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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 (S) 240.14a-11(c) or (S) 240.14a-12
Imperial Credit Industries, Inc.
--------------------------------------------------------------------------------
(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:
-------------------------------------------------------------------------
(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:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
IMPERIAL CREDIT INDUSTRIES, INC.
23550 HAWTHORNE BOULEVARD
BUILDING 1, SUITE 110
TORRANCE, CALIFORNIA 90505
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of IMPERIAL CREDIT INDUSTRIES, INC., a
California corporation (the "Company"), will be held at the Marriott Hotel,
3635 Fashion Way, Torrance, California 90503, on June 28, 2000, at 10:00 a.m.
Pacific Time.
The Annual Meeting of Shareholders of the Company is being held for the
following purposes:
1. To elect a Board of Directors to serve for the ensuing year.
2. To consider and act upon a proposal to ratify the appointment of KPMG
LLP as the independent accountants of the Company for the year ending December
31, 2000.
3. To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.
Only holders of Common Stock of record at the close of business on May 30,
2000, will be entitled to vote at the Annual Meeting. A list of shareholders
of record will be available at the Annual Meeting and for ten days prior to
the Annual Meeting at the Company's address above.
Your proxy is enclosed. You are cordially invited to attend the Annual
Meeting, but if you do not expect to attend, or if you plan to attend but
prefer that the proxyholders vote your shares, please date and sign your proxy
and return it in the enclosed postage paid envelope. The giving of this proxy
will not affect your right to vote in person in the event you find it
convenient to attend. Please return the proxy promptly to avoid the expense of
additional proxy solicitation.
Dated: May 30, 2000
For the Board of Directors,
/s/ H. Wayne Snavely
H. Wayne Snavely
Chairman, Chief Executive Officer and
President
<PAGE>
----------------
PROXY STATEMENT
----------------
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
June 28, 2000, at 10:00 a.m. Pacific Time
Your proxy is solicited on behalf of the Board of Directors of Imperial
Credit Industries, Inc. (the "Company" or "ICII") for use at the Annual
Meeting of Shareholders to be held at the above time and date at the Marriott
Hotel, located at 3635 Fashion Way, Torrance, California 90503. The
approximate mailing date for this proxy statement and the enclosed proxy is
June 5, 2000.
The cost of this solicitation of proxies will be borne by the Company.
Solicitations will be made by mail. In addition, the officers and regularly
engaged employees of the Company may, in a limited number of instances,
solicit proxies personally or by telephone. The Company will reimburse banks,
brokerage firms, other custodians, nominees and fiduciaries for reasonable
expenses incurred in sending proxy materials to beneficial owners of Common
Stock of the Company.
The Company's Annual Report on Form 10-K for the year ended December 31,
1999, as filed with the Securities and Exchange Commission (the "Commission"),
and the Company's Annual Report to Shareholders are included with this
solicitation. Additional copies are available without charge to any
shareholder upon request.
Voting Information
If a proxy in the accompanying form is duly executed and returned, the
shares represented by the proxy will be voted as directed. If no direction is
given, the shares will be voted FOR the election of the six nominees for
Director named herein and FOR the ratification of the appointment of KPMG LLP
as the Company's independent accountants for the year ending December 31,
2000. Any proxy given may be revoked at any time prior to its exercise by
notifying the Secretary of the Company in writing of such revocation, by
giving another proxy bearing a later date, or by attending and voting in
person at the Annual Meeting.
Holders of Common Stock of record at the close of business on May 30, 2000
will be entitled to vote at the Annual Meeting. There were 33,011,661 shares
of Common Stock outstanding at that date. Each share is entitled to one vote
and a majority of the shares of Common Stock outstanding and represented by
shareholders attending in person or by their proxyholders will constitute a
quorum for the Annual Meeting. In the election of Directors, shareholders may
either vote "FOR" all nominees for election or withhold their votes from one
or more nominees for election. Votes that are withheld and shares held by a
broker, as nominee, that are not voted (so-called "broker non-votes") in the
election of Directors will not be included in determining the number of votes
cast, although proxies marked to abstain and broker non-votes are counted for
purposes of determining a quorum.
In the election of Directors, the nominees who receive the most votes for
the number of positions to be filled will be elected Directors. The proposal
to ratify the appointment of the Company's independent accountants will be
approved if the number of shares voted in favor exceeds the number of shares
voted against. For any other matter that comes before the Annual Meeting for
action, shareholders may vote "FOR," "AGAINST," or
1
<PAGE>
"ABSTAIN" with respect to that matter. Proxies marked to abstain will have the
same effect as votes against such other matter, and broker non-votes will have
no effect on such other matter. Approval of any other matters that come before
the Annual Meeting for action will require the affirmative vote of the holders
of a majority of the shares duly voted on the matter. Unless a proxy is
properly revoked pursuant to the procedures described above, the proxyholders
will have the discretion to vote on such other matters on behalf of the
shareholder in their best judgment.
