<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [_]
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
SGV Bancorp, 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:
N/A
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(2) Aggregate number of securities to which transaction applies:
N/A
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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):
N/A
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(4) Proposed maximum aggregate value of transaction:
N/A
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(5) Total fee paid:
N/A
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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 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:
N/A
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(2) Form, Schedule or Registration Statement No.:
N/A
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(3) Filing Party:
N/A
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(4) Date Filed:
N/A
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Notes:
<PAGE>
SGV BANCORP, INC.
225 North Barranca Street
West Covina, California 91791
(626) 859-4200
October 15, 1999
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders of
SGV Bancorp, Inc., the holding company for First Federal Savings and Loan
Association of San Gabriel Valley, which will be held on November 18, 1999, at
2:00 p.m., Pacific Time, at the Radisson Hotel San Gabriel Valley, 14635 Baldwin
Park Town Center, Baldwin Park, California.
The attached notice of the annual meeting and the proxy statement describe
the formal business to be transacted at the annual meeting. Directors and
officers of SGV Bancorp, as well as a representative of Deloitte & Touche LLP,
SGV Bancorp's independent auditors, will be present at the annual meeting to
respond to any questions that stockholders may have regarding the business to be
transacted.
The Board of Directors of SGV Bancorp has determined that the matters to be
considered at the annual meeting are in the best interests of SGV Bancorp and
its stockholders. For the reasons set forth in the proxy statement, the Board of
Directors unanimously recommends that you vote "FOR" each matter to be
considered.
Your cooperation is appreciated since a majority of the common stock must
be represented, either in person or by proxy, to constitute a quorum for the
conduct of business. Whether or not you expect to attend, please sign, date and
return the enclosed proxy card promptly in the postage-paid envelope provided so
that your shares will be represented.
On behalf of the Board of Directors and all of the employees of SGV Bancorp
and First Federal, I thank you for your continued interest and support.
Sincerely yours,
/s/ Barrett G. Andersen
Barrett G. Andersen
President and Chief Executive Officer
<PAGE>
SGV BANCORP, INC.
225 NORTH BARRANCA STREET
WEST COVINA, CALIFORNIA 91791
(626) 859-4200
__________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 18, 1999
__________________________________
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of SGV
Bancorp, Inc. (the "Company") will be held on November 18, 1999, at 2:00 p.m.,
Pacific Time, at the Radisson Hotel San Gabriel Valley, 14635 Baldwin Park Town
Center, Baldwin Park, California.
The purpose of the annual meeting is to consider and vote upon the
following matters:
1. The election of two directors to a three-year term of office;
2. The ratification of the appointment of Deloitte & Touche LLP as
independent auditors of the Company for the fiscal year ending June
30, 2000; and
3. Such other matters as may properly come before the annual meeting and
at any adjournments thereof, including whether or not to adjourn the
meeting.
The Board of Directors has established September 30, 1999, as the record
date for the determination of stockholders entitled to receive notice of and to
vote at the annual meeting and at any adjournments thereof. Only record holders
of the common stock of SGV Bancorp as of the close of business on that date will
be entitled to notice of and to vote at the annual meeting or any adjournments
thereof. In the event there are not sufficient votes for a quorum or to approve
or ratify any of the foregoing proposals at the time of the annual meeting, the
annual meeting may be adjourned in order to permit further solicitation of
proxies by the Company. A list of stockholders entitled to vote at the annual
meeting will be available at SGV Bancorp, Inc., 225 N. Barranca Street, West
Covina, California 91791, for a period of 10 days prior to the annual meeting
and will also be available at the meeting itself.
By Order of the Board of Directors
/s/ Edie J. Beachboard
Edie J. Beachboard
Corporate Secretary
West Covina, California
October 15, 1999
<PAGE>
SGV BANCORP, INC.
_______________________
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 18, 1999
_______________________
Solicitation and Voting of Proxies
This proxy statement is being furnished to stockholders of SGV Bancorp,
Inc. in connection with the solicitation by the Board of Directors of proxies to
be used at the annual meeting of stockholders, to be held on November 18, 1999,
at 2:00 p.m., Pacific Time, at the Radisson Hotel San Gabriel Valley, 14635
Baldwin Park Town Center, Baldwin Park, California and at any adjournments
thereof. The 1999 Annual Report to Stockholders, including consolidated
financial statements for the fiscal year ended June 30, 1999, and a proxy card,
accompanies this proxy statement, which is first being mailed to record holders
on or about October 15, 1999.
Regardless of the number of shares of common stock owned, it is important
that record holders of a majority of the outstanding shares of common stock be
represented by proxy or in person at the annual meeting. Stockholders are
requested to vote by completing the enclosed proxy card and returning it signed
and dated in the enclosed postage-paid envelope. Stockholders are urged to
indicate their vote in the spaces provided on the proxy card. Proxies solicited
by the Board of Directors of SGV Bancorp will be voted in accordance with the
directions given therein. Where no instructions are indicated, signed proxy
cards will be voted "FOR" the election of the nominees for director named in
this proxy statement, and "FOR" the ratification of Deloitte & Touche LLP as
independent auditors of SGV Bancorp for the fiscal year ending June 30, 2000.
Other than the matters set forth on the attached Notice of Annual Meeting
of Stockholders, the Board of Directors knows of no additional matters that will
be presented for consideration at the annual meeting. Execution of a proxy,
however, confers on the designated proxy holders discretionary authority to vote
the shares in accordance with their best judgment on such other business, if
any, that may properly come before the annual meeting and at any adjournments
thereof, including whether or not to adjourn the annual meeting.
A proxy may be revoked at any time prior to its exercise by filing a
written notice of revocation with the Corporate Secretary of SGV Bancorp, by
delivering to SGV Bancorp a duly executed proxy bearing a later date, or by
attending the annual meeting and voting in person. However, if you are a
stockholder whose shares are not registered in your own name, you will need
appropriate documentation from your record holder to vote personally at the
annual meeting.
The cost of solicitation of proxies on behalf of the Board of Directors
will be borne by SGV Bancorp. In addition to the solicitation of proxies by
mail, Kissel-Blake, Inc. will assist SGV Bancorp in soliciting proxies for the
annual meeting and will be paid a fee of $4,000 plus
<PAGE>
out-of-pocket expenses. Proxies may also be solicited personally or by mail or
telephone by directors, officers and other employees of SGV Bancorp and First
Federal without additional compensation therefor. SGV Bancorp will also request
persons, firms and corporations holding shares in their names, or in the name of
their nominees, which are beneficially owned by others, to send proxy material
to and obtain proxies from such beneficial owners, and will reimburse such
holders for their reasonable expenses in doing so.
Voting Securities
The securities that may be voted at the annual meeting consist of shares of
common stock of SGV Bancorp, with each share entitling its owner to one vote on
all matters to be voted on at the annual meeting, except as described below.
There is no cumulative voting for the election of directors.
The close of business on September 30, 1999 has been fixed by the Board of
Directors as the record date for the determination of stockholders of record
entitled to notice of and to vote at the annual meeting and at any adjournments
thereof. The total number of shares of SGV Bancorp common stock outstanding on
the record date was 2,176,323 shares.
