SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check Appropriate Box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Exchange Act Rule 14a-11
or 14a-12
SJNB FINANCIAL CORP.
- - - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
SJNB FINANCIAL CORP.
- - - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a(1)(1), 14a-6(j)(2).
/ / $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 transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which the transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
/ / 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 date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
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PROXY STATEMENT 1995
[PASTE-UP SJNB LOGO HERE]
FINANCIAL CORP.
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
-------------------------------
MAY 24, 1995
SJNB FINANCIAL CORP.
April 15, 1995
Dear Shareholder:
You are cordially invited to attend the 1995 Annual Meeting of Shareholders
of SJNB Financial Corp. to be held on May 24, 1995 at 10:00 a.m., at The
Fairmont Hotel, Club Regent Room, 170 South Market Street, San Jose, California.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WHETHER OR
NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO COMPLETE, DATE, SIGN
AND RETURN THE ENCLOSED PROXY IN THE RETURN ENVELOPE PROVIDED.
Sincerely yours,
Robert A. Archer
CHAIRMAN OF THE BOARD
James R. Kenny
PRESIDENT & CHIEF EXECUTIVE OFFICER
SJNB FINANCIAL CORP.
ONE NORTH MARKET STREET
SAN JOSE, CALIFORNIA 95113
(408) 947-7562
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 24, 1995
To the Shareholders of SJNB Financial Corp.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of SJNB
Financial Corp. will be held at The Fairmont Hotel, Club Regent Room, 170 South
Market Street, San Jose, California on May 24, 1995 at 10:00 a.m., for the
following purposes:
1. Electing directors to serve for the ensuing year.
2. Approving the amendment increasing the number of shares available
for options in the SJNB Financial Corp. 1992 Employee Stock Option Plan.
3. Approving the amendment increasing the number of shares available
for options in the SJNB Financial Corp. 1992 Director Stock Option Plan.
4. Ratifying the selection of KPMG Peat Marwick as the Corporation's
independent public accountants for the year ending December 31, 1995.
5. Acting upon such other business as may properly come before the
meeting and any adjournments thereof.
Nominees for directors are listed in the enclosed proxy statement.
The close of business on April 10, 1995 is the record date for the
determination of shareholders entitled to notice of and to vote at the meeting
or adjournments thereof.
Whether or not you plan to attend the meeting, YOU MAY VOTE BY COMPLETING,
SIGNING AND RETURNING THE ENCLOSED PROXY CARD PROMPTLY. You may revoke your
proxy at any time prior to the time it is voted.
By Order of the Board of Directors,
Robert A. Archer
CHAIRMAN OF THE BOARD
April 15, 1995
(Approximate mailing date of proxy materials)
James R. Kenny
PRESIDENT & CHIEF EXECUTIVE OFFICER
PLACE AND TIME OF ANNUAL MEETING:
The Fairmont Hotel
Club Regent Room
170 South Market Street
San Jose, California
May 24, 1995 10:00 a.m.
TABLE OF CONTENTS
PAGE
-----
INTRODUCTION............................................................................................... 1
PURPOSE OF THE MEETING..................................................................................... 1
GENERAL PROXY STATEMENT INFORMATION........................................................................ 2
Revocability of Proxies.................................................................................. 2
Solicitation of Proxies.................................................................................. 2
Outstanding Securities and Voting Rights................................................................. 2
Principal Shareholders................................................................................... 3
Proposals of Shareholders................................................................................ 3
ELECTION OF DIRECTORS...................................................................................... 3
Nominees to the Board of Directors....................................................................... 3
Nominations for Directors................................................................................ 4
Certain Committees of the Board of Directors............................................................. 5
Meetings of the Board of Directors....................................................................... 5
Executive Officers....................................................................................... 6
Security Ownership of Management......................................................................... 7
Executive Compensation and Transactions with Directors and Officers...................................... 9
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934....................................... 10
INCREASING THE NUMBER OF SHARES FOR WHICH OPTIONS MAY BE GRANTED UNDER THE SJNB FINANCIAL CORP. 1992
EMPLOYEE STOCK OPTION PLAN................................................................................ 11
INCREASING THE NUMBER OF SHARES FOR WHICH OPTIONS MAY BE GRANTED UNDER THE SJNB FINANCIAL CORP. 1992
DIRECTOR STOCK OPTION PLAN................................................................................ 15
INDEPENDENT PUBLIC ACCOUNTANTS............................................................................. 18
OTHER BUSINESS............................................................................................. 18
PROXY STATEMENT
OF
SJNB FINANCIAL CORP.
ONE NORTH MARKET STREET
SAN JOSE, CALIFORNIA 95113
(408) 947-7562
ANNUAL MEETING OF SHAREHOLDERS
MAY 24, 1995
INTRODUCTION
These proxy materials are furnished in connection with the solicitation of
proxies by the Board of Directors of SJNB Financial Corp. ("Corporation"), a
California corporation, for use at the Annual Meeting of Shareholders to be held
on May 24, 1995 at 10:00 a.m. at The Fairmont Hotel, Club Regent Room, 170 South
Market Street, San Jose, California, and any adjournment thereof. These proxy
materials were mailed to shareholders on or about April 15, 1995.
PURPOSE OF THE MEETING
The meeting is to be held for the purposes of:
1. Electing fifteen (15) directors (the entire Board of Directors) to
serve until the next annual meeting of shareholders and until their
successors are elected and have qualified.
2. Approving the amendment increasing the number of shares available
for options in the SJNB Financial Corp. 1992 Employee Stock Option Plan.
3. Approving the amendment increasing the number of shares available
for options in the SJNB Financial Corp. 1992 Director Stock Option Plan.
4. Ratifying the selection of KPMG Peat Marwick as the Corporation's
independent public accountants for the year ending December 31, 1995.
5. Acting upon such other business as may properly come before the
meeting and any adjournments thereof.
The date of this Proxy Statement is April 15, 1995.
GENERAL PROXY STATEMENT INFORMATION
REVOCABILITY OF PROXIES
Any shareholder giving the enclosed proxy has the right to revoke it at any
time before it is exercised by filing with the Corporation's Secretary, James R.
Kenny, a written notice of revocation or by presenting at the meeting a duly
executed proxy bearing a later date. A shareholder may also revoke the proxy by
attending the meeting and electing to vote in person, before any vote is taken.
SOLICITATION OF PROXIES
This proxy solicitation is made by the Board of Directors of the Corporation
and the cost of the solicitation is being borne by the Corporation. Solicitation
is being made by this Proxy Statement and may also be made by employees of the
Corporation who may communicate with shareholders or their representatives in
person, by telephone or by additional mailings in connection with proxies. While
there are no present plans to do so, the Corporation may utilize the services of
non-employees in connection with the solicitation of proxies if management
determines that this is appropriate.
OUTSTANDING SECURITIES AND VOTING RIGHTS
The Corporation has one class of securities issued and outstanding,
consisting of 2,365,543 shares of common stock, no par value. Such shares are
held by approximately 1,600 shareholders. All of the shares are voting shares
and entitled to vote at the annual meeting.
Only those shareholders of record of the Corporation's common stock as of
the record date, April 10, 1995, will be entitled to notice of and to vote in
person or by proxy at the meeting or any adjournment thereof, unless a new
record date is set for an adjourned meeting.
