===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
IMPERIAL BANCORP
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
[LOGO OF IMPERIAL BANCORP]
Imperial Bank Building
P.O. Box 92991
Los Angeles, California 90009
(310) 417-5600
April 7, 2000
TO OUR SHAREHOLDERS:
We are pleased to invite you to attend the Annual Meeting of Shareholders of
the Company which will be held at our offices in the Imperial Bank Building,
9920 South La Cienega Boulevard, Second Floor, Inglewood, California 90301, on
Thursday, May 18, 2000, at 10:00 a.m.
The matters upon which Shareholders will be asked to act will be to elect
directors and to ratify the appointment of KPMG LLP as the Company's
independent accountants. Information about these matters is set forth in the
attached Proxy Statement.
Although you may presently plan to attend the meeting, I urge that you
complete your proxy and date, sign and return the proxy in the enclosed
postage paid envelope. If you attend the meeting, as I hope you will, you may
vote in person even though you have previously mailed the executed proxy card.
/s/ George L. Graziadio, Jr.
George L. Graziadio, Jr.
Chairman of the Board, President and
Chief Executive Officer
[LOGO OF IMPERIAL BANCORP]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 18, 2000
The Annual Meeting of Shareholders of Imperial Bancorp will be held at the
Company's offices in the Imperial Bank Building, 9920 South La Cienega
Boulevard, Second Floor, Inglewood, California 90301, on May 18, 2000, at
10:00 a.m., to consider and vote upon the following proposals:
1. The election of six directors.
2. To ratify the appointment of KPMG LLP as independent accountants for
2000.
3. Any other business that may properly come before the meeting.
The foregoing matters are more fully described in the accompanying Proxy
Statement.
Shareholders of record at the close of business on March 24, 2000, will be
entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Richard M. Baker
Richard M. Baker
Secretary
[LOGO OF IMPERIAL BANCORP]
PROXY STATEMENT
VOTING AND PROXY
The enclosed proxy is being solicited by the Board of Directors of Imperial
Bancorp, a California corporation, and will be voted at the Annual Meeting of
Shareholders on May 18, 2000, unless revoked prior to the voting thereof.
The solicitation of proxies will be by mail and the cost will be borne
directly by the Company. Additionally, officers and other Company employees
may solicit proxies by telephone, telegram or personally. Upon request, the
Company will reimburse banks, brokers, nominees and related fiduciaries for
reasonable expenses incurred by them in sending annual reports and proxy
materials to beneficial owners of the Company's stock.
All shares represented by each properly executed unrevoked proxy received in
time for the meeting will be voted. Any proxy given may be revoked any time
prior to its exercise by filing with the Secretary of the Company a writing
revoking it or a duly executed proxy bearing a later date, or by attending and
voting in person. The Proxy Statement and the accompanying Form of Proxy will
be first mailed to the Company's Shareholders on or about April 7, 2000.
Voting Securities
Shareholders of record on March 24, 2000, are entitled to notice of, and to
vote at, the 2000 Annual Meeting of Shareholders or any adjournment or
adjournments thereof. As of March 24, 2000, there were 45,041,500 outstanding
shares of common stock. Each Shareholder is entitled to one vote for each
share held on all matters to come before the meeting.
The candidates receiving the highest number of votes, up to the number of
directors to be elected, shall be elected.
Nominations for Directors
Article III, Section 3(b) of the Company's By-Laws sets forth the following
special procedures for nominations of directors by persons other than the
Board of Directors:
"Nominations for the election of directors may be made by the Board of
Directors or by any Shareholder entitled to vote for the election of
directors. Such nominations other than by the Board of Directors shall be
made by notice in writing, delivered or mailed by first class United States
mail, postage prepaid, to the Secretary of the corporation not less than 60
days prior to the first anniversary of the date of the last meeting of
Shareholders of the corporation called for the election of directors.
(1) Each notice shall set forth (i) the name, age, business address
and, if known, residence address of each nominee proposed in such
notice; (ii) the principal occupation or employment of each such
nominee; (iii) the number of shares of stock of the corporation which
are beneficially owned by such nominee; and (iv) such other information
as would be required by the Federal Securities Law and the Rules and
Regulations promulgated thereunder in respect to an individual
nominated as a director of the corporation and for whom proxies are
solicited by the Board of Directors of the corporation.
(2) The Chairman of any meeting of Shareholders may, if the facts
warrant, determine and declare to the meeting that a nomination was not
in accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting and the defective
nomination shall be disregarded."
To comply with the above By-Law provision, nominations for the 2000 Annual
Shareholders Meeting by persons other than the Board of Directors should have
been received on or before March 28, 2000. The Company did not receive any
such nominations and considers such nominations to be closed.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following sets forth information as of March 24, 2000, pertaining to the
securities ownership by persons known to the Company to own 5% or more of any
class of the Company's voting securities, current directors of the Company and
Named Executive Officers. The information contained herein has been obtained
from the Company's records, from various filings made by the named individuals
with the Securities and Exchange Commission or from information furnished
directly by the individuals or entity to the Company.