In accordance with the provisions of SGV Bancorp's Certificate of
Incorporation, record holders of common stock who beneficially own in excess of
10% of the outstanding shares of common stock (the "limit") are not entitled to
any vote with respect to the shares held in excess of the limit. A person or
entity is deemed to beneficially own shares owned by an affiliate of, as well as
by persons acting in concert with, such person or entity. SGV Bancorp's
Certificate of Incorporation authorizes the Board of Directors: (1) to make all
determinations necessary to implement and apply the limit, including determining
whether persons or entities are acting in concert, and (2) to demand that any
person who is reasonably believed to beneficially own stock in excess of the
limit supply information to SGV Bancorp to enable the Board of Directors to
implement and apply the limit.
The presence, in person or by proxy, of the holders of at least a majority
of the total number of shares of common stock entitled to vote (after giving
effect to the limit described above, if applicable) is necessary to constitute a
quorum at the annual meeting. In the event that there are not sufficient votes
for a quorum, or to approve or ratify any matter being presented at the time of
the annual meeting, the annual meeting may be adjourned in order to permit the
further solicitation of proxies.
As to the election of directors, the proxy card being provided by the Board
of Directors enables a stockholder to: (1) vote "FOR ALL NOMINEES" for the
election of the nominees proposed by the Board of Directors; (2) "WITHHOLD FOR
ALL NOMINEES" to vote against the nominees proposed by the Board of Directors;
or (3) vote "FOR ALL NOMINEES EXCEPT" to vote for one of the nominees being
proposed. Under Delaware law and SGV Bancorp's bylaws, directors are elected by
a plurality of votes cast, without regard to either broker non-votes, or proxies
as to which authority to vote for one or more of the nominees being proposed is
withheld.
2
<PAGE>
As to the proposed ratification of Deloitte & Touche LLP as independent
auditors of SGV Bancorp set forth in Proposal 2 and all other matters that may
properly come before the annual meeting, by checking the appropriate box, a
stockholder may: (1) vote "FOR" the item; (2) vote "AGAINST" the item; or (3)
"ABSTAIN" from voting on the item. Under SGV Bancorp's bylaws, unless otherwise
required by law, all such matters shall be determined by a majority of the votes
cast, without regard to either broker non-votes, or proxies marked "ABSTAIN" as
to that matter.
Proxies solicited hereby will be returned to SGV Bancorp's transfer agent,
and will be tabulated by inspectors of election designated by the Board of
Directors, who will not be employed by, or a director of, SGV Bancorp or any of
its affiliates. After the final adjournment of the annual meeting, the proxies
will be returned to SGV Bancorp for safekeeping.
3
<PAGE>
Security Ownership of Certain Beneficial Owners
The following table lists information as to those persons believed by SGV
Bancorp to be beneficial owners of more than 5% of SGV Bancorp's outstanding
shares of common stock on the record date, as disclosed in certain reports
regarding such ownership filed by such persons with SGV Bancorp and with the
Securities and Exchange Commission, in accordance with Sections 13(d) and 13(g)
of the Securities Exchange Act of 1934, as amended ("Exchange Act"). Other than
those persons listed below, SGV Bancorp is not aware of any person, as such term
is defined in the Exchange Act, that owns more than 5% of SGV Bancorp's common
stock as of the record date.
<TABLE>
<CAPTION>
Amount and
Nature of
Name and Address Beneficial Percent of
Title of Class of Beneficial Owner Ownership Class
- ----------------------- ------------------------------------ ------------ ------------
<S> <C> <C> <C>
Common Stock First Federal Savings and Loan 183,428(1) 8.4%
Association of San Gabriel Valley
Employee Stock Ownership Plan and
Trust ("ESOP")
225 North Barranca Street
West Covina, California 91791
Common Stock Jeffrey L. Gendell 214,500(2) 9.9%
Tontine Partners, L.P.
Tontine Financial Partners, L.P.
Tontine Management, L.L.C.
Tontine Overseas Associates, L.L.C.
200 Park Avenue, Suite 3900
New York, New York 10166
Common Stock Grace & White, Inc. 300,500(3) 13.52%
515 Madison Avenue, Suite 1700
New York, New York 10022
Common Stock FMR Corp. 137,800(4) 6.21%
82 Devonshire Street
Boston, Massachusetts 02109
</TABLE>
- --------------------------------
(1) The ESOP Committee of the Board of Directors administers the ESOP. The ESOP
Trustee must vote all allocated shares held in the ESOP in accordance with
the instructions of the participants. As of the record date, 95,466 shares
have been allocated to participants' accounts. Under the ESOP, the ESOP
Trustee will vote unallocated shares in a manner calculated to most
accurately reflect the instructions received from participants regarding the
allocated stock, subject to its fiduciary duties under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
(2) Based on information disclosed in an amended Schedule 13D filed with the SEC
on July 15, 1998.
(3) Based on information disclosed in an amended Schedule 13G filed with the SEC
on February 12, 1999.
(4) Based on information disclosed in an amended Schedule 13G filed with the SEC
on February 11, 1999.
4
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires SGV Bancorp's officers, as
defined in regulations promulgated by the SEC thereunder, directors, and persons
who own more than 10% of a registered class of SGV Bancorp's equity securities,
to file reports of ownership with the SEC. Officers, directors and greater than
10% stockholders are required by SEC regulation to furnish SGV Bancorp with
copies of all Section 16(a) forms they file. Based on a review of copies of such
reports of ownership furnished to SGV Bancorp, or written representations that
no forms were necessary, SGV Bancorp believes that during the past fiscal year
all filing requirements applicable to its officers, directors and greater than
10% beneficial owners were complied with.
PROPOSALS TO BE VOTED ON AT THE MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
The Board of Directors of SGV Bancorp currently consists of six directors
and is divided into three classes. Each of the six members of SGV Bancorp's
Board of Directors also presently serves as a director of First Federal.
Directors are elected for staggered terms of three years each, with the term of
office of only one of the three classes of directors expiring each year.
Directors serve until their successors are elected and qualified.
The two nominees proposed for election at this annual meeting are Thomas A.
Patronite and John D. Randall. No person being nominated as a director is being
proposed for election pursuant to any agreement or understanding between any
person and SGV Bancorp.
In the event that any such nominee is unable to serve or declines to serve
for any reason, it is intended that the proxies will be voted for the election
of such other person as may be designated by the present Board of Directors. The
Board of Directors has no reason to believe that any of the persons named will
be unable or unwilling to serve. Unless authority to vote for the nominees is
withheld, it is intended that the shares represented by the enclosed proxy card,
if executed and returned, will be voted "FOR" the election of all nominees
proposed by the Board of Directors.
The Board of Directors recommends that you vote "FOR" the election of the
nominees named in this proxy statement.
5
<PAGE>
Information with Respect to Nominees, Continuing Directors and Executive
Officers
The following table lists, as of the SGV Bancorp record date: the names of
the nominees; continuing directors of SGV Bancorp; their ages; a brief
description of their recent business experience, including present occupations
and employment; certain directorships held by each; the year in which each
became a director; and the year in which their terms (or in the case of the
nominees, proposed terms) as director of SGV Bancorp expire. The table also
lists the amount of SGV Bancorp common stock and the percent thereof
beneficially owned by each director and "named executive officer" and all
directors and executive officers as a group as of the SGV Bancorp record date.