Each share of common stock is entitled to one vote at the annual meeting,
except with respect to the election of directors. In elections for directors,
California law provides that a shareholder, or his or her proxy, may cumulate
his or her votes, that is, each shareholder has a number of votes equal to the
number of shares owned by him or her, multiplied by the number of directors to
be elected. A shareholder may cumulate such votes for a single candidate, or
distribute such votes among as many candidates as he or she deems appropriate.
However, a shareholder may cumulate votes only for a candidate or candidates
whose names have been properly placed in nomination prior to the voting, and
only if the shareholder has given notice at the meeting, prior to the voting, of
his or her intention to cumulate his or her votes. See "Nominations for
Directors" herein. If any one shareholder has given such notice, all
shareholders may cumulate their votes for the candidates in nomination. The
proxy holders are given, under the terms of the proxy, discretionary authority
to cumulate votes represented by shares for which they are named proxy.
In the election of directors, the fifteen (15) candidates receiving the
highest number of votes will be elected. Approval of the amendment to the SJNB
Financial Corp. 1992 Employee Stock Option Plan requires the affirmative vote of
the majority of the outstanding shares. Approval of the amendment to the SJNB
Financial Corp. 1992 Director Stock Option Plan and ratification of the
selection of KPMG Peat Marwick as the Corporation's independent public
accountants require the affirmative vote of a majority of the shares represented
at the meeting.
If a shareholder withholds authority to vote for directors on the enclosed
proxy, or attends the meeting, elects to vote in person, but abstains from
voting in the election of directors, that shareholder's shares will not be
counted in determining the candidates receiving the highest number of votes. For
shares present at the meeting in person or by proxy, an abstention in the votes
with respect to the amendments of the stock options plans and the ratification
of the independent public accountant is treated the same as a vote against those
matters. For shares held in street name, if the beneficial holder does not
indicate to the record holder how to vote the shares, the record holder will not
return its proxy with respect to such shares and such shares will not be
considered in determining if a quorum is present at the meeting and will not be
voted at the meeting.
2
If the enclosed proxy is completed in the appropriate spaces, signed, dated
and returned, the proxy will be voted as specified in the proxy. If no
specification is made on an executed proxy, it will be voted FOR the election of
directors nominated by the Board, FOR both amendments of the stock option plans
and FOR the ratification of KPMG Peat Marwick as the Corporation's independent
public accountants.
Management of the Corporation is not aware of any other matters to come
before the meeting, and recommends that the shareholders vote FOR the election
of the directors nominated by the Board, FOR both amendments of the stock option
plans and FOR the ratification of the selection of KPMG Peat Marwick as the
Corporation's independent public accountants.
PRINCIPAL SHAREHOLDERS
Management knows of no person who is the beneficial owner of more than 5% of
the Corporation's outstanding shares.
PROPOSALS OF SHAREHOLDERS
Under certain circumstances, shareholders are entitled to present proposals
at shareholder meetings. For any such proposal to be included in the proxy
statement prepared for next year's annual meeting, the shareholder must submit
the proposal prior to December 18, 1995, in a form that complies with applicable
regulations.
ELECTION OF DIRECTORS
NOMINEES TO THE BOARD OF DIRECTORS
Each of the directors is to be elected to serve for the ensuing year and
until his or her successor is elected and has qualified. The nominees for
director as proposed by the Board are as follows:
FIRST ELECTED PRINCIPAL OCCUPATION
NAME A DIRECTOR(1) AGE DURING THE PAST FIVE YEARS
- - - ---------------------------- ------------- --- ----------------------------------------------------------------
Ray Akamine 1994 49 Vice President of Finance for Mariani Packing Company, a food
processing company located in San Jose, California, from June
1984 to the present.
Robert A. Archer 1982 61 Chairman of the Board of Directors of the Corporation and SJNB
since 1993. President and a principal stockholder of Coast
Counties Truck and Equipment Company, a heavy duty truck
dealership and service facility in San Jose, which he has owned
and operated for more than 30 years.
Albert V. Bruno 1994 50 Professor of Marketing of Santa Clara University where he is
also Associate Dean of the Leavey School of Business. He has
been at Santa Clara University since 1971 and has served as
chairman of the Marketing Department and Acting Dean.
William H. Curtis 1986 59 Sole owner of CRI Properties, a San Jose based real estate
development company, which he founded in 1979.
Rod Diridon 1994 54 Executive Director of the International Institute for Surface
Transportation Policy Studies at the College of Business at San
Jose State University since 1995. Prior to that, served as the
Supervisor of the 4th District of the County of Santa Clara, to
which he was elected in 1974.
Dominic A. Fanelli, Sr. 1986 71 Real estate investment and property management.
3
FIRST ELECTED
A PRINCIPAL OCCUPATION
NAME DIRECTOR (1) AGE DURING THE PAST FIVE YEARS
- - - ---------------------------- ------------- --- ----------------------------------------------------------------
Jack G. Fischer 1982 67 President of Darling & Fischer, Inc. with mortuaries in San
Jose, Campbell and Los Gatos, which he has owned and operated
since 1955; President of Los Gatos Memorial Park.
F. Jack Gorry 1988 61 Private consultant since September 1992; previously he was
President, Chief Executive Officer, director and founder of CXR
Corp., a telecommunications company.
James R. Kenny 1991 50 President, Chief Executive Officer and Secretary of the
Corporation and San Jose National Bank since September 1991;
previously he was a director, President and Chief Operating
Officer of Pacific Western Bancshares and its subsidiary
Pacific Western Bank.
Arthur K. Lund 1982 61 A practicing attorney at law and a member of Rosenblum, Parish &
Isaacs in San Jose. Mr. Lund was previously the Chairman of the
Board from 1983 through 1992.
Louis Oneal 1982 62 A practicing attorney at law and a member of Oneal and Oneal in
San Jose.
Diane P. Rubino 1987 46 President of Hill View Packing Company since 1993. Previous
partner of Valley View Packing since 1977.
Douglas L. Shen 1994 56 A self employed dentist since 1966. His office is located in San
Jose, California.
Gary S. Vandeweghe 1982 56 A practicing attorney at law, specializing in tax law; a member
of Rankin, Luckhardt, Vandeweghe, Landess & Lahde in San Jose
for over twelve years.
John W. Weinhardt 1986 63 President of San Jose Water Company for over 17 years.
<FN>
- - - ------------------------
(1) Includes service as a director of San Jose National Bank prior to the
organization of SJNB Financial Corp. Directors Akamine, Bruno, Diridon and
Shen were directors of Business Bancorp and California Business Bank prior
to the merger.
The enclosed proxy will be voted in favor of the election of the above-named
nominees as directors, unless authority to vote for directors is withheld. If
any of the nominees should be unable or decline to serve, which is not
anticipated, discretionary authority is reserved for the proxy holders to vote
for a substitute, to be designated by the present Board of Directors. In the
event that additional persons are nominated as directors, the proxy holders
intend to vote all the proxies received by them in such manner in accordance
with cumulative voting as will assure the election of as many of the nominees
listed above as possible and, in that event, the specific nominees to be voted
for will be determined by the proxy holders.
