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 Section 240.14a-11(c) or Section
240.14a-12
SJNB FINANCIAL CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
SJNB FINANCIAL CORP.
- --------------------------------------------------------------------------------
(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), 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 transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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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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4) Date Filed:
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PROXY STATEMENT 1996
[SJNB FINANCIAL CORP. LOGO]
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
-------------------------------
MAY 22, 1996
[SJNB LOGO]
April 15, 1996
Dear Shareholder:
You are cordially invited to attend the 1996 Annual Meeting of Shareholders
of SJNB Financial Corp. to be held on May 22, 1996 at 10:00 a.m., at The San
Jose Hilton, Santa Clara Room, 300 Almaden Boulevard, 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. THE BOARD OF
DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE PROPOSALS ON THE PROXY.
Sincerely yours,
/s/ Robert A. Archer
- -------------------------------------------
Robert A. Archer
CHAIRMAN OF THE BOARD
/s/ James R. Kenny
- -------------------------------------------
James R. Kenny
PRESIDENT & CHIEF EXECUTIVE OFFICER
One North Market Street
San Jose, California 95113
Phone: (408) 947-7562
Fax: (408) 947-0362
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 22, 1996
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 San Jose Hilton, Santa Clara Room, 300
Almaden Boulevard, San Jose, California on May 22, 1996 at 10:00 a.m., for the
following purposes:
1. To elect the following thirteen directors of the Corporation to
serve until the next Annual Meeting of Shareholders and until their
respective successors shall be elected and qualified:
Ray Akamine
Robert A. Archer
Albert V. Bruno
Rod Diridon
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
2. To approve the adoption of the 1996 Stock Option Plan of SJNB
Financial Corp.
3. To ratify the appointment of KPMG Peat Marwick as the Corporation's
independent public accountants for the year ending December 31, 1996.
4. To consider and transact such other business as may properly come
before the Annual Meeting.
The close of business on April 5, 1996 is the record date for the
determination of shareholders entitled to notice of and to vote at the Annual
Meeting or any adjournments thereof.
Whether or not you plan to attend the Annual Meeting, YOU MAY VOTE BY
COMPLETING, SIGNING AND RETURNING THE ENCLOSED PROXY PROMPTLY. Any shareholder
present at the Annual Meeting may vote personally on all matters brought before
the Annual Meeting, in which event your proxy will not be used.
By Order of the Board of Directors,
/s/ Robert A. Archer
- -------------------------------------------
Robert A. Archer
CHAIRMAN OF THE BOARD
/s/ James R. Kenny
- -------------------------------------------
James R. Kenny
PRESIDENT & CHIEF EXECUTIVE OFFICER
April 15, 1996
(Approximate mailing date of proxy materials)
TABLE OF CONTENTS
PAGE
----
INTRODUCTION.......................................................... 1
GENERAL INFORMATION................................................... 1
Revocability of Proxies............................................. 1
Solicitation of Proxies............................................. 1
Outstanding Securities and Voting Rights............................ 1
Proposals of Shareholders........................................... 2
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.................................. 6
Executive Officers.................................................. 6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT........ 7
EXECUTIVE COMPENSATION AND TRANSACTIONS WITH DIRECTORS AND OFFICERS... 9
Summary Compensation Table.......................................... 9
Stock Option Plans.................................................. 10
Employment Agreements............................................... 10
Compensation of Directors........................................... 11
Transactions with Directors and Officers............................ 11
Compliance with Section 16(a) of the Securities Exchange Act of
1934............................................................... 11
APPROVAL OF THE ADOPTION OF THE 1996 STOCK OPTION PLAN................ 12
INDEPENDENT PUBLIC ACCOUNTANTS........................................ 14
ANNUAL REPORT ON FORM 10-KSB.......................................... 14
APPENDIX A-1996 STOCK OPTION PLAN OF SJNB FINANCIAL CORP.
PROXY STATEMENT
OF
SJNB FINANCIAL CORP.
ONE NORTH MARKET STREET
SAN JOSE, CALIFORNIA 95113
(408) 947-7562
ANNUAL MEETING OF SHAREHOLDERS
MAY 22, 1996
INTRODUCTION
These proxy materials are furnished in connection with the solicitation of
proxies by the Board of Directors of SJNB Financial Corp. (the "Corporation"), a
California corporation, for use at the Annual Meeting of Shareholders to be held
on May 22, 1996 at 10:00 a.m. at The San Jose Hilton, Santa Clara Room, 300
Almaden Boulevard, San Jose, California, and any postponements or adjournments
thereof (the "Meeting"). These proxy materials were mailed to shareholders on or
about April 15, 1996.
GENERAL INFORMATION
REVOCABILITY OF PROXIES
A proxy for voting your shares at the Meeting is enclosed. 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 a duly executed proxy bearing a later date. A
shareholder may also revoke a proxy by attending the Meeting and advising the
Chairman of his or her election to vote in person.
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. The Corporation has retained the
services of Skinner & Company to assist in the solicitation of proxies at a cost
not to exceed $3,500 plus reasonable out-of-pocket expenses.
OUTSTANDING SECURITIES AND VOTING RIGHTS
The Corporation has one class of securities issued and outstanding,
consisting of shares of common stock, no par value. Such shares are held by
approximately 1,600 shareholders.
Only those shareholders of record of the Corporation's common stock as of
the record date, April 5, 1996, 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. As of the record date, 2,428,857
shares of the Corporation's common stock were outstanding.
Each share of common stock is entitled to one vote at the Meeting, except
that shareholders may have cumulative voting rights 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. Under
cumulative voting rules, each shareholder is entitled to 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 cast 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. See "Nominations for Directors" herein. Cumulative voting may be used
only if a shareholder has given notice at the Meeting, prior to the voting, of
his or her intention to cumulate his or her votes. If any one shareholder has
given such notice, all shareholders may cumulate their votes for the candidates
in nomination. The Board of Directors does not, at this time, intend to give
such notice or to cumulate the votes it may hold pursuant to the proxies
solicited herein unless the required notice by a shareholder is given, in which
event votes represented by proxies
delivered pursuant to this Proxy Statement may be cumulated in the discretion of
the proxy holders, in accordance with the recommendations of the Board of
Directors. Therefore, discretionary authority to cumulate votes in such event is
solicited in this Proxy Statement.
In the election of directors, the thirteen (13) candidates receiving the
highest number of votes will be elected whether or not votes are cumulated.
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 with respect
to the approval of the Corporation's 1996 Stock Option Plan and the ratification
of the independent public accountants is treated the same as a vote against
those matters. Broker non-votes (shares as to which brokerage firms have not
received voting instructions from their clients and therefore do not have the
authority to vote the shares at the Meeting) will not be considered in
determining if a quorum is present at the Meeting and will not be voted at the
Meeting.
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 and FOR the approval of the Corporation's 1996
Stock Option Plan and FOR the ratification of KPMG Peat Marwick as the
Corporation's independent public accountants.
The proxy also confers discretionary authority to vote the shares
represented thereby on any matter that was not known at the time this Proxy
Statement was mailed which may properly be presented for action at the Meeting
and may include: approval of minutes of the prior annual meeting which will not
constitute ratification of the actions taken at such meeting; action with
respect to procedural matters pertaining to the conduct of the Meeting; and
election of any person to any office for which a bona fide nominee is named
herein if such nominee is unable to serve or for good cause will not serve.
Management of the Corporation is not aware of any other matters to come before
the Meeting. If, however, any other matters of which the Board is not now aware
are properly presented for action, it is the intention of the proxy holders
named in the enclosed proxy to vote such proxy on such matters in accordance
with their best business judgment.