<TABLE>
<CAPTION>
Shares of
Name and Principal Expiration Common Stock
Occupation at Present Director of Term as Beneficially Percent of
and for Past Five Years Age Since(1) Director Owned(2) Class
- -------------------------------------------- ----- ------------ ---------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
NOMINEES
Thomas A. Patronite 61 1993 2002 23,320(3)(4) *
President and part owner of
Azusa Engineering, Inc.,
a manufacturing and parts
distribution firm.
John D. Randall 68 1991 2002 17,470(3)(4) *
Educational consultant;
Retired President of Mt. San
Antonio College; Chairman of the Board
of First Federal and SGV Bancorp
since October 1998.
CONTINUING DIRECTORS
Barrett G. Andersen 51 1983 2000 101,246(3)(4)(5) 4.3%
President and Chief Executive
Officer of SGV Bancorp and First Federal;
Director, President and Chief Executive
Officer of First Covina.
Royce A. Stutzman 61 1991 2000 15,820(3)(4)
CPA and Managing Partner and *
Chairman of Vicenti, Lloyd &
Stutzman, business consultants
and certified public accounts;
Chairman of the Board of
First Federal 1994-1996; Chairman of
SGV Bancorp 1995-1996.
Irven G. Reynolds 73 1976 2001 38,570(3)(4) 1.64%
Owner of Reynolds Buick/
GMC Trucks; Chairman of
the Board of First Federal
1992-1994; Director of First
Covina.
Benjamin S. Wong 48 1991 2001 27,070(3)(4) 1.15%
Chairman of the Board of First Federal and
SGV Bancorp 1996-1998; City Councilman
and former Mayor of West Covina;
President of Great Wall Restaurant, Inc. and
General Manager of Great Wall Restaurant,
a family owned restaurant.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Shares of
Name and Principal Expiration Common Stock
Occupation at Present Director of Term as Beneficially Percent of
and for Past Five Years Age Since(1) Director Owned(2) Class
- -------------------------------------------- ----- ------------ ---------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
NAMED EXECUTIVE OFFICERS
WHO ARE NOT DIRECTORS
Ronald A. Ott 43 -- -- 53,501(3)(4)(5) 2.27%
Executive Vice President,
Chief Financial Officer and
Treasurer of SGV Bancorp;
Executive Vice President of
First Federal since February
1996 and Senior Vice President
and Treasurer of First Federal
since 1991; Director of First Covina
Service Corp.
Dale J. Schiering 52 -- -- 25,032(3)(4)(5) 1.06%
Senior Vice President, Chief Lending
Officer of First Federal and SGV Bancorp
since September 1995; Secondary
Marketing Manager of Union Federal 1987-
1995.
Michael A. Quigley
Senior Vice President, Chief
Retail Banking Officer of First Federal and 48 -- -- 13,338(4)(5)(6) *
SGV Bancorp since October 1996;
Executive Vice President of Cenfed Bank
1989-1996.
Stock Ownership of all -- -- -- 410,746(7) 17.43%(7)
Directors and Executive Officers
as a Group (15 persons).
</TABLE>
_____________________
* Represents less than 1.0% of SGV Bancorp's voting securities.
(1) Includes years of service as a director of First Federal.
(2) Each person effectively exercises sole (or shares with spouse or other
immediate family member) voting or dispositive power as to shares reported
herein (except as noted).
(3) Includes 3,023 shares awarded to each outside director and 18,002, 13,094
and 6,546 shares awarded to Messrs. Andersen, Ott and Schiering,
respectively, under the SGV Bancorp, Inc. 1995 Amended and Restated Stock-
Based Incentive Plan ("Stock-Based Incentive Plan"). These awards were
awarded on January 17, 1996 and commenced vesting at a rate of 20% per year
on January 17, 1997. Each participant presently has voting power as to the
shares awarded.
(4) Includes options to purchase 6,546 shares of SGV Bancorp common stock
granted to each outside director and options to purchase 32,733, 22,913 and
11,457 shares of SGV Bancorp common stock granted to Messrs. Andersen, Ott
and Schiering, respectively, under the Stock-Based Incentive Plan, which are
currently exercisable or will become exercisable within 60 days of the
record date. Includes options to purchase 500 and 200 shares of SGV Bancorp
common stock granted to Messrs. Andersen and Ott, respectively, under the
SGV Bancorp, Inc. 1997 Stock-Based Incentive Plan (the "1997 Incentive
Plan"), which vested 100% on February 20, 1999. Also includes options to
purchase 3,907, 3,506, 3,306 and 3,306 shares of SGV Bancorp common stock
granted to Messrs. Andersen, Ott, Schiering and Quigley, respectively,
pursuant to the 1997 Incentive Plan, which vested 100% on September 8, 1999.
Excludes options to purchase 4,364 shares of SGV Bancorp common stock
granted to each outside director and options to purchase 21,820, 15,274 and
7,637 shares of SGV Bancorp common stock granted to Messrs. Andersen, Ott
and Schiering, respectively, pursuant to the Stock-Based Incentive Plan,
which are not yet exercisable. Such shares vest at a rate of 20% per year,
beginning January 17, 1997. Also excludes 2,500, 2,000, 1,500 and 1,500
options granted to Messrs. Andersen, Ott, Schiering and Quigley,
respectively, pursuant to the 1997 Incentive Plan, which are not yet
exercisable. Such shares vest 100% on January 22, 2000.
(5) Includes 6,029, 5,605, 3,022 and 1,199 shares beneficially owned by Messrs.
Andersen, Ott, Schiering and Quigley, respectively, under First Federal's
ESOP.
(6) Mr. Quigley's ownership includes options to purchase 7,638 shares of SGV
Bancorp common stock granted under the 1997 Incentive Plan which are
currently exercisable, or will become exercisable within 60 days of the SGV
Bancorp record date. Excludes options to purchase 7,637 shares of SGV
Bancorp common stock granted to Mr. Quigley, pursuant to the 1997 Incentive
Plan, which are not yet exercisable. Such shares commenced vesting at a rate
of 25% per year on February 21, 1998.
(7) For purposes of calculating the aggregate ownership percentage, all options
which are currently exercisable or will become exercisable within 60 days of
the record date, and 75,540 unvested shares of restricted stock have been
added to the amount of outstanding SGV Bancorp common stock as of the
record date.
7
<PAGE>
Meetings of the SGV Bancorp Board of Directors and Committees of the Board of
Directors
The SGV Bancorp Board of Directors conducts its business through meetings
of the SGV Bancorp Board and through activities of its committees. The SGV
Bancorp Board meets monthly and may have additional meetings as needed. During
fiscal 1999, the SGV Bancorp Board held 18 meetings. All of the directors of SGV
Bancorp attended at least 75% of the total number of SGV Bancorp's Board
meetings held and committee meetings on which such directors served during
fiscal 1999.
