SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ____ )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
QUAKER CITY BANCORP, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
N/A
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transactions applies:
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(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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QUAKER CITY BANCORP, INC.
7021 GREENLEAF AVENUE
WHITTIER, CA 90602
(310) 907-2200
September 27, 1996
Dear Stockholder:
You are cordially invited to attend the 1996 Annual Meeting of Stockholders
(the "Annual Meeting") of Quaker City Bancorp, Inc. (the "Company"), the holding
company for Quaker City Federal Savings and Loan Association (the
"Association"), scheduled to be held on Wednesday, November 13, 1996, at the
Whittier Hilton, 7320 Greenleaf Avenue, Whittier, California, at 10:00 a.m.
local time. As described in the accompanying Notice of Annual Meeting of
Stockholders and Proxy Statement, stockholders will be asked to vote on the
election of directors for the Company. Directors and executive officers of the
Company will be present at the Annual Meeting to respond to any questions that
our stockholders may have regarding the business to be transacted.
I URGE YOU TO VOTE YOUR PROXY AS SOON AS POSSIBLE. Your vote is very
important, regardless of the number of shares you own. Whether or not you plan
to attend the Annual Meeting in person, I urge you to sign, date and return the
enclosed proxy card promptly in the accompanying postage prepaid envelope. You
may, of course, attend the Annual Meeting and vote in person even if you have
previously returned your proxy card.
On behalf of the Board of Directors and all of the employees of the Company
and the Association, I wish to thank you for your continued support.
Sincerely yours,
FREDERIC R. (RICK) McGILL
President and Chief Executive Officer
IMPORTANT: IF YOUR QUAKER CITY BANCORP, INC. SHARES ARE HELD IN THE NAME OF A
BROKERAGE FIRM OR NOMINEE, ONLY THEY CAN EXECUTE A PROXY ON YOUR BEHALF. TO
ENSURE THAT YOUR SHARES ARE VOTED, PLEASE TELEPHONE THE INDIVIDUAL RESPONSIBLE
FOR YOUR ACCOUNT TODAY AND OBTAIN INSTRUCTIONS ON HOW TO DIRECT HIM OR HER TO
EXECUTE A PROXY ON YOUR BEHALF.
IF YOU HAVE ANY QUESTIONS CONCERNING THE PROXY STATEMENT OR ACCOMPANYING
PROXY OR IF YOU NEED ANY HELP IN VOTING YOUR STOCK, PLEASE TELEPHONE MORROW &
COMPANY AT 1-800-856-8309 TODAY.
PLEASE SIGN, DATE AND RETURN
THE ENCLOSED PROXY CARD TODAY.
QUAKER CITY BANCORP, INC.
7021 GREENLEAF AVENUE
WHITTIER, CA 90602
(310) 907-2200
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on November 13, 1996
____________________
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Stockholders (the
"Annual Meeting") of Quaker City Bancorp, Inc. (the "Company"), the holding
company of Quaker City Federal Savings and Loan Association, will be on held
Wednesday, November 13, 1996, at the Whittier Hilton, 7320 Greenleaf Avenue,
Whittier, California, at 10:00 a.m. local time, subject to adjournment or
postponement by the Board of Directors, for the following purposes:
1. To elect two persons to the Board of Directors to serve until
the 1998 annual meeting of stockholders and until their successors are
duly elected and qualified; and
2. To transact such other business as may properly come before the
Annual Meeting or any or all adjournments or postponements thereof.
Only holders of record of the common stock, par value $.01 per share,
of the Company on Thursday, September 19, 1996, will be entitled to notice
of, and to vote at, the Annual Meeting and any adjournment or postponement
thereof.
Prior to the voting thereof, a proxy may be revoked by the person
executing such proxy by (i) filing with the Corporate Secretary of the
Company, prior to the commencement of the Annual Meeting, either a written
notice of revocation or a duly executed proxy bearing a later date or (ii)
by voting in person at the Annual Meeting.
By order of the Board of Directors
KATHRYN M. HENNIGAN
Corporate Secretary
Whittier, California
September 27, 1996
YOUR VOTE IS IMPORTANT
TO VOTE YOUR SHARES, PLEASE SIGN AND DATE THE ENCLOSED PROXY CARD AND
MAIL IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE
QUAKER CITY BANCORP, INC.
7021 GREENLEAF AVENUE
WHITTIER, CA 90602
(310) 907-2200
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PROXY STATEMENT
ANNUAL
MEETING
OF STOCKHOLDERS
November 13, 1996
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INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors (the "Board" or the "Board of Directors") of Quaker City
Bancorp, Inc., a Delaware corporation (the "Company"), the holding company of
Quaker City Federal Savings and Loan Association (the "Association"), of proxies
for use at the 1996 Annual Meeting of Stockholders of the Company (the "Annual
Meeting") scheduled to be held at the time and place and for the purposes set
forth in the accompanying Notice of Annual Meeting of Stockholders.
INFORMATION REGARDING VOTING AT THE ANNUAL MEETING
GENERAL
At the Annual Meeting, the stockholders of the Company are being asked to
consider and to vote upon the election of the two directors nominated by the
Company's Board of Directors to serve until the 1999 annual meeting of
stockholders. For information regarding the proposal regarding the election of
directors, see the section of this Proxy Statement entitled "ELECTION OF
DIRECTORS." Shares represented by properly executed proxies received by the
Company will be voted at the Annual Meeting in the manner specified therein or,
if no instructions are marked on the enclosed proxy card, FOR each of the
director nominees identified on such card. Although management does not know of
any matter other than the election of directors to be acted upon at the Annual
Meeting, unless contrary instructions are given, shares represented by valid
proxies will be voted by the persons named on the accompanying proxy card in
accordance with their respective best judgment with respect to any other matters
that may properly come before the Annual Meeting.
Execution of a proxy will not in any way affect a stockholder's right to
attend the Annual Meeting and vote in person, and any person giving a proxy has
the right to revoke it at any time before it is exercised by (i) filing with the
Corporate Secretary of the Company, prior to the commencement of the Annual
Meeting, a duly executed instrument dated subsequent to such proxy revoking the
same or a duly executed proxy bearing a later date or (ii) attending the Annual
Meeting and voting in person.
The mailing address of the principal executive offices of the Company is
7021 Greenleaf Avenue, Whittier, California 90602, and its telephone number is
(310) 907-2200. The approximate date on which this Proxy Statement and the
enclosed proxy card are first being sent to stockholders is October 7, 1996.
RECORD DATE AND VOTING
Only stockholders of record on Thursday, September 19, 1996 (the "Record
Date"), will be entitled to notice of and to vote at the Annual Meeting. There
were outstanding on the Record Date 3,800,600 shares of common stock, par value
$.01 per share, of the Company ("Common Stock"). Each share of Common Stock is
entitled to one vote on each matter to be voted on at the Annual Meeting.
1
As provided in the Company's Certificate of Incorporation, 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 persons acting in concert with,
such person or entity. The Company's Certificate of Incorporation authorizes the
Board of Directors (i) to make all determinations necessary to implement and
apply the Limit, including determining whether persons or entities are acting in
concert, and (ii) to demand that any person who is reasonably believed to
beneficially own stock in excess of the Limit supply information to the Company
to enable the Board 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
subtracting any shares held in excess of the Limit pursuant to the Company's
Certificate of Incorporation) is necessary to constitute a quorum at the Annual
Meeting. In the event there are not sufficient votes for a quorum at the time of
the Annual Meeting, the Annual Meeting may be adjourned in order to permit the
further solicitation of proxies.
Directors will be elected by a plurality of the votes of the shares of
Common Stock present in person or represented by proxy and entitled to vote on
the election of directors. Abstentions and broker non-votes are counted for the
purpose of determining the presence or absence of a quorum for the transaction
of business. Abstentions are counted in tabulations of the votes cast on
proposals presented to stockholders, thus constituting the equivalent of a
negative vote for purposes of determining whether a director has been elected,
whereas broker non-votes are not counted for purposes of determining whether a
proposal has been approved. Shares in excess of the Limit will not be counted
for either the purpose of determining the presence or absence of a quorum or
whether a proposal has been approved.
SOLICITATION
The cost of preparing, assembling and mailing the Notice of Annual Meeting
of Stockholders, this Proxy Statement and the enclosed proxy card will be paid
by the Company. Following the mailing of this Proxy Statement, directors,
officers and other employees of the Company may solicit proxies by mail,
telephone, telegraph or personal interview. Such persons will receive no
additional compensation for such services. Brokerage houses and other nominees,
fiduciaries and custodians nominally holding shares of Common Stock of record
will be requested to forward proxy soliciting material to the beneficial owners
of such shares, and will be reimbursed by the Company for their reasonable
charges and expenses in connection therewith. In addition, the Company has
retained proxy solicitor Morrow & Co., Inc. ("Morrow & Co.") to assist in the
solicitation of proxies. Morrow & Co. may solicit proxies by mail, telephone,
telegraph and personal solicitation, and will request brokerage houses and other
nominees, fiduciaries and custodians nominally holding shares of Common Stock of
record to forward proxy soliciting material to the beneficial owners of such
shares. For these services, the Company will pay Morrow & Co. a fee estimated
not to exceed $6,000, plus reimbursement for reasonable out-of-pocket expenses.