Shareholders have cumulative voting rights in the election of Directors.
Under the cumulative voting method, a shareholder may multiply the number of
shares owned by the number of Directors to be elected and cast this total
number of votes for any one candidate or distribute the total number of votes
in any proportion among as many candidates as the shareholder desires. A
shareholder may not cumulate votes for a candidate unless such candidate's
name has been placed in nomination prior to the voting and unless a
shareholder has given notice at the Annual Meeting, prior to the voting, of
the shareholder's intention to cumulate votes. If any shareholder gives such
notice, all shareholders may then cumulate their votes. The proxyholders
appointed by the Board of Directors also have authority to cumulate votes as
they see fit under these circumstances for as many nominees as they believe
can be elected.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's Directors are elected annually to serve until the next annual
meeting of shareholders and thereafter until their successors are elected. The
Company's by-laws provide for a variable Board of Directors with a range of
between five and nine members, with the number currently set at six. No proxy
may be voted for more than six nominees for Director.
Unless otherwise directed by shareholders, the proxyholders will vote all
shares represented by proxies held by them for the election of the maximum
number of the following nominees they believe may be elected, all of whom are
now members of and constitute the Company's Board of Directors. The Company is
advised that all of the nominees have indicated their availability and
willingness to serve if elected. In the event that any nominee becomes
unavailable or unable to serve as a Director of the Company prior to the
voting, the proxyholders will refrain from voting for the unavailable nominee
or will vote for a substitute nominee in the exercise of their best judgment.
Recommendation of the Board of Directors
The Board of Directors recommends a vote for the nominees for Director.
Information Concerning Nominees
Information concerning the nominees based on data furnished by them is set
forth below.
<TABLE>
<CAPTION>
Name * Age Position with Company
------ --- ---------------------
<S> <C> <C>
H. Wayne Snavely............ 59 Chairman of the Board, Chief Executive Officer and President
Brad S. Plantiko............ 44 Executive Vice President and Chief Financial Officer
Perry A. Lerner (1) (2)..... 57 Director
Robert S. Muehlenbeck (1)... 52 Director
Stephen J. Shugerman........ 53 Director
James P. Staes (2).......... 61 Director
</TABLE>
--------
* All of such persons may be reached at: Imperial Credit Industries, Inc.,
23550 Hawthorne Boulevard, Suite 110, Torrance, CA 90505
(1) Member of Compensation Committee.
(2) Member of Audit Committee.
2
<PAGE>
H. Wayne Snavely has been Chairman of the Board and Chief Executive Officer
of the Company since December 1991 and President since February 1996. Mr.
Snavely served as a director of Imperial Bank from 1975 to 1983 and from 1993
to January 1998. He serves on the Board of Visitors of the Graduate School of
Business Management at Pepperdine University.
Brad S. Plantiko has been Executive Vice President and Chief Financial
Officer of the Company since July 1998. From October 1980 to July 1998, Mr.
Plantiko was with KPMG Peat Marwick, LLP, where he was partner in-charge of
its finance company services for the western United States. Mr. Plantiko has
more than 18 years of experience serving banks, thrifts, mortgage banks and
finance companies. He serves on the Board of Visitors of the Graduate School
of Business Management at Pepperdine University. Mr. Plantiko is a member of
the American Institute of Certified Public Accountants.
Perry A. Lerner has been a Director of the Company since May 1992. He has
been a principal in the investment firm of Crown Capital Group, Inc., since
1996. Mr. Lerner was with the law firm of O'Melveny & Myers from 1982 to 1997,
having been a partner with the firm from 1984 to 1996. Mr. Lerner was an
Attorney-Advisor of the International Tax Counsel of the United States
Treasury Department from 1973 to 1976. Mr. Lerner is a Director of Boss
Holdings, Inc., a specialty consumer products company.
Robert S. Muehlenbeck has been a Director of the Company since December
1991. Mr. Muehlenbeck retired in 1998 as an Executive Vice President of
Imperial Bank with primary responsibility for corporate finance, and mergers
and acquisitions. He also served as President of Imperial Ventures, Inc.,
Imperial Bank's venture capital small business investment company and
President of Imperial Capital Corp., an investment and mezzanine lending
entity. Mr. Muehlenbeck was formerly the President of Seaborg, Incorporated
and has been involved in commercial and residential real estate development
and finance activities.
Stephen J. Shugerman has been a Director of the Company since December
1991. From June 1987 until December 1998, Mr. Shugerman was President of the
Company's bank subsidiary, Southern Pacific Bank ("SPB"). Mr. Shugerman was
Vice-Chairman of SPB from December 1998 to September 1999. From June 1985 to
May 1987, Mr. Shugerman was President of ATI Thrift & Loan Association, a
privately owned thrift and loan association, and, from 1979 to 1985, he was
Senior Vice President of Imperial Thrift and Loan Association, a former
subsidiary of Imperial Bank.