The Boards of Directors of SGV Bancorp and First Federal maintain
committees, the nature and composition of which are described below.
Audit Committee. The SGV Bancorp Audit Committee consists of Messrs.
Randall, Stutzman and Wong, all of whom are outside directors. This committee
meets on a quarterly basis. The primary purpose of this committee is to provide
reasonable assurance that financial disclosures made by management accurately
portray the financial condition and results of operation. The committee also
maintains a liaison with the outside auditors and reviews the adequacy of
internal controls. The Audit Committee met six times in fiscal 1999.
Nominating Committee. SGV Bancorp's Nominating Committee consists of
Messrs. Andersen, Stutzman, Reynolds and Wong. The committee considers and
recommends the nominees for director to stand for election at SGV Bancorp's
annual meeting of stockholders. SGV Bancorp's Certificate of Incorporation and
Bylaws also provide for stockholder nominations of directors. These provisions
require such nominations to be made pursuant to timely notice in writing to SGV
Bancorp's Corporate Secretary. The stockholder's notice of nomination must
contain all information relating to the nominees which is required to be
disclosed by SGV Bancorp's Bylaws and by the Exchange Act. The Nominating
Committee met on July 19, 1999.
Compensation/Benefits Committee. SGV Bancorp's Compensation/Benefits
Committee consists of Messrs. Reynolds, Randall and Patronite. This committee
meets to establish compensation for the Chief Executive Officer, approve the
compensation of senior officers and various compensation and benefits to be paid
to employees and review the incentive compensation programs when necessary. The
Compensation/Benefits Committee met seven times in fiscal 1999. First Federal
also has an Employee Compensation and Benefits Committee, consisting of Messrs.
Reynolds, Randall and Andersen and Ms. Edie J. Beachboard, a non-voting member,
which met eight times during fiscal 1999.
Directors' Compensation
Fee Arrangements. Currently, all nonemployee directors of First Federal
receive a retainer of $1,600 per month and all nonemployee directors of SGV
Bancorp receive a retainer of $375 per month. No committee meeting fees are
paid. Directors of First Covina do not receive a fee for service on its Board of
Directors.
8
<PAGE>
Stock-Based Incentive Plan. No options or stock awards were granted to
outside directors in fiscal year 1999. However, under the Stock-Based Incentive
Plan, each outside director was granted non-statutory options to purchase 10,910
shares of SGV Bancorp common stock on January 17, 1996 at an exercise price of
$9.63 per share, which was the fair market value of the shares on the date of
grant. Options become exercisable in five equal annual installments of 20%
commencing one year from the date of grant. Additionally, each outside director
was awarded 3,023 shares of SGV Bancorp common stock on January 17, 1996. To the
extent shares are available for grants under the Stock-Based Incentive Plan,
each outside director who is elected subsequent to January 17, 1996 will be
granted an award equal to 625 shares of SGV Bancorp common stock. Awards to
directors vest in five equal annual installments of 20% commencing one year from
the date of grant.
1997 Incentive Plan. The shareholders of SGV Bancorp approved the 1997
Incentive Plan on November 20, 1997. Pursuant to the 1997 Incentive Plan, each
outside director is eligible to receive awards of non-statutory stock options
and stock awards (collectively, the "Directors' Awards"). No Directors' Awards
were made during fiscal year 1999.
1995 Directors' Deferred Fee Stock Unit Plan. SGV Bancorp and First Federal
have implemented the 1995 Directors' Deferred Fee Stock Unit Plan for its
directors. Under the Deferred Fee Plan, directors may elect to defer receipt of
directors' fees earned by them until their service with the SGV Bancorp Board of
Directors terminates. The directors' deferred fees are credited to the account
of participating directors under the terms of the Deferred Fee Plan and are
credited with earnings based on several investment choices, including SGV
Bancorp stock. If a participant chooses to have deferred fees credited to a
stock unit account with the Deferred Fee Plan, the participant will receive a
benefit based on the earnings from and appreciation in the stock of SGV Bancorp.
Executive Compensation
The report of the Compensation/Benefits Committee and the stock performance
graph shall not be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act or the Exchange Act, except to the extent that SGV Bancorp
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
Compensation/Benefits Committee Report on Executive Compensation. Under
rules established by the SEC, SGV Bancorp is required to provide certain data
and information in regard to the compensation and benefits provided to SGV
Bancorp's Chief Executive Officer and other executive officers of SGV Bancorp.
The disclosure requirements for the Chief Executive Officer and such executive
officers include the use of tables and a report explaining the rationale and
considerations that led to fundamental compensation decisions affecting those
individuals. In fulfillment of this requirement, the Compensation/Benefits
Committee, at the direction of the Board of Directors, has prepared the
following report for inclusion in this document.
9
<PAGE>
General. SGV Bancorp is the parent company of First Federal and does not
pay any cash compensation to the executive officers of SGV Bancorp. The SGV
Bancorp Board of Directors has established a Compensation/Benefits Committee
consisting of Messrs. Reynolds, Randall and Patronite, all of whom are outside
directors.
A separate committee, the Employee Compensation and Benefits Committee of
First Federal, was responsible for establishing the calendar 1999 compensation
and benefits for executive officers of First Federal and for reviewing
recommendations of management for compensation and benefits for other officers
and employees of First Federal. The Employee Compensation and Benefits Committee
of First Federal consists of Directors Reynolds, Randall and Andersen and Ms.
Beachboard, who is a non-voting member. Mr. Andersen's compensation and benefits
were established by the Board of Directors, based upon recommendations made by
the committee. Mr. Andersen did not participate in establishing his compensation
and benefits.
Compensation Policies. The Employee Compensation and Benefits Committee
established the factors and criteria upon which the executive officers'
compensation was based and determined how such compensation relates to First
Federal's performance, general compensation policies, competitive factors, and
regulatory requirements. The committee's compensation policies are designed to
reward and provide incentive for executives based upon achievement of individual
and First Federal goals.
For purposes of determining the competitive market for First Federal's
executives, the committee reviewed the compensation paid to top executives of
thrifts and banks with total assets in a range of First Federal's total asset
size and performance results comparable to those of First Federal. This
information was generally derived from the following sources: (1) 1998 SNL
Executive Compensation Review for Thrift Institutions; (2) peer group data taken
from the America's Community Bankers 1998 Compensation Survey for Savings
Institutions; and (3) the Western League of Savings Institutions 1998 Salary
Survey. The three surveys were given different weight by the committee when
determining compensation for SGV Bancorp's and First Federal's Executive
Officers. Specifically, the SNL Compensation Review, ACB survey and Western
League survey were given weight of 75%, 10% and 15%, respectively.
Executive officers' compensation consisted of salary and long term
incentive compensation in the form of stock options and stock awards. Base
salary levels are within a range consistent with salaries paid by other
institutions that are similar in asset size and geographical markets to First
Federal. Each executive's base salary was determined based upon an evaluation of
the individual's performance contribution. Although the committee's
determinations with respect to base salary are subjective and no specific
formula is used, the committee considers the overall performance of First
Federal as well as the level of responsibility and experience of each executive
officer.