The Company is of the opinion that there is no person who possesses directly
or indirectly the power to direct or cause direction of the management and
policies of the Company, nor is it aware of the existence of a group of
persons formed for such purpose, whether through the ownership of voting
securities, by contract or otherwise.
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. Thus, careful attention should
be given to the code designations and footnote references set forth in the
column "Nature of Holdings." In addition, options with respect to shares
exercisable or shares issuable within 60 days of the date of this information
are deemed to be outstanding and have been utilized in calculating the
percentage ownership of those individuals possessing such interest. Thus, the
total number of shares considered to be outstanding for the purposes of this
table may vary depending upon the stockholder's particular circumstance.
Name and Address of Imperial Bancorp Official Payments Corp.
Beneficial Owner ------------------------------ ---------------------------
and Position Held for which Shares Nature of Percent of Shares Nature of Percent of
Inclusion Required Held Holdings Common Held Holdings Common
- --------------------------- ------ --------- ---------- ------ --------- ----------
1. George L. Graziadio,
Jr.--Chairman of the
Board, President & CEO
--Direct Ownership 897,400 AC(1)(2) 15,000 AC(2)
--Graziadio Investment
Company 3,107,592 AC(2)(3)
--Exercisable under
Stock Option Plans 640,373 AC(2) 75,000 AC(2)
--Employee Stock
Ownership Plan 1,191 A(2)
--401K Plan 611 AC(2)
--Profit Sharing Plan 127 AC(2)
--------- ------
4,647,294 10.32% 90,000 0.42%
2. Norman P. Creighton--
Director
--Direct Ownership 678,054 AC(1) 10,000 AC(1)
--Exercisable under 1986
Stock Option Plan 582,053 AC
--Employee Stock
Ownership Plan 380 A
--------- ------
1,260,487 2.80% 10,000 0.05%
3. Prudential Trust
Company Trustee for:
--Imperial Bancorp
Profit Sharing Plan 859,063
--Imperial Bancorp 401K
Plan 798,989
U.S. Trust Company
Trustee for:
--Imperial Bancorp
Employee Stock
Ownership Plan 1,117,442
---------
2,775,494 6.16%
4. John A. Andreini--
Director
--Direct Ownership 46,440 AC(2) 3,000 AC(2)
--Exercisable under 1986
Stock Option Plan 17,496 AC(2)
--------- ------
63,936 0.14% 3,000 0.01%
2
Name and Address of Imperial Bancorp Official Payments Corp.
Beneficial Owner -------------------------------- ----------------------------
and Position Held for which Nature of Percent of Shares Nature of Percent of
Inclusion Required Shares Held Holdings Common Held Holdings Common
- --------------------------- ----------- --------- ---------- ------- --------- ----------
5. G. Louis Graziadio,
III--Director
--Direct Ownership 164,377 AC(2) 6,000 AC(2)
--Ginarra Holdings, Inc. 29,900 AC(2)
--Trustee Gina and Carra
Partnership 285,549 BDE(4)
--Exercisable under 1986
Stock Option Plan 25,077 AC(2)
--Graziadio Investment
Company, 3,107,592
shares 172,471 E(3)(5)
--------- -------
647,474 1.44% 35,900 0.17%
6. William L. MacDonald--
Director
--Direct Ownership 3,557 AC(1)(2) 3,000 AC(2)
--Exercisable under 1986
Stock Option Plan 32,950 AC(2)
--------- -------
36,507 0.08% 3,000 0.01%
7. Paul A. Novelly--
Director
--Direct Ownership 10,680 AC(2)
--Paul A. Novelly
Charitable Remainder
Trust 122,472 ACE(6)
--Apex Oil Employees
Savings Plan 111,087 BDE(6)
--Novelly Exempt Trust 102,487 E(6)
--West Bank Trust 814,786 E(6)
---------
1,161,512 2.58%
8. Daniel R. Mathis--
President of Imperial
Bank
--Direct Ownership 615 AC(2) 3,000 AC(2)
--Exercisable under 1986
Stock Option Plan 379,765 AC(2)
--Employee Stock
Ownership Plan 4,328 A(2)
--401K Plan 3,061 AC(2)
--Profit Sharing Plan 1,415 AC(2)
--------- -------
389,184 0.86% 3,000 0.01%
9. Richard J. Casey--
Exec. VP of Imperial
Bank
--Direct Ownership 147,608 AC(2) 2,000 AC(2)
--Exercisable under 1986
Stock Option Plan 94,985 AC(2)
--Employee Stock
Ownership Plan 4,574 A(2)
--401K Plan 7,957 AC(2)
--Profit Sharing Plan 1,237 AC(2)
--------- -------
256,361 0.57% 2,000 0.01%
10. Harry W. Chenoweth--
Exec. VP of Imperial
Bank
--Direct Ownership 54,891 AC(2) 2,000 AC(2)
--Exercisable under 1986
Stock Option Plan 951 AC(2)
--401K Plan 629 AC(2)
--------- -------
56,471 0.13% 2,000 0.01%
11. All Current Officers
and Directors as a
Group of 17 8,740,392 (7) 18.98% 229,400 1.07%
12. Graziadio Family
Trust
(Phillip M. Bardack,
Stevan Calvillo,
William R. Lang,
Trustees)
--Beneficial Owner of
More Than Five Percent 3,256,344 BD 7.23%
3
Notes:
The address for all persons above is:
Imperial Bank Building
9920 South La Cienega Boulevard
Inglewood, CA 90301
A--Possess Sole Voting Power
B--Possess Shared Voting Power
C--Possess Sole Investment Power
D--Possess Shared Investment Power
E--Disclaim Beneficial Ownership
- --------
(1) George L. Graziadio, Jr., Norman P. Creighton and William L. MacDonald
serve as members of the Imperial Bancorp Salary Investment, Profit Sharing
and Employee Stock Ownership Plans Administrative Committee (the
"Committee") which is a committee of the Board of Directors of the
Company. The Committee has the power, pursuant to the Imperial Bancorp
Salary Investment, Profit Sharing and Employee Stock Ownership Plans, to
direct the Plan Trustee as to the manner in which it shall vote the shares
of common stock held by the Trustee, other than allocated shares held in
the Employee Stock Ownership Plan. The Committee acts by a majority vote.