James P. Staes has been a Director of the Company since December 1999. Mr.
Staes, a commercial banker and retired Navy Captain, served as President and
CEO of Home Bank in Signal Hill, California from 1982 to 1996 and Vice
Chairman of California United Bank from 1996 to 1997. Mr. Staes is a past
President of the California Bankers Association and Southern California
Community Bankers Association. Mr. Staes also served as a director of the
Western Independent Bankers Association and as a member of the Conference of
State Bank Supervisors.
Directors of the Company hold office until the next annual meeting of
shareholders and until their successors are elected and qualified, or until
their earlier resignation or removal. All officers are appointed by and serve
at the discretion of the Board of Directors, subject to employment agreements,
where applicable.
No Directors were involved in any petitions under the Federal bankruptcy
laws during the past five years, except that Mr. Snavely was the Chairman and
Mr. Shugerman was a Director of Southern Pacific Funding Corporation, an
affiliate which filed for Chapter 11 bankruptcy protection in October 1998.
Director Compensation
Directors who are not employees of the Company receive a fee of $7,500 per
quarter plus $500 per Board meeting attended. In addition, non-employee
Directors annually receive options (at the then current fair market value) to
acquire 10,000 shares of the Company's Common Stock, which vest and become
exercisable after one year. Non-employee Directors who are members of the
Compensation and Audit Committees receive a fee of $500 for each committee
meeting attended, if such meeting is held on a date other than a Board meeting
date.
3
<PAGE>
Committees and Attendance at Board Meetings
Eleven meetings of the Board of Directors were held in fiscal 1999. Each
Director attended at least 75% of the aggregate of all meetings held by (i)
the Board of Directors and (ii) those committees of the Board of Directors on
which such Director served.
The Audit Committee, which recommends the selection of independent
accountants, meets with, and reviews the scope and findings of audit
activities performed by, the Company's internal auditors and independent
accountants, met seven times during 1999. The Compensation Committee, which
determines executive compensation, met two times during 1999. The Board of
Directors currently has no Nominating Committee.
Executive Compensation
The following table provides information concerning the cash and non-cash
compensation earned and received by our Chief Executive Officer and our other
executive officers (the "Named Executive Officers") whose salary and bonus
during the fiscal year ended December 31, 1999 exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
------------------------ Awards
Fiscal Other Annual Options
Name and Principal Position Year Salary Bonus Compensation Granted
--------------------------- ------ -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
H. Wayne Snavely........... 1999 $500,000 $500,000 $76,558(1) 150,000
Chairman, Chief Executive.. 1998 502,114 -- 78,640(1) --
Officer and President...... 1997 450,000 700,000 29,082(1) --
Brad S. Plantiko........... 1999 $175,000 $225,471 $63,828(2) 100,000
Executive Vice President... 1998 77,403 99,519 55,815(2) 84,000
and Chief Financial Officer
Irwin L. Gubman............ 1999 $210,385 $100,000 $64,703(3) 100,000
General Counsel and Secre-
tary...................... 1998 201,532 125,000 18,557(3) 26,800
1997 200,000 200,000 16,852(3) 70,000
John C. Getzelman.......... 1999 $196,285 $ -- $16,614(4) 50,000
President, Southern Pacific
Bank...................... 1998 15,385 -- 923(4) 50,000
Scott B. Sampson........... 1999 $300,000 $391,000 $10,228(5) --
President, Coast Business
Credit Division........... 1998 227,302 471,404 13,517(5) 67,000
Southern Pacific Bank...... 1997 200,000 334,527 12,663(5) --
Kevin E. Villani........... 1999 $350,000 $ -- $66,753(7) 50,000
Executive Vice President,
Finance (6)............... 1998 352,691 150,000 71,110(7) 34,000
1997 300,000 266,666 17,082(7) 50,000
Stephen J. Shugerman (8)... 1999 $334,615 $ -- $65,233(9) --
1998 304,224 -- 71,325(9) --
1997 250,000 501,000 21,882(9) --
</TABLE>
--------
(1) In 1999, 1998 and 1997, consists of (1) a car allowance paid by our
company of $18,000, $18,000 and $18,000, respectively, and (2) aggregate
contributions paid by our company of $58,558, $60,640 and $11,082,
respectively, under employee benefit plans.
(2) In 1999 and 1998, consists of (1) a car allowance paid by our company of
$9,000 and $3,980, respectively, and (2) aggregate contributions paid by
our company of $54,828 and $51,835, respectively, under employee benefit
plans.