Long-Term Incentive Compensation. SGV Bancorp and First Federal maintain
the Stock-Based Incentive Plan and 1997 Incentive Plan, under which executive
officers have received grants and awards. See "--Summary Compensation Table" and
"--Option Grants in Last Fiscal Year." The committee believes that stock
ownership is a significant incentive in building stockholders' wealth
10
<PAGE>
and aligning the interests of employees and stockholders. Stock options and
stock awards under such plans were allocated by the committee based upon
regulatory practices and policies, the practices of other recently converted
financial institutions as verified by external surveys and the executive
officers' levels of responsibility and contributions to SGV Bancorp and First
Federal.
Effective January 17, 1997, one-third of the High Performance award that
was previously forfeited under the Stock-Based Incentive Plan was regranted to
the same executive officers in the same amounts as originally granted. The
regranted shares are base grants that vest at 25% annually beginning January 17,
1998. In regranting the forfeited shares to the same individuals, the committee
considered the awards as part of an overall compensation package designed to
provide long-term incentives to senior management.
Compensation of the Chief Executive Officer. The CEO's base salary is
currently $200,004 per annum. This amount is near the median for financial
institutions of a similar size with similar characteristics. The CEO's base
salary was increased from $188,256 to $200,004 on January 1, 1999 based on his
performance in the previous 12-month period. The CEO did not receive a bonus.
No specific formula was used nor did the committee set specified salary levels
based upon the achievement of particular quantifiable objectives or financial
goals. Rather, the committee considered the overall profitability of SGV
Bancorp and the contribution made to SGV Bancorp by the CEO.
The CEO has entered into employment agreements with SGV Bancorp and First
Federal that specify his base salary and require periodic review of such salary.
In addition, the CEO and other executive officers have the option to participate
in a Supplemental Executive Retirement Plan (SERP). The CEO and other executive
officers also participate in other benefit plans available to all employees,
including the Employee Stock Ownership Plan and the 401(k) Plan. The CEO and
other executive officers are also participants in the Stock-Based Incentive Plan
and 1997 Incentive Plan, which are intended to align the interests and
performance of executive officers with the long-term interests of SGV Bancorp's
stockholders. The CEO was awarded options to purchase 54,553 shares of SGV
Bancorp common stock, and awarded 18,002 shares of SGV Bancorp common stock,
under the Stock-Based Incentive Plan. All of these awards commenced vesting at
a rate of 20% per year beginning on January 17, 1997, subject to, in the case of
two-thirds of the stock awards, the achievement of certain performance goals
established by the committee. In addition, the CEO was awarded options to
purchase 500 shares of SGV Bancorp common stock pursuant to the 1997 Incentive
Plan, which vested on February 20, 1999, options to purchase 3,907 shares of SGV
Bancorp common stock which vested on September 8, 1999 and options to purchase
2,500 shares of SGV Bancorp common stock which will vest on January 22, 2000.
Compensation/Benefits Committee
Irven G. Reynolds
John D. Randall
Thomas A. Patronite
11
<PAGE>
Stock Performance Graph. The following graph shows a comparison of
cumulative total shareholder return on SGV Bancorp's common stock, based on the
market price of the common stock with the cumulative total return of companies
in the Nasdaq National Market and Nasdaq Bank Stocks for the period beginning on
June 29, 1995, the day SGV Bancorp's common stock began trading, through June
30, 1999.
Cumulative Total Return Among SGV Bancorp, Inc. Common Stock,
Nasdaq Stock Market Index and Nasdaq Bank Stock Index
<TABLE>
Summary
06/29/95 12/29/95 06/28/96 12/31/96 06/30/97 12/31/97 06/30/98 12/31/98 06/30/99
-------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SGV Bancorp, Inc. 100.000 122.308 104.615 138.462 171.923 218.462 213.846 153.846 246.154
Nasdaq Stock Market 100.000 114.258 129.352 140.578 157.314 172.258 207.133 242.729 295.988
Nasdaq Bank Stocks 100.000 123.842 130.860 163.515 204.541 273.762 283.464 271.876 280.080
</TABLE>
Notes:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the
previous trading day.
C. If the monthly interval, based on the fiscal year-end is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to 100.00 on 06/29/95, the first
day of trading for SGV Bancorp, Inc. Corp. common stock.
12
<PAGE>
Summary Compensation Table. The following table shows, for the years ended
June 30, 1999, 1998 and 1997, the cash compensation paid by First Federal, as
well as certain other compensation paid or accrued for those years, to the chief
executive officer and those executive officers of SGV Bancorp and First Federal
who received an amount in salary and bonuses in excess of $100,000 in fiscal
1999 ("named executive officers").
<TABLE>
<CAPTION>
Long-Term Compensation
---------------------------------------
Annual Compensation(1) Awards Payouts
-------------------------------------- ---------------------------- ---------
Other Restricted Securities
Annual Stock Underlying LTIP All Other
Name and Principal Compensation Awards Options/SARs Payouts Compensation
Positions Year Salary($)(1) Bonus($) ($)(2) ($)(3) (#)(4) ($)(5) ($)(6)
- ---------------------- ---- ----------- ----------- ----------- ---------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Barrett G. Andersen 1999 $197,750 $ -- -- -- 6,407 -- $5,179
President and Chief 1998 186,594 -- -- -- 500 -- 5,005
Executive Officer 1997 175,217 -- -- 13,800 -- -- 4,837
Ronald A. Ott 1999 $151,196 $ -- -- -- 5,506 -- $4,536
Executive Vice 1998 142,666 -- -- -- 200 -- 4,280
President, Chief 1997 135,245 -- -- 10,040 -- -- 4,027
Financial Officer and
Treasurer
Dale J. Schiering 1999 $116,520 $ -- -- -- 4,806 -- $3,496
Senior Vice President 1998 110,450 -- -- -- -- -- 3,312
and Chief Lending Officer 1997 105,105 -- -- 5,014 -- 2,619
Michael A. Quigley 1999 $113,933 $ -- -- -- 4,806 -- $3,418
Senior Vice President 1998 106,320 -- -- -- -- -- 2,152
and Chief Retail Banking 1997 68,361 -- -- -- 15,275 -- --
Officer
</TABLE>
______________________________________
(1) Under Annual Compensation, the column titled "Salary" includes amounts
deferred under First Federal's 401(k) Plan, pursuant to which officers may
defer up to 15% of their compensation up to the maximum limits under the
Internal Revenue Code.
(2) There were no: (a) perquisites over the lesser of $50,000 or 10% of the
individual's total salary and bonus for the year; (b) payments of above-
market preferential earnings on deferred compensation; (c) payments of
earnings with respect to long-term incentive plans prior to settlement or
maturation; (d) tax payment reimbursements; or (e) preferential discounts on
stock.