The Board also has the right to act as a committee of the entirety. The
shares held by the Trustee are not included in the number of shares shown
to be beneficially held by each of Messrs. George L. Graziadio, Jr.,
Norman P. Creighton and William L. MacDonald as each of them disclaims
direct beneficial ownership of the shares so held.
(2) Pursuant to California law, personal property held in the name of a
married person may be community property as to which either spouse has the
power and ability to manage and control in its entirety. The Company has
no information pertaining to whether these shares are or are not community
property or whether any arrangement exists between the spouses pertaining
to voting or disposing of these shares and has thus assumed that, in the
absence of information to the contrary, married persons share investment
and voting power with their spouse.
(3) Holdings attributable to multiple parties have been adjusted to avoid
duplications.
(4) G. Louis Graziadio, III holds 285,549 shares as trustee for his children,
which are reported in his total. Mr. Graziadio disclaims beneficial
ownership of the shares so reported.
(5) The Graziadio Investment Co. ("GICP") is a California limited partnership
of which the Graziadio Investment Corp. ("GI Corp.") is the General
Partner. George L. Graziadio is the controlling shareholder of GI Corp.
and a Class A Limited Partner of GICP. The limited partners include the
George L. & Reva M. Graziadio Grandchildren's Trust No. 1 (Trust No. 1),
George & Reva Graziadio Living Trust (Trust), Dynasty Trust I, and G.
Louis Graziadio, III. G. Louis Graziadio, III is a trustee of Trust No. 1
and Dynasty Trust I and disclaims beneficial ownership except as to his
beneficial interest, 5.55% of GICP.
(6) Mr. Novelly is the settlor and trustee of the Paul A. Novelly Charitable
Remainder Trust and has sole voting and investment power, but disclaims
any beneficial ownership of its shares. He shares voting and investment
power of the shares held by the Apex Oil Employees Savings Plan, but
disclaims beneficial ownership. Mr. Novelly is the settlor and beneficiary
of the Novelly Exempt Trust, but not a trustee, and has no voting or
investment power and disclaims any beneficial ownership. Mr. Novelly is
the settlor and a beneficiary of the West Bank Trust, but not a trustee,
and, thus, has no voting or investment power and he disclaims beneficial
ownership of the West Bank Trust's shares.
(7) There are 2,126,960 shares representing outstanding options exercisable by
current officers and directors within 60 days of this table.
4
PROPOSAL 1. ELECTION OF DIRECTORS
Directors are elected at each Annual Meeting of Shareholders and hold office
until their respective successors are elected. The By-Laws of the Company
provide that the number of directors may be no less than five (5) and no more
than ten (10) with the number being fixed by a resolution of the Board of
Directors which has set the number as six (6). All the nominees other than Mr.
Andreini were elected to the Board at the last Shareholders Meeting. All the
nominees are believed to be willing to serve as directors, but if any of them
should decline or be unable to act as a director, the proxy holders will vote
for the person designated by the Board of Directors to replace any such
nominee.
Set forth below is certain information as of March 24, 2000, with respect to
each of the nominees.
Director Principal Occupation And
Name Age Since Other Directorships Held
---- --- -------- ------------------------
George L. Graziadio, Jr. 80 1969 Chairman of the Board, President and Chief
Executive Officer of the Company; Director of
the Company; Chairman of the Board of Imperial
Bank; Director of various other subsidiaries.
Mr. Graziadio is engaged as an owner or partner
in many other business activities, primarily in
the real estate industry. Mr. Graziadio is the
father of G. Louis Graziadio, III, nominee for
election to the Board of Directors.