________________
The date of this Proxy Statement is September 27, 1996.
2
ELECTION OF DIRECTORS
At the Annual Meeting, stockholders of the Company will be asked to vote on
the election of two directors. The two nominees receiving the highest number of
votes at the Annual Meeting will be elected directors of the Company. To fill
these two board positions, the enclosed proxy, unless indicated to the contrary,
will be voted FOR the nominees listed below and on the enclosed proxy card. All
directors elected at the Annual Meeting will be elected to three-year terms and
will serve until the 1999 annual meeting of stockholders and until their
successors have been duly elected and qualified.
Set forth below are the names of the persons nominated by the Company's
Board of Directors for election as directors at the Annual Meeting. Your proxy,
unless otherwise indicated, will be voted FOR Messrs. Cannon and Leichtfuss. For
a description of Mr. Cannon's and Mr. Leichtfuss' principal occupation and
business experience during the last five years and present directorships, please
see "DIRECTORS AND EXECUTIVE OFFICERS_Directors," below.
FIRST TERM AS
BECAME FIRST BECAME COMPANY
DIRECTOR OF DIRECTOR OF DIRECTOR
NAME CURRENT OCCUPATION ASSOCIATION COMPANY EXPIRES
NOMINEES FOR ELECTION
David T. Cannon D.T. Cannon Associates, a marketing and 1984 1993 1999
management consulting firm;
retired Western Regional
Director for Industrial Relations
of Eastman Kodak Company
David K. Leichtfuss President, Broadview Mortgage 1991 1993 1999
CONTINUING DIRECTORS
J.L. Thomas Chairman of the Board of the Company 1975 1993 1997
and of the Association
Frederic R. McGill President and Chief Executive Officer of 1995 1995 1998
the Company and of the
Association
Alfred J. Gobar President and Chairman, AJGA, Inc. 1992 1993 1998
Wayne L. Harvey C.P.A., Managing Partner, Harvey & 1981 1993 1997
Parmelee
Edward L. Miller Partner, law firm of Bewley, Lassleben 1985 1993 1997
& Miller
(1) On November 15, 1995, Mr. McGill was appointed President of the Company and
of the Association, and Mr. Thomas was elected Chairman of the Board of the
Company and of the Association. Effective July 1, 1996, Mr. McGill was elected
Chief Executive Officer of the Company and of the Association; Mr. Thomas
remains Chairman of the Board and a member of the management team.
The Company has been advised by each nominee named in this Proxy Statement
that he is willing to be named as such herein and is willing to serve as a
director if elected. However, if any of the nominees should be unable to serve
as a director, the enclosed proxy will be voted in favor of the remainder of
those nominees not opposed by the stockholder on such proxy and may be voted for
a substitute nominee selected by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE
---
NOMINEES LISTED ABOVE.
3
DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS
The following table sets forth certain information, except where otherwise
indicated, as of June 30, 1996 with respect to the directors of the Company and
the Association. At such date, Mr. Thomas was Chairman of the Board and Chief
Executive Officer and Mr. McGill was a Director, President and Chief Operating
Officer of the Company and of the Association. Effective July 1, 1996, Mr.
McGill was appointed Chief Executive Officer of the Company and of the
Association; Mr. Thomas remains Chairman of the Board and a member of the
management team.
All directors of the Company serve three-year terms and approximately one-
third are elected at each annual stockholders' meeting. The Association
continues to have a classified board, approximately one-third of the members of
which are elected each year to serve three-year terms.
POSITION HELD
TERM AS TERM AS WITH THE
FIRST BECAME ASSOCIATION FIRST BECAME COMPANY COMPANY
NAME OF DIRECTOR OF DIRECTOR DIRECTOR DIRECTOR AND THE
DIRECTOR AGE ASSOCIATION EXPIRES OF COMPANY EXPIRES ASSOCIATION
D.W. Ferguson 80 1952 1995 1993 1995 Director Emeritus
J.L. Thomas 60 1975 1997 1993 1997 Director, Chairman of the
Board and Chief
Executive
Officer
Frederic R. McGill 49 1995 1998 1995 1998 Director, President and
Chief Operating
Officer
David T. Cannon 66 1984 1996 1993 1996 Director
Alfred J. Gobar 63 1992 1998 1993 1998 Director
Wayne L. Harvey 58 1981 1997 1993 1997 Director
David K. Leichtfuss 51 1991 1996 1993 1996 Director
Edward L. Miller 59 1985 1997 1993 1997 Director
Set forth below is certain information concerning the principal occupation
and business experience of each of the individuals named above during the past
five years.
D.W. Ferguson is Director Emeritus of the Board of the Company and the
Association. Mr. Ferguson has served as Chairman of the Company since its
formation in 1993 until November of 1995. Mr. Ferguson joined the Association in
1937 and held various positions prior to becoming the President and Chief
Executive Officer in 1951, a position he held until 1982. Mr. Ferguson was
elected to the Board of Directors of the Association in 1952 and served as the
Chairman of the Association's Board from 1982 to 1995.
J.L. Thomas is Chairman of the Company and the Association. Mr. Thomas
served as President and Chief Executive Officer of the Company since its
formation in 1993 until July of 1996. Mr. Thomas joined the Association in
1961, and was elected to the Board of Directors in 1975. Mr. Thomas served as
Chief Operating Officer of the Association from 1976 to 1982, and became its
President and Chief Executive Officer in 1982, serving in that capacity until
July of 1996. Mr. Thomas also serves as the Chairman of the Board of Directors
of Quaker City Financial Corp., a wholly owned subsidiary of the Association
("QCFC"), and of Quaker City Neighborhood Development, Inc. a wholly owned
subsidiary of the Company ("QCND").
Frederic R. (Rick) McGill served as Executive Vice President and Chief
Operating Officer of the Company since its formation in 1993, serving in that
capacity until July of 1996. Mr. McGill joined the
4
Association in 1991 as Executive Vice President and Chief Operating Officer. Mr.
McGill was appointed President of and elected to the Board of Directors of the
Company and the Association in 1995, and was appointed Chief Executive Officer
effective July 1, 1996. Prior to joining the Association, Mr. McGill was an
independent financial consultant specializing in mortgage banking. Mr. McGill
has over 25 years experience in the banking industry. Mr. McGill has also served
as the Chief Executive Officer of QCFC since 1991 and of QCND since July 1,
1996.
David T. Cannon, retired, has been a member of the Board of the Association
since 1984 and of the Company since its formation in 1993. Previously, he
served as Western Regional Director for Industrial Relations of Eastman Kodak
Company. Mr. Cannon currently operates his own marketing and management
consulting business, D.T. Cannon Associates. Mr. Cannon is the Chairman of the
Compensation Committee of the Company's Board.
Alfred J. Gobar is President and Chairman of AJGA, Inc., a family-owned
economics consulting firm. Mr. Gobar has held this position since 1990. Prior
to 1990, Mr. Gobar served as President and Chairman of Alfred Gobar Associates,
Inc., a family-owned economics consulting firm. Mr. Gobar has been a director
of the Association since 1992 and of the Company since its formation in 1993.
Wayne L. Harvey is the Managing Partner of Harvey & Parmelee, certified
public accountants, and has been with such firm since 1958. Mr. Harvey has been
a director of the Association since 1981 and of the Company since its formation
in 1993. Mr. Harvey is the Chairman of the Audit Committee of the Company's
Board.
David K. Leichtfuss is the President of Broadview Mortgage Corp., a
mortgage banking company that specializes in residential permanent financing,
and has been with such company since 1988. Mr. Leichtfuss has been a director
of the Association since 1991 and of the Company since its formation in 1993.
Edward L. Miller is a partner in the law firm of Bewley, Lassleben & Miller
and has been associated with such firm since 1963. Mr. Miller has been a
director of the Association since 1985 and of the Company since its formation in
1993. Mr. Miller is the Chairman of the Philanthropy Committee of the
Association's Board.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company's Board of Directors has a standing Audit Committee and
Compensation Committee.
The Audit Committee held 5 meetings during the 1996 fiscal year, and
currently consists of Messrs. Harvey (Chairman), Miller and Cannon. The Audit
Committee's responsibilities are generally to assist the Board in fulfilling its
legal and fiduciary responsibilities relating to accounting, audit and reporting
policies and practices of the Company, the Association and their subsidiaries.
The Audit Committee also, among other things, recommends to the Board the
engagement of the Company's independent auditors; monitors and reviews the
quality and activities of the Company's internal audit function and those of its
independent auditors; and, monitors the adequacy of the Company's operating and
internal controls as reported by management, the independent auditors and
internal auditors.