NOMINATIONS FOR DIRECTORS
The Corporation's Bylaws provide that nominations for directors may be made
by shareholders, provided that certain informational requirements concerning the
identities of the nominating shareholder and the nominee are complied with in
advance of the meeting. This provision is intended to provide advance notice to
management of any attempt to effect an election contest or a change in control
of the Board of Directors. Specifically, the Bylaws provide that nominations for
directors, other than those made by or on behalf of existing management, must be
made in writing and mailed or delivered to the President of the Corporation, not
less than 14 nor more than 50 days prior to any meeting of shareholders called
for the election of directors, except that if less than 21 days' notice of the
meeting is given,
4
such nomination must be mailed or delivered to the President by the close of
business on the 7th day following the date on which the notice was mailed. The
written nomination must include the following information, to the extent known
by the nominating shareholder: (a) the name and address of each proposed
nominee; (b) the principal occupation of each proposed nominee; (c) the total
number of shares of common stock of the Corporation that will be voted for each
proposed nominee; (d) the name and residence address of the nominating
shareholder; and (e) the number of shares of common stock of the Corporation
owned by the nominating shareholder.
The Bylaws provide that nominations not made in accordance with the above
procedure may, in his discretion, be disregarded by the Chairman of the meeting
and, upon his instructions, the inspectors of election shall disregard all votes
cast for each such nominee.
CERTAIN COMMITTEES OF THE BOARD OF DIRECTORS
The Boards of Directors of the Corporation and its subsidiary, San Jose
National Bank ("the Bank"), have standing Audit, Compensation and Loan and
Investment Committees. The Audit Committee of the Corporation and the Bank is
chaired by Diane P. Rubino and the members are Ray Akamine, Rod Diridon, Dominic
A. Fanelli, Sr., F. Jack Gorry, and John W. Weinhardt. The Audit Committee met
three times in 1994 for the purpose of reviewing the scope of and planning for
the annual audit, and reviewing the results of internal operations audits of the
Bank and the Bank's compliance with consumer laws,
regulatory agency reports and securities reports.
The Compensation Committee is chaired by John W. Weinhardt and the members
are Robert A. Archer, Jack G. Fischer, F. Jack Gorry, Douglas L. Shen, and Gary
S. Vandeweghe. The Compensation Committee met three times in 1994 for the
purpose of setting compensation levels of senior officers and directors, review
and approval of bonus plans and payments, and review and approval of employee
benefit plans, including stock option, insurance and retirement plans. In
addition, it reviews and approves the Corporation's Compensation Policy.
The Loan and Investment Committee is chaired by Dominic A. Fanelli, Sr., and
the members are Ray Akamine, Robert A. Archer, William H. Curtis, James R.
Kenny, Arthur K. Lund, Louis Oneal and Douglas L. Shen. The Loan and Investment
Committee met twelve times in 1994. It is responsible for reviewing the
Corporation's and the Bank's loan and investment policy, approval of loans which
are greater than $1.5 million, review of the allowance for loan losses, and the
review of criticized and nonperforming loans.
MEETINGS OF THE BOARD OF DIRECTORS
The Corporation's Board of Directors held a total of 11 meetings in 1994,
including regular and special meetings. The Board of Directors of the Bank held
a total of 11 meetings in 1994, including regular and special meetings. No
nominee for director of the Corporation, while serving as a director, attended
fewer than 75% of the total number of meetings of the Boards and of the
committees of which he or she was a member, except for Mr. Diridon and Mr.
Vandeweghe.
5
EXECUTIVE OFFICERS
The following are the executive officers of the Corporation and certain
information concerning each of them:
PRINCIPAL OCCUPATION
NAME AND POSITION(S) AGE DURING THE PAST FIVE YEARS
- - - ------------------------------------------------- --- --------------------------------------------------------
James R. Kenny 50 See description under Nominees to Board of Directors.
President, Chief Executive Officer,
Secretary and Director of the Corporation
and the Bank.
Eugene E. Blakeslee 49 Executive Vice President and Chief Financial Officer of
Executive Vice President and the Corporation and the Bank since September 1991;
Chief Financial Officer of the previously Vice President/ Development of California
Corporation and the Bank. Real Estate Management Corp., a property management and
real estate development firm; prior to 1991 was
Executive Vice President and Chief Financial Officer of
Pacific Western Bancshares and its subsidiary, Pacific
Western Bank.
Frederic H. Charpiot 48 Senior Vice President of the Bank since October 1991;
Senior Vice President and Chief Credit prior thereto was Vice President of the Bank.
Officer of the Bank.
Judith Doering-Nielsen 49 Senior Vice President and Senior Lending Officer of the
Senior Vice President and Senior Bank since October 1991; previously Vice President and
Lending Officer of the Bank. Senior Credit Officer of First National Bank of Central
California (formerly Pajaro Valley Bank); prior thereto
Senior Vice President and Manager of Corporate Funding
Group of Pacific Western Bank from August 1989 to
October 1991.
Robert T. Remedios 55 Senior Vice President and Cashier of the Bank since
Senior Vice President and Cashier October 1991; prior thereto was Senior Vice
of the Bank. President/Operations at Pacific Western Bank.
Margo A. Culcasi 48 Senior Vice President of the Bank since February 1992;
Senior Vice President of the Bank. prior thereto was Senior Vice President at Cupertino
National Bank since 1990; and prior thereto was Senior
Vice President at Pacific Western Bank since 1978.
6
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the number of the Corporation's common shares
beneficially owned as of December 31, 1994, by each director of the Corporation,
each executive officer named in the Summary Compensation Table and by the
directors and executive officers of the Corporation and its subsidiary as a
group:
PERCENT OF
OUTSTANDING
POSITIONS WITH THE NUMBER OF SHARES COMMON
CORPORATION BENEFICIALLY OWNED STOCK (1)
------------------------ ------------------ -----------
Ray Akamine Director 9,477 *
Robert A. Archer Chairman of the Board 50,031(2)(3) 1.94%
Albert Bruno Director 15,165 *
William H. Curtis Director 12,317(4) *
Rod Diridon Director 699 *
Dominic A. Fanelli, Sr. Director 12,727(5) *
Jack G. Fischer Director 19,472(6) *
F. Jack Gorry Director 9,248(7) *
James R. Kenny President, Chief 90,817(8) 3.59%
Executive Officer,
Director and Secretary
Arthur K. Lund Director 78,422(9)(10)(11) 3.04%
Louis Oneal Director 79,843(3)(9) 3.12%
Diane P. Rubino Director 12,137(7) *
Douglas L. Shen Director 59,298(12) 2.34%
Gary S. Vandeweghe Director 33,453(3) 1.29%
John W. Weinhardt Director 5,420(7) *
Eugene E. Blakeslee Executive Vice 44,129(13) 1.74%
President, Chief
Financial Officer
Frederic H. Charpiot Senior Vice President 8,378(14) *
Margo A. Culcasi Senior Vice President 3,675(15) *
Judith Doering-Nielsen Senior Vice President 17,045(16) *
Directors and Executive Officers 565,563(18) 22.33%
as a group (20 persons)(17)
<FN>
- - - ------------------------
* Less than 1% of the outstanding common stock.
(1) Based upon 2,365,543 shares outstanding as of March 30, 1995.
(2) Including 4,777 shares owned of record by a trust of which Mr. Archer is a
trustee and beneficiary.
(3) Including 11,140 shares underlying presently exercisable options granted
under the Corporation's Stock Option Plans.