(3) Pursuant to the Stock-Based Incentive Plan, Messrs. Andersen, Ott and
Schiering held 7,801, 5,673 and 2,837 unvested shares of SGV Bancorp common
stock, respectively. The market value of these shares was $156,020,
$113,460, and $56,740, respectively, at June 30, 1999. Awards granted in
1996 vest at a rate of 20% per year. The first vesting occurred on January
17, 1997. Awards granted in 1997 vest at 25% per year commencing January
17, 1998. Two-thirds of the plan share awards to Messrs. Andersen, Ott and
Schiering are subject to the achievement of certain performance goals
established by the committee, in addition to the vesting requirement. See
"--Compensation Committee Report on Executive Compensation." All
outstanding plan share awards become immediately exercisable upon death,
disability or change in control. If consummated, the merger with IndyMac
Mortgage Holdings, Inc. ("IndyMac") will constitute a change in control.
(4) Includes options to purchase 500 and 200 shares of SGV Bancorp common stock
granted to Messrs. Andersen and Ott, respectively, in fiscal 1998, under the
1997 Incentive Plan, which became exercisable on February 20, 1999.
Includes options to purchase 15,275 shares of SGV Bancorp common stock
granted to Mr. Quigley under the 1997 Incentive Plan in fiscal 1997, which
became exercisable in equal installments at an annual rate of 25% beginning
February 21, 1998. Includes options to purchase 3,907, 3,506, 3,306 and
3,306 shares of SGV Bancorp common stock granted to Messrs. Andersen, Ott,
Schiering and Quigley, respectively, in fiscal 1999, under the 1997
Incentive Plan, which became exercisable on September 8, 1999. Also,
includes options to purchase 2,500, 2,000, 1,500 and 1,500 shares of SGV
Bancorp common stock granted to Messrs. Andersen, Ott, Schiering and
Quigley, respectively, in fiscal 1999, under the 1997 Incentive Plan, which
become exercisable on January 22, 2000. All outstanding stock options vest
immediately upon death, disability or change in control. If consummated,
the merger with IndyMac will constitute a change in control.
(5) For 1999, 1998 and 1997, First Federal had no long-term incentive plans.
Accordingly, there were no payouts or awards under any long-term incentive
plan.
(6) Consists of amounts contributed by First Federal on behalf of the named
individuals pursuant to First Federal's 401(k) Plan.
13
<PAGE>
Employment Agreements. First Federal and SGV Bancorp entered into
employment agreements with Messrs. Andersen and Ott (individually, the
"executive"). These employment agreements are intended to ensure that First
Federal and SGV Bancorp will be able to maintain a stable and competent
management base. The continued success of First Federal and SGV Bancorp depends
to a significant degree on the skills and competence of Messrs. Andersen and
Ott.
The employment agreements provide for a three-year term for both Messrs.
Andersen and Ott. The employment agreements provide that, commencing on the
first anniversary date and continuing each anniversary date thereafter, the
Board of Directors may extend the agreement for an additional year so that the
remaining term shall be three years, unless written notice of non-renewal is
given by the Board of Directors after conducting a performance evaluation of the
executive. The agreements provide that the executive's base salary will be
reviewed annually. The current base salaries for Mr. Andersen and Mr. Ott are
$200,004 and $152,928, respectively. In addition to the base salary, the
agreements provide for, among other things, participation in stock benefit plans
and other fringe benefits applicable to executive personnel. The agreements
provide for termination by First Federal or SGV Bancorp for cause as defined in
the agreements at any time. In the event First Federal or SGV Bancorp chooses to
terminate the executive's employment for reasons other than for cause or as a
result of a change in control of First Federal or SGV Bancorp, or in the event
of the executive's resignation from First Federal and SGV Bancorp upon: (1)
failure to re-elect the executive to his current offices; (2) a material change
in the executive's functions, duties or responsibilities; (3) a relocation of
the executive's principal place of employment by more than 30 miles; (4)
liquidation or dissolution of First Federal or SGV Bancorp; or (5) a breach of
the agreement by First Federal or SGV Bancorp, the executive or, in the event of
death, his beneficiary, would be entitled to receive an amount equal to the
remaining base salary payments due to the executive and the contributions that
would have been made on the executive's behalf to any employee benefit plans of
First Federal or SGV Bancorp during the remaining term of the agreement. First
Federal and SGV Bancorp would also continue and pay for the executive's life,
health and disability coverage for the remaining term of the agreement.
Under the agreements, if voluntary or involuntary termination follows a
change in control of First Federal or SGV Bancorp, the executive or, in the
event of death, his beneficiary, would be entitled to a severance payment equal
to the greater of: (1) the payments due for the remaining terms of the
agreement; or (2) three times the executive's highest annual compensation earned
during the preceding five fiscal years, as defined in the agreements, which
include base salary and other taxable and non-taxable amounts, for the five
preceding taxable years. First Federal and SGV Bancorp would also continue the
executive's life, health, and disability coverage for 36 months. The agreements
have been amended to provide that in the event payments and benefits under the
agreements, together with payments from other benefit plans made in connection
with any change in control, are determined to constitute an excess parachute
payment under Section 280G of the Internal Revenue Code, resulting in the
imposition of an excise tax on the recipient and denial of the deduction for
such excess amounts to SGV Bancorp and First Federal, the executive will receive
from SGV Bancorp an additional payment such that the effect of the imposition of
the excise tax is effectively eliminated.
14
<PAGE>
Notwithstanding that both agreements provide for a severance payment in the
event of a change in control, the executive would only be entitled to receive a
severance payment under one agreement. Payments to the executive under First
Federal's agreement will be guaranteed by SGV Bancorp in the event that payments
or benefits are not paid by First Federal. In the event of a change in control
of SGV Bancorp or First Federal, based on currently available information,
Messrs. Andersen and Ott would receive approximately $961,500 and $739,800,
respectively, in severance benefits as well as other cash and non-cash benefits
as determined under the agreements. The merger with IndyMac constitutes a
change in control that entitles Messrs. Ott and Andersen to these payments if
the merger is completed.
In connection with SGV Bancorp's merger with IndyMac, it is anticipated
that Messrs. Andersen and Ott will enter into new employment agreements with the
surviving corporation of the merger if it is completed. If the merger is not
completed, Messrs. Ott's and Andersen's current employment agreements will
continue to govern their relationship with SGV Bancorp and First Federal.
Supplemental Executive Retirement Plan. In 1995, First Federal established
a non-qualified Supplemental Executive Retirement Plan ("SERP") to provide
certain officers and highly compensated employees with additional retirement
benefits. The benefits provided under the SERP will make up the benefits lost
to the SERP participants due to application of limitations on compensation and
maximum benefits applicable to First Federal's tax qualified 401(k) Plan and the
ESOP. Benefits will be provided under the SERP at the same time and in the same
form as the benefits provided under the 401(k) Plan and the ESOP.
First Federal has established an irrevocable grantor's trust ("rabbi
trust") in connection with the SERP. This trust is being funded with
contributions from First Federal for the purpose of providing the benefits
promised under the terms of the SERP. The SERP participants have only the
rights of unsecured creditors with respect to the trust's assets, and will not
recognize income with respect to benefits provided by the SERP until such
benefits are received by the participants. The assets of the rabbi trust are
considered part of the general assets of First Federal and are subject to the
claims of First Federal's creditors in the event of First Federal's insolvency.