The Compensation Committee held 6 meetings during the 1996 fiscal year, and
currently consists of Messrs. Cannon (Chairman), Miller and Harvey. The
Compensation Committee is authorized to review salaries and compensation,
including non-cash benefits, of directors, officers and other employees of the
Company and to recommend to the Board salaries, remuneration and other forms of
additional compensation and benefits as it deems necessary. In July of 1996, the
Board established a subcommittee of the Compensation Committee, made up of two
outside directors, Messrs. Cannon and Harvey, whose principal responsibility is
to administer for purposes of Section 16 of the Securities Exchange Act of
5
1934, as amended, and rules thereunder the stock benefit plans of the Company
with respect to certain transactions by executive officers and directors of the
Company.
The Company's Board of Directors selects nominees for election as
directors. The Company does not have a standing nominating committee. The
candidates for election at this Annual Meeting were nominated by the Board of
Directors. In accordance with Section 6 of Article I of the Company's Bylaws (a
copy of which is available upon request to the Corporate Secretary of the
Company), stockholder nominations for election of directors may be voted on at
an annual meeting only if such nominations are made pursuant to written notice
timely given to the Corporate Secretary accompanied by certain information. To
be timely, a stockholder's written notice must be delivered to or mailed and
received at the principal executive offices of the Company not less than 90 days
prior to the date of the meeting, provided that, in the event that less than 100
days' notice or prior disclosure of the date of the meeting is given or made to
stockholders, a stockholder's notice will be timely if received not later than
the tenth day following the day on which such notice of the date of the meeting
is mailed or such public disclosure is made. Such stockholder's notice must set
forth with respect to each director nominee all of the information relating to
such person that is required to be disclosed in solicitations for elections of
directors under the rules of the Securities and Exchange Commission ("SEC") and
the stockholder's name and address, as they appear on the Company's books, and
the number of shares of Common Stock owned by the stockholder giving the notice.
MEETINGS OF THE BOARD OF DIRECTORS
During the 1996 fiscal year, there were 12 meetings of the Board of
Directors of the Company. All directors attended at least 75% of the meetings of
the Board of Directors, and all members of the committees of the Board attended
at least 75% of the meetings of those committees, in each case, after the
election of such individual to the Board or to such committee.
COMPENSATION OF DIRECTORS
DIRECTORS' FEES. The Company does not currently pay directors' fees.
Currently, the Chairman of the Board of the Association receives a monthly
retainer fee of $2,200 and all other directors of the Association receive a
monthly retainer fee of $1,900 each. Committee meeting fees of $100 per hour per
meeting are also paid to non-employee directors of the Association. In addition,
a $200 monthly retainer is paid to the Audit Committee Chairman for general
services in addition to meetings.
DIRECTORS' OPTION PLAN. The Company has adopted a stock option plan for
directors who are not officers or employees of the Company or its affiliates.
See "COMPENSATION AND OTHER INFORMATION_Non-Employee Directors' Option Plan,"
below.
ASSOCIATION RECOGNITION AND RETENTION PLAN FOR OUTSIDE DIRECTORS. The
Association has adopted a recognition and retention plan for outside directors
of the Association. See "COMPENSATION AND OTHER INFORMATION_Non-Employee
Director Retention Plan," below.
EXECUTIVE OFFICERS
Set forth below are the executive officers of the Company, together with
the positions currently held by those persons, as of June 30, 1996. The
executive officers serve at the pleasure of the Company's
6
Board of Directors; however, the Company has entered into employment agreements
with Messrs. Thomas and McGill, which agreements are described under
"COMPENSATION AND OTHER MATTERS_Employment Agreements and Change of Control
Arrangements," below.
NAME AGE POSITION (1)
Kathryn M. Hennigan 45 Corporate Secretary and Senior Vice President, Administrative Services
Frederic R. McGill 49 Director, President and Chief Operating Officer(2)
Harold L. Rams 50 Senior Vice President, Lending of the Association
Karen A. Tannheimer 37 Senior Vice President, Loan Service of the Association
Robert C. Teeling 46 Senior Vice President, Retail Banking of the Association
J.L. Thomas 60 Director, Chairman of the Board and Chief Executive Officer(2)
Dwight L. Wilson 48 Senior Vice President, Treasurer and Chief Financial Officer
- - ------------------------
(1) Unless otherwise indicated, the indicated position is with the Company and
the Association.
(2) Information set forth regarding directors and executive officers is
presented as of June 30, 1996. Effective July 1, 1996, Mr. McGill was
appointed Chief Executive Officer of the Company and of the Association;
Mr. Thomas remains Chairman of the Board and a member of the management
team.
Set forth below is certain information concerning the business experience
during the past five years of each of the individuals named above (other than
Mr. Thomas and Mr. McGill_see "Directors" above).
Kathryn M. Hennigan has served as Senior Vice President, Administrative
Services and Corporate Secretary of the Company since its formation in 1993. Ms.
Hennigan joined the Association in 1992 as the Human Resource Manager. Ms.
Hennigan was promoted to Senior Vice President, Administrative Services and
Corporate Secretary of the Association in January, 1993. Prior to joining the
Association, Ms. Hennigan held various management and administrative positions,
including principal for seven years in a senior high school in Fullerton,
California.
Harold L. Rams joined the Association in 1975 and currently serves as the
Senior Vice President, Lending. Mr. Rams has over 20 years experience in the
banking industry, primarily in multifamily residential lending.
Karen A. Tannheimer joined the Association in 1983 as the Loan Service
Supervisor. Ms. Tannheimer served in such capacity until 1986 when she left the
Association for a position with a computer service company. Ms. Tannheimer
attained the position of Supervisor-Systems Analysis Group before leaving the
computer services company to rejoin the Association in June, 1992. Ms.
Tannheimer currently serves as the Senior Vice President, Loan Service.
Robert C. Teeling joined the Association in 1991 as the Senior Vice
President, Retail Banking. From 1986 to 1991, Mr. Teeling served as Vice
President, Retail Banking for Columbia Savings and Loan. Prior to joining the
Association, Mr. Teeling had over 20 years experience in retail banking with
various savings and loan associations in the southern California area.
Dwight L. Wilson has served as Senior Vice President, Treasurer and Chief
Financial Officer of the Company since its formation in 1993. Mr. Wilson joined
the Association in 1976 as the Assistant Controller and held that position until
1979. Mr. Wilson served as the Controller of the Association from 1979 to 1985.
Since 1985, Mr. Wilson has been the Treasurer and Chief Financial Officer of the
Association and QCFC.
7
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the shares of Common Stock owned as of the
Record Date by each director (and director nominee), by the Chief Executive
Officer and the four other most highly compensated executive officers of the
Company and/or the Association who were serving as executive officers at
September 19, 1996 and who each received total salary and bonus in excess of
$100,000 in fiscal 1996 (the "Named Executive Officers") and by all directors
and executive officers as a group.
SHARES OF COMMON
STOCK BENEFICIALLY PERCENT OF
NAME AND ADDRESS(1) TITLE(2) OWNED(3) CLASS(13)
D.W. Ferguson(4) Director Emeritus 47,696 1.25%
J.L. Thomas(5) Chairman of the Board 114,159 2.98%
Frederic R. McGill(6) President and Chief Executive
Officer 72,121 1.88%
David T. Cannon(7) Director 31,300 *
Wayne L. Harvey(7) Director 63,394 1.66%
Edward L. Miller(7) Director 172,821 4.53%
David K. Leichtfuss(8) Director 23,516 *
Alfred J. Gobar(8) Director 87,518 2.29%
Dwight L. Wilson(9) Senior Vice President, Treasurer and 34,240 *
Chief Financial Officer
Harold L. Rams(10) Senior Vice President, Lending of the 36,165 *
Association
Kathryn M. Hennigan(11) Corporate Secretary and Senior Vice 31,927 *
President, Administrative ------- -----
Services
All directors and executive 760,852
officers as a group (13
persons)(12) 19.91%
- - ---------------------------
* Does not exceed 1.0% of the Company's voting securities.
(1) The address of each person is c/o Quaker City Bancorp, Inc., 7021
Greenleaf Avenue, Whittier, California 90602.
(2) Titles are for both the Company and the Association unless otherwise
indicated.
(3) Each person effectively exercises sole (or shares with spouse or other
immediate family member) voting and dispositive power as to shares
reported.
(4) Includes 4,554 shares under the Quaker City Federal Savings and Loan
Association Recognition and Retention Plan for Outside Directors ("DRP"),
which will vest on January 1, 1997, as to which voting may be directed,
and includes 20,700 option shares under the Quaker City Bancorp, Inc.
1993 Stock Option Plan for Outside Directors ("Directors' Option Plan")
that are currently exercisable or that will become exercisable within 60
days of September 19, 1996.
(5) Includes 3,778 allocated shares under the Quaker City Federal Savings and
Loan Association Employee Stock Ownership Plan and Trust ("ESOP"); 13,800
shares under the Quaker City Federal Savings and Loan Association
Recognition and Retention Plan for Officers and Employees ("MRP"), which
will vest on January 1, 1997, as to which voting may be directed; and
29,000 option shares under the Quaker City Bancorp, Inc. 1993 Stock
Option Plan for Officers and Employees ("Incentive Option Plan") that are
currently exercisable or that will become exercisable within 60 days of
September 19, 1996.