Norman P. Creighton 64 1985 Director of the Company; Vice Chairman of the
Board, Chief Executive Officer and Director of
Imperial Bank.
John A. Andreini 72 2000 Director of the Company; Director of Imperial
Bank. Chairman of the Board of Andreini & Co.
G. Louis Graziadio, III 50 1984 Director of the Company. Chairman and CEO of
Ginarra Holdings, Inc., and subsidiaries, a
California corporation engaged in investments.
Chairman of the Board and CEO of Boss Holdings,
Inc.; Director of LGI Liquidation Co. He is the
son of George L. Graziadio, Jr., Chairman of the
Board.
Paul A. Novelly 56 1998 Director of the Company, Director of Imperial
Bank. Owner of Apex Oil Co., Inc. Director of
Coastcast Corp; Director of Boss Holdings, Inc.;
Director of Intrawest Corp.
William L. MacDonald 50 1999 Director of the Company, Director of Imperial
Bank. Chairman, President and CEO of
Compensation Resource Group. Director of
Imperial Creditcorp.
Mr. Andreini has been a director of Imperial Bank since 1997. He was
appointed to the Board of the Company effective January 13, 2000.
The Company does not currently have a nominating committee of the Board of
Directors. Generally, the Board of Directors as a whole acts upon such matters
as nominations. The Compensation Committee is composed of Messrs. Andreini and
MacDonald. The Company has an Executive Committee which is composed of Messrs.
Graziadio, Creighton, Yost, Mathis, Casey, Chenoweth, Daley and Lacey. The
Committee meets monthly, primarily to consider and act upon various aspects of
the Company's ongoing operations. The Committee may, however, consider such
matters as compensation and audit and make recommendations on these or other
matters to the Board of Directors in its entirety. From time to time, the
Board of Directors has and will refer matters to the Executive Committee for
implementation in line with policies established by the Board of Directors.
The Executive Committee met 12 times during 1999.
5
Messrs. Andreini, MacDonald and Novelly serve on the Audit Committee, which
meets quarterly or more as needed.
The Company's Board of Directors held 12 regularly scheduled meetings during
1999. No incumbent director, other than Mr. Andreini, attended fewer than 75%
of the aggregate of (a) the total number of meetings of the Board of Directors
and (b) the total number of meetings of committees of the Board of which he
served (during the period for which he served).
Director Fees
The directors who are not salaried employees of the Company or its
subsidiaries receive an annual retainer of $12,000, payable quarterly, $1,000
per Board meeting attended and $500 for each committee meeting attended. In
addition, members of the Audit Committee receive an additional $3,000
retainer, payable quarterly, and $500 per meeting attended. Directors may
defer all or a portion of their fees under the Deferred Compensation Plan.
Salaried employees receive no additional compensation for their services as
directors.
Executive Compensation
The following table sets forth for the fiscal years ended December 31, 1999,
1998 and 1997, the compensation for services in all capacities to the Company
of those persons who were at December 31, 1999, the chief executive officer
and the other four most highly compensated executive officers of the Company
(the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
Other Restricted Number All
Name and Annual Stock of Option LTIP Other
Principal Position Year Salary(1) Bonus Comp(2) Awards Shares(3) Payouts Comp(4)
------------------ ---- --------- -------- -------- ---------- --------- ------- -------
George L. Graziadio, Jr. 1999 $500,000 $983,883 $299,435 0 0 0 $15,512
Chairman of the Board 1998 500,000 722,909 190,927 0 145,800 0 7,893
and Chief Executive Officer, 1997 435,000 767,442 270,614 0 0 0 13,012
Imperial Bancorp
Norman P. Creighton 1999 $500,000 $891,875 $322,657 0 0 0 $15,512
Vice Chairman of the 1998 500,000 644,904 119,817 0 87,480 0 12,893
Board and Chief Executive 1997 435,000 700,900 217,167 0 0 0 17,762
Officer, Imperial Bank
Daniel R. Mathis 1999 $360,000 $642,150 $134,063 0 0 0 $15,512
President, 1998 325,000 419,187 44,032 0 87,480 0 7,893
Imperial Bank 1997 275,000 443,100 69,117 0 0 0 13,012
Richard J. Casey 1999 $225,000 $400,000 $115,786 0 0 0 $15,512
Executive Vice President, 1998 225,000 170,645 43,250 0 17,496 0 12,893
Imperial Bank 1997 200,000 243,500 97,148 0 0 0 17,762
Harry W. Chenoweth 1999 $225,000 $261,698 $115,164 0 0 0 $15,512
Executive Vice President, 1998 225,000 208,821 43,394 0 17,496 0 12,893
Imperial Bank 1997 185,000 229,700 63,223 0 67,354 0 1,480
- --------
(1) Compensation deferred at election of executive included in category and
year earned.
(2) Includes automobile allowance, additional life, GTL, legal services,
employer contribution to deferred compensation and below market interest
on loans.