The Board of Directors recommends that the shareholders vote FOR the
election of the directors nominated by the Board and FOR the approval of the
Corporation's 1996 Stock Option Plan and FOR the ratification of the selection
of KPMG Peat Marwick as the Corporation's independent public accountants.
PROPOSALS OF SHAREHOLDERS
Under certain circumstances, shareholders are entitled to present proposals
at shareholder meetings. For any such proposal to be considered for inclusion in
the proxy statement prepared for next year's Annual Meeting, the proposal must
be received at the Corporation's executive offices at One North Market Street,
San Jose, California, 95113 prior to December 10, 1996.
2
ELECTION OF DIRECTORS
NOMINEES TO THE BOARD OF DIRECTORS
The Bylaws of the Corporation provide that the number of directors of the
Corporation shall be no less than nine and no more than seventeen, with the
exact number within such range to be fixed by amendment of the Bylaws adopted by
the shareholders or by the Board of Directors. The number of directors is
presently fixed at thirteen.
The persons names below, all of whom are currently members of the
Corporation's Board of Directors, have been nominated for election as directors
to serve until the next Annual Meeting and until their successors are duly
elected and qualified. Votes will be cast in such a way as to effect the
election of all nominees or as many nominees as possible in the event of
cumulative voting. If any nominee should become unable or unwilling to serve as
a director, the proxies will be voted for such substitute nominee as shall be
designated by the Board of Directors. The Board of Directors presently has no
knowledge that any of the nominees will be unable or unwilling to serve. The
thirteen nominees receiving the highest number of votes at the Meeting shall be
elected.
The following table sets forth certain information with respect to those
persons nominated by the Board of Directors for election as directors, which
information is based on data furnished by each such nominee. Each member of the
Corporation's Board of Directors also serves as a director of San Jose National
Bank ("SJNB").
FIRST
ELECTED A PRINCIPAL OCCUPATION
NAME DIRECTOR (1) AGE DURING THE PAST FIVE YEARS
- ------------------------- ------------ --- --------------------------------------------------
Ray Akamine 1994 50 Chief Financial Officer of Consolidated Factors in
Monterey, California, since November 1995. Prior
to that, he served as Vice President of Finance
for Mariani Packing Company, a food processing
company located in San Jose, California, from
June 1984 to November 1994.
Robert A. Archer 1982 62 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 51 Professor of Marketing at 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.
Rod Diridon 1994 55 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, he served as the
Supervisor of the 4th District of the County of
Santa Clara, to which he was elected in 1974.
Jack G. Fischer 1982 68 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.
3
FIRST
ELECTED A PRINCIPAL OCCUPATION
NAME DIRECTOR (1) AGE DURING THE PAST FIVE YEARS
- ------------------------- ------------ --- --------------------------------------------------
F. Jack Gorry 1988 62 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 51 President, Chief Executive Officer and Secretary
of the Corporation and SJNB 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 62 A practicing attorney at law and a member of
Rosenblum, Parish & Isaacs in San Jose. Mr. Lund
was previously the Chairman of the Board of the
Corporation from 1983 through 1992.
Louis Oneal 1982 63 A practicing attorney at law and a member of Oneal
and Oneal in San Jose.
Diane P. Rubino 1987 47 President of Hill View Packing Company since 1993.
Previous she was a partner of Valley View Packing
since 1977.
Douglas L. Shen 1994 57 A self employed dentist since 1966. His office is
located in San Jose, California.
Gary S. Vandeweghe 1982 57 A practicing attorney at law, specializing in tax
law; a member of the Law Offices of Gary S.
Vandeweghe since December 1995. Prior to that, he
was a member of Rankin, Luckhardt, Vandeweghe,
Landess & Lahde in San Jose for over twelve
years.
John W. Weinhardt 1986 64 President of San Jose Water Company for over 17
years.
- ------------------------
(1) Includes service as a director of SJNB 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.
There is no family relationship among any of the Corporation's executive
officers, directors or nominees for director.
NOMINATIONS FOR DIRECTORS
The Corporation's Bylaws provide that nominations for a director 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, and may have the effect of precluding third-party
nominations if not followed. 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, no 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, such nomination must be mailed or delivered
to the President by the close of business on the seventh 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
4
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 Board of Directors of the Corporation and its subsidiary, SJNB, each
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, F. Jack Gorry, and John W. Weinhardt. The
Audit Committee met four times in 1995 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 1995 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, the Committee reviews and approves the Corporation's Compensation
Policy.
The Loan and Investment Committee is chaired by Ray S. Akamine, and the
members are Robert A. Archer, James R. Kenny, Arthur K. Lund, Louis Oneal and
Gary S. Vandeweghe. The Loan and Investment Committee met twelve times in 1995.
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.
The Corporation does not have a standing nominating committee. The Board of
Directors of the Corporation performs the functions of such committee.
Nominations by shareholders can be made only by complying with the Corporation's
Bylaws and the notice provisions discussed above. This Bylaw provision is
designed to give the Board of Directors advance notice of competing nominations,
if any, and the qualifications of nominees, and may have the effect of
precluding third-party nominations if not followed.
5
MEETINGS OF THE BOARD OF DIRECTORS
The Corporation's Board of Directors held a total of 11 meetings in 1995,
including regular and special meetings. The Board of Directors of the Bank held
a total of 11 meetings in 1995, 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 Board of Directors of the
Corporation and of the committees thereof of which he or she was a member,
except Mr. Vandeweghe.
EXECUTIVE OFFICERS
The executive officers of the Corporation and SJNB include James R. Kenny,
President and Chief Executive Officer, about whom information is provided above,
and the following persons:
PRINCIPAL OCCUPATION
NAME AND POSITION(S) AGE DURING THE PAST FIVE YEARS
- ------------------------------------------ --- --------------------------------------------------
Eugene E. Blakeslee 50 Executive Vice President and Chief Financial
Executive Vice President and Chief Officer of the Corporation and SJNB since
Financial Officer of the Corporation and September 1991; prior thereto, was Executive Vice
SJNB. President and Chief Financial Officer of Pacific
Western Bancshares and its subsidiary, Pacific
Western Bank.
Frederic H. Charpiot 48 Senior Vice President of SJNB since October 1991;
Senior Vice President and Chief Credit prior thereto, was Vice President of SJNB.
Officer of SJNB
Judith Doering-Nielsen 50 Senior Vice President and Senior Lending Officer
Senior Vice President and Senior Lending of SJNB since October 1991; prior thereto, was
Officer of SJNB Senior Vice President and Manager of Corporate
Funding Group of Pacific Western Bank from August
1989 to October 1991.
Robert T. Remedios 56 Senior Vice President and Cashier of SJNB since
Senior Vice President and Cashier of SJNB October 1991; prior thereto, was Senior Vice
President/Operations of Pacific Western Bank.
Margo A. Culcasi 48 Senior Vice President of SJNB since February 1992;
Senior Vice President/Liability prior thereto, was Senior Vice President of
Management of SJNB Cupertino National Bank since 1990.
6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of February 29, 1996
pertaining to beneficial ownership of the Corporation's common stock by each
current director of the Corporation, each nominee to be elected to the Board of
Directors, the Chief Executive Officer, the four other most highly compensated
executive officers and all directors and officers(1) of the Corporation and SJNB
as a group. To the best knowledge of the Corporation, as of April 5, 1996, no
person or entity was the beneficial owner of more than 5% of the Corporation's
outstanding common stock. The information contained herein has been obtained
from the Corporation's records, from information furnished directly by the
individual or entity to the Corporation, or from various filings made by the
named individuals with the Securities and Exchange Committee (the "SEC").