(3) In 1999, 1998 and 1997 consists of (1) a car allowance paid by our company
of $9,000, $8,307 and $6,000, respectively, and (2) aggregate
contributions paid by our company of $55,703, $10,250 and $10,852,
respectively, under employee benefit plans.
(4) In 1999 and 1998, consists of (1) a car allowance paid by our company of
$12,000 and $923, respectively, and (2) aggregate contributions paid by
our company of $4,614 and $0, respectively, under employee benefit plans.
(5) In 1999, 1998 and 1997, consists of (1) a car allowance paid by our
company of $6,000, $6,000 and $6,000, respectively, and (2) aggregate
contributions paid by our company of $4,228, $7,517 and $6,663,
respectively, under employee benefit plans.
4
<PAGE>
(6) Mr. Villani served as Chief Financial Officer until July 1998. Mr.
Villani served as Executive Vice President, Finance until September 30,
1999. Mr. Villani served as a director and President of Imperial Credit
Asset Management, Inc. until December 31, 1999.
(7) In 1999, 1998 and 1997, consists of (1) a car allowance paid by our
company of $12,000, $10,615, and $6,000, respectively, and (2) aggregate
contributions paid by our company of $54,753, $60,495, and $11,082,
respectively, under employee benefit plans.
(8) Mr. Shugerman resigned as President of SPB effective December 1998. Mr.
Shugerman resigned as Vice Chairman of SPB on September 1, 1999. Mr.
Shugerman received additional compensation of $140,268 during the period
from September 1, 1999 to December 31, 1999. Mr. Shugerman was paid
$80,291 after his last day of employment with the Company in satisfaction
of accrued vacation Mr. Shugerman earned while he was an employee of the
Company. Additionally, Mr. Shugerman was paid $59,977 under the terms of
his severance agreement. All of these amounts are included in the table
above.
(9) In 1999, 1998 and 1997, consists of (1) a car allowance paid by our
company of $7,061, $10,800, and $10,800, respectively, and (2) aggregate
contributions paid by our company of $58,172, $60,525, and $11,082,
respectively, under employment benefit plans.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential
Realizable Value
at Assumed Annual
Rates of
Stock Price
Appreciation for
1999 Percentage Exercise Option Term
Options of Total Price Expiration -----------------
Name Granted Grants Per Option Date 5% 10%
---- ------- ---------- ---------- ---------- -- --------
<S> <C> <C> <C> <C> <C> <C>
H. Wayne Snavely.... 100,000 10.32% $7.56 1/27/04 $208,938 $461,698
H. Wayne Snavely.... 50,000 5.16 8.00 2/23/04 110,513 244,204
Brad S. Plantiko.... 50,000 5.16 8.00 2/23/04 110,513 244,204
Brad S. Plantiko.... 50,000 5.16 4.00 10/25/04 55,256 122,102
Irwin L. Gubman..... 50,000 5.16 8.00 2/23/04 110,513 244,204
Irwin L. Gubman..... 50,000 5.16 4.00 10/25/04 55,256 122,102
John C. Getzelman... 50,000 5.16 8.00 2/23/04 110,513 244,204
Kevin E. Villani.... 50,000 5.16 8.00 2/23/04 110,513 244,204
</TABLE>
Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values
<TABLE>
<CAPTION>
Number of Number of
Unexercised Unexercised Senior
Options at FY- Management Options
End Under the at FY-End Under Value of all Unexercised
Shares Option Plan the Option Plan In-the-Money Options at
Acquired on Value Exercisable/ Exercisable/ December 31, 1999
Name Exercise Realized Unexercisable Unexercisable Exercisable/Unexercisable(1)
---- ----------- -------- --------------- ------------------ ----------------------------
<S> <C> <C> <C> <C> <C>
H. Wayne Snavely........ -- -- 240,000/310,000 917,052/ -- $4,683,958/$ --
Brad S. Plantiko........ -- -- 16,800/167,200 -- / -- -- /112,500
Irwin L. Gubman......... -- -- 51,360/175,440 -- / -- -- /112,500
John C. Getzelman....... -- -- 10,000/90,000 -- / -- -- / --
Scott B. Sampson........ -- -- --/84,000 -- / -- -- / --
Kevin E. Villani........ -- -- 116,800/154,000 -- / -- 5,999/2,000
Stephen J. Shugerman.... -- -- 60,000/40,000 158,524/ -- 768,818/ --
</TABLE>
--------
(1) Based on a price per share of $6.25, which was the price of a share of our
common stock as quoted on the Nasdaq National Market at the close of
business on December 31, 1999.
Employment Agreements
As of January 1, 1997, Mr. Snavely entered into a five-year employment
agreement at an annual base salary of $450,000, since increased to $500,000,
plus an annual bonus based on attainment of performance objectives, including
our Company's return on equity, earnings per share and increases in the price
of our Company's common stock. Under the agreement, Mr. Snavely's total cash
compensation may not exceed $1.5 million annually.