(6) Includes 3,778 allocated shares under the ESOP; 12,420 shares under the
MRP, which will vest in three equal installments on each of January 1,
1997, 1998 and 1999 as to which voting may be directed; and 34,500 option
shares under the Incentive Option Plan that are currently exercisable or
that will become exercisable within 60 days of September 19, 1996.
8
(7) Includes 2,156 shares under the DRP, which will vest on January 1, 1997,
as to which voting may be directed, and includes 15,525 option shares
under the Directors' Option Plan that are currently exercisable or that
will become exercisable within 60 days of September 19, 1996.
(8) Includes 1,553 shares under the DRP, which will vest on January 1, 1997,
as to which voting may be directed, and includes 15,525 option shares
under the Directors' Option Plan that are currently exercisable or that
will become exercisable within 60 days of September 19, 1996.
(9) Includes 3,027 allocated shares under the ESOP; 7,452 shares under the
MRP, which will vest in three equal installments on each of January 1,
1997, 1998 and 1999, as to which voting may be directed; and 20,700
option shares under the Incentive Option Plan that are currently
exercisable or that will become exercisable within 60 days of September
19, 1996.
(10) Includes 2,946 allocated shares under the ESOP; 7,452 shares under the
MRP, which will vest in three equal installments on each of January 1,
1997, 1998 and 1999, as to which voting may be directed; and 20,700
option shares under the Incentive Option Plan that are currently
exercisable or that will become exercisable within 60 days of September
19, 1996.
(11) Includes 2,342 allocated shares under the ESOP; 6,210 shares under the
MRP, which will vest in three equal installments on each of January 1,
1997, 1998 and 1999, as to which voting may be directed; and 20,700
option shares under the Incentive Option Plan that are currently
exercisable or that will become exercisable within 60 days of September
19, 1996.
(12) Includes 19,865 allocated shares under the ESOP; 14,128 shares under the
DRP, which will vest on January 1, 1997, as to which voting may be
directed; 59,754 shares under the MRP, which will vest in three equal
installments on each of January 1, 1997, 1998 and 1999, as to which
voting may be directed; 98,325 option shares under the Directors' Option
Plan that are currently exercisable or that will become exercisable
within 60 days of September 19, 1996; and 152,000 option shares under the
Incentive Option Plan that are currently exercisable or that will become
exercisable within 60 days of September 19, 1996.
(13) As of the Record Date, there were 3,800,600 shares of Common Stock
outstanding.
9
COMPENSATION AND OTHER INFORMATION
A transition in the management of the Company has occurred since the
Company's 1995 Annual Meeting of Stockholders. On November 15, 1995, Mr. Gill
was appointed President of the Company and of the Association, and Mr. Thomas
was elected Chairman of the Board of the Company and of the Association.
Effective July 1, 1996, Mr. McGill was elected Chief Executive Officer of the
Company and of the Association; Mr. Thomas remains Chairman of the Board and a
member of the management team. A discussion of the compensation arrangement for
the new Chief Executive Officer can be found in the "Compensation Committee
Report on Executive Compensation," and for the Chairman of the Board under the
"Employment Agreements and Change in Control Agreements," below.
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid by the Company,
including any of its subsidiaries, to the Named Executive Officers for services
during the fiscal years ended June 30, 1996, 1995 and 1994.
LONG TERM
COMPENSATION
ANNUAL AWARDS PAYOUTS
COMPENSATION(1)
RESTRICTED SECURITIES
STOCK UNDERLYING
NAME AND AWARD(S) OPTIONS LTIP PAYOUTS
PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(2) (#) ($)
J.L. Thomas 1996 $250,000 $94,838 $ -- $ -- $ --
Chief Executive Officer and Director 1995 225,000 78,840 -- -- --
1994 225,000 -- 372,564 103,500 244,867
Frederic R. McGill 1996 189,000 55,764 -- -- --
Executive Vice President and 1995 180,000 55,188 -- -- --
Chief Operating Officer 1994 180,000 -- 186,300 51,750 --
Dwight L. Wilson 1996 118,000 25,146 -- -- --
Senior Vice President, Treasurer and 1995 107,300 18,687 -- -- --
Chief Financial Officer 1994 101,200 -- 111,780 31,050 --
Harold L. Rams 1996 108,800 23,675 -- -- --
Senior Vice President, Lending 1995 106,700 19,138 -- -- --
1994 106,700 -- 111,780 31,050 --
Kathryn M. Hennigan 1996 94,700 20,465 -- -- --
Senior Vice President, Administrative 1995 82,400 14,845 -- -- --
Services and Corporate Secretary 1994 71,000 2,926 93,150 31,050 --
- - -----------------------
(1) Under Annual Compensation, the column titled "Salary" includes deferred
compensation. The column titled "Bonus" consists of payments earned in
the reported fiscal year under the Association's Incentive Compensation
Plan.
(2) The shares of Common Stock under the column titled "Restricted Stock
Awards" under Long-Term Compensation were awarded under the Quaker City
Federal Savings and Loan Association Recognition and Retention Plan for
Officers and Employees ("MRP") on January 1, 1994 and the values set
forth therefor in the table have been calculated based on the closing
sales price thereof on December 31, 1993, the last day of trading prior
to the date of award. The MRP was established by the Association as a
method of providing officers and employees of the Association with a
proprietary interest in the Company in a manner designed to encourage
such persons to remain with the Association. The MRP is administered by
the non-employee members of the Compensation Committee of the
Association's Board of Directors.
10
Under the MRP, awards are granted to certain officers and employees in
the form of shares of Common Stock held by the MRP. Awards are
nontransferable and nonassignable. The Committee selects the officers and
employees to whom awards are to be granted, the number of shares covered
by the awards and any vesting requirements. Awards made to Mr. Thomas
vest in three equal annual installments commencing on January 1, 1995 and
continuing on each anniversary date thereafter. Awards made to other
officers vest in five equal installments commencing on January 1, 1995
and continuing on each anniversary date thereafter. Awards to other
employees were 100% vested on January 1, 1995. When shares become vested
and are distributed in accordance with the MRP, the recipients will also
receive amounts equal to accrued dividends, if any, with respect thereto.
The aggregate number of shares of Common Stock that have been awarded
under the MRP to Messrs. Thomas, McGill, Wilson and Rams and Ms.
Hennigan, as of June 30, 1996 are 41,396, 20,700, 12,420, 12,420, and
10,350, respectively. The aggregate number of unvested shares of Common
Stock awarded under the MRP and held by Messrs. Thomas, McGill, Wilson
and Rams and Ms. Hennigan as of June 30, 1996 are 13,800, 12,420, 7,452,
7,452, and 6,210, respectively, and the aggregate value of such shares at
fiscal year end June 30, 1996, calculated by multiplying the number of
such shares by the closing market price of the Common Stock on June 30,
1996, was $188,922, $170,030, $102,018, $102,018, and $85,015,
respectively. Awards will be 100% vested upon termination of employment
or service due to death, disability or normal retirement of the officer
or employee or upon a change in control of the Association or the
Company. In the event that before reaching normal retirement, an officer
or employee terminates service with the Association or the Company, the
officer's or employee's nonvested awards will be forfeited.
STOCK OPTIONS
The following table sets forth the number of shares covered by options held
by the Named Executive Officers at fiscal year-end June 30, 1996. In addition,
the table sets forth the value of the unexercised options that were in-the-money
at June 30, 1996. Options are "in-the-money" if the fair market value of the
shares covered thereby is greater than the option exercise price. At June 30,
1996, all the options set forth in the table were in-the-money.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES(1)
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options at
Options at Fiscal Year
Fiscal Year End($)(2)
End (#)
Name Exercisable Unexercisable Exercisable Unexercisable
J.L. Thomas 49,000 34,500 $303,310 $213,555
Frederic R. McGill 34,500 17,250 213,555 106,778
Dwight L. Wilson 20,700 10,350 128,133 64,067
Harold L. Rams 20,700 10,350 128,133 64,067
Kathryn M. Hennigan 20,700 10,350 128,133 64,067
- - ---------------------
(1) No free-standing stock appreciation rights ("SARs") are issuable under
the Company's Incentive Option Plan.
(2) The values of unexercised in-the-money options set forth in the table
have been calculated, in accordance with requirements promulgated by the
SEC, by determining the difference between the fair market value of the
underlying Common Stock at fiscal year-end June 30, 1996 and the exercise
price of the options.
EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL ARRANGEMENTS
In connection with the Conversion of the Association from mutual to stock
form in December of 1993 (the "Conversion") and the commencement of operations
by the Company as the holding company thereof, the Association and the Company
entered into employment agreements with Messrs. Thomas and
11
McGill ("Executive," respectively). The Association and the Company also entered
into change in control agreements, which are two-year agreements, with Messrs.
Wilson and Rams and with Ms. Hennigan ("Executive," respectively). The
employment agreements and change in control agreements were entered into with
the intent of ensuring that the Association and the Company will be able to
maintain a stable and competent management base after the Conversion. The
continued success of the Association and the Company depends to a significant
degree on the skills and competence of these individuals.