(3) Adjusted to reflect 3 for 2 stock split in February 1998, 8% stock
dividend in February 1999, and 8% stock dividend in February 2000.
(4) These amounts represent contributions to the Company's Profit Sharing
Plan, 401K Plan and Employee Stock Ownership Plan.
6
Termination and Change of Control Arrangements
The Board of Directors has adopted a Basic Severance Compensation Plan and
an Acquisition Compensation Continuation Plan for officers, including
executive officers. Under the Basic Severance Compensation Plan, except for
cause, executive officers who are members of the Bank's Management Committee
and a Bank Director will receive 24 month's salary either as continuation or
in a lump sum, including full benefits during the 24 month period. Executive
officers who are members of Management Committee will receive 18 month's
salary either in a lump sum or continuation, along with full benefits during
the 18 month period. Executive officers who are Senior Vice Presidents will
receive one month's salary for each year of employment with a minimum of 4
month's pay and a maximum of 12 month's pay, with full benefits throughout the
severance period.
Under the Acquisition Compensation Continuation Plan, executive officers who
are members of the Bank's Management Committee and a Bank Director will
receive 36 month's salary either in a lump sum or through salary continuation,
three times the current target bonus, gross up for any federal excise tax
incurred, and full benefits throughout the severance period. Executive
officers who are members of Management Committee will receive 24 month's
salary either in a lump sum or salary continuation, two times the current
target bonus and gross up for any federal excise tax incurred, along with full
benefits during the severance period. Executive officers who are Senior Vice
Presidents will receive two month's salary for each year of employment with a
minimum of 12 month's pay and a maximum of 18 month's pay, along with a bonus
equal to the average of the last two years paid bonus, and full benefits
during the severance period.
Supplemental Compensation Plans
The Chairman of the Company is covered by a Death Benefit Only Plan ("DBO
Plan") which, pursuant to a compensation agreement executed between the
Company and Mr. Graziadio, provides for a death benefit beginning at
$2,546,000.00 in year one and increasing annually to $5,085,461.00 at the end
of year 15. The Company has purchased a life insurance policy to fund the
death benefits under the DBO Plan.
In 1996, the Company established a Split Dollar Life Insurance Plan to
provide certain death benefits to the estate of the Company's Chairman and his
spouse. The insurance policy purchased under the Plan provides for a lump sum
payment to the estate of the last to survive in amounts ranging from
$10.5 million in year one to $5.2 million in year 26, depending on the time of
death. The Company is obligated to make annual premium payments of $830,000
with respect to the policy for a twelve year period. At the end of the 13th
year, the Company will receive back an amount equal to the aggregate premiums
paid without interest or earnings. The cash surrender value of the policy
offsets the amount of premiums paid. The net income from the policy for the
year ended December 31, 1999, approximated $197,650.
In January 1996, the Board of Directors approved the 1996 Deferred
Compensation Plan for certain senior executives, including the Chairman and
other officers and directors of the Company and its subsidiaries. Under the
1996 Plan, eligible executives can elect to have credited to their account
annually a portion of covered compensation which is matched by the
participant's employer. The first $9,500 is matched at 50% to encourage senior
executives to not participate in the Qualified 401K Plan, thereby reducing the
top heavy restrictions on that Plan and allowing mid-management employees
greater participation in the Qualified 401K Plan, and the balance on a basis
related to the Company's return on equity, from 10% to 50%, with such amounts
earning interest at a rate set annually based, beginning September 1, 1997, on
the 10-year Treasury Bond yield plus 250 basis points as determined by the
Plan Committee. The bonus for 1995, paid in 1996, for eligible executives
could be included in the 1996 Plan. Each employee participant is limited to
20% of covered compensation and each director to 100%. The Plan allows
participants to effectively roll over amounts distributable under the 1992
Plan into the 1996 Plan in 1999. The anticipated liabilities of the Company
and its subsidiaries under the 1996 Plan are being accrued for financial
statement purposes. To offset the Deferred Compensation Plan liability, the
Company purchased life insurance policies during 1996 for which it is the
beneficiary. The policies have a cash surrender value which substantially
offsets the premiums paid for the policies. The net expense of the policies
approximated $227,243 for the year ended December 31, 1999.
7
Stock Option Plan
The 1986 Stock Option Plan was approved by the Shareholders at the 1987
Annual Meeting and amended at the 1990, 1992, 1993, 1995, 1996, 1997 and 1998
Annual Meetings. The 1986 Plan provides for stock options covering 4,794,257
shares of the Company's common stock, as adjusted for stock dividends, which
may be or have been granted to key executive and supervisory personnel of the
Company and its subsidiaries. Through March 24, 2000, options for 4,477,789
shares had been granted and are outstanding.
All option prices were equal to the market value of the common stock on the
date of grant and the grants were for the term of either five or ten years as
provided in the Plan, with all options exercisable one-fourth or one-sixth
each year after the first year following the date of grant other than options
granted to directors, which are immediately vested.