Earnings on the trust's assets are taxable to First Federal. The trustee of the
trust may invest the trust's assets in SGV Bancorp's stock, as well as other
investments deemed acceptable by the committee.
Stock Option Plans. SGV Bancorp maintains the Stock-Based Incentive Plan
and the 1997 Incentive Plan, which provide for the granting of discretionary
awards to officers and key employees as determined by a committee of non-
employee directors. Named executive officers received grants of 21,525 options
pursuant to the 1997 Incentive Plan during fiscal 1999. The following table
lists all grants of options under the Stock-Based Incentive Plan and 1997
Incentive Plan to the named executive officers for fiscal 1999 and contains
certain information about the potential value of those options based upon
certain assumptions as to the appreciation of SGV Bancorp's stock over the life
of the options.
15
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Options(1)
- ----------------------------------------------------------------------------------------- --------------------
Number of
Securities % of Total
Underlying Option/SARs Exercise or
Options/ Granted to Base Price
SARs Granted Employees in Per Expiration
Name (#)(2)(3)(4)(5) Fiscal Year Share Date(6) 5% 10%
- ----------------------------------------------------------------------------------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Barrett G. Andersen..... 3,907 10.4% $11.75 09/08/08 $28,871 $73,164
2,500 6.7% $12.50 01/22/09 $19,653 $49,804
Ronald A. Ott........... 3,506 9.4% $11.75 09/08/08 $25,909 $65,667
2,000 5.3% $12.50 01/22/09 $15,720 $39,840
Dale J. Schiering....... 3,306 8.8% $11.75 09/08/08 $24,431 $61,921
1,500 4.0% $12.50 01/22/09 $11,790 $29,880
Michael A. Quigley...... 3,306 8.8% $11.75 09/08/08 $24,431 $61,921
1,500 4.0% $12.50 01/22/09 $11,790 $29,880
</TABLE>
_____________________________
(1) The amounts represent certain assumed rates of appreciation. Actual gains,
if any, on stock option exercises and common stock holdings are dependent on
the future performance of the common stock and overall stock market
conditions. There can be no assurance that the amounts reflected in this
table will be realized.
(2) Options to purchase 3,907, 3,506, 3,306 and 3,306 shares of SGV Bancorp
common stock granted to Messrs. Andersen, Ott, Schiering and Quigley,
respectively, on September 8, 1998 pursuant to the 1997 Incentive Plan
became exercisable on September 8, 1999. Options to purchase 2,500, 2,000,
1,500 and 1,500 shares of SGV Bancorp common stock granted to Messrs.
Andersen, Ott, Schiering and Quigley, respectively, on January 22, 1999
pursuant to the 1997 Incentive Plan become exercisable on January 22, 2000.
Options become immediately exercisable upon death, disability or change in
control (as defined in the option plans). If consummated, the merger with
IndyMac will constitute a change in control.
(3) The purchase price may be paid in cash or in common stock.
(4) Options include limited rights (SAR) pursuant to which the options may be
exercised in the event of a change in control of SGV Bancorp. Upon exercise
of a limited right, the optionee would receive a cash payment equal to the
difference between the exercise price of the related option on the date of
the grant and the fair market value of the underlying share of common stock
on the date the limited right is exercised.
(5) To the extent permissible under Section 422 of the Code, options will be
treated as incentive options.
(6) The option term is 10 years.
16
<PAGE>
The following table provides certain information with respect to the number
of shares of common stock represented by outstanding options held by the named
executive officers as of June 30, 1999. Also reported are the values for "in-
the-money" options which represent the positive spread between the exercise
price of any such existing stock options and the year end price of the common
stock.
Fiscal Year-End Option/SAR Values
<TABLE>
<CAPTION>
Value of
Number of Securities Unexercised
Underlying Unexercised In-the-Money
Options/SARs at Option/SARs at
Fiscal Year End(#) Fiscal Year End($)
------------------------------- --------------------------------
Name Exercisable/Unexercisable(1) Exercisable/Unexercisable(2)
- ------------------------- ------------------------------- --------------------------------
<S> <C> <C>
Barrett G. Andersen...... 33,233/28,227 $340,876/$277,256
Ronald A. Ott............ 23,113/20,780 $238,182/$202,316
Dale J. Schiering........ 11,457/12,443 $118,809/$117,720
Michael A. Quigley....... 7,638/12,443 $ 54,383/$ 92,900
</TABLE>
___________________________
(1) Includes options to purchase 54,553, 38,187 and 19,094 shares of SGV
Bancorp common stock awarded to Messrs. Andersen, Ott and Schiering,
respectively, that have an exercise price of $9.63 and became exercisable
at an annual rate of 20% beginning January 17, 1997. Includes options to
purchase 500 and 200 shares of SGV Bancorp common stock awarded to Messrs.
Andersen and Ott, respectively, that have an exercise price of $17.13 and
became exercisable on February 20, 1999. Includes options to purchase
15,275 shares of SGV Bancorp common stock awarded to Mr. Quigley that have
an exercise price of $12.88 and became exercisable at an annual rate of 25%
beginning February 21, 1998. Includes options to purchase 3,907, 3,506,
3,306 and 3,306 shares of SGV Bancorp common stock awarded to Messrs.
Andersen, Ott, Schiering and Quigley, respectively, that have an exercise
price of $11.75 and became exercisable on September 8, 1999. Includes
options to purchase 2,500, 2,000, 1,500 and 1,500 shares of SGV Bancorp
common stock awarded to Messrs. Andersen, Ott, Schiering and Quigley,
respectively, that have an exercise price of $12.50 and become exercisable
on January 22, 2000. The options will expire 10 years from the date of
grant.
(2) Based on market value of the underlying stock at the fiscal year end, minus
the exercise price. The market price on June 30, 1999 was $20.00.
17
<PAGE>
Transactions With Certain Related Persons
Federal regulations require that all loans or extensions of credit to
executive officers and directors must be made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with the general public and must not involve more than
the normal risk of repayment or present other unfavorable features. In
addition, loans made to a director or executive officer in excess of the greater
of $25,000 or 5% of First Federal's capital and surplus (up to a maximum of
$500,000) must be approved in advance by a majority of the disinterested members
of the Board of Directors.
First Federal changed its long standing policy of not making loans to
executive officers and directors on June 16, 1997 by resolution of the Board of
Directors. During fiscal year 1999, First Federal made loans to its executive
officers and directors on the same terms and conditions offered to the general
public. The policy pursuant to which these loans were made provides that all
loans made by First Federal to its executive officers and directors be made in
the ordinary course of business, on substantially the same terms, including
collateral, as those prevailing at the time for comparable transactions with
other persons and may not involve more than the normal risk of collectibility or
present other unfavorable features. In July 1999, the SGV Bancorp Board agreed
to revert back to its former policy of not making loans to executive officers
and directors.
SGV Bancorp intends that all transactions between SGV Bancorp and its
executive officers, directors, holders of 10% or more of the shares of any class
of its common stock and affiliates thereof, will contain terms no less favorable
to SGV Bancorp than could have been obtained by it in arms-length negotiations
with unaffiliated persons and will be approved by a majority of independent
outside directors of SGV Bancorp not having any interest in the transaction.