The employment agreements with the Association and the Company provide for
a three-year term for Messrs. Thomas and McGill. Commencing on the first
anniversary date and continuing each anniversary date thereafter, the Board of
Directors of the Association may extend the employment agreements with the
Association for an additional year such that the remaining terms shall be the
amount of the original term unless written notice of non-renewal is given by the
Board of Directors of the Association after conducting a performance evaluation
of the Executive. Effective June 30, 1996, the Association's Board extended the
employment agreements of Messrs. Thomas and McGill until June 30, 1999. In
connection with extending Mr. Thomas' employment agreement with the Association,
a "sunset provision" was included in his employment agreement such that the
agreement automatically terminates on his sixty-fifth birthday, unless earlier
terminated. With respect to their employment agreements with the Company,
commencing on the date of execution of the employment agreement with the
Company, the term of the employment agreements for Messrs. Thomas and McGill
extend, unless earlier terminated, one day each day until such time as the
Company's Board of Directors or the Executive elects not to extend the term of
the employment agreement by giving written notice to the other party, in which
case the term of the employment agreement will be fixed and will end on the
third anniversary date of the written notice. Notwithstanding the foregoing, Mr.
Thomas' employment agreement with the Company also automatically terminates upon
his sixty-fifth birthday, unless earlier terminated.
The employment agreements provide that Messrs. Thomas and McGill will
receive an annual base salary of $175,000 and $210,000, respectively, which will
be reviewed annually by the Board of the Association. In addition to the base
salary, the employment agreements provide for, among other things, disability
pay, participation in stock benefit plans and other fringe benefits applicable
to executive personnel.
The employment agreements provide for termination by the Association or the
Company for cause at any time. In the event the Association or the Company
chooses to terminate the Executive's employment for reasons other than for cause
or for disability, or in the event of the Executive's resignation from the
Association and the Company upon: (i) failure to re-elect the Executive to his
current offices; (ii) a material change in the Executive's functions, duties or
responsibilities, or relocation of his principal place of employment, or a
material reduction in benefits or perquisites; (iii) liquidation or dissolution
of the Association or the Company; or (iv) a breach of the employment agreement
by the Association or the Company, the Executive or, in the event of death, his
beneficiary, would be entitled to receive an amount equal to: (i) the amount of
the remaining salary payments that the Executive would have earned if he
continued his employment with the Association or Company during the remaining
unexpired term of the employment agreement at the Executive's defined base
salary on the date the Executive was terminated; (ii) the average of the amount
of bonus and any other cash compensation paid to the Executive during the term
of the employment agreement times the remaining number of years of the
employment agreement and any fraction thereof, and (iii) an amount equal to the
average of the annual contributions that were made on the Executive's behalf to
any employee benefit plan of the Company or Association during the term of the
employment agreement times the remaining number of years of the employment
agreement and any fraction thereof.
If termination of employment follows a "change in control" of the
Association or the Company, as defined in the employment agreement, the
Executive or, in the event of death, his beneficiary, would be entitled to an
aggregate payment from the Association and the Company equal to the greater of:
(i) the
12
payments due for the remaining term of the agreement; or (ii) three times the
Executive's average annual compensation for the three preceding taxable years,
including bonuses and any other cash compensation paid or to be paid to the
Executive during such years, and the amount of any contributions made or to be
made to any employee benefit plan. The Association and the Company would also
continue the Executive's life, health and disability coverage for the remaining
unexpired term of the employment agreements to the extent allowed by the plans
or policies maintained by the Company or Association from time to time. Payments
to the Executive under the Association's employment agreements are guaranteed by
the Company in the event that payments or benefits are not paid by the
Association. The employment agreements also provide for reduced benefits to an
Executive upon termination of employment due to disability and further provide
that the Association and Company shall indemnify the Executive to the fullest
extent allowable under federal and Delaware law.
In the event of a change in control, based upon fiscal 1996 salary and
bonus, Messrs. Thomas and McGill would receive approximately $1,034,514 and
$734,292, respectively, in severance payments in addition to other cash and
noncash benefits provided under the employment agreements.
The change in control agreements with the Association and the Company
provide for a two-year term for Messrs. Wilson and Rams and Ms. Hennigan.
Commencing on the first anniversary date and continuing on each anniversary
thereafter, the change in control agreements may be extended by the Board of
Directors of the Association for a year so that the remaining terms shall be two
years. Effective June 30, 1996, the Association's Board extended the term of the
change of control agreements with each Executive until June 30, 1998. Commencing
on the date of execution of the change in control agreement with the Company,
the term of the change in control agreement extends for one day each day until
such time as the Board of Directors of the Company or the Executive elects not
to extend the term of the change in control agreement by giving written notice
to the other party, in which case the term of the change in control agreement
will be fixed and will end on the second anniversary date of the written notice.
Each change in control agreement provides that at any time following a change in
control of the Company or the Association, if the Company or the Association
terminates the Executive's employment for any reason other than cause, the
Executive or, in the event of death, the Executive's beneficiary would be
entitled to receive an aggregate payment from the Association and the Company
equal to two times the Executive's average annual salary for the two preceding
taxable years, including bonuses and any other cash compensation paid or to be
paid to the Executive during such years and the amount of any contributions made
or to be made to any employee benefit plan. The Association and the Company
would also continue the Executive's life, health and disability coverage for the
remaining unexpired term of his change in control agreement to the extent
allowed by the plans or policies maintained by the Company or Association from
time to time. Payments to the Executive under the Association's change in
control agreements are guaranteed by the Company in the event that payments or
benefits are not paid by the Association.
If a change in control occurs, based upon fiscal 1996 salary and bonus, the
amounts payable to Messrs. Wilson and Rams and Ms. Hennigan, pursuant to the
change in control agreements would be approximately $286,292, $264,950, and
$230,330, respectively, in addition to other cash and noncash benefits provided
for under the change in control agreements.
The change in control agreements and the employment agreements contain a
provision to the effect that in the event of a change in control, the aggregate
payments under the agreements shall not constitute an excess parachute payment
under Section 280G of the Internal Revenue Code of 1986, as amended ("Code")
(which imposes an excise tax on the recipient and denial of the deduction for
such excess amounts to the employer). Such provision provides that the payments
under the agreements shall be reduced to one dollar below the amount that would
trigger an excise tax under Section 280G.
13
The Quaker City Federal Savings and Loan Association Recognition and
Retention Plan for Officers and Employees (referred to herein as the "MRP")
contains a change of control provision. See Footnote 2 to the Summary
Compensation Table above. The Company's 1993 Incentive Option Plan ("Incentive
Option Plan") provides that to the extent not previously exercisable, options
granted under the Incentive Option Plan become exercisable upon a change in
control.
DEFINED BENEFIT PLAN
The Association maintains the Quaker City Federal Savings and Loan
Association Employee Retirement Income Plan, a non-contributory defined benefit
pension plan ("Defined Benefit Plan"). An employee becomes eligible to
participate in the Defined Benefit Plan upon attaining the age of 21 and
completing one year of service during which he or she has served a minimum of
1,000 hours. The Defined Benefit Plan provides for a monthly benefit to the
employee upon retirement at the age of 65, or if later, the fifth anniversary of
the employee's initial participation in the Defined Benefit Plan. The Defined
Benefit Plan also provides for a monthly benefit upon the participant's death,
disability and early retirement. Early retirement is conditioned upon the
attainment of the age of 55, and the completion by the participant of five years
of service.
The following table illustrates the estimated annual benefits payable under
the Defined Benefit Plan as of December 31, 1993 upon retirement at age 65 for
the final average compensation and years of service classification specified. As
described further below, the amounts set forth reflect that participants' years
of service credited for purposes of benefit calculations were frozen as of
December 31, 1993.
QUAKER CITY FEDERAL SAVINGS AND LOAN ASSOCIATION
DEFINED BENEFIT PLAN
YEARS OF SERVICE
FINAL AVERAGE
COMPENSATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
$150,000 $13,811 $18,415 $23,019 $25,519 $28,019
75,000 22,061 29,415 36,769 40,519 44,269
100,000 30,311 40,415 50,519 55,519 60,519
125,000 38,561 51,415 64,269 70,519 76,769
150,000 46,811 62,415 78,019 85,519 93,019
175,000 46,811 62,415 78,019 85,519 93,019
200,000 46,811 62,415 78,019 85,519 93,019
225,000 46,811 62,415 78,019 85,519 93,019
250,000 46,811 62,415 78,019 85,519 93,019
275,000 46,811 62,415 78,019 85,519 93,019
300,000 46,811 62,415 78,019 85,519 93,019
350,000 46,811 62,415 78,019 85,519 93,019
400,000 46,811 62,415 78,019 85,519 93,019
Upon establishment of the Defined Benefit Plan, benefits payable to non-
executive officers and other employees under the Defined Benefit Plan were
determined by taking into account the participant's final average compensation,
including regular pay, overtime and bonuses, Social Security benefits and years
of credited service. In conjunction with the establishment by the Association in
1993 of an employee stock ownership plan (the "ESOP"), effective December 31,
1993 benefit calculations under the Defined Benefit Plan from January 1, 1994
forward are based upon current compensation levels and credited service through
December 31, 1993 only. The benefit amounts listed above were computed on a
single life annuity basis, which is the normal form of payment under the Defined
Benefit Plan.