The table should be read with the understanding that more than one person
may be the beneficial owner or possess certain attributes of beneficial
ownership with respect to the same securities. Therefore, careful attention
should be given to the footnote references set forth in the column "Amount and
Nature of Beneficial Ownership." In addition, shares usable pursuant to options
which may be exercised within 60 days of April 5, 1996 are deemed to be issued
and outstanding and have been treated as outstanding in calculating the
percentage ownership of those individuals possessing such interest, but not for
any other individuals. Thus, the total number of shares considered to be
outstanding for the purposes of this table may vary depending upon the
individual's particular circumstance.
AMOUNT AND PERCENT OF
NATURE OF OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL COMMON
BENEFICIAL OWNER (2) OWNERSHIP (3) STOCK
-------------------------------- ---------------- -----------
Ray S. Akamine 9,477 *
Robert A. Archer 50,031(4) 2.05%
Albert V. Bruno 15,165 *
Rod Diridon 699 *
Jack G. Fischer 19,472 *
F. Jack Gorry 9,248 *
James R. Kenny 102,221(5) 4.10%
Arthur K. Lund 78,422(6)(7)(8) 3.22%
Louis Oneal 78,843(6)(9) 3.23%
Diane P. Rubino 12,137 *
Douglas L. Shen 63,860(10) 2.62%
Gary S. Vandeweghe 33,503(9) 1.37%
John W. Weinhardt 5,420 *
Eugene E. Blakeslee 49,866(11) 2.00%
Frederic H. Charpiot 11,547(12) *
Margo A. Culcasi 5,468(13) *
Judith Doering-Nielsen 20,611(14) *
Directors and Executive Officers 527,675(15) 21.63%
as a group (18 persons)
- ------------------------
* Less than 1% of the outstanding common stock.
(1) As used throughout this Proxy Statement, the terms "officer" and "executive
officer" refer to the Corporation and SJNB's President and Chief Executive
Officer and Executive Vice President and Chief Financial Officer, and SJNB's
Chief Credit Officer, Senior Lending Officer, Cashier and Senior Vice
President/Liability Management.
(2) The address for all persons is c/o the Corporation, One North Market Street,
San Jose, California 95113.
7
(3) Includes shares beneficially owned, directly and indirectly, together with
associates. Subject to applicable community property laws and shared voting
or investment power with a spouse, the persons listed have sole voting and
investment power with respect to such shares unless otherwise noted.
(4) Including 4,167 shares owned of record by a trust of which Mr. Archer is a
trustee and beneficiary.
(5) Including 50,000 shares underlying stock options.
(6) Including 51,884 shares owned of record by a trust of which Mr. Lund and Mr.
Oneal are trustees.
(7) Including 3,782 shares owned of record by a trust of which Mr. Lund is the
trustee and beneficiary.
(8) Including 7,615 shares underlying stock options.
(9) Including 4,400 shares underlying stock options.
(10) Including 30,816 shares owned of record by a trust of which Dr. Shen is a
trustee and beneficiary.
(11) Including 25,000 shares underlying stock options.
(12) Including 9,088 shares underlying stock options.
(13) Including 4,000 shares underlying stock options.
(14) Including 10,000 shares underlying stock options.
(15) Including 124,503 shares underlying stock options.
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 all
capacities to the Corporation and SJNB in 1995.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION SECURITIES
--------------------- UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY (1) BONUS OPTIONS COMPENSATION (2)
- -------------------------------------------------- ---- ---------- ------- ---------- ----------------
James R. Kenny 1995 $ 160,000 $90,000 25,000 $6,046
President, Chief Executive Officer 1994 $ 150,000 $53,350 0 $6,046
and Secretary of the Corporation 1993 $ 150,000 $33,000 0 $5,923
and SJNB
Eugene E. Blakeslee 1995 $ 107,000 $70,000 20,000 $4,620
Executive Vice President and 1994 $ 100,000 $38,000 0 $4,620
Chief Financial Officer of the 1993 $ 100,000 $25,000 0 $4,497
Corporation and SJNB
Frederic H. Charpiot 1995 $ 80,000 $50,000 10,000 $4,166
Senior Vice President and Chief 1994 $ 72,000 $28,000 0 $3,670
Credit Officer of SJNB 1993 $ 72,000 $18,000 0 $2,845
Judith Doering-Nielsen 1995 $ 85,000 $40,000 10,000 $4,197
Senior Vice President and Senior 1994 $ 80,000 $28,000 0 $4,620
Lending Officer of SJNB 1993 $ 82,000 $20,000 0 $3,894
Margo A. Culcasi 1995 $ 75,000 $27,710 15,000 $4,365
Senior Vice President/ 1994 $ 75,000 $34,224 0 $2,106
Liability Management of SJNB
- ------------------------
(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
the year earned.
(2) Consists of SJNB's contributions to vested and unvested defined contribution
plans. Mr. Kenny's total also includes a life insurance premium of $1,426
paid by SJNB each year.
9
STOCK OPTION PLANS
The following table provides certain information concerning the options held
by the executive officers named in the Summary Compensation Table at December
31, 1995 pursuant to the SJNB Financial Corp. Plan (which expired in 1992) and
the 1992 Employee Stock Option Plan:
FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING VALUE OF IN-THE-MONEY
UNEXERCISED OPTIONS UNEXERCISED OPTIONS (1)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------------------------ ----------- ------------- ----------- -------------
James R. Kenny 50,000 25,000 $418,750 $101,550
Eugene E. Blakeslee 25,000 20,000 $206,250 $ 81,250
Frederic H. Charpiot 8,088 10,000 $ 78,004 $ 47,916
Margo A. Culcasi 4,000 16,000 $ 30,500 $ 58,555
Judith Doering-Nielsen 10,000 10,000 $ 82,450 $ 40,620
- ------------------------
(1) Fair market value of the Corporation's common stock on December 31, 1995 was
$13.375.
The following table provides certain information concerning options granted
to the executive officers named in the Summary Compensation Table:
OPTION GRANTS IN LAST FISCAL YEAR
PERCENT OF TOTAL
NUMBER OF OPTIONS GRANTED
SECURITIES TO EXPIRATION
NAME UNDERLYING OPTIONS EMPLOYEES IN 1995 EXERCISE PRICE DATE
---------------------- ------------------ ----------------- -------------- ----------
James R. Kenny 25,000 18% $9.3125 7/25/05
Eugene E. Blakeslee 20,000 14% $9.3125 7/25/05
Frederic H. Charpiot 10,000 7% $9.3125 7/25/05
Margo A. Culcasi 10,000 7% $9.3125 7/25/05
Judith Doering-Nielsen 10,000 7% $9.3125 7/25/05
There were no options exercised by the above executive officers during 1995.
EMPLOYMENT AGREEMENTS
Mr. Kenny is employed by the Corporation and SJNB pursuant to an employment
agreement dated March 27, 1996 which provides an annual salary of $160,000. The
term of the agreement is three years, with annual one year extensions each year
thereafter. In addition, Mr. Kenny is to receive an incentive bonus of 1.5% of
the Corporation's pre-tax, pre-bonus net earnings before extraordinary items,
provided that SJNB's net earnings before extraordinary items in any year during
the term of the Agreement is equal to or exceeds 1% of average assets. Mr. Kenny
may also receive stock options. Pursuant to the Agreement, the Corporation
provides an automobile for Mr. Kenny, as well as public liability and property
damage insurance. Mr. Kenny also receives $250,000 in term life insurance
coverage. In the event that Mr. Kenny is involuntarily terminated for reasons
other than dishonesty or malfeasance, he is entitled to receive a lump sum
payment equal to twenty-four months' salary (plus incentive or bonus payments
accrued, if any). In the event of a "change in control", Mr. Kenny will receive
a lump sum payment in an amount equal to two times his average annual
compensation for the five years immediately preceding the change in control
(plus incentive or bonus payments accrued, if any).