(4) Including 4,408 shares underlying presently exercisable options granted
under the Corporation's Stock Option Plans.
(5) Including 6,520 shares underlying presently exercisable options granted
under the Corporation's Stock Option Plans.
(6) Including 8,140 shares underlying presently exercisable options granted
under the Corporation's Stock Option Plans.
(7) Including 3,000 shares underlying presently exercisable options granted
under the Corporation's Stock Option Plans.
7
(8) Including 40,000 shares underlying presently exercisable options granted
under the Corporation's Stock Option Plans.
(9) Including 51,884 shares owned of record by a trust of which Mr. Lund and
Mr. Oneal are trustees.
(10) Including 3,782 shares owned of record by a trust of which Mr. Lund is the
trustee and beneficiary.
(11) Including 19,408 shares underlying presently exercisable options granted
under the Corporation's Stock Option Plans.
(12) Including 30,816 shares owned of record by a trust of which Dr. Shen is a
trustee and beneficiary.
(13) Including 20,000 shares underlying presently exercisable options granted
under the Corporation's Stock Option Plans.
(14) Including 7,088 shares underlying presently exercisable options granted
under the Corporation's Stock Option Plans.
(15) Including 3,000 shares underlying presently exercisable options granted
under the Corporation's Stock Option Plans.
(16) Including 8,000 shares underlying presently exercisable options granted
under the Corporation's Stock Option Plans.
(17) Including directors and executive officers of the Corporation and its
subsidiary, San Jose National Bank.
(18) Including 166,984 shares underlying presently exercisable options granted
under the Corporation's Stock Option Plans.
8
EXECUTIVE COMPENSATION AND TRANSACTIONS WITH DIRECTORS AND OFFICERS
SUMMARY COMPENSATION TABLE
The following table sets forth the cash compensation paid to or allocated
for the Chief Executive Officer of the Corporation and those other executive
officers whose cash compensation exceeded $100,000 for services rendered in 1993
and 1994.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY (1) BONUS COMPENSATION (2)
- - - ------------------------------------------------------- --------- ----------- --------- -----------------
James R. Kenny 1994 $ 150,000 $ 53,350 $ 4,620
President, Chief Executive Officer and Secretary of 1993 $ 150,000 $ 33,000 $ 4,497
the Corporation and the Bank 1992 $ 150,000 $ 6,058
Eugene E. Blakeslee 1994 $ 100,000 $ 38,000 $ 4,620
Executive Vice President and Chief Financial Officer 1993 $ 100,000 $ 25,000 $ 4,497
of the Corporation and the Bank 1992 $ 100,000 $ 3,923
Frederic H. Charpiot 1994 $ 72,000 $ 28,000 $ 3,670
Senior Vice President and Chief Credit Officer of the 1993 $ 72,000 $ 18,000 $ 2,845
Bank 1992 $ 72,000 $ 2,260
Margo A. Culcasi 1994 $ 75,000 $ 34,224 $ 2,106
Senior Vice President of the Bank
Judy Doering-Nielsen 1994 $ 80,000 $ 28,000 $ 4,620
Senior Vice President and Senior Lending Officer of 1993 $ 82,000 $ 20,000 $ 3,894
the Bank 1992 $ 81,364 $ 990
<FN>
- - - ------------------------
(1) The executive officers received perquisites in addition to their salaries.
The value of such perquisites did not exceed 10% of their salaries. Salary
amounts include compensation deferred at the election of the executive in
year earned.
(2) All other compensation consists of the Bank's contributions to vested and
unvested defined contribution plans.
STOCK OPTION PLANS
The following is certain information concerning the options held by the
executive officers named in the Summary Compensation Table at December 31, 1994
pursuant to the SJNB Financial Corp. Plan (which expired in 1992) and the 1992
Employee Stock Option Plan:
YEAR-END OPTION VALUE TABLE
NUMBER OF SECURITIES
UNDERLYING VALUE OF
UNEXERCISED OPTIONS UNEXERCISED OPTIONS
---------------------------- ----------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------ -------------- ------------ --------------
James R. Kenny 40,000 10,000 $ 100,000 $ 25,000
Eugene E. Blakeslee 20,000 5,000 $ 47,500 $ 11,875
Frederic H. Charpiot 7,176 2,824 $ 19,544 $ 7,006
Margo A. Culcasi 3,000 2,000 $ 5,250 $ 3,500
Judith Doering-Nielsen 8,000 2,000 $ 17,000 $ 4,250
There were no options granted to or exercised by the above executive
officers during 1994.
9
EMPLOYMENT AGREEMENT
Mr. Kenny is employed by the Corporation and Bank pursuant to an employment
agreement providing that he will receive a base salary of $150,000 per year. In
addition, Mr. Kenny is to receive 15% of an officer bonus pool, equaling 10% of
pre-tax earnings, to be established if the Corporation's net earnings before
extraordinary items equal or exceed 1% of average assets. The employment
agreement also provides that Mr. Kenny is to receive $250,000 in term life
insurance coverage. Mr. Kenny is also entitled to severance pay equal to $75,000
in the event he is involuntarily terminated for reasons other than dishonesty or
malfeasance.
COMPENSATION OF DIRECTORS
Beginning in July of 1994, outside director compensation was changed to an
annual retainer of $15,000 for Mr. Archer and $12,000 for other directors,
payable on a monthly basis. In addition, Committee meeting fees were reduced to
$250 per meeting. From January 1994 through June, 1994, non-officer directors of
San Jose National Bank received $500 per Bank Board meeting attended plus a
maximum of $300 for attendance at each meeting of standing committees of SJNB of
which they are a member, except for Robert Archer. Mr. Archer, who served as
Chairman of the Corporation and SJNB, was paid $750 for each Bank Board meeting
attended as well as $250.00 for each committee meeting. Directors of the
Corporation do not now receive additional fees for attendance at the
Corporation's Board meetings.
The Corporation has adopted the 1992 Director Stock Option Plan (the
"Director Plan"), which provides for the grant of options for up to 55,000
shares of stock to directors of the Corporation. The terms of the Director Plan
are discussed below at "Increasing the Number of Shares for Which Options May be
Granted Under the SJNB Financial Corp. 1992 Director Stock Option Plan."
No options have been granted to date under the Director Plan.
TRANSACTIONS WITH DIRECTORS AND OFFICERS
San Jose National Bank has had in the ordinary course of business, and
expects to have in the future, banking transactions with directors, officers,
shareholders and their associates, including transactions with corporations of
which such persons are directors, officers or controlling shareholders. The
transactions involving loans have been and will be entered into with such
persons in the ordinary course of business, on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons, and on terms not involving more than
the normal risk of collectibility or presenting other unfavorable features.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Under the securities laws of the United States, the Corporation's directors,
executive officers and any persons holding more than ten percent of the
Corporation's common stock are required to report their initial ownership of the
Corporation's stock and any subsequent changes in that ownership to the
Securities and Exchange commission. Specific due dates for these reports have
been established and the Corporation is required to disclose in this Proxy
Statement any failure to file by these dates during 1994. All of these filing
requirements were satisfied, except as set forth below.
Robert A. Archer filed one late report covering the sale of 610 shares of
common stock.
Gary S. Vandeweghe filed one late report covering the acquisition of 693
shares and the disposition of 500 shares.