5
<PAGE>
Pursuant to the employment agreement with Mr. Snavely, he is entitled to
receive compensation following his termination, as follows: (1) with cause:
base salary shall be paid through the date on which termination occurs, or (2)
without cause (or for "good reason" as defined in the employment agreement),
base salary shall be paid through the date of termination together with the
pro-rata portion of any cash bonus award the employee would be entitled to
receive at year end and a severance amount equal to base salary reduced by the
employee's projected primary social security benefit. The severance amount
shall be further reduced if the executive becomes employed by another company
or becomes an independent contractor of another company and shall be
eliminated entirely if such other company is determined by our Board of
Directors to compete with our Company.
As of September 1, 1998, Mr. Sampson entered into an employment agreement
that expires on January 31, 2002, which provides for an annual base salary of
$300,000 plus an annual incentive bonus. Mr. Sampson's bonus is equal to 1.5%
of Coast Business Credit's annual pre-tax profit determined in accordance with
generally accepted accounting principles and is contingent upon Coast Business
Credit's annual net profit equaling or exceeding either 2% of its average
assets for the calendar year, exclusive of goodwill, or a pretax return on its
capital for the year of 20%.
Pursuant to the employment agreement with Mr. Sampson, he is entitled to
receive compensation following his termination, as follows: (1) with cause or
by mutual agreement or voluntarily by Mr. Sampson: base salary shall be paid
through the date on which termination occurs, or (2) without cause (or if
there is more than a 10 mile change in physical location of employment): base
salary shall be paid through the term of employment together with the pro rata
portion of any incentive cash bonus he would otherwise be entitled to receive
for the year of termination.
Termination Protection Agreements
In January 1999, we entered into individual termination protection
agreements with Messrs. Snavely, Gubman and Plantiko. The agreements provide
for severance payments to these senior executives in the event of a change in
control of our Company and a subsequent termination of any one of these senior
executives within three years of the change in control for any reason. The
senior executives will receive a lump sum payment of three times their
respective base salaries and their highest bonus earned in any of the last
three fiscal years preceding the change in control and a percentage of their
respective bonuses for the year in which the change of control occurs.
In addition, we will continue to provide these senior executives with
medical, dental, life insurance, disability and accidental death and
dismemberment benefits until the third anniversary of the termination unless
the executive becomes employed by another employer, in which case these
coverages will be secondary to those provided by the new employer. All
deferred compensation in respect of each senior executive will also become
fully vested and we will pay in cash all such deferred compensation and any
unpaid portion of the executive's bonus. Any amounts payable to an executive
will include additional amounts to cover certain taxes resulting from those
payments.
A change in control for purposes of the termination protection agreements
includes the following events: (1) any person or persons become the beneficial
owner of at least 40% of our outstanding common stock other than by the
acquisition of such common stock directly from our Company, or (2) any merger
or other business combination, liquidation or sale of substantially all of our
assets occurs where our shareholders and any trustee or fiduciary of our
employee benefit plans own less than 60% of the surviving corporation, or (3)
within any 24 month period, the persons who were Directors immediately before
the beginning of such period cease to constitute at least a majority of our
Board, or the board of any successor corporation.
Compensation Committee Interlocks and Insider Participation
Our Company's Compensation Committee consists of Messrs. Muehlenbeck and
Lerner. Mr. Muehlenbeck retired in 1998 as an Executive Vice President of
Imperial Bank, a former 24% shareholder of our Company. Mr. Lerner is the
Manager of Corona Film Finance Fund, in which ICII is an investor.
6
<PAGE>
Report Of The Compensation Committee
The Compensation Committee sets and administers the policies governing the
Company's compensation program, including incentive and stock option plans.
The Company participates in studies and surveys of compensation practices for
comparable companies in the Company's industry. The Committee considers these
studies and surveys in determining base salary, bonus and long-term stock-
based compensation. The Committee discusses and considers executive
compensation matters and makes its decisions, subject to review by the
Company's Board of Directors.
The Company's compensation policies are structured to link the compensation
of the Chief Executive Officer, Chief Financial Officer and other executives
of the Company and its subsidiaries with corporate performance. Through the
establishment of annual and long-term compensation programs, the Company has
aligned the financial interests of its executives with the results of the
Company's performance, which is designed both to put the Company in a
competitive position regarding executive compensation and to help ensure
corporate performance, thereby enhancing shareholder value.
The Company's executive compensation philosophy is to set base salary at a
conservative market rate and then to provide performance-based variable
compensation which allows total compensation to fluctuate according to the
Company's earnings as well as value received by shareholders. Targeted levels
of total executive compensation are set at levels that the Committee believes
to be consistent with others in the Company's industry, with such compensation
increasingly weighted toward programs contingent upon the Company's level of
annual and long-term performance. As a result, the Named Executive Officers'
actual compensation levels in any particular year may be above or below those
of the Company's competitors, depending upon the Company's performance.