Mr. Kenny's previous employment agreement provided that he receive an annual
salary of $150,000 and 15% of an officer bonus pool, equaling 10% of pre-tax
earnings to be established if the Corporation's net earnings before
extraordinary items equaled or exceeded 1% of average assets. That agreement
also provided a $250,000 term life insurance policy and severance pay equal to
$75,000 in the event of involuntary termination.
10
Mr. Blakeslee is employed by the Corporation and SJNB pursuant to an
employment agreement dated March 27, 1996 which provides an annual salary of
$107,000. The term of the agreement is one year, with automatic extensions each
year thereafter. In addition, Mr. Blakeslee is entitled to participate in the
Corporation's bonus plan, pool, stock option plan or other arrangements
authorized and approved by the Board of Directors. Mr. Blakeslee's agreement
also states that the Corporation provides an automobile for Mr. Blakeslee, as
well as public liability and property damage insurance. In the event that Mr.
Blakeslee is involuntarily terminated for reasons other than dishonesty or
malfeasance, he is entitled to receive a lump sum payment equal to twelve
months' salary (plus incentive or bonus payments accrued, if any). In the event
of a "change in control", Mr. Blakeslee will receive severance pay in an amount
equal to one times his average annual compensation for the five years
immediately preceding the change in control (plus incentive or bonus payments
accrued, if any).
COMPENSATION OF DIRECTORS
In 1995, the outside directors of SJNB, except Chairman Archer, were paid an
annual retainer of $12,000. Mr. Archer was paid an annual retainer of $15,000.
In addition, directors were paid $250 for attendance at each meeting of standing
committees of SJNB of which they are a member. 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 255,000
shares of stock to directors of the Corporation. No options have been granted to
date under the Director Plan.
The new 1996 Stock Option Plan provides for automatic annual option grants
of 5,000 options on June 1, 1996 and March 1 each year thereafter to each
non-employee director, compared to 2,000 options annually under the Director
Plan. Assuming the 1996 Stock Option Plan is approved by the shareholders at the
Meeting, non-employee directors will receive no further grants under the
Director Plan.
TRANSACTIONS WITH DIRECTORS AND OFFICERS
SJNB 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. In the opinion of management of
SJNB, all loans and commitments to lend included in such transactions 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 of
similar creditworthiness, and on terms not involving more than a 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 SEC.
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 1995. To the Corporation's knowledge, based on a review of the
copies of such reports furnished to the Corporation and written representations
that no other reports were required, during the fiscal year ended December 31,
1995 all such filing requirements applicable to its officers, directors and ten
percent shareholders were met.
11
APPROVAL OF THE ADOPTION OF THE 1996 STOCK OPTION PLAN
INTRODUCTION
On March 27, 1996, the Board of Directors adopted the Corporation's 1996
Stock Option Plan (the "Plan"), subject to the approval of the Corporation's
shareholders. A copy of the Plan appears as Appendix A to this Proxy Statement.
Shareholders are urged to read the Plan in its entirety. The Plan provides for
awards in the form of options (which may constitute incentive stock options or
non-statutory stock options) to key employees and outside directors.
The Board believes that the Plan will enable the Corporation to continue to
attract and retain highly qualified individuals capable of implementing the
Corporation's long-term strategic goals and objectives. The Board further
believes that the Plan will provide the Corporation with the means to motivate
high levels of performance by key employees in order to increase shareholder
value.
The Plan is intended to replace the Director Plan and the 1992 Employee
Stock Option Plan (the "Employee Plan"), under which plans approximately 310,000
shares of Common Stock currently remain available for grant.
The Compensation Committee of the Board of Directors (the "Committee")
expects to use option awards under the Plan as its primary method of providing
stock-based incentive compensation to key employees and outside directors over
the next few years. The Plan provides that options under the Plan may not be
granted at less than 100% of fair market value of the Common Stock on the grant
date, which means that participants receive nothing unless the Corporation's
stock price increases over the option term. The Board believes that the Plan
directly ties management's and director's interests to those of the shareholders
and that approval of the Plan is in the shareholders' best interests.
PURPOSE
The purpose of the Plan is to promote the long-term success of the
Corporation and the creation of shareholder value by (a) encouraging key
employees and outside directors to focus on critical long-range objectives, (b)
encouraging the attraction and retention of key employees and outside directors
with strong qualifications, including key executives that may join the
Corporation in the future as a result of acquisitions, and (c) linking key
employees and outside directors directly to shareholder interests through
increased stock ownership.
ADMINISTRATION
The Plan will be administered by the Committee, which consists entirely of
outside directors. The Committee selects the key employees of the Corporation or
any subsidiary who will receive awards, determines the size of any award and
establishes any vesting or other conditions. Grants of options to outside
directors will be subject to the restrictions in the Plan.
ELIGIBILITY
Key employees of the Corporation and outside directors are eligible to
receive awards under the Plan. Directors who are not employees of the
Corporation or any of its subsidiaries ("Outside Directors") are eligible to
receive automatic grants under the Plan. The Committee may also choose to
implement a program whereby Outside Directors may elect to receive awards under
the Plan in lieu of annual retainer and meeting fees. As of March 31, 1996, none
of the executive officers or Outside Directors were participants in the Plan. As
of April 1, 1996, approximately eighty-five employees and twelve Outside
Directors were eligible to participate in the Plan.
OPTIONS
Options may include nonstatutory stock options ("NSOs") as well as incentive
stock options ("ISOs") intended to qualify for special tax treatment. The
exercise price of options must be equal to or greater than 100% of the fair
market value of the Common Stock on the date of grant. On April 1, 1996, the
Corporation's Common Stock closed at $14.00 per share. The term of an ISO cannot
exceed 10 years, and all options are nontransferable prior to the optionee's
death.
12
The exercise price of an option may be paid in any lawful form permitted by
the Committee, including cash or the surrender of shares of Common Stock of the
Corporation already owned by the optionee.
VESTING CONDITIONS
With respect to all employees, the Committee determines the number of
options in the award as well as the vesting and all other conditions. The
vesting conditions may be based on the employee's service, his or her individual
performance, the Corporation's performance or other appropriate criteria. In
general, the vesting conditions will be based on the employee's service after
the date of grant. Vesting may be accelerated in the event of the employee's
death, disability or retirement or in the event of a change of control. The
events which constitute a change of control for purposes of the Plan are as
defined in Article 14 of the Plan.
AUTOMATIC GRANTS TO OUTSIDE DIRECTORS
The Plan provides that Outside Directors will automatically receive an NSO
covering 5,000 shares annually at an exercise price equal to 100% of the market
price of the Common Stock on the date of grant. NSOs granted to Outside
Directors become exercisable 40% one year after grant and 20% annually for the
next three years, or earlier in the event of a change of control with respect to
the Corporation. The NSOs expire 10 years after grant, except that they expire
ninety days after the Outside Director's service terminates.
OTHER PROVISIONS
The Committee is authorized, within the provisions of the Plan, to modify or
extend outstanding options or to exchange new options for outstanding options,
including outstanding options with a higher exercise price than the new options.
NUMBER OF AVAILABLE SHARES
The total number of shares available for grant under the Plan is 310,000. In
addition, if awards under the Employee Plan are forfeited or terminated before
being exercised or vested, the corresponding common shares shall become
available for awards under the Plan. If the Plan is approved by the
shareholders, no further awards will be made under the Director Plan. The total
number of shares available for grant under the Plan shall be subject to
adjustment in the event of stock splits, stock dividends and other similar
recapitalization transactions. No individual may receive option grants in a
single year covering more than 100,000 shares. If any options are forfeited, or
if options terminate for any other reason prior to exercise, then they again
become available for awards.