For the fiscal year ended December 31, 1999, there were no stock options
granted to the Company's Named Executive Officers.
The following table sets forth information with respect to the Named
Executive Officers concerning unexercised options held as of the end of fiscal
1999. All option information has been adjusted to reflect the February 2000
stock dividend.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END
OPTION VALUES
Value of Unexercised
Number of Unexercised In-the-Money Options
Options at 12/31/99 at 12/31/99
Shares Value ------------------------ --------------------------
Name Acquired Realized Exercisable/Unexercisable Exercisable/Unexercisable
---- -------- -------- ------------------------- --------------------------
George L.
Graziadio,
Jr.(1) 0 $ 0 590,373 0 $7,850,232 $ 0
Norman P.
Creighton(2) 0 $ 0 532,053 0 $7,347,482 $ 0
Daniel R.
Mathis(3) 0 $ 0 310,858 67,021 $ 3,582,202 $ 811,188
Richard J.
Casey(4) 0 $ 0 79,976 28,130 $ 1,324,624 $ 337,150
Harry W.
Chenoweth(5) 0 $ 0 38,052 46,798 $ 385,338 $460,730
- --------
(1) George L. Graziadio, Jr. has 590,373 shares in unexercised director's
options valued at $7,850,232 as of 12/31/99. Director's options are
immediately exercisable in whole or in part and expire five years from
date of grant.
(2) Norman P. Creighton has 532,053 shares in unexercised director's options.
Director's options are immediately exercisable in whole or in part and
expire five years from date of grant. The total value of all unexercised,
in-the-money options was $7,347,482 as of 12/31/99.
(3) Daniel R. Mathis has 248,146 unexercised nonqualified options and 42,253
unexercised incentive options. In addition, he has 87,480 shares in
unexercised director's options. Director's options are immediately
exercisable in whole or in part and expire five years from date of grant.
The total value of all unexercised in-the-money options was $4,393,390 as
of 12/31/99.
(4) Richard J. Casey has 76,087 unexercised nonqualified options and 32,019
unexercised incentive options. The total value of all unexercised, in-the-
money options was $1,661,774 as of 12/31/99.
(5) Harry W. Chenoweth has 51,567 unexercised nonqualified options and 33,283
unexercised incentive options. The total value of all unexercised, in-the-
money options was $846,068 as of 12/31/99.
8
REPORT OF THE COMPENSATION COMMITTEE
Executive Compensation Principles
Imperial Bancorp's compensation policies have been structured to align the
compensation of the Chief Executive Officer and the other senior executives of
the Company and its principal subsidiary with the values, objectives and
business and financial performance of the entity. The Company has aligned the
financial interests of executives with the results of the Company's financial
performance by the establishment of short and long term compensation programs
which are designed to ensure corporate performance that will enhance
shareholder value as well as maintain the Company as competitive in its
industry regarding executive compensation. The Committee with the assistance
of the Company's Human Resources professionals has utilized studies and
surveys in assessing and establishing base salary, bonus and long term stock
based compensation. The Committee has considered and reached its decisions as
reflected in Executive Compensation, subject to Board review.
The Company has historically maintained a philosophy of setting base salary
at a conservative level in relation to the market place and then provided
performance based variable incentive compensation which results in cash
compensation which fluctuates according to earnings results as well as stock
performance.
The Company has deferred compensation plans that allow for the deferral of
any amounts of compensation that would be in excess of that which is
deductible under applicable tax laws to assure no disallowance of compensation
under "excess compensation" rules if the Company's compensation mechanism
failed to qualify. Compensation is intended qualify for deductibility under
Section 162 (m) of the Internal Revenue Code.
Executive Compensation Programs
Mr. Graziadio, as Chairman and CEO, received the same base salary as the
prior year. His performance based bonus increased $260,974, reflecting the
overall improved results of the Company, as well as the improvement in core
results of operations. Mr. Graziadio's total bonus decreased as last year's
bonus included an incentive payment from the exercise by the Bank of a stock
option received in a customer transaction. Normalized net income increased 9%
for the year ended December 31, 1999, to $62.2 million or $1.34 a share, from
$57.1 or $1.28 per share for a year earlier. Net income for the year ended
December 31, 1999, increased 98% to $86.8 million or $1.87 per share, from
$43.7 million or $0.92 per share for 1998, reflecting the lack of negative
results from Imperial Credit Industries, Inc. and the favorable results from
the initial public offering of Official Payments Corporation. The Company's
common stock outperformed both the S&P 500 and the Southern California Bank's
Index, as well as the SNL Securities $5B-$10B Bank Index during 1999.
The compensation of the other named executives was set based on both the
performance of the Company as a whole, as well as the business units for which
they are directly responsible, in line with objectives set at the beginning of
the year.
Mr. Richard K. Eamer retired at the end of 1999 having participated in
Committee decisions throughout the year, but not in the determination of 1999
bonuses. Mr. Eamer has been commended for his many years of service to the
Company, and his significant contributions as a member of the Company's and
it's subsidiaries' boards and committees. His participation will be missed.