Section 162(m) of the Internal Revenue Code limits the Company's tax
deduction for compensation paid in excess of $1,000,000 to any one of the
Chief Executive Officer and the four other most highly compensated executive
officers unless (i) such compensation was based upon attainment of pre-
established, objective performance goals, (ii) the Compensation Committee
consists only of "outside directors" as defined for purposes of Section
162(m), and (iii) such performance-based compensation has been approved by
shareholders. All of the members of the Compensation Committee qualify as
"outside directors." In 1998, shareholders approved the Company's Executive
Performance Compensation Plan. The Committee will continue to review the
Company's existing compensation program to determine the deductibility of
future compensation paid or awarded pursuant thereto and will seek guidance
with respect to changes to the Company's existing compensation program that
will enable the Company to continue to attract and retain key individuals
while optimizing the deductibility to the Company of amounts paid as
compensation.
The Committee believes that its overall executive compensation program has
been successful in providing competitive compensation appropriate to attract
and retain highly qualified executives and also to encourage increased
performance from the executive group, which should create added shareholder
value.
COMPENSATION COMMITTEE:
Robert S. Muehlenbeck, Chairman
Perry A. Lerner
7
<PAGE>
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a graph comparing the cumulative total shareholder
returns on the Company's Common Stock, the S&P 500 Stock Index, the Specialty
Finance Lending Index and an index of companies engaged in the Company's
current business focus (the "Diversified Commercial Lending Index") for the
period from January 1, 1994 through December 31, 1999. The Specialty Finance
Lending Index includes: AMRESCO, Inc., ContiFinancial Corp., The Finova Group,
Inc., Green Tree Financial Corp., Imperial Credit Industries, Inc., and The
Money Store, Inc. The Diversified Commercial Lending Index includes: Allstate
Financial Corp., American Business Financial, AMRESCO, Inc., Capital Trust,
Inc., CIT Group, Inc., DVI, Inc., Financial Federal Corp., FINOVA Group, Inc.,
First Sierra Financial, Franchise Mortgage Acceptance Company, Healthcare
Financial Partners, Heller Financial, Inc., HPSC, Inc., Imperial Credit
Industries, Inc., KBK Capital Corp., Pioneer Commercial, PLM International,
Inc., Point West Capital, Prime Capital Corp., Resource America, Source
Capital Corp., Standard Funding, T&W Financial, UniCapital Corp., and WMF
Group, Ltd.
The graph assumes $100 invested on January 1, 1994 in the Company's Common
Stock, the S&P 500 Stock Index, the Specialty Finance Company Index, and the
Diversified Commercial Lending Index.
COMPARISON OF CUMULATIVE TOTAL RETURN OF
COMPANY, PEER GROUP AND BROAD MARKET
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
SPECIALTY DIVERSIFIED S&P
IMPERIAL FINANCE COMMERCIAL COMPOSITE
FISCAL YEAR ENDING CREDIT INDS LENDING INDEX LENDING INDEX INDEX
------------------ ----------- ------------- ------------- ---------
<S> <C> <C> <C> <C>
1994 $100.00 $100.00 $100.00 $100.00
1995 $383.63 $177.18 $165.50 $137.58
1996 $814.96 $281.70 $251.75 $169.17
1997 $795.56 $381.24 $357.86 $225.61
1998 $325.02 $327.09 $328.90 $290.09
1999 $242.55 $211.02 $224.38 $351.13
</TABLE>
8
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
with respect to the beneficial ownership of the Company's Common Stock as of
May 15, 2000, by (i) each Director of the Company, (ii) the Chief Executive
Officer and the four most highly compensated executive officers whose salary
exceeded $100,000 for the year ended December 31, 1999, (iii) each person who
is known to the Company to own beneficially more than 5% of the Common Stock,
and (iv) all Directors and executive officers of the Company as a group.
Unless otherwise indicated, the Company believes that the beneficial owners of
the Common Stock listed below have sole investment and voting power with
respect to such shares, subject to community property laws where applicable.
<TABLE>
<CAPTION>
Number of
Shares
Beneficially % of Total
Beneficial Owner (1) Owned Outstanding(2)
-------------------- ------------ --------------
<S> <C> <C>
Wallace R. Weitz & Company (3)................ 8,890,700 25.6
Dimensional Fund Advisors, Inc (4)............ 2,749,360 7.9
Waveland International Limited (5)............ 2,178,582 6.3
H. Wayne Snavely(6)........................... 1,869,542 5.4
Stephen J. Shugerman(7)....................... 335,449 1.0
Perry A. Lerner(8)............................ 144.960 *
Robert S. Muehlenbeck(9)...................... 110,057 *
James P. Staes (10)........................... 3,500 *
Irwin L. Gubman (11).......................... 160,516 *
Brad S. Plantiko (12)......................... 71,626 *
John G. Getzelman (13)........................ 10,389 *
Scott B. Sampson (14)......................... 44,779 *
All Directors and Officers as a Group (12
persons)(15)................................. 2,844,973 8.2
</TABLE>
--------
* Less than 1%.