NEW PLAN BENEFITS
The Committee has full discretion to determine the number of options to be
granted to employees under the Plan; provided, however, that no individual may
receive option grants in a single calendar year covering more than 100,000
shares. Therefore, the aggregate benefits and amounts that will be received by
each of the officers named in the Summary Compensation Table, the executive
officers as a group and all other employees are not determinable. Until the
Board directs otherwise or an Outside Director ceases to serve as a director,
each director will receive an annual automatic grant of 5,000 options.
TERM OF THE PLAN, AMENDMENT AND TERMINATION
The Board of Directors may at any time amend, modify or terminate the Plan.
An amendment of the Plan shall be subject to the approval of the Corporation's
shareholders only to the extent required by applicable law. The Plan shall
remain in effect until it is terminated except that no ISOs may be granted after
May 21, 2006.
FEDERAL INCOME TAX CONSEQUENCES
Neither the optionee nor the Corporation will incur any federal tax
consequences as a result of the grant of an option. The optionee will have no
taxable income upon exercising an ISO (except that the alternative minimum tax
may apply), and the Corporation will receive no deduction when an ISO is
exercised. Upon exercising an NSO, the optionee generally must recognize
ordinary income equal to the
13
"spread" between the exercise price and the fair market value of the Common
Stock on the date of exercise; the Corporation ordinarily will be entitled to a
deduction for the same amount. In the case of an employee, the option spread at
the time an NSO is exercised is subject to income tax withholding, but the
optionee generally may elect to satisfy the withholding tax obligation by having
shares of Common Stock withheld from those purchased under the NSO. The tax
treatment of a disposition of option shares acquired under the Plan depends on
how long the shares have been held and on whether such shares were acquired by
exercising an ISO or by exercising a NSO. The Corporation will not be entitled
to a deduction in connection with a disposition of option shares, except in the
case of a disposition of shares acquired under an ISO before the applicable ISO
holding periods have been satisfied.
The adoption of the Plan requires the affirmative vote of not less than a
majority of the shares of Common Stock present in person or represented and
voting at the Meeting. The Board of Directors recommends that the shareholders
vote FOR the adoption of the Corporation's 1996 Stock Option Plan.
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, 1996. KPMG Peat Marwick examined the financial
statements of the Corporation and its subsidiary for the year ended December 31,
1995. KPMG Peat Marwick has informed the Corporation that it has had no
connection during the past three years with the Corporation or its subsidiary 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 on an annual basis.
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 1997.
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 1996 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 Meeting and will have an opportunity to make a statement if
they desire to do so, and will be available to respond to appropriate questions.
The affirmative vote of a majority of the shares represented and voting 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.
ANNUAL REPORT ON FORM 10-KSB
A copy of the Corporation's Annual Report on Form 10-KSB for the year ended
December 31, 1995 is included in the Corporation's Annual Report to
Shareholders.
14
APPENDIX A
1996 STOCK OPTION PLAN OF
SJNB FINANCIAL CORP.
(Adopted Effective May 22, 1996)
TABLE OF CONTENTS
ARTICLE 1. INTRODUCTION................................................ 1
ARTICLE 2. ADMINISTRATION.............................................. 1
2.1 Committee Composition....................................... 1
2.2 Committee Responsibilities.................................. 1
ARTICLE 3. SHARES AVAILABLE FOR GRANTS................................. 1
3.1 Basic Limitation............................................ 1
3.2 Additional Shares........................................... 1
ARTICLE 4. ELIGIBILITY................................................. 1
4.1 General Rules............................................... 1
4.2 Outside Directors........................................... 2
4.3 Incentive Stock Options..................................... 2
ARTICLE 5. OPTION GRANTS............................................... 2
5.1 Stock Option Agreement...................................... 2
5.2 Number of Shares............................................ 3
5.3 Exercise Price.............................................. 3
5.4 Exercisability and Term..................................... 3
5.5 Effect of Change in Control................................. 3
5.6 Modification or Assumption of Options....................... 3
ARTICLE 6. PAYMENT FOR OPTION SHARES................................... 3
6.1 General Rule................................................ 3
6.2 Surrender of Stock.......................................... 3
6.3 Exercise/Sale............................................... 3
6.4 Exercise/Pledge............................................. 3
6.5 Promissory Note............................................. 3
6.6 Other Forms of Payment...................................... 4
ARTICLE 7. PROTECTION AGAINST DILUTION................................. 4
7.1 Adjustments................................................. 4
7.2 Reorganizations............................................. 4
ARTICLE 8. PAYMENT OF DIRECTOR'S FEES IN OPTIONS....................... 4
8.1 Effective Date.............................................. 4
8.2 Elections to Receive NSOs................................... 4
8.3 Number and Terms of NSOs.................................... 4
ARTICLE 9. LIMITATION ON RIGHTS........................................ 4
9.1 Retention Rights............................................ 4
9.2 Shareholders' Rights........................................ 4
9.3 Regulatory Requirements..................................... 4
ARTICLE 10. LIMITATION ON PAYMENTS...................................... 5
10.1 Basic Rule.................................................. 5
10.2 Reduction of Payments....................................... 5
10.3 Overpayments and Underpayments.............................. 5
10.4 Related Corporations........................................ 5
ARTICLE 11. WITHHOLDING TAXES........................................... 6
11.1 General..................................................... 6
11.2 Share Withholding........................................... 6
ARTICLE 12. ASSIGNMENT OR TRANSFER OF OPTIONS........................... 6
ARTICLE 13. FUTURE OF THE PLAN.......................................... 6
13.1 Term of the Plan............................................ 6
13.2 Amendment or Termination.................................... 6
ARTICLE 14. DEFINITIONS................................................. 6
ARTICLE 15. EXECUTION................................................... 8
i
1996 STOCK OPTION PLAN OF
SJNB FINANCIAL CORP.
ARTICLE 1. INTRODUCTION.
The Plan was adopted by the Board on March 27, 1996, effective as of May 22,
1996. The Plan replaces the SJNB Financial Corp. 1992 Employee Stock Option Plan
and the SJNB Financial Corp. 1992 Director Stock Option Plan.
The purpose of the Plan is to promote the long-term success of the Company
and the creation of shareholder value by (a) encouraging Key Employees to focus
on critical long-range objectives, (b) encouraging the attraction and retention
of Key Employees with exceptional qualifications and (c) linking Key Employees
directly to shareholder interests through increased stock ownership. The Plan
seeks to achieve this purpose with grants of Options, which may constitute
incentive stock options or nonstatutory stock options.
The Plan shall be governed by, and construed in accordance with, the laws of
the State of California (except their choice-of-law provisions).
ARTICLE 2. ADMINISTRATION.
2.1 COMMITTEE COMPOSITION. The Plan shall be administered by the
Committee. The Committee shall consist exclusively of two or more directors of
the Company, who shall be appointed by the Board. In addition, the composition
of the Committee shall satisfy:
(a) Such requirements as the Securities and Exchange Commission may
establish for administrators acting under plans intended to qualify for
exemption under Rule 16b-3 (or its successor) under the Exchange Act; and
(b) Such requirements as the Internal Revenue Service may establish for
outside directors acting under plans intended to qualify for exemption under
section 162(m)(4)(C) of the Code.
The Board may also appoint one or more separate committees of the Board, each
consisting of two or more directors of the Company who need not satisfy the
foregoing requirements. Such committees may administer the Plan with respect to
Key Employees who are not subject to section 16 of the Exchange Act or section
162(m) of the Code, may grant Options under the Plan to such Key Employees and
may determine all terms of such Options.
2.2 COMMITTEE RESPONSIBILITIES. The Committee shall (a) select the Key
Employees who are to receive Options under the Plan, (b) determine the type,
number, vesting requirements and other features and conditions of such Options,
(c) interpret the Plan and (d) make all other decisions relating to the
operation of the Plan. The Committee may adopt such rules or guidelines as it
deems appropriate to implement the Plan. The Committee's determinations under
the Plan shall be final and binding on all persons.