Due to a miscommunication regarding the settlement date, Eugene E. Blakeslee
filed one late report covering the purchase of 1,000 shares of stock.
10
INCREASING THE NUMBER OF SHARES FOR WHICH OPTIONS MAY BE GRANTED UNDER THE SJNB
FINANCIAL CORP. 1992 EMPLOYEE STOCK OPTION PLAN
In 1992, the Board of Directors of the Corporation adopted the SJNB
Financial Corp. 1992 Employee Stock Option Plan (the "Employee Plan"). The
Employee Plan was ratified and approved by the shareholders of the Corporation
at the 1992 annual shareholders' meeting. Since that time, the Employee Plan has
been used by the Corporation and San Jose National Bank (the "Bank") to provide
incentive for employees to enhance the success of the Corporation and the Bank.
The Employee Plan currently provides that options may be granted for up to
135,000 shares of stock. Options are outstanding under this Plan for 51,660
shares. On February 22, 1995, the Board of Directors of the Corporation approved
an amendment to the Employee Plan to increase the number of shares covered by
the Employee Plan from 135,000 to 235,000.
At the meeting, the shareholders are being asked to ratify and approve an
amendment of the Employee Plan to increase the number of shares for which
options may be granted under the Employee Plan from 135,000 to 235,000.
The following describes the provisions of the Employee Plan, both prior to
the proposed amendment and after the amendment.
GENERAL
The purpose of the Employee Plan is to provide a means whereby employees of
the Corporation, the Bank and any other corporation that may become a subsidiary
of the Corporation may be given an opportunity to purchase shares of common
stock of the Corporation. The Employee Plan is intended to advance the interests
of the Corporation and the Bank by encouraging stock ownership on the part of
key employees, by enabling the Corporation and the Bank to secure and retain the
services of highly qualified persons as employees, and by providing such
employees with an additional incentive to make every effort to enhance the
success of the Corporation and the Bank.
The Employee Plan provides for the grant of both non-qualified options and
options which are intended to qualify as "incentive stock options" as defined in
Section 422 of the Internal Revenue Code (the "Code"). The Code provides that no
income is recognized from the grant of an incentive stock option or, as long as
certain requirements are met, from the exercise of an incentive stock option by
the optionee. If the employment requirements are not met, ordinary income will
be recognized at the time of exercise. On the sale of stock acquired through the
exercise of an option, long-term or short-term capital gain will be recognized,
depending upon how long the stock was held. The employer is not allowed a
business expense deduction with respect to an incentive stock option unless
income is recognized by the optionee.
Generally, the grant of an option that does not qualify as an incentive
stock option (a "non-qualified option") does not constitute ordinary income to
the optionee, unless the option has a readily ascertainable fair market value.
When a non-qualified option is exercised, the optionee recognizes income in an
amount equal to the difference between the option price and the value of the
stock at the time of exercise. The employer is allowed a business expense
deduction equal to the amount included in the optionee's income in the
employer's corresponding tax year.
PRINCIPAL FEATURES OF THE EMPLOYEE PLAN
All full-time and part-time employees of the Corporation and any subsidiary
of the Corporation are eligible to be granted options pursuant to the Employee
Plan. At March 7, 1995, 75 individuals were eligible to participate. Directors
who are not employees of the Corporation and/or any subsidiary are not eligible
to participate in the Employee Plan.
The Plan provides that options may be granted to participants by the
Corporation from time to time for 135,000 shares. The shareholders are being
asked at this meeting to ratify an amendment to the Employee Plan to increase
the number of shares for which options may be granted to 235,000. The
11
number of shares for which options may be granted is subject to certain
adjustment provisions described below. When options expire or terminate, the
shares of common stock applicable to any unexercised portions of those options
may again be made subject to options under the Employee Plan if at such time
options may still be granted under the Employee Plan. Shares of common stock
applicable to expired or terminated options under any other plans, such as the
prior plan or the Director Plan, may not be made subject to options under the
Employee Plan.
Options may be granted under the Employee Plan from time to time, until the
termination date of the Employee Plan on March 18, 2002.
No employee may receive options to purchase, in the aggregate, more than 5%
of the outstanding shares of common stock of the Corporation.
The Employee Plan also provides that the aggregate fair market value of the
shares for which an optionee may first exercise incentive stock options in any
calendar year may not exceed $100,000. This limitation on the grant of incentive
stock options does not apply to options granted under the Employee Plan which
are designated as "non-incentive" or "non-qualified" options.
The Employee Plan is administered by the Compensation Committee of the Board
of Directors of the Corporation. All members of the committee must be
"disinterested" in the Employee Plan, as defined in the applicable rules of the
Securities and Exchange Commission. In general, a director is disinterested if
he or she is not eligible to participate in the Employee Plan. The committee has
the authority to determine the persons who will participate and the extent of
their participation, the time or times at which any option will be granted or
exercisable and to interpret the Employee Plan and prescribe, amend and rescind
rules and regulations relating to the Employee Plan. In determining the
participants to whom options are granted, the committee takes into account the
duties of the respective participants, their present and potential contributions
to the success of the Corporation and its subsidiaries, and such other factors
as the committee deems relevant in connection with accomplishing the purposes of
the Employee Plan.
To the extent that options are granted as incentive stock options, the
Employee Plan is administered so as to qualify such options as incentive stock
options.
EXERCISE PRICE AND TERM OF OPTIONS
The option price to be paid upon exercise of an option may not be less than
the fair market value of the Corporation's common stock as determined on the
date the option is granted. The fair market value of the common stock may be
established by the committee by use of any reasonable valuation method, taking
into consideration prices at which shares have recently traded, the number of
shares traded and other relevant factors. The market value of the common stock
on December 31, 1994 was $7.50 per share.
No "incentive stock option," as defined in Section 422 of the Code, may be
granted to any participant who, on the date such option is granted, owns stock
representing more than 10% of the total combined voting power of all classes of
stock of the Corporation, or its parent or subsidiary corporations, if any,
unless the exercise price of such option is equal to at least 110% of the fair
market value of the shares of the Corporation's common stock on the date such
option is granted.
Each option granted under the Employee Plan will expire not more than ten
years from the date the option is granted. Each option may be exercised on such
terms and conditions as the committee determines, but an option may be exercised
only in equal installments as follows: to the extent of 40% of the number of
shares originally covered thereby, at any time after the commencement of the
second year of the term of the option, and to the extent of an additional 20% of
such number of shares, at any time after the commencement of each of the third,
fourth, and fifth years of the term of the option; and such installments will be
cumulative. In no event, however, will the Corporation be required to issue
fractional shares.
12
No option is assignable or transferable otherwise than by will or the laws
of descent and distribution. During the lifetime of an optionee, an option is
exercisable only by the optionee.
Shares purchased pursuant to the exercise of options must, at the time of
exercise, be paid for in full, in cash or common stock that has been owned by
the optionee at least six (6) months prior to the notice. If shares of common
stock are tendered as payment, the shares will be valued at their fair market
value, as determined by the Corporation, on the date of the notice given to the
Corporation by the optionee with respect to such exercise.