(1) Except for Wallace R. Weitz & Company, Dimensional Fund Advisors, Inc.,
and Waveland International Limited, each of such persons may be reached
through our Company at 23550 Hawthorne Boulevard, Building One, Suite
110, Torrance, California 90505, telephone (310) 373-1704.
(2) Percentage ownership is based on 34,787,641 shares of common stock
outstanding as of May 15, 2000.
(3) Based upon a Schedule 13F filed with the Company reflecting beneficial
ownership as of March 31, 2000. The shares are owned by various
investment advisory clients of Wallace R. Weitz & Co., which is deemed a
beneficial owner of the shares only by virtue of the direct or indirect
investment and/or voting discretion it possesses pursuant to the
provisions of investment advisory agreements with such clients. Wallace
R. Weitz & Company is located at One Pacific Place, Suite 600, 1125 South
103 Street, Omaha, NB 68124-6008.
(4) Based upon a Schedule 13F filed with the Company reflecting beneficial
ownership as of March 31, 2000. The shares are owned by various
investment vehicles managed by Dimensional Fund Advisors, Inc., which is
deemed the beneficial owner of the shares only by virtue of the direct or
indirect investment and/or voting discretion it possesses pursuant to its
agreement with such investment vehicles. Dimensional Fund Advisors, Inc.
is located at 1299 Ocean Avenue, 11th Floor, Santa Monica, California
90401-1038.
(5) Based upon a Schedule 13F filed with the Company reflecting beneficial
ownership as of March 31, 2000. Waveland International Limited is a
private investment partnership and is located at 227 W. Monroe Street,
Suite 4800, Chicago, Illinois 60606.
(6) Includes 1,217,052 shares subject to stock options exercisable within 60
days of 5/15/00.
(7) Includes 218,524 shares subject to stock options exercisable within 60
days of 5/15/00.
(8) Includes 126,422 shares subject to stock options exercisable within 60
days of 5/15/00.
(9) Includes 70,022 shares subject to stock options exercisable within 60
days of 5/15/00.
(10) Does not include any shares subject to stock options exercisable within
60 days of 5/15/00.
(11) Includes 51,360 shares subject to stock options exercisable within 60
days of 5/15/00.
(12) Includes 16,800 shares subject to stock options exercisable within 60
days of 5/15/00.
(13) Includes 10,000 shares subject to stock options exercisable within 60
days of 5/15/00.
(14) Includes 39,800 shares subject to stock options exercisable within 60
days of 5/15/00.
(15) Includes 1,775,980 shares subject to stock options exercisable within 60
days of 5/15/00.
9
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Officers, Directors and persons owning more than 10% of the Company's
equity securities are required, under Section 16(a) of the Securities Exchange
Act of 1934, to file reports of and changes in such ownership with the
Commission and to furnish the Company with copies of all forms they file.
Based on the Company's review of the copies of such forms it has received and
review of other available data, the Company believes that, during 1999, its
officers and Directors complied with Section 16(a) filing requirements.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Sale of Holdings by former Principal Shareholder and Outstanding Line of
Credit
On May 14, 1999, we entered into an agreement with our former parent
Imperial Bank, a subsidiary of Imperial Bancorp (NYSE:IMP). On May 17, 1999,
we repurchased 10% or 3,682,536 shares of our outstanding Common Stock from
Imperial Bank for $8.00 per share or $29.5 million. At December 31, 1999,
Imperial Bank owned no shares of ICII Common Stock.
In October 1999, we purchased the Lewis Horwitz Organization and certain
loan portfolios from Imperial Bancorp. As part of the transaction, a line of
credit was established with Imperial Bank in order to fund the acquisition. As
of April 30, 2000, the outstanding balance for the line of credit was $6
million.
Imperial Bank has extended a $30 million commitment to SPB for the issuance
of letters of credit for customers of SPB's Coast Business Credit Division.
Other Matters
In October 1997, we loaned H. Wayne Snavely, our Chairman and Chief
Executive Officer, $1,999,998 for the purpose of assisting him to purchase
common stock in a real estate investment trust we sponsored, Imperial Credit
Commercial Mortgage Investment Corp. ("ICCMIC"). The loan was evidenced by a
promissory note maturing June 14, 2002, secured by a deed of trust and stock
of ICCMIC held by him. The note bears interest at an annual rate of 10.4%
payable in semi-annual installments commencing June 15, 1998. As of May 1,
2000, the loan had been fully repaid. This loan was made in our ordinary
course of business, on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions
with other persons, and did not involve more than normal risk of
collectibility or present other unfavorable features.