ARTICLE 3. SHARES AVAILABLE FOR GRANTS.
3.1 BASIC LIMITATION. The aggregate number of Options awarded under the
Plan shall not exceed 310,000, subject to Section 3.2. No grants shall be made
under the Predecessor Plan after May 22, 1996. The limitation of this Section
3.1 shall be subject to adjustment pursuant to Article 7.
3.2 ADDITIONAL SHARES. If an Option granted under this Plan or the
Predecessor Plan is forfeited or terminates for any other reason before being
exercised in full, then the Common Shares corresponding to the unexercised
portion of such Option shall become available for new grants under this Plan.
ARTICLE 4. ELIGIBILITY.
4.1 GENERAL RULES. Only Key Employees shall be eligible for designation as
Optionees by the Committee. Key Employees who are Outside Directors shall only
be eligible for the grant of the NSOs described in Section 4.2 and for making an
election described in Article 8.
1
4.2 OUTSIDE DIRECTORS. Any other provision of the Plan notwithstanding,
the participation of Outside Directors in the Plan shall be subject to the
following conditions:
(a) Outside Directors shall receive no Options except as described in
this Section 4.2 and Article 8.
(b) Each Outside Director who serves as a member of the Board on June 1,
1996, shall receive a one-time grant of an NSO covering 5,000 Common Shares
(subject to adjustment under Article 7). Such NSO shall be granted on June
1, 1996.
(c) Each Outside Director who serves as a member of the Board on March 1
of any year after 1996 shall receive an NSO covering 5,000 Shares (subject
to adjustment under Article 7).
(d) Each NSO granted to an Outside Director under this Section 4.2 shall
become exercisable in four installments at 12-month intervals over the
48-month period following the date of grant. The first installment shall
consist of 40% of the Common Shares subject to such NSO, and each of the
three subsequent installments shall consist of 20% of the Common Shares
subject to such NSO. All NSOs granted to an Outside Director under this
Section 4.2 shall become exercisable in full in the event of:
(i) The termination of such Outside Director's service because of
death, total and permanent disability or retirement at or after age 70;
or
(ii) A Change in Control with respect to the Company.
(e) The Exercise Price under all NSOs granted to an Outside Director
under this Section 4.2 shall be equal to 100% of the Fair Market Value of a
Common Share on the date of grant, payable in one of the forms described in
Sections 6.1, 6.2, 6.3 and 6.4.
(f) All NSOs granted to an Outside Director under this Section 4.2
shall terminate on the earliest of:
(i) The 10th anniversary of the date of grant;
(ii) The date three months after the termination of such Outside
Director's service for any reason other than death or total and permanent
disability; or
(iii) The date 12 months after the termination of such Outside
Director's service because of death or total and permanent disability.
4.3 INCENTIVE STOCK OPTIONS. A Key Employee who owns more than 10% of the
total combined voting power of all classes of outstanding stock of the Company
or any of its Parents or Subsidiaries shall not be eligible for the grant of an
ISO unless the requirements set forth in Section 422(c)(6) of the Code are
satisfied.
ARTICLE 5. OPTION GRANTS.
5.1 STOCK OPTION AGREEMENT. Each grant of an Option under the Plan shall
be evidenced by a Stock Option Agreement between the Optionee and the Company.
Such Option shall be subject to all applicable terms of the Plan and may be
subject to any other terms that are not inconsistent with the Plan. The Stock
Option Agreement shall specify whether the Option is an ISO or an NSO. The
provisions of the various Stock Option Agreements entered into under the Plan
need not be identical. Options may be granted in consideration of a cash payment
or in consideration of a reduction in the Optionee's other compensation. A Stock
Option Agreement may provide that new Options will be granted automatically to
the Optionee when he or she exercises the prior Options and pays the exercise
price in the form described in Section 6.2.
2
5.2 NUMBER OF SHARES. Each Stock Option Agreement shall specify the number
of Common Shares subject to the Option and shall provide for the adjustment of
such number in accordance with Article 7. Options granted to any Optionee in a
single calendar year shall in no event cover more than 100,000 Common Shares,
subject to adjustment in accordance with Article 7.
5.3 EXERCISE PRICE. Each Stock Option Agreement shall specify the Exercise
Price; provided that the Exercise Price under an ISO shall in no event be less
than 100% of the Fair Market Value of a Common Share on the date of grant. In
the case of an NSO, a Stock Option Agreement may specify an Exercise Price that
varies in accordance with a predetermined formula while the NSO is outstanding.
5.4 EXERCISABILITY AND TERM. Each Stock Option Agreement shall specify the
date when all or any installment of the Option is to become exercisable. The
Stock Option Agreement shall also specify the term of the Option; provided that
the term of an ISO shall in no event exceed 10 years from the date of grant. A
Stock Option Agreement may provide for accelerated exercisability in the event
of the Optionee's death, disability or retirement or other events and may
provide for expiration prior to the end of its term in the event of the
termination of the Optionee's service.
5.5 EFFECT OF CHANGE IN CONTROL. The Committee may determine, at the time
of granting an Option or thereafter, that such Option shall become fully
exercisable as to all Common Shares subject to such Option in the event that a
Change in Control occurs with respect to the Company.
5.6 MODIFICATION OR ASSUMPTION OF OPTIONS. Within the limitations of the
Plan, the Committee may modify, extend or assume outstanding options or may
accept the cancellation of outstanding options (whether granted by the Company
or by another issuer) in return for the grant of new options for the same or a
different number of shares and at the same or a different exercise price. The
foregoing notwithstanding, no modification of an Option shall, without the
consent of the Optionee, alter or impair his or her rights or obligations under
such Option.
ARTICLE 6. PAYMENT FOR OPTION SHARES.
6.1 GENERAL RULE. The entire Exercise Price of Common Shares issued upon
exercise of Options shall be payable in cash at the time when such Common Shares
are purchased, except as follows:
(a) In the case of an ISO granted under the Plan, payment shall be made
only pursuant to the express provisions of the applicable Stock Option
Agreement. The Stock Option Agreement may specify that payment may be made
in any form(s) described in this Article 6.
(b) In the case of an NSO, the Committee may at any time accept payment
in any form(s) described in this Article 6.
6.2 SURRENDER OF STOCK. To the extent that this Section 6.2 is applicable,
payment for all or any part of the Exercise Price may be made with Common Shares
which have already been owned by the Optionee for more than six months. Such
Common Shares shall be valued at their Fair Market Value on the date when the
new Common Shares are purchased under the Plan.
6.3 EXERCISE/SALE. To the extent that this Section 6.3 is applicable,
payment may be made by the delivery (on a form prescribed by the Company) of an
irrevocable direction to a securities broker approved by the Company to sell
Common Shares and to deliver all or part of the sales proceeds to the Company in
payment of all or part of the Exercise Price and any withholding taxes.
6.4 EXERCISE/PLEDGE. To the extent that this Section 6.4 is applicable,
payment may be made by the delivery (on a form prescribed by the Company) of an
irrevocable direction to pledge Common Shares to a securities broker or lender
approved by the Company, as security for a loan, and to deliver all or part of
the loan proceeds to the Company in payment of all or part of the Exercise Price
and any withholding taxes.
6.5 PROMISSORY NOTE. To the extent that this Section 6.5 is applicable,
payment may be made with a full-recourse promissory note.
3
6.6 OTHER FORMS OF PAYMENT. To the extent that this Section 6.6 is
applicable, payment may be made in any other form that is consistent with
applicable laws, regulations and rules.
ARTICLE 7. PROTECTION AGAINST DILUTION.
