------------------------- ------------------------- ---------------------- ---------------------- ------------------------
64,553 (48,544 at Option price is not
Steven R. Sensenbach 0 None $2.92)(12) less than fair market
(6,009 at $2.60) value on the date of
(10,000 at $3.50) granting of the
option.(13)
- -------------------------- ------------------------- ---------------------- ---------------------- ------------------------
Robert Schoeffler 0 None 1,400 (1,400 at Option price is not
$6.25) less than fair market
value on the date of
granting of the
option.(13)
- -------------------------- ------------------------- ---------------------- ---------------------- ------------------------
Sara Ahern 0 None -0-
- -------------------------- ------------------------- ---------------------- ---------------------- ------------------------
Soule Sensenbach 0 None 1,869 (1,869 at Option price is not
$2.92) less than fair market
value on the date of
granting of the
option.(13)
========================== ========================= ====================== ====================== ========================
</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 to the 1987 plan except that the Bank may make
matching contributions of 25%(14) of titled officers' deferrals up to a maximum
of 10% and 50%(15) 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 $85,911 ($51,546 net of income tax),
$84,535 ($66,815 net of income tax), and $138,833 ($81,911 net of income tax),
for the years ended December 31, 1997, 1996 and 1995, respectively. This
information is not included in the prior table.
- -------------------------
(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 the fourth quarter of 1997
ranged from a low of $4.50 to a high of $5.13 (See Annual Report).
(14) Reduced from 50% to 25% on June 30, 1995.
(15) Reduced from 100% to 50% on June 30, 1995.
9
<PAGE> 12
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
$9,500(17) 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 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 $6,732 ($4,040 net of income taxes), $14,862 ($11,747 net
of income tax), and $36,070 ($21,281 net of income taxes) for the years ended
December 31, 1997, 1996, and 1995, respectively. This information is not
included in the prior table.
COMPENSATION OF DIRECTORS
Members of the Board of Directors were paid compensation worth
$1,000.00 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 Co., LLP 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 Co., LLP ("VTD") as the
Bancorp's independent accountants for the year ending December 31, 1998. 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 1997 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 Co., LLP as the Bancorp's
independent accountants for the year ending December 31, 1998.
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.
- -------------------
(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
FINANCIAL INFORMATION AND INCORPORATION BY REFERENCE
The 1997 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, 1997, including the financial statements and related
statements of income attached as part of those financial statements which were
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
1997 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: 9/24/98 Vineyard National Bancorp
/s/ SOULE SENSENBACH
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.
11
<PAGE> 14
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 23, 1998,
at the Annual Meeting of the shareholders on November 19, 1998 or any
adjournments, including all powers the undersigned would possess if personally
present, as follows:
[ ] Authorize to vote for the [ ] Withhold authority to vote for the
nominees as a group nominees as a group
[ ] FOR [ ] AGAINST
1. To elect as a group the nine (9) persons nominated to the Board of
Directors to serve until the next annual meeting of shareholders as
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.
2. To ratify the appointment of the accounting firm of Vavrinek, Trine,
Day & Co., LLP as auditors and as independent accountants for the year
ending December 31, 1998.
Authorize to vote Withhold authority to
for this nominee vote for this nominee
[ ] [ ] Frank S. Alvarez
[ ] [ ] A. Arthur Braeger
[ ] [ ] Charles L. Keagle
[ ] [ ] Roland Noriega
[ ] [ ] Joel H. Ravitz
[ ] [ ] Steven R. Sensenbach
[ ] [ ] Jodie D. Smith
[ ] [ ] Lester Stroh M.D.
[ ] [ ] Renny V. Thomas
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY
IN THE POSTAGE PREPAID ENVELOPE PROVIDED.
<PAGE> 15
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 nine (9) nominees for the Board of Directors and for the
ratification of the appointment of the accounting firm.
If any other business is presented at the meeting, this Proxy shall be
voted in accordance with the recommendations of the Board of Directors.
When signing as an attorney in fact, 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: ________________, 1998 _________________________________________
(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