The focus of the Committee continues to be the maintenance of compensation
programs for the Company that appropriately rewards the efforts of the
employees and corresponds with the results of those efforts on the success of
the Company and the value generated for its shareholders.
COMPENSATION COMMITTEE
John A. Andreini
William L. MacDonald
9
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on Imperial's common stock against the
cumulative total return of the S&P 500 Stock Index, the stocks on Montgomery
Securities' Western Bank Monitor for Southern California ("Southern California
Banks"), and the SNL $5B-$10B Bank Index for the period of five fiscal years
commencing January 1, 1994, and ended December 31, 1999.
[PERFORMANCE GRAPH APPEARS HERE]
Southern
Imperial California SNL $5B-$10B
Period Ending Bancorp S&P 500 Banks Bank Index
------------- -------- --------- ---------- ------------
12/31/94 100.00 100.00 100.00 100.00
12/31/95 203.76 137.58 126.83 153.34
12/31/96 323.37 169.03 191.46 205.40
12/31/97 730.88 225.44 366.10 336.92
12/31/98 369.61 289.79 332.04 325.93
12/31/99 579.28 350.78 329.18 298.70
Data points for the years 1994-1995 of the Southern California Banks were
provided by Montgomery Securities. Data points for the years 1996-1999 of the
Southern California Banks were provided by SNL Securities, L.P.
Compliance with Section 16(a) of the Securities Act of 1934
Section 16(a) of the Securities Act of 1934 requires the Company's directors
and executive officers, and persons who own more than 10% of a registered
class of the Company's securities, to file with the Securities
10
and Exchange Commission ("SEC") initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the
Company. Officers, directors and greater than 10% shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company during the fiscal year ended December 31,
1998, all Section 16(a) filing requirements applicable to its officers,
directors and greater than 10% beneficial owners were complied with, except
for a late filing by J. Richard Barkley of one Form 4.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
A loan to Norman P. Creighton, made pursuant to the Employee Loan Program
under the By-Law approved by the Shareholders at their 1984 Annual Meeting,
was paid in full in August 1999.
There is a loan to George L. Graziadio, Jr., Chairman and President of the
Company, in the current amount of $3,168,592.20, which was originally to be
used to repay prior loans from the Company. The loan matures at the earlier of
his termination or January 1, 2002, is secured by his interest in the DBO Plan
and bears interest at the rate set each year equal to 60 percent of the
average of the one year and three year Treasury securities at the end of the
prior calendar year. For 2000, the rate will be 3.68%. An additional loan in
the original amount of $1,500,000 was granted to Mr. Graziadio in 1990, with a
current balance of $103,571.42, which is due on demand or August 16, 2000, and
which bears interest at the rate specified above. This loan was approved and
modified by the Company's Board pursuant to the By-Law adopted by the
Shareholders at the 1984 Annual Meeting.
Under applicable state and federal law and regulations, the amount by which
the interest rate applicable on the loans is less than the market rate is
treated as compensation and subject to taxation. A discount on all these
employee loans is being accreted to interest income over the same period as
the related deferred compensation is being amortized to expense.
E&G Development Company, an affiliate of Mr. G. L. Graziadio, Jr., subleases
certain space from Imperial Bank Realty Company, Inc. ("Realty"), a wholly
owned subsidiary of the Company, on a month-to-month basis, at the current
monthly rental of $583.49. The terms and conditions of this transaction were
considered competitive with similar rentals in the area at the time it was
entered into.
Loans by the Bank to Executive Officers and Directors
All extensions of credit by the Bank to executive officers and directors of
the Company and the Bank, if any, are made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons and do not involve more than the
normal risk of collectibility or present other unfavorable features. Such
loans will generally be subject to the provisions of Federal and California
law which will require them to be on terms comparable to those of transactions
with similarly situated nonaffiliated persons.
PROPOSAL 2. RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected and appointed KPMG LLP independent
certified public accountants, to audit the financial statements of the Company
and its consolidated subsidiaries for the year ending December 31, 2000. In
recognition of the important role of the independent accountants, the Board of
Directors has determined that its selection of such accountants should be
submitted to the Shareholders for review and ratification on an annual basis.
KPMG LLP has audited the financial statements of the Company and its
consolidated subsidiaries since 1973. The appointment of KPMG LLP as the
Company's independent accountants for 1999 was ratified at the 1999 Annual
Meeting of Shareholders.
11
KPMG LLP is knowledgeable of the Company's operations and accounting
practices and is well qualified to act in the capacity of independent
accountants. In addition to audit services relating to the Company's
consolidated financial statements and various governmental reporting
requirements, KPMG LLP performs some nonaudit services for the Company. Fees
applicable to the audit of the Company's consolidated financial statements are
reviewed and approved by the Audit Committee before the services are provided.
Other services are not normally approved by the Audit Committee or the
Company's Board of Directors before the services are provided, but are
subsequently reviewed by the Audit Committee. Management believes that the
nonaudit services provided by KPMG LLP have no effect on the independence of
that firm.