TERMINATION OF EMPLOYMENT
Except as stated below with respect to termination of employment "for
cause," in the event that an optionee's employment is terminated his or her
option terminates immediately. The optionee will have the right, however, to
exercise the option within three months from the date of such termination to the
extent he or she was entitled to exercise the same immediately prior to
termination, with certain exceptions in the case of disability or death.
If an employee-optionee's employment is terminated for cause, including such
causes as willful breach of duty by the employee or habitual neglect of duty,
his or her right to exercise any option immediately and automatically
terminates, unless the committee decides, in its sole and absolute discretion,
to reinstate the option as described below.
If the committee determines that an optionee's option is to be reinstated as
provided above, written notice of such determination will be sent to the
optionee, at his or her last known address. Upon receipt of such written notice,
the optionee will have the right to exercise the option, to the extent that he
or she was entitled to exercise the same immediately prior to termination, at
any time during the period from receipt of such written notice to a day three
months from the day of termination.
ADDITIONAL TERMS
In the event that the outstanding shares of common stock of the Corporation
are increased or decreased or changed into or exchanged for a different number
or kind of shares or other securities of the Corporation or of another
corporation, by reason of reorganization, merger, consolidation,
recapitalization, reclassification, stock split, combination of shares, dividend
payable in common stock, acquisition, or the like, appropriate adjustment will
be made by the committee in the number and kind of shares for the purchase of
which options may be granted under the Employee Plan. In addition, the committee
will make appropriate adjustment in the number and kind of shares as to which
outstanding options shall be exercisable, so that any participant's
proportionate interest in the Corporation by reason of rights under any
unexercised portions of such options will be maintained. Such adjustment in
outstanding options will be made without change in the total price applicable to
the unexercised portion of the options and with a corresponding adjustment in
the option price per share.
In the event of a dissolution or liquidation of the Corporation, a merger,
consolidation, acquisition, or other reorganization involving the Corporation or
a principal subsidiary, in which the Corporation or such principal subsidiary is
not the surviving or resulting corporation, or a sale by the Corporation of all
or substantially all of its assets, the committee will cause the termination of
all options outstanding under the Employee Plan as of the effective date of such
transaction, provided, however, that not less than thirty (30) days written
notice of the expected effective date of such transaction will be given to each
optionee, and each optionee will have the right, on the effective date of such
termination, to exercise his or her option as to all or any part of the shares
covered thereby, including shares as to which such option would not otherwise be
exercisable. In any event, the surviving or resulting corporation may, in its
absolute and uncontrolled discretion, tender options to purchase its shares on
its terms and conditions.
In the event of a change in control of the Corporation, which is defined for
this purpose as the acquisition by a person, entity or group of 25% or more of
the Corporation's outstanding stock, each optionee will have the right,
commencing fifteen days before the expected effective date of such acquisition,
to exercise any outstanding option as to all or any part of the shares covered
thereby, including shares as to which such option has not yet become
exercisable, but subject to all other terms
13
and conditions of such option. The Corporation must cause not less than 15 days
written notice of the expected effective date of such transaction to be given to
each optionee. If no effective date is established prior to the acquisition of
control, options will be exercisable as to all shares covered thereby, including
shares as to which such option had not yet become exercisable, commencing on the
actual effective date of such acquisition.
The proceeds from the sale of common stock pursuant to the exercise of
options will be used for the Corporation's general corporate purposes.
TERMINATION OF THE EMPLOYEE PLAN AND AMENDMENTS
The Employee Plan will terminate on March 18, 2002. The Employee Plan may be
terminated at any time, or from time to time may be modified or amended, by the
shareholders of the Corporation, upon the written consent or affirmative vote of
the holders of at least a majority of the outstanding shares.
In addition, the Board of Directors may terminate the Employee Plan at any
time and from time to time modify or amend the Employee Plan in such respects as
it deems advisable, to conform to any requirements of the laws and regulations
relating to the Corporation, or in any other respect. However, no such action of
the Board of Directors may, without the approval of the shareholders, alter the
provisions of the Employee Plan so as to (a) increase, other than pursuant to
the adjustment provisions of the Employee Plan, the maximum number of shares as
to which options may be granted under the Employee Plan; (b) add a new class of
participants; (c) decrease the minimum exercise price; (d) extend the term of
the Employee Plan or the maximum term of options granted under the Employee
Plan; or (e) withdraw the administration of the Employee Plan from the
committee.
OPTIONS GRANTED PURSUANT TO THE EMPLOYEE PLAN
To date, options to purchase a total of 55,910 shares of the Corporation's
common stock have been granted pursuant to the Employee Plan. The following
table shows the options granted to date under the Employee Plan to each person
named in the Executive Compensation Table; all executive officers as a group;
each other employee who has received 5% or more of the options granted under the
Employee Plan and all non-executive officers and employees as a group.
EMPLOYEE PLAN BENEFITS
NO. OF
NAME AND POSITION SHARES (1)
- - - ---------------------------------------------------------------------------------- ----------
Frederic H. Charpiot, Senior Vice President 4,560
Margo A. Culcasi, Senior Vice President 5,000
Executive Officers as a Group 9,560
Laura A. Graves, Vice President 4,500
Richard E. Hagarty, Vice President 5,000
Emily V. Ruvalcaba, Vice President 5,000
Steve L. Snarr, Vice President 5,000
Non-Executive Officers and Employees as a Group 46,350
<FN>
- - - ------------------------
(1) All options have been granted with exercise prices equal to the fair market
value of the Corporation's common stock as of the time of the grant.
The options that may be granted under the Employee Plan in the future have
not yet been determined.
REQUIRED APPROVAL
The favorable vote of a majority of the Corporation's outstanding shares is
required for approval of the proposed amendment of the Employee Plan to increase
the number of shares for which options may be granted under the Employee Plan
from 135,000 to 235,000. The IRS requires this approval for
14
qualified stock option plans of this type. The Board of Directors recommends
that the shareholders vote FOR the amendment of the Employee Plan and, if the
enclosed proxy is executed and returned, it will be voted in favor of the
amendment, unless otherwise indicated.
INCREASING THE NUMBER OF SHARES FOR WHICH OPTIONS MAY BE GRANTED UNDER THE SJNB
FINANCIAL CORP. 1992 DIRECTOR STOCK OPTION PLAN
In 1992, the Board of Directors of the Corporation adopted the SJNB
Financial Corp. 1992 Director Stock Option Plan (the "Director Plan"). The
Director Plan was ratified and approved by the shareholders of the Corporation
at the 1992 annual shareholders' meeting. The Director Plan provides specific
incentive to the Board of Directors of the Corporation and the Bank to increase
the return on equity of the Corporation, as described below.
The Director Plan currently provides that options may be granted for up to
55,000 shares of stock. No options have been granted under the Director Plan. On
February 22, 1995, the Board of Directors of the Corporation approved an
amendment to the Director Plan to increase the number of shares covered by the
Director Plan from 55,000 to 255,000.
At the meeting, the shareholders are being asked to ratify and approve an
amendment of the Director Plan to increase the number of shares for which
options may be granted under the Director Plan from 55,000 to 255,000.
The following describes the provisions of the Director Plan, both prior to
the proposed amendment and after the amendment.