On December 22, 1999, we loaned H. Wayne Snavely, Brad S. Plantiko, Irwin
L. Gubman, Paul B. Lasiter, and John C. Getzelman each $61,050 in connection
with their purchase of $81,400 of Imperial Credit Asset Resolution, Inc.
("ICARI") Preferred Stock. ICARI is a 100% owned consolidated subsidiary of
ICII. Each loan is evidenced by a promissory note maturing on December 22,
2019, and is secured by the Preferred Stock of ICARI purchased by each of the
above named executive officers. Each note bears interest at an annual rate of
10.4% and is payable in semi-annual installments commencing June 15, 2000. At
May 1, 2000, the outstanding balance of each note was $61,050 for each of the
above named executive officers. Each of these loans was made in our ordinary
course of business, on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions
with other persons, and did not involve more than normal risk of
collectibility or present other unfavorable features.
10
<PAGE>
PROPOSAL NO. 2
Ratification Of Appointment Of Independent Accountants
The Board of Directors of the Company has selected and appointed KPMG LLP
to act as the Company's independent accountants for the year ending December
31, 2000. In recognition of the important role of the independent accountants,
the Board of Directors has determined that its selection of such accountants
should be submitted to the shareholders for review and ratification on an
annual basis.
KPMG LLP has examined the financial statements of the Company since 1991.
Management is satisfied with its performance to date.
Recommendation of the Board of Directors
The Board of Directors recommends a vote for the appointment of KPMG LLP as
independent accountants for the year ending December 31, 2000.
The affirmative vote of a majority of the shares voting on this proposal is
required for its adoption. In view of the difficulty and the expense involved
in changing independent accountants on short notice, if the proposal is not
approved, it is contemplated that the appointment for 2000 may be permitted to
stand, unless the Board of Directors finds other compelling reasons for making
a change. Disapproval of this proposal will be considered as advice to the
Board of Directors to select other independent accountants for the following
year. Representatives of KPMG LLP are expected to be present at the Annual
Meeting and will have the opportunity to make a statement if they desire to do
so. They will also be available to respond to appropriate questions.
SHAREHOLDERS' PROPOSALS
Shareholders' proposals intended to be presented at the Company's next
Annual Meeting of Shareholders to be held in 2001 must be received at the
Company's principal executive offices no later than February 5, 2001, in order
to be considered for inclusion in the proxy statement and form of proxy
relating to that meeting. The proxyholders will have discretionary authority
to vote on any matters presented at the meeting of which the Company has not
received notice by April 15, 2001.
OTHER BUSINESS
The Board of Directors knows of no other matter to be acted upon at the
Meeting. However, if any other matter shall properly come before the Meeting,
the proxyholders named in the proxy accompanying this Proxy Statement will
have discretionary authority to vote all proxies in accordance with their best
judgment.
By Order of the Board of Directors,
/s/ Irwin L. Gubman
Irwin L. Gubman, Secretary
Dated: May 30, 2000
Torrance, California
11
<PAGE>
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IMPERIAL CREDIT INDUSTRIES, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS ON JUNE 28, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints H. Wayne Snavely, Brad S. Plantiko and Irwin
L. Gubman, or any of them, each with full power of substitution, as proxies of
the undersigned to vote all of the undersigned's shares of Imperial Credit
Industries, Inc. common stock at the Annual Meeting of Shareholders of Imperial
Credit Industries, Inc., at the Marriott Hotel, located at 3635 Fashion Way,
Torrance, California 90503, on June 28, 2000, at 10:00 a.m. Pacific Time.
1. Election of Directors:[_] FOR all nominees listed below [_] WITHHOLD
AUTHORITY
H. Wayne Snavely . Brad S. Plantiko . Stephen J. Shugerman
Perry A. Lerner . Robert S. Muehlenbeck . James P. Staes
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.
-----------------------------------------------------------------------
2. To ratify the appointment of KPMG LLP as independent accountants for the
year ending December 31, 2000.
The Board of Directors recommends a vote FOR:
FOR [_] AGAINST [_] ABSTAIN [_]
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
3. In their discretion, upon any and all such other matters as may properly
come before the meeting or any adjournment or postponement thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED OR, IF NO CHOICE IS SPECIFIED, WILL BE
VOTED FOR THE SIX NOMINEES FOR ELECTION AND FOR PROPOSALS 2 AND 3. (Please sign
exactly as name appears. When shares are held by joint tenants, both should
sign. When signing as attorney, as executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in full
corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.)
Dated:_________________, 2000
-----------------------------
Signature
-----------------------------
Signature, if held jointly
SHAREHOLDERS ARE URGED TO MARK, DATE, SIGN AND RETURN THIS PROXY IN THE
ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
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