18
<PAGE>
PROPOSAL 2. RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
SGV Bancorp's independent auditors for the fiscal year ended June 30, 1999
were Deloitte & Touche LLP. SGV Bancorp's Board of Directors has reappointed
Deloitte & Touche LLP to continue as independent auditors for First Federal and
SGV Bancorp for the year ending June 30, 2000, subject to ratification of such
appointment by the stockholders.
Representatives of Deloitte & Touche LLP will be present at the annual
meeting. They will be given an opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions from
stockholders present at the annual meeting.
Unless marked to the contrary, the shares represented by the enclosed proxy
card will be voted "FOR" ratification of the appointment of Deloitte & Touche
LLP as the independent auditors of SGV Bancorp.
The Board of Directors recommends that you vote "FOR" ratification of the
appointment of Deloitte & Touche LLP as the independent auditors of SGV Bancorp.
ADDITIONAL INFORMATION
Recent Developments
SGV Bancorp has entered into an Agreement and Plan of Merger with IndyMac
Mortgage Holdings, Inc. pursuant to which, if the merger is consummated, SGV
Bancorp stockholders will receive approximately $25.00 in cash, subject to
adjustments as described in the merger agreement, for each share of SGV
Bancorp's common stock they own. The terms of SGV Bancorp's merger with IndyMac
may be found in the merger agreement that was filed as an exhibit to SGV
Bancorp's Form 8-K filed with the SEC on July 14, 1999. Consummation of the
merger is subject to several conditions, including regulatory approval and
stockholder approval. This annual meeting proxy statement is not soliciting
your vote to approve the merger with IndyMac. Proxy materials regarding SGV
Bancorp's merger with IndyMac will be sent to you prior to a special meeting of
stockholders that will be called by SGV Bancorp to consider the Agreement and
Plan of Merger.
Stockholder Proposals
In the event SGV Bancorp's merger with IndyMac is not completed, SGV
Bancorp anticipates that it will hold its 2000 Annual Meeting of Stockholders on
or about November 16, 2000. To be considered for inclusion in SGV Bancorp's
proxy statement and form of proxy relating to the 2000 Annual Meeting of
Stockholders, a stockholder proposal must be received by the Corporate Secretary
of SGV Bancorp at the address set forth on the first page of this proxy
statement not later than June 17, 2000. Any such proposal will be subject to 17
C.F.R. (S) 240.14a-8 of the Rules and Regulations under the Securities Exchange
Act of 1934, as amended.
19
<PAGE>
Notice of Business to be Conducted at an Annual Meeting
SGV Bancorp's bylaws provide an advance notice procedure for a stockholder
to properly bring business before an annual meeting. The stockholder must give
written advance notice to the Corporate Secretary of SGV Bancorp not less than
90 days before the date originally fixed for such meeting, provided, however,
that in the event that less than 100 days' notice or prior public disclosure of
the date of the meeting is given or made to stockholders, notice by the
stockholder to be timely must be received not later than the close of business
on the tenth day following the date on which SGV Bancorp's notice to
stockholders of the annual meeting date was mailed or such public disclosure was
made. The advance notice by stockholders must include the stockholder's name
and address, as they appear on SGV Bancorp's record of stockholders, a brief
description of the proposed business, the reason for conducting such business at
the annual meeting, the class and number of shares of SGV Bancorp's capital
stock that are beneficially owned by such stockholder and any material interest
of such stockholder in the proposed business. In the case of nominations to the
Board of Directors, certain information regarding the nominees must be provided.
Nothing in this paragraph shall be deemed to require SGV Bancorp to include in
its proxy statement, or the proxy relating to an annual meeting, any stockholder
proposal which does not meet all of the requirements for inclusion established
by the SEC in effect at the time such proposal is received.
Other Matters Which May Properly Come Before the Meeting
The Board of Directors knows of no business which will be presented for
consideration at the annual meeting other than as stated in the Notice of Annual
Meeting of Stockholders. If, however, other matters are properly brought before
the annual meeting, it is the intention of the persons named in the accompanying
proxy to vote the shares represented thereby on such matters in accordance with
their best judgment.
Whether or not you intend to be present at the annual meeting, you are
urged to return your proxy card promptly. If you are then present at the annual
meeting and wish to vote your shares in person, your original proxy may be
revoked by voting at the annual meeting.
By Order of the Board of Directors
/s/ Edie J. Beachboard
Edie J. Beachboard
Corporate Secretary
West Covina, California
October 15, 1999
You are cordially invited to attend the meeting in person. Whether or not you
plan to attend the meeting, you are requested to sign, date and promptly
return the accompanying proxy card in the enclosed postage-paid envelope.
20
<PAGE>
Exhibit 99.1
- --------------------------------------------------------------------------------
[FRONT SIDE]
R E V O C A B L E
P R O X Y
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF SGV BANCORP, INC.
SGV BANCORP, INC.
ANNUAL MEETING OF SHAREHOLDERS
November 18, 1999
2:00 p.m. Pacific Time
The undersigned hereby appoints the Board of Directors of SGV Bancorp, Inc.
(the "Company") to act as proxy for the undersigned, and to vote all shares of
Common Stock of the Company that the undersigned is entitled to vote only at
the Annual Meeting of Shareholders, to be held on November 18, 1999, at 2:00
p.m. Pacific Time, at the Radisson Hotel San Gabriel Valley, 14635 Baldwin
Park Town Center, Baldwin Park, California, and at any and all adjournments
thereof, as indicated on the reverse side of this proxy.
This proxy is revocable and will be voted as directed, but if no
instructions are specified, this proxy will be voted FOR each of the proposals
listed. If any other business is presented at the Annual Meeting, including
whether or not to adjourn the meeting, this proxy will be voted by the Board
of Directors in their best judgment. At the present time, the Board of
Directors knows of no other business to be presented at the Annual Meeting.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
- --------------------------------------------------------------------------------
(UP ARROW) FOLD AND DETACH HERE (UP ARROW)
<PAGE>
Please mark
your votes as
indicated in
this example [X]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE PROPOSALS PRESENTED.
1. The election as directors of all nominees listed (except as marked to the
contrary below).
VOTE
WITHHELD FOR ALL
FOR ALL FOR ALL NOMINEES
NOMINEES NOMINEES EXCEPT
[ ] [ ] [ ]
Thomas A. Patronite and John D. Randall
INSTRUCTION: To withhold your vote for any individual nominee, mark "For All
Nominees Except" and write that nominee's name on the line provided below:
- --------------------------------------------------------------------------------
2. The ratification of the appointment of Deloitte & Touche LLP as independent
auditiors of SGV Bancorp, Inc. for the fiscal year ending June 30, 2000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
The undersigned acknowledges receipt from the Company prior to the execution
of this proxy of a Notice of Annual Meeting of Shareholders and of a Proxy
Statement dated October 15, 1999 and of the Annual Report to Shareholders.
Signature of Shareholder ______________________________ Date: _____________
Signature of Shareholder ______________________________ Date: _____________
Please sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give full
title. If shares are held jointly, each holder may sign, but only one
signature is required.