7.1 ADJUSTMENTS. In the event of a subdivision of the outstanding Common
Shares, a declaration of a dividend payable in Common Shares, a declaration of a
dividend payable in a form other than Common Shares in an amount that has a
material effect on the price of Common Shares, a combination or consolidation of
the outstanding Common Shares (by reclassification or otherwise) into a lesser
number of Common Shares, a recapitalization, a spinoff or a similar occurrence,
the Committee shall make such adjustments as it, in its sole discretion, deems
appropriate in one or more of (a) the number of Options available for future
grants under Article 3, (b) the limitation set forth in Section 5.2, (c) the
number of NSOs to be granted to Outside Directors under Section 4.2, (d) the
number of Common Shares covered by each outstanding Option or (e) the Exercise
Price under each outstanding Option. Except as provided in this Article 7, an
Optionee shall have no rights by reason of any issue by the Company of stock of
any class or securities convertible into stock of any class, any subdivision or
consolidation of shares of stock of any class, the payment of any stock dividend
or any other increase or decrease in the number of shares of stock of any class.
7.2 REORGANIZATIONS. In the event that the Company is a party to a merger
or other reorganization, outstanding Options shall be subject to the agreement
of merger or reorganization. Such agreement may provide, without limitation, for
the assumption of outstanding Options by the surviving corporation or its
parent, for their continuation by the Company (if the Company is a surviving
corporation), for accelerated vesting and accelerated expiration, or for
settlement in cash.
ARTICLE 8. PAYMENT OF DIRECTOR'S FEES IN OPTIONS.
8.1 EFFECTIVE DATE. No provision of this Article 8 shall be effective
unless and until the Board has determined to implement such provision.
8.2 ELECTIONS TO RECEIVE NSOS. An Outside Director may elect to receive
his or her annual retainer payments and meeting fees from the Company in the
form of cash or NSOs, or a combination thereof, as determined by the Board. Such
NSOs shall be issued under the Plan. An election under this Article 8 shall be
filed with the Company on the prescribed form.
8.3 NUMBER AND TERMS OF NSOS. The number of NSOs to be granted to Outside
Directors in lieu of annual retainers and meeting fees that would otherwise be
paid in cash shall be calculated in a manner determined by the Board. The terms
of such NSOs shall also be determined by the Board.
ARTICLE 9. LIMITATION ON RIGHTS.
9.1 RETENTION RIGHTS. Neither the Plan nor any Option granted under the
Plan shall be deemed to give any individual a right to remain an employee or
director of the Company, a Parent or a Subsidiary. The Company and its Parents
and Subsidiaries reserve the right to terminate the service of any employee or
director at any time, with or without cause, subject to applicable laws, the
Company's certificate of incorporation and by-laws and a written employment
agreement (if any).
9.2 SHAREHOLDERS' RIGHTS. An Optionee shall have no dividend rights,
voting rights or other rights as a shareholder with respect to any Common Shares
covered by his or her Option prior to the issuance of a stock certificate for
such Common Shares. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to the date when such certificate is
issued, except as expressly provided in Article 7.
9.3 REGULATORY REQUIREMENTS. Any other provision of the Plan
notwithstanding, the obligation of the Company to issue Common Shares under the
Plan shall be subject to all applicable laws, rules and regulations and such
approval by any regulatory body as may be required. The Company reserves the
right to restrict, in whole or in part, the delivery of Common Shares pursuant
to any Option prior to the satisfaction of all legal requirements relating to
the issuance of such Common Shares, to their registration, qualification or
listing or to an exemption from registration, qualification or listing.
4
ARTICLE 10. LIMITATION ON PAYMENTS.
10.1 BASIC RULE. Any provision of the Plan to the contrary
notwithstanding, in the event that the independent auditors most recently
selected by the Board (the "Auditors") determine that any payment or transfer by
the Company under the Plan to or for the benefit of an Optionee (a "Payment")
would be nondeductible by the Company for federal income tax purposes because of
the provisions concerning "excess parachute payments" in section 280G of the
Code, then the aggregate present value of all Payments shall be reduced (but not
below zero) to the Reduced Amount; provided that the Committee, at the time of
granting an Option or at any time thereafter, may specify in writing that such
Option shall not be so reduced and shall not be subject to this Article 10. For
purposes of this Article 10, the "Reduced Amount" shall be the amount, expressed
as a present value, which maximizes the aggregate present value of the Payments
without causing any Payment to be nondeductible by the Company because of
Section 280G of the Code.
10.2 REDUCTION OF PAYMENTS. If the Auditors determine that any Payment
would be nondeductible by the Company because of Section 280G of the Code, then
the Company shall promptly give the Optionee notice to that effect and a copy of
the detailed calculation thereof and of the Reduced Amount, and the Optionee may
then elect, in his or her sole discretion, which and how much of the Payments
shall be eliminated or reduced (as long as after such election the aggregate
present value of the Payments equals the Reduced Amount) and shall advise the
Company in writing of his or her election within 10 days of receipt of notice.
If no such election is made by the Optionee within such 10-day period, then the
Company may elect which and how much of the Payments shall be eliminated or
reduced (as long as after such election the aggregate present value of the
Payments equals the Reduced Amount) and shall notify the Optionee promptly of
such election. For purposes of this Article 10, the present value shall be
determined in accordance with Section 280G(d)(4) of the Code. All determinations
made by the Auditors under this Article 10 shall be binding upon the Company and
the Optionee and shall be made within 60 days of the date when a Payment becomes
payable or transferable. As promptly as practicable following such determination
and the elections hereunder, the Company shall pay or transfer to or for the
benefit of the Optionee such amounts as are then due to him or her under the
Plan and shall promptly pay or transfer to or for the benefit of the Optionee in
the future such amounts as become due to him or her under the Plan.
10.3 OVERPAYMENTS AND UNDERPAYMENTS. As a result of uncertainty in the
application of Section 280G of the Code at the time of an initial determination
by the Auditors hereunder, it is possible that Payments will have been made by
the Company which should not have been made (an "Overpayment") or that
additional Payments which will not have been made by the Company could have been
made (an "Underpayment"), consistent in each case with the calculation of the
Reduced Amount hereunder. In the event that the Auditors, based upon the
assertion of a deficiency by the Internal Revenue Service against the Company or
the Optionee which the Auditors believe has a high probability of success,
determine that an Overpayment has been made, such Overpayment shall be treated
for all purposes as a loan to the Optionee which he or she shall repay to the
Company, together with interest at the applicable federal rate provided in
Section 7872(f)(2) of the Code; provided, however, that no amount shall be
payable by the Optionee to the Company if and to the extent that such payment
would not reduce the amount which is subject to taxation under Section 4999 of
the Code. In the event that the Auditors determine that an Underpayment has
occurred, such Underpayment shall promptly be paid or transferred by the Company
to or for the benefit of the Optionee, together with interest at the applicable
federal rate provided in Section 7872(f)(2) of the Code.
10.4 RELATED CORPORATIONS. For purposes of this Article 10, the term
"Company" shall include affiliated corporations to the extent determined by the
Auditors in accordance with Section 280G(d)(5) of the Code.
5
ARTICLE 11. WITHHOLDING TAXES.
11.1 GENERAL. To the extent required by applicable federal, state, local
or foreign law, an Optionee or his or her successor shall make arrangements
satisfactory to the Company for the satisfaction of any withholding tax
obligations that arise in connection with the Plan. The Company shall not be
required to issue any Common Shares until such obligations are satisfied.
11.2 SHARE WITHHOLDING. The Committee may permit an Optionee to satisfy
all or part of his or her withholding or income tax obligations by having the
Company withhold all or a portion of any Common Shares that otherwise would be
issued to him or her or by surrendering all or a portion of any Common Shares
that he or she previously acquired. Such Common Shares shall be valued at their
Fair Market Value on the date when taxes otherwise would be withheld in cash.