GENERAL
The purpose of the Director Plan is to provide a means whereby directors of
the Corporation, the Bank or other corporations which are or may hereafter
become subsidiaries of the Corporation may be given an opportunity to purchase
shares of common stock of the Corporation. The Director Plan is intended to
advance the interests of the Corporation and the Bank by encouraging stock
ownership on the part of directors, by enabling the Corporation and the Bank to
recruit and retain the services of highly qualified persons as directors, by
providing such directors with an additional incentive to make every effort to
enhance the success of the Corporation and the Bank, and by providing a means
whereby directors may be compensated for significant contributions to the
success of the Corporation and the Bank.
Options granted under the Director Plan are not intended to qualify as
"incentive stock options" as defined in Section 422 of the Code. Generally, the
grant of a non-qualified option does not constitute ordinary income to the
optionee, unless the option has a readily ascertainable fair market value. When
a non-qualified option is exercised, the optionee recognizes income in an amount
equal to the difference between the option price and the value of the stock at
the time of exercise. The Corporation is allowed a business expense deduction
equal to the amount included in the optionee's income in the Corporation's
corresponding tax year.
PRINCIPAL FEATURES OF THE DIRECTOR PLAN
All directors of the Corporation or any subsidiary of the Corporation,
including those who are also employees of the Corporation or any subsidiary, are
eligible to be granted options under the Director Plan. At March 7, 1995, 15
individuals were eligible to participate.
Options may be granted under the Director Plan, under the conditions
specified below, for up to 55,000 shares. The shareholders are being asked at
this meeting to ratify an amendment to the Director Plan to increase the number
of shares for which options may be granted to 255,000. The number of shares for
which options may be granted is subject to certain adjustment provisions
described below. When options expire or terminate, the shares of common stock
applicable to any unexercised portions of those options may again be made
subject to options under the Director Plan if at such time options
15
may still be granted under the Director Plan. Shares of common stock applicable
to expired or terminated options under any other plans, such as the prior plan
or the Employee Plan, may not be made subject to options under the Director
Plan.
The Director Plan provides that options will be granted to participants
pursuant to the formula set forth below, so long as shares are available under
the Director Plan but not later than March 18, 2002. If for a fiscal year the
Corporation's net income before extraordinary items equals or exceeds 13% of its
average shareholders' equity for such year, as calculated from financial
statements audited by the Corporation's independent certified public
accountants, each person who serves as a director of the Corporation and/or a
subsidiary on the date of the meeting of the Board of Directors of the
Corporation held in the following February will receive an option for 2,000
shares of common stock on the date of such meeting. If for such prior fiscal
year the Corporation's earnings were less than 13% of average equity, no options
will be granted under the Director Plan.
The Director Plan is administered by a committee of the Board of Directors
of the Corporation. The committee has the authority to interpret the Director
Plan and prescribe, amend and rescind rules and regulations relating to the
Director Plan.
EXERCISE PRICE AND TERM OF OPTIONS
The option price to be paid upon exercise of an option will be equal to the
fair market value of the Corporation's common stock as determined on the date
the option is granted. The fair market value of the common stock may be
established by the committee by use of any reasonable valuation method, taking
into consideration prices at which shares have recently traded, the number of
shares traded and other relevant factors. The market price of the common stock
of December 31, 1994 was $7.50 per share.
Each option granted under the Director Plan will expire ten years from the
date the option is granted, unless terminated earlier by its terms. Each option
may be exercised only in equal installments as follows: to the extent of 40% of
the number of shares originally covered thereby, at any time after the
commencement of the second year of the term of the option, and to the extent of
an additional 20% of such number of shares, at any time after the commencement
of each of the third, fourth, and fifth years of the term of the option; and
such installments will be cumulative. In no event, however, will the Corporation
be required to issue fractional shares.
No option is assignable or transferable otherwise than by will or the laws
of descent and distribution. During the lifetime of an optionee, an option is
exercisable only by the optionee.
Shares purchased pursuant to the exercise of options must, at the time of
exercise, be paid for in full, in cash or common stock that has been owned by
the optionee at least six (6) months prior to the notice. If shares of common
stock are tendered as payment, the shares will be valued at their fair market
value, as determined by the Corporation, on the date of the notice given to the
Corporation by the optionee with respect to such exercise.
TERMINATION OF SERVICE AS A DIRECTOR AND EMPLOYMENT
Except as stated below with respect to termination of service as a director
or employment for certain reasons, in the event that an optionee is no longer a
director of the Corporation or one of its subsidiaries (and, in the case of an
optionee who was also an employee, no longer an employee of the Corporation or a
subsidiary), his or her option will terminate immediately. The optionee will
have the right, however, to exercise the option, at any time within three months
from the day he or she ceases to be a director or employee to the extent that he
or she was entitled to exercise the same immediately prior to such day, with
certain exceptions in the case of disability or death.
If a director's service as a director is terminated pursuant to Section 302
of the California General Corporation Law (with respect to removal for cause),
pursuant to Section 304 of the California General Corporation Law (with respect
to removal by shareholders' suit in case of fraudulent or dishonest acts or
gross abuse of authority or discretion with reference to the corporation), or if
the Office of the Comptroller
16
of the Currency or other supervisory authority exercises its cease and desist
powers to remove a director from office, and such optionee's employment, if any,
with the Corporation or any of the subsidiaries has also been or is also
terminated, the right to exercise any option granted under the Director Plan
immediately and automatically terminates, unless the committee decides, in its
sole and absolute discretion, to reinstate the option as described below.
In addition to the above automatic termination of an option in certain
cases, if the employment of an optionee who is an employee is terminated for
cause, including such causes as willful breach of duty by the employee during
the course of his or her employment or habitual neglect of duty, and such
optionee is also no longer a director of the Corporation or any of the
subsidiaries, the right to exercise any option granted under the Director Plan
immediately and automatically terminates, unless the committee decides, in its
sole and absolute discretion, to reinstate the option as described below.
If the committee determines that the optionee's option is to be reinstated,
written notice of such determination will be sent to the optionee, at his or her
last known address. Upon receipt of such written notice, the optionee has the
right to exercise his or her option, to the extent that he or she was entitled
to exercise the same immediately prior to termination, at any time during the
period from receipt of said written notice to a day three months from the day of
termination.
TERMINATION OF THE DIRECTOR PLAN AND AMENDMENTS
The Director Plan will terminate on March 18, 2002. The Director Plan may be
terminated at any time, or from time to time may be modified or amended, by the
shareholders of the Corporation, upon the written consent or affirmative vote of
the holders of at least a majority of the outstanding shares.
In addition, the Board of Directors may terminate the Director Plan at any
time and from time to time modify or amend the Director Plan in such respects as
it deems advisable, to conform to any requirements of the laws and regulations
relating to the Corporation, or in any other respect. However, no such action of
the Board of Directors may, without the approval of the shareholders, alter the
provisions of the Director Plan so as to (a) increase, other than pursuant to
the adjustment provisions of the Director Plan, the maximum number of shares as
to which options may be granted under the Director Plan; (b) add a new class of
participants; (c) decrease the minimum exercise price; (d) extend the term of
the Director Plan or the maximum term of options granted under the Director
Plan; or (e) withdraw the administration of the Director Plan from the
committee. Also, the Board may not amend the Director Plan provisions that
specify the amount, timing and terms of the grant of options under the Plan more
than once every six months, other than to comport with changes in the Code, the
Employee Retirement Income Security Act or the rules thereunder.