14
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Association maintains a non-qualified Supplemental Executive Retirement
Plan ("SERP") for certain employees and their beneficiaries whose benefits from
the Association's Defined Benefit Plan and the tax qualified ESOP are reduced by
reason of the annual limitation on benefits and contributions imposed by Section
415 of the Code and the limitations imposed on compensation taken into
consideration in the determination of benefits under the Defined Benefit Plan
and the ESOP due to Section 401(a)(17) of the Code. The SERP provides additional
benefits to participants to ensure that they receive an aggregate annual benefit
from the Defined Benefit Plan, the ESOP and Social Security of an amount equal
to 65% of such participants' final average compensation at age 65.
The following table illustrates the estimated annual benefits payable under
the Defined Benefit Plan and the SERP (collectively, the "Plans") as of December
31, 1993 upon retirement at age 65 for the final average compensation and years
of service classification specified. The amounts set forth reflect that
participants' years of service credited for purposes of benefit calculations
under the Defined Benefit Plan were frozen as of December 31, 1993.
QUAKER CITY FEDERAL SAVINGS AND LOAN ASSOCIATION
TARGETED RETIREMENT INCOME
YEARS OF SERVICE
FINAL AVERAGE
COMPENSATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
$150,000 $ 9,375 $ 17,500 $ 17,500 $ 17,500 $ 17,500
75,000 21,563 33,750 33,750 33,750 33,750
100,000 33,750 50,000 50,000 50,000 50,000
125,000 45,938 66,250 66,250 66,250 66,250
150,000 58,125 82,500 82,500 82,500 82,500
175,000 70,313 98,750 98,750 98,750 98,750
200,000 82,500 115,000 115,000 115,000 115,000
225,000 94,688 131,250 131,250 131,250 131,250
250,000 106,875 147,500 147,500 147,500 147,500
275,000 119,063 163,750 163,750 163,750 163,750
300,000 131,250 180,000 180,000 180,000 180,000
350,000 155,625 212,500 212,500 212,500 212,500
400,000 180,000 245,000 245,000 245,000 245,000
Benefits payable to executive officers under the Defined Benefit Plan and
the SERP have, since the establishment thereof until December 31, 1993, been
determined by taking into account the executive's final average compensation,
Social Security benefits and years of credited service. The compensation covered
by the Plans is comprised of salary and bonuses, but does not include the other
possible components of compensation set forth in the Summary Compensation Table
presented earlier in this Proxy Statement. As set forth above, in connection
with the Association's establishment of the ESOP in 1993, effective December 31,
1993 benefit calculations under the Defined Benefit Plan from January 1, 1994
forward are based upon current compensation levels and credited service through
December 31, 1993 only. The benefit amounts listed above were computed on a
single life annuity basis, which is the normal form of payment under the Plans.
15
The approximate years of service and covered compensation, as of January 1,
1996, for the Named Executive Officers under the Plans are as follows:
COVERED
NAME SERVICE COMPENSATION
- - ---- ------- ------------
J.L. Thomas 34 $294,838
Frederic R. McGill 4 255,264
Dwight L. Wilson 19 140,296
Harold L. Rams 20 132,525
Kathryn M. Hennigan 3 111,115
NON-EMPLOYEE DIRECTORS' OPTION PLAN
Non-employee directors ("Outside Directors") of the Company and the
Association are eligible to receive stock options under the Quaker City Bancorp,
Inc. 1993 Stock Option Plan for Outside Directors (the "Directors' Option
Plan"). The purpose of the Directors' Option Plan is to promote the growth and
profitability of the Company and the Association by providing an incentive in
the form of stock options to Outside Directors of outstanding competence to
achieve long-term objectives of the Company and the Association by encouraging
their acquisition of an equity interest in the Company.
The Directors' Option Plan authorizes the granting of non-statutory stock
options for a total of 103,500 shares of Common Stock to Outside Directors.
Stock options for an aggregate of 98,325 shares of Common Stock were granted to
the six Outside Directors at the date of the Conversion at an exercise price of
$7.50 per share, which was the offering price of the Common Stock in the initial
public offering of the Company. To the extent options for shares are available
for grants under the Directors' Option Plan, on each anniversary of the
effective date of the Directors' Option Plan, each subsequently elected Outside
Director will be granted, if such Outside Director is qualified, non-statutory
stock options to purchase 2,587 shares of Common Stock or a number of options to
purchase such lesser number of shares as remain in the Directors Option Plan. If
options for sufficient shares are not available to fulfill the grant of options
to an Outside Director, and thereafter options become available, such persons
shall receive options to purchase an amount of shares of Common Stock,
determined by dividing pro rata among such persons the number of options
available. There are 5,175 options to purchase shares of Common Stock remaining
in the Directors' Option Plan for future grants.
All options granted under the Directors' Option Plan in connection with the
Conversion became exercisable January 1, 1995; options granted to a subsequently
elected Outside Director will become exercisable on the first business day of
January following that date on which such subsequent Outside Director is
qualified and first begins to serve as a Director, provided, however, that in
the event of death, disability or retirement of the participant or upon a change
in control of the Company or the Association, all options previously granted
would automatically become exercisable. Each option granted under the Directors'
Option Plan expires upon the earlier of 10 years following the date of grant, or
one year following the date the Outside Director ceases to be a director.
NON-EMPLOYEE DIRECTOR RETENTION PLAN
The Quaker City Federal Savings and Loan Association Recognition and
Retention Plan for Outside Directors (the "DRP") authorizes the granting of
awards of up to 43,414 shares of Common Stock to Outside Directors. The DRP is
a self-administering plan. Under the DRP, awards will be granted to Outside
Directors in the form of shares of Common Stock held by the DRP. Awards are
nontransferable and nonassignable. Each Outside Director at the time of the
Conversion received an award equal to 517 shares and an additional share award
based on prior years of service with the Association. To the extent shares are
available, any Outside Directors who are subsequently elected will receive
similar awards. Awards to Outside Directors vest in three equal installments,
commencing on January 1, 1995, in the case
16
of Outside Directors at the time of the Conversion, and on the first business
day of the January following the date upon which a person is first appointed as
an Outside Director, in the case of subsequent Outside Directors, and continuing
on each anniversary date thereafter. Awards will be 100% vested upon termination
of employment or service as a director due to death, disability or retirement of
the Outside Director or upon a change in the control of the Association or the
Company. When shares become vested and are actually distributed in accordance
with the DRP, the recipients will also receive amounts equal to any accrued
dividends with respect thereto.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee consists of Messrs. Cannon (Chairman),
Miller and Harvey. Mr. Harvey has a mortgage loan from the Association, the
outstanding balance of which at June 30, 1996 was $157,668. See "RELATED PARTY
TRANSACTIONS," below.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
ADMINISTRATION
The compensation program is administered by the Compensation Committee of
the Company's Board of Directors, which is composed of three outside, non-
employee directors. The Chief Executive Officer and the Senior Vice President,
Administrative Services, serve as advisors to the Compensation Committee.
Following review and approval by the Compensation Committee, all issues
pertaining to employment-related contracts are submitted to the full Board of
Directors for approval.
The following is the Compensation Committee report addressing the
compensation of the Company's executive officers for the 1996 fiscal year.
PHILOSOPHY
The goals and objectives of the executive compensation policies remain the
same as last year. The Compensation Committee's executive compensation policies
are designed to provide competitive levels of compensation that integrate pay
with the Company's annual and long-term performance goals, reward above average
corporate performance, recognize individual initiative and achievements and
assist the Company in attracting and retaining qualified executives. Targeted
levels of executive compensation are set at levels the Compensation Committee
believes to be consistent with others in the financial services industry, with
executives' compensation packages increasingly being weighted toward programs
contingent upon the Company's long-term (three years or more) performance. As a
result, the executives' actual compensation levels in any particular year may be
above or below those of the Company's competitors, depending upon the Company's
performance.
The Company's compensation strategy continues to support the concept of
pay-for-performance, associating the goal of variable pay for variable
performance. A mix of compensation elements, with an emphasis on tying long-term
incentives to corporate performance, is designed to meet this goal. The mix of
compensation elements varies between executive levels within the organization,
with compensation opportunities of senior executives relying more heavily on
annual and long-term incentive compensation.
With regard to the Internal Revenue Code provision limiting the
deductibility of certain executive officer compensation in excess of $1 million,
the Company intends to take all necessary steps to cause the compensation paid
to executive officers to be deductible by the Company.
17
PERFORMANCE TO DATE
The Company's compensation strategy is based on the philosophy that Company
executives should be compensated within competitive norms for their level of
responsibility within the organization. The Company has determined the
competitive marketplace for different executive levels within the organization.
Generally, the competitive marketplace for senior executives has been defined as
financial institutions with assets between $500 million and $1 billion that are
located in California.
It should be noted that the Company wishes to compare itself on a broader
basis for corporate performance purposes, and thus the peer group referenced
above for comparison purposes in regard to cash compensation is not identical to
that used in the Stock Price Performance Graph which appears immediately after
this report.