Any payment of taxes by assigning Common Shares to the Company may be subject to
restrictions, including any restrictions required by rules of the Securities and
Exchange Commission.
ARTICLE 12. ASSIGNMENT OR TRANSFER OF OPTIONS.
Except as provided in Article 11, an Option granted under the Plan shall not
be anticipated, assigned, attached, garnished, optioned, transferred or made
subject to any creditor's process, whether voluntarily, involuntarily or by
operation of law. An Option may be exercised during the lifetime of the Optionee
only by him or her or by his or her guardian or legal representative. Any act in
violation of this Article 12 shall be void. However, this Article 12 shall not
preclude an Optionee from designating a beneficiary who will receive any
outstanding Options in the event of the Optionee's death, nor shall it preclude
a transfer of Options by will or by the laws of descent and distribution.
ARTICLE 13. FUTURE OF THE PLAN.
13.1 TERM OF THE PLAN. The Plan, as set forth herein, was adopted on March
27, 1996, subject to the approval of the Company's shareholders at the 1996
annual meeting. The Plan shall become effective on May 22, 1996. The Plan shall
remain in effect until it is terminated under Section 13.2, except that no ISOs
shall be granted after May 21, 2006.
13.2 AMENDMENT OR TERMINATION. The Board may, at any time and for any
reason, amend or terminate the Plan, except that the provisions of Section 4.2
relating to the amount, price and timing of Option grants to Outside Directors
shall not be amended more often than permitted by Rule 16b-3 under the Exchange
Act. An amendment of the Plan shall be subject to the approval of the Company's
shareholders only to the extent required by applicable laws, regulations or
rules. No Options shall be granted under the Plan after the termination thereof.
The termination of the Plan, or any amendment thereof, shall not affect any
Option previously granted under the Plan.
ARTICLE 14. DEFINITIONS.
14.1 "BOARD" means the Company's Board of Directors, as constituted from
time to time.
14.2 "CHANGE IN CONTROL" shall mean the occurrence of any of the following
events:
(a) Approval by the shareholders of the Company of a merger or
consolidation of the Company with or into another entity or any other
corporate reorganization, if either:
(A) The Company is not the continuing or surviving entity; or
(B) More than 50% of the combined voting power of the Company's
securities outstanding immediately after such merger, consolidation or
other reorganization is owned by persons who were not shareholders of the
Company immediately prior to such merger, consolidation or other
reorganization;
(b) A change in the composition of the Board, as a result of which fewer
than one-half of the incumbent directors are directors who either:
(A) Had been directors of the Company 24 months prior to such change;
or
6
(B) Were elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of the directors who had been
directors of the Company 24 months prior to such change and who were
still in office at the time of the election or nomination; or
(c) Any "person" (as such term is used in sections 13(d) and 14(d) of
the Exchange Act) by the acquisition or aggregation of securities is or
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing 25% or more of the combined voting power of the
Company's then outstanding securities ordinarily (and apart from rights
accruing under special circumstances) having the right to vote at elections
of directors (the "Base Capital Stock"); except that any change in the
relative beneficial ownership of the Company's securities by any person
resulting solely from a reduction in the aggregate number of outstanding
shares of Base Capital Stock, and any decrease thereafter in such person's
ownership of securities, shall be disregarded until such person increases in
any manner, directly or indirectly, such person's beneficial ownership of
any securities of the Company.
14.3 "CODE" means the Internal Revenue Code of 1986, as amended.
14.4 "COMMITTEE" means a committee of the Board, as described in Article
2.
14.5 "COMMON SHARE" means one share of the common stock of the Company.
14.6 "COMPANY" means SJNB Financial Corp., a California corporation.
14.7 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
14.8 "EXERCISE PRICE" means the amount for which one Common Share may be
purchased upon exercise of an Option, as specified in the applicable Stock
Option Agreement.
14.9 "FAIR MARKET VALUE" means the market price of Common Shares,
determined by the Committee as follows:
(a) If the Common Shares are traded over-the-counter on the date in
question but are not classified as a national market issue, then the Fair
Market Value shall be equal to the mean between the last reported
representative bid and asked prices quoted by the Nasdaq system for such
date;
(b) If the Common Shares are traded over-the-counter on the date in
question and are classified as a national market issue, then the Fair Market
Value shall be equal to the last-transaction price quoted by the Nasdaq
system for such date;
(c) If the Common Shares are traded on a stock exchange on the date in
question, then the Fair Market Value shall be equal to the closing price
reported by the applicable composite transactions report for such date; and
(d) If none of the foregoing provisions is applicable, then the Fair
Market Value shall be determined by the Committee in good faith on such
basis as it deems appropriate.
Whenever possible, the determination of Fair Market Value by the Committee shall
be based on the prices reported in the Western Edition of THE WALL STREET
JOURNAL. Such determination shall be conclusive and binding on all persons.
14.10 "ISO" means an incentive stock option described in Section 422(b) of
the Code.
14.11 "KEY EMPLOYEE" means (a) a common-law employee of the Company, a
Parent or a Subsidiary or (b) an Outside Director. Service as an Outside
Director shall be considered employment for all purposes of the Plan, except as
provided in Sections 4.2 and 4.3.
14.12 "NSO" means a stock option not described in sections 422 or 423 of
the Code.
14.13 "OPTION" means an ISO or NSO granted under the Plan and entitling
the holder to purchase one Common Share.
14.14 "OPTIONEE" means an individual or estate who holds an Option.
7
14.15 "OUTSIDE DIRECTOR" shall mean a member of the Board who is not a
common-law employee of the Company, a Parent or a Subsidiary.
14.16 "PARENT" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain. A corporation that attains the status of a Parent on
a date after the adoption of the Plan shall be considered a Parent commencing as
of such date.
14.17 "PLAN" means this 1996 Stock Option Plan of SJNB Financial Corp., as
amended from time to time.
14.18 "PREDECESSOR PLAN" means the SJNB Financial Corp. 1992 Employee
Stock Option Plan and 1992 Director Stock Option Plan.
14.19 "STOCK OPTION AGREEMENT" means the agreement between the Company and
an Optionee which contains the terms, conditions and restrictions pertaining to
his or her Option.
14.20 "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A corporation that attains
the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.
ARTICLE 15. EXECUTION.
To record the adoption of the Plan by the Board, the Company has caused its
duly authorized officer to affix the corporate name and seal hereto.
SJNB FINANCIAL CORP.
By
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8
SJNB FINANCIAL CORP.
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 22, 1996
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, 1996, and revoking any proxy
heretofore given, hereby constitutes and appoints John W. Weinhardt, 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 22, 1996 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 Arthur K. Lund Louis Oneal
Rod Diridon Gary S. Vandeweghe John W. Weinhardt
James R. Kenny Albert V. Bruno F. Jack Gorry
Douglas L. Shen Jack G. Fischer Diane P. Rubino
Robert A. Archer
(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. Approval of 1996 Stock Option Plan. Approval of the adoption of the 1996
Stock Option Plan of SJNB Financial Corp.
FOR AGAINST ABSTAIN
/ / / / / /
3. Ratification of Accountants. To ratify the selection of KPMG Peat Marwick
as independent certified public accountants for the Company for 1996.
FOR AGAINST ABSTAIN
/ / / / / /
4. 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 AND 3. 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 AND 3. IF OTHER
BUSINESS IS PRESENTED, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE BEST
JUDGMENT OF THE PROXIES.
- ------------------------------------------------------------
(Signature)
- ------------------------------------------------------------
(Signature)
Date: ____________________, 1996
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.