The affirmative vote of a majority of the shares voting on this proposal is
required for its adoption. In view of the difficulty and the expense involved
in changing independent accountants on short notice, if the proposal is not
approved, it is contemplated that the appointment for 2000 may be permitted to
stand, unless the Board of Directors finds other compelling reasons for making
a change. Disapproval of the proposal will be considered as advice to the
Board to select other independent accountants for the following year.
A representative of KPMG LLP is expected to be present at the Shareholders
Meeting and will be provided the opportunity to make a statement and to
respond to appropriate questions of Shareholders.
ALL PROXIES HELD BY PROXY HOLDERS OF THE COMPANY WILL BE VOTED IN FAVOR OF
THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS INDEPENDENT ACCOUNTANTS OF
THE COMPANY AND ITS SUBSIDIARIES FOR 2000 AND THE BOARD OF DIRECTORS URGES YOU
TO VOTE FOR THIS PROPOSAL.
OTHER MATTERS
Management is not aware of any other matters to come before the meeting. If
any other matter not mentioned in this Proxy Statement is brought before the
meeting, the proxy holders named in the enclosed form of proxy will have
discretionary authority to vote all proxies with respect to such matters in
accordance with their judgement.
PROPOSALS FOR THE 2000 ANNUAL MEETING
Shareholders' proposals submitted for inclusion in the Proxy Statement for
the 2001 Annual Meeting must be received at the Company's Executive Offices no
later than December 8, 2000.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Richard M. Baker
Richard M. Baker
Secretary
Date: April 7, 2000
12
IMPERIAL BANCORP
2000 PROXY
This Proxy is Solicited on Behalf of the Board of Directors.
The undersigned appoints George L. Graziado, Jr. and Norman P. Creighton as
proxies, each with the power to appoint his substitute, and authorizes them to
represent and to vote, as designated on the reverse, all the shares of common
stock of Imperial Bancorp held of record by the undersigned on March 24, 2000,
at the Annual Meeting of Shareholders to be on May 18, 2000, or any adjournments
thereof.
(Continued and to be signed on other side)
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Shareholders
IMPERIAL BANCORP
May 18, 2000
Please Detach and Mail in the Envelope Provided
Please mark your |
A [ X ] votes as in this |
example. |_____
WITHHOLD
FOR AUTHORITY
all Nominees for all Nominees
1. ELECTION OF [ ] [ ] Nominees: George L. Graziadio, Jr.
DIRECTORS John A. Andreini
Norman P. Creighton
To withhold authority to vote for any individual, G. Louis Graziadio, III
write that Nominee's name on the line below. William L. MacDonald
Paul A. Novelly
- ------------------------------------------------
FOR AGAINST ABSTAIN
2. To ratify the appointment of KPMG LLP as [ ] [ ] [ ]
independent accountants of the Company and
its subsidiaries for 2000.
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3.
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. WHEN SHARES ARE HELD BY JOINT
TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, AS EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A CORPORATION, PLEASE
SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
Signature(s)_______________________ ______________________ Date __________, 2000
NOTE: Please mark, sign, date and mail this proxy card promptly using the
enclosed envelope.
IMPERIAL BANCORP
2000 Meeting
---------------------
DIRECTION CARD
Imperial Bancorp Employee Stock Ownership Plan
TO: American Stock Transfer and Trust Company
You are hereby directed to report to U.S. Trust Company, Trustee, to vote with
respect to the proposals listed on the reverse, the number of shares of
Imperial Bancorp Common Stock held for my account in the Imperial Bancorp
Employee Stock Ownership Plan at the Annual Meeting of Shareholders of Imperial
Bancorp on May 18, 2000, and any adjournments thereof, as follows:
(Continued and to be signed on other side)
Please date, sign and mail your
direction card back as soon as possible!
Direction Card for Meeting of Shareholders
IMPERIAL BANCORP
May 18, 2000
Please Detach and Mail in the Envelope Provided
__
Please mark your | |
A [ X ] votes as in this |
example. |_____
WITHHOLD
FOR AUTHORITY
all Nominees for all Nominees
1. ELECTION OF [ ] [ ] Nominees: George L. Graziadio, Jr.
DIRECTORS John A. Andreini
Norman P. Creighton
To withhold authority to vote for any individual, G. Louis Graziadio, III
write that Nominee's name on the line below. William L. MacDonald
Paul A. Novelly
- ------------------------------------------------
FOR AGAINST ABSTAIN
2. To ratify the appointment of KPMG LLP as [ ] [ ] [ ]
independent accountants of the Company and
its subsidiaries for 2000.
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3.
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. WHEN SHARES ARE HELD BY JOINT
TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, AS EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A CORPORATION, PLEASE
SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
Signature(s)_______________________ ______________________ Date __________, 2000
NOTE: Please mark, sign, date and mail this proxy card promptly using the
enclosed envelope.