In the spring of 1995, a competitive review of the current cash
compensation program (base salary and short-term incentive cash compensation)
for Company executives was performed by an independent outside consulting firm,
KPMG Peat Marwick LLP ("Peat Marwick"). The findings of such review were used
by the Compensation Committee in its June 1995 executive salary review for
fiscal 1996. As a result of the Compensation Committee review, senior
executives received raises ranging from 2% to 15% for fiscal 1996. These raises
in base salaries reflected the impact of the above-mentioned competitive salary
review, as well as increased job responsibilities and performance.
Annual incentive compensation for both the Chief Executive Officer and the
Chief Operating Officer was based solely on corporate goals and had targets of
45% and 35% of base salary, respectively, for fiscal year 1996. For fiscal
1996, these goals pertained to performance in the following areas: net profit,
asset quality, operating expense ratios, regulatory and compliance ratings, and
implementation of a customer service program. In addition, a profitability
threshold required for any corporate bonus award continues to be an integral
part of the incentive compensation plan. Incentive compensation for fiscal 1996
for other executive officers of the Company, with a target of 25% of base
salary, was based 80% upon corporate and 20% upon personal goal achievement.
The annual incentive program also included a profitability threshold necessary
for the payment of any bonus based on corporate goals. In July of 1996,
executive officers received bonuses approved by the Board of Directors based on
both management objectives and their personal goal achievement, as applicable,
during fiscal year 1996.
The third part of executive compensation is the long-term compensation
program, which has two components, incentive stock options and stock grants.
Stock options are granted under the Company's Incentive Option Plan and stock
grants are awarded under the Association's MRP. The purpose of both of these
plans is to encourage management stability as well as stock ownership of the
Company. Under the Incentive Option Plan, senior executives receive stock
options which offer them the possibility of future gains, depending on the
executive's continued employment by the Company or the Association and the long-
term price appreciation of the Company's Common Stock. At the Conversion,
senior executives were granted options that vest over a period of three years,
with one-third becoming exercisable on each of January 1, 1995, 1996, and 1997.
In addition to stock options, at the Conversion, stock grants were awarded
to senior executives under the MRP. Awards granted to Mr. Thomas vest over a
three-year period, with rights to acquire one-third of the awarded shares on
each of January 1, 1995, 1996 and 1997, and awards granted to all other
executive officers vest over a five-year period, with rights to acquire one-
fifth of the awarded shares on each January first of 1995 through 1999. The
Compensation Committee does not contemplate making additional grants to the
current group of senior executives until at least 1998.
18
CHIEF EXECUTIVE OFFICER COMPENSATION
A transition in the management of the Company has occurred since the
Company's 1995 Annual Meeting of Stockholders. On November 15, 1995, Mr. Thomas
was elected Chairman of the Board and Mr. McGill was appointed President.
Effective July 1, 1996, Mr. McGill was appointed Chief Executive Officer; Mr.
Thomas remains Chairman of the Board and a member of the management team. This
report on Chief Executive Officer compensation will therefore reflect fiscal
1996 compensation for Mr. Thomas, as well as the compensation structure for Mr.
McGill for fiscal 1997. For information on fiscal 1997 compensation
arrangements for Mr. Thomas, refer to the section "Employment Agreements and
Change in Control Arrangements."
In conjunction with the Conversion in December of 1993, an analysis of Mr.
Thomas' cash compensation was performed by independent outside consultants Peat
Marwick. Several factors, including the Board of Directors' evaluation of the
findings of the compensation analysis, along with their assessment of the
competitiveness of Mr. Thomas' cash compensation and their interest in
increasing the pay for performance orientation of the compensation program,
prompted the Board of Directors to increase Mr. Thomas' target short-term
incentive level from 35% of base salary for fiscal 1994 to 40% and 45% for
fiscal years 1995 and 1996, respectively. The spring 1995 compensation review
performed by Peat Marwick reaffirmed the appropriateness of the incentive
compensation targets previously set for Mr. Thomas. For fiscal year 1996, the
base salary for Mr. Thomas was raised 11%, from $225,000 to $250,000 and his
target short-term incentive level was increased from 40% to 45 % of base salary.
In July of 1996, Mr. Thomas received an incentive bonus of $94,838, approved by
the Board of Directors and based on corporate goal achievement, for fiscal year
1996.
As was noted above, effective July 1, 1996, Mr. McGill was appointed Chief
Executive Officer of both the Company and the Association. For fiscal 1997, Mr.
McGill will receive a base salary of $210,000, with a target short-term
incentive level of 40% of base salary. The annual incentive bonus payout is
based on the same corporate goal achievement, including a profitability
threshold, as all other executives.
CONCLUSION
The Committee believes that the current compensation policies for the
Company and the Association are both effective and appropriate, since the pay-
for-performance cash compensation strategy resulted in a below-median cash
compensation payout in fiscal 1994, when the profitability level of the Company
and the Association was negative. For fiscal 1995 and 1996, when the profit
threshold was met, there was a proportionate incentive compensation payout. The
Compensation Committee will continue to support a compensation mix which
increasingly relies on incentive compensation for corporate goal achievement.
1996 COMPENSATION COMMITTEE
David T. Cannon
Wayne L. Harvey
Edward L. Miller
The report of the Compensation Committee shall not be deemed incorporated
by any general statement incorporating by reference this proxy statement into
any filing under the Securities Act of 1933, as amended (the "Securities Act"),
or under the Exchange Act, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
19
STOCK PRICE PERFORMANCE GRAPH
The stock price performance graph below 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 the Company specifically incorporates this information by
reference and shall not otherwise be deemed filed under such Acts.
The graph below compares the cumulative total stockholder return of the
Company's Common Stock with the cumulative total return of the NASDAQ National
Market System equity index and Media General's Savings and Loan Industry Group
index since December 30, 1993, when the Company's Common Stock was first
registered under the Exchange Act, through June 30, 1996. The graph assumes
that $100 was invested on December 30, 1993 in the Common Stock and each index
and that all dividends were reinvested. No cash dividends have been declared on
the Company's Common Stock since the Company's formation in September 1993.
Stockholder returns over the indicated period should not be considered
indicative of future stockholder returns.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG QUAKER CITY BANCORP, INC., INDUSTRY INDEX AND BROAD MARKET
PERFORMANCE GRAPH APPEARS HERE
Measurement Period QUAKER CITY INDUSTRY BROAD
(Fiscal Year Covered) BANCORP, INC. INDEX MARKET
- - ------------------- ------------- -------- ------
Measurement Pt-12/30/93 $100 $100 $100
FYE 12/94 $114.67 $105.68 $100.75
FYE 12/95 $122.67 $121.80 $118.17
FYE 12/96 $146.00 $154.78 $148.75
1. Quaker City Bancorp, Inc. returns were calculated based on the closing sale
prices per share of the Common Stock as follows: 12/30/93 (initial trading
day), $9.38; 6/30/94, $10.75; 6/30/95, $11.50; 6/30/96, $13.68.
2. The $7.50 per share initial public offering price of the Company's Common
Stock was not used in calculating the Quaker City Bancorp, Inc. graph
points.
20
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of the Record Date, (i) the name of each
person believed by the Company to be the beneficial owner of more than 5% of the
outstanding Common Stock, (ii) the total number of shares of Common Stock
beneficially owned by each such person and (iii) the percentage of all Common
Stock outstanding held by each such person.
NAME AND ADDRESS OF AMOUNT AND NATURE OF
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS(2)
Common Stock Quaker City Federal Savings 316,642 shares(1) 8.33%
and Loan Association
Employee Stock Ownership
Plan and Trust ("ESOP")
7021 Greenleaf Avenue
Whittier, California
90602
__________________________________
(1) Shares of Common Stock were acquired by the ESOP in the Conversion. A
committee which consists of non-employee members of the Board of
Directors of the Association administers the ESOP (the "ESOP Committee").
An unrelated third party has been appointed as the corporate trustee for
the ESOP ("ESOP Trustee"). The ESOP Committee may instruct the ESOP
Trustee regarding investment of funds contributed to the ESOP. The ESOP
Trustee must vote all allocated shares held in the ESOP in accordance
with the instructions of the participating employees. Under the ESOP,
unallocated shares held in the suspense account will be voted by the ESOP
Trustee in a manner calculated to most accurately reflect the
instructions received from participants regarding the allocated stock so
long as such vote is in accordance with the provisions of the Employee
Retirement Income Security Act of 1974, as amended. As of the Record
Date, 93,150 shares of Common Stock in the ESOP had been allocated, but
not distributed, to participating employees, including 19,865 shares
allocated to executive officers as described in the footnotes to the
Security Ownership of Management table as of the Record Date. As of the
Record Date, 4,208 shares of Common Stock in the ESOP had been
distributed.
(2) As of the Record Date, there were 3,800,600 shares of Common Stock
outstanding.