ADDITIONAL TERMS
The additional terms of the Director Plan are the same as the terms
described under "INCREASING THE NUMBER OF SHARES FOR WHICH OPTIONS MAY BE
GRANTED UNDER THE SJNB FINANCIAL CORP. 1992 EMPLOYEE STOCK OPTION PLAN --
Additional Terms."
OPTIONS GRANTED PURSUANT TO THE DIRECTOR PLAN
Options have not been granted under the Director Plan, and may not be
granted except under the formula described above. Directors have in the past
received options under the Corporation's prior 1982 stock option plan, but that
plan has now expired and options may no longer be granted under that plan.
REQUIRED APPROVAL
The favorable vote of a majority of the shares represented at the meeting is
required for approval of the proposed amendment to the Director Plan to increase
the number of shares for which options may be granted under the Director Plan
from 55,000 to 255,000. The Board of Directors recommends that the shareholders
vote FOR the amendment of the Director Plan and, if the enclosed proxy is
executed and returned, it will be voted in favor of the amendment, unless
otherwise indicated.
17
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected KPMG Peat Marwick to serve as
independent public accountants for the Corporation and its subsidiary for the
year ending December 31, 1995, subject to the approval of the shareholders. KPMG
Peat Marwick has informed the Corporation that it has had no connection during
the past three years with the Corporation or its subsidiaries in the capacity of
promoter, underwriter, voting trustee, director or employee.
In recognition of the important role of the independent public accountants,
the Board of Directors has determined that its selection of the independent
public accountants should be submitted to the shareholders for review and
ratification.
In the event the appointment is not ratified by the shareholders, the
adverse vote will be deemed to be an indication to the Board of Directors that
it should consider selecting other independent public accountants for 1995.
Because of the difficulty and expense of making any substitution of accounting
firms after the beginning of the current year, it is the intention of the Board
of Directors that the appointment of KPMG Peat Marwick for the year 1995 will
stand unless for other reasons the Board of Directors deems it necessary or
appropriate to make a change. The Board of Directors also retains the power to
appoint another independent public accounting firm to replace an accounting firm
ratified by the shareholders in the event the Board of Directors determines that
the interests of the Corporation require such a change.
It is anticipated that one or more representatives of KPMG Peat Marwick will
be present at the annual meeting and will have an opportunity to make a
statement and to respond to appropriate questions.
The favorable vote of a majority of the shares represented at the meeting is
required for ratification of KPMG Peat Marwick as the Corporation's independent
public accountants. The Board of Directors recommends that the shareholders vote
FOR the ratification of the selection of KPMG Peat Marwick to serve as
independent public accountants and, if the enclosed proxy is executed and
returned, it will be voted in favor of the ratification unless otherwise
indicated.
OTHER BUSINESS
If any other matters come before the meeting, not referred to in this Proxy
Statement, including matters incident to the conduct of the meeting, the proxy
holders will vote the shares represented by proxies in accordance with their
best judgment. Management is not aware of any other business to come before the
meeting and, as of the date of preparation of this Proxy Statement, no
shareholder has submitted to management any proposal to be acted upon at the
meeting.
18
SJNB Financial Corp. and Subsidiary
[Paste-up Logo]
San Jose National Bank
One North Market Street, San Jose, California 95113 - 408/947-7562
Member FDIC and Federal Reserve Bank
M
SJNB FINANCIAL CORP.
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 24, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of common stock acknowledges receipt of the Notice
of Annual Meeting of Shareholders of SJNB Financial Corp., a California
corporation (the "Company"), dated April 15, 1995, and revoking any proxy
heretofore given, hereby constitutes and appoints Dominic A. Fanelli, Sr., Diane
P. Rubio and F. Jack Gorry, or any of them, with full power of substitution, as
attorney and proxy to appear and vote all of the shares of common stock of the
Company standing in the name of the undersigned which the undersigned could vote
if personally present and acting at the Annual Meeting of the Shareholders of
the Company to be held at San Jose, California, on May 24, 1995 at 10:00 a.m.
local time or at any adjournments thereof, upon the following items as set forth
in the Notice of Meeting and more fully described in the Proxy Statement.
ADDRESS CHANGE/COMMENTS
IMPORTANT: PLEASE DATE AND SIGN ON REVERSE SIDE
/SEE REVERSE SIDE/
/X/PLEASE MARK YOUR CHOICES LIKE THIS
-----------
COMMON
1. Election of Directors. To vote for the election of the following persons as
directors of the Company, to serve until the next annual meeting:
Ray S. Akamine Robert A. Archer Albert V. Bruno
William H. Curtis Rod Diridon Dominic A. Fanelli, Sr.
Jack G. Fischer F. Jack Gorry James R. Kenny
Arthur K. Lund Louis Oneal Diane P. Rubino
Douglas L. Shen Gary S. Vandeweghe John W. Weinhardt
(Instructions: To withhold a vote for one or more nominees, strike a line
through that nominee's name. To vote for all nominees except one whose name is
struck, check "FOR." To vote against all nominees named above, check
"AGAINST.")
FOR AGAINST ABSTAIN
/ / / / / /
2. Amendment to Employee Stock Option Plan. Approval of the amendment
increasing the number of shares available for options in the SJNB Financial
Corp. 1992 Employee Stock Option Plan.
FOR AGAINST ABSTAIN
/ / / / / /
3. Amendment to Director Stock Option Plan. Approval of the amendment
increasing the number of shares available for options in the SJNB Financial
Corp. 1992 Director Stock Option Plan.
FOR AGAINST ABSTAIN
/ / / / / /
4. Ratification of Accountants. To ratify the selection of KPMG Peat Marwick
as independent certified public accountants for the Company for 1995.
FOR AGAINST ABSTAIN
/ / / / / /
5. Other Business. The proxies are authorized to vote in their discretion on
such other matters as may properly come before the meeting or any
adjournment thereof.
THE PROXY IS SOLICITED BY, AND ON BEHALF OF, THE BOARD OF DIRECTORS AND MAY
BE REVOKED PRIOR TO ITS EXERCISE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION AS DIRECTORS OF
THE NOMINEES NAMED ABOVE AND FOR PROPOSALS 2, 3 AND 4. THE PROXY, WHEN PROPERLY
EXECUTED AND RETURNED TO SJNB FINANCIAL CORP., WILL BE VOTED IN THE MANNER
DIRECTED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION AS
DIRECTORS OF THE NOMINEES NAMED ABOVE AND FOR PROPOSALS 2, 3 AND 4. IF OTHER
BUSINESS IS PRESENTED, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE BEST
JUDGMENT OF THE PROXIES.
- - - ------------------------------------------------------------
(Signature)
- - - ------------------------------------------------------------
(Signature)
Date: ____________________, 1995
I/We do ____ or do not ____ expect to attend this meeting.
Please sign exactly as your name(s) appear(s). When signing as attorney,
executor, administrator, trustee, officer, partner, or guardian, please give
full title. If more than one trustee, all should sign. Whether or not you plan
to attend this meeting, please sign and return this proxy promptly in the
enclosed postage-paid envelope.
To assure a quorum, you are urged to date and sign the Proxy and mail it
promptly in the enclosed envelope, which requires no additional postage if
mailed in the United States or Canada.
PLEASE COMPLETE, SIGN AND DATE THIS PROXY AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.