RELATED PARTY TRANSACTIONS
Section 11 of the Home Owners' Loan Act requires that all loans or
extensions of credit by the Association to executive officers and directors of
the Association, of the Company and of the Company's other subsidiaries
(collectively, "Insiders") or to companies which an Insider controls ("Related
Interests"), must be made on substantially the same terms (including interest
rates and collateral) as, and must follow credit underwriting procedures not
less stringent than, 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 an
Insider or Related Interest in excess of the lesser of (a) $500,000, or (b) the
greater of $25,000 or 5% of the Association's capital and surplus, must be
approved in advance by a majority of the entire Board of Directors of the
Association, with interested directors abstaining from participating directly or
indirectly in the voting. The aggregate loans by the Association to an Insider
and his or her Related Interests generally may not exceed 15% of the
Association's capital, and the aggregate of all loans by the Association to all
of its Insiders and their Related Interests generally may not exceed 100% of the
Association's capital. Additional restrictions apply to loans by the
Association to its executive officers, which generally may not exceed $100,000
with the exception of loans to finance the education of the officer's children,
and loans to finance or refinance the purchase, construction, maintenance or
improvement of the officer's residence.
21
It is the policy of the Association to offer loans to executive officers
and directors on their principal residence and to offer to extend a line of
credit for overdraft protection on a checking account held at the Association.
The Association's policy provides that all loans to its executive officers and
directors shall be made in the ordinary course of business, shall 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
shall not involve more than the normal risk of collectibility or present other
unfavorable features. During fiscal 1996, director Wayne L. Harvey and
executive officer Karen A. Tannheimer had loans from the Association. The
largest amount of Mr. Harvey's indebtedness to the Association during fiscal
1996 was $159,580 and as of June 30, 1996, his loan from the Association had an
outstanding balance of $157,668. The largest amount of Ms. Tannheimer's
indebtedness to the Association during fiscal 1996 was $204,656 and as of June
30, 1996, her loan from the Association had an outstanding balance of $203,282.
Both loans were made by the Association in conformance with the above-stated
policy on loans to executive officers and directors.
In connection with the Conversion of the Association and the commencement
of operations of the Company, the Association and the Company entered into two-
year change in control agreements with executive officers Karen A. Tannheimer
and Robert C. Teeling. The terms of such agreements are the same as those of
the change in control agreements entered into by the Association and the Company
with Messrs. Wilson and Rams and Ms. Hennigan described above under
"COMPENSATION AND OTHER INFORMATION -- Employment Agreements and Change in
Control Arrangements."
As part of the Conversion, an ESOP was established by the Association. The
ESOP borrowed $3,105,000 from the Company to purchase 414,000 shares of Common
Stock of the Company. As of the Record Date, 316,642 shares held by the ESOP
were unallocated to individual participant accounts. Such shares constituted
8.33% of the outstanding Common Stock as of the Record Date. The ESOP loan will
be repaid principally from the Association's discretionary contributions to the
ESOP over a 10-year period. At June 30, 1996, the outstanding balance of the
loan was $2,251,125.
Mr. Miller is a partner of the law firm of Bewley, Lassleben & Miller. The
Company retained such law firm during fiscal 1996 and has continued to retain
the firm in fiscal 1997. The amount of fees paid to the firm in fiscal 1996 did
not exceed five percent of the law firm's gross revenues for the firm's last
full fiscal year.
22
THE COMPANY'S RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Peat Marwick have been the independent certified public accountants for the
Association since 1969 and for the Company since commencement of its business
operations following the Conversion of the Association from mutual to stock form
on December 30, 1993, and have been selected by the Company to continue to serve
as the accountants for the Company for fiscal 1997. Representatives of Peat
Marwick will attend the Annual Meeting with an opportunity to make a statement
if they desire to do so and will be available to respond to appropriate
questions.
STOCKHOLDERS' PROPOSALS
Any stockholder of the Company wishing to have a proposal considered for
inclusion in the Company's proxy solicitation materials relating to the
Company's 1997 annual meeting of stockholders must give notice of such proposal
in writing to the Corporate Secretary of the Company at its principal executive
offices and such notice must be received on or before May 31, 1997. The notice
must comply with Section 6 of Article I of the Company's Bylaws (a copy of which
is available upon request to the Corporate Secretary of the Company), which
section requires that the notice contain a brief description of such proposal
and the reason for conducting such business at the annual meeting, the name and
address, as they appear on the Company's books, of the stockholder making such
proposal, the number of shares of Common Stock beneficially owned by such
stockholder and any material interest of such stockholder in such proposal. The
Board of Directors will review proposals from eligible stockholders which it
receives by that date and will determine whether any such proposal will be
included in its 1997 proxy solicitation materials. An eligible stockholder is
one who upon submission of the proposal is the record or beneficial owner of at
least 1% or $1,000 in market value of securities entitled to vote at the 1997
annual meeting of stockholders, who has held such securities for at least one
year and who shall continue to own such securities through the date on which the
meeting is held.
OTHER MATTERS
At the time of preparation of this Proxy Statement, the Board of Directors
of the Company was not aware of any other matters to be brought before the
Annual Meeting. No eligible stockholder had submitted notice of any proposal 90
days before the date of the Annual Meeting. However, if any other matters are
properly presented for action, in the absence of instructions to the contrary,
it is the intention of the persons named in the enclosed form of proxy to vote,
or refrain from voting, in accordance with their respective best judgment on
such matters.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Exchange Act and the rules promulgated
thereunder and requirements of the National Association of Securities Dealers,
Inc. (the "NASD"), officers and directors of the Company and persons who
beneficially own more than 10% of the Common Stock of the Company are required
to file with the SEC and the NASD and furnish to the Company reports of
ownership and change in ownership with respect to all equity securities of the
Company.
Based solely on its review of the copies of such reports received by it
during or with respect to the fiscal year ended June 30, 1996, and/or written
representations from such reporting persons, the Company believes that all
reports required to be filed by such reporting persons during or with respect to
the fiscal year ended June 30, 1996 were timely filed, except that Mr. McGill
filed one Form 4 late relating to a single sale of Common Stock by a trustee
(other than himself) of a family trust and Mr. Cannon filed one Form 4 late
relating to a single sale of Common Stock obtained under a Company benefit plan.
23
ANNUAL REPORT ON FORM 10-K
The Company's Annual Report to Stockholders for the fiscal year ended June
30, 1996, including audited financial statements, is being mailed to
stockholders along with these proxy materials. This year's Annual Report to
Stockholders includes the Annual Report on Form 10-K as filed with the SEC.
Exhibits to the Annual Report on Form 10-K may be obtained from the Company upon
payment of the Company's reasonable expenses to furnish such exhibits. To
obtain any such exhibits, contact Kathryn Hennigan, Corporate Secretary, Quaker
City Bancorp, Inc., 7021 Greenleaf Avenue, Whittier, California 90602.
By order of the Board of Directors
/s/ Kathryn M. Hennigan
KATHRYN M. HENNIGAN
Corporate Secretary
Whittier, California
September 27, 1996
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. NO POSTAGE
IS REQUIRED IF MAILED IN THE UNITED STATES.
If your shares are held in the name of a brokerage firm, bank nominee or
other institution, only it can vote your shares. Accordingly, please contact
the person responsible for your account and give instructions for your shares to
be voted.
If you have any questions, or have any difficulty voting your shares,
please contact Morrow & Co. by calling 1-800-856-8309.
24
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REVOCABLE PROXY
QUAKER CITY BANCORP, INC.
The undersigned hereby appoints Rick McGill and Dwight L. Wilson, or either
of them, each with full power of substitution, as the lawful proxies of the
undersigned and hereby authorizes such persons to represent and to vote as
designated below all shares of the common stock of Quaker City Bancorp, Inc.
(the "Company") which the undersigned would be entitled to vote if personally
present at the 1996 Annual Meeting of Stockholders of the Company to be held on
November 13, 1996 and at any adjournments or postponements thereof (the "1996
Annual Meeting").
1. ELECTION OF DIRECTORS
[_] FOR all nominees [_] WITHHOLD AUTHORITY to
listed below (except vote for all nominees
as indicated to the listed below
contrary below)
DAVID T. CANNON
DAVID K. LEICHTFUSS
INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that nominee's name here:
- - --------------------------------------------------------------------------------
2. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the 1996 Annual Meeting.
[_] FOR [_] AGAINST [_] ABSTAIN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE PROPOSALS. IMPORTANT--
PLEASE SIGN AND DATE ON OTHER SIDE AND RETURN PROMPTLY. THIS PROXY IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
(Continued on other side)
- - --------------------------------------------------------------------------------
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THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
FOR EACH OF THE PROPOSALS.
The undersigned acknowledges receipt of the Notice of Annual Meeting and
Proxy Statement for the 1996 Annual Meeting.
When signed as attorney, 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.
Whether or not you plan to attend the 1996 Annual Meeting, you are urged to
execute, date and return this proxy, which may be revoked at any time prior to
its use.
Dated:___________, 1996
_______________________
(Signature of
Stockholder)
_______________________
(Signature of
Additional
Stockholder(s))
Please sign your name
exactly as it appears
hereon, date and
return this proxy in
the reply envelope
provided. If you
receive more than one
proxy card, please
sign, date and return
all cards